    [Senate Hearing 107-697]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 107-697

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2003

    =======================================================================

                                    HEARINGS

                                    before a

                              SUBCOMMITTEE OF THE

                COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                          ONE HUNDRED SEVENTH CONGRESS

                                 SECOND SESSION

                                       ON

                                   H.R. 5010

      AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENT OF DEFENSE FOR THE
         FISCAL YEAR ENDING SEPTEMBER 30, 2003, AND FOR OTHER PURPOSES

                                   __________

                             PART 1 (Pages 1-650)

                             Department of Defense
                           Nondepartmental witnesses

                                   __________

             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

                    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
                      Terrence E. Sauvain, Staff Director
                     Charles Kieffer, Deputy Staff Director
                   Steven J. Cortese, Minority Staff Director
                Lisa Sutherland, Minority Deputy 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
                                  Tom Hawkins
                                Robert J. Henke
                                 David Morrison
                                  Lesley Kalan
                                   Menda Fife
                                Mazie R. Mattson
                          Steven J. Cortese (Minority)
                            Sid Ashworth (Minority)
                           Kraig Siracuse (Minority)
                           Alycia Farrell (Minority)

                             Administrative Support

                                 Elnora Harvey
                            Nicole Royal (Minority)

                                C O N T E N T S

                                  ----------

                          Wednesday, February 27, 2002

                                                                       Page

    Department of Defense: Office of the Secretary...................     1

                            Wednesday, March 6, 2002

    Department of Defense: Department of the Army....................    65

                           Wednesday, April 17, 2002

    Department of Defense: Missile Defense Agency....................   125

                           Wednesday, April 24, 2002

    Department of Defense:
        National Guard Bureau........................................   177
        Reserves.....................................................   261

                             Wednesday, May 1, 2002

    Department of Defense: Department of the Navy....................   309

                             Wednesday, May 8, 2002

    Department of Defense:
        Health Affairs...............................................   379
        Nurse Corps..................................................   421

                            Wednesday, May 15, 2002

    Department of Defense: Department of the Air Force...............   469

                             Tuesday, May 21, 2002

    Department of Defense: Office of the Secretary...................   531

                            Wednesday, June 5, 2002

    Department of Defense:
        United States Military Academy, U.S. Army....................   597
        United States Naval Academy..................................   605
        United States Air Force Academy..............................   611

                            Wednesday, June 12, 2002

    Nondepartmental witnesses........................................   631

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2003

                                  ----------

                          WEDNESDAY, FEBRUARY 27, 2002

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:25 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Daniel K. Inouye (chairman)
    presiding.
        Present: Senators Inouye, Hollings, Byrd, Dorgan,
    Feinstein, Stevens, Specter, Domenici, Shelby, Gregg, and
    Hutchison.

                             DEPARTMENT OF DEFENSE

                            Office of the Secretary

    STATEMENT OF DR. PAUL WOLFOWITZ, DEPUTY SECRETARY OF
                DEFENSE
    ACCOMPANIED BY DR. DOV ZAKHEIM, UNDER SECRETARY OF DEFENSE, COMPTROLLER

                 opening statement of senator daniel k. inouye

        Senator Inouye. Secretary Wolfowitz, Dr. Zakheim, on behalf
    of the committee I would like to welcome you as we begin our
    deliberations on the Department of Defense (DOD) appropriations
    request for fiscal year 2003. It provides for the common
    defense. So states the Constitution in its preamble. This
    function was so important to the formation of this more perfect
    union our forefathers placed this clause in the very first
    paragraph of our Nation's governing document.
        The function of this subcommittee is to appropriate the
    funding necessary to insure that our military can provide for
    the common defense. It is indeed a critically important task.
    Last year some would argue we failed in that endeavor. On
    September 11, 2001, our defenses broke down. Three icons of
    American strength, the Twin Towers and the Pentagon, the
    workplaces of thousands of American were attacked with
    devastating consequences. The attack came not from a hostile
    nation but from a handful of terrorists armed with jumbo jets.
    Their weapon, filled with irony, was one which symbolizes
    American economic success and democratic freedoms. Our airlines
    have afforded millions of our citizens to fly unfettered for
    business or pleasure.
        As we all know, thousands of lives were lost and had it not
    been for the heroic efforts of civilians on a fourth plane,
    another location would have also likely been attacked. Some
    would argue we failed in this attack, they want to know how
    this happened, what went wrong, and who was to blame, and I
    think these are fair questions. It might not be fair, but it
    seems to me that many who are quick to point fingers today are
    the same ones who would have argued that we need to cut defense
    spending, that we don't need to modernize our forces or pay our
    troops, many of the same ones who wonder why some of us feel it
    is necessary that we pay our military personnel a decent wage
    and why we work to insure that they have adequate housing,
    acceptable health care and the promise of a reasonable
    retirement income after they have sacrificed for our country.
        I know that our witnesses today and my colleagues here are
    not among these naysayers. We recognize that less than 1
    percent of the American population is willing to wear the
    uniform of our Nation. We know that we should be grateful to
    them and we must treat them accordingly. I tell you this
    because I already hear the criticism of your budget request for
    fiscal year 2003.
        These critics argue that, why should we be giving the
    Pentagon an increase of $48 billion when they just had a $20
    billion increase less than a year ago. They point out that at
    the same time as defense is increasing substantially, all other
    discretionary spending is being curtailed with a minimal
    increase only to cover accounting change. They want to know how
    homeland defense, the protection of the waterways and airports
    will be safeguarded within this small increase in domestic
    spending. They find the disparity between defense and non-
    defense troubling.
        Mr. Secretary, Dr. Zakheim, I will not be a party to
    shortchange defense, but I think that you have your work cut
    out for you. It will be up to you to convince our colleagues
    that your needs are greater than those of other Federal
    agencies, the Federal Bureau of Investigation (FBI), the
    Customs Service, the Coast Guard, State Department and others.
    They too must strive to better protect our Nation from another
    terrorist attack and meet the challenges of this century.
        Your task is particularly challenging as you have requested
    $10 billion for unknown contingency costs. Your critics call
    this a slush fund. Any light you can shed on this will help us
    defend this request. Mr. Secretary, Dr. Zakheim, we look
    forward to your testimony on these and other important issues.
        But before we proceed, it is my privilege to call upon my
    good friend the vice chairman of the subcommittee, Senator
    Stevens.

                        statement of senator ted stevens

        Senator Stevens. Thank you very much, and I apologize for
    being late. I was in another subcommittee meeting before that
    vote. I do join in welcoming these two witnesses.
        I think no administration has faced in as short a period of
    time the range of national security challenges that this one
    has faced in this first year and I think it is really a change,
    substantial change in our society. But I think that the men and
    women of our armed services owe a great deal of gratitude to
    the two of you for your hard work and your sacrifice in taking
    these positions, and I do thank you for your extraordinary
    leadership in meeting these challenges and I'm sure that you
    are now and will become even more trusted partners of this
    committee and our work for defense.
        We have got both a blessing and a curse right now. The
    additional funds that we have before us now requested by the
    administration will go a long way to address the things that we
    know exist in our Department of Defense, but it is going to
    increase the second guessing that we will hear along the line
    about the choices to be made in the budget and particularly
    between the budget for defense and non-defense, as the chairman
    has indicated. We constantly face questions of why there should
    be such an increase in defense.
        We worked with you last year to produce legislation to
    respond to the attacks of September 11 and I know under the
    leadership of Senator Inouye we will continue with a sense of
    determination to meet the needs that you have outlined here
    today to assist our men and women in uniform both home and
    abroad.
        I joined the chairman and others last week in going to
    central Asia and I have to tell you, we have traveled around
    the world to meet with our military forces now for well over 30
    years and I have never seen young people so ready and so
    confident and so able, they really had a tremendous attitude,
    the morale was very high, and it reflects great credit upon the
    job that you all are doing and those in the command structure
    are doing to reassure these young people of what their task is
    and what their mission is.
        I look forward to your testimony and an opportunity to work
    with you as the year goes ahead. Let me say, I think there are
    going to be some changes within the command structure that I
    still do not understand, but we will watch, we will deal with
    those as they unfold. Thank you very much.
        Senator Inouye. Senator Hollings.

                    statement of senator ernest f. hollings

        Senator Hollings. Thank you very much, Mr. Chairman. I am
    glad to meet Dr. Zakheim. I have been an admirer of Secretary
    Wolfowitz for a long long time and incidentally, I am an
    admirer of Rumsfeld and was so before he became popular. Last
    year there was a news story that he would be the first in the
    Cabinet to leave. I am not going to get into that but since the
    distinguished gentleman is ``clueless in the Nation's
    capital,'' I guess that is the Governors that David Broder
    writes about, because they come to town and they are worried,
    and they find almost a hedonistic government here in
    Washington.
        Specifically, every one of them have deep deep deficits,
    there are not any surpluses. The State just over here across
    the river is over $1 billion, up in New York the State there is
    $48 billion, and the City of New York, Senator Stevens and I
    were there, and on saving the City of New York, that is $25
    billion in the hole. There are at least a half dozen States
    trying to not just cut spending but increase taxes. Governor
    Bush down in Florida, he is holding back, withholding on a tax
    cut. But he is not calling it a tax increase. When we try to
    hold the line and practice fiscal responsibility, they said oh
    no, that is increasing taxes, and you cannot comment on the
    reality in this town. The pollsters have taken over totally,
    Mr. Chairman.
        But the point is that we just seemingly go on and on in
    1999 and incidentally, the Clinton budget, I will have to check
    it, but he was very sensitive about having ducked the military,
    it was a point in his campaign and in fact it is an important
    point down in my State still. But the fact was, he was not
    going to deny the military in his 8 years as President and
    Commander in Chief. And while we had in 1999 the $275 billion,
    in 2000 we jumped it to $295 billion, and last year we jumped
    it another $11 billion to $306 billion. Both the year before
    last we had a pay increase, last year we had a pay increase,
    and there are increases that you are now submitting. But that
    is not the point.
        The point is that this aura of somehow defense had gone to
    pot on President Clinton's watch, yet the two distinguished
    gentlemen and ranking members say the morale is high and
    everybody knows they have performed admirably in Afghanistan,
    so we have a strong defense. But last year sitting in that same
    seat, Secretary Rumsfeld 6 days before 9/11 attested to the
    fact that he was going to have a new high tech defense, which
    calls for the old systems to be phased out and the savings were
    going to pay for the high tech systems. He said it was going to
    cost more money, but he attested to the fact that the budget
    you are now here to testify on, Secretary Wolfowitz, is $347
    billion. He said the budget would be $328 billion for this
    fiscal year, but the one you're testifying about this morning
    it was going to be $347 billion. Of course since that time we
    have added $20 billion in the supplemental and we willingly did
    so, we wanted to show our troops our support.
        And yet we find here today, that there is $50 billion more,
    like he said, in a contingency fund. The Crusader, the V-22,
    the F-22--every kind of piece of equipment imaginable. And then
    in this year's submission, the Navy is not going to start
    constructing enough ships and everything else, yet there is a
    projected $650 billion as what we are going to have to approve
    this year for the 10-year budget.
        So I will be questioning trying to find out how in the
    world can we maintain the credibility of this subcommittee, Mr.
    Secretary. I will never forget Schwartzkopf coming up here
    after Desert Storm, and he did not go to the authorizing
    committees at all, and he did not go, he said I am coming to
    this Defense Subcommittee here in the United States Senate
    because you saved my Central Command. They were about to
    abolish it, and we saved that. You remember that, Senator
    Stevens, Mr. Chairman, and we have always had it on the other
    side, Chairman Inouye. On this subcommittee, we are the ones
    that are going to provide resources to our Armed Forces.
        So I welcome you, but we are going to have to have some
    cold hard justifications--this town is going to sober up
    sometime this year. We already ended up last year without a
    surplus and on the contrary, a $43 billion deficit. As you sit
    in that chair we are already 4 months into this fiscal year,
    almost 5 months, $190 billion in the red, we have a deficit,
    and we know it will exceed over $350 billion by the end of the
    year. And so the politicians that are running for reelection in
    October when those figures come out, they will say that we are
    running a deficit of $350 billion because of Afghanistan, but
    that war did not cost that much. But of course when we say we
    are not going to pay any bills, all the Governors are having to
    pay their bills.
        We have always paid for our wars. We have to pay our taxes,
    so that when this committee votes to pay for this war, we have
    resources to pay the bills. But we say by the way, since we
    have a war we are going to have deficits and incidentally, the
    war is never going to end. Thank you, Mr. Chairman.
        Senator Inouye. Senator Hutchison.

                   statement of senator kay bailey hutchison

        Senator Hutchison. I would just like to say that I think
    that the Department of Defense has done a phenomenal job since
    September 11. Who would have thought that this would be the
    mission that you would be undertaking. We thought you were
    going to be required to update the military for the next
    century, and you are, but you're also dealing with the crisis
    of the moment, and I certainly appreciate the increase in needs
    this demands and we will work with you in every way.
        I do have a couple questions which I will save for later. I
    do want to mention that the Department has always funded the
    research for Gulf War illness, which I think has enormous
    implications for the future as well as the past. We must not
    only make sure that our people are treated right from previous
    service but also ensure that we find the cause so that we can
    treat the people who will be subjected to possible chemical
    warfare in the future. I do not see enough in this year's
    budget submission for this, so I would like to just point that
    out and say that I hope that you will be amenable to continuing
    that research for the cures and the potential vaccines that we
    will need for our servicemembers who might be exposed to
    chemical warfare in the field in the future.
        I thank you and I will have a few questions later.
        Senator Inouye. Thank you. Senator Feinstein.

                     statement of senator dianne feinstein

        Senator Feinstein. Thank you very much, Mr. Chairman.
    Gentlemen, I didn't start out quite where Senator Hollings is
    in his remarks, but I must tell you, I have come to have a very
    great appreciation for how the Department is being run, for the
    leadership of the Secretary. For you, Mr. Wolfowitz, I have had
    occasion as you know through the briefings and intelligence to
    follow this, and I think you are doing a very impressive job
    and I just want to say that.
        Now I have some real concerns about this budget and I also
    want to speak to this. I think my first concern is that perhaps
    the force structure changes are not always attuned to this new
    warfare, which is asymmetrical, which is probably going to be
    with us for a long time, where there is going to be a great
    deal of difficulty in sorting out combatants from
    noncombatants, and where the type of warfare may not always be
    the same as it is in Afghanistan where you have the ability for
    the Northern Alliance to do much of the groundwork and we just
    use our technology in the air with great success.
        That if this war on terrorism is going to be sustained and
    no one knows really what victory actually will be, that kind of
    privileged position is not always going to be there, and so I
    have a concern as to whether our force structure is really
    adequate to reflect this kind of a war concept.
        I also believe that because we are in this and we are in it
    for a sustained period of time, we no longer have the relative
    luxury to fund systems with questionable applicability,
    particularly related to the missile defense systems. I am very
    concerned about the continued priority the Department is
    placing on the development of a national missile defense
    program for which I can see little applicability in the war
    that we are actually going to be sustaining most likely for the
    next decade, I hope not, but it is very likely that that could
    be the fallout. And so I am concerned that the testing, the
    cost, and strategic and arms control implications of the
    current missile defense plan may well detract valuable
    resources, time and attention from more pressing security
    needs. I am willing to support a judicious testing program,
    because I think it is important to do so, but I have real
    questions about the administration's development and deployment
    plan and I hope to ask about that in my questions.
        I also have concern about the fact that the Department is
    asking for the 44 F-18s, the 12 C-17s, the joint strike
    fighter, the F-22, all of these planes, and I wonder frankly if
    they are all necessary and what the priority is if there is a
    priority. I mean, I know the joint strike fighter is not going
    to come on line soon enough to provide the kind of
    interservicing we had hoped for, but nonetheless, these are
    significant new requests.
        So, the bottom line is I look forward to discussing that
    with you and also this $10 billion fund that is there which
    concerns me because I have reread the resolution we passed to
    authorize the action, the military action against those who
    were responsible for 9/11 or connected to 9/11. I recognize the
    word connected may also authorize other things, but to put in
    really $10 billion seems to me, significantly reduces the
    Congress's opportunity to exercise the purse strings as we are
    entitled to do.
        So those areas of my concern and I just want to thank you
    for the very good work that you and the Secretary have done up
    to this point, and I look forward to having an opportunity to
    ask these questions at the appropriate time. Thanks, Mr.
    Chairman.
        Senator Inouye. Senator Domenici.

                     statement of senator pete v. domenici

        Senator Domenici. Thank you very much, Mr. Chairman. Let me
    say it is good to have you here, and my comments are going to
    be brief.
        First, I want to say things have been going our way for a
    change. This was a very difficult war to fight, and frankly I
    am very proud of the way it has progressed, I commend the
    Department, the Secretary, those who have helped him such as
    yourself, and obviously the President for his leadership. There
    is a long way to go however.
        We have also been fortunate in that the recession that we
    were all worried about may have already bottomed out.
    Economists are now saying this may be the shallowest recession
    we have had in modern days, and already the gross domestic
    product is moving into a positive mode from having been only 2
    or 3 months in the mildest of recessionary numbers.
        Our country was faced with both a recession and a war, and
    there were a lot of people who wondered how long we could
    continue to fund our defense and other needs and have a
    recession. I think we are going to have that question answered
    because I think we are going to be out of the recession. From
    my standpoint the question is, do you have a need for
    everything that you have asked us for and if you do, then we
    ought to fund it. If there are some things we can save money
    on, it does not mean we ought to give you less, because
    obviously there are some things that should be funded that are
    not. I think it is just as important that you tell us, tell
    this committee, what you think would be helpful that did not
    get funded because I believe that this is the time to send the
    right signals and to get started with reference to science and
    technology. I am somewhat concerned with whether we are doing
    enough in that area, Doctor, and I would like your comments in
    terms of research, science and technology.
        Actually we are living in an era when about every 10 years
    we completely change technology as I understand it. My
    questions will be directed in that area. I thank you once
    again; it is a pleasure to serve on this committee, and I hope
    we will be able to do you justice and do the Defense Department
    justice.
        My thought, if nobody else raised it, and if they did I
    want to lend my voice to it, is about the $10 billion that you
    seek in an emergency fund that would not be appropriated for
    specific programs or items. I think that is new and unique, and
    I don't know how we can do that and how it sets itself into the
    budget. So I believe there has to be some discussion about that
    $10 billion which you want us to give you the flexibility on; I
    am not sure that we can do that. But I do share the basic
    underpinnings of that request; you do need flexibility in fast
    moving times. You might need a reserve for flexibility, but I
    am not sure that we know how to do that.
        Thank you very much, Mr. Chairman.
        Senator Inouye. Senator Dorgan.

                      statement of senator byron l. dorgan

        Senator Dorgan. Dr. Wolfowitz, thank you very much for what
    you are doing, and Secretary Rumsfeld and the administration. I
    think things are going very well and the Congress and the
    American people appreciate that. I along with some of my
    colleagues was in central Asia some weeks ago, and I could not
    be more proud of the men and women who are serving our country
    and I know that they recognize your leadership and the support
    of the Congress in that service.
        Dr. Wolfowitz, I would like to call you at some point if
    you will take my telephone call to visit about a couple issues.
    There is no money in this budget to buy airplanes for the Air
    National Guard. We have some of the best pilots flying the
    oldest planes on Block 15, the F-16s, and you know, we need to
    do something about that. We talked to the previous
    administration about it as well, and we need to do something to
    reconcile that issue.
        I would also like to just mention in the area of defense
    microelectronics, there was an ad in the Post the other day to
    balance our procurement for weapons with information. As all of
    us know, the Department of Defense has trouble keeping up with
    advances in commercial electronics and information systems. New
    generations of microchips are being introduced in the
    commercial world roughly once every 18 months and by the time
    DOD deploys a system, its electronics are often several
    generations behind those being marketed in the commercial
    world. I hope that we can talk about the defense
    microelectronics activity. Senator Stevens and I have done some
    work in that area and I think it is an increasingly important
    area that we recognize, especially in view of what is happening
    in central Asia.
        But again, let me--I know you came to testify and let me
    allow you to do that. Thank you for being here and I hope we
    can pursue a couple of these issues to help us address them.
        Senator Inouye. Senator Shelby.

                     statement of senator richard c. shelby

        Senator Shelby. Mr. Chairman, I ask unanimous consent that
    my entire statement be made part of the record.
        Senator Inouye. Without objection.
        Senator Shelby. And other than that, I just want to welcome
    Secretary Wolfowitz to the committee and I look forward to what
    he was to say. But I also want to join the chorus of the
    committee in commending not only Secretary Wolfowitz, but
    Secretary Rumsfeld, for the leadership that you have shown over
    at the Pentagon. I want to say thank you on behalf of my
    constituents and I think a lot of the American people.
        [The statements follows:]
                Prepared Statement of Senator Richard C. Shelby
        I want to applaud President Bush and our top defense officials for
    sending us an fiscal year 2003 defense budget that I think all of us
    should be encouraged about. While budget restraints necessitate that
    the push and pull continues for control of limited dollars to fund
    competing requirements such as recapitalization and transformation, I
    do believe that things are looking up at the Department of Defense. The
    past decade has been very difficult indeed. Without congressional
    action to add defense funding during those years, I would hate to see
    where the Department would be now.
        The Bush Administration's $379 billion request signals a firm
    commitment to winning the war on terrorism and to building a force
    that, through transformation, will become even more dominant across the
    full spectrum of military operations. After September 11, when we look
    both internally and abroad and assess the threats we face, it is
    increasingly clear that we must pass this defense budget and continue
    to work aggressively to build our defensive and offensive capabilities
    in future years. The devastating attacks in New York and against the
    Pentagon prove that we are vulnerable. It is sobering to realize just
    how vulnerable we are to the myriad of possible attacks we could suffer
    at the hands of terrorists. While the United States was the target of
    the attack on September 11, our allies are also vulnerable to attack. I
    am increasingly concerned when I look across the Atlantic and assess
    the military capabilities of our allies. I see our most important
    partners and friends whose militaries are falling further and further
    behind our own in funding and technology.
        I also hear increasingly harsh rhetoric focused on the
    Administration's prosecution of the war on terrorism and our
    willingness to act unilaterally. While we are stronger with our allies
    standing beside us and contributing to this war on terrorism, I do not
    believe that we should let the coalition dictate our interests. I look
    to the Bush Administration to explore the ``capabilities gap'' that
    exists and continue to work closely with our allies to promote
    cooperation as we move to the next phase of the war on terrorism.
        I intend to do what I can to support and help President Bush,
    Secretary Rumsfeld, and Deputy Secretary Wolfowitz to win this war as
    well as rebuild our armed forces and shape them for the future. These
    efforts will continue to require a lot from our President and military
    officials. President Bush has provided outstanding leadership in these
    efforts and continues to communicate in very clear and precise terms
    with both the American people and with those abroad who would seek to
    do us harm.
        An honest budgetary assessment of the threats and the risks we face
    if we are not prepared is represented in the fiscal year 2003 defense
    request before us. We must invest in our men and women in uniform, in
    robust research and development programs, in new and technologically
    superior weapons, in airlift and naval assets that enable force
    projection, and in recapitalization of legacy systems that will form
    the bridge to our future objective forces. Each service has needs and
    we should work very hard to see that as many are met as possible.
        We face a delicate balancing act--near and long term threats with
    limited dollars to buy what we need across the services to modernize
    our military. The Bush Administration has presented us with an
    encouraging defense request of $379 billion that is projected to grow
    by $400 billion over the next five years. The war we are waging and the
    changes we seek to make within our military will take time and will be
    expensive, but I am confident that we will be victorious on both
    fronts.

                        ADDITIONAL SUBMITTED STATEMENTS

        Senator Inouye. The subcommittee has also received
    statements from Senators Kohl and Cochran, which will be
    inserted into the Record.
        [The statements follow:]
                    Prepared Statement of Senator Herb Kohl
        In his budget request the President proposes a massive increase in
    defense spending for a nation at war. This budget calls for $379
    billion in fiscal year 2003 defense spending--a $48 billion increase--
    to fund pay raises, cover rising health care costs, procure high tech
    weapons, and prosecute the on-going war on terrorism.
        Especially during wartime, we are reminded of how much our security
    depends upon maintaining a well trained and equipped fighting force. I
    am encouraged by the investment this budget makes in our soldiers,
    providing a significant pay raise and boosting the Base Housing
    Allowance to keep the benefits of military service competitive with the
    private sector.
        I am aware that a significant portion of the budget increase will
    go to funding the increasing costs associated with providing health
    care to our soldiers, retirees, and their families. General health care
    inflation and the new Tricare for Life program provide significant
    funding challenges, but we must keep our commitment to providing first-
    class health care to our military personnel.
        The events of September 11th and our on-going campaign in
    Afghanistan demonstrate the vital importance of transforming our
    nation's military to meet the challenges of the 21st century. Our
    experience in Afghanistan has highlighted the critical role that
    intelligence, special forces, and high-tech, guided munitions play in
    modern combat. But if we are to make a full investment in transforming
    our military into a more mobile force, then we must have the leadership
    to make tough choices. In reviewing this budget, I am concerned that
    while it makes the right investments in developing and procuring the
    weapons of the future, it fails to make the necessary cuts in legacy
    systems.
        This funding boost is the largest in two decades and the major
    portion of an overall budget that will return us to deficit spending.
    While the on-going war calls for increased spending, the DOD must
    redouble current efforts to improve business practices to get the most
    out of our tax dollars.
                                     ______

                   Prepared Statement of Senator Thad Cochran
        Mr. Chairman, I am pleased to join my colleagues in welcoming
    Secretaries Paul Wolfowitz and Dov Zakheim here today. I look forward
    to working with them and our Defense leadership to sustain and improve
    our current capabilities while our military transforms strategies and
    platforms for the 21st century.
        I am pleased that this year's budget request attempts to address
    some of the concerns of this Subcommittee, including fighting and
    winning the war on terror, maintaining morale and readiness,
    transforming the military for the 21st century, improving Department of
    Defense management operations, as well as providing a significant
    development and deployment program for missile defenses. However, I am
    troubled that some areas still fall short of the mark, particularly
    ship construction. I understand that the Quadrennial Defense Review
    calls for a minimum floor of 310 hulls to support our maritime
    strategy. Further, Defense and Navy leadership have stated a
    requirement for 340-375 ships while the current shipbuilding rate is
    decreasing. I am concerned by the continued downward trend in
    shipbuilding and its potential negative impact on our Nation and our
    Navy's ability to maintain a credible forward presence and perform
    required missions. Additionally, I am concerned with the harm that the
    construction rate is having on our shipbuilding industrial base and its
    ability to meet future requirements.
        Full commitment should be given to development of the DD(X) program
    and its family of destroyer, cruiser, and littoral ship platforms. It
    will provide the operating efficiencies, stealth, and power projection
    that will enable us to prevail in future conflicts with less impact to
    our sailors and Marines.
        A renewed commitment should also be given to the Marine Corps-Navy
    team in the amphibious arena. Modern strategy points to maneuvering and
    presence in the littorals, yet the amphibious shipbuilding program
    reflects only five ships through fiscal year 2007. I look forward to
    your testimony.

        Senator Inouye. Thank you very much. I will now call upon
    Dr. Wolfowitz.

                    SUMMARY STATEMENT OF DR. PAUL WOLFOWITZ

        Dr. Wolfowitz. Mr. Chairman, members of the committee, it's
    an honor to appear before this committee. We are in the
    presence of three decorated veterans from World War II, members
    of that greatest generation, and I'm in the presence of a
    committee that has been in the forefront of providing the
    resources that have enabled our servicemen and women to
    accomplish what they are doing for this Nation's security.

                     RESOURCES FOR THIS HISTORIC CHALLENGE

        We do indeed face enormous challenges, in some ways not as
    big perhaps in terms of the scale or the resources involved,
    but in terms of the stakes involved, in some ways as big as
    that great challenge of World War II. We are faced as we are
    always faced with in wartime with these difficult issues of
    priorities, and Mr. Chairman, you referred to that in your
    opening remarks and I'm sure we will in the questions, but I
    think we all owe an enormous debt, an enormous vote of thanks
    to what our military has been able to accomplish already so far
    in this campaign.
        If I had come to you in June and said we needed extra money
    in order to be able to base forces in Kazakhstan, not only
    would you not have believed me, I'm not sure I would have
    believed myself. I wouldn't have even been able to tell you
    that that was in Uzbekistan. We are now performing functions
    today that were in no military plan as of September 11th, and
    we're doing them I think with great effectiveness.
        And I believe, although one has to realize that there is
    still a very long way to go, I think it's unquestionable that
    the success so far in that campaign has done a great deal to
    protect Americans here at home. Secretary Rumsfeld has said no
    amount of defenses and barriers and protective activities, and
    no amount of hunkering down can protect us from every possible
    way the terrorists can attack. Therefore, while we have to take
    security measures and we're taking them on an enormous scale,
    and I might say not just in the FBI or Customs, but also
    billions of dollars and tens of thousands of people in the
    armed services are engaged in protecting our facilities here in
    the United States.
        But by taking the war to the enemy and by doing it as
    effectively as our men and women have been able to do, I
    believe has made a significant contribution to the fact that so
    far, and I can only say so far, that they haven't struck again.
    It's not that they're not trying. We have the evidence of Mr.
    Reid, who nearly killed 150 people on a civilian airliner, who
    is clearly part of that same network. We have intelligence
    every day that says they are still planning.
        So there may be some downs as well as some ups, and I think
    Senator Domenici said, it's nice that things are going our way
    for a change, and they are going our way for a change. Things
    may not always be going our way. We've got to have the same
    kind of staying power for this conflict that your generation
    had in World War II.
        I think we can say thanks that we are able to accomplish
    this campaign, this war, with a defense budget that even with
    this very large increase, will be less than 3.5 percent of our
    Gross Domestic Product (GDP). I don't believe there is any time
    in history that I'm aware of, certainly not in the history of
    the 20th century, when we ever were able to go to war with that
    small a defense burden. I hope it will stay at that level, but
    I think we should appreciate how much is accomplished with a
    relatively small piece.
        As we look at priorities, it's not to shortchange any of
    the other things that other agencies have to do for our
    security or related activities that the State Department does
    to make this campaign possible, but I do believe that the
    priority does need to be on all of those activities conducted
    by government that can help make not only our citizens today
    safer but to provide a free and safe future for our children
    and grandchildren.
        Mr. Chairman, I have a much longer statement that I would
    like to submit for the record, and if you will bear with me for
    maybe 10 minutes, I would like to just summarize the main
    points in it.
        Senator Inouye. Without objection.

                 ACCOMPLISHING SEVERAL MISSIONS SIMULTANEOUSLY

        Dr. Wolfowitz. We are in fact trying to do two major tasks
    at the same time. We are trying to fight a war on terrorism. We
    are also trying to prepare our forces for the conflicts that
    might come a decade from now or even longer, and the defense
    forces of any particular year are very much the product of
    investments that were made a decade or two decades before. So
    even as we're fighting this war, we need to be certain that
    we're doing everything we can to make sure that our successors
    10 or 20 years from now have those capabilities they need to
    protect our country in the future.
        When the Cold War ended, Mr. Chairman, we began a very
    substantial draw down of our defense forces and our budgets,
    which was appropriate to do so. We cashed a large peace
    dividend, lowering the level of our defense burden by half of
    what it was at Cold War peak. Much of that, as I said, was an
    appropriate adjustment to the great improvement in our security
    that resulted from victory in the Cold War. But ultimately,
    that draw down went too far.
        While our commitments around the world stayed the same and
    even grew in some cases, our country spent much of the 1990s
    living off of investments made in the Cold War instead of
    making new investments to address the threats of this new
    century. As I discussed with this committee last year, even
    before September 11, we faced the urgent need to replenish
    critical accounts. After September 11, we find ourselves facing
    the additional challenge of accomplishing three significant
    missions at the same time. We can only accomplish those three
    missions, fighting the war on terror, supporting our people,
    and selectively modernizing the forces we have and transforming
    our Armed Forces for wars of the future, with proper
    investments over a sustained period.

                        RISING COSTS AND MUST-PAY BILLS

        And we have to accomplish these missions in an environment
    of rising costs, particularly rising costs for the most
    critical element of the force, our people. Indeed, if one wants
    to understand properly why we are here for such a large
    increase, a $48 billion increase, I think you need to
    understand that the 2003 budget addresses a variety of must-pay
    bills, and many of them are personnel accounts. It includes a
    $14.1 billion increase for retiree health care and pay raises.
    If we don't pay our people properly, we risk jeopardizing that
    critical element of the force.
        There are other bills such as realistically pricing the
    systems that we buy and realistically costing our activities,
    that's another $7.4 billion. There is $6.7 billion to cover
    inflation, and $19.4 billion including the contingency fund,
    for the war on terror. Added together, those bills come to
    $47.6 billion, which is why President Bush sent to Congress a
    2003 defense budget request of $379 billion, a $48 billion
    increase from the 2002 budget. And if you do that arithmetic,
    Mr. Chairman, you can see that the only reason we are able to
    have a considerable amount of money to invest in new programs
    after paying all of those bills is because we have in fact
    reallocated priorities, killed programs, and made hard choices
    and smart choices.

                          NEW DIRECTIONS FROM THE QDR

        The 2003 budget request was guided by the results of last
    year's strategy review and the Quadrennial Defense Review
    (QDR). Out of the intense debate that led to those reviews, we
    reached agreement within the Department on the urgent need for
    real changes on our defense strategy.
        Among the new directions set in the QDR, I've highlighted
    three as among the most important. First, we decided to move
    away from the two major theater war force sizing construct to a
    new approach that instead places greater emphasis on deterrence
    in four critical theaters, backed by the ability to swiftly
    defeat two aggressors at the same time while preserving the
    option for one rather than two major offensives to occupy an
    aggressor's capital and replace the regime.
        Second, to confront a world marked by surprise and
    substantial uncertainty, we concluded that we needed to shift
    our planning from the threat-based model that has guided our
    thinking in the past to a capabilities-based model that is more
    appropriate for a future that is highly uncertain.
        Third, that capabilities-based approach places great
    emphasis on defining where we want to go with the
    transformation of our forces.
        In the testimony that follows, I'm going to address where
    we are putting dollars and resources behind that
    transformation. As Secretary Rumsfeld has said, transformation
    is about more than just dollars, it's about more than bombs and
    bullets and dollars and cents, it's about new approaches, it's
    about culture, it's about mindset and ways of thinking of
    things. And that by the way, Mr. Chairman, has been
    characteristic of major military transformations in the past,
    where frequently we have seen two adversaries, one of whom was
    equally equipped with the same new equipment, but one of which
    understood the implications and the organizational doctrine,
    the cultural changes required to use it effectively and the
    other didn't.
        Indeed, that is part of the reason why the British, many
    think that is why the British and French lost the Battle of
    France in a mere 4 weeks to an enemy that was no stronger in
    equipment accounts. In just the few months of the current
    campaign, we have seen a great deal of that kind of change
    underway.
        To mention just one example, not long ago I had the
    opportunity to be briefed by an Air Force F-15 pilot who had
    been persuaded to forego a rated pilot's job to instead fly an
    unmanned Predator aircraft from a location far from the field
    of battle. For a pilot destined for the cockpit, it was a
    difficult choice for her, yes, it was a woman pilot, especially
    given concerns among pilots that such an assignment could
    stymie their careers. There is no question that unmanned
    vehicles have made a significant impact in the current
    campaign, and promise even greater operational impacts in the
    future, which is why the Air Force leadership today is working
    hard to encourage other such trailblazers to become Predator
    pilots and help define a new concept of operations. So at this
    moment, what it means to be a fighter pilot in the U.S. Air
    Force is undergoing a transformation.
        It's also important to note that transformation doesn't
    mean transforming the entire force overnight. It begins with
    leveraging the systems we have with new technology and new
    thinking, and as we begin by changing only a small percentage
    of the force, we can indeed change the capability of the entire
    force. That is our aim, and by giving some definition to what
    transformation is and putting money behind those ideas, we
    believe we have already energized the defense team in dramatic
    ways, but we can energize a transformation that will be ongoing
    and exponential and provide the right forces to our successors
    a decade from now.
        In the QDR and the review that defined our investment
    priorities in the 2003-2007 budget, we identified six key
    transformational goals, and I would like to discuss how this
    budget addresses those goals. I would note that the budget as a
    whole requests some $53.9 billion for research, development,
    test and evaluation (RDT&E). That's a $5.5 billion increase
    over fiscal year 2002. And it requests $71.9 billion for
    procurement, that's a $7.6 billion increase over fiscal year
    2002. It funds 13 new transformational programs and accelerates
    funding for 22 more existing programs.
        Out of that total investment of some $125, $126 billion in
    procurement and RDT&E, the transformation programs that I am
    going to discuss in those six key categories account for
    roughly $21 billion, or 17 percent of our investment funding,
    rising to 22 percent over the course of the Future Years
    Defense Program (FYDP). Let me discuss the details of that $21
    billion into the six key categories as follows:
        First, our highest transformational priority and identified
    as such even before September 11 is protecting our bases of
    operation and homeland defense. We know that both terrorists
    and state supporters of terrorism are actively looking to build
    or buy nuclear, chemical and biological weapons of mass
    destruction. We also know that a number of hostile regimes,
    many of them by the way who also support terrorism, are
    investing heavily in ballistic missile capabilities that
    threaten our allies and even to threaten the homeland of the
    United States. To meet our objective in making homeland defense
    the Department's top priority, the President's 2003 budget
    funds a number of programs, including not only a $7.8 billion
    request for our refocused and revitalized missile defense
    research and testing program, but it is also important to note
    that the budget invests $10.5 billion for a variety of programs
    directly addressed to combating terrorism. That's almost
    double, in fact slightly more than double the amount that we
    were investing in that area just 2 years ago, and approximately
    $3 billion more that we are budgeting for missile defense in
    fiscal year 2003. That is due in very great measure to new
    priorities that we have to address in the wake of September 11,
    needs that range from the immediate necessities of hiring
    guards and building jersey barriers to the long-term
    necessities of training first responders and refining our
    intelligence response to the ongoing threat of terrorism.
        Of that $18.3 billion I just identified, we consider some
    $8 billion of that to be truly transformational. And I should
    note that in the totals I'm giving you for transformational
    programs, we are applying a pretty tight definition to what we
    consider transformational.
        Our second transformational goal from the QDR is denying
    enemies sanctuary. Again, this was identified as a high
    priority long before September 11. It has obviously been a
    major capability we have been using in this campaign. As we
    root out al Qaeda and members of the Taliban, it is readily
    apparent how important it is to be able to rob our enemies of
    places to hide and function.
        The key to that is long-range precision strike and I would
    emphasize that long-range precision strike is not just about
    heavy bombers. It's also done with ground forces and most
    importantly, it's done most effectively when we can link ground
    and air assets together. During my last tour at the Pentagon,
    Mr. Chairman, during the Persian Gulf War, where we worked so
    hard to try to stop the Iraqi scud attacks on Israel, we had an
    almost total inability to take advantage of what we had in the
    air and link it with the brave people we put in on the ground.
    Obviously we have come a long way in the last 10 years in what
    we've been able to do in Afghanistan, but we need to go much
    further.
        As we have seen in the campaign in Afghanistan, Special
    Forces mounted on horseback have used modern communications to
    direct strikes from 50-year-old B-52s. When Secretary Rumsfeld
    was asked why he was introducing the horse cavalry back into
    modern war, he said it was all part of the transformation plan,
    and indeed it is. Transformation isn't just developing new
    systems, it's also about using old systems in new ways with new
    doctrines, new types of organization, and new operational
    concepts.
        The fiscal year 2003 budget funds a number of programs
    designed to help us deny sanctuary to our enemies. It includes
    roughly $1 billion of increased spending on unmanned aerial
    vehicles. It includes another billion dollars for conversion,
    to start the conversion of four Trident nuclear submarines from
    a Cold War nuclear mission into stealthy, high endurance
    conventional strike submarines.
        It's important to note as I say, that we are applying a
    very strict definition to which programs we consider
    transformational. As an illustration, there are many things in
    this budget not included in these figures. For example in this
    budget request, we're asking for nearly $2 billion, $1.7
    billion precisely, for funding to increase production of the
    joint direct attack munitions and other precision guided
    munitions which have proven critical to making transformation
    work.
        With just that strict definition, the fiscal year 2003
    budget requests $3.2 billion for transformational programs to
    support that objective of denying sanctuary to our adversaries,
    and $16.9 billion over the FYDP, an increase of 157 percent.
        The third critical category is countering the very
    determined efforts of those who want to keep us out of their
    operating areas through what we call anti-access strategies, by
    attacking our ships at sea or denying us access to bases or
    attacking our bases. We see both in what our adversaries say
    and what they do that they recognize that if they have to go
    head to head with American forces, they will lose. If they can
    keep us from being able to operate in their area, it's their
    only chance. We have to be able to counter that. Overall, the
    fiscal year 2003 budget requests $7.4 billion for programs to
    support that goal of projecting power over vast distances, and
    $53 billion over the FYDP, an increase of 21 percent.
        Our fourth key goal is leveraging information technology,
    the technology that was key to linking horse cavalry and B-52s.
    In that example, less than 20 minutes from the time a Non
    Commissioned Officer (NCO) on horseback entered key information
    into his laptop, Joint Direct Attack Munitions (JDAMs) launched
    from a B-52 miles away were dropping on enemy positions just a
    few hundred meters from that NCO, who was obviously a brave
    man, I would point out. Clearly a key transformation goal is to
    leverage advances in information technology to seamlessly
    connect United States forces to insure that they see the same
    precise real-time picture of the battlefield.
        The fiscal year 2003 budget funds a number of programs
    designed to leverage information technology. One technology
    that we're investing in heavily which has very large future
    potential is laser communications, a promising experimental
    that if successful will give wide-band satellites the ability
    to pass data to each other at speeds measured in gigabits per
    second, as opposed to megabits per second, a significant and
    dramatic improvement.
        I would note, Mr. Chairman, I don't think you had to worry
    about gigabits during World War II, but it's impressive to see
    what the young men and women, for example, at Fort Lewis in
    Washington, what they were able to do with computers. It's
    almost second nature to them, and one example that we got at
    that same Air Force briefing I referred to, we were told about
    how the people netting these information gathering networks
    together are operating in chat rooms, operating six chat rooms
    at a time. We don't have to teach them the chat room product,
    they come into the service already knowing this remarkable
    capability.
        The fiscal year 2003 budget requests $2.5 billion for
    programs to support this objective of leveraging information
    technology.
        Our fifth objective as information warfare takes an
    increasingly significant role in modern war is to be able to
    protect our information networks and to attack or cripple those
    of our adversaries. Many of the programs in that area are
    classified, it is a new area, it's one that I think we have to
    work even harder. The fiscal year 2003 budget requests $174
    million for programs to support that objective, an increase of
    28 percent over the FYDP.
        Finally, our sixth priority for transformation is space.
    Space is the ultimate high ground. The fiscal year 2003 budget
    requests about $200 million to strengthen space capabilities
    and $1.5 billion over the FYDP, an increase of 145 percent.
        As important as transformation is, Mr. Chairman, it is even
    more important to take care of our people. They are the key,
    not only to the future but also to the present. The men and
    women who wear our Nation's uniform are doing us proud.
    Military service by its nature asks our service members to
    assume risks and sacrifices that the rest of us do not. We
    should not ask those who put themselves in harm's way to forego
    competitive pay or quality housing. The President's fiscal year
    2003 budget requests $94 billion for military pay and
    allowances, including $1.9 billion for an across-the-board 4.1
    percent pay raise.
        It also makes major advances in lowering out of pocket
    housing costs for those living in private housing so that we
    will be able by 2005 to eliminate all out of pocket housing
    costs for our men and women in uniform.
        Just a word, Mr. Chairman, about cost savings. We
    understand that we have a requirement to make the best possible
    use of the very substantial resources that you and your
    colleagues and the American taxpayers are providing us. We have
    taken a realistic approach in looking at a number of programs
    and found areas where we can save money. We have proposed
    terminating a number of programs over the next 5 years that
    were not in line with the new defense strategy or were having
    program difficulties, including the DD-21, the Navy Area
    Missile Defense, some 18 Army Legacy programs and the
    Peacekeeper Missile. We also accelerated retirement of a number
    of aging and expensive to maintain capabilities such as the F-
    14, DD-963 destroyers, and the Vietnam-era helicopters.
        We are also proceeding toward our goal of 15 percent
    reduction in headquarters staffing, and the Senior Executive
    Council is finding additional ways and will continue to find
    additional ways to manage the Department more efficiently.
        The budget as I mentioned at the beginning, reflects over
    $9 billion in redirected funds from acquisition program
    changes, management improvements and other initiatives, savings
    that help to fund transformation and other pressing
    requirements.
        Throughout this budget, Mr. Chairman, we were required to
    make some tough trade-offs. We were not able to meet our
    objective of lowering average age of tactical aircraft.
    However, we are investing in unmanned aircraft and in the F-22
    and the joint strike fighter, which require significant up-
    front investments, but will not come on line for several years.
    While the budget proposes faster growth in science and
    technology, we have not yet met our goal of having 3 percent of
    the budget in that category. And we have not been able to fund
    ship building at replacement rates in 2003. Although our ships
    are relatively new, we've got to change that course or we will
    eventually find ourselves with a substantially reduced force.
        In conclusion, Mr. Chairman, a budget of $379 billion is
    obviously a great deal of money, but it is misleading to
    compare this budget to budgets of the Cold War or to the
    defense budgets of other countries. We do not face other
    countries' budgets on the battlefield; we fight their forces.
    The budget of the Taliban would have been a tiny fraction of
    that of the United States. Yet, it has been unquestionably
    important that we have had the capability to deploy forces
    thousands of miles away rapidly and effectively to an
    unexpected theater of operations to defeat that force.
        Our success thus far in meeting this challenge only
    confirms that ours is the best military force in the world. We
    must have the best military force in the world. We can't afford
    to have less than that.
        The New York comptroller's office estimated the local
    economic cost of the September 11 attacks on New York City
    alone will add up to about $100 billion over the next 3 years.
    Estimates of the cost to the national economy from September 11
    range from about $170 billion last year and estimates range as
    high as almost $250 billion a year in lost productivity, sales,
    jobs, airline revenue, and countless other areas. The cost of
    human lives and the pain and suffering of so many thousands of
    Americans is incalculable.

                               PREPARED STATEMENT

        The President's budget addresses our country's need to
    fight the war on terror, to support our men and women in
    uniform, and to prepare for the challenges of the 21st century.
    This committee has been and continues to be an important
    safeguard of the long-term interests of our great nation, and I
    know you understand there is nothing more important than
    preserving peace and security. We look forward to working,
    continuing to work with this committee to insure that peace and
    security is what we can leave to generations to come. Thank you
    for your patience.
        [The statement follows:]
                    Prepared Statement of Dr. Paul Wolfowitz
                                  introduction
        Mr. Chairman and Members of the Committee: This Committee has
    provided our country great bipartisan support and strong leadership,
    and our relationship with the Committee and its staff has been truly
    outstanding from beginning to end. I appreciate the opportunity to
    return to this committee to testify in support of the 2003 defense
    budget request. Since we met last summer, a great deal has changed, of
    course. I look forward to addressing some of these changes with you.
        One of the greatest--and gravest--changes was brought by September
    11th--a day that changed our nation forever. September 11th has taught
    us once again that when it comes to America's defense, we must spend
    what is necessary to protect our freedom, our security and prosperity--
    not just for this generation, but to preserve peace and security for
    our children and our grandchildren.
        Today, we are engaged in the enormous task of fighting a global war
    on terrorism. As difficult as it is to think about other challenges in
    the middle of waging this war, it is essential that we think beyond our
    current effort if we are to face the security challenges and conflicts
    that are certain to arise throughout this century.
        The 2003 Defense Budget request is designed to address the
    President's goals in five key areas: (1) fighting and winning the war
    on terror; (2) defending the American people from a range of potential
    threats, from securing the homeland to defending against ballistic and
    cruise missiles; (3) restoring morale and readiness of the Armed
    Forces; (4) transforming the force; and (5) managing the Defense
    Department in a more business-like manner. Many elements of the budget
    address more than one of these goals. However, my remarks today will
    focus largely on what we are doing to transform the force, a critical
    area in which we need Congress's help.
        When the Cold War ended, the United States began a very substantial
    draw down of our defense forces and our budgets. We cashed a large
    ``peace dividend,'' lowering the level of our defense burden by half
    from the Cold War peak. Much of that was an appropriate adjustment to
    the great improvement in our security that resulted from the end of the
    Cold War. The draw down, however, ultimately went too far.
        While our commitments around the world stayed the same and even
    grew in some cases, our country spent much of the 1990s living off
    investments made during the Cold War, instead of making new investments
    to address the threats of this new century. As I discussed with this
    committee last year, even before September 11th, we faced the urgent
    need to replenish critical accounts. After September 11th, we find
    ourselves facing the additional challenges of accomplishing three
    significant missions at the same time: First, to win the global war on
    terrorism; second, to restore capabilities by making investments in
    procurement, people and modernization; and, third, to prepare for the
    future by accelerating the transformation for the 21st Century.
        It will be difficult and demanding to tackle all three of these
    missions at once, but we must do it--and without delay. Even as we
    fight the war on terror, potential adversaries study our methods and
    capabilities, and they plan for how they can take advantage of what
    they perceive to be our weaknesses and vulnerabilities. Now is
    precisely the moment we must begin to build forces that can frustrate
    those plans and provide us with the capabilities we need to win the
    wars of the coming decades.
        We can only accomplish the Defense Department's three missions--
    fighting the war on terrorism, supporting our people and selectively
    modernizing the forces we have now, and transforming our Armed Forces
    for the wars of the future--with proper investments over a sustained
    period. And we must accomplish these missions in an environment of
    rising costs, particularly for that most critical element of the
    force--our people. Comparisons have been drawn between this budget
    request and those of the Cold War--but, it is important to consider
    that we simply could not buy the quality of people that comprise
    today's force, nor could we equip and train them properly, at Cold War
    prices.
        The 2003 budget addresses ``must pay'' bills such as retiree health
    care and pay raises ($14.1 billion)--if we don't pay our people
    properly, we risk losing this critical element of the force; and there
    are other bills such as realistic costing ($7.4 billion); inflation
    ($6.7 billion): and the war on terrorism ($19.4 billion). Added
    together, these bills come to $47.6 billion. That is why President Bush
    sent to Congress a 2003 defense budget request of $379 billion--a $48
    billion increase from the 2002 budget, and the largest increase since
    the early 1980s.
                              new defense strategy
        The 2003 budget request was guided by the results of last year's
    strategy review and the Quadrennial Defense Review (QDR), both of which
    involved an unprecedented degree of debate and discussion among the
    Department's most senior leaders. Out of this intense debate, we
    reached agreement on the urgent need for real changes in our defense
    strategy.
        I might add that our conclusions have not gone unnoticed. One
    foreign observer reports that the QDR contains ``the most profound
    implications'' of the four major defense reviews conducted since the
    end of the Cold War. What is most compelling about this analysis is
    that it appears in a Chinese journal. That Chinese observer thinks the
    QDR's conclusions are important as a blueprint for where we go from
    here--and we think so, too.
        My statement today addresses how the President's budget intends to
    meet this blueprint, shaped by the needs of the environment we face
    today and the environment we could face in the decades to come.
        Among the new directions set in the QDR, the following are among
    the most important:
        First, we decided to move away from the two Major Theater War (MTW)
    force sizing construct, which called for maintaining forces capable of
    marching on and occupying the capitals of two adversaries and changing
    their regimes--at the same time. The new approach instead places
    greater emphasis on deterrence in four critical theaters, backed by the
    ability to swiftly defeat two aggressors at the same time, while
    preserving the option for one major offensive to occupy an aggressor's
    capital and replace the regime. By removing the requirement to maintain
    a second occupation force, we can free up resources for various lesser
    contingencies that might face us and also be able to invest for the
    future.
        Second, to confront a world marked by surprise and substantial
    uncertainty, we agreed that we needed to shift our planning from the
    ``threat-based'' model that has guided our thinking in the past to a
    ``capabilities-based'' model for the future. We don't know who may
    threaten us or when or where. But, we do have some sense of what they
    may threaten us with and how. And we also have a sense of what
    capabilities can provide us important new advantages.
        Third, this capabilities-based approach places great emphasis on
    defining where we want to go with the transformation of our forces.
    Transformation, as Secretary Rumsfeld has said, ``is about an awful lot
    more than bombs and bullets and dollars and cents; it's about new
    approaches, it's about culture, it's about mindset and ways of thinking
    of things.''
        Even in just the few months of the current campaign, we have seen a
    great deal of that kind of change underway. To mention just one
    example, not long ago, an Air Force F-15 pilot had to be persuaded to
    forego a rated pilot's job to fly, instead, an unmanned Predator
    aircraft from a location far from the field of battle. For a pilot
    destined for the cockpit, it was a difficult choice for her--especially
    given concerns among some pilots that such an assignment could stymie
    their careers. But there is no question that unmanned vehicles have
    made a significant impact in the current campaign and promise even
    greater operational impacts in the future--which is why the Air Force
    leadership is working hard to encourage other such trailblazers to
    become Predator pilots and help define a new concept of operations. So,
    at this moment, what it means to be a fighter pilot in the U.S. Air
    Force is undergoing a transformation.
        It is also important to note that transformation cannot mean
    transforming the entire force overnight. It begins with leveraging the
    systems we have with new technology and new thinking. As we begin by
    changing only a small percentage of the force we can, in fact, change
    the capability of the entire force.
        That is our aim. And by giving some definition to what
    transformation is and putting money behind these ideas, we can energize
    the Defense team in dramatic ways, and energize a transformation that
    will be ongoing and exponential.
        We identified six key transformational goals that define our
    highest priorities for investments in the 2003-07 Future Years Defense
    Program (FYDP). First, to protect the U.S. homeland and forces
    overseas; second, to project and sustain power in distant theaters;
    third, to deny enemies sanctuary, or places where they can hide and
    function; fourth, to protect information networks from attack; fifth,
    to use information technology to link up U.S. forces so they can fight
    jointly; and sixth, to maintain unhindered access to space--and protect
    U.S. space capabilities from enemy attack.
        We reached these conclusions before September 11th, but our
    experiences since then have validated many of those conclusions, and
    reinforced the importance of continuing to move forward in these new
    directions. The 2003 budget request advances each of the six
    transformational goals by accelerating funding for the development of
    the transformational programs and by funding modernization programs
    that support transformation goals.
        The budget requests $53.9 billion for Research, Development, Test,
    and Evaluation (RDT&E)--a $5.5 billion increase over fiscal year 2002.
    It requests $71.9 billion for procurement--$68.7 billion in the
    procurement title--a $7.6 billion increase over fiscal year 2002--and
    $3.2 billion in the Defense Emergency Response Fund. It funds 13 new
    transformational programs, and accelerates funding for 22 more existing
    programs.
        All together, transformation programs account for roughly $21.1
    billion, or 17 percent, of investment funding (RDT&E and procurement)
    in the President's 2003 budget request--rising to 22 percent over the
    five year FYDP. Let me discuss the details of the $21.1 billion in each
    of the six categories that follow.
    1. Protecting Bases of Operation/Homeland Defense
        It is obvious today that our first goal, protecting our bases of
    operation and homeland defense, is an urgent priority--especially since
    we know that both terrorists and state--supporters of terrorism are
    actively looking to build or buy nuclear, chemical and biological
    weapons of mass destruction.
        To meet our objective of making homeland defense the Department's
    top priority, the President's 2003 budget funds a number of programs.
    These include:
      --$300 million to create a Biological Defense Homeland Security
            Support Program to improve U.S. capabilities to detect and
            respond to biological attack against the American people and
            our deployed forces.
      --$7.8 billion for a refocused and revitalized missile defense
            research and testing program that will explore a wide range of
            potential technologies that will be unconstrained by the ABM
            Treaty after June 2002, including:
        --$623 million for the Patriot PAC III to protect our ground forces
                from cruise missile and tactical ballistic missile attack.
        --$3.5 million for the Mobile Tactical High-Energy Laser that can
                be used by U.S. ground forces to destroy enemy rockets,
                cruise missiles, artillery and mortar munitions.
        --$598 million for the Airborne Laser (ABL), a speed of light
                ``directed energy'' weapon to attack enemy ballistic
                missiles in the boost-phase of flight--deterring an
                adversary's use of WMD since debris would likely land on
                their own territory.
        --$534 million for an expanded test-bed for testing missile
                intercepts;
        --$797 million for sea, air and space-based systems to defeat
                missiles during their boost phase;
        It is important to note that the budget invests $10.5 billion for
    combating terrorism programs, which is $5.1 billion more than we were
    investing in that area just two years ago and approximately $3 billion
    more than we have budgeted on missile defense in 2003. That is due, in
    very great measure, to new priorities we must address in the wake of
    September 11th--needs that range from the immediate necessities of
    hiring guards and building jersey barriers to the long-term necessities
    of training first responders and refining our intelligence response to
    the on-going threat of terrorism. But, our commitment to missile
    defense remains as strong as ever--especially in the wake of 9/11,
    which is just a pale shadow of what adversaries armed with weapons of
    mass destruction could do.
        The budget invests $8 billion to support defense of the U.S.
    homeland and forces abroad--$45.8 billion over the five year Future
    Years Defense Plan (2003-07), an increase of 47 percent from the
    previous FYDP. In addition, the budget funds combat air patrols over
    major U.S. cities ($1.2 billion) and other requirements related to this
    transformation goal.
    2. Denying Enemies Sanctuary
        The President's budget funds a number of programs to ensure
    adversaries know that if they attack, they will not be able to escape
    the reaches of the United States. As we root out al Qaeda and members
    of the Taliban, it is readily apparent how important it is to rob our
    enemies of places to hide and function--whether it be in caves, in
    cities, or on the run.
        Key to denying sanctuary is the development of new capabilities for
    long-range precision strike, which is not just about heavy bombers, but
    about linking ground and air assets together, including unmanned
    capabilities. It also includes the ability to insert deployable ground
    forces into denied areas and allow them to network with our long-range
    precision-strike assets.
        This is something we have seen in the campaign in Afghanistan. Our
    Special Forces, mounted on horseback, have used modern communications
    to communicate with and direct strikes from 50-year-old B-52s.
    Introducing the horse cavalry back into modern war, as Secretary
    Rumsfeld has said, ``was all part of the transformation plan.'' And it
    is. Transformation isn't always about new systems, but using old
    systems in new ways with new doctrines, new types of organization, new
    operational concepts.
        The President's 2003 budget funds a number of programs designed to
    help us meet our objective of denying sanctuary to enemies. They
    include:
      --$141 million to accelerate development of UAVs with new combat
            capabilities.
      --$629 million for Global Hawk, a high-altitude unmanned vehicle that
            provides reconnaissance, surveillance and targeting
            information. We will procure three Air Force Global Hawks in
            2003, and accelerate improvements such as electronics upgrades
            and improved sensors, and begin development of a maritime
            version.
      --$91 million for the Space-Based Radar, which will take a range of
            reconnaissance and targeting missions now performed by aircraft
            and move them to space, removing the risk to lives and the need
            for over-flight clearance;
      --$54 million for development of a small diameter bomb, a much
            smaller, lighter weapon that will allow fighters and bombers to
            carry more ordnance and thus provide more kills per sortie;
      --$1 billion for conversion of four Trident nuclear submarines into
            stealthy, high endurance SSGN Strike Submarines that can each
            carry over 150 Tomahawk cruise missiles and up to 66 Special
            Operations Forces into denied areas;
      --$30 million for advanced energetic materials and new earth
            penetrator weapons to attack hardened and deeply buried
            targets;
      --$961 million for the DD(X), which replaces the cancelled DD-21
            destroyer program and could become the basis of a family of
            21st Century surface combat ships built around revolutionary
            stealth, propulsion, and manning technologies. Initial
            construction of the first DD(X) ship is expected in fiscal year
            2005.
        It is important to note that we have applied a very strict
    definition to which programs we include in these totals as
    transformational. Many things that enable transformation are not
    included in these figures. For example, the $1.7 billion in this budget
    for funding for the Joint Direct Attack Munitions (JDAMs) and other
    precision guided munitions are, in fact, critical to making
    transformation work, but are not part of the total I have mentioned
    here.
        With that strict definition, the 2003 budget requests $3.2 billion
    for transformational programs to support our objective of denying
    sanctuary to America's adversaries, and $16.9 billion over the five
    year FYDP (2003-07)--an increase of 157 percent.
    3. Projecting Power in Anti-access Areas
        A third critical category is countering the very determined efforts
    of those who want to keep us out of their operating areas through what
    we call anti-access strategies, by attacking our ships at sea or
    denying us access to bases or attacking our bases.
        Projecting and sustaining power in anti-access environments has
    been a necessity in the current campaign; circumstances forced us to
    operate from very great distances.
        In many other cases, U.S. forces depend on vulnerable foreign bases
    to operate--creating incentives for adversaries to develop ``access
    denial'' capabilities to keep us out of their neighborhoods.
        We must, therefore, reduce our dependence on predictable and
    vulnerable base structure, by exploiting a number of technologies that
    include longer-range aircraft, unmanned aerial vehicles, and stealthy
    platforms, as well as reducing the amount of logistical support needed
    by our ground forces so we can deploy them rapidly in an agile,
    flexible way.
        The President's 2003 budget includes increased funds for a number
    of programs designed to help us project power in ``denied'' areas.
    These include:
      --$630 million for an expanded, upgraded military GPS that can help
            U.S. forces pinpoint their position--and the location of their
            targets--with unprecedented accuracy.
      --$5 million for research in support of the Future Maritime
            Preposition Force of new, innovative ships that can receive
            flown-in personnel and off-load equipment at sea, and support
            rapid reinforcement of conventional combat operations.
            Construction of the first ship is planned for fiscal year 2007.
      --$83 million for the development of Unmanned Underwater Vehicles
            that can clear sea mines and operate without detection in
            denied areas.
      --About $500 million for the Short Takeoff/Vertical Landing (STOVL)
            Joint Strike Fighter that does not require large-deck aircraft
            carriers or full-length runways to takeoff and land.
      --$812 million for 332 Interim Armored Vehicles--protected, highly
            mobile and lethal transport for light infantry--enough for one
            of the Army's transformational Interim Brigade Combat Teams
            (IBCT). The fiscal year 2003-2007 FYDP funds six IBCTs at about
            $1.5 billion each.
      --$707 million for the Army's Future Combat System--a family of
            advanced-technology fighting vehicles that will give future
            ground forces unmatched battlefield awareness and lethality.
      --$88 million for new Hypervelocity Missiles that are lighter and
            smaller (4 feet long and less than 50 pounds) and will give
            lightly armored forces the lethality that only heavy armored
            forces have today.
        The 2003 budget requests $7.4 billion for programs to support our
    goal of projecting power over vast distances, and $53 billion over the
    five year FYDP (2003-07)--an increase of 21 percent.
    4. Leveraging Information Technology
        A fourth important goal is leveraging information technology.
    Information technology was the key to linking the horse cavalry with B-
    52s in my earlier example. In less than 20 minutes from the time an NCO
    on horseback entered key information into his laptop, JDAMs launched
    from a B-52 miles away were dropping on enemy positions--within just a
    few hundred meters of the NCO. Clearly, a key transformation goal is to
    leverage advances in information technology to seamlessly connect U.S.
    forces--in the air, at sea and on the ground so they can communicate
    with each other, instantaneously share information about their location
    (and the location of the enemy), and all see the same, precise, real-
    time picture of the battlefield.
        The President's 2003 budget funds a number of programs designed to
    leverage information technology. These include:
      --$172 million to continue development of the Joint Tactical Radio
            System, a program to give our services a common multi-purpose
            radio system so they can communicate with each other by voice
            and with data;
      --$150 million for the ``Link-16'' Tactical Data Link, a jam-
            resistant, high-capacity, secure digital communications system
            that will link tactical commanders to shooters in the air, on
            the ground, and at sea--providing near real-time data;
      --$29 million for Horizontal Battlefield Digitization that will help
            give our forces a common operational picture of the
            battlefield;
      --$61 million for the Warfighter Information Network (WIN-T), the
            radio-electronic equivalent of the World Wide Web to provide
            secure networking capabilities to connect everyone from the
            boots on the ground to the commanders;
      --$77 million for the ``Land Warrior'' and soldier modernization
            program to integrate the small arms carried by our soldiers
            with high-tech communications, sensors and other equipment to
            give new lethality to the forces on the ground;
      --$40 million for Deployable Joint Command and Control--a program for
            new land- and sea-based joint command and control centers that
            can be easily relocated as tactical situations require.
        One technology that we are investing in, which has very large
    potential implications, is laser communications, a promising,
    experimental technology that, if successful, would give wide-band
    satellites the ability to pass data to each other at speeds measured in
    gigabits per second as opposed to megabits per second--a significant
    and dramatic improvement.
        The 2003 budget requests $2.5 billion for programs to support this
    objective of leveraging information technology, and $18.6 billion over
    the five year FYDP (2003-07)--an increase of 125 percent.
    5. Conducting Effective Information Operations
        As information warfare takes an increasingly significant role in
    modern war, our ability to protect our information networks and to
    attack and cripple those of our adversaries will be critical.
        Many of the programs supporting this objective are classified. But
    the President's 2003 budget funds a number of programs designed to
    provide unparalleled advantages in information warfare, such as $136.5
    million for the Automated Intelligence, Surveillance and Reconnaissance
    System, a joint ground system that provides next-generation
    intelligence tasking, processing, exploitation and reporting
    capabilities.
        The 2003 budget requests $174 million for programs to support this
    objective--$773 million over the five-year FYDP (2003-07)--an increase
    of 28 percent.
    6. Strengthening Space Operations
        Space is the ultimate ``high ground.'' One of our top
    transformational goals is to harness the United States' advantages in
    space where we can see what adversaries are doing around the world and
    around the clock. As we move operations to space, we must also ensure
    the survivability of our space systems.
        The President's 2003 budget includes funds for a number of programs
    designed to provide unmatched space capabilities and defenses. These
    include:
      --$88 million for Space Control Systems that enhance U.S. ground
            based surveillance radar capabilities and, over time, move
            those surveillance capabilities into space;
      --$103.1 million for Directed Energy Technology to deny use of enemy
            electronic equipment with no collateral damage, to provide
            space control, and to pinpoint battlefield targets for
            destruction.
        The 2003 budget requests about $200 million to strengthen space
    capabilities--$1.5 billion over the five-year FYDP (2003-07)--an
    increase of 145 percent.
        Of course, we cannot transform the entire military in one year, or
    even in a decade--nor would it be wise to try to do so. Rather, we
    intend to transform a percentage of the force, the leading edge of
    change that will, over time, lead the rest of the force into the 21st
    Century. As Secretary Rumsfeld has emphasized, ``transformation is not
    an event--it is an ongoing process.''
                           people/military personnel
        While we transform for the future, we must take care of our most
    valuable resource: the men and women who wear our nation's uniform.
    Military service by its nature asks our service members to assume
    certain risks and sacrifices. But, we should not ask those who put
    themselves in harm's way to forego competitive pay and quality housing.
        The President's 2003 budget requests $94.3 billion for military pay
    and allowances, including $1.9 billion for an across-the-board 4.1
    percent percent pay raise.
        The budget also includes $4.2 billion to improve military housing,
    putting the Department on track to eliminate most substandard housing
    by 2007--several years sooner than previously planned. It will also
    lower out-of-pocket housing costs for those living in private housing
    from 11.3 percent today to 7.5 percent in 2003--putting us on track to
    eliminate all out of pocket housing costs for the men and women in
    uniform by 2005. This represents a significant change--before 2001,
    out-of-pocket costs were 18.8 percent.
        We stand by our goal of reducing the replacement rate for DOD
    facilities from the current and unacceptable 121 years, to a rate of 67
    years (which is closer to the commercial standard). We have dedicated
    some $20 billion over the 2003-07 FYDP to this end. But most of those
    investments have been delayed until the out-years, when BRAC is finally
    implemented and we will know which facilities will be closed.
        The budget also includes $10 billion for education, training, and
    recruiting, and $22.8 billion to cover the most realistic cost
    estimates of military healthcare.
                                  cost savings
        We have taken a realistic approach in looking at a number of
    programs, and have found areas where we can save some money. We have
    proposed terminating a number of programs over the next five years that
    were not in line with the new defense strategy, or were having program
    difficulties. These include the DD-21, Navy Area Missile Defense, 18
    Army Legacy programs, and the Peacekeeper Missile. We also accelerated
    retirement of a number of aging and expensive to maintain capabilities,
    such as the F-14, DD-963 destroyers, and 1,000 Vietnam-era helicopters.
        We have focused modernization efforts on programs that support
    transformation. We restructured certain programs that were not meeting
    hurdles, such as the V-22 Osprey, Comanche, and SBIRS programs.
    Regarding the V-22, the production rate has been slowed while attention
    is focused on correcting the serious technical problems identified by
    the blue ribbon panel and a rigorous flight test program is to be
    conducted to determine whether it is safe and reliable. The
    restructured programs reflect cost estimates and delivery dates that
    should be more realistic.
        We are working to generate savings and efficiency in other programs
    as well. For example, today, the B-1 bomber cannot operate effectively
    in combat environment where there is a serious anti-aircraft threat. So
    the Air Force is reducing the B-1 bomber fleet by about one-third, and
    using the savings to modernize the remaining aircraft with new
    precision weapons, self-protection systems, and reliability upgrades
    that will make the B-1 suitable for future conflicts. This should 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. These are the kinds of tradeoffs we are encouraging
    throughout the Department.
        We are also proceeding toward our goal of a 15 percent reduction in
    headquarters staffing, and the Senior Executive Council is finding
    additional ways to manage DOD more efficiently.
        The budget reflects over $9 billion in redirected funds from
    acquisition program changes, management improvements, and other
    initiatives--savings that help to fund transformation and other
    pressing requirements.
        Currently, to fight the war on terrorism and fulfill the many
    emergency homeland defense responsibilities, we have had to call up
    over 70,000 guard and reserves. Our long term goal, however, is to
    refocus our country's forces, tighten up on the use of military
    manpower for non-military purposes and examine critically the
    activities that the U.S. military is currently engaged in to identify
    those that are no longer needed.
        The Secretary of Defense and the Defense Department have made one
    of the highest reform priorities to put our financial house in order.
    This represents a significant undertaking: managing DOD might be
    compared to managing several Fortune 500 companies combined. We have
    launched an aggressive effort to modernize and transform our financial
    and non-financial management systems--to include substantial
    standardization, robust controls, clear identification of costs, and
    reliable information for decision makers. Especially key is the
    creation of an architecture that will integrate the more than 674
    different financial and non-financial systems that we have identified.
        Congress's decision to put off base closure for two more years
    means that the Department will have to continue supporting between 20-
    25 percent more infrastructure than needed to support the force. The
    decision to hold up the process another two years will be a costly one
    for taxpayers. Additionally, because of the post-September 11th force
    protection requirements, DOD is forced to protect 25 percent more bases
    than we need.
        The two-year delay in base closure should not be taken as an
    opportunity to try to ``BRAC-proof'' certain bases and facilities.
    Earmarks directing infrastructure spending on facilities that the
    taxpayers of America don't need and that eventually could be closed
    would be compounding the waste that the delay in BRAC is already
    causing.
                                   tradeoffs
        Throughout this budget process, we were required to make some tough
    tradeoffs.
      --We were not able to meet our objective of lowering average age of
            tactical aircraft. However, we are investing in unmanned
            aircraft, and in the F-22 and JSF, which require significant
            upfront investments, but will not come on line for several
            years.
      --While the budget proposes faster growth in Science and Technology
            (S&T), we were not able to meet our goal of 3 percent of the
            budget.
      --And we have not been able to fund shipbuilding at replacement rates
            in 2003--which means we remain on a downward course that, if
            not unchecked, could reduce the size of the Navy to a clearly
            unacceptable level in the decades ahead. To sustain the Navy at
            acceptable levels, the United States needs to build eight or
            nine ships annually. The proposed Future Years Defense Program
            budgets for procurement of 5 ships in fiscal year 2004, 7 ships
            in 2005, 7 ships in 2006 and 10 ships in 2007.
                                   conclusion
        A budget of $379 billion represents a great deal of money. But, it
    is misleading to compare this budget to budgets of the Cold War or to
    the defense budgets of other countries. We do not face other countries'
    budgets on the battlefield; we fight their forces. The budget of the
    Taliban would have been a small fraction of that of the United States.
    Yet, it has been unquestionably important that we have had the
    capability to deploy forces rapidly and effectively to an unexpected
    theater of operations. Our success thus far in meeting this challenge
    only confirms that ours is the world's best military force. We need the
    world's best military force. We can't afford to have less than that.
        The New York City comptroller's office estimated the local economic
    cost of the September 11th attacks on New York City alone will add up
    to about $100 billion over the next three years. Estimates of the cost
    to the national economy range from about $170 billion last year--and
    estimates range as high as almost $250 billion a year in lost
    productivity, sales, jobs, airline revenue, and countless other areas.
    The cost in human lives, and the pain and suffering of so many
    thousands of Americans who lost loved ones that day, is incalculable.
        The President's budget address our country's need to fight the war
    on terror, to support our men and women in uniform and modernize the
    forces we have, and to prepare for the challenges of the 21st Century.
    This Committee is an important safeguard of the long-term interests of
    our great nation, and well understands that there is nothing more
    important than preserving peace and security. We look forward to
    working with this Committee to ensure that peace and security is what
    we can leave to generations to come.

                         STRAINS ON MILITARY PERSONNEL

        Senator Inouye. Thank you very much, Mr. Secretary. Because
    of the constraints of time, may I request that the questioning
    period be limited to 10 minutes per member.
        Six days ago, Senator Stevens and I had the privilege of
    visiting our troops in Uzbekistan and Pakistan and Afghanistan.
    As the vice chairman pointed out, we were not just impressed
    but amazed at the high level of morale. However, the personnel
    tempo which is now being driven by the war on terrorism and the
    pace of deployments, I believe is putting a significant strain
    on our personnel and their families.
        So my question is, are our current end strength levels
    adequate to meet the U.S. military commitments at home and
    around the world? And secondly, have the events of 9/11
    impacted the Department's ability to recruit and retain
    military personnel?
        Dr. Wolfowitz. Let me answer the second part of the
    question first and the answer is, we seem to be doing very well
    on retention and recruitment. The willingness of Americans to
    come forward and serve their country and the willingness of
    reservists to serve on active duty is remarkable and heart
    warming.
        You are, I think, correct in identifying the fact that we
    are pushing our forces hard. In addition to what you have
    mentioned we have, and I would like to get the exact number for
    the record, but well over 80,000 people now called to active
    duty, many of them on homeland security missions. Indeed,
    during the time of the Olympics in Utah, we had more people on
    active duty in the State of Utah than we had on active duty in
    Afghanistan.
        We can't keep calling people back to reserve duty and
    expect them to stay in the reserves, that isn't quite what they
    had in mind when they joined. So we are looking very hard at
    what our long-term personnel requirements will be. But
    Secretary Rumsfeld has been pressing people to not simply say
    we need extra people to do all these extra tasks, but also to
    identify where perhaps there are things that we don't need to
    do, so we can reduce that strain not by adding people but by
    reducing some unnecessary missions.
        As you may know, we had been trying long before September
    11 to get our 2,000 or so people out of the Sinai where in our
    view at least, the military mission is no longer needed. For
    reasons I cannot understand, we are told that politically it's
    not a very good time. That's the kind of example of what we run
    into when we try to find ways to reduce those burdens. But we
    would like to try to manage, if we can, without increasing end
    strength, but we can't do that on the backs of the men and
    women in uniform, or even worse, the backs of their families.
        As you know, Mr. Chairman, nothing will send somebody out
    of the service faster than being sent away on a deployment or
    an unaccompanied tour, leaving his family at home for
    intolerable periods of time.
        [The information follows:]

    ----------------------------------------------------------------------------------------------------------------
                                                ARNG     USAR     ANG     USAFR     USNR     MCR     USCGR    TOTAL
    ----------------------------------------------------------------------------------------------------------------
    NOBLE EAGLE.............................   10,826    6,103   15,966    6,082    7,859    4,047    1,566   52,449
    ENDURING FREEDOM........................    7,232    7,680    7,562    8,189      636      117  .......   31,416
                                             -----------------------------------------------------------------------
          TOTAL.............................   18,058   13,783   23,528   14,271    8,495    4,164    1,566   83,865
    ----------------------------------------------------------------------------------------------------------------
    NOTE: Numbers are as of June 6, 2002.

    Summary

    National Guard (Air and Army):
        Homeland Security (Noble Eagle)...............................26,792
        Enduring Freedom..............................................14,794
    Reserves (Army, Navy, Air Force, Marines, & Coast Guard):
        Homeland Security (Noble Eagle)...............................25,657
        Enduring Freedom..............................................16,622

        Senator Inouye. It is true that the retention and
    recruiting in general will be acceptable, but I am certain you
    have some shortfalls in certain areas like pilots and nurses.
    Have you provided any incentives to recruit or retain men and
    women in those categories?
        Dr. Wolfowitz. Let me try to get a more detailed answer for
    the record. I have been given the impression that we're doing
    quite well on the recruiting side and that we haven't needed
    extra incentives. Where we are not doing so well is, we had to
    put stop loss orders in for a lot of military specialties. I
    don't think it's a recruiting problem, I think it's that we
    can't train up the number of people you need fast enough to
    meet the needs, and that is a real issue and one we have to
    address, because keeping people in the service when they have
    made other plans is again, not the way we want to treat our
    people if we can avoid it.
        [The information follows:]

        The Critical Skills Accession Bonus (CSAB), enacted into law in
    2002, authorizes the Secretary concerned to pay up to $60,000 in lump
    sum or installments, to new officers who accept a commission and serve
    on active duty in a designated critical skill for a specified period of
    time. Services are drafting proposals to use this authority in 2003 to
    enhance their nurse accessions.
        The Department accesses sufficient numbers of pilots; our challenge
    is retaining them. We continue to monitor our pilot shortage and offer
    the Aviation Continuation Pay (ACP). Continued utilization of the
    enhanced aviation continuation pay program resulted in a substantial
    increase in additional years of committed service from pilots and
    aviators throughout the Department enabling the Services to man
    aircraft cockpits. Continued use of the ACP will enhance our ability to
    retain these critical assets.
        The Critical Skills Retention Bonus (CSRB), enacted in 2001,
    incentivizes the retention of officers with selected critical skills.
    The Air Force 2003 program includes Developmental Engineers,
    Scientific/Research Specialists, Acquisition Program Managers,
    Communication/Information Systems Officers and Civil Engineers; the
    Navy proposal offers the CSRB to Surface Warfare and Submarine Support
    Officers. No Service has proposed using this authority to retain
    nurses, but the health communities are evaluating the use of this
    authority to target their critical health profession skills.
        Enlisted retention programs rely primarily on the Selected
    Reenlistment Bonus (SRB). The SRB is intended to encourage the
    reenlistment of sufficient numbers of qualified enlisted personnel in
    critical military specialties with high training costs or demonstrated
    retention shortfalls. Services periodically review the skills eligible
    for the SRB against the criteria and adjust their programs accordingly.

                      THE $10 BILLION CONTINGENCY REQUEST

        Senator Inouye. And now the $10 billion question. How do
    you respond to the critics of this request?
        Dr. Wolfowitz. First of all, it's absurd to call it as some
    do, a slush fund. The purpose of this request is very clear. It
    is to continue the kind of operations we are conducting today,
    and basically at the level we are at today. One of your
    colleagues earlier referred to this as a new and unique
    request. It isn't actually new or unique. It is pretty much
    exactly part of what we came to the Congress for last fall; in
    fact, it is less. We came to you with a request for a $10
    billion fund that could be used for any purposes in the war on
    terror and another $10 billion that could be used with a 15-day
    notification, and another $20 billion that might be required.
    You might think of this as the front end of the $20 billion
    request we had, and I think it's the only prudent way where we
    expect to meet the need to continue to conduct operations, at
    least something like this level.
        For those who were concerned that this was some kind of
    writing a blank check to some unlimited expansion of the war,
    this has been shown that this isn't going to fund anything much
    more than roughly the level of activity we are at for
    approximately 5 months into fiscal year 2003. We don't know
    what we're going to need in fiscal year 2003. I suppose it's
    possible that we will be able miraculously to say we don't need
    to conduct military operations at that level. It's equally
    possible and maybe more likely that we will find that in many
    ways our expenses and burdens are rising.
        It seems to me the only prudent thing to do, especially
    when thinking about allocating resources for the next fiscal
    year, is to assume that at least a $10 billion amount is
    necessary and we ought to have that available going into the
    year and not have to come with a supplemental on October 1,
    which is where we would be if this money were not appropriated.
        Senator Inouye. Since I am from the Pacific, I am certain
    you understand my special concern for the Navy, and I have been
    concerned about the ship building program because it continues
    to be plagued with cost overruns and delays. In the fiscal year
    2003 budget request, there is $645 million to complete prior-
    year ship building programs. This is on top of the $729 million
    provided for the same purpose. What is your plan to address
    these issues and getting the ship building program back on
    track?
        Dr. Wolfowitz. I am going to ask Dr. Zakheim to add some
    more detail here, but you are correct in identifying the fact
    that we have some problems in how ship building is going, and
    while we would like to see our ship building at a higher level
    in this budget, the leadership of the Navy after a lot of
    careful thought decided it was a much higher priority to get
    the readiness accounts up to improve the operation, the care of
    the present force. And they do have the advantage that, as I
    mentioned earlier, our current fleet is relatively new, I think
    the average age is about 16 years. And while we're not building
    at replacement rates, we don't have to be quite at replacement
    rates yet. Even if we were to put more money into ship building
    this year, we're not so sure we would be putting it into the
    right programs, partly because of some of the problems that you
    have identified.
        Dov, do you want to add to that?
        Dr. Zakheim. Only to say that the way the Navy approached
    its overall budget was to fully fund readiness, and in the past
    as you know, Mr. Chairman, what has often been the case is that
    readiness programs were underfunded and funds migrated from
    procurement accounts to the readiness accounts, so that the
    ships that are in the budget, and one could I think make a
    reasonable argument that the two ballistic missile carrying
    submarines (SSBNs) count as part of ship building, but those
    five plus two are likely to be protected in a way that previous
    ship building budgets have not.
        We went back to restricted funding, the priority of funding
    5-year contracts, and we feel reasonably certain about this
    budget and about the rest of the 5-year ship building program,
    where we will have up to 10 or so ships by 2007.

                         OFFICE OF STRATEGIC INFLUENCE

        Senator Inouye. Thank you. Just for the record, the Office
    of Strategic Influence is now out of business?
        Dr. Wolfowitz. That's correct. It was never in the business
    of producing disinformation or misleading people, I would like
    to make that clear. That is not our business and I think quite
    fundamentally, we understand as I think the whole country and
    the rest of the government understands that truth is on our
    side in this war and truth is one of the more important
    aspects, and we would not want to do things in any way to
    diminish our goal to deliver the truth by allowing people to
    think that we are doing something else.

                  FISCAL YEAR 2002 SUPPLEMENTAL APPROPRIATIONS

        Senator Inouye. We have been told that you may have a
    supplemental request submitted by the end of April, but it does
    not appear to be that that will be done. What is the status
    now?
        Dr. Wolfowitz. I'm very hesitant to predict how long it
    takes things sometimes to get out of the executive branch.
    There is an urgency to get a supplemental request up here
    because we are starting fairly soon to run out of the
    supplemental appropriation that you passed last fall, and it
    would be unfortunate if we end up back in the situation that we
    have been in so often before where we are dipping into a future
    account in order to cover expenses and the expectation that we
    will get reimbursed from a supplemental. We are trying to work
    it as fast as we can and our colleagues at the Office of
    Management and Budget (OMB) are working hard with us, and we
    will just try to get it here as quickly as possible.
        Senator Inouye. I thank you. My time is up. Senator
    Stevens.

                                  C-17 FUNDING

        Senator Stevens. Thank you very much. Secretary Wolfowitz,
    we have followed the C-17 for years. At one time all three of
    the other defense committees or subcommittees had opposed the
    C-17 and it still proceeded. We still have an overwhelming
    support for that system. As a matter of fact, the availability
    of that aircraft is a limiting factor on our ability to
    redeploy our forces today.
        This budget request reduces the procurement rate by 20
    percent to 12 aircraft in 2003, but it does not decrease the
    overall buy. And so my question to you is one, why did you do
    this? And two, what will be the additional cost in the
    procurement if we follow your request?
        Dr. Wolfowitz. My understanding is that first of all, I
    agree with you strongly about the importance of the C-17 and
    applaud you and others who made sure this program survived, and
    we have the benefit of it today. My understanding is that the
    12 aircraft budgeted for in 2003 will be combined with the
    previous multiyear purchase to maintain the economical
    production rate of the plant during fiscal year 2004, where the
    rate is 15, and that our follow-on multiyear procurement will
    sustain the C-17 production profile at that rate through fiscal
    year 2007. So that, I am told that this profile results in the
    same total costs and the same delivery schedule but to revert
    to a traditional multiyear at this point would require an
    additional $650 million in 2003 appropriations without
    accelerating the delivery schedule. So I think, as I understand
    it, it's a matter of trying to match up the year by year
    funding with the actual production capability but not to add
    anything to the cost of production.
        Senator Stevens. I would request that you give us the
    detail for the record. Last year we were told the most
    efficient and cost effective rate of production was 15 a year,
    and we authorized that and we funded it at that level. Now it's
    going down to 12 and you're telling us that somehow or another,
    that that 12 next year will continue the rate of 15 this year.
    I have serious questions about that and I hope you will give us
    some details of that analysis for the record.
        Dr. Wolfowitz. I would like to see them myself, Senator,
    and will get them to you.
        [The information follows:]

        The C-17 Multiyear Procurement (MYP) is structured so that Boeing
    maintains their most efficient and cost effective rate of production at
    15 aircraft a year. While the budget indicates that only 12 aircraft
    are being procured in fiscal year 2003, the use of advance procurement
    funding for long-lead components, parts, and materials, and some
    fabrication and assembly, allows the contractor to maintain the optimum
    production rate and delivery of 15 aircraft per year.

                 MISSILE DEFENSE TEST FACILITY AND X-BAND RADAR

        Senator Stevens. Secondly, I understand that we are going
    forward now with what really is a test facility for a national
    missile defense system. Can you tell me when you believe the
    test facility will be operational?
        And secondly, the X-band radar proposed out of that system
    for Shemya has been delayed, and I am told that there is some
    concept of placing those radars on ships at sea. It was sure my
    understanding, and the committee's understanding, that the X-
    band radar, Shemya would be part of the worldwide deployment of
    X-band radars. I have never heard of putting X-band radars on
    ships at sea and I would like to know, is that correct, is that
    going to be the functional addition to the national missile
    defense system X-band radar for the Pacific?
        Dr. Wolfowitz. Fort Greeley, Senator, we started site
    preparation in the August, October time frame, and cleared land
    and started grading some roads. The Ground Base Missile Defense
    (GMD) validation of operation and concept environmental
    assessment for Greeley has been performed and is ready for
    public comment, and upon completion of that 30-day public
    comment period in April, we will be awarding contracts, the
    Army Corps of Engineers will be awarding contracts for starting
    actual test bed construction. That would include roads, a
    readiness control building, a missile assembly building,
    mechanical/electrical building, electrical substation,
    interceptor storage building, and several other smaller
    buildings.
        In late June we will reach the expiration period of our 6-
    month Anti-Ballistic Missile (ABM) Treaty withdrawal
    notification and at that point we would begin excavation and
    construction of six missile silos. All of those facilities
    would be completed and in operation as part of the ground-based
    missile defense field with five prototype interceptors, should
    be installed and checked out and ready by September of 2004.
    That would give us a capability we've never had before for
    validating construction techniques, validating the operational
    concept and putting it in a representative Arctic environment.
        On the X-band radar, my understanding is that the Missile
    Defense Agency is still looking at the best location deployment
    systems for X-band radars, including very definitely the
    possibility of Shemya. Indeed, I think they feel that Shemya is
    an operational requirement for an effective system. But they
    are also looking at ships and other locations with respect to a
    test bed, not an operational system.

                         MISSILE DEFENSE SUPPORT GROUP

        Senator Stevens. Thank you for that. Could you tell me,
    what is the Missile Defense Study Group? We have read about it
    in the press and I have not been informed and I do not think
    any of us have been. What is that? We have Missile Defense
    Agency and the Ballistic Missile Defense Organization (BMDO)
    under General Ron Kadish, and we have the statement of the
    Under Secretary of Defense for Acquisition that there is now a
    new group, the Missile Defense Support Group. Can you tell us
    what that is?
        Dr. Wolfowitz. It's part of the oversight mechanism that
    was put in place when we restructured the BMDO office into the
    Missile Defense Agency. We tried to give General Kadish and his
    people more flexibility to pursue things that work and stop
    doing things that don't work, but we wanted some mechanism that
    would insure a reasonable level of oversight in reviewing those
    decisions. The Missile Defense Support Group is the group that
    performs that function as an adjunct of the Senior Executive
    Council, which consists of the three service secretaries and
    under secretaries. So, I would describe it as a management tool
    that is meant to give General Kadish a great deal of
    flexibility but keep a reasonable level of oversight at the
    same time.
        Senator Stevens. Will that be then that the Missile Defense
    Agency will be the organization that will comply with the
    Federal acquisition procedures, contract awards, other
    functions and that this Missile Defense Study Group is an
    oversight policy group? We worry about this second level here
    now that might second-guess the decisions of the Agency.
        Dr. Wolfowitz. Well, the level that would have any
    authority to overrule the decisions of the Agency would be the
    level of the service secretaries and the under secretary for
    acquisition and myself. In the past arrangement, we could have
    those decisions second guessed by the Defense Acquisition
    Board, which is a whole other large bureaucracy. I think we
    have actually given him more flexibility, but there has to be
    some degree of oversight. But he is the accountable official
    and my understanding is, and if it's wrong, I'll get back to
    you for the record, but my understanding is that it is the head
    of the Missile Defense Agency who has the responsibility for
    complying with acquisition regulations.
        Senator Stevens. I see our distinguished chairman has
    arrived and we want to give him the opportunity to ask his
    questions.

                                DOD CONSULTANTS

        We tried to implement a program for reduction of our
    consultants in the Department of Defense. As a matter of fact,
    we made a reduction in the budget itself to reflect that,
    coming from this subcommittee. I would like you to document how
    many consultants are currently employed by and how much is
    actually spent for noncareer workers in that capacity by the
    Department. Will you please provide for the record a statement
    of how many consultants and contract workers the Department
    employs now, how many they plan to employ in 2003, and how much
    will the Department spend for such services in 2002 and 2003?
        Dr. Wolfowitz. We will do that, Senator.
        [The information follows:]

        The Department of Defense has no central repository of data on the
    number of consultants and contract workers employed by the Department,
    how many are planned to be employed in 2003, nor how much the
    Department will spend for such services in 2002 and 2003.

        Senator Inouye. I thank you very much, and along with
    Senator Stevens, I want to recognize the chairman of the
    committee, Chairman Byrd.

                            FUNDING WAR ON TERRORISM

        Senator Byrd. Thank you. I have had the pleasure and the
    privilege of hearing Mr. Wolfowitz recently and I am glad to
    have this opportunity to ask just a few questions again, and I
    thank you, Mr. Chairman, and I thank you Mr. Ranking Chairman,
    for inviting me.
        Doctor, instead of concentrating on completing our
    operations in Afghanistan, the Pentagon seems to be looking for
    opportunities to stay longer and to extend itself further into
    the region. This concerns me. I think that we seem to be good
    at developing entrance strategies, not so good in developing
    exit strategies. I see that the Pentagon is basing a $30
    billion projected cost of the war on a series of assumptions
    regarding operations. According to the information I have
    received from your office you have calculated that America's
    war on terrorism will cost a total of $30 billion in fiscal
    year 2002. Congress has already provided $17.4 billion, which
    means that the Defense Department will need a $12.6 billion
    supplemental just to cover the cost of the war for 1 year. Does
    the Pentagon have a list of goals that it expects to
    accomplish, Dr. Wolfowitz, with the $30 billion?
        Dr. Wolfowitz. The $30 billion is basically a projection
    and I would emphasize, at every stage of this campaign things
    change, they change rapidly. Just as we had no idea on
    September 10 that we would be engaged in a conflict halfway
    around the world in Afghanistan, we also had no idea on October
    15th that we would be deploying forces on the ground in
    Afghanistan as quickly as we did, we had no idea the Taliban
    would collapse as quickly as it did, we had no idea that we
    would be putting people on the ground to pursue al Qaeda
    terrorists in caves as quickly as we did. Everything here has
    gone in ways that have been unpredictable.
        I say that by emphasizing that whatever I'm going to say
    about where we will be in June or in August or in September is
    a prediction of the unpredictable. What we have basically done
    is to say it's a reasonable assumption that we will continue to
    operate at roughly the level we're at today. And I would
    emphasize, the level we're at today, particularly for a major
    conflict of this kind, is very very low. We only have about
    5,000 people on the ground in Afghanistan; that's one one-
    hundreth, 1 percent of what we deployed in the total coalition
    force in the Persian Gulf 10 years ago.
        They are engaged in primarily, our major objective is to
    continue to pursue al Qaeda terrorists, to capture them or kill
    them, to obtain information and intelligence about what they
    were doing there and what their ties are to people elsewhere.
    Not so long ago, we picked up a videotape in Kabul, I believe
    it was, or somewhere in Afghanistan, that led to the arrest of
    terrorists in Singapore who were planning to attack American
    Navy ships.
        This is a global network and by what we have been able to
    do in Afghanistan, I think we have significantly disrupted that
    network and given ourselves more intelligence to go after. At
    the same time, we do not want to see Afghanistan become again
    in 2 or 3 or 5 years, a haven for the same group of terrorists
    or another group of terrorists, and that requires some
    attention to maintaining the security conditions of the country
    after we're finished.
        But I would assure you, Senator Byrd, we have no desire to
    stay one day longer than we have to, or use one soldier,
    sailor, airman or Marine more than we have to. Our basic
    principle of long-term security in Afghanistan is to try to
    train and equip the Afghans to do as much of the job for
    themselves as possible, I think that is the strategy and that's
    the basis on which we have made what I admit, again, is a guess
    as to what our costs will be.

                        AFFORDABILITY OF DEFENSE REQUEST

        Senator Byrd. Well, Dr. Wolfowitz, General Franks is a good
    commander, he takes his orders, as you do, from the President.
    What I see here appears to be an expanding agenda. I read all
    of these accounts about creating an army in Afghanistan. We
    went there to hunt down the terrorists. We don't know where
    Osama bin Laden is, whether he is alive or dead, or where
    Mullah Omar is hiding. We have bombed the caves of Afghanistan
    back into the dark ages, which lasted 1,000 years, and we've
    killed Afghans who are not our enemies. We killed 16 just a few
    days ago because we dropped, apparently didn't have the correct
    intelligence. There have been a lot of bodies I'm sure brought
    out of those caves. So we don't have Osama bin Laden. And if we
    expect to kill every terrorist in the world, that's going to
    keep us going beyond doomsday. How long can we afford this? How
    much have we spent in Afghanistan already to date?
        Dr. Wolfowitz. I believe the total that we've spent on
    deployments, and I think that includes money that we spent for
    Operation Noble Eagle, which is the air defense of the United
    States, is $10.3 billion through the end of January. That
    includes a number of immediate security measures that were
    taken for homeland security force protection after September
    11, which totals $3.9 billion.
        Senator Byrd. So we have spent how much in Afghanistan?
        Dr. Wolfowitz. Dov, do you have it broken down between
    Afghanistan and Noble Eagle? What I have is a $7.4 billion
    figure which, I'm sorry, Senator, I don't have the breakdown on
    it, I will try to get it for you. The $7.4 billion figure
    covers our operation in Afghanistan and our air defense
    requirements in the United States, those two together. I would
    guess that roughly $6 billion of that total is Afghanistan.
        Senator Byrd. And the President is asking for $379 billion
    for defense for fiscal year 2003, which is more than $1 billion
    a day. How long can we stand this kind of pressure upon our
    Treasury? And the President has committed our country to build
    an Afghan national army, according to what I read in the press,
    and to spend hundreds of millions of dollars to rebuild that
    country, and there is no end in sight, no end in sight to our
    mission in Afghanistan.
        Look at the Philippines. We are sending 660 troops there to
    fight a rebel group there. Already, 10 soldiers on that mission
    have lost their lives in a helicopter accident. Look at
    Colombia. I have yet to see any effect of the $1 billion in
    U.S. aid that has been sent to the jungle down there. The drugs
    that were supposed to be eradicated are still finding their way
    onto our streets. But as the Colombian government heats up its
    war against the rebel drug dealers, the President is
    considering sending more aid, perhaps more U.S. troops to that
    country. And then there is Iraq. And so on and so on.

                        U.S. COMMITMENTS IN AFGHANISTAN

        Mr. Chairman, you have been very liberal with my time. Let
    me ask just one final question. I have not heard any estimates
    of how much it will cost to train and equip an Afghan national
    army that the President has said, the United States will assist
    in its creation, but Congress has control of the purse string,
    if we pay attention to Section 7 of Article 1 of the United
    States Constitution. We have to begin asking some questions. No
    blank checks to be written. Do we know how much it will cost,
    Dr. Wolfowitz, to follow through on the administration's
    promise or have we committed in essence to giving Afghanistan a
    blank check? Where are we, what is it going to cost, what is
    the end game here? When will we know that we have achieved
    victory and that we need to get out of Afghanistan?
        Dr. Wolfowitz. Senator, we are actually still in the
    process of trying to assess what would be the right kind of
    army for Afghanistan and what it would cost. And frankly, the
    push in our assessments is to get people's expectations down to
    be more realistic and not to try to create some giant force
    that they don't actually need. And we strongly agree with the
    thrust of your comments that we don't want to have a long-term
    continuing American presence in that country if we can help it.
    That is I think the main reason why we want to see the Afghans
    themselves have something to do with the security function.
        The other side of the coin, and I'm pretty sure you would
    agree with this, because I know how stalwart you have been in
    support of our defense programs over many years and you know
    that, as I know, that we enjoy a much saver world today because
    we persevered through the Cold War. I think we will enjoy a
    much safer world 4 or 5 or 10 years from now, maybe sooner, but
    I don't think much sooner than that, by persevering in this war
    on terrorism.
        But you are absolutely right, that we have to be careful
    about overcommitting ourselves, we've got to be very careful
    about not taking on other peoples jobs for them, and looking
    for ways to get out of places as well as ways to get in. So
    it's balancing those two things at the same time, but I can't
    tell you when we will have won. Unfortunately, that's something
    we will sort of know only when it's, the terrorists have
    stopped. We do know that they are still out there in large
    numbers, and it's not only in Afghanistan, but we do know that
    what we are able to accomplish in Afghanistan even as we speak
    is helping us to prevent terrorist acts here in the United
    States.
        Senator Byrd. Thank you, Doctor. Thank you, Mr. Chairman,
    and I thank my colleagues for your patience.
        Senator Inouye. Senator Hollings.
        Senator Hollings. Back to the original theme, Secretary
    Wolfowitz. Every response up here is to the needs of the
    reelection campaign and not the needs of the country, and if
    there is any division, then we just move on. That old political
    axiom, when in doubt, do nothing. That comment is made as a
    result of your comment on the Sinai. I find that you and I are
    going down the same side of the street together. We have got 13
    peacekeeping; now we're going to add 2 more in the Philippines
    and in Georgia. Now we are going into the old Soviet Union, and
    I thought we would never get in there, but you got us in there
    according to my morning paper.
        I can get reelected on that down in South Carolina, we are
    confronting Communism once again. But the truth of the matter
    is that you have to go into these places to eliminate the
    terrorist element. I am not worried so much about Afghanistan
    because I know you are sincere about it, but there can be no
    sincerity to the Balkans. Ten years ago we went there for 1
    year, now it's 10 years later. In other words, we are in a
    sacrificial mode around here which doesn't exist, but tell the
    Europeans they are just going to have to take over or let them
    run the operation. We have to sit here and argue with the
    council of foreign relations, are they going to run the
    government? Why not cut back with the Balkans? Kosovo, they are
    just hunkered down by themselves there, all those troops, why
    not cut back the Kosovo operation?

                            U.S. TROOPS IN THE SINAI

        It seems to me that you agree with Secretary Rumsfeld on
    the Sinai, and the people around in that area are not very
    friendly to us, they are not very understanding and
    cooperative, they do not want us there, so why do we not get
    out of the Sinai?
        Dr. Wolfowitz. Well, I agree with Secretary Rumsfeld.
    Unfortunately, the people there do want us there. That's what
    we're grappling with.
        Senator Hollings. You know that from the 900 that we got--
    --
        Dr. Wolfowitz. Oh, our people don't want to be there.
        Senator Hollings. No. The 900 people who are there are
    telling you the people around them do not want us there, they
    are not very friendly about our deployment there at all. Go
    over and talk to them.
        With respect, since my time is limited, with respect to the
    C-17, it was Secretary Perry that we put him in the cockpit up
    in Charleston, someone on this committee said, and I agree with
    Senator Stevens, let us get that procurement up at least to the
    15 or more. I visited with him and I agree with his comments
    about the Reserves, they are going around the clock. In
    Charleston you have the 437th regulars, a C-17 outfit, and you
    have the 315th reserves, by General Black, and they are going
    around and around the world. I think about 78 percent of
    everything going into Afghanistan is on a C-17.
        And yes their morale is high, but how are they going to
    keep it up in the Reserves? Like the frustration noted in the
    distinguished gentleman's question, when are we going to have
    victory, they want to know, when are we going to get some
    relief? So you need more regular crews and more planes in the
    C-17 force.
        I am for the high tech, for the new defense as Secretary
    Rumsfeld testified to last year, and reiterated by the
    Commander in Chief. I went down with him 1 month ago to The
    Citadel when he announced the end of the ABM Treaty and he says
    yes, we are going to take the savings from cutting legacy
    systems and put them into this new highly technological defense
    force, and balance off those costs. And we now are asking for
    three new strike fighters. Yes, let us go with the F-22 and
    maybe even limit the first buy of F-18s. Can we economize there
    and be realistic? I'm trying to pare down this additional $50
    billion that was not needed last September and is all of a
    sudden needed when we have not even spent the additional $20
    billion we added in the supplemental. Could we do that and not
    hurt defense?

        SPENDING OF SUPPLEMENTAL APPROPRIATIONS AND BRING DOWN OVERSEAS
                                  DEPLOYMENTS

        Dr. Wolfowitz. First of all, to say that we haven't spent
    the supplemental, we are spending it at a great rate.
        Senator Hollings. You have spent $20 billion already?
        Dr. Wolfowitz. Not yet.
        Senator Hollings. That is not what our budget figures show.
        Dr. Wolfowitz. We have spent $10.3 billion already
        Senator Hollings. About half of it.
        Dr. Wolfowitz. It's actually, the amount we got totaled, I
    believe it was $17.3 billion and as of the end of January we
    had spent $10.2 billion of that. We are spending at a rate that
    will need more money by late spring, and as I said also, there
    are some costs like healthcare bills and things like that that
    you simply have to pay.
        On the question of these deployments, which we are trying
    to bring down, we have had some success, particularly in the
    Balkans. In Bosnia we had nearly 4,500 troops there in January
    of last year. As of last month, we have gotten that down to
    3,160, so that's more than 1,000 troops down in that area. And
    we are trying to take advantage of the fact that our allies
    have said they want to help. They are helping by the way,
    substantially in Afghanistan today.
        Those numbers change, but we have roughly in Afghanistan
    today roughly 5,000 Americans and I believe, and I will get
    exact numbers for the record, our allies have something in the
    neighborhood of 6,000 troops, they have more than we do by
    roughly 1,000, and the combination of the peacekeeping force in
    Kabul and people on the ground, as well as including
    Australian, Canadian, New Zealand, British Special Forces. So
    we're getting a lot of help from people, but this is a
    difficult and strenuous operation, and I think indeed what is
    remarkable is that we are able to do it without an enormous
    increase in our defense budget, the type we were talking for
    World War II or the Korean War, or even for Vietnam. We are
    looking for every place that we can save some money.
        [The information follows:]

    U.S. personnel in Afghanistan (as of June 2, 2002)................ 7,259
    Allied personnel in Afghanistan (as of June 2, 2002).............. 4,760

                            CUTTING UNNEEDED SYSTEMS

        Dr. Wolfowitz. And we raised the question of the three new
    fighters. The problem is they don't come in at the right times.
    If we had joint strike fighters available today, we could do
    without the F-18, but absent the joint strike fighter, you have
    to do something or our Navy aircraft are just going to get
    terribly old. They are already too old already, and that leads
    to maintenance problems or accidents and things of that kind.
        Senator Hollings. The Crusader, do you think we need that?
        Dr. Wolfowitz. I think we need some of it, a lot fewer than
    the Army had planned on. We have cut that program by almost
    two-thirds, and they have done a lot to cut the size and weight
    of the system. But I'm not one of those people who think I can
    bet the farm on not needing artillery 10 years from now, and I
    think it's the best artillery system available.
        Senator Hollings. The V-22 has killed more men than the
    enemy.
        Dr. Wolfowitz. We know that it is a troubled program. We
    had a very senior level group look at it. They believe that
    those problems can be worked out. We will know sometime over
    the course of the next year whether that optimism is justified
    or not. If it's not, we are going to have to look at it again.
        Senator Hollings. It is our design, Mr. Secretary, as you
    and I know, we clear an area with air power, not like on the
    Normandy beaches, and the Blackhawk helicopter flies our troops
    where we want after we flatten the area with our air assets. It
    seems to me that the V-22 is a luxury that's not needed.

                            NEED FOR NEW SUBMARINES

        With respect to the new Virginia class submarines, I agree
    on the requisition for the regular force with respect to
    Tomahawks and carrying on Seal cruise, but do we need another
    new one with the subs?
        Dr. Wolfowitz. I think we do, Senator, and we may at some
    point figure out more fundamental changes in how to use our
    submarine force and then maybe we will look at different
    designs. But I do think that if you look at 10 years from now,
    look at what an adversary can do with out technology against
    ships on the surface of the sea, you can only conclude that we
    are going to need more subsurface capability, not less. And
    that means also that we have to sustain the remarkable
    industrial base that builds those incredible ships.
        So that's the context in which I think one has to look at
    the Virginia class, not as a Cold War function we don't need
    anymore, but part of that subsurface force for the future.
        Senator Hollings. Thank you, Mr. Chairman.
        Senator Inouye. Senator Shelby.

             CAPABILITIES GAP BETWEEN ALLIES AND THE UNITED STATES

        Senator Shelby. Thank you, Mr. Chairman. Mr. Secretary, I
    am glad you are with us today. Last June I asked General Ryan
    about what he called the growing asymmetry of technology
    between the United States and our European allies. Also last
    year, Lord George Robertson said, ``We have a glaring trans-
    Atlantic capabilities gap and an interoperability problem
    between the allies.''
        The Bush administration has consistently pushed, and I have
    supported them, for the modernization of our military.
        Even attributing much of what is being said by our allies
    to political posturing and rhetoric, I'm increasingly concerned
    about the capabilities gap and how this would translate to the
    battlefield.
        One, in terms of concrete military capabilities, how big is
    the current capability gap between us and our North Atlantic
    Treaty Organization (NATO) allies?
        Dr. Wolfowitz. It's very large.
        Senator Shelby. Since our allies' current military budgets
    do nothing that I know of to narrow this gap and presumably
    will restrict their ability to join the fight in the future, I
    would submit that the prospect of having to go it alone puts
    even greater pressure on us to provide more funding if we hope
    to be able to execute future operations and defeat future
    threats. Would you agree?
        Dr. Wolfowitz. If the implication is that we have to spend
    more because our allies are spending less, I'm not sure I would
    agree with that. I would like to see them spending more.
        Senator Shelby. We all would.
        Dr. Wolfowitz. It's also, in fairness, I agree with the
    thrust of what you're saying and I agree with Lord Robertson's
    criticism of the inadequate defense spending levels of our
    allies. At the same time, I really do want to emphasize
    particularly for those British and French and Canadian,
    Australian troops that are risking their lives on the ground in
    Afghanistan with us today, and in fact the most recent casualty
    we had was an Australian. We enormously appreciate the effort
    they are making. I think it would be much better for them and
    for us if they were investing more in their future forces as we
    are doing.
        Senator Shelby. They might be willing in the future but
    they might not be capable.
        Dr. Wolfowitz. There is that distinct danger. And even
    today they are very very dependent on our lift and our other
    support capabilities to get them to the battlefield. I believe
    it was Senator Hollings who was pointing out that now, lift is
    one of the most constrained resources.
        Senator Shelby. I know, Mr. Secretary, that the gap
    concerns Lord Robertson pointed out in the conference, it has
    to concern them in the future and their ability to project
    force and to be a player around the world, doesn't it?
        Dr. Wolfowitz. I think so. And you know, I do think you
    have heard some of the political posturing that's going on over
    there during an election year.
        Senator Shelby. It is an election year over there.
        Dr. Wolfowitz. I guess so. It always seems that there is an
    election somewhere every month. It is a fact that we were
    attacked on September 11th and they weren't, but I would hope
    for a greater understanding on their part that they could be
    next, that we were attacked by hijackers who didn't just come
    from the Middle East, some of them came from Europe, the worst
    of them came from Hamburg, as a matter of fact. And I think we
    really are in this thing together and on the whole we have
    been. The voices that get the most attention are the noisiest
    ones. That's what I keep coming back to, what we're seeing on
    the ground in Afghanistan, it's a different picture and it's
    not one you hear about enough in my opinion.

                                 TRANSFORMATION

        Senator Shelby. To another area, transformation. Almost all
    the talk about transformation revolves around technology
    solutions to future tactics with the big issue of course being
    funding or money. Each service is working to transform its
    fighting forces. This budget includes $21 billion for
    transformation programs, and over the next 5 years, $136
    billion is projected to go to fund transformation efforts.
        Debate has heated up, Mr. Secretary, as you well know, over
    the need to buy more tactical aircraft, ships, ammunition, and
    to recapitalize more systems in an effort to keep our forces
    ready while we build this transformation bridge to the future.
    I don't hear much about fundamental force structure
    transformation these days.
        When I think about the money you are asking us to spend, I
    think about an article which appeared in the San Diego Union
    Tribune on January 30 of this year. In it, a retired rear
    admiral discussed fundamental transformation ideas and the need
    to take steps to eliminate interservice duplication. The
    example used was to combine the medical, logistical and
    intelligence groups currently serving each military branch. In
    the context of the budget hearing, I think this article asks an
    important question, and I would like to know your answers. Mr.
    Secretary, if you were building a new military from scratch,
    and I know we are not, today, would it be structured like our
    military is currently structured? How do we get to where we
    want to go, I guess is the real question.
        Dr. Wolfowitz. It's an unusually important question and is
    as I think you stated in asking the question, transformation is
    about more than money and as Secretary Rumsfeld said
    repeatedly, it's probably the changes in the way people think
    that are the most important piece of it, the way they organize
    and the way they operate. That includes looking systematically
    at how we do things and whether we are continuing to do things
    just because we have done them for the last 10 or 20 or 30
    years and we don't need to do them anymore. That's the Sinai,
    for example, where the President of Egypt and the Prime
    Minister of Israel disagree, and I think that's an example.
    We're looking very systematically at where we want to be
    combining either for efficiency or for improved combat
    effectiveness. We now have Army guys on the ground interacting
    with long-range bomber pilots in ways that----
        Senator Shelby. And it is working too, is it not.
        Dr. Wolfowitz. It is. So we really do have to think
    differently, and we do have to keep in mind this Legacy force
    which you referred to and we are investing in it. The real
    reason for the three tactical fighters is to make sure that the
    Legacy force works, I don't really like that word, but that the
    main part of our force can fight our wars for the next 10 years
    while we build those future capabilities.
        Now, I cannot remember how many smart comments I have read
    about how if the previous budget did not cut 30,000 people out
    of the Army or out of the Navy or the Air Force, I have not
    read it about the Marine Corps, but at any rate, imagine where
    we would be, I think now, in light of the questions the
    chairman was asking about the possibility of even an increased
    end strength, if we had started whacking away force structure.
    We took a very careful look at force structure during the
    summer in the QDR and we concluded that we could reduce the
    strain on the force structure by changing our strategic
    concept, but given the deployment requirements that we had,
    that we needed something roughly the size of what we have
    today. It's not an accident that we are the only country in the
    world that can even think about mounting operations in a remote
    place like Afghanistan on 3 weeks notice. We are a much safer
    country today because we were able to do that and I think it's
    an investment that is worth it.
        Senator Shelby. And I thank you.
        Senator Inouye. Senator Specter.
        Senator Specter. Mr. Secretary, I join my colleagues in
    welcoming you here. How are you enjoying the job?
        Dr. Wolfowitz. Enjoying it.
        Senator Specter. We see that Iraq has dominated a good bit
    of the news. When Secretary of State Colin Powell recently
    commented about the ``axis of evil,'' he said we do not plan to
    go to war against North Korea and we did not plan to go to war
    against Iran, but Iraq was conspicuously absent with a
    nondeclaration. By 20-20 hindsight, I think most would agree
    that we made a mistake in not proceeding against Osama bin
    Laden and al Qaeda. This is based on the indictments which have
    been returned in Federal court against bin Laden for killing
    Americans in Mogadishu in 1993, the embassy bombings in 1998,
    and the implication of the U.S.S. Cole and his worldwide
    ``jihad.'' What Saddam Hussein is doing is a real problem.
        Aside from the comments which have been made by the
    officials, it seems to me that it might be very useful for this
    subcommittee or the Appropriations Committee sitting as a
    whole, or perhaps Armed Services or Foreign Relations, to
    conduct hearings to try to get as much on the public record as
    we can so that the public understands. Some things would have
    to be said confidentially in closed session, but it would be
    useful in my view to know, as specifically as we can in public
    session with the balance in closed session, the threat which
    Saddam poses with weapons of mass destruction, the specifics of
    what he has done by ignoring the United Nations, and the
    chances of his compliance. I see the Secretary General is now
    going to meet with him. He has a track record of backing down
    when things look like they are getting tough. What is the game
    plan and a rough outline, again perhaps in closed session, and
    what happens after he is caught? It could hardly be a surprise
    to Saddam Hussein to know that is something that may happen.

          CONGRESSIONAL HEARING ON TERRORISM POLICIES AND CONSULTATION

        What is your thinking on the utility of such congressional
    hearings?
        Dr. Wolfowitz. Senator, you raise a whole series of
    unquestionably key issues that people have to think through. I
    think you can understand that for any of us in the executive
    branch, these are decisions that can be taken only by the
    President, and he has made some very clear and important
    statements.
        Senator Specter. He did this only for the press. What
    happened to consultation with Congress?
        Dr. Wolfowitz. Well, I think there are appropriate ways to
    do consultation. I think what the President laid before the
    Congress and the country on January 29th is the fact that we
    have a problem. The problem is countries that are openly
    hostile toward the United States, supporting terrorists and
    pursuing weapons of mass destruction, and the implications of
    where that is heading is too dangerous for us to sit back and
    wait for it to happen and react afterwards.
        I think you made the very correct analogy that we should
    have dealt with bin Laden before September 11th. And of course
    you recognize as we all do, that had we done so, no doubt
    people would have said we didn't have sufficient evidence.
    We're in that zone where we can't wait until we have proof
    beyond a reasonable doubt.
        Senator Specter. What is the congressional role on a
    declaration of war or the authorization of use of force? The
    President came to the Congress and formed a resolution for the
    use of force against al Qaeda. Of course he knew he would get
    it.
        In 1991, some recollections differ, but I have a pretty
    firm recollection that President George H.W. Bush did not want
    a resolution, but he got one. It was a tough debate. It was the
    most important debate that has happened in the 22 years I have
    been here.
        Dr. Wolfowitz. That's correct. He did want a resolution,
    and some debated that, and he made the decision to in fact ask
    for it. But you are right, it was an absolute critical debate,
    and I think it was very important.
        Senator Specter. Is not the country better served for the
    issue to come before the Congress if there is consideration by
    the President on the use of force against Iraq?
        Dr. Wolfowitz. The problem is, I think in your question,
    you're sort of assuming that he has made decisions that I don't
    know that he has made yet, and I am not at all in the position
    to start speculating.
        Senator Specter. There is a lot of attribution that he did
    make the decision.
        Dr. Wolfowitz. Well, and a lot of it is completely
    erroneous, so don't believe everything you read.
        Senator Specter. That is why I used that word attribute,
    there was no charge there.
        Dr. Wolfowitz. And I don't make decisions about that sort
    of thing.
        Senator Specter. Mr. Secretary, you have done an
    outstanding job for years and years. I know there is going to
    be some resolution and when it comes, you will get it. However,
    I want to state one member's opinion, that the Congress ought
    to be involved and the American people ought to be involved and
    there ought to be a guideline. One way to get there--I do not
    know of another good way to get there--is on the hearing law,
    and it seems to me imminent enough so that the Congress ought
    to consider the matter. As to how we resolve it, I do not know
    that I raise it, but I do want to talk to you about this latest
    proposal.
        Dr. Wolfowitz. I would add, Senator, that there are
    obviously things that are easily discussed in closed sessions
    that we wouldn't want to be sitting out here discussing while
    Saddam Hussein or Mr. Khomeini or other people are listening to
    us, so that is one aspect of the dialogue that I think you need
    to keep in mind as well. And we have had, I think I have
    participated by now in four or five of them, I think very good
    closed sessions with the full Senate.
        Senator Specter. I agree with you about the closed
    sessions. Although the sessions we have in S-407 are very
    helpful, they are not really like hearings where you have 10
    minutes to pursue a question and even that is not necessarily
    enough. However, I commend you for your consideration, because
    some of us feel very strongly that the Congress ought to get
    involved at an early date, and you cannot quite wait until the
    President has made a decision to use force, because then the
    Congress is out of it.

                             ARAB-ISRAELI RELATIONS

        Let me ask you about the proposals for Israel to go back to
    pre-1967 borders and for the Arab states--to say normalized is
    the wrong word because they have never been normal--to
    recognize Israel and Israel's right to exist. Concerns which
    trouble me are how do you do that and protect the Israelis who
    are in settlements outside the 1967 borders. When we talk about
    relations, how do we deal with Saudi Arabia, other foreign
    countries, or other Arab countries in order to have a real
    peace?
        Since Camp David, the United States has given $50 billion
    plus in aid to Egypt, and there is a very cool peace. When
    President Mubarak has been asked about it, he says that is the
    best he can do, but they do not have real trade, visitor
    exchanges, they do not really have a warm peace, so if the
    matter is to be pursued, what can be done on those two big
    issues for assurances to Israel so that they will be getting
    something in exchange for that kind of concession?
        Dr. Wolfowitz. I think ultimately the Israelis have to make
    the decision about what, if anything, to do. I know when
    President Sadat made his courageous visit to Israel in 1977, so
    in that time in fact we have made progress. If you think back
    to then, it was a time that Sadat used the word Israel when
    speaking to the Israeli press, and it was the first time in
    history that an Arab leader had referred to Israel by its
    proper name. And he changed, as I think you remember, I
    remember vividly, in just 24 hours, changed the whole
    psychological outlook of the Israeli public, Israeli people
    toward making peace with Egypt, and in fact led to a return to
    the 1967 borders and a peace which for all of its coolness, has
    actually been sustained to this day.
        But that coolness, unfortunately, is one of the things that
    contributes, I think, to Israeli reluctance now to take risks,
    and I think it certainly would make a big difference in moving
    toward a peace settlement that I think the Israelis desperately
    want, we certainly want to see it, I think the Palestinian
    people desperately need to create that atmosphere, where people
    are willing to take risks.
        Senator Specter. I quite agree with you, it is an Israeli
    decision, but the President purportedly told the Crown Prince,
    and I think the United States is going to be involved.
        Mr. Chairman, I want to close by posing two questions and
    asking for written responses, Mr. Secretary. I am pleased to
    see that there is a request for $1.9 billion for the V-22
    Osprey. I would appreciate a response in writing on how the
    Osprey is looking, what are the tests showing. There were lots
    of problems on falsification of records, but I think it's a
    great plane, let us see where that stands.
        Dr. Wolfowitz. We will get that for you, Senator.
        [The information follows:]

        The V-22 returned to flight test in May 2002, and as of 10
    June 2002 has flown four sorties for a total of 5.5 hours. The
    comprehensive inspections indicate that the current
    modifications made to the hydraulics system with respect to
    line clearance are effective and safe. These modifications will
    continue to be assessed as we complete more flight tests.
    Flight tests that have been conducted have exceeded all
    expectations in regard to aircraft performance and reliability.
    Test pilots report that the aircraft is performing well.
        The flight test program has been thoroughly restructured to
    assess the effectiveness of solutions, regarding reliability of
    hydraulic system components and flight control software,
    overall aircraft and reliability rates and operational
    effectiveness. By October of 2003 the flight test program will
    have gradually increased from one to seven Marine (MV) variants
    actively involved in flight testing. Flight testing of the
    Special Operations (CV) variant is scheduled to start in August
    2002.

        Senator Specter. The second question I would like to ask
    is, you have almost $400 million for the C-130 aircraft,
    including $176 million for the C-130J, but there is nothing for
    the EC-130J, which is used by the 193rd Special Operations
    Wing, which has done extraordinary service in Kosovo and
    elsewhere. The wing is desperately in need of two new planes to
    carry on their mission. If you can, please give me a response
    to that.
        Thank you very much for the good work you are doing, Mr.
    Secretary and Dr. Zakheim.
        [The information follows:]

                                EC-130 Aircraft
        I am very proud of the job that has been done by our special
    operations Commando Solo crews in Afghanistan. Commando Solos are
    unique, high demand/low density platforms and continue to be an asset
    for the department. Commando Solo is also wholly comprised of volunteer
    air national guardsmen.
        Thanks to Congressional support, the transition from the EC-130E to
    the EC-130J model was made possible by additional funds in fiscal years
    1997 through 2001, providing five of the planned eight C-130J aircraft
    and special operations-unique modifications. The Air Force Master Plan
    provides funding for the remaining three C-130J for conversion to EC-
    130J in fiscal years 2006 through 2008. The 193rd Special Operations
    Wing is the only unit that flies the EC-130 and will receive all eight
    EC-130J aircraft. In addition, the fiscal year 2003 budget request
    contains $79.4 million to mitigate special mission equipment
    obsolescence and degraded capability equipment issues on EC-130
    aircraft.

        Dr. Wolfowitz. Senator, forgive me for the reminiscence. I
    remember when you visited Indonesia when I was Ambassador, and
    you were there as I recall, as the junior Senator from Russell,
    Kansas, but you are now the senior Senator, am I right?
        Senator Specter. That is right, I was the junior Senator
    from Russell, Kansas, and Senator Dole is still the senior
    Senator from Russell, Kansas.
        Dr. Wolfowitz. I just thought it was remarkable, two
    Senators from different States and both born in the same small
    town in Kansas.
        Senator Specter. It is in the water, Mr. Secretary.
        Senator Inouye. Mr. Secretary, Dr. Zakheim, we thank you
    very much for appearing before the subcommittee today, and we
    will continue our discussions throughout this year.

                         ADDITIONAL COMMITTEE QUESTIONS

        Several members have requested that they be permitted to
    submit questions to you for your consideration, and I hope you
    will do so.
        [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. Paul Wolfowitz
                Questions Submitted by Senator Daniel K. Inouye
                ballistic missile defense-missile defense agency
        Question. Mr. Secretary, the Department recently established the
    Missile Defense Agency to take the place of the old Ballistic Missile
    Defense Office. We have heard many concerns about this new agency being
    shielded from appropriate oversight both in the Pentagon and by
    Congress. Can you give us your assurance that this is not the case?
        Answer. I can assure you that the changes to our missile defense
    structure, rather than shielding the MDA from appropriate oversight,
    will provide for more consistent and immediate oversight by the
    Department's most senior leaders.
        The Secretary of Defense redesignated the Ballistic Missile Defense
    Organization as the Missile Defense Agency (MDA) to underscore the
    national priority placed on missile defense and to provide MDA the
    authority and structure consistent with development of a single,
    integrated missile defense system. But while the Secretary provided the
    MDA Director with new authorities that differ from traditional
    Department processes, he has taken action to ensure that the Department
    has direct and focused executive oversight. The Senior Executive
    Council (SEC), which I chair, provides the primary oversight of the
    MDA. Among its other responsibilities, the SEC will provide policy,
    planning and programming guidance to the MDA; decide whether to stop,
    start, slow, or accelerate their efforts; and approve transition and
    fielding recommendations. In addition to the SEC, the Under Secretary
    of Defense for Acquisition, Technology, and Logistics [USD(AT&L)], has
    established a Missile Defense Support Group (MDSG) of Department
    experts that provides advice to him, the MDA Director and supports SEC
    decision-making. While not an oversight group, the MDSG does perform
    independent analyses. Both the MDA Director and the MDSG chairman
    report to the USD (AT&L), providing senior Department officials real-
    time involvement in MDA activities and helping reduce our decision-
    making cycle time.
        With regard to congressional oversight, the Department will
    continue to provide Congress the same documentation as we have in the
    past. Although there are changes in the information we will provide,
    the changes will be consistent with the changes to the missile defense
    structure. For example, we will submit a Selected Acquisition Report
    (SAR) for the BMD System RDT&E program that includes major schedule
    objectives, an estimate of RDT&E funding, and major prime contractor
    cost performance data. However, unit cost data for individual elements
    will only be included once the SEC decides to start procurement of that
    element. An example of this is the PAC-3 program where the Department
    submitted a separate SAR this year to support its transition to the
    Army. In addition to the BMD System SAR, we continue to provide
    Congress our annual detailed Budget Justification materials. These
    materials include detailed budget and schedule summaries for all major
    budget projects. Finally, the Department will continue to provide
    extensive briefings to both Members of Congress and their staffs.
        Question. Since the military services ultimately will be the ones
    who procure and implement BMD systems, what role will they play in
    shaping ballistic missile defense policy and programs? Do the services
    have a say in ballistic missile defense budget matters?
        Answer. The Management structure of the Ballistic Missile Defense
    System (BMDS) is designed to allow the MDA to focus on research,
    development, testing and demonstration of BMD capabilities, while
    providing for the transition of proven capabilities to system
    development and the transfer to the services for procurement,
    operations, and support. The Services have an important role throughout
    the BMDS life cycle, both in policy planning and budget development.
        BMD policy is guided by a Senior Executive Council (SEC)
    established by the Secretary of Defense (SecDef). The SEC includes the
    Service Secretaries, the Under Secretary of Defense (Acquisition,
    Technology and Logistics) and chaired by me. The SEC reviews and
    approves MDA and service planning and budgeting for the fielding of
    specific capabilities, through system development and transfer to the
    user Service for procurement. The Services, in concert with the Joint
    Staff, determine force structure requirements, and budget for
    procurement, operations and support within the service TOA.
        At the RDT&E project level, service liaison offices are being
    established within the MDA to ensure that force integration planning
    and requirements are included in the MDA-funded capability development
    and demonstration phase. The Director, MDA will also have individual
    Service Boards of Directors with each Service Acquisition Executive to
    provide regular consultation and to resolve issues that cannot be
    rapidly satisfied at a lower level. Potential system cost estimates
    must include full provisions for Service procurement, operations, and
    support. Service participation in development and planning will
    increase during the transition phase, in order to ensure a smooth
    transfer of management and system support responsibilities.
                             defense health program
        Question. In past years the Department has seldom been able to
    project its required expenditures for the Defense Health Program (DHP).
    The Department deserves praise for its efforts to provide realistic
    costs in the fiscal year 2003 budget request for the DHP. However, the
    expansion of TRICARE and rising health care costs will continue to
    generate stress on the military health system, which supports 8.3
    million military beneficiaries. Assuming there is no supplemental in
    fiscal year 2003, and shortfalls in military healthcare arise, how will
    the Department cover those shortfalls without jeopardizing the health
    care of patients?
        Answer. The Department recognizes that health care is an
    entitlement and will not jeopardize the health care of patients. If
    there is a shortfall in the budget for military health care and there
    is no supplemental, the Department will have to reprogram resources
    internally to cover the shortfall. However, we believe that the fiscal
    year 2003 Defense Health Program (DHP) is adequately funded based on
    recent healthcare cost experience and do not anticipate a shortfall.
    The pharmacy program is budgeted at 15 percent and Managed Care Support
    Contracts are budgeted at 12 percent over fiscal year 2002 levels to
    account for anticipated inflation and program growth. These are areas
    that have been budgeted at lower levels in the past and contained the
    greatest risk for our program. As a result of these increases, a
    significant portion of our fiscal risk has been mitigated. The
    establishment of the DOD Medicare Eligible Retiree Health Care Fund
    also serves to limit some of the financial risk in the DHP and the
    Department as a whole by providing a mandatory funding source
    (independent from DHP appropriations) to pay for Medicare-eligible
    care.
        Question. How will the Military Treatment Facilities accommodate
    the expansion of TRICARE benefits, particularly with the influx of
    older retirees who tend to have unique health care needs, tend to
    require more patient visits per year, and tend to require more
    prescription drugs?
        Answer. Overall, the Military Health System will handle the
    expansion of TRICARE to include 65-and-over beneficiaries by
    implementing the Medicare Eligible Military Retiree Health Care Fund,
    authorized by section 713 of the National Defense Authorization Act for
    Fiscal Year 2001. This will provide resources to fund the out-of-pocket
    costs of these beneficiaries after Medicare pays, as well as to pay for
    their care in Military Treatment Facilities.
        Our senior beneficiaries continue to be eligible for care in
    military facilities, but it is important to recognize that the capacity
    of military facilities did not increase by virtue of the enactment of
    TRICARE for Life. We recognize that many beneficiaries want to continue
    to receive care at military facilities, while also taking advantage of
    TRICARE for Life benefits. Therefore, last year we established a new
    program called ``TRICARE Plus,'' a primary care enrollment program that
    gives seniors (and other beneficiaries not in managed care plans) an
    opportunity to enroll and be assigned to a primary care doctor at the
    military facility. This opportunity is limited by local capacity. When
    these beneficiaries need care beyond the capabilities of the MTF, they
    use their civilian health care benefits, in most cases TRICARE for
    Life.
        Question. How does the fiscal year 2003 budget request address the
    problems of recruiting and retaining medical personnel, particularly in
    the reserves?
        Answer. The Defense Health Program portion of the budget designates
    an increase in funding of $8.2 million to the Armed Forces Health
    Professions' Scholarship Program (AFHPSP) to increase scholarships by
    approximately 282. The budget also includes an increase of $3.75
    million to expand use of the Health Professions' Loan Repayment Program
    (HPLRP).
                          tactical aircraft purchases
        Question. Secretary Wolfowitz, it is a well known fact that
    modernizing our tactical air forces is critical to sustaining our
    military superiority in the future. Yet, in many top-of-the-line DOD
    aircraft procurement programs, such as the F-18 fighter and C-17 cargo
    aircraft, the Department's fiscal year 2003 request cuts the number of
    aircraft to be bought compared to last year. What are the Department's
    reasons for not increasing tactical aircraft purchase rates at the same
    time that your budget is increasing by $48 billion?
        Answer. We believe that the Department's long-term tactical fighter
    modernization efforts are leading to a truly ``transformational''
    fighter force structure. We are moving as rapidly as feasible toward a
    highly survivable, capabilities-based fighter force that meets the
    future needs and provides the users with an asymmetric capability
    advantage. The Department is trying to balance the procurement of
    adequate numbers of F/A-18E/F fighter aircraft with simultaneous wise
    investment in the development and procurement of the next generation of
    more capable fighters. The Department's fiscal year 2003 budget request
    demonstrates this time-phased TACAIR modernization plan. With regard to
    existing fighter aircraft procurement, the budget request continues to
    support the full-rate production of the F/A-18E/F aircraft. Likewise,
    the Department continues to aggressively pursue an increasing ramp-up
    of F-22 aircraft towards full-rate production (e.g., the program is
    currently in low-rate production). It should be noted that combined F/
    A-18E/F and F-22 procurement has increased by 6 aircraft from fiscal
    year 2002 to fiscal year 2003. The Department's commitment to next
    generation fighter development is demonstrated by aggressive efforts to
    complete F-22 development, and our continued increase in the Joint
    Strike Fighter System Development and Demonstration program from
    approximately $1.5 billion in fiscal year 2002, to $3.5 billion in
    fiscal year 2003. The fiscal year 2003 request also funds the follow-on
    multi-year procurement of 60 additional C-17 cargo aircraft, which
    maintains a production delivery rate of 15 aircraft per year until
    fiscal year 2008. In terms of procurement spending, a comparison of
    fiscal year 2002 to fiscal year 2003 spending in the U.S. Navy and U.S.
    Air Force aircraft procurement reflects the Department is spending
    about $2 billion more on its recapitalization efforts. In addition to
    the aforementioned efforts, the Department has expanded selected
    transformation initiatives, such as the Unmanned Combat Air Vehicle,
    that may offer the potential as a force enabler to augment manned
    aircraft by enhancing our ability to hold certain military targets at
    risk with decreased risk to personnel. The Department considers that
    the President's Budget provides the appropriate balance between current
    acquisition programs and future development efforts to ensure needed
    future air warfare capabilities.
        Question. Mr. Secretary, isn't it true that, over the long term, if
    we don't purchase modern aircraft at a sufficient rate, we will have to
    cut our force structure? Do you anticipate that this will occur in the
    near future?
        Answer. When we construct our annual acquisition program plans, we
    try to account for the projected phase out of aging aircraft types in
    an effort to maintain adequate force structure into the future. Combat
    aircraft typically have a service life of 20-30 years, depending upon
    type. Therefore, combat aircraft forces need to be sustained with
    recapitalization programs that anticipate future needs well in advance.
    The Department reviews threat estimates and emerging operational needs
    in updating force structure and modernization plans as needed. In some
    cases, new operational concepts, weapons, and support systems
    eventually may permit some force structure reductions. In other cases,
    new operational needs may call for selected increases. The DOD's
    acquisition program plans factor all these considerations into our
    annual acquisition program request. The Department considers that the
    President's fiscal year 2003 Budget provides for procurement of the
    aircraft needed to achieve required modernization and maintain
    sufficient force structure for the foreseeable future.
        Question. We have just returned from a trip to the war region in
    Central Asia where we heard from our military commanders there that the
    one system they needed more of was the C-17 airlift aircraft. Have you
    heard these reports? What are your thoughts about which aircraft have
    been the most useful in our Afghanistan engagement?
        Answer. It is true that airlift, especially the C-17, is high on
    the CINC's priority list. However, to suggest that one aircraft in
    particular has been the most useful in carrying out Operation Enduring
    Freedom would not be appropriate. Comparisons between the contributions
    of the different platforms tend to obscure the fact that different
    aircraft, both sea- and land-based, provide unique and complementary
    capabilities. The success that we have enjoyed has been the result of
    the flexible mix of aircraft systems available to support military
    operations.
        During Operation Enduring Freedom, land-based United States and
    British tankers refueled carrier-based fighter-bombers, while B-1s and
    B-52s relied heavily on the Navy's electronic warfare EA-6B and strike
    aircraft to disable or destroy enemy air defenses helping to assure
    access to targets, and helping to assist in providing access to assure
    targets access. Much of the success of the Navy's tactical aircraft
    TACAIR success was the direct result of the support provided by Air
    Force KC-135 and United Kingdom Royal Air Force UK RAF Tanker aircraft.
    Pilots from all services benefited from targeting information provided
    by special mission aircraft such as Joint STARS, P-3s, and Predator and
    Global Hawk unmanned aerial vehicles. U.S. Special Operation Forces and
    anti-Taleban Afghan observers provided eyes on the ground. Army Apache
    and Marine Cobra helicopters provided close air support to our troops
    fighting on the ground, as recently witnessed in Operation Anaconda.
    Other aircraft, such as the AC-130 gun ships, conducted effective
    missions by night and struck terror in the hearts of terrorists while
    hunting them down in the dark of night. Transports such as C-17 and C-
    130 provided critical logistic support while Army and Marine
    helicopters furnished mobility and supplies to dispersed forces on the
    ground.
        All of these aircraft are playing a vital role in Operation
    Enduring Freedom.
                            tanker aircraft leasing
        Question. Mr. Secretary, last year the Congress enacted legislation
    allowing the Air Force to lease up to 100 Boeing 767's for replacing
    its aging air-refueling tanker fleet. It is my understanding that no
    contract agreement has been reached on this program. What is the status
    of this program? When do you anticipate an agreement to proceed on this
    program will be reached?
        Answer. Pursuant to the legislation, the Air Force intends to
    negotiate with Boeing for up to 100 Boeing 767 tankers. Currently, the
    Air Force is reviewing information provided by both Boeing and Airbus
    in an effort to gauge available technology and properly bound and
    define the business case required by the 2002 statute. An agreement to
    proceed on this program will not be reached until we have negotiated a
    good deal for the department and I have reported to the Congressional
    Defense Committees. I anticipate reporting my findings to Congress in
    accordance with the legislation this summer.
        Question. Secretary Wolfowitz, do you agree that the Air Force's
    tanker fleet is aging and in need of replacement?
        Answer. Yes, I agree the Air Force's tanker fleet is aging and in
    need of replacement. The vast majority of the tanker fleet is comprised
    of KC-135s, which were delivered between 1957 and 1965 and have an
    average fleet age of over 41 years. The operations and sustainment
    costs for this aging fleet are projected to rise in the years to come,
    while operational availability is expected to decline, making
    recapitalization crucial. While we recognize the need for replacement,
    any approach to modernizing the fleet, whether by leasing aircraft,
    buying new aircraft, or some other approach, will be reviewed by the
    Department prior to any decision being implemented to ensure the
    approach represents best value to the Government.
        Question. Moreover, do you agree that contingency operations, such
    as the one we have ongoing in Afghanistan, place a great burden on our
    tanker aircraft?
        Answer. Yes, I agree that contingency operations, such as Operation
    Enduring Freedom, place a great burden on our tanker aircraft.
        Question. Do you also agree that, in the absence of adequate
    procurement funds, that an operational lease program is the best way to
    modernize our tanker aircraft force?
        Answer. We are still considering the most efficient way to
    modernize our tanker aircraft force. An operational lease program is
    one option under consideration, but it is premature to state if leasing
    is the best approach.
                           ballistic missile defense
        Question. Mr. Secretary, the Department's Ballistic Missile Defense
    program has recently suffered some significant setbacks. First the Navy
    Area Theater missile defense program was terminated. And second, the
    Space Based Radar--Low program is being dramatically restructured. The
    Department, to date, has provided no clear indication of how it intends
    to address these issues. Can you recommend to the Committee how we
    should proceed to deal with these issues?
        Answer. A sea-based terminal ballistic missile defense capability
    is only one of the opportunities that exist for the development of a
    multi-tiered land-sea-air-space-based missile defense. Mr. Aldridge has
    tasked the Missile Defense Agency in close consultation with the Navy,
    to address sea-based terminal ballistic missile defense capability as
    part of the integrated Ballistic Missile Defense System and for the
    Navy to address its extended-range anti-air warfare needs in light of
    cancellation of the Navy Area Missile Defense Program.
        The prior plan for SBIRS Low was based on a stressing requirement
    set tailored for the difficult, sophisticated threat projected for the
    National Missile Defense Program. The schedule for the launch of the
    first generation satellite was considered moderate to high risk. MDA
    expects to present, by 15 May, a restructured program adopting an
    evolutionary approach to the performance of the sensor system element,
    and a more realistic schedule.
        Question. Secretary Wolfowitz, do the problems in these two missile
    defense systems undermine the concept of developing a ``layered''
    missile defense?
        Answer. No. The actions taken by the MDA, with the concurrence of
    the SEC, regarding SBIRS Low and Navy Area, demonstrate the flexibility
    inherent in managing the BMD program as an integrated system. The
    program envisions a layered defense with evolving capability
    objectives, based on the projected threat capabilities and the phased
    deployment of system elements in blocks of demonstrated missile defense
    technologies.
        The MDA, with participation by the services and CINCs, is working
    to develop a Ballistic Missile Defense System (BMDS) that layers
    defenses to intercept missile in all phases of their flight (i.e.,
    boost, midcourse, and terminal) against all ranges of threats. In doing
    so, the MDA plans and executes work such that efforts in a particular
    area of the BMDS may be truncated or stopped if the results are
    unsatisfactory or where the development effort should be shifted to
    another integrated BMDS element to permit its acceleration.
        The Navy Area program suffered technical and schedule challenges,
    that impacted cost. This put the Department in the position of being
    unable to certify to the Nunn-McCurdy stipulations and resulted in the
    program's cancellation. The MDA is addressing the Sea-Based Terminal
    element in the context of its role in fulfilling a portion of the
    layered BMDS. As part of the SBIRS Low restructure the element is
    converting to a spiral development, capability-based approach. The
    initial satellites will support the BMDS Test Bed. These first
    satellites may have less capability and therefore lower schedule and
    technical risk of achieving launch. Subsequent satellites will have
    greater capability as technology matures. This will allow for early
    contingency operations and increasing capability. Lessons learned from
    the initial satellite operations will feed back to later satellites,
    increasing their capability and lowering their schedule and technical
    risks. An adjustment to the funding profile across the Future Years
    Defense Plan (FYDP) may be required to provide the best capability for
    the country.
        Question. What are the arms control treaty implications of your
    ballistic missile defense budget request? Is the ABM Treaty violated if
    the Committee approves your program as requested?
        Answer. All DOD activities, including those in the Missile Defense
    Agency budget, will be conducted in compliance with U.S. arms control
    obligations. With respect to the ABM Treaty of 1972, on December 13,
    2001, the United States gave notice of its withdrawal from the Treaty,
    effective six months from that date (June 14th). The ABM Treaty will
    not be violated if the Committee approves the missile defense program
    as requested.
                                 space programs
        Question. Mr. Secretary, achieving dominance in space is a key to
    transforming our military. Unfortunately, some of our more critical
    space programs--the Space Based Radar satellites and the Advanced EHF
    satellite, to name a few--have experienced delays, cost overruns and
    other performance problems. Does the Department have a plan to manage
    these programs in order to avoid additional cost overruns and delays?
        Answer. Yes. For example, the Space Based Radar is a relative new
    start. We stood up a program office to manage this effort last May
    2001. Although there has been considerable discussion between the Air
    Force and the National Reconnaissance Office over how to optimally
    structure the program office, so far we are unaware of any other
    management, cost or schedule problems.
        In the case of the Advanced EHF, which provides protected satellite
    communications for a number of high priority command and control
    functions, we have taken several actions. In response to the Advanced
    EHF problems, caused by an attempt to accelerate the launch schedule as
    a result of the loss of a Milstar EHF satellite in 2000, we have
    increased the oversight of the execution of this program and are also
    evaluating alternatives for meeting the operational requirements after
    satellite three. Our objective is a transformational communications
    architecture that supports the expanding bandwidth requirements of the
    warfighter.
        Question. Do you view the problems in these programs to be more a
    function of management difficulties or technical difficulties?
        Answer. At this time I am not aware of any significant management
    or technical issues with Space Based Radar. Some have expressed concern
    about management challenges associated with effectively integrating Air
    Force and National Reconnaissance Office (NRO) expertise into a single
    program office, but these concerns are mitigated by the assignment of
    Mr. Peter Teets to serve as both the Undersecretary of the Air Force
    and the Director of NRO.
        As described in the previous question, the Department has taken
    several actions to address the Advanced EHF management issues.
    Additionally, the Department has identified a new approach to
    technically satisfy the expanding warfighter requirement for very high
    bandwidth capacity and the continuing need for secure national level
    command and control. Instead of proceeding beyond satellite three with
    the Advanced EHF, the Department is proposing two new start satellite
    communication programs in fiscal year 2003, as follows:
      --The Advance Wideband Satellite program, for which we are asking
            $200 million in fiscal year 2003, will utilize Laser
            communications to relay surveillance and reconnaissance
            information for processing and dissemination.
      --The National Strategic Satellite Communications System, for which
            we are asking for $10 million in fiscal year 2003 with a
            significant ramp up in the out-years, will provide highly
            protected communications for national level command and
            control.
                        defense emergency response fund
        Question. Secretary Wolfowitz, earlier this month you testified
    before another Senate Committee that the Defense Emergency Response
    Fund would run out of funds sometime in April. What is the current
    status of Defense Emergency Fund balances available to the Department,
    and is that still your forecast?
        Answer. I continue to estimate that Defense Emergency Response Fund
    balances will be fully exhausted in April. Through the end of February,
    $11.9 billion of the $15.2 billion appropriated to DERF has been
    committed, obligated or pending transfer to restore funds advanced from
    the baseline appropriations for the cost of the war on terrorism.
    However, the funds appropriated and apportioned in the last
    supplemental for increased OPTEMPO and the pay costs of Guard and
    Reserve personnel who have been mobilized are already depleted. The
    Military Departments have begun to advance funding from the fourth
    quarter operation and maintenance and military pay accounts to fund the
    high OPTEMPO and pay costs associated with continuing the war on
    terrorism. However, I anticipate that the supplemental funds that will
    soon be requested will be sufficient to make the operation and
    maintenance and military pay accounts whole again, and therefore there
    will be no impact of DOD readiness.
        Question. Secretary Wolfowitz, for how long does the Department
    envision maintaining the reserve mobilization at the current levels?
        Answer. The global war on terrorism will be variable and dynamic
    and, as the President has said, will more than likely go on for years.
    Thus, there are many unknown factors, including how long it will be
    necessary to maintain the current level of reserve mobilization. As the
    global war on terrorism evolves, the Department will continue to
    evaluate the use of Reserve Component personnel and ensure that they
    are being employed effectively for essential requirements. Judicious
    use of resources is a critical element of executing the war on
    terrorism over the long term and it is important that we not exhaust
    the available pool of Reservists and Guardsmen in the early phases of
    this operation.
        Question. Are the respective armed services using current year
    operation and maintenance funding to provide for increased force
    protection costs, or are these being covered by Emergency Response Fund
    dollars?
        Answer. The DOD's baseline budget in fiscal year 2002 for force
    protection was $4.5 billion for the protection of DOD personnel against
    acts of terrorism. After threat conditions markedly changed, the
    Department sought additional funds for force protection last autumn. An
    additional $1.4 billion was provided. I intend that all additional
    force protection requirements in fiscal year 2002 be funding via
    supplemental funding. To do otherwise would threaten the ability to
    sustain readiness funded in the baseline operation and maintenance
    accounts.
                                     ______

                    Questions Submitted by Senator Herb Kohl
                          strategy on future conflicts
        Question. Recent articles and statements by Administration
    officials have indicated that we are not ready to engage in a conflict
    with Iraq at this time. I am not advocating such a move, but I am
    surprised that the United States is not prepared. Our previous national
    strategy was to be ready to fight and win two major regional conflicts,
    our current strategy is to fight and win against a major regional
    adversary, while defending against another regional adversary in
    another theater. If that is our strategy, why are we unprepared to deal
    with Iraq? Why do we not have enough precision guided munitions to
    fight a relatively small conflict and then take on a regional
    adversary? Is this a failure of the Department of Defense to accurately
    plan what we need to fight these future conflicts?
        Answer. The current strategy requires the United States to fight
    and win two overlapping wars, and we are capable of prosecuting that
    strategy today. Our armed forces have many capabilities that can be
    brought to bear against an adversary. The skillful orchestration of
    these various capabilities in the right mix appropriate to the threat
    is the objective of advance planning. In light of our increasing usage
    of precision munitions in recent combat we are adapting our production
    rates and planning accordingly.
                      elimination of cold war era programs
        Question. I am concerned that since the Department of Defense
    funding is increasing by such large amounts there is no political will
    to eliminate Cold War era programs that are no longer relevant to
    future conflicts. The Secretary has talked about making tough choices
    to move the military toward transformation, but this budget doesn't
    seem to make any choices. Instead of transformation over tradition we
    are getting both the old systems and the new. Can you provide some
    examples where the Department of Defense has decided to eliminate
    weapon systems or programs, outside of missile defense, in favor of
    newer approaches? Where has the Department of Defense decided to skip a
    generation of technology as the President proposed?
        Answer. There are several examples where the Department of Defense
    is eliminating weapon systems and programs. Recently the Army
    terminated 18 of its programs that are not planned for the Objective
    Force. Eleven (11) of those programs will be terminated in fiscal year
    2003, while the remaining seven (7) will be terminated between fiscal
    year 2004 and fiscal year 2007. The funding associated with these 18
    systems has been realigned to support higher Army priorities. The Army
    will also eliminate several different rotor aircraft in its inventory
    upon fielding the Comanche helicopter. When the Comanche is fully
    fielded, the Army will have only three types of helicopters (Comanche,
    Black Hawk, and Chinook). By eliminating 1,000 Vietnam-era aircraft
    from the force, AH-1 Cobras this year and UH-1 Hueys by fiscal year
    2004, the Army will free the resources needed to support other
    transformation goals. The Navy cancelled the DD 21 Land Attack
    Destroyer program and will satisfy those requirements through the DD(X)
    program which will focus efforts on maturing transformational
    technologies. This move will also increase risk reduction efforts while
    establishing a family of ships that will include the future cruiser
    (CG(X)), the future destroyer (DD(X)), and a littoral combat ship
    (LCS). The DD(X) program is also an example of the Department's efforts
    to skip a current generation of weapons in favor a greater future
    capability.
                        requirements generation process
        Question. The Goldwater-Nichols Act helped establish a process to
    ensure the requirements of the warfighter initiate and guide the
    development of military weapons programs. Congress felt that
    identification of warfighter requirements should be a documented
    process in any weapons development program. The Department of Defense
    has exempted the missile defense program from the Requirements
    Generation Process, thereby taking the warfighter and documented
    warfighter requirements out of the development process. Outside of
    allowing the warfighter to provide unofficial and verbal input to the
    development process, what efforts will the Department take to ensure
    that warfighters are allowed to document their requirements and
    establish performance parameters which the acquisition community must
    meet to ensure the missile defense programs have adequate military
    utility?
        Answer. Under the new management approach for Ballistic Missile
    Defense (BMD), warfighter involvement in establishing the needs of the
    fighting forces will be robust and ongoing. In fact, under this new
    approach, there will be even greater opportunity for the warfighter to
    influence the development of BMD and its earliest deployment to the
    fighting forces than ever before.
        Developing BMD as a single program with a capability-based approach
    will produce a better outcome and provide greater Service involvement.
    Under the new approach, the warfighter will provide the Missile Defense
    Agency (MDA) with the desired operational features and approaches to
    system development. The Joint Theater and Missile Defense Organization
    (JTAMDO) will serve as the voice for the Commanders in Chief (CINCs)
    and the Military Services to lead the collaborative effort with the
    CINCs and Services on operational matters. JTAMDO will also develop the
    operational concepts, develop the operational architecture, and assess
    military utility, during BMD System (BMDS) development and transition
    to production. Further, MDA will work closely with JTAMDO in developing
    the joint command and control architecture for the BMDS and integrating
    it into the applicable joint command and control architectures for air
    and missile defense.
        Under the new approach, the Chairman of the Joint Chiefs of Staff
    and the Services will be included in deliberative and advisory bodies
    that will influence BMD development on an ongoing basis. The Chairman
    of the Joint Chiefs of Staff and the Services are included in the
    Missile Defense Support Group (MDSG) and the Working Group which
    supports the MDSG principals. Under the former process, meetings of
    principals from the Services with senior officials of MDA were
    infrequent, normally occurring on the occasion of a milestone decision
    or other significant program event. By contrast, the MDSG meets
    frequently, providing a unique opportunity for the warfighter to voice
    concerns on BMD development.
        Additionally, MDA has created a separate forum for intensive
    engagement with the Services. A Joint Board of Directors between MDA
    and each of the Military Services has been created. Meetings of the
    Board of Directors will be conducted frequently to ensure that BMD
    development effort is conducted with full involvement of the Services.
        Finally, the Services will be involved in the decision to
    transition an individual element of the BMDS to deployment as a
    military capability for the fighting forces. A recommendation from the
    Director, MDA, that the BMDS or a BMDS element should be considered for
    transition to production would be approved by the Senior Executive
    Council (SEC), which includes the Service Secretaries. Upon SEC
    approval, USD (AT&L) will establish necessary product teams to support
    a Milestone C decision after receiving advice from the Defense
    Acquisition Board (DAB). Following this decision, a capability-based
    ORD will be produced and approved by the Joint Requirements Oversight
    Council (JROC). Legacy processes of DOD acquisition regulations, with
    full Service involvement, would be fully implemented at this point.
                           federal acquisition system
        Question. The role of the federal acquisition system is to guide
    programs through stages of development with reporting requirements
    which allow senior leaders to evaluate system capability, performance,
    cost and schedule. Now that the Department has exempted the missile
    defense programs from the federal acquisition system, how will the
    Department ensure adequate review is provided in the development of
    missile defense programs? What reporting requirements and measures of
    effectiveness will missile defense programs have to provide during
    their development to allow for review of their progress? How will these
    reporting requirements determine if the programs are running at high
    cost or behind schedule? How will the reporting requirements judge the
    trade off of additional development risk for additional performance or
    additional cost? What reporting requirements will be used to determine
    if a missile defense program should be accelerated, decelerated,
    modified, or terminated?
        Answer. On January 2nd of this year, the Secretary of Defense
    redesignated the Ballistic Missile Defense Organization as the Missile
    Defense Agency (MDA) and changed the responsibilities and authorities
    of the Director. The Secretary gave the Agency new priorities and
    direction, and expanded responsibilities and authority to execute the
    missile defense program. The Secretary has set up a formal oversight
    process for the missile defense program. The Director, MDA, will report
    directly to the Under Secretary of Defense (Acquisition, Technology and
    Logistics). The Senior Executive Council, or SEC, chaired by myself,
    provides executive oversight of the program. Permanent members are the
    Service Secretaries and the Under Secretary (AT&L). Other Department
    officials will be included as needed, depending on the subject at hand.
        The SEC conducts periodic formal and informal reviews of the
    program. The SEC has met six times since last summer to review the
    Ballistic Missile Defense program. Reviews include such topics as
    program plans, management approaches, test performance, system
    architecture, technological alternatives, basing options, and threat.
    The SEC provides guidance regarding policy, planning, and programming;
    makes the decisions as to whether to stop, start, slow, or accelerate
    efforts; and approves recommendations on fielding elements of the
    system. This group demands high standards of accountability.
        Additionally, the Department has created a new, standing Missile
    Defense Support Group (MDSG), the Chairman of which reports directly to
    the Under Secretary (AT&L). The MDSG provides advice both to the Under
    Secretary and Director, MDA, as well as input to the SEC. It performs
    independent assessments, and is supported, in turn, by a working group.
    The members of the MDSG are all senior department officials, and
    experienced in missile defense. These changes provide more direct and
    focused executive oversight and reporting than that provided under the
    former approach. It will enable the Department to respond more rapidly
    to emerging events. They provide for more internal accountability at a
    more rapid pace than we have had in the past.
                                     ______

                  Questions Submitted by Senator Thad Cochran
                                  shipbuilding
        Question. Secretary Wolfowitz, as you know, I have been concerned
    about the low rate of shipbuilding. I am not only troubled with the
    size of the Fleet but also about the industrial base. I am pleased to
    see you have recognized that the shipbuilding rate needs to be higher
    than the current rate of five ships, however, your current projections
    show construction of only five to seven hulls over the next four years
    while accelerating ship inactivation's. How do you plan to ensure the
    Fleet is sufficiently sized to fully support a forward-deployed,
    combat-credible posture while maintaining an operational tempo that
    supports Quality of Life and retention efforts?
        Answer. The request for five ships in fiscal year 2003 and 34 ships
    across the FYDP provides the best balance between the Department's
    competing requirements and available resources. While the Department
    recognizes that the build rate of five ships in fiscal year 2003 and
    approximately 7 ships per year across the FYDP is insufficient to
    sustain the current fleet size over the long term, we are making
    substantial investments now in programs such as CVN(X) and DD(X), as
    well as SSBN conversions to cruise missile carrying submarines (SSGN)
    that represent the bridge to the transformed Naval Forces of the
    future.
        Question. Secretary Wolfowitz, I understand that Navy priorities
    for accelerating procurement of additional ships, if funds were
    available, would first be a DDG-51 and then an LPD-17. If additional
    funds were available, do you support these priorities?
        Answer. The Department is currently reviewing ship requirements for
    the future fleet. The Navy is participating in the review, and if
    additional funds were available for accelerating ship procurement, the
    Department would review the latest information from the ongoing review
    and determine the shipbuilding priorities at that time. Both the DDG-51
    and LPD-17 programs could be accelerated if additional funding were
    available. However, the current budget request meets the current
    requirements for the Navy.
                     marine expeditionary brigade vehicles
        Question. Secretary Wolfowitz, I understand that the current
    amphibious lift capacity for Marine Expeditionary Brigade vehicles will
    support only 2.1 brigades. How do you plan to meet the current and
    future brigade lift requirements given that the average age of almost
    half of your amphibious Fleet is over 30 years old?
        Answer. Both the Secretary of the Navy and the Commandant of the
    Marine Corps have recognized the Marine Corps' fiscally unconstrained
    requirement to simultaneously lift the assault echelons of three Marine
    Expeditionary Brigades (MEB AE). There are no current plans to satisfy
    this unconstrained requirement.
        Current ship building plans require keeping amphibious ships well
    past their Expected Service Lives (ESLs). Many vessels with planned
    replacement will have to serve approximately a decade beyond their
    intended life expectancy. Once the final LPD-17 is delivered, around
    2015, amphibious lift capacity will achieve 83 percent of the 3.0 MEB
    AE lift required for one Major Theater War. The LPD-17 class ship will
    provide greater amphibious lift capabilities as they replace four
    classes of older ships, including the aging LPD-4 AUSTIN class ships
    that are now in service. For comparison purposes, the vehicle capacity
    of an LPD-4 class ship is 11,800 square feet and for the LPD-17 class
    ship it is 24,600 square feet.
        The second element of the future lift capability involves the
    replacement of the LHA class of amphibious assault ships. The LHA
    Replacement Analysis of Alternatives (AOA) is expected to be released
    in June 2002.
        To help correct the near-term vehicle lift shortfall, the Navy
    created the Amphibious Lift Enhancement Plan (ALEP) which has 5
    decommissioned LKAs and 4 decommissioned LSTs in Mobilization Category
    B. As part of a major wartime mobilization, these vessels would take
    approximately 180 days to return to service. While their capabilities
    are not compatible with today's operational concepts, they could
    provide the additional vehicle square.
        One note regarding the recent use of high speed ferries as
    transportation assets.: while useful in an intratheater logistics role,
    they are not acceptable substitutes for lifting elements of an Assault
    Echelon into a combat environment lack both the survivability and
    sustainment to steam with an Amphibious Task Force and deliver an
    assault echelon in a hostile environment.
                                 dd(x) program
        Question. Secretary Wolfowitz, could you provide an update on how
    the DD(X) program is progressing? Do you believe that down select for
    design will remain on schedule for April of this year?
        Answer. The Navy cancelled the DD-21 Phase III Request for Proposal
    (RFP) on 30 November 2001 and issued a new Phase III solicitation based
    on the DD(X) strategy. The award of that Phase III contract will
    represent the down select to one team led by a shipbuilder which will
    become the design agent and technology developer for DD(X). Both of the
    industry teams competing to design DD(X)--the Blue Team, led by Bath
    Iron Works with Lockheed Martin Corporation as the systems integrator,
    and the Gold Team, led by Ingalls Shipbuilding Inc. with Raytheon
    Systems Co. as the systems integrator--responded with proposals in
    February 2002.
        The Navy is scheduled to award a best value contract in April 2002.
                   reductions in funding for training rockets
        Question. Secretary Wolfowitz, I am concerned with the Department's
    decision to slash funding for the Hydra-70 rocket system in fiscal year
    2003 by nearly 85 percent, at a time when our nation's front line
    forces are deployed with these systems in Afghanistan and other
    countries. This seems to be inconsistent with the direction provided by
    this committee last year and this could put combat readiness at risk.
        How does the Department plan to maintain the combat proficiency of
    aviators with such dramatic reductions in the procurement of training
    rockets?
        Answer. The Army has made a tough choice to move the military
    toward transformation. This is a clear example of where the Department
    of Defense has decided to move forward and accept risk by reducing the
    amount of Hydra-70 rockets procured and move toward rocket technology
    that will give the war fighter a low cost precision engagement
    capability far greater than he possesses today. To mitigate the near
    term readiness risk, Army anticipates no change to current training
    strategies for the next two years. As part of its continuing and
    ongoing review process, the Army staff is reassessing rocket
    strategies.
                     recapitalization of aging war reserve
        Question. Secretary Wolfowitz, how will the Department address the
    recapitalization of the 2.75-inch war reserve that is aging and less
    capable than the current production configuration, and incapable of
    being deployed on Naval aircraft carriers because of safety issues?
        Answer. The Department is recapitalizing a limited number of
    unserviceable 2.75-inch war reserve rockets, by refurbishment. The
    upgrades result in these items being reclassified as Combat Useable
    Assets and address safety issues. As a parallel effort, the Department
    is also engaged in modernizing this weapon to address the need for
    increased precision capability and to satisfy insensitive munitions
    requirements. Items remaining in war reserve will continue to be
    screened for component re-use and for use in training.
                             future cost increases
        Question. Secretary Wolfowitz, how will the Department mitigate the
    future cost increases to the Air Force, Navy and Marine Corps users
    that rely on the Army as the Single Manager for procurement of this
    vital weapon system?
        Answer. The Department is conducting a study of the 2.75-inch
    rocket industrial base which will determine cost drivers that influence
    rocket procurement prices. The project manager will work closely with
    industry to develop and implement solutions to minimize cost increases
    to the other services.
                                   sbirs-low
        Question. Secretary Wolfowitz, the following statements have been
    issued by administration officials in recent months:
        The Statement of Administration Policy on the fiscal year 2002
    Defense Appropriations Bill, issued on November 28th of last year,
    declared that ``The President is committed to the development and
    deployment of effective missile defenses to protect the United States,
    our forces, and our friends and allies as soon as possible.''
        In a letter to the Chairman of the Armed Services Committee dated
    November 14, 2001, Secretary Rumsfeld stated that a key element of the
    Administration's national security strategy was ``the intention to
    develop and deploy limited defenses against ballistic missiles as soon
    as technologically possible.''
        In a letter to Senator Kyl dated November 27, 2001, the President's
    National Security Adviser stated that SBIRS-Low ``is a critical part of
    this Administration's missile defense program.''
        Do these statements still reflect the views of the Administration
    and the Defense Department?
        If not, please explain what has changed.
        Answer. SBIRS Low is a critical component of the Ballistic Missile
    Defense System (BMDS).
        Question. If all those statements still hold, the Defense
    Department's actions with respect to SBIRS-Low are puzzling. According
    to information provided by Defense Department officials, both program
    contractors are currently on schedule and within budget. Yet DOD has
    slipped the program two years in anticipation of delays that might
    occur in the future, and removed substantial funding over the Future
    Years Defense Plan. How does delaying a critical element of the missile
    defense program because of possible future problems promote the
    deployment of effective missile defenses as soon as technologically
    possible?
        Answer. The prior plan for SBIRS Low was based on a stressing
    requirement set tailored for difficult, sophisticated threats. The
    probability of achieving the first launch of the complex satellite on
    schedule was considered low. The program was restructured to create a
    more realistic schedule. Part of the SBIRS restructure is converting
    the program to a spiral development, capability-based approach. The
    initial satellites will support the BMDS Test Bed. These first
    satellites may have less capability and therefore lower schedule and
    technical risk of achieving launch. Subsequent satellites will have
    greater capability as technology matures. This will allow early
    contingency operations and increasing capability thereafter. Lessons
    learned from the initial satellite operations will feed back to later
    satellites, increasing their capability and lowering their schedule and
    technical risks.
        Question. Secretary Wolfowitz, there is always some risk a program
    won't complete its work in the time desired--schedule risk--and there's
    some risk that a program won't achieve all its technical goals--
    technical risk. Can you please explain how reducing funding for SBIRS-
    Low by approximately $1.5 billion over the Future Years Defense Plan
    reduces either of those risks? Doesn't a funding reduction increase
    those risks?
        Answer. The prior plan for SBIRS Low was based on a stressing
    requirement set tailored for difficult, sophisticated threats. The
    probability of achieving the first launch of the complex satellite on
    schedule was considered low. The program is being restructured to
    create a more realistic schedule. Part of the SBIRS restructure is
    converting the program to a spiral development, capability-based
    approach. The initial satellites will support the BMDS Test Bed. These
    first satellites may have less capability and therefore lower schedule
    and technical risk of achieving launch. Subsequent satellites will have
    greater capability as and technology matures. This will allow early
    contingency operations and increasing capability thereafter. Lessons
    will be learned from the initial satellite operations that will feed
    back to later satellites, increasing their capability and lowering
    their schedule and technical risks.
        Question. Secretary Wolfowitz, there has been some suggestion that
    SBIRS-Low would be unnecessary if a series of large, land-based X-band
    radars could be placed at various locations around the world. Doesn't
    such an approach have serious drawbacks in terms of the political
    difficulties of securing and maintaining basing rights--especially in
    the face of possible regime changes--as well as significant challenges
    in protecting those bases from attack?
        Answer. That is correct. A space-based sensor constellation
    provides the opportunity to view missiles launched anywhere on the
    globe, aimed at any point, reducing the dependency on foreign basing,
    reducing the vulnerability to direct attack and, mitigating the
    geographic viewing limitations of surface-based radars. That is
    precisely why the SBIRS Low capability is key to an effective, reliable
    sensor suite. In addition, a balanced infrared and radar sensor suite
    ensures that no single countermeasure is able to negate our sensor
    capability. Complementary sensors based on different methodologies
    (i.e., radar and infrared) create a capability that is highly effective
    against a wide variety of countermeasures.
                                     ______

                  Questions Submitted by Senator Arlen Specter
                       military commission procedures act
        Question. I have introduced along with Senator Durbin the Military
    Commission Procedures Act, S. 1937. Have you had the chance to review
    the bill and do you have any comments? Can you comment on the status of
    the procedures for the military commissions being prepared by DOD and
    do you know of any plans to conduct such commissions in the foreseeable
    future?
        Answer. Before Secretary Rumsfeld publicly announced the military
    commission procedures on March 21, 2002, DOD gave careful consideration
    to all inputs provided by Congress, including S. 1937, S. 1941 (a
    separate draft bill sponsored by Senator Leahy), and the views of other
    Senators and Congressmen. The result of this critical deliberation is a
    set of procedures that we believe is fair, balanced, and just.
        A comparison of DOD's military commission procedures with S. 1937
    reveals more commonalities than differences. Both provide that the
    accused is presumed innocent, that he is not required to testify, that
    he may obtain witnesses and documents to use in his own defense, that
    the standard of guilt is proof ``beyond a reasonable doubt,'' and that
    a unanimous vote is required to impose the death penalty. Although
    there are some differences concerning composition, certain trial
    procedures, handling of classified information, and appeals, DOD's
    procedures taken as a whole are entirely appropriate to the unique
    circumstances of the war against terrorism and comply with the
    President's directive to provide each accused with a full and fair''
    trial. While we appreciate the thought and effort that went into
    drafting the legislation, we do not believe any additional legislation
    in this area is necessary or appropriate.
        There is no timeline in place for trials. The President has not
    designated anyone for trial before a military commission, and law
    enforcement intelligence, and military personnel continue to conduct
    their respective investigations.
                               major theater wars
        Question. Secretary Wolfowitz, prior to September 11th, persistent
    funding shortfalls, compounded with expanding requirements and record
    high operational tempo, had resulted in significant risk in executing
    the national military strategy of fighting two nearly simultaneous
    major theater wars. Now our country faces just that scenario should we
    choose to escalate our activities in Iraq? Does the increase in the
    proposed fiscal year 2003 budget eliminate this risk?
        Answer. The fiscal year 2003 budget contributes significantly to
    improving the health of the Department and its ability to execute the
    Nation's defense strategy. The fiscal year 2003 budget balances funding
    that contributes to near-term readiness--and our ability to fight two
    overlapping wars--with funding that begins transforming our Armed
    Forces. I am confident of our ability to execute the strategy, and this
    budget will only improve our posture in that regard.
                                     ______

                Questions Submitted by Senator Pete V. Domenici
                                directed energy
        Question. As you know, our National Laboratories, particularly
    those in New Mexico, as well as our military research labs, have made
    tremendous advances in directed energy and in particular, in laser
    development. Both Kirtland Air Force Base and White Sands Missile Range
    in my home state have been at the forefront of many of these
    breakthroughs and continue to develop these technologies for military
    applications that can drastically reduce collateral damage on the
    battlefield.
        Does the Administration envision directed energy technologies as
    ranking prominently in the transformation capabilities of our military
    forces, and do our military labs and testing grounds currently have the
    resources to adequately accommodate such an expanded mission?
        Answer. Directed Energy provides the Department of Defense with
    unique opportunities to augment and improve its operational
    capabilities and tactics as we work to transform our military forces
    and continue to deal with the complex national security environment
    currently unfolding. The Services all have implemented energy programs
    and recognize that the potential for speed-of-light long-standoff-range
    engagements, unique damage mechanisms, greatly enhanced multi-target
    engagement, and deep magazines are desirable attributes for a 21st-
    century arsenal. Directed energy technologies have matured to the point
    where it is feasible, over the next two decades, to include systems on
    aircraft, space vehicles, ships, and ground vehicles. The remaining
    science and technology challenges include work on power generation and
    storage, power conditioning and component development, thermal
    management, weapons effects, high power microwave pulse forming
    technology, a verity of laser sources and beam control, and atmospheric
    understanding and compensation. There are continuing engineering
    challenges to improve reliability and reduce the cost and size of
    directed energy systems.
        Current directed energy programs supported by the military include
    the airborne laser acquisition program, the airborne tactical laser and
    area denial system Advanced Concept Technology Demonstrations,
    technology oriented space based and ground based laser thrusts, and the
    new starts in the areas of mobile tactical high energy laser and free
    electron laser. Although the engineering and technology challenges for
    directed energy systems are formidable, we consider these programs and
    related enabling technology programs to be adequately funded to meet
    validated DOD mission requirements. We, of course, are continuing to
    review the potential of directed energy systems and to maintain the
    necessary flexibility to exploit technology opportunities that may
    arise from current research.
                            critical infrastructure
        Question. One of the issues I have worked very hard on is that of
    addressing the non-traditional asymmetrical threats, such as chemical,
    biological, nuclear, and even cyber attacks. We now know these are a
    very real challenge, not only to our assets around the world, but also
    to our own critical infrastructures here in the United States. Our
    national laboratories in New Mexico have significant experience and
    know-how in the field of computer modeling that can be applied to risk
    assessments of our critical infrastructures.
        Please describe how RDT&E funding is being directed in this budget
    to meet these challenges, and how the notion of transformation plays
    into this effort.
        Answer. The Defense Threat Reduction Agency's (DTRA) RDT&E funding
    is being directed to develop the National Infrastructure Simulation and
    Analysis Center (NISAC). Further, DTRA RDT&E funding continues to
    support the Mission Degradation Analysis (MIDAS) program. NISAC is an
    effort to develop architecture to simulate and analyze the nation's
    civilian infrastructures. NISAC will leverage Sandia National
    Laboratory and Los Alamos National Laboratory modeling and simulation
    expertise. The NISAC will provide an enabling capability to help
    national, state and local leaders deal with protecting the nation's
    critical infrastructures. In fiscal year 2002, the NISAC effort was
    funded at $20 million. The MIDAS program, started in December 2000, is
    a research and development effort to develop methodologies and
    automated tools to enable an integrated assessment of the degradation
    of critical infrastructures upon selected DOD missions and functions.
    The MIDAS effort was funded at $2.7 million for fiscal year 2002. While
    NISAC is a national-level initiative, MIDAS focuses on the DOD. MIDAS
    is also developing methodologies to enable the assessment of future
    infrastructures to integrate protection as these future infrastructures
    are created. Both efforts will provide capabilities for risk
    assessments: NISAC at the national level and MIDAS at the DOD level.
    These two separate, but related, efforts will help the nation to
    understand, analyze and protect critical infrastructures to ensure
    continuity of government and DOD mission accomplishment. With this
    insight into the infrastructure, we will be better positioned to shape
    changes to our infrastructure to support increased homeland security in
    the face of our war on terrorism.
        Question. In addition, what role do you envision for both Los
    Alamos and Sandia National laboratories as we continue in the war
    against terrorism?
        Answer. Sandia National Laboratory (SNL) and Los Alamos National
    Laboratory (LANL) will play a vital role in the war against terrorism
    via the National Infrastructure Simulation and Analysis Center. SNL and
    LANL have expertise in modeling and simulation which will couple with
    their high performance computing capability. SNL and LANL have already
    completed some of the building blocks of creating models for specific
    pieces of our nation's extremely complex infrastructure. The existing
    capabilities and initial infrastructure modeling efforts will build
    upon each other to enable a growing understanding of the operation of
    the nation's infrastructure and the interdependencies among the
    infrastructures. SNL's and LANL's participation will facilitate the
    proper protection of the nation's infrastructure.
                                     milcon
        Question. It is my understanding that DOD has made the decision to
    postpone significant investment in military construction to align with
    the delay in BRAC. However, there are a number of bases throughout the
    country, including four in my state, that are so unique in their
    missions, and so vital to our national security, that in order to
    maintain their maximum level of operation, they will require capital
    improvements before 2005. Many of these bases already have significant
    milcon backlogs and further delaying milcon investments will exacerbate
    this problem.
        This is also true for military housing on these bases. For example,
    the budget does not provide for military housing projects at Kirtland
    Air Force Base or White Sands Missile range. Ultimately, a lack of
    adequate housing reflects directly on the retention and morale of our
    military servicemen and women.
        Does the increase in out-year milcon funding take this growing
    backlog problem into full account, and can aging workplace facilities
    at bases like Kirtland Air Force Base and White Sands Missile Range be
    sustained in their current condition without significantly affecting
    operations?
        Answer. Yes, our military construction and Sustainment, Restoration
    and Modernization budget requests take the backlog problem into full
    account. The Defense Facilities Strategic Plan, published in August
    2001, defines our facilities vision for the future--healthy; productive
    installations and facilities that are available when and where needed
    with capabilities to support current and future military requirements.
    The first step in this is to sustain what we own. Our fiscal year 2003
    budget request of $5.6 billion increases sustainment funding to 93
    percent of the requirement, from 89 percent in last year's budget. Full
    funding of sustainment throughout the program is an appropriate
    investment that will avoid significant costs in the future by
    stabilizing facility conditions and preventing further erosion.
        Also, the Department is requesting $3.3 billion for
    recapitilization (including both operations and maintenance and
    military construction funds) to restore and modernize our facilities.
    Recapitilization is important not only to restore the readiness of poor
    facilities, but also to maintain the relevance of all facilities to
    future missions of the Department. A consistent modernization program
    tied to expected service life best accomplishes this. The Department
    stands by its goal of achieving a recapitilization rate of 67 years. We
    currently plan to achieve this goal by fiscal year 2007.
                                     ______

              Questions Submitted by Senator Kay Bailey Hutchison
                               u.s.s. ``inchon''
        Question. Secretary Wolfowitz, in December of last year, the
    Pentagon publicly announced that it would retire the Navy's only mine
    warfare command ship, the U.S.S. Inchon, prior to the end of the fiscal
    year. A letter was sent to my office, a month later, informing me of
    the decision. Just last week, the Navy came by my office to brief me on
    the way ahead.
        The plan:
      --The Inchon is retired, and with it goes 25 percent of the uniformed
            billets at Naval Station Ingleside.
      --The Navy will deploy, on a rotational basis, additional mine
            warfare equipment on big-decked amphibious assault ships.
      --$53 million has been identified in the FYDP to study replacements.
      --New platforms may be procured by fiscal year 2007.
        This plan raises more questions than it answers.
        What impact will the retirement of the Inchon have on the Navy's
    mine-warfare capabilities?
        Answer. The near-term impact on dedicated Mine Countermeasures
    (MCM) capabilities has been minimal. Since fire damage in October 2001,
    Inchon has been precluded from operational tasking. Available large-
    deck amphibious ships (LHA/LHD class) have been on call to provide the
    MCS deck of opportunity. The optimum long-term solution is the subject
    of an ongoing Navy study.
        Question. How suitable are large amphibious ships as substitutes?
        Answer. Large amphibious ships are possible substitutes for the
    Inchon because they can provide support for all three legs of the MCM
    triad, particularly MH-53E mine countermeasures aircraft. The large
    deck amphibious ships are capable of providing full support for this
    type of aircraft and related MCM equipment. In addition, large-deck
    amphibious ships also have a well deck--which Inchon did not--which can
    support, among other things, the Marine Mammal System.
        Question. What impact will this dual-hatting have on the Marine
    Corps ability to execute its missions?
        Answer. The Navy does not plan to deploy, on a rotational basis,
    additional mine warfare equipment on big-decked amphibious assault
    ships. The Navy's interim plan for a Mine Countermeasures Command and
    Control Ship (MCS) is to employ a host of shared usage, on-demand,
    multi-purpose ship platforms of opportunity, most preferably a big deck
    amphibious (L-class) ship with a ``Plug and Play'' mine warfare
    package. This package will include a temporary MCS deployable team that
    will provide the mine countermeasures (MCM) specific command and
    control and mission planning expertise that has previously been
    provided by the MCS. How ``dual hatting'' will impact USMC missions
    will depend on the situation facing the operational commander. In some
    scenarios Inchon would not have been available due to higher priority
    commitments, maintenance and training cycles, and excessive transit
    time to the theater of operation. As was then the plan and remains for
    the foreseeable future, operational commanders will task organize to
    utilize other MCM options including use of alternative platforms, shore
    basing and operational maneuver over and around mined waters. Where the
    operational commander chooses to exercise the traditional big deck
    amphibious ship MCS option, USMC operations may or may not be affected,
    depending upon the urgency of the amphibious assault, availability of
    alternative deck space on other amphibs, and difficulty of the MCM
    operation. In a worst-case scenario, some combination of Marines and
    their equipment will be off-loaded at an appropriate support base until
    the mine threat is neutralized or alternative lift becomes available.
        Question. Perhaps most importantly, what will become of Ingleside?
    What new missions will the Navy establish at Ingleside to offset the
    projected loss of jobs?
        Answer. Naval Station Ingleside is a viable installation that is
    home to the Navy's Center of Excellence for Mine Warfare. This base is
    homeport for 21 MCM and MHC Class ships, provides facilities to Mine
    Warfare Training Center and is the future home of Commander Mine
    Warfare Command.
        There are numerous transformational initiatives and systems, which
    might be suited for assignment to Naval Station Ingleside. The Navy is
    studying options to replace the dedicated MCS functions that U.S.S.
    Inchon performed. This MCM initiative, coupled with future initiatives
    and requirements, should be considered for location at Ingleside,
    Texas.
                                 transformation
        Question. Secretary Wolfowitz, while I am encouraged that the
    budget submission includes increases for transformational initiatives
    such as the procurement of additional unmanned aerial vehicles and
    extra research dollars for space-based radars, I was surprised by the
    modest goal you endorsed during a public appearance last week.
        In a speech before the American Institute of Aeronautics and
    Astronautics, you indicated that it would be unreasonable to expect
    more that 10 percent of the military to be transformed before the end
    of the decade. This plan raises more questions than it answers.
        Hasn't the impressive performance of many of our systems in the
    current war on terrorism encouraged you to proceed at a more ambitious
    pace?
        Answer. The performance of our forces in the current war on
    terrorism has been most impressive. In fact the current war on
    terrorism underscores the fact that transformation is about much more
    than technology, systems, and programs--it is about transforming how we
    think, how we lead, how we train, how we exercise, and how we fight.
    Transforming 10 percent of the force over the course of a decade can
    make a dramatic difference in the capabilities of the entire force. In
    one of the famous historical examples of transformation--the
    development and combination of armored warfare, air warfare, and
    tactical radio communications by the Germans during the period between
    the two World Wars--10 percent is roughly the percentage of the German
    army that had been transformed to effect blitzkrieg in 1939 and 1941.
        Our expectations for transformation are indeed ambitious. We are
    examining activities that will create and anticipate the future. We
    expect to co-evolve concepts, processes, organizations, and
    technologies to produce new sources of military power. Our approach to
    transformation is grounded in the Information Age and represents a
    continuous process that fosters a culture of innovation to produce
    dramatically improved future capabilities. Transformation is not an
    end-state, nor strictly a synonym for modernization. We intend to
    expand the boundaries of existing competencies and develop new
    competitive areas. During our ongoing dialog and as we deal with the
    near term issues, it will be important that we also take the long view.
    There is no near term destination for transformation. This is an area,
    for example, that will be difficult to put on a budget cycle. But as we
    move forward it will be important for us to identify those few lead
    elements which have the potential for changing our current operational
    concepts and the way the force operates.
                               vaccine production
        Question. Secretary Wolfowitz, I am discouraged that the budget
    submission does not include any funds for the Department to pursue an
    organic vaccine production capability.
        The Congress was expecting that the fiscal year 2003 submission
    would contain the down payment for a government-owned, contractor-
    operated (GOCO) vaccine production facility. Site selection was
    supposed to be conducted this December. This facility is needed to
    produce small quantities of vaccines to combat the exotic pathogens
    that appear on the Department's ``Validated Threat List''--vaccines for
    which there is no national demand or commercial market.
        Now I understand that the Department has abdicated its
    responsibility, hoping that HHS will foot the bill for the project.
    While I concede that the Department of Health and Human Services may be
    the ideal agency to take the lead on vaccines to be procured in
    quantities sufficient to inoculate the entire population, such as Small
    Pox, the Pentagon's requirements are very unique, and do not overlap
    with HHS's public health mission.
        Why has the Department backed away from pursuing an in-house
    solution to the unique threats that face our men and women in uniform?
        Answer. DOD is not in favor of building new infrastructure unless
    it can be determined that industry cannot meet DOD needs for production
    of vaccines to protect U.S. Service members. Whereas in the past there
    was limited industry interest, the events following September 11, 2001
    have indicated an industry desire to assist DOD with its vaccine
    production needs. Over the past year, interagency DOD/HHS meetings,
    including representation from other interested Executive Branch
    agencies, have focused on vaccine acquisition for the nation and
    military force protection primarily focused on bioterrorism threat
    agents. The DOD and HHS continue to have discussions with leaders in
    the biotechnology and pharmaceutical industry to evaluate whether
    industry can meet our needs and to gain their views as to how actual or
    apparent barriers can be overcome so industry will readily participate
    in research, development and acquisition. To pursue a DOD only vaccine
    production facility at this time would be premature and could lead to
    duplication of infrastructure investment.
        Question. What leads you to believe that HHS will be willing to pay
    for a facility whose laboratory space would be dominated by the
    production of DOD-specific vaccines?
        Answer. DOD and HHS are continuing to work together identifying
    requirements for vaccines that address unique military requirements and
    the larger need for public health vaccines. Each Department will need
    to identify resources necessary to meet their needs. If a dedicated
    facility is needed to meet national requirements, we expect multiple
    agencies will share the cost to construct and operate such a facility.
                             military construction
        Question. Secretary Wolfowitz, I am particularly troubled by the
    Administration's decision to defer, potentially, hundreds of military
    construction projects. The publicly stated rationale--a desire not to
    construct new facilities at bases that may soon be closed--is
    unsatisfactory. Are we to assume that the projects included in the
    budget are for facilities that the Pentagon has already determined will
    not be closed?
        Answer. No. The Department has made no determination of which bases
    will or will not be closed. The projects included in the budget reflect
    the Services' priorities for the current inventory and mission
    requirements within fiscal and planning guidance provided by the
    Secretary.
        Question. How can you justify enormous MilCon increases for Germany
    and Korea at the expense of domestic projects? After all, Fort Hood is
    home to more service members than all of South Korea.
        Answer. Our service men and women stationed overseas deserve the
    same quality of life as our service men and women stationed in the
    United States. Moreover, the facilities overseas are usually in much
    worse condition than those in the United States. For instance, 83
    percent of the Army facilities overseas are rated C3/C4, whereas the
    Army rates 78 percent of their worldwide facilities as C3/C4. The Air
    Force rates 82 percent of their overseas facilities as C3/C4 whereas
    they rate 63 percent of their worldwide facilities as C3/C4.
                        expansion of role in afghanistan
        Question. Secretary Wolfowitz, the press has recently reported that
    the United States military would soon assume the responsibility of
    training Afghanistan's new Army. Please describe exactly what that will
    entail?
        Answer. President Bush announced on January 28 that the United
    States will assume responsibility for establishing and training the
    Afghan National Army. On 18-23 February, Major General Charles
    Campbell, Chief of Staff, U.S. Central Command, led an assessment team
    to Kabul to develop a plan for training the Afghan National Army. The
    team achieved basic consensus with the Afghan Interim Authority's
    Ministry of Defense to begin a 12-week training course for the first
    few multiethnic light infantry and border guard battalions as early as
    May 2002. The Secretary of Defense has approved initiating this
    training.
        U.S. Central Command will train Afghan National Army leaders and
    trainers concurrently with Afghan National Army battalion training.
    Every fourth and fifth battalion trained will be a border force
    battalion. U.S. Central Command trainers will come from Special Forces
    units.
        U.S. Central Command's assessment team projected that United
    States-led training would take approximately 18 months, after which
    Afghan National Army trainers or contractors will be able to take over
    most training.
        Question. What role will our coalition allies play in the training
    mission?
        Answer. At the April 3 conference in Geneva on Afghan security
    issues, we welcomed international contributions to this training
    effort, and are speaking with other countries to encourage their
    participation, under U.S. leadership, by contributing training,
    equipment, or cash. Furthermore, at present there are no international
    mechanisms for funding or paying salaries of the Afghan National Army.
    The United Nations intends to develop a trust fund to manage
    international contributions to Afghan military expenses and salaries.
    The State Department has requested $20 million in its fiscal year 2002
    supplemental that could be used to pay Afghan military salaries.
    Representatives from the State Department and Defense Department
    discussed these topics with other countries at Geneva. Based on the
    Geneva meeting and other discussions, we will compile countries' offers
    and pass them to the Afghan government, which will be responsible for
    accepting or rejecting them.
        Question. Do you anticipate needing to provide surplus materials to
    equip this new Army?
        Answer. Possibly. The State Department's supplemental request
    includes a request for funds to help train and equip the Afghan
    National Army. We expect that State's supplemental request will cover
    the bulk of the U.S. Government's training and equipment contribution.
    Meanwhile, we are examining options for providing the Afghan National
    Army with equipment and materials from DOD and other countries, so that
    Afghan National Army training can begin as soon as possible.
                                     ______

                     Questions Submitted to Dr. Dov Zakheim
                Questions Submitted by Senator Daniel K. Inouye
                 other miscellaneous military personnel issues
        Question. Dr. Zakheim, last year, this Committee was concerned with
    excess Permanent Change of Station (PCS) moves and, in particular, its
    impact on retention. The fiscal year 2003 budget request increases PCS
    moves by $400 million. Why are your requesting this increase and
    specifically how many more moves does this request support?
        Answer. The PCS increase for fiscal year 2003 is $349.6 million
    producing 28,864 additional moves.
        The fiscal year 2002 President's Amended Budget request reflected a
    requirement for 715,170 moves. When the Congress reduced funding by
    $180 million for the program in January 2002, the Services were
    compelled to reduce the number of planned moves by 17,716, creating a
    bow-wave of moves in fiscal year 2003. The fiscal year 2003 President's
    Budget reflects a program of 726,318 moves, of which 433,317 are
    mandatory accession and separation moves, corresponding to increases in
    anticipated accessions and separations. Of the program increase of
    28,864 moves, 5,557 are due to increased accession and separation
    requirements.
        There are 293,000 operational, training, rotational and unit moves
    budgeted in fiscal year 2003. These moves are required to ensure
    overseas stationing commitments, to facilitate force rotation policies,
    and to maintain requisite levels of training, force readiness, quality
    of life, and unit integrity. Of the program increase of 23,307
    operational, training, rotational and unit moves, most can be
    attributed to bow-waved move requirements deferred from fiscal year
    2002 due to the congressional reduction.
        The Congress expressed concern that military members moved too
    frequently and stated that since the PCS program funded more than
    715,000 moves, 52 percent of the force would move during the year. This
    analysis failed to exclude mandatory accession and separation moves.
    When these moves are excluded, a similar analysis shows that only 30
    percent of the force are expected to move within the year--consistent
    with a 3+ year rotation cycle.
        The fiscal year 2003 program of 726,318 moves is lower then the
    number of moves expected in fiscal year 2001 (728,408) and represents
    the minimum program requirement for fiscal year 2003.
        Question. Last week USA Today (``E-mails detail Indiana Guard
    `ghosts','' February 20, 2002) reported that National Guard units
    across the country are reporting false, inflated numbers of troops to
    protect their funding and, in one instance, to prevent a battalion from
    failing a readiness report. What steps is the Department taking to
    investigate these allegations?
        Answer. The Department was working closely with the U.S. General
    Accounting Office (GAO) months before the series of USA Today articles
    appeared, to produce a systematic and accurate comparison of Army Guard
    strength and pay information for review and to initiate any needed
    corrective measures. These efforts are continuing. Articles in the USA
    Today on ``ghosting'' soldiers--delaying removal transactions to
    inflate State Guard or unit strength--appear to be based principally on
    anecdotal information from interviews with Guardsmen and former
    Guardsmen. The Department prefers to base its conclusions on actual
    data. The most recent data indicates a 97 percent participation rate
    throughout the Army National Guard with only a 3 percent non-
    participation rate. This is consistent with the latest GAO information
    and with a current Army National Guard Non-Participation Summary
    Report. The National Guard's current objective is a 98 percent
    participation rate.
        We have also examined the potential readiness impact of non-
    participating soldiers. Even if up to 3 percent of Army National Guard
    soldiers were listed as non-participants, this would have limited
    impact on readiness reports for two reasons. First, because P-level
    (personnel) threshold bands in the SORTS rating system are separated by
    margins of about 10 percent, 3 percent (or less) over-reporting of
    assigned strength has little impact. More significantly, unit
    commanders have regulatory authority to subjectively upgrade or
    downgrade, if in their opinion the change more accurately portrays the
    actual readiness of the unit. This has far more impact on the overall
    readiness report than a 3 percent shift in assigned strength.
        There are both acceptable (e.g., medical convalescence) and
    unacceptable (e.g., unexcused absence) reasons for non-participation.
    In reviewing non-participation in the National Guard, we have found
    some delays in the process for establishing a pay record for new
    accessions and Guard members moving from active duty back to a drilling
    status, along with processing delays for members being discharged or
    transferred from the National Guard. To address these and any related
    strength accounting problems, a standing DOD working group has
    developed an action plan that is now being implemented. The plan
    involves further evaluation and analysis of non-pay record files and
    reconciliation of pay and personnel records by all Reserve components.
    The goal is to improve the timeliness in processing personnel
    transactions and the accuracy of personnel and strength accounting.
                                     ______

                  Questions Submitted by Senator Thad Cochran
                                   sbirs-low
        Question. Dr. Zakheim, several times over the past decade, a unique
    requirement for forward staging platforms supporting Special Operations
    and Expeditionary Forces was demonstrated. Lacking a platform to
    perform this function, an Aircraft Carrier has been taken out of the
    normal deployment schedule, with its jets replaced by ground forces and
    helicopters. Removing an Aircraft Carrier from the normal deployment
    schedule causes increased stress on an already strained Fleet. This
    requirement for Special Operations and Expeditionary Forces carries
    growing significance in light of the war on terrorism. To alleviate
    disruption to the Carrier deployment schedule and to better meet this
    emergent need, have you considered the procurement of a LHD or a
    modified LHD amphibious ship to meet this requirement?
        Answer. We are actively considering and assessing the merit of an
    ``LHD-plus'' alternative (a longer and wider LHD with increased
    survivability) as part of the ongoing Amphibious Assault Ship
    Replacement (LHA(R)) Analysis of Alternatives (AoA). The AoA is
    scheduled to be completed by July 2002. Additionally, we have recently
    funded a Military Sealift Command study to examine short-term
    alternatives for an afloat forward staging base. Both of these efforts
    are focused on finding better ways to conduct these types of
    operations.
        Question. Dr. Zakheim, are the current SBIRS-Low contractors
    meeting their contractual requirements? That is, are they doing the
    work required, in the time allotted, and for the price agreed to?
        Answer. The SBIRS Low contractors are meeting their current
    contractual requirements, but it is important to note that this program
    is in the early stages of development and this program is linked to the
    ground control system and SBIRS High segments which are not meeting
    their requirements.
        Question. If that is the case, what is the basis for public
    statements by the Defense Department Comptroller that the SBIRS-Low
    program is ``not meeting hurdles?''
        Answer. It is important to understand that both SBIRS High and
    SBIRS Low are a family of systems that are coupled by a common ground
    control system. The program is designed to be fielded in a series of
    increments. Increment I is the ground station upgrade, Increment II is
    fielding SBIRS High and Increment III is fielding of SBIRS Low. The
    technical hurdles are in Increments I and II. The Department slipped
    fielding of those two increments so naturally the third increment had
    to slip as well.
                                     ______

                 Question Submitted by Senator Pete V. Domenici
                              contractor personnel
        Question. Please provide the number of administrative and
    professional contractor personnel who are currently working along side
    government personnel inside the Pentagon of other DOD office buildings
    within the Office of the Secretary of Defense, the Office of the
    Service Secretaries, the Office of the Chiefs-of-Staff, and the Joint
    Staff. Please provide the data by major staff within each office.
        Answer. The Department of Defense has no central repository of data
    on the number of contract workers employed by the Department working
    along side government personnel inside the Pentagon of other DOD office
    buildings within the Office of the Secretary of Defense, the Office of
    the Service Secretaries, the Office of the Chiefs-of-Staff, and the
    Joint Staff.
                                     ______

              Questions Submitted by Senator Kay Bailey Hutchison
                                gulf war illness
        Question. Secretary Zakheim I am concerned that the proposed budget
    would slash Gulf War Illness research from $17.5 million to $5 million.
    This represents a 71 percent reduction.
        Given the recent advances in identifying the cause of this elusive
    illness, wouldn't now be the time to increase GWI research funding?
        Answer. Funding for GWI related research is budgeted in the Force
    Health Protection (FHP) program element (PE 0601105D8Z). The core
    fiscal year 2002 FHP budget was $26.4 million (before $10 million of
    congressional increases), while the fiscal year 2003 President's Budget
    request contains $10 million.
        As part of the budget formulation process, we must make difficult
    choices to achieve a balanced and affordable defense program. The
    fiscal year 2003 President's Budget Request represents a balanced
    program that supports research on many of the key technologies that
    will be necessary for the Department's objectives. However, we also
    need to ensure that the funding levels of the various components in the
    Department's total budget are balanced based on our assessment of the
    most urgent requirements.
                             military construction
        Question. Secretary Zakheim, Secretary Rumsfeld testified before
    the Senate Armed Services Committee earlier this month that the
    Department of Defense needed to fix the chronic under-funding of its
    infrastructure. He further stated that we must take care of the
    department's greatest asset: the men and women in uniform. Yet, the
    budget submitted actually cuts military construction by 14 percent in
    an effort to not spend money at bases that may be closed by the
    upcoming BRAC in 2005.
        How do you rationalize these positions? Do we really believe that
    the solution to fixing our infrastructure and taking care of our
    service members is to delay much needed military construction for three
    more years?
        Answer. In the context of competing priorities resulting from the
    events of September 11th, we have developed the fiscal year 2003
    Military Construction budget to support the President's and Secretary's
    aims with a balanced program to improve quality of life, enhance
    sustainment and modernization of existing facilities, and fund critical
    new construction.
        Although the fiscal year 2003 budget request is lower than last
    year's fiscal year 2002 request, in no way does it imply an easing of
    our commitment to revitalize DOD infrastructure. In fact, the $9
    billion request is the second largest request in the past six years.
    Additionally, the fiscal year 2003 column of the fiscal year 2002
    President's budget was only $7.4 billion. This year we raised the
    fiscal year 2003 level to $9 billion.
        This budget also places increased emphasis on sustaining and
    revitalizing the current inventory of facilities by increasing funds
    for Sustainment, Restoration and Modernization in the Operation and
    Maintenance appropriations by $500 million from last year's request.
    The fiscal year 2003 budget funds 93 percent of the Military Services'
    facilities sustainment requirement. That is up from 89 percent last
    year and significantly higher than in previous years, such as fiscal
    year 2000 when the Department met only 78 percent of the Services'
    facilities maintenance requirements.
        The President's fiscal year 2003 budget includes $4.2 billion to
    improve housing for military families, putting the Department on track
    to eliminate substandard housing by 2007, three years sooner than
    previously planned. This budget includes $227 million more than our
    fiscal year 2002 request to construct new housing and revitalize
    inadequate units. It also includes $195 million for housing
    privatization, to take advantage of the 8:1 leverage we have obtained
    on our investments in contracts awarded so far. At this rate, with our
    $195 million investment we should be able to obtain over $1.5 billion
    worth of quality privatized housing.
        This budget also includes $2.9 billion to operate and maintain
    fiscal year 2003 family housing inventory of 250,000 government-owned
    units and over 29,000 lease units. While the government-owned inventory
    declines by 25,000 units from fiscal year 2002 level due to
    privatization and demolition, we did not reduce the fiscal year 2003
    budget. Instead, we reapplied the freed-up funds to reduce the backlog
    of maintenance on units on hand.
        The fiscal year 2003 request also includes $1.2 billion to improve
    housing for our single soldiers; the $1.2 billion provides the same
    level of funding as in fiscal year 2002 and continues the Department's
    effort to provide private living space for all our unmarried military
    personnel (except those undergoing basic training).
        The budget also includes $.4 billion to improve medical and dental
    facilities, dependent schools, childcare centers and physical fitness
    facilities.
                                   sbirs-low
        Question. Secretary Zakheim, I am troubled by the Administration's
    decision to delay the SBIRS-Low program by two years. If the decision
    to delay was made because the program is not meeting its technical
    goals, then the budget submission would mark the first time that this
    fact had been reported to the Congress. This is a critical program, one
    that may benefit our national security in many areas other than missile
    defense.
        What can the Department, and the Congress, do to speed the
    deployment of this system?
        Answer. We may fully decouple SBIRS Low from SBIRS High and convert
    the program to a spiral development, capability-based approach. Under
    this concept, the initial satellites will support the Ballistic Missile
    Defense System (BMDS) Test Bed. The first satellites may have less
    capability and therefore lower schedule and technical risk to achieving
    launch. Subsequent satellites will have greater capability as
    technology matures. This will allow early contingency operations and
    increasing capability thereafter. Lessons learned from the initial
    satellite operations will feed back to later satellites, increasing
    their capability.

                              SUBCOMMITTEE RECESS

        Senator Inouye. The subcommittee will stand in recess until
    March 6 when we will receive testimony on the Army's budget
    request. Thank you very much.
        [Whereupon, at 12:28 p.m., Wednesday, February 27, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2003

                                  ----------

                            WEDNESDAY, MARCH 6, 2002

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:07 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Daniel K. Inouye (chairman)
    presiding.
        Present: Senators Inouye, Leahy, Dorgan, Stevens, Specter,
    Domenici, and Shelby.

                             DEPARTMENT OF DEFENSE

                             Department of the Army

    STATEMENTS OF:
            HON. 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. Secretary White, General Shinseki, on
    behalf of this committee I would like to welcome you once again
    as we consider the fiscal year 2003 defense appropriation
    request of the Army. I need not tell you that much has changed
    since you last appeared before this committee. For one thing,
    we seem to be having extraordinary action in Afghanistan. In
    our Nation's global war on terrorism, Army soldiers have played
    many critical roles, securing airfields abroad, providing
    security along borders and at airports here at home, and
    responding to the many taskings of our Commander-in-Chief.
        I would also like to note the invaluable service provided
    to the Nation by the quiet professionals of the Army Special
    Forces. They have undertaken some of the most difficult
    missions known to soldiers, identifying targets, coordinating
    supporting arms for the Northern Alliance, and conducting
    battlefield diplomacy.
        Two weeks ago Vice Chairman Stevens and I had the chance to
    visit Central Asia. In Afghanistan and Uzbekhistan, we are
    again reminded of the high quality and commitment of all the
    volunteer forces. Our men and women in uniform were focused on
    the missions at hand and their morale was unbelievably
    excellent. This is a tribute to their commitment and to their
    small unit commanders on the ground.
        Secretary White and General Shinseki, there is much to
    praise, but there are also some questions to answer.
    Mobilization of the Army Reserve and Guard has reached 24,000
    soldiers. Our soldiers are now deployed to the Philippines.
    They are also in the former Soviet republics and they will soon
    be in Yemen. These commitments are in addition to our rotations
    into and out of Bosnia, Kosovo, the Sinai, and Saudi Arabia.
        How long will we continue these deployments and
    mobilizations? Do we have sufficient forces to meet these
    requirements? What will happen to the morale if we keep up this
    pace of overseas deployment?
        To help meet these demands and your other requirements, the
    President has requested $91 billion for the Army in fiscal year
    2003. This amount is $10 billion above your current budget. As
    you know, this subcommittee has taken the lead in supporting
    your transformation efforts. However, you must understand that
    such large appropriations will be scrutinized, and as such we
    will have many questions for you today.
        So we look forward to hearing how this request supports the
    Army's current and future missions. But first I would like to
    yield to my vice chairman, Senator Stevens.

                        STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Gentlemen, I just had the privilege of
    going over some photographs that the staff took on our trip to
    Afghanistan. I want to tell you, joining with the chairman, the
    forces we saw, as I told a group just earlier this week, know
    who they are, where they are from, and what they have to do,
    and they are really up. I have never seen such gung-ho guys in
    my life. Very, very, very purposeful visit as far as I am
    concerned.
        We have I think every reason to be absolutely proud of
    them, and I want to congratulate you both for the leadership of
    the Army that has got them where they are today. They are going
    to continue to make us proud over there, I am confident of
    that.
        I share the chairman's statement. I really hope that we can
    find some way to make sure that the Army's transformation
    continues on schedule and that you have everything you need
    during this period. I had problems to begin with about the
    Interim Combat System and the Future Combat Systems. I am sure
    we are all concentrating on the present combat system and
    making sure that it is not overlooked as we are going through
    this transformation.
        We want to keep up with what you are doing. The Crusader
    and Comanche, they are two systems that I feel very strongly
    about and I have supported. The increases this year are
    substantial and I would like to make certain in our hearing
    today that we could be assured of spending that money in the
    time frame that you have requested it for, because I do not
    want it to displace other items that would be equally
    advantageous to our people now and get ahead of ourselves and
    tying up budget authority that is not going to be spent in the
    next fiscal year, but would go on into the future years.
        I can tell you, the two of you have great support here in
    the Congress. You have been very wise, Mr. Secretary, in
    selecting Les Brownlee to be your Under Secretary, whoever did
    it. We have a team there with you that we all know and want to
    work with. Again, I just cannot tell you how proud I was and I
    think we all were to see our forces over there in Pakistan,
    Uzbekhistan, Afghanistan, and also in Belgium as we went over.
        That is a great team you have got over there and we look
    forward to working with you to support it.
        Thank you very much.
        Senator Inouye. Now may I call upon the Secretary.
        Mr. White. Thank you, Mr. Chairman and Senator Stevens,
    distinguished members of the committee. Good morning. General
    Shinseki and I appreciate the opportunity to appear before you
    representing the great young people that you just talked about,
    the soldiers of our Army.
        Mr. Chairman, we would ask your consent to make a brief
    opening statement and insert a joint written statement for the
    record.
        Senator Inouye. Mr. Secretary, may I interrupt. I just
    noticed my colleague here, if you do not mind. Senator Dorgan.
        Mr. White. Yes, sir.

                      STATEMENT OF SENATOR BYRON L. DORGAN

        Senator Dorgan. Mr. Chairman, I will put a statement in the
    record. I believe that what you and Senator Stevens have said
    is what I observed as well on a trip to Central Asia,
    Afghanistan, Uzbekhistan, and other countries. I have never
    seen such pride in a mission; soldiers, men and women, who are
    in harm's way, but who understand that what they are doing is
    critically important, not only to our country but to the world,
    in combatting terrorism. That says a lot about the leadership
    in the Army and in all of our services.
        I am particularly interested at some point about the value
    of the information you have received from Air Force assets,
    Global Hawk and the Predator. My understanding is that both of
    those assets have been enormously helpful to the Army. But I
    will not delay the Secretary, but let me just say to the
    Secretary and the General how much we appreciate their service
    and how much we appreciate the service of the men and women in
    the U.S. Army.
        Mr. White. Thank you.
        Senator Inouye. Please proceed.

                          STATEMENT OF SECRETARY WHITE

        Mr. White. I would like to begin this morning by
    highlighting three critical tasks that the Army must accomplish
    if we are to succeed in the joint service task of providing for
    the Nation's defense: First, we must help win the global war on
    terrorism; second, we must transform to meet the challenges of
    future conflicts; and third, we must secure the resources
    needed to pursue both the war on terror and Army
    transformation.
        Our first task is to help win the war on terrorism. Today
    more than 14,000 soldiers are deployed in U.S. Central
    Command's area of responsibility supporting Operation Enduring
    Freedom, from Egypt to Pakistan, from Kenya to Kazakhistan.
    Wherever they serve, our soldiers are nothing short of
    inspirational, as you noted in your opening remarks. They are
    accomplishing a complex and dangerous mission with
    extraordinary courage, skill, and determination. Some have been
    injured, others have given their lives. More will surely
    follow. Our Nation is forever indebted to them and their
    families for their sacrifice.
        As the war evolves, requirements for Army forces are
    growing, from assuring regional stability in Central Asia to
    stability and support operations in Afghanistan to securing
    detainees at Guantanamo Bay, Cuba, to training counterterrorism
    forces in the Philippines and the former Soviet republic of
    Georgia. At the same time, the Army continues to deter
    potential adversaries in Southwest Asia, in Korea, while
    upholding U.S. security commitments, as you noted, in Bosnia,
    Kosovo, Macedonia, the Sinai, and elsewhere.
        In fact, the Army has over 138,000 soldiers and 38,000
    civilians deployed or forward stationed in 120 different
    countries. The Army also continues, as you also noted, its long
    tradition of supporting homeland security, mobilizing over
    25,000 Guard and Reserve soldiers for Title 10 or Federal
    service here and overseas and activating another 11,000 Guard
    soldiers for State-controlled homeland security missions.
        In addition to mobilizing reserves, we have also expanded
    our stop-loss program to suspend the voluntary separation of
    over 12,000 Active and Ready Reserve soldiers. Despite the
    disruption, our soldiers, their families, and employers are
    responding magnificently.
        But these are not long-term solutions and additional
    wartime manning requirements with no adjustment in our global
    posture to offset end strength will further strain the force.
    The strain may begin to manifest itself in future retention
    shortfalls, I am sure beginning in the Reserve components and
    extending into the active Army.
        Our second task is to transform the Army to meet the
    challenges of the next conflict, as the Chief of Staff set down
    the marker, I believe right here in this room, several years
    ago. America's future depends on it since transformation is at
    the heart of our competitive advantage as a Nation. However,
    transformation is a process, not an end state. To the extent we
    do not transform, we are at risk.
        To reduce risk, we are accelerating our transformation to
    the full spectrum Objective Force. We will shortly select the
    lead system integrator for the Army's family of Future Combat
    Systems, the foundation of the Objective Force. Let me
    emphasize that this is not a business as usual approach. The
    lead system integrator will be charged with achieving the
    milestones for fielding a threshold capability this decade by
    incorporating best of breed designs within the United States
    and maximum competition for best value procurements.
        Selection of a lead system integrator represents a bold and
    dramatic step forward in our journey to transform the Army. As
    I said, we should be able to announce that very, very shortly.
        We are presently fielding an Interim Force, six interim
    brigade combat teams, to close the capabilities gap between our
    heavy and light forces. The Interim Force also provides a
    bridge to the Objective Force through leader development and
    experimentation. At the same time, we are selectively
    modernizing and recapitalizing key systems in our Legacy Force,
    as you touched on, as a hedge against near-term risk and to
    facilitate the fielding of the Objective Force. This approach
    will both provide an enhanced readiness and provide an
    affordable means to transform.
        The third task is to secure the resources needed to pursue
    both the war on terror and Army transformation. The fiscal year
    2003 budget addresses all of our priorities. However, we
    continue to assume risk in our Legacy Force and longstanding
    shortfalls remain in installation, sustainment, restoration,
    and modernization. As good stewards, we are doing our part to
    free up resources for investment in higher priority programs.
    We have made tough tradeoffs. We have terminated 29 programs in
    the last 3 years, we have restructured 12 more, reduced
    recapitalization from 21 to 17 systems, and accelerated the
    retirement of 1,000 Vietnam-era helicopters.
        We are also striving to manage the Army more efficiently,
    starting at the top by restructuring the Army's headquarters
    into a leaner, more integrated organization. This initiative
    allows us to meet the congressionally mandated 15 percent
    reduction in headquarters staffs and reinvest manpower saved
    back into the operational Army, thereby increasing our tooth-
    to-tail ratio.
        We are also leveraging e-business concepts and technologies
    in our Army knowledge management initiative. This initiative
    involves managing our information infrastructure more like an
    integrated enterprise. For example, by October we will have
    pared down the network servers in our personnel system from
    4,500 to one super-server database, reducing errors and saving
    millions in cost avoidance and staff hours. Even greater
    economies of scale will be realized as we continue to flatten
    our operational structure and eliminate unnecessary systems.
        We are also achieving efficiencies through three other
    important Army initiatives: centralized installation
    management, utilities privatization, and our residential
    communities initiative. In the interest of time, I will defer
    comment on these initiatives until our question and answer
    period.

                               prepared statement

        Let me conclude by thanking the members of the
    distinguished committee for your strong support. I look forward
    to working with you to ensure our Army remains, as you say and
    as we all say when we see soldiers in the field, doing a
    wonderful job for our country, the best Army in the world.
        Thank you very much, Mr. Chairman.
        [The statement follows:]
    Prepared Joint Statement of Honorable Thomas E. White and General Eric
                                  K. Shinseki
        Mr. Chairman and distinguished members of the Committee, thank you
    for this opportunity to report to you on the United States Army's
    readiness to provide for our Nation's security today and in the future.
    Throughout our Nation's history, The Army has demonstrated that it is
    America's decisive ground combat force with capabilities sufficiently
    diverse to cover the full spectrum of operations demanded by the
    Nation--anytime, anywhere. The essence of The Army remains unchanged--
    an ethos of service to the Nation, the readiness to fight and win wars
    decisively, and a willingness to accomplish any mission the American
    people ask of us.
        Today, we are engaged in a global war on terrorism and defense of
    our homeland. Soldiers, On Point for the Nation, are protecting and
    promoting American interests around the globe. They are accomplishing
    these vital missions much as we have for over 226 years with little
    fanfare or attention. The Army is able to accomplish what is asked by
    relying on the strength of its Soldiers--active, National Guard, Army
    Reserve--and civilians, who honorably and proudly answer the calls to
    duty.
        The Army has no illusions about the challenges it faces. It must
    help win the global war on terrorism and prepare for future wars and
    conflicts by effectively using the resources you provide us to
    transform. With the continued support of Congress and the
    Administration, our Soldiers will continue to do their part to
    decisively win the global war on terrorism, rapidly transform
    themselves to fight and win new and different kinds of conflicts, meet
    our obligations to allies and friends, and maintain our readiness for
    the unexpected and unpredictable challenges that may arise.
                             strategic environment
        The attacks of September 11 provide compelling evidence that the
    strategic environment remains dangerous and unpredictable. Although we
    may sense dangerous trends and potential threats, there is little
    certainty about how these threats may be postured against America or
    her interests. Uncertainty marks the global war on terrorism, and our
    Soldiers continue to be involved in smaller-scale contingencies and
    conflicts. Yet, the potential for large-scale conventional combat
    operations will continue to lurk just beneath the surface. Victory in
    battle will require versatile combat formations and agile Soldiers, who
    can deploy rapidly, undertake a multiplicity of missions, operate
    continuously over extended distances without large logistics bases, and
    maneuver with speed and precision to gain positional advantage. Our
    Soldiers must be capable of prosecuting prompt and sustained land
    operations across a spectrum of conflict resulting in decisive victory.
                              strategic framework
        The 2001 Quadrennial Defense Review (QDR) established a new
    strategic framework for the defense of the Nation that struck a balance
    between near-term readiness and our ability to transform ourselves in
    order to meet current and future conflicts. The report outlined a new
    operational concept that gives continued priority to homeland defense,
    promotes deterrence through forward presence, and asks that we have the
    ability to conduct both smaller-scale contingencies and large scale,
    high-intensity combat operations simultaneously.
        Our Soldiers can defeat enemy armies, seize and control terrain,
    and control populations and resources with minimal collateral
    casualties and damage. They can operate across the spectrum of military
    operations, from full-scale conventional conflict to fighting
    terrorists, to setting the conditions for humanitarian assistance. This
    multifaceted ground capability enables us to assure our allies and
    friends, dissuade future military competition, deter threats and
    coercion, and, when necessary, decisively defeat any adversary.
        As The Army continues to work with other departments, agencies, and
    organizations, emerging requirements that are not fully defined in the
    2001 QDR may require additional resourcing, whether technological,
    logistical, or force structure. Despite ten years of downsizing, The
    Army has accomplished all assigned missions to a high standard. In
    short, we are doing more with less, and the strain on the force is
    real. Our Soldiers continue to give us more in operational readiness
    than we have resourced.
        While we fight and win the global war on terrorism, The Army must
    prepare itself to handle demanding missions in the future strategic
    environment. Over two years ago, The Army undertook transforming itself
    into a force that is more strategically responsive and dominant at
    every point on the spectrum of military operations. We have gained
    insight from previous deployments, operations, and exercises, along
    with leading-edge work in Army Battle Labs, joint and Army warfighting
    experiments, and wargames. With this insight, The Army embarked on
    initiatives to assure its dominance in a new contemporary operational
    environment by deterring and defeating adversaries who rely on
    surprise, deception, and asymmetric warfare to achieve their objectives
    against conventional forces. The attacks of September 11, 2001 and our
    subsequent operations overseas validated The Army's Transformation. If
    anything, September 11 provided new urgency to our efforts. Thus, we
    are accelerating Transformation to give our commanders the most
    advanced capabilities they need to ensure that we have the best led,
    best equipped, and best trained Soldiers for the emerging global
    environment. And to mitigate risk as we transform to meet future
    requirements, we will prioritize among the imperatives of meeting
    existing threats, safeguarding our homeland, and winning the war
    against terrorism.
                       soldiers--on point for the nation
        Globally, Soldiers offer tangible reassurance to our allies, build
    trust and confidence, promote regional stability, encourage democratic
    institutions, and deter conflict. Nothing speaks to the values of
    America more than Soldiers on the ground providing comfort, aid, and
    stability at home and abroad. The Army, as part of a joint military
    team, provides a wide range of options to our leaders and commanders.
    As we have seen, in today's world we cannot win without the human
    dimension on the battleground. Whether it be gathering intelligence,
    challenging an adversary's ability to conceal and seek cover, or
    protecting innocent civilians, the American Soldier remains the
    ultimate precision weapon during combat operations, particularly when
    legitimate targets are interspersed among non-combatants. In the final
    analysis, it is the Soldier on the ground who demonstrates the
    resilience of American commitment and provides the needed flexibility
    to decisively defeat our adversaries.
        Since October 2001, Army conventional and special operations
    forces, as part of the joint force, have participated in Operation
    ENDURING FREEDOM in the Afghanistan theater of operations. The range of
    their capabilities has been extensive. These highly trained Soldiers
    have worked with local forces to forge a powerful alliance. They have
    designated targets for air strikes, secured airfields, and performed
    reconnaissance and security missions that facilitated the safe
    introduction of follow-on forces. Supporting the war effort, they have
    provided security to joint forces, critical facilities, and supply
    lines, and they have received and prepared both combat and humanitarian
    supplies for air delivery to Afghanistan. Currently, more than 12,000
    Soldiers are deployed--from Egypt to Pakistan, from Kenya to
    Kazakhstan. And although hostilities in Afghanistan are shifting focus,
    requirements for ground forces are growing--they are assuring regional
    stability in Afghanistan, directing humanitarian assistance and relief
    operations, securing detainees at Guantanamo Bay, Cuba, and deploying
    to the Philippines.
        At home, The Army continues its long tradition of support to
    homeland security. Even before September 11, 2001, The Army had 10
    trained and certified Weapons of Mass Destruction Civil Support Teams
    ready to assist civil authorities and had trained 28,000 civilian first
    responders in 105 cities. Since the attacks, we have mobilized over
    25,000 Army National Guard (ARNG) and United States Army Reserve (USAR)
    Soldiers for federal service here and overseas. Nearly 11,000 Soldiers
    are on state-controlled duty securing airports, seaports, reservoirs,
    power plants, the Nation's capital region, and serving at ``ground
    zero'' in New York City alongside the U.S. Army Corps of Engineers. To
    increase protection for our citizens and reduce vulnerability, we
    accelerated the safe destruction of the U.S. stockpile of lethal
    chemical agent and munitions while combating the proliferation of
    chemical weapons. And continuing a commitment to civil authorities,
    nearly 500 Soldiers worked Super Bowl XXXVI, and over 5,000 Soldiers
    are helping ensure the security of the 2002 Winter Olympics in Salt
    Lake City, Utah.
        But, fighting the global war on terrorism in no way diminishes the
    requirements placed on The Army for support to missions and operations
    around the world--indeed, it expands it. While The Army remains engaged
    at home, it is prudently taking action for follow-on operations around
    the world, to include mobilizing some 2,000 ARNG Soldiers to augment
    our missions in the European theater. In fact, The Army--active, ARNG,
    and USAR--has over 124,000 Soldiers and 38,000 civilians stationed in
    110 countries. Additionally, on any given day last year some 27,000
    Soldiers were deployed to 60 countries for operations and training
    missions. And it is easy to forget that our Soldiers have been on the
    ground conducting peacekeeping missions in the Balkans for six years,
    in Saudi Arabia and Kuwait for eleven years, and in the Sinai for
    nineteen years. Our Soldiers have been in Korea and Europe for over 50
    years, assuring their peace and stability while, at the same time,
    providing the Nation with a rapid deployment capability to areas near
    those theaters of operations, as needed. Depending on the next move in
    the war on terrorism, additional manning requirements will be placed on
    The Army that will inevitably create more stress on our current
    endstrength.
             the army vision: people, readiness, and transformation
        On October 12, 1999, The Army articulated its Vision that defined
    how The Army would meet the Nation's requirements now and into the 21st
    Century. The Vision is comprised of three interdependent components--
    People, Readiness, and Transformation. It provides direction and
    structure for prioritizing resources to ensure The Army remains the
    most dominant and intimidating ground force in the world to deter those
    who would contemplate threatening the interests of America. Ultimately,
    it is about risk management, striking a balance between readiness today
    and preparedness for tomorrow. It is about having overmatching
    capabilities while simultaneously reducing our vulnerabilities in order
    to dominate those who would threaten our interests--now and in the
    future. It is about examining where we are now and where we need to be,
    and it is about achieving decisive victory--anywhere, anytime, against
    any opposition. The Army's budget request for fiscal year 2003 supports
    The Army Vision and the strategic guidance to transform to a full
    spectrum force while ensuring warfighting readiness. It reflects a
    balanced base program that will allow The Army to remain trained and
    ready throughout fiscal year 2003, while ensuring our force is
    protected as we fulfill our critical role in the global war on
    terrorism. It mans the force--endstrength of 480,000 Active Component,
    350,000 Army National Guard, and 205,000 Army Reserve Soldiers--and
    provides our Soldiers with better pay and incentives.
    People
        People--Soldiers, civilians, retirees, veterans, and their
    families--are The Army. People are central to everything we do in The
    Army. Institutions do not transform; people do. Platforms and
    organizations do not defend our Nation; people do. Units do not train,
    they do not stay ready, they do not grow and develop leadership, they
    do not sacrifice, and they do not take risks on behalf of the Nation;
    people do. We must adequately man our force, provide for the Well-Being
    of our Soldiers and their families, and develop leaders for the future
    so that The Army continues to be a professionally and personally
    rewarding experience. Soldiers will always be the centerpiece of our
    formations. They are our sons and daughters. We are committed to
    recruiting and retaining the best people and giving them the finest
    tools to do their job so that they remain the world's best army.
    Manning the Force
        Current and future military operations depend on an Army with the
    flexibility to respond quickly in order to rapidly meet changing
    operational requirements. The Army has approached its manpower
    challenge in a variety of ways. In fiscal year 2000, we implemented a
    personnel strategy to man units at 100 percent. Starting with
    divisional combat units, the program expanded in fiscal year 2001 and
    fiscal year 2002 to include early deploying units. Funding in the
    fiscal year 2003 budget for change-of-station moves improves our
    ability to man units at desired grade and skill levels by placing
    Soldiers where they are needed. The Army is currently assessing its
    ability to fill remaining units by the end of fiscal year 2004.
        The ARNG and USAR now make up more than 50 percent of The Army's
    force structure. Ongoing and expanded reserve integration initiatives--
    to include Full Time Support--have increased reserve readiness and
    increased their ability to rapidly transition from a peacetime to a
    wartime posture.
        A new advertising campaign in 2001--An Army of One--raised the
    awareness and interest levels of potential Soldiers. The Army achieved
    100 percent of its goal for all components in recruiting and retention
    for the second year in a row. And to ensure that we recruit and retain
    sufficient quality personnel, we continue to examine innovative
    recruiting and retention programs. The increases for enlistment and
    retention bonuses will enable The Army to sustain these recruiting and
    retention successes, although some shortfalls remain.
                Well-Being
        Our Soldiers appreciate, more than you realize, your support this
    past year for pay increases of at least 5 percent and the 3.6 percent
    for the civilians who support them. Targeted pay increases for highly
    skilled enlisted Soldiers and mid-grade officers, the online electronic
    Army University education program, and upgraded single-soldier barracks
    and residential communities further support and aid in maintaining the
    Well-Being of Soldiers willing to put their lives at risk for our
    national interests. In turn, the attention to a Soldier's Well-Being
    helps The Army recruit and retain the best people. Our Soldiers ask
    little in return, but they judge their Nation's commitment to them by
    how well it takes care of them and their families. It is a commitment
    we must honor.
        Army readiness is inextricably linked to the Well-Being of our
    People. Our success depends on the whole team--Soldiers, civilians,
    retirees, and their families--all of whom serve the Nation. The term
    Well-Being is not a synonym with ``quality of life,'' but rather an
    expansion of the concept that integrates and incorporates existing
    quality of life initiatives and programs. Well-Being takes a
    multifaceted approach. We are working with the Office of the Secretary
    of Defense to improve TRICARE in order to provide better medical care
    for Soldiers, families, and retirees and to continue to close the
    compensation gap between Soldiers and the civilian sector, and the
    budget's increases housing allowances reduces out-of-pocket expenses
    for military personnel from 11.3 percent in fiscal year 2002 to 7.5
    percent in fiscal year 2003 and puts The Army on track for eliminating
    average out-of-pocket costs entirely by fiscal year 2005 for those
    Soldiers and families living on the economy.
                Leader Development
        Civilian and military leaders are the linchpin of Transformation.
    The leaders and Soldiers who will implement the new warfighting
    doctrine must be adaptive and self-aware, capable of independent
    operations separated from friendly elements for days at a time,
    exercising initiative within their commander's intent to rapidly
    exploit opportunities as they present themselves on the battlefield.
    Leaders must be intuitive and capable of rapid tactical decision-
    making, and all Soldiers must master the information and weapons
    systems technologies in order to leverage their full potential. But new
    technologies and new kinds of warfare will demand a new kind of leader.
    As part of our transformation process, The Army is taking a
    comprehensive look at the way we develop officers, warrant officers and
    non-commissioned officers through the Army Training and Leader
    Development Panels to review and assess issues and provide
    recommendations on how to produce The Army's future leaders. We have
    expanded these reviews to include Army civilians in anticipation of the
    need to replace the increasing number who will become retirement
    eligible after fiscal year 2003. The Army must have top-notch military
    and civilian people at all levels in order to meet the global,
    economic, and technological challenges of the future.
        In June 2001, The Army published the most significant reshaping of
    Army warfighting doctrine since 1982. Field Manual 3-0, Operations,
    emphasizes The Army's ability to apply decisive force through network-
    centric capabilities and shows just how dramatically The Army must
    transform itself to fight both differently and more effectively. This
    doctrine will assist in the development of a new force--the Objective
    Force--that maximizes the technological advantages of equipment, leader
    development, and evolutionary warfighting concepts. The Objective Force
    will demand a generation of leaders who know how to think, not what to
    think.
    Readiness
        At its most fundamental level, war is a brutal contest of wills.
    Winning decisively means dominating the enemy. To be dominant, we must
    be not only organized, manned, and equipped, but also fully trained.
    Today, The Army is ready for its assigned missions, but sustained
    support from the Nation, Congress, and the Administration is required
    to ensure that we maintain our readiness. To do so requires that we pay
    attention to training, installations, force protection and readiness
    reporting. The fiscal year 2003 budget request supports readiness and
    provides funding to maintain our current facilities at an acceptable
    level. Fiscal year 2003 funding improves on fiscal year 2002 levels in
    terms of maintaining a stable training base to develop quality leaders
    and soldiers. Resources have been aligned to ensure our forces are
    trained, equipped and ready to fight. In addition, funding is provided
    to enhance unit training and deployability--a positive impact on
    overall readiness.
                Unit Training
        Tough, demanding training which is supported by an infrastructure
    that allows us to train, sustain, and deploy is essential to readiness.
    History has taught us and we have learned that, in the end, armies
    fight the way they train. The Army is committed to fully executing our
    training strategy--the higher the quality of training, the better the
    leaders and warfighters we produce. The result is an increased state of
    readiness to serve our Nation. To this end, we must fully modernize
    training ranges, combat training centers, and training aids, devices,
    simulators, and simulations to provide adequate and challenging
    training. The Army has funded the integration of virtual and
    constructive training capabilities to achieve realism and cost
    effectiveness.
        As we move to greater network-centric warfare capability, our
    forces will operate with even greater dispersion, and maintaining
    sufficient maneuver areas for training these extended formations will
    become even more critical. Combat is a complex mixture of people,
    equipment, and the training that fuses them together. Live training
    requires adequate land, sea, air and spectrum to even begin to
    realistically recreate combat-like conditions. That space is
    increasingly being encroached upon, intensifying environmental
    constraints and operational restrictions that will result in
    unanticipated and unwarranted limitations on needed test and training
    activities. Thus, The Army is implementing a sustainable program to
    manage the lifecycle of training and testing ranges by integrating
    operational needs, land management, explosives safety, and
    environmental stewardship. This program will ensure the continuing
    viability of training ranges by addressing the multiple aspects of
    encroachment: endangered species and critical habitats, unexploded
    ordnance and munitions, spectrum encroachment, airspace restrictions,
    air quality, noise, and urban growth. As we transform to a future force
    with new systems, organizational structures, and new doctrine to
    achieve full spectrum operational capability, our training enablers and
    infrastructure, along with realistic and relevant training venues, must
    be funded to match the timelines we have established to field a highly
    trained Soldier--one whose unit is poised to fight new and different
    kinds of conflicts while maintaining traditional warfighting skills.
        The Army OPTEMPO budget is a top priority, and The Army is
    committed to improving its training and unit readiness. The budget
    supports a ground OPTEMPO program of 800 M1 Abrams Tank miles at home
    station. The Flying Hour Program is funded for an average of 14.5
    required live flying hours per aircrew per month for the Active
    Component, and nine live aircrew flying hours for Reserve Components.
    We have scheduled ten brigade rotations (nine Active Component and one
    Army National Guard) through the National Training Center, ten brigade
    rotations (nine Active Component and one Army National Guard) through
    the Joint Readiness Training Center. The Battle Command Training
    Program will conduct two corps Warfighter exercises and train six
    division command and staff groups, an increase of one divisional staff
    training exercise in fiscal year 2003. Additionally, funding for
    training enabler support has been increased 20 percent from fiscal year
    2002 levels.
                Installations
        Installations provide homes, family and training support, and power
    projection platforms for The Army. They are the bases where Soldiers
    live, train, and from which they launch on their missions. Worldwide,
    we have physical plants worth over $220 billion. For too many years,
    The Army has under funded long-term facilities maintenance in order to
    fully fund combat readiness and contingency operations; thus, we now
    have first-class Soldiers living and working in third-class facilities.
    Commanders currently rate two-thirds of their infrastructure condition
    so poor that it significantly impacts mission accomplishment and
    morale. The fiscal year 2003 budget funds over 90 percent of
    Sustainment, Restoration, and Modernization (SRM) requirements and
    builds on the fiscal year 2002 funded levels, slowing the deterioration
    of our aging infrastructure. But, the major investment in SRM in fiscal
    year 2002 is helping to improve only the most critical conditions in
    our crumbling infrastructure. Over the next five years, SRM shortfalls
    will continue to approximate $3 billion annually as a result of our
    aging facilities. Exacerbating this situation is the fact that The Army
    has more facility infrastructure than we need. The cost of operating
    and sustaining these facilities directly competes with funding our
    warfighting capability. The realignment or closure of excess facilities
    will free funds for installations and bring the recapitilization rate
    closer to the Department of Defense's goal of 67 years by 2010. The
    Army is divesting itself of mothballed facilities and examining
    privatization alternatives. For example, we are capitalizing on the
    success of the Residential Communities Initiatives by expanding the
    program to 24 projects to more efficiently and effectively manage
    installations. Encompassing over 63,000 family housing units, the
    program allows the private sector to remodel, build, and manage housing
    on Army bases in order to provide the quality housing our Soldiers and
    their families deserve. The fiscal year 2003 budget provides the
    military facilities and soldier housing needed to improve Army
    readiness, quality of life, and efficiency. In fiscal year 2003, we
    will institute a centralized installation management organization that
    will improve our facilities and infrastructure through consistent
    funding and standards that promote the equitable delivery of base
    operation services and achieve efficiencies through corporate practices
    and regionalization.
                Force Protection
        The missions and training we assign Soldiers are not without risks,
    and Soldiers must be able to live, train, and work in safe, secure
    environments. We minimize risks by proactively protecting our force.
    For example, we reevaluated force protection security programs and
    adjusted over $800 million in fiscal year 2003 to further support
    controlled access to installations, in-transit security, counter-
    terrorism training improvements, information assurance, situational
    awareness, crisis response, and force protection command and control.
    An additional $1.8 billion is required for further force protection and
    security program requirements generated in the wake of the attacks on
    America.
                Readiness Reporting
        Measuring readiness requires accuracy, objectivity, and uniformity.
    The Army is transforming its current readiness reporting system to
    achieve greater responsiveness and clarity on unit and installation
    status. The Strategic Readiness System (SRS) will provide senior
    leaders with an accurate and complete near real time picture
    representative of the entire Army (operating forces, institutional
    forces, and infrastructure). The SRS will be a predictive management
    tool capable of linking costs to readiness so resources can be
    effectively applied to near- and far-term requirements. A prototype SRS
    is being evaluated at selected installations, and its development will
    continue to ensure compliance with congressionally directed readiness
    reporting.
    Transformation
        Transformation is first and foremost about changing the way we
    fight in order to win our Nation's wars--decisively. The 21st Century
    strategic environment and the implications of emerging technologies
    necessitate Army Transformation. The global war on terrorism reinforces
    the need for a transformed Army that is more strategically responsive,
    deployable, lethal, agile, versatile, survivable, and sustainable than
    current forces.
        Technology will enable our Soldiers to see the battlefield in ways
    not possible before. See First enables leaders and Soldiers to gain a
    greater situational awareness of themselves, their opponents, and the
    battle space on which they move and fight. Superior awareness enables
    us to Understand First, to assess and decide on solutions to the
    tactical and operational problems at hand faster than our opponents--to
    gain decision superiority over our opponents. Networked units are able
    to Act First, to seize and retain the initiative, moving out of contact
    with the enemy to attack his sources of strength or key vulnerabilities
    at a time and place of our choosing. The Army uses precision fires--
    whether delivered by joint platforms or Soldiers firing direct fire
    weapons--to defeat the enemy as rapidly and decisively as possible.
    Army units will be capable of transitioning seamlessly from stability
    operations to combat operations and back again, given the requirements
    of the contingency. And when we attack, we destroy the enemy and Finish
    Decisively.
        The Army is taking a holistic approach to Transformation,
    implementing change across its doctrine, training, leader development,
    organization, materiel, and soldier systems, as well as across all of
    its components. Transformation will result in a different Army, not
    just a modernized version of the current Army. Combining the best
    characteristics of our current forces, The Army will possess the
    lethality and speed of the heavy force, the rapid deployment mentality
    and toughness of our light forces, and the unmatched precision and
    close combat capabilities of our special operations forces--adopting a
    common warrior culture across the entire force. Transformation will
    field the best-trained, most combat effective, most lethal Soldier in
    the world.
        True Transformation takes advantage of new approaches to
    operational concepts and capabilities and blends old and new
    technologies and innovative organizations that efficiently anticipate
    new or emerging opportunities. Transformation will provide versatile
    forces that have a decisive margin of advantage over potential
    adversaries and fulfill the Nation's full spectrum requirements.
    Transformed ground forces will dominate maneuver on the battlefield to
    gain positional advantage over the enemy with overwhelming speed while
    enhancing the capabilities of the joint force. This approach will
    contribute to the early termination of the conflict on terms favorable
    to the United States and its allies. Transformation will exploit
    network-centric capabilities to enable rapidly deployable and
    sustainable Army forces to quickly and precisely strike fixed and
    mobile targets throughout the depth and breadth of the battlefield.
        Transformation consists of three interrelated elements--the
    Objective Force, the Interim Force, and the Legacy Force. We will
    develop concepts and technologies for the Objective Force while
    fielding an Interim Force to meet the near-term requirement to bridge
    the operational gap between our heavy and light forces. The third
    element of Transformation is the modernization and recapitalization of
    existing platforms within our current force--the Legacy Force--to
    provide these platforms with the enhanced capabilities available
    through the application of information technologies. Several important
    initiatives that should produce even greater advances in 2002 are the
    production, testing, and delivery of the Interim Force vehicle early
    this year, and the development of mature technologies to achieve
    Objective Force capabilities.
        Digitization concepts tested and proved with the Legacy Force are
    being refined in the Interim Force and will be applied to the Objective
    Force. These efforts, along with planned training and testing and joint
    exercises--such as the U.S. Joint Forces Command's ``Millennium
    Challenge 2002''--will enable The Army to stay ahead of current and
    future adversaries by providing the Nation and its Soldiers with
    unmatched advanced capabilities. To achieve additional momentum, we
    will carefully concentrate research and development and acquisition
    funding on our most critical systems and programs.
                The Objective Force
        The end result of Transformation is a new, more effective, and more
    efficient Army with a new fighting structure--the Objective Force. It
    will provide our Nation with an increased range of options for crisis
    response, engagement, or sustained land force operations. Instead of
    the linear sequential operations of the past, the Objective Force will
    fight in a distributed and non-contiguous manner. Objective Force units
    will be highly responsive, deploy rapidly because of reduced platform
    weight and smaller logistical footprints, and arrive early to a crisis
    to dissuade or deter conflict. These forces will be capable of vertical
    maneuver and defeating enemy anti-access strategies by descending upon
    multiple points of entry. With superior situational awareness,
    Objective Force Soldiers will identify and attack critical enemy
    capabilities and key vulnerabilities throughout the depth of the battle
    space. For optimum success, we will harmonize our Transformation
    efforts with similar efforts by other Services, business and industry,
    and our science and technology partners.
        By focusing much of its spending in science and technology, The
    Army will create a new family of ground systems called the Future
    Combat Systems (FCS). This networked system-of-systems--a key to
    fielding the Objective Force--will allow leaders and Soldiers to
    harness the power of digitized information systems. And the FCS will
    allow commanders to bring a substantial, perhaps even exponential,
    increase in combat capabilities to the joint force without a large
    logistics footprint. Newer technologies will be inserted into the FCS
    as they become ready. In November 2001, the solicitation for the FCS
    Lead System Integrator (LSI) was released to industry. In coordination
    with The Army and DARPA, the LSI will select the ``best of breed''
    technologies, components, and sub-components through maximum
    competition among the sub-contractors. The Lead System Integrator is a
    new solicitation and acquisition strategy that will accelerate The
    Army's Transformation and see the FCS first unit equipped and
    operational by 2010. We anticipate selection of the Lead System
    Integrator in March 2002. In the fiscal year 2003 budget, we invested
    97 percent of our Science and Technology resources toward the design
    and development of the Objective Force and enabling technologies. With
    this funding level, The Army will begin fielding an Objective Force--
    this decade.
        We owe our Soldiers the best tools and equipment so they are not
    put at risk by obsolete or aging combat support systems. The Comanche
    helicopter, the Objective Force Warrior system, and Command, Control,
    Communications, Computers, Intelligence, Surveillance, and
    Reconnaissance (C\4\ISR) initiatives are integral components of the
    network-centric operations of the Objective Force. They are the
    infrastructure that allows Soldiers to do what they do best--fight and
    win our Nation's wars. Comanche will provide an armed aerial
    reconnaissance capability critical for gathering intelligence for
    coordinated attacks against targets of opportunity, and the fiscal year
    2003 budget supports continued System Development and Demonstration and
    Mission Equipment Package Development, component development testing,
    and flight-testing. The Objective Force Warrior system will provide
    quantum improvements over our current soldier systems in weight,
    signature, information exchange capabilities, ballistics tolerance, and
    chemical, biological, and environmental protection for our individual
    Soldiers on the battlefield.
        Terrestrial systems alone will not enable full spectrum dominance.
    Space is a vertical extension of the battlefield and a key enabler and
    force multiplier for land force operations. Objective Force commanders
    will access and integrate the full spectrum of C\4\ISR and Information
    Operations capabilities, to include national agencies, strategic and
    operational units, tactical organizations, and joint or multinational
    forces. In short, commanders will draw upon a wide array of
    capabilities that enable not just overwhelming force projection, but
    the ability to out-think our adversaries.
        Transporting and sustaining the Objective Force will require
    capabilities that are cost effective, that adhere to rapid deployment
    timelines, and that have a smaller logistical footprint over longer
    distances without jeopardizing readiness. Materiel readiness will be
    maintained at reduced costs by increasing inventory visibility,
    eliminating artificial ownership barriers, and integrating automated
    systems.
                The Interim Force
        The Interim Force is a transition force that bridges the near-term
    capability gap between our heavy and light forces. It will combine the
    best characteristics of the current Army forces--heavy, light, and
    special operations forces. Organized into Interim Brigade Combat Teams
    (IBCTs), it will leverage today's technology with selected capabilities
    of the Legacy Force to serve as a link to the Objective Force. Most
    importantly, the Interim Force--a combat ready force--will allow
    exploration of new operational concepts relevant to the Objective
    Force. The Army will field at least six of these new, more responsive
    brigade combat teams. These units comprise an Interim Force that will
    strengthen deterrence and expand options for the field commanders. Over
    the past two years, we have organized two brigades at Fort Lewis,
    Washington, and additional IBCTs are programmed for Alaska, Louisiana,
    Hawaii, and Pennsylvania. Leaders and Soldiers of the IBCTs at Fort
    Lewis, along with an Army coordination cell, have been working closely
    with all supporting agencies to develop wide-ranging iterative
    solutions to doctrine, training, logistics, organizations, material,
    and soldier systems required to field the Interim Force. The first IBCT
    has completed brigade and battalion level headquarters training with
    the Army's Battle Command Training Program and company level maneuver
    live fire training across the spectrum of conflict. The IBCT is
    training extensively for restrictive and urban terrain, and the force
    has used special operations training techniques and procedures for the
    development of night and urban fighting techniques. This brigade will
    attain its first incremental warfighting capability--and infantry
    company--in August of this year, and its full initial operational
    capability in May 2003.
        Training of the Interim Force is proving that the practice of
    combining heavy, light, and special operations cultures results in a
    more adaptable and capable leader or Soldier. The Army has learned from
    experimentation that technology such as digitization allows the
    integration of intelligence data with tactical and operational
    information and gives our leaders and Soldiers the ability to seize and
    retain the initiative, build momentum quickly, and win decisively. The
    Army is accelerating the development and fielding of the Interim Force
    and studying the viability of fielding an additional interim capability
    in the European area. The fiscal year 2003 budget continues funding of
    303 Interim Armored Vehicles (IAV) in fiscal year 2002 and 332 in
    fiscal year 2003 for the third IBCT.
                Legacy Force--Revitalizing The Army
        Transformation applies to what we do, as well as how we do it. We
    are working with the business community to accelerate change across the
    entire Army, promote cooperation, share information, gain greater
    control over resource management, and adopt better business practices
    by eliminating functions or activities that no longer provide value.
    This initiative seeks to focus constrained resources on achieving
    excellence in areas that contribute directly to warfighting.
    Transformation of our business practices cannot wait, and we have
    started at the highest levels.
        The Army is restructuring the Army Secretariat and Army Staff to
    create a more unified headquarters for the conduct of enhanced policy,
    planning, and resource management activities. The goal is to transform
    the headquarters into a streamlined, integrated staff more responsive
    to rapidly changing operational and institutional missions and to push
    more resources out to the field units. This will streamline the flow of
    information and speed decision-making. The unified headquarters will
    seek greater integration of the reserve components into key staff
    positions to better accommodate issues and concerns. To minimize
    turbulence in the workforce, we will reinvest manpower savings in other
    Army priorities. Realignment initiatives already underway will help us
    meet the congressionally mandated 15 percent reduction in headquarters
    staffs. With congressional support, The Army will apply these
    methodologies to the entire force.
        As The Army transforms, the Legacy Force--our current force--will
    remain ready to provide the Nation with the warfighting capability
    needed to keep America strong and free. Through selective modernization
    and recapitalization, the Legacy Force allows The Army to meet today's
    challenges and provides the time and flexibility to get Transformation
    right. Effectively managing risk without sacrificing readiness, The
    Army is focusing resources on systems and units that are essential to
    both sustaining near-term readiness and fielding the Objective Force
    while taking prudent risk with the remainder of the force.
    Recapitalization rebuilds or selectively upgrades existing weapons
    systems and tactical vehicles, while modernization develops and
    procures new systems with improved warfighting capabilities. The Army
    has identified 17 systems--its Prioritized Recapitalization Program--
    and fully funded them in selected units. Among these systems are the
    AH-64 Apache, UH-60 Black Hawk, and CH-47 Chinook helicopters; the M1
    Abrams tank; the M2 Bradley fighting vehicle; and the Patriot Advanced
    Capability-3 missile defense upgrade. Modernization provides the
    linkage to facilitate the fielding of the Interim and Objective Forces.
    The Crusader self-propelled howitzer will provide combat overmatch to
    our commanders until at least 2032 and serve as a technology carrier to
    the Objective Force. Recent restructuring initiatives have reduced
    Crusader's strategic lift requirements by 50 percent. Technology
    improvements have increased its range by 33 percent, increased the
    sustained rate of fire by a factor of 10, and utilizing robotics,
    reduced crew requirements by 33 percent. The fiscal year 2003 budget
    supports completion of the detailed design effort, completion of
    critical technologies integration and risk reduction efforts,
    powerpack/drive train integration of the chassis, and initiation of
    manufacturing of System Development and Demonstration prototypes.
    Modernized M1A2SEP tanks and M2A3 Bradley fighting vehicles are capable
    of the same situational awareness as the Interim Force, thus enabling
    Soldiers and leaders to learn network-centric warfare on existing
    chassis. The advantage these information technologies provide our
    current force further enhance its warfighting capability. Army Aviation
    modernization efforts will reduce our helicopter inventory by 25
    percent and retain only three types of helicopters in service, and the
    savings in training and logistics will be used to support the
    recapitalization of our remaining fleet. As part of its Legacy Force
    strategy, The Army terminated an additional 18 systems and restructured
    12 in this budget cycle.
                           a commitment to the future
        The Army, like the American people, remains committed to preserving
    freedom. As we have for over 226 years, we will continue to win our
    Nation's wars. Contrary to the expectations of some, the post-Cold War
    period has not seen a reduction in the demands placed on Soldiers on
    the ground. In fact, in the years since the fall of the Soviet Union,
    the international security environment has underscored the importance
    of ongoing commitments and highlighted new requirements for The Army.
    These increased demands have intensified the competition for resources
    and reduced needed investments in people, systems, platforms, and
    research and development. Unless redressed, risks incurred from this
    resources shortfall could undermine The Army's ability to satisfy
    national security requirements. At the same time, the war on terrorism,
    the requirement to secure the homeland, and the need to maintain
    readiness for possible near-term contingencies have validated the need
    for a new kind of Army--a capabilities-based ground force that can
    fight and win battles across the full spectrum of military operations.
    We are accelerating Army Transformation to achieve these capabilities.
    The Army cannot predict what other changes the future will bring, but
    what will not change is the need for our Nation to have the best
    trained, best led and best equipped Soldiers on the ground, deployed
    rapidly at precisely the right time, the right place, and with the
    right support structure as part of a joint military team.
        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. We look forward to discussing these issues with you.
        [Clerk's Note.--The Posture Statement 2002 can be found on the web
    at www.army.mil.]

        Senator Inouye. Thank you, Mr. Chairman.
        General Shinseki.

                     STATEMENT OF GENERAL ERIC K. SHINSEKI

        General Shinseki. Thank you, Mr. Chairman, Senator Stevens,
    Senator Dorgan. We are honored once again, the Secretary and I,
    to be here with you and for this opportunity to update you on
    the posture of the Army and its state of readiness.
        First, it is with great regret that the Secretary and I
    express our deepest condolences to families who have suffered
    loss during this most recent fighting in the war against
    terrorism.
        We do have the greatest fighting force in the world. They
    are the best soldiers and the best leaders. Thank you for going
    to visit them and reaffirming with all of us just how great
    they are. Willingly and without hesitation, they continue to
    demonstrate their profound and abiding devotion to this Nation.
        As the Secretary has indicated, on our behalf they take
    risks. They take risks for us. They go into harm's way. They
    shed their blood, prepared to give their lives if necessary,
    and some have in the most recent fighting, to defend peace and
    freedom and our way of life.
        They will see this through to its decisive outcomes. We
    could not be prouder of all of them.
        Let me further report, Mr. Chairman, that our soldiers and
    our civilians in the Army appreciate much more than I can put
    into words--and this has something to do with the great morale
    you encounter as you and other members of this committee make
    your trips--what you have done for them in this past year:
    enhancements in pay, enhancements in housing and health care
    and retirement benefits.
        They continue to make incredible contributions and even
    more incredible sacrifices. But they look to us to demonstrate
    the Nation's appreciation and its commitment to them and their
    families. It is a commitment that you have honored well,
    members of this committee, and they are very grateful.
        Nearly 3 years ago now, the Army took a hard,
    discriminating look at itself. After examining our capabilities
    against the emerging strategic environment, we decided to take
    some risk, to break with our past. We committed ourselves to
    transforming the way we will fight and will win the wars, the
    new wars of this new century. This committee elected to
    underwrite that transformation, an Army transformation, at a
    time when the very term was a bit unfamiliar and uncommon.
        Today when one considers the magnitude of what we have
    accomplished with your support, it is staggering. With this
    submission, this Army submission for the fiscal year 2003
    budget, the Army buys its last heavy tank--confirmation of our
    sustainable momentum in our move towards the irreversibility
    that we seek to achieve in our transformation.
        Your investments are paying dividends. The selective
    recapitalization and modernization of our legacy systems
    maintains the acceptable readiness to fight and win today
    through this decade and the years beyond as we begin
    transformation to things that Senator Stevens asked us to be
    sensitive to. In August of this year, our first Interim Brigade
    Combat Team at Fort Lewis will achieve its initial warfighting
    capability. By this December, we intend to operationally test
    two of that brigade's battalions and by next spring we will
    evaluate the entire interim brigade for its initial operating
    capability.
        Again, this month we anticipate selecting a lead systems
    integrator for the Future Combat System, that future Objective
    Force that we intend to field at the end of this decade, a new
    solicitation and acquisition strategy that will accelerate
    transformation to the Objective Force by the year 2010. We are
    prepared to fight these near-term conflicts against terrorism
    or any of a host of other dangers even as we set about changing
    ourselves to fight the wars of the 21st century.
        Army has done a lot to help itself. We have made our own
    tough decisions. To fully fund transformation between fiscal
    year 2003 and fiscal year 2007, we have restructured or
    eliminated 18 Legacy Force modernization systems. We have
    reduced heavy maneuver and artillery battalions by 25 percent.
    We have cut aviation structure by 21 percent. We have manned
    our 10 Active Component divisions and two active cavalry
    regiments at 101 percent, something that was not in place 2\1/
    2\ years ago. Since October of the year 2000, the strength of
    other early deploying units has grown from 92 to 99 percent,
    and by the end of this year, we expect that those formations
    will be fully manned at 100 percent.
        The ``Army of One'' advertising campaign that drew a lot of
    discussion when it first was revealed has been a resounding
    success as far as the Army is concerned. In 2001 we achieved
    our recruiting targets for the second year in a row and we will
    exceed our recruiting targets again this year, and I can make
    that statement today looking forward to September of this year.
    We have also exceeded our retention goals.
        We have been changing our stance as an Army and this
    President's budget builds on the momentum we have attained over
    the last 2\1/2\ years. But we need to do more and we need to
    move faster. The attacks of September 11 validated the vision
    the Army declared 2\1/2\ years ago and the ensuing war against
    terrorism has underscored the need to accelerate transformation
    to better prepare our soldiers for the uncertain challenges of
    the 21st century.
        All of our troops are performing superbly--Active, Guard,
    Reserve, and from all of the services. In Afghanistan Army
    special operators enabled the anti-Taliban forces to compel the
    enemy to mass so that significant capabilities of our air-
    delivered munitions could be brought to bear. These successes
    are not accidental and they are never won easily. Victories in
    battles like Mazar-e Sharif, Herat, and Kanduz and Bagram and
    now in the Shahikot region, as well as the successful
    operations on Objectives Rhino and Gekko and in the region of
    Tora Bora, represent 10 years of painstaking work on the part
    of the Army, hard work, superior training, real world
    experiences in places like Bosnia, Kosovo, Nigeria, Colombia,
    Philippines, and, yes, Pakistan and Uzbekhistan, just to name a
    few.
        Mr. Chairman, our investments have borne fruit in a
    conflict that was difficult to predict 6 months ago. Our new
    century is marked by uncertainty. Recognizing and preparing for
    uncertainty is what the Army vision is all about. In this new
    century, strategic success demands strategic responsiveness,
    seeing the world with an unblinking eye, a lethal, agile,
    survivable, versatile, and sustainable force, and the
    infrastructure and lift capabilities to deliver that force
    anywhere in the world quickly so that it can win decisively.
        That force is the Army's Objective Force, and the continued
    strong support of this Congress and the administration, with
    that support, you will see that Objective Force fielded this
    decade.
        Mr. Chairman, thank you again for allowing us to be here
    and I look forward to your questions.

                           RECOGNITION OF U.S. TROOPS

        Senator Inouye. This morning all of us have used the word
    ``morale'' and General Shinseki has indicated that it is
    important that we demonstrate an appreciation for the services
    rendered by these men and women and to recognize their
    contributions.
        In that line, may I ask a few questions. Let me not tie
    directly to readiness or to weapons systems. I have yet to see
    a ribbon--in all wars, if you went to Korea there was a Korea
    ribbon, or a Vietnam ribbon. I have not seen one for this
    conflict, nor have I heard of any unit receiving a unit
    citation. I see enough on the Cable News Network (CNN) and
    other news media suggesting the heroics of our men. Somehow
    they are not recognized.
        I just received a report that in all the time we have been
    there two Silver Stars and nine Bronze Stars with V's have been
    issued and about 10 Purple Hearts. I think it is very important
    that due recognition be made, not just by word but by awards
    and decorations. Similarly, I think these awards and
    decorations would have a salutary impact, not on the Government
    Issue's (GI's), but among the people, their parents, their
    brothers and sisters. They want to know that their loved ones
    are involved and doing their gung-ho work.
        So are we doing anything like this, General?
        General Shinseki. I have offered to the Secretary a
    recommendation, for example, that beyond the individual awards,
    which is within the service's responsibility to recognize
    individual performance, the awards you spoke about, Silver
    Stars, Bronze Stars--you are correct there is not a campaign
    medal and I think, appropriately so, that discussion will be
    undertaken.
        Within the Army, I have offered to the Secretary a
    recommendation that, because of the combat that is going on in
    Afghanistan, that the units who serve there--as you know, in
    the Army we have the tradition, you wear your unit patch on
    your left shoulder, but if you go to war with that unit you
    move that unit's designation and you wear it on the right
    shoulder sleeve as demonstration that you fought in combat with
    that organization.
        That recommendation is before the Secretary for him to
    consider and I expect that that will be approved. But,
    appropriately, a campaign ribbon for this operation is
    something we will consider.

                 STATUS OF INTERIM BRIGADE COMBAT TEAMS (IBCT)

        Senator Inouye. General Shinseki, your plans call for six
    Interim Brigade Combat Teams with the armored vehicles, interim
    armored vehicles (IAV's). Can you give us a status report of
    that?
        General Shinseki. Yes, sir. We have set aside funding for
    six brigades, as you indicated, the two initial at Fort Lewis,
    one in Alaska, one in Hawaii, one at Fort Polk, and then one
    with the very important effort with the National Guard, the
    56th Brigade out of Pennsylvania. The way these were organized
    was a look at a strategic environment that described a movement
    from Eurocentric issues and a movement towards challenges in
    the Pacific Basin.
        So if you look at how we organized the allocation of those
    six brigades, four of them are focused on the Pacific, and yet
    they are located adjacent to strategic deployment airfields
    where they can be picked up and moved in a variety of
    directions. As I am reminded from time to time, sitting in
    Alaska, that brigade is actually closer to Saudi Arabia than it
    is sitting at Fort Bragg. So the locations were key.
        As sometimes happens when we set about changing a direction
    and creating new requirements, as we have in these brigades, we
    do very well at the training and the operation and maintenance
    (O&M) pieces and it takes us a little while to knit together
    the rest of the programs that would allow us to ensure that
    when these brigades begin to stand up at these designated
    locations that we have prepared the way in the vast array of
    other requirements, to include ranges, maneuver areas,
    environmental studies. All of that effort now is underway.
        The funding for that has not been fully marked and we are
    working on that now to bring those aspects in, which will
    include some discussion of military construction (MILCON). When
    the budget was submitted, these locations were not clearly
    identified. So there is some work left to be done, some issues
    to be addressed.
        We have been asked to look at perhaps a brigade of this
    type in Europe and I would offer to you that this brigade, an
    IBCT in Europe, we have equal contributions. It would be very
    responsive and have the kind of lethality that light infantry
    does not have today. That issue is one of affordability and we
    continue to study that, and there are some requirements for us
    to provide an Army position on that.
        Senator Inouye. General Shinseki, I have many other
    questions, but this is the last for this round. We have had
    World War I with a certain type of fighting and World War II.
    Then it changed in Vietnam. Now we have a very different type
    of war. Will your transformation to the Objective and Interim
    Forces enhance your ability to fight this new type of war?

                               IBCT CAPABILITIES

        General Shinseki. Mr. Chairman, if we had the Interim
    Brigade Combat Team today it would be the first unit of choice
    going into a place like Afghanistan. It would provide the
    mobile, tactical mobility, the protection of light infantry,
    the modern weapons platform, assault guns, all of which would
    have been very helpful here.
        But when it arrives, it will meet, in the interim, this
    requirement. This requirement is driven by the fact that, as we
    are structured today, the Army has tremendous capabilities in
    two fists: the great light infantry we have, the best special
    operators, the best in our Ranger forces, and light infantry;
    and then tremendous heavy forces, the great heavy formations
    that are organized around the M-1 battle tank.
        The challenge for our Army is that you can get in very
    quickly with your light forces and then you have to wait for
    the heavies to arrive. This gap in operational capability is a
    long wait. The Future Combat System is intended to correct that
    situation. In other words, we will be able to get in there very
    quickly with future combat platforms that will fight like the
    light infantry forces do today--rapid, deployable, on positions
    faster than the adversary can react--but it will also have the
    attributes of our heavy forces, which is lethality and
    survivability. These characteristics now are sort of separated
    into the different communities we have in the force: great
    deployment, rapid deployment in our light forces, but they lack
    the staying power that the heavy forces have. Heavy forces, on
    the other hand, tremendous lethality, survivability; it lacks
    the deployability.
        We intend with the Future Combat System to solve these
    problems.
        Senator Inouye. Thank you.
        Senator Stevens.
        Senator Stevens. Thank you very much.
        Let me apologize for this pile of paper up here. We just
    received an onslaught of mail from September, October,
    November, December, and I am trying to sort the wheat from the
    chaff here, but it is not too easy to do.
        I would start off by echoing our chairman's comments,
    gentlemen. I do believe that the concept of unit citations as
    well as sub-unit citations in view of the type of operations
    going on over in the Afghanistan area are very much warranted.
    I do believe, unfortunately, we are too prone lately to
    consider awarding medals to those who unfortunately have lost
    their lives, and I understand that. But there are just a lot of
    people over there doing a lot of extremely, extremely brave
    things and I think that they need to be recognized and the
    people at home need to know that we have recognized what they
    are doing.
        Too often, they would not even know about it if we did not
    call their attention to it, because we all know most of the
    people who have been in combat really do not talk much about
    it. My friend here, we have never really had a conversation
    about the day that he ended up in the hospital and yet we have
    been together for over 32 years. So it is just one of those
    things.
        You learn about it when you read the citation. It is up to
    you guys to see that those citations get out there and get out
    there in a meaningful fashion. We had some conversations like
    this with your commanders in Afghanistan.
        Mr. White. We will do that. We will support that.
        Senator Stevens. That is a good point. Thank you.
        General, how long will you proceed now with this
    recapitalization of the Legacy Force and achieve the
    transformation to the Objective Force? How long will it take
    you to do that?

                          FIELDING THE OBJECTIVE FORCE

        General Shinseki. Well, Senator, the intent is to field
    this Objective Force before the end of the decade, so the year
    is 2010. But that begins the process of transformation, and as
    we are able to field the Objective Force we will take today's
    Legacy Force and begin to reorganize and re-equip them with
    objective capabilities and that will go on for some time.
        Senator Stevens. The Legacy Force is what we are going to
    be fighting this current war against global terrorism, am I
    correct?
        General Shinseki. That is correct. That is correct, and we
    will keep that force ready and maintained for the next 10 years
    plus. Even as we continue to transform, we will have to keep
    that force ready to fight.
        Senator Stevens. But the force that is over there now is
    the Interim Force, right?
        General Shinseki. The force that is over there now is the
    Legacy Force. It is today's force.
        Senator Stevens. It is the Legacy Force.
        General Shinseki. It is. The Interim Force, the Interim
    Brigade Combat Teams, will begin to be fielded the end of this
    year. As they arrive, you will find them on these operations.
    If we had them now, they would be in Afghanistan. We just could
    not get there fast enough, Senator.
        But the capabilities are real and we need them in the
    interim even as we are building this future combat capability
    by the year 2010.

                                ARMY HELICOPTERS

        Senator Stevens. Shifting gears now to helicopters, we are
    all unfortunately familiar with the stories that are coming in
    about the loss of helicopters. Our budget before us now asks
    for $912 million for the Comanche. That is a significant
    increase. There does not seem to be much to replace the
    Blackhawks or the other helicopters that have been and are
    being lost now.
        Is there a problem about immediate replacement or assets
    that will be needed before we can get the Comanches delivered?
        General Shinseki. Senator, any time we encounter combat
    damages we do have to replace those aircraft. Yes, those
    requirements get stated and we fix them through your help.
        Senator Stevens. Will we see those numbers for the
    supplemental?
        General Shinseki. You will.
        Senator Stevens. Are you seeking money in the supplemental
    for that?
        General Shinseki. Absolutely.
        Senator Stevens. Okay.
        General Shinseki. Absolutely, for the combat damages. For
    the Comanche, it is a major Army program and I would say,
    looking at the fighting that is going on in places like
    Afghanistan today and the fact that you have got attack
    helicopters that are flying at very low altitudes right into
    the teeth of strafing fire and dealing with providing fires to
    the troops on the ground, we very much need Comanche.
        Senator Stevens. Well, we are very supportive of Comanche
    as far as I am concerned.

                      RESERVE COMPONENT PERSONNEL CALL-UP

        I do not want you to misunderstand this question, but this
    week alone there have been three other Senators who have come
    to me and asked me if I have heard any comments from my people
    at home about the number of the National Guard people who have
    been called up and the impact on local businesses. I told them,
    yes, when I was home I did. I did not hear anyone say, Stevens,
    you have got to get these guys back, but they have asked, how
    long is it going to take and is this really necessary to have
    these guys called up for so long.
        They took it with ease when we were reacting to the events
    of 9/11 and I know we are trying to prevent, God forbid,
    another such event from taking place by having these people on
    duty. But what is the status and review of how long we can keep
    these people? You have a 90-day requirement, do you not? Can
    they be kept more than 90 days on active duty on a crisis
    recall?
        General Shinseki. Well, actually we have a 179 day.
        Senator Stevens. 179?
        General Shinseki. That is correct, Senator, for overseas
    deployments. Statewide, we have even looked at a year-long
    deployment, which is tremendous pressure. But this is driven by
    what the Secretary and I have testified to before and I have
    for the last 2 years, and that is an Army that is smaller than
    the mission profile it is asked to perform.
        Senator Stevens. I understand that. But when you see
    someone who really is a junior executive in a local business
    out there watching people walk through the gates to get on an
    airplane, that sort of strains it a little bit, I think. I
    think they have joined the National Guard and are participating
    in those activities in order to be available if they are needed
    to go overseas.
        Mr. White. I agree with that. The airport security was an
    emergency measure following 9/11. We have agreed on a plan with
    the Department of Transportation (DOT), which is standing up
    the Federal Aviation Security Administration, to pull the Guard
    out of the airports over the next 90-day period. That will take
    some of the pressure off the Guard deployment for non-
    traditional types of things that the Guard is doing.
        Senator Stevens. Do you have a time frame for that?
        Mr. White. We should be done with that by the end of May.
    That will be a changeout between the new Federal agency,
    security people and the guardsmen in the airports.
        Senator Stevens. We can tell our people that the need for
    the call-up of the National Guard for duty such as that in the
    home Guard concept will be reviewed by May?
        Mr. White. That piece of it should be shut down by May and
    the troops will be redeployed.

                         SPECIAL FORCES TEAMS EQUIPMENT

        Senator Stevens. General Shinseki, as Senator Inouye
    mentioned, I believe, we met with an 18-man Special Forces team
    that had been operating in Afghanistan for 4 months. As a
    matter of fact, I was told I believe that they were out there
    in one stint 2\1/2\ months on one patrol. A superb job, a
    superb job.
        But we wondered about the equipment and their capabilities
    and whether those teams were designed to stay out that long. It
    seems like an awful long time for them to be out there. As a
    matter of fact, none of them spoke the local language, but they
    had been extremely successful in organizing and putting
    together Afghan units to conduct the battles.
        I wonder, has anyone analyzed really the extent of their
    equipment and what they need and what they had?
        General Shinseki. Senator, I tell you, we look at this all
    the time. We never quite anticipate the environment sometimes
    we end up with. The biggest challenge for light forces is
    weight. There are lots of things we can give them, but they
    essentially are foot-mobile and cannot carry it all in. So we
    give them what they need and then the challenge for us is how
    to creatively keep them sustained in terms of resupply, because
    just merely getting in there to give them resupply tips their
    hand if they are in a strategic reconnaissance role.
        So that is a little bit challenging. But we manage to do
    that with Special Operations platforms that can get in there in
    the dark of night and with no lights, run at high speed, and do
    a delivery.
        But the quality here, the important quality here, is not
    just the equipment. It is the quality of the youngster. When
    you think about, in small groups these young Americans--and
    they are mostly Army special operators, but there are other
    services with them as well--going into a part of the world
    where the leadership that was trying to oppose the Taliban
    could not get their act together. They just could not even work
    together.
        As you indicate, these youngsters went in there without
    firsthand knowledge of the language. Some of them spoke Russian
    so that they could--in that part of the world it is not
    uncommon to find a Russian speaker. So, communicating through a
    third language, were able to get them to put their forces
    together just enough to create a threat, that the Taliban had
    to then mass and they had to come out of the cities and the
    villages, move their equipment from being parked next to
    mosques and come out and confront this anti-Taliban force.
        When they did, our youngsters also had the skills to be
    able to bring in munitions coming off the B-52's and B-2's. We
    never envisioned them going into battle on horseback or having
    on their hips the international maritime satellite (MRSAT)
    communications device as being the method by which they were
    able to link this fight together. The creativity of that
    youngster is what brought all this together.
        Yes, we do continue to look at the kinds of tools we give
    them. But when they are riding 14 hours on horseback to get to
    the fight, most of us who have ever been on a horse, 14 hours
    is a long time, and you have got to do a lot of back management
    just to be able to stay upright. Well, these are tough kids and
    they dealt with that situation. I do not know what an Afghani
    saddle is like, but I know it is not like one of our westerns.
        Senator Stevens. We met with those guys and they gave us
    some pictures of that, and they are very proud and very
    capable. They reminded me of a conversation we had long ago
    with Colin Powell when he told us that he had been dropped with
    a team into Cambodia. I do not know if he has ever told you
    about it.
        General Shinseki. No.
        Senator Stevens. Well, his point to us was that they had 18
    days food and they were supposed to get a resupply, and on that
    18th day when you start eating the last of the food, that is
    when you know what it means to trust your Government. I hope we
    understand that, too.
        I have other questions, but again I want to tell you, that
    bunch is something else over there. I just wish more people
    could see it.
        I saw that movie the other night, ``We Were Soldiers.'' A
    hell of a movie. We took some of the people who were ``Band of
    Brothers'' survivors and brought them here and had a chance for
    Members of Congress to meet them. If you have got some of those
    survivors from that unit, we would like some time to arrange a
    little reception up here for them.
        General Shinseki. Sir, that would be wonderful.
        Mr. White. Great idea.
        Senator Stevens. Thank you very much.
        Senator Inouye. Thank you.
        Senator Shelby.
        Senator Shelby. Thank you. Thank you, Mr. Chairman. I have
    a number of questions. It will probably take me a few rounds,
    Mr. Chairman.

     SCIENCE AND TECHNOLOGY (S&T) AND SYSTEM DEMONSTRATION AND DEVELOPMENT
                                     (SDD)

        While the Research, Development and Engineering Centers
    (RDEC) and labs have performed S&T 6.1, 6.2, 6.3 functions, the
    Program Executive Officer/Program Manager (PEO/PM) has taken
    mature technology from industry, RDEC's, and other resources to
    execute the SDD phase. However, the program executive office
    (PEO) project manager reorganizations, as briefed to you, Mr.
    Secretary, October 4, 2001, includes the following guidance:
    ``A director for S&T''--that is a GS-16--``will be established
    in each PEO. This individual will be responsible for S&T
    objectives, transitioning programs from the RDEC's and advanced
    technology demonstrations, advance concept technology
    demonstrations. Management oversight of funding allocated for
    S&T activities will be the responsibility of each director for
    science and technology and elsewhere. Selected S&T funding,
    6.3, will flow through the director for S&T in each PEO.''
        I am concerned that this part of your organization plan
    represents a dangerous precedent and blurs the lines between
    S&T and SDD. Putting S&T funds under PEO/PM program manager
    oversight would invite, I believe, the use of these funds to
    supplement the chronic shortfalls invariably experienced by
    development programs.
        I do not believe the Department of Defense (DOD) is
    spending enough on the research and development (R&D) programs,
    remaining below the 3 percent funding target. With such a
    reorganization, I cannot see how fundamental Army S&T
    capabilities will not suffer even more.
        The General Accounting Office (GAO) best practices report
    points out the importance of demonstrating high technology
    readiness levels prior to initiation of SDD. We all support
    your efforts to transform the Army, but huge technology hurdles
    remain and I want to see the Army focus on supporting an
    environment to close the technology maturity gap that exists.
        The GAO report stated key to this environment was making a
    science and technology organization, rather than the program or
    product development manager, responsible for maturing the
    technology to a high technology readiness level (TRL). I agree
    with the GAO. I believe that the Army's organic labs and RDEC's
    are the right places to conduct fundamental S&T research and
    development. The movement of 6.3 R&D funding away from the Army
    RDEC's would not only marginalize them, but I believe hurt
    their ability to function.
        Several questions now. What is the status of this
    reorganization plan, Mr. Secretary? If it is proceeding, why
    are the history and the GAO wrong, and explain to me why you
    believe, if you do, that S&T funds would be better managed and
    spent by PEO's rather than RDEC's? Do you plan to request
    additional 6.1 and 6.2 funding to ensure that RDEC's have the
    funds necessary to mature technology to the higher TRL's? What
    regulations are in place to ensure that 6.3 funds will be used
    for S&T purposes and not to supplement SDD shortfalls?
        I know I have covered a mouthful.
        Senator Dorgan. Let me ask Senator Shelby to yield just for
    a moment, because I have to be at a 10:45 event.
        Senator Shelby. Yield for what?
        Senator Dorgan. Just yield to make a point.
        Senator Shelby. Oh, I yield my time.
        Senator Dorgan. I had wanted to ask questions about the
    Predator and Global Hawk with respect to intel and the use of
    that by the Army. I especially wanted to ask a series of
    questions about the high mobility trailers, which I have some
    difficulty about what is going to be happening there with the
    Army. I think what I will do is defer, perhaps submit questions
    to you, and call you, General and Secretary, on the issue of
    the high mobility trailers.
        Also, in this morning's newspaper there is a reference, I
    believe it is the Los Angeles Times, talking about the snow-
    covered mountains and elevations of 11,000 feet where combat is
    occurring: ``Most U.S. troops are using cold weather gear first
    designed in the 1950's rather than new high-tech materials,''
    and so on. If you might respond to that as well to see if there
    is any way for us to be helpful there. I do not know the
    veracity of this particular account.
        Because I have to leave, I thank you for allowing me to
    make those points, and I will be in touch with you about the
    high mobility trailers. Just simply, you are in the process, I
    believe, of a $250 million add on high mobility trailers,
    perhaps to be produced by those that produced previous trailers
    at 50 percent over cost and trailers that did not work and
    trailers that had to be warehoused. I will have some great
    difficulty with that. I hope that we can produce these new
    trailers through bids that are submitted by companies that I
    think can do a better job.
        But I thank you, Senator Shelby.
        [The information follows:]

                               Cold Weather Gear

        United States Army forces serving in Afghanistan and
    adjacent areas are not using cold weather clothing first
    designed in the 1950s. In fiscal year 1989, the Army began
    fielding the extended cold weather clothing system (ECWCS) to
    all high-priority units. ECWCS is a state-of-the-art, cold
    weather clothing ensemble that capitalizes on the technological
    advances of industry in the area of synthetic fibers and films,
    particularly polypropylene and polytetrafluoroethylene (PTFE).
    ECWCS is a layered system that may be adjusted to individual
    metabolism and prevailing weather conditions. The ECWCS system
    consists of polypropylene underwear, polyester fiberpile shirt
    and overalls, balaclava hood, parka and trousers made with a
    three-layer nylon and PTFE laminate, intermediate cold weather
    gloves and boots. Initial fielding of ECWCS was completed to
    all designated units in fiscal year 1993.
        In fiscal year 1996, ECWCS underwent an improved design
    change called generation II ECWCS. The Army procured $7 million
    of the generation II version and fielded them to Korea as part
    of the low rate initial production effort. Ultimately, the Army
    decided not to procure the generation II ECWCS since initial
    fielding and sustainment costs of the system were prohibitive
    and the improvements provided no real operational benefit to
    the Army.
        In second quarter of fiscal year 2000, as the result of an
    $8 million Congressional plus up, the Army began limited
    fielding of a new ECWCS black fleece shirt and overalls
    developed in fiscal year 1999. These new items reduce the
    polyester bulk by 40 percent and serve as an insulating layer
    for the system. The ECWCS overalls were only fielded to units
    in Alaska because they are intended for use in temperatures
    ranging from -25 to -60 degrees Fahrenheit. The black fleece
    shirt and overalls became available through the supply system
    in the fourth quarter of fiscal year 2001 and will be phased in
    as stocks of the older, bulkier fiberpile version are depleted.

                       High Mobility Trailer Procurement

        The Army is not spending $250 million in this fiscal year
    on the high mobility trailer. This year's efforts have been to
    field the trailers produced in previous years. None of these
    resources have gone to the prime vendor. In fiscal year 2004,
    the Army plans to execute a competitive re-buy procurement of
    the high mobility trailer that will alleviate the previous
    concerns. The Army has an acquisition objective of 25,112
    trailers.

        Senator Shelby. Thank you. I did not know it was your time.
    You can have it all.
        Mr. Secretary.
        Mr. White. To go back to your question, sir.
        Senator Shelby. Yes, sir.
        Mr. White. We have done a number of things on the
    acquisition side over the past 9 months, one of which is to
    bring all the PEO's under the control of the Assistant
    Secretary for Acquisition, Logistics, and Technology, the
    acquisition executive of the Army.
        The second thing we did was attempt to better line up the
    tech base with the PEO structure so that we get a better cross-
    walking of technologies out of the tech base into the PEO
    structure. This is tremendously important with the Future
    Combat Systems. About 95 percent, I think, of all the S&T money
    that we have today is focused on bringing to fruition the
    Future Combat Systems. That is why we made that alignment.
        I absolutely agree with you that a strong and vital
    technology base is critical to the Army as we go forward. We
    are not quite at----
        Senator Shelby. We should fund that base, should we not?
        Mr. White. Yes, we need to.
        We are not quite at 3 percent, either. In some services--
    the overall DOD objective is 3 percent and some services are
    closer than others. We, being a labor intensive service, it is
    more difficult for us to make it than others. I think we are at
    1.7 percent, 1.8 percent, something like that. But I am
    absolutely committed to a strong S&T base and committed to
    focus that base in a way that it produces things that we can
    transition into systems development going forward.
        The reorganization that you discussed is an attempt to
    better focus that effort, but not penalize the RDEC's that you
    referred to.

                       CHEMICAL DEMILITARIZATION PROGRAM

        Senator Shelby. Mr. Secretary, I want to shift into another
    area. That is the chemical demilitarization program that has
    been going on, among other places, in Anniston, Alabama, area.
    I would like to hear your thoughts on the current status of
    these programs and what your plans are to make sure that the
    program does not receive the same distinction next year. That
    is, it was labeled by, the chemical stockpile emergency
    preparedness program (CSEPP) was labeled ``ineffective'' in
    President Bush's budget submission.
        You know we have been working together on this, too, and
    with Secretary Aldridge.
        Mr. White. Right.
        Senator Shelby. What are the Army's--well, go ahead and
    answer that part. What are you going to do to make sure that
    you do not get that same label again, in effect?
        Mr. White. Well, we have changed the leadership of the
    program. Assistant Secretary Fiori, who I believe has discussed
    this with you and Senator Sessions in particular for the
    Anniston situation, has put together a new program that
    accelerates this whole process. I am confident as we work all
    the details of that we will not only significantly reduce the
    risk that the existing stockpile represents, but the economics
    of it will be much better as we go forward. We are in the
    initial phases of that and we are having success.
        The specific situation at Anniston, of course, really has
    to do with sorting out the Federal Emergency Management Agency
    (FEMA) relationship with the State of Alabama. We on the Army
    side have given the money to FEMA to support the impact that
    this will have on the State and FEMA has to work out with the
    State the details of transferring our money to the State. I am
    hopeful that can be done shortly because we need to get on with
    destroying this material.
        Senator Shelby. But destroying it safely.
        Mr. White. Yes, sir.
        Senator Shelby. See, my concern and Senator Sessions and
    anybody else, I hope, is making sure that those chemicals are
    destroyed in a safe manner, because anybody, anybody living in
    that area, has to have concern and they do. We will continue to
    get into that.
        But what are the Army's plans, Mr. Secretary, for disposing
    of the secondary waste stream at each destruction facility?
        Mr. White. The secondary waste stream will be a hazardous
    material, as opposed to a chemical weapon material, chemical
    grade weapon material, and a hazardous material can be disposed
    of through normal commercial sources. We will make those
    arrangements and see that that happens.
        Senator Shelby. You are familiar, I am sure, Mr. Secretary,
    with the software problem there. I hope you are. One of the
    pressing safety items in the Calhoun County-Anniston area has
    been an upgrade of the emergency management information system
    (EMIS) software system. This upgrade would allow the local
    emergency management agency (EMA) to quickly and accurately
    warn the thousands of people who live within a short distance
    of the stockpile in the event of an accident, which we hope
    never happens.
        Despite the existence of EMIS, the Army accepted an
    unsolicited bid in 1993 from Pacific Northwest National Labs
    (PNNL) to develop a second emergency software system for the
    CSEPP known as the Federal emergency management information
    system (FEMIS), F-E-M-I-S. Forty million dollars and 9 years
    later, General Doesburg, the stockpile commander, said the Army
    will not use FEMIS because of test failures. The Calhoun County
    Emergency Management Agency agrees with the Army and is using
    EMIS, E-M-I-S.
        Funding to upgrade EMIS has been requested so that the Army
    and Calhoun County will have the best possible software system
    operating their emergency operation center's (EOC's). Last
    October, Under Secretary of Defense Pete Aldridge got involved,
    as you know, in the program and he has agreed to the software
    upgrade.
        This software funding problem has existed for years and is
    part of our concern about safety. It seems to be a huge
    conflict of interest there, that one of the people who is
    responsible for the issue in the Army had close ties to Pacific
    Northwest National Labs, the developer of the FEMIS software.
    In fact, as an Army colonel he was involved in the original
    unsolicited bid process. He then went to work for PNNL as the
    FEMA sales person after retiring from the Army and now works
    for Dr. Fiori. I think it is very discouraging to see these
    things happen.
        But the bottom line on Anniston, as you well know, is
    safety. We know we have got to dispose of these chemicals
    because they are sitting there and time is ticking. But we have
    to do it, and we have got to touch every little point to make
    sure that it is safety, because the people are deeply
    concerned, should be deeply concerned. If I lived there, heck,
    I would, and you would be, too.
        Mr. White. I absolutely agree.
        Senator Shelby. You know where we are coming from.
        Mr. White. Yes, sir.
        Senator Shelby. Okay. I believe my time is up. Thank you.
        Senator Inouye. Thank you.
        Senator Leahy.
        Senator Leahy. Thank you, Mr. Chairman and Senator Stevens.
        I want to welcome the Secretary and of course General
    Shinseki back to the subcommittee. You have done a great deal
    in preparing our men and women in Afghanistan and actually
    further afield. I compliment you on that. I suspect that
    neither one of you have nights where you get a full night's
    sleep as the reports come in.
        I have some questions related to land mines, which I will
    raise at another point, along the lines, General, of some of
    the questions you and I have discussed in our private meetings.

                         RESERVE COMPONENT AUGMENTATION

        Mr. Secretary, I want to talk to you about a situation on
    our northern border. The Vermont National Guard, among other
    Guards, are being sent to the border to help the Immigration
    and Naturalization Service (INS) agents and Customs inspectors.
    We have also put a lot of money in the budget to increase the
    number of INS agents and Customs inspectors. We have asked the
    Attorney General when that might happen. We had a vague answer
    the other day in the hearing, but I suspect a more specific one
    will come.
        In the meantime, the Guard is helping out. They are needed.
    Our Federal agents along the northern border are greatly
    overtaxed. We have a question of suspected terrorists, bombs,
    and damaging materials coming in.
        Now, these highly trained men and women are going to be
    prevented from carrying side arms for protection. That is like
    sending another Vermonter, John LeClair, onto the ice without
    his hockey stick. It does not seem to make a great deal of
    sense. If we are going to ask them to do this, if we are going
    to ask them to be on the border in this position, why are they
    not carrying side arms?
        Mr. White. Why are they not carrying side arms?
        Senator Leahy. Yes.
        Mr. White. Sir, the border augmentation that is a 179-day
    commitment that is just beginning, just for background it will
    be a Title 10 activation of the Guard. We will detail the
    guardsmen to the control of the Border Patrol, INS, and
    Customs, the three agencies that they will be committed to.
        It was the view of the Border Patrol, Customs, and INS that
    the nature of the duties of the guardsmen as they patrol the
    border would not require them to be armed.
        Senator Leahy. Well then, why do we need them there?
        Mr. White. Because these are people----
        Senator Leahy. Are they not going to be doing some of the
    same things that the INS and Customs agents would be doing who
    would be armed?
        Mr. White. In some cases, yes.
        Senator Leahy. Well then, if the INS and Customs agents, if
    we feel that there is enough of a threat they have to be armed,
    why are not our guardsmen armed?
        Mr. White. Well, the feeling of those agencies was because
    they would always be in the presence of an armed agent that
    they themselves would not necessarily have to be armed.
        Senator Leahy. That would be a lot of fun if I was out
    there saying that I am there because normally we might send
    four Customs agents, for example, because of whatever the
    threat might be, but now because the Customs agents are spread
    so thin we are going to send three unarmed guardsmen and one
    armed Customs agent, but now we will still have that same force
    of four, but only one will be armed.
        We have a very good border with Canada.
        Mr. White. Yes.
        Senator Leahy. They are our largest trading partner. I live
    an hour's drive from the Canadian border. We go back and forth
    all the time. The vast majority of people going back and forth
    across there are very law-abiding. But as you know, without
    going into classified items in this open hearing, as you know
    this has also been an attractive border to would-be terrorists.
        For the life of me, I cannot--my point is this. If you have
    got somebody who is fulfilling a role in an office, for
    example, where people are not armed, that is one thing. If you
    are telling them they have got to go out there and do the same
    thing that it is necessary to have an armed person, why are
    they not armed?
        Mr. White. Well, for that portion of the people that fall
    in the category that you describe, we have reopened the
    discussion on the arming versus unarming.
        Senator Leahy. I wish you would, because we have them armed
    standing by the screening devices.
        Mr. White. Yes.
        Senator Leahy. Probably a good idea because it seems half
    the time the screening devices do not work, although I have
    done my best to help the economy of this country, at least
    whatever company it is that makes fingernail clippers, by
    having to buy one every time I go through. But at least we have
    got the Nation safe from 61-year-old U.S. Senators carrying
    fingernail clippers.
        Mr. White. That piece of it is being reconsidered.
        Senator Leahy. Well, thank you. Would you keep us posted or
    have your staff keep me posted on this.
        Mr. White. Certainly.
        Senator Leahy. I have other questions, but I will submit
    them for the record, Mr. Chairman.
        Senator Inouye. Thank you very much.
        [The information follows:]
                                          United States Senate,
                                         Washington, DC, March 1, 2002.
    The Honorable Donald H. Rumsfeld,
    Secretary of Defense, 1000 Defense Pentagon, Washington, D.C.
        Dear Secretary Rumsfeld: We understand that members of the National
    Guard called to active duty to support the INS and the Customs Service
    at the Northern Border in law enforcement field positions will not be
    permitted to carry sidearms. We think it is a mistake not to provide
    adequate protection to highly trained people conducting a national
    mission. It defies logic that active duty personnel working in direct
    support of armed federal agents will be prohibited from carrying
    weapons themselves, especially as they will be in battle dress uniforms
    which will presumably make them obvious targets.
        That National Guard forces providing security at airports, the
    Olympics, and even here at the nation's Capitol are armed makes one
    wonder exactly how the circumstances on the border are so different to
    warrant such an extraordinary decision. Our only explanation is that it
    is the result of the Defense Department's puzzling unwillingness to
    call up forces under Title 32 and provide the Guard with maximum
    flexibility to support other federal agencies. Several Senators raised
    several concerns about the shaping of the Guard border mission in a
    February letter. We are enclosing another copy for your review. We hope
    you will address this situation quickly.
                Sincerely,
                                       Patrick Leahy,
                                               Co-Chair, National Guard
                                                   Caucus.
                                       Kit Bond,
                                               Co-Chair, National Guard
                                                   Caucus.
                                     ______

                                          United States Senate,
                                     Washington, DC, December 12, 2001.
    The Honorable Tom Ridge,
    Director, Office of Homeland Security, The White House, Washington, DC.
        Dear Tom: Recently, the Justice Department announced its request
    that troops from the National Guard supplement agents from the
    Immigration and Naturalization Service along the porous 4,000-mile
    northern border. We understand that the Department of Defense is
    considering calling up these troops on a federal, Title 10 status. As
    representatives of two border states, we would like the administration
    to reconsider the idea and call up the forces under Title 32 instead.
        Title 32 would allow more flexibility to accomplish this critical
    mission. Unlike forces called up under Title 10, Title 32 forces are
    not subject to posse comitatus restrictions. They can assist local and
    federal law enforcement organizations with its full range of
    activities, including arrests. Also in contrast to Title 10, Title 32
    forces can continue to train for other missions. As the National Guard
    remains the nation's primary military reserve, this status allows our
    nation's adjutants general the ability to cycle forces through training
    and remain ready for other contingencies.
        Title 32 also ensures that members of the Guard called up stay
    generally within their home state. Our nation's governors will remain
    in control, while Guard forces serving in their home state can bring
    unparalleled familiarity with the problems and challenges facing their
    communities. That understanding raises the comfort level of the
    country's citizens who might otherwise be concerned to hear that active
    duty troops from far away are serving in their community.
        There are certainly occasions where members of the National Guard
    should be called up under a Title 10 status. But in this case, it seems
    apparent that Title 32 is the more sensible approach. We would
    appreciate your considering this question and responding as soon as
    possible with your views. We are impressed with your contributions in
    the months immediately after the awful, events of September 11, and we
    look forward to continuing our work together.
                Sincerely,
                                       Patrick Leahy,
                                               United States Senator.
                                       Patty Murray,
                                               United States Senator.
                                       James Jeffords,
                                               United States Senator.
                                       Maria Cantwell,
                                               United States Senator.

                             CRUSADER AND COMANCHE

        Senator Inouye. If I may ask this final question of both of
    you. The problems of the Crusader and Comanche programs have
    become standard fare for critics of the United States Army.
    Almost every day there is some article in the paper. For
    example, the Crusader artillery gun has been criticized as
    being a cold war weapon by some, unfit for rapid battlefield
    combat and too heavy to transport. Some have said that the
    Comanche helicopter has been in development for nearly two
    decades and the program has been criticized for poor contractor
    performance, cost overruns, repeated restructurings, the latest
    coming at the end of last year.
        Now we have before us a budget request of about $0.4
    billion for research and development on these two systems,
    which is about 20 percent of your total R&D budget. Obviously,
    you consider these two programs to be very, very important. I
    would like to give you an opportunity to respond to these
    critics, if I may.
        Mr. White. Let me begin and then the Chief of Staff, I am
    sure, will also add his views.
        I view Crusader to be absolutely vital to the Army going
    forward. The Army that General Shinseki and I grew up in was
    always outgunned by its adversaries. The biggest mismatch that
    we ever had with the Soviets was the field artillery side. We
    have not fielded a new artillery cannon on a brand new chassis
    in this country since the early 1960's. That was the 109
    system, which is now in its sixth major modification.
        The weight of the Crusader was a concern at 60 tons. We
    have put it on a slim-fast diet. It will come in at 40 tons or
    less. It has tremendous range, rate of fire, and tactical
    mobility equivalent to the Abrams. In fact, it will have a
    common engine with the Abrams. And it is C-17 transportable.
    You can get two of them or one of them and an ammo resupply
    vehicle in a C-17.
        If we had it in Afghanistan today combined with the Q-37
    counterbattery radar, we would not have to worry about the
    mortars that have been causing casualties in the 10th Mountain
    and the 101st on that battlefield. It will be a tremendous
    counterfire capability. So I am four-square behind Crusader.
        Comanche in its 20 years, as you point out, has suffered
    from every known disease to a development program, from
    migrating requirements to less than stellar contractor support
    to uneven funding. Our commitment, the Chief's and I, is to get
    the program focused on producing a block one, an armed
    replacement for Kiowa, which is what we must have. Kiowa has
    been in the fleet since Vietnam. Second, rearrange the
    contractors into a more efficient operation. We have done that.
    Third, fund the program and get it fielded, and we intend to do
    just exactly that.
        We are going through a Defense Acquisition Board review of
    Comanche. That will be done in May. But this is a
    transformational system and we must get this thing fielded.
        Senator Inouye. Chief?
        General Shinseki. I would just add, Mr. Chairman, the
    descriptions of Crusader being a cold war relic has primarily
    to do with weight. What is also true about cold war artillery
    was it could not move very fast, it did not keep up with our
    maneuver forces, with our M-1's and our Bradleys. So the speed
    with which we attacked was always driven by the speed at which
    our artillery pieces could keep up, which was not very good, as
    we discovered in Desert Storm.
        What is also true about cold war artillery was it did not
    have a very good rate of fire, it was not very accurate, and it
    did not outrange our adversaries.
        So we set about fixing that for all of the years in the
    cold war we lived, outgunned by our adversary. There is some
    truth to the fact that Crusader came in heavier than we wanted
    or had envisioned. But as the Secretary says, we have taken
    some aggressive action here to drive it back down to about 40
    tons.
        Would we like it to be lighter than that? Obviously. But
    there is a point in engineering by which, if you are firing
    long-range heavy artillery, the weight of the platform for
    purposes of stability and digging in trails and giving this a
    stable platform, you just cannot overcome the mechanics.
        What is not true about Crusader being a cold war relic is
    that we have downsized the number of people it takes to fight
    that system, down to a handful of soldiers, 7 to 10 down to 6.
    So there has been a tremendous reduction. We automatically load
    this. This outshoots now all known adversaries. It is a fleet
    platform that keeps up with the tanks and the Bradleys that we
    have in the offensive formations. It will shoot at a rate of
    fire that outshoots our adversaries, so that it can put 10
    rounds in the area, move before the return fire from enemy
    artillery comes in.
        All of the good things that we have designed in the
    Crusader are not cold war. These are breakthroughs in fires
    that we, the Secretary and I, have lived with. In all the
    briefings that we ever gave as young commanders that talked
    about how we were going to fight our formations, we could never
    solve the fires piece. We now have.
        One thing about Crusader that we are all wrestling with is
    the weight of that platform. But the Crusader is selected to go
    into our III Corps, the heavy counter-attack corps, which goes
    by boat anyway. So the majority of these platforms will be
    transported by boat.
        Having slimmed it down from 55 to 60 tons to 40 has
    accomplished this. We can put a Crusader on a C-5 or a C-17 and
    we can ship that gun where we need it. Because of its
    capabilities, two to three Crusaders will outfire a battery of
    guns. Four Crusaders in Kosovo would have put steel on every
    inch of that province, and that is the capability we have
    needed for years and, frankly, that technology is what we need
    to continue to develop so that in years ahead as we go to
    Objective Force capability we can transition this into to
    robotic systems that we are looking at.
        Crusader is as close to robotics right now as we in the
    Army have been in a long time. You have three soldiers sitting
    separate from the gun that can dial up and fire the gun and
    automatically load it. Whether it is 3 feet or 300 feet, same
    principles. We need to field the Crusader to leverage that
    capability.
        I support the Secretary's comments on Comanche. We need to
    field Comanche. We need to solve the problems that we have
    discovered here. With his decisions and bringing the two
    partners, the producing companies, into a relationship, I am
    confident that Comanche will solve the problems we have
    encountered to this point. We need to get on with it.
        If Afghanistan is any demonstration of what armed
    reconnaissance and close air support with heliborne platforms
    will require, we need to go to Comanche.
        Senator Inouye. Your Crusader, as you say, can keep up with
    the Bradley?
        General Shinseki. It can, yes, sir.
        Mr. White. Crusader will have a common engine with M-1. The
    new Abrams engine will be the same one as in the Crusader.
        Senator Inouye. Well, I am hoping and praying with you,
    because I think that this is the new weapons system we need for
    the new wars. As you pointed out, if we had the Crusader there
    at this moment many of the problems we seem to face may have
    been avoided.

                               AFGHANISTAN UPDATE

        My very last question: Can you give us an update as to what
    is happening in Afghanistan right now?
        General Shinseki. Sir, I will do the best I can. I have
    just returned this morning from Europe and I know there has
    been a lot of coverage in the press, so I am not sure exactly
    what you have been provided.
        But I think you know that for some time there has been
    evidence that there has been a group of folks moving in and
    around the area. We have frankly been trying to pin them down.
    We finally have, and in doing so we have put large conventional
    forces in. This is why you see the 101st and the 10th Mountain
    involved in sealing off this area, along with other U.S.
    Special Operations formations, as well as allies.
        Having sealed that area off where this force is not able to
    bleed its way out of a piece of terrain, they are now fixed in
    this Shahikot Valley and we have begun the process of
    eliminating them. Pretty good sized numbers. Exactly, numbers
    vary from report to report, frankly because they do not all
    show themselves at once. They have perfected the technique of
    firing on us with mortars and small arms fires, rocket
    propelled grenade's (RPG's), and then ducking back into holes
    that have been prepared for decades that go underground. Then
    we will bring fires on their position, and as soon as the fire
    is lifted they come back up. They are pretty savvy about how to
    do that.
        So as we occupy positions--I think there are seven or eight
    positions that we were to occupy. We got into the first six and
    then ran into their locations, and we have been now for 4 days
    in the thick of it. They are taking casualties in large
    numbers, but there are sufficient left that there is a good
    tough fight going on.
        There are stories of heroism that will come out eventually,
    but tremendous youngsters that have done the tough fighting.
    Ultimately, after you have delivered all the fires you can, if
    they are determined to resist then you are just going to have
    to get in the holes with them and root them out. This has been
    true for every combat operation this Army has been in for as
    far back as any of us can read the history.
        This will be resolved. We will get it done. The tremendous
    youngsters that you saw on your visits are the youngsters that
    are performing these tough missions and we are mighty proud of
    them.
        Senator Inouye. Thank you very much.
        Senator Stevens.
        Senator Stevens. You are right. We saw them. We saw them
    loading up and had a good idea where they were going. As a
    matter of fact, they are great.

                                MILCON FOR IBCTS

        I have one question and then a short statement. I asked you
    a little bit about the brigades. We are looking now at MILCON
    and for the Interim Brigade Combat Teams I am disturbed to see
    that under the Army's current proposed MILCON time line the
    initial operating capability (IOC) for the brigade team is not
    reflected in the request for MILCON. There is an unfunded
    requirement not only for Alaska, but for Hawaii.
        At each location I was told there is a $200 million to $700
    million training and maintenance facility requirement for
    readiness, training, and deployment, and that is not in the
    line. If it is not in the line, you are not going to meet your
    IOC of 2005. Would you take a look at that, please?
        General Shinseki. I will, Senator. I alluded to this a
    little earlier. When we stood up these brigades and identified
    where they were going, we could put training dollars and
    operations and maintenance dollars against the unit, but we
    have been playing a bit of catch-up because the budget submit
    went in and we could not tie all the pieces together. Most of
    that had to do with installation support, MILCON activities. So
    that is why you see them arrayed as they are.
        Senator Stevens. Well, the Alaska one is supposed to begin
    to convert in 2003, but there is not money in the budget for
    them to start that in terms of MILCON.
        General Shinseki. I believe 2004 is when we actually will
    stand that up. But there is a requirement, you are absolutely
    right, to begin that work even today, this year and next year.

                              PROTECTING SOLDIERS

        Senator Stevens. This last comment--I know Senator Domenici
    is here and others. I hope you do not misunderstand this, but I
    remember hearing here when we were talking about systems and a
    suggestion came from this side of the table to upgrade the
    Patriot from an anti-air to an anti-missile system. I am
    disturbed to hear today that we do not have right now an answer
    to those mortars. I would urge you to look at some systems.
        It is harsh to say, but six Predators cost less than one
    Comanche and they are available now. They can be bought by the
    end of the year. I would hope you look at the systems you need.
    I know that is Air Force, but those guys ought to be out there
    protecting their people in Afghanistan right now, unmanned
    aerial vehicles, and now they are capable of lethal response. I
    would hope that you would look at that, because it bothers me
    to think, after seeing the things we have seen lately in''
    Blackhawk Down'' and'' We Were Soldiers,'' that we might be
    sending people out there without the ultimate in protection
    that they need.
        So if you need it you should ask us. We would like to work
    with you. We like to see you be adaptable to the systems that
    are available now that can get over there quickly.
        General Shinseki. We will. There was not the attempt to say
    that we are not having Predators available to the forces there.
    Having used it myself, I know the great capability there and I
    am sure that the commanders on the ground have access to it.
        Senator Stevens. Thank you.
        Senator Inouye. Thank you.
        Senator Shelby.

                              TECHNOLOGY MATURITY

        Senator Shelby. Thank you again, Mr. Chairman.
        General Shinseki, I just want to make a few statements,
    then ask you a question. Regarding the technology maturity gap
    that I mentioned earlier with the Secretary, I want to
    illustrate my concerns and ask some questions using the
    Netfires system as an example. The Future Combat Systems (FCS)
    concept is not viable without a precision standoff lethal
    capability against stationary and moving armor, as well as
    other targets, because no protection system has been developed
    to my knowledge that will allow an 18-ton FCS vehicle to
    survive a direct fire engagement with any main battle tank.
        Netfires is the FCS precision standoff lethal capability
    under development at the Defense Advanced Research Projects
    Agency (DARPA). Netfires is an extremely complex and ambitious
    system of systems. It consists of two missiles: a precision
    attack missile and a loitering attack missile. They operate in
    a complex multimode, multi-link radio frequency (RF) network.
    Each missile is a node able to communicate with other missiles,
    relay aircraft, ground stations, forward observers, and
    vehicles.
        The loitering attack missiles (LAMs) have LADAR seekers,
    the precision attack missiles (PAMs) have imaging infrared
    seekers. LAMS can find targets for PAMs and loiter for up to an
    hour and attack targets themselves. In addition, Netfires
    operates autonomously--no man in the loop. This means the
    system must rely on automatic target acquisition and
    recognition.
        In concept, Netfires meets FCS requirements and would be a
    great capability on the battlefield, except the RF network
    which would be embedded in and part of the FCS command and
    control network faces significant technical hurdles in the
    areas of operating bands and required frequency bandwidths. RF
    data links of the type required are inherently vulnerable to RF
    jamming. Making them more jam-resistant increases the
    complexity of antennas and processors and problems with
    integrating them with the missile structure and aerodynamic
    configuration.
        This takes time and money and there is no guarantee of
    success. Netfires operates autonomously, as I said, and must
    rely on automatic target acquisition and recognition. But in
    spite of years of work, no acceptably reliable automatic target
    acquisition/automatic target recognition (ATA-ATR) technology
    is available. While significant progress has been made,
    particularly in the L-A-D-A-R, LADAR, technology, there is
    significant risk that an acceptable level of performance is
    still many years away.
        Netfires I understand intends the rely on the global
    positioning system to achieve the high navigational accuracy to
    bring the missiles in very close to the target location for
    better ATR reliability and to compensate for the low
    resolution.
        Netfires has been rated as high risk for demonstrating even
    a minimal capability without the network capability to meet the
    May 3rd deadline for entry into SDD. I believe this example
    that I have been trying to relate here is instructive and
    deserves our serious consideration and yours. Given the status
    of the technologies, how can the Netfires system hope to meet
    its May 3rd milestone for entry into the SDD?
        General Shinseki. May 2003 entry.
        Senator Shelby. Yes, that is right.
        General Shinseki. I think, Senator, you have given us a
    good summary and also described the challenges.
        Senator Shelby. It is not much of a summary.
        General Shinseki. It is what we wrestle with. Some have
    described technology like good wine: It takes time.
        Senator Shelby. It takes time.
        General Shinseki. Some of this will not be ready in May
    2003, and what we, the Secretary and I, have to lay out is a
    decision process that says that this will never deliver what we
    want, stop funding it, and do not put another dollar at it, or
    this is not ready----
        Senator Shelby. Or show where it will.
        General Shinseki. Absolutely. Or there is potential here
    and it is worthy of continued investment at some level, either
    at a very low level or at a modestly aggressive level. We are
    in fact putting in place these decision processes that have
    scientists and engineers, all the experts available to us. We
    have also looked beyond--you were talking about our RDEC's and
    our own labs, which have been tremendous performers in the
    past.
        Senator Shelby. It has brought you to where we are today,
    has it not?
        General Shinseki. That is correct.
        Senator Shelby. R&D. The Secretary alluded to that earlier.
        General Shinseki. That is correct.
        But over time we have also migrated some of our
    capabilities that used to be resident in the labs and they are
    out there in industry.
        Senator Shelby. That is where it goes.
        General Shinseki. What we have to be smart enough to do is
    to be able to vacuum all that information, see what is going on
    out in industry. We have pretty good indications from industry
    that they are willing to partner with us. Of course, it
    involves dollars. But there is international industry as well
    that have some S&T ventures that we are not aware of and we
    continue to try to find out what is out there.
        But for us it is about getting the technologies we need,
    having a mechanism that says this will be ready, and invest in
    it.
        Senator Shelby. Making smart decisions based on what you
    see.
        General Shinseki. That is correct.
        Mr. White. That is one of the reasons we are going to a
    lead systems integrator (LSI). It recognizes the complexity of
    piecing together components of technology with the relative
    maturation schedule, which is precisely why we are going to
    bring an LSI on probably tomorrow.

                       SPACE AND MISSILE DEFENSE COMMAND

        Senator Shelby. General, in another area in a sense, but
    similar, is the Army considering dissolving the U.S. Army Space
    and Missile Defense Command (SMDC)? If so, what is the impact
    to the civil servant, military, since you are the Chief of
    Staff, contractor work forces, in my area Redstone Arsenal, in
    other locations where SMDC activities exist, such as Colorado
    Springs, White Sands Missile Range, Kwajalein, and so forth?
        General Shinseki. You asked are we thinking about evolving?
        Senator Shelby. Yes, sir, dissolving, and if you are----
        General Shinseki. Dissolving? No. I misunderstood you.
        Senator Shelby. Dissolving.
        General Shinseki. I thought you asked evolving.
        Senator Shelby. No, dissolve.
        General Shinseki. As far as I am concerned, the Army has a
    role in space.
        Senator Shelby. Absolutely. We have defended that a long
    time.
        General Shinseki. Yes, that is correct. And SMDC is our
    organization that----
        Senator Shelby. Is your key component there, is it not?
        General Shinseki. Absolutely. We do have an Army space
    program. It is hard to define what clearly today, what that
    role in the future is going to be, but 2 years ago we had a
    hard time defining what Army transformation was going to be as
    well. Just as important as transformation is to this Army in
    its ground responsibilities that is tied to this terrestrial
    globe, we do have a role for the Army in space, and SMDC will
    keep us in that discussion.
        Senator Shelby. You and the Secretary plan to defend that
    role, do you not?
        General Shinseki. We do.
        Mr. White. Yes, we do.
        Senator Shelby. Thank you.
        Thank you, Mr. Chairman.
        Senator Inouye. Senator Domenici.

                     PATRIOT ADVANCED CAPABILITY-3 TESTING

        Senator Domenici. I do not have very many questions, Mr.
    Chairman, so I will move with dispatch. I just did not want to
    fail to come by and greet the Secretary and see you, General.
    Perhaps after we finish here I could talk with you about Walter
    Reed and what they have done to be helpful to this Senator.
        Could I ask, Mr. Secretary: The Army recently tested the
    Patriot Advanced Capability (PAC-3) air defense missile at
    White Sands, and it missed its cruise missile target. What is
    the Army's plans for future testing of PAC-3 at White Sands
    Missile Range?
        Mr. White. We are going to continue to test it. We have had
    many successful engagements with PAC-3. PAC-3, of course, has
    been sent back to us for management from the Ballistic Missile
    Defense Agency at the Office of the Secretary of Defense (OSD)
    level. It has had many successful engagements. That particular
    one was not. The preliminary conclusion is because of some
    faulty settings and not any fundamental difficulty with the
    missile itself. So we are very bullish on the PAC-3 capability.
        Senator Domenici. Do you know when it would be deployed?
        Mr. White. I would have to get you that for the record.
        Senator Domenici. Would you, please.
        [The information follows:]

                Patriot Advanced Capability 3 (PAC-3) Deployment

        The initial Patriot PAC-3 deployment occurred in September
    2001. This fielding was to the Air Defense School at Fort
    Bliss, Texas, and provided equipment for troop training. This
    year we are fielding PAC-3 to the Patriot battalion in Korea.
    Starting in fiscal year 2003 we will field PAC-3 at the rate of
    one battalion per year. This fielding schedule synchronizes
    with the ongoing Patriot recapitalization program which will
    provide the Patriot battalion with system equipment which will
    have been refurbished to zero miles and zero hours condition.
    The end result is a like-new Patriot battalion that is fully
    PAC-3 capable.

        General Shinseki. There are four tests, of which this first
    test was test one. The next test goes on March 21 and the
    deployment decisions will be driven by how these tests turn
    out.
        Senator Domenici. Thank you very much.

                            DIRECTED ENERGY WEAPONS

        I have long been a proponent, along with a number of
    Senators of directed energy and the weapons systems that are
    evolving around that. Just last month I visited a joint
    technology office that will serve the tri-services in their
    efforts to exploit directed energy applications. That is going
    to be in my home city of Albuquerque as I understand it. This
    technology can play a vital role in making both our interim
    forces and our long-range objective forces more lethal while
    simultaneously reducing the risk of collateral damage, which I
    imagine you worry about every day as you look at Afghanistan.
        Could you please update us on the status of the
    negotiations with Israel with reference to the Tactical High
    Energy Laser (THEL) System.
        General Shinseki. May I provide that for the record,
    Senator?
        Senator Domenici. Indeed.
        [The information follows:]

              Tactical High Energy Laser Negotiations With Israel

        I fully agree with your assessment that directed energy
    weapons have a vital role in the Transformation to the
    Objective Force. The unprecedented success of the cooperative
    U.S. Army/Israeli Ministry of Defense Tactical High Energy
    Laser (THEL) advanced concept technology demonstration program
    was crucial in our assessment of this leap-ahead technology.
        The Mobile Tactical High Energy Laser (MTHEL) program will
    serve as a pathfinder to this advanced weapon capability. The
    MTHEL program will place the first U.S. high-energy laser
    weapon prototype in the hands of U.S. Army warfighters. The
    warfighters will use the prototype to develop the tactics,
    doctrine, and other warfighting elements necessary to integrate
    this new capability into the Objective Force.
        The MTHEL program will provide Israel an increased
    capability to protect its population, infrastructure, and
    forces from attack by terrorists or conventional forces. This
    capability is important at this time of heightened tension in
    the Middle East and may play an important role in U.S. peace
    initiatives for the region.
        The U.S. Army is engaged in informal discussions with the
    Israeli Ministry of Defense concerning collaborative
    development of the MTHEL weapon system prototype. The purpose
    of informal discussions is to lay the foundation for future
    formal negotiations and to identify areas to be given emphasis
    during those negotiations.
        The informal discussions have identified many areas of
    mutual interest and general agreement in principle. There are a
    few remaining areas that both parties continue to discuss. The
    current informal discussions will form the basis for successful
    negotiations that will enable the U.S. Army to collaborate with
    the Israeli Ministry of Defense in the development of the MTHEL
    weapon system prototype.
        The U.S. Army framework for the discussion is to insure
    U.S. national security interests are protected and to insure
    compliance with U.S. laws and policies. The U.S. Army is
    committed to resolve any issue that may arise in the current
    informal discussions or future formal negotiations and to
    resolve such issues in the context of this basic framework.

        General Shinseki. I am not as current on the negotiations
    with Israel. But as you know, we do have a very active THEL
    program, high energy laser program, and it is part of the
    dimension in technology that we are looking at for future
    combat capability.
        Senator Domenici. My last question has to do with how you
    intend to pursue directed energy, so let me ask, how will the
    Army synchronize the development of directed energy weapons
    with your Future Combat System concept? I assume it would
    surely, at least at this stage, be a part of that.
        Mr. White. It is.
        Senator Domenici. Who wants to do that?
        General Shinseki. I would tell you that we are looking at a
    broad range of technologies and all I can tell you at this
    point is that high energy lasers and other systems are part of
    that look.
        Senator Domenici. What I am concerned about, and that is
    why I asked how are you going to go about synchronizing the
    development of the directed energy weapons as you put together
    your Future Combat Systems, is because some things may be ahead
    of others. Nevertheless, directed energy weaponry is surely
    gaining and getting close to a point where it ought to be
    considered as part of, clearly as part of the Future Combat
    System. I just wondered how you were doing that. Is my
    assumption correct?
        Mr. White. Yes, it is correct in that we view it as a part
    of the long-term solution here. The question obviously will be
    what is its state of maturity when we get ready to field the
    first block or will we pick it up in a subsequent block as we
    expand the Objective Force capability.
        Senator Domenici. I thank you.
        Thank you, Mr. Chairman.
        Senator Inouye. Thank you.
        Senator Specter.

                              ADEQUACY OF FUNDING

        Senator Specter. Thank you, Mr. Chairman.
        The Armed Forces have distinguished themselves in the
    military operations in Afghanistan, and this is really great to
    see. There has been very substantial funding for the Department
    of Defense in the period that I have been here and, under the
    principle that you get what you pay for, we have been very
    pleased with your success.
        Are you adequately funded up to the present time to
    continue to carry on an aggressive war in Afghanistan, General?
        General Shinseki. Well, sir, I will tell you that this is a
    good budget and it allows us to address some long-term issues
    that were in need of attention.
        Senator Specter. Before you get to this budget, I am
    concerned about the existing budget. Do you have sufficient
    funds in your existing budget to carry on the aggressive war in
    Afghanistan?
        General Shinseki. Well, we spend about $360 million each
    month to address the war, the global war that we are currently
    conducting. That burn rate, if you will, probably carries into
    about April. But beyond that, early April, the Army will have
    to pull fourth quarter training money forward and begin to
    spend it on financing this war on terrorism, in anticipation
    that there will be a supplemental that will help pay that so
    that we can then return moneys to fourth quarter training.
        To answer your specific questions, we are good for this
    month and then I run into a cash deficit problem and I have got
    to start flowing money from the fourth quarter.
        Senator Specter. You may prefer to answer this in closed
    session or in a private conversation, but what is your strength
    and what are your resources, if the war against al-Qaeda moves
    into other quarters--the Philippines, Yemen, Somalia, or
    perhaps other places? Do you have adequate resources in your
    Special Operations to carry on that kind of a worldwide
    campaign that the President has talked about?
        General Shinseki. Not in the budget as we see it. We would
    have to be supplemented to address these unanticipated
    requirements.
        Senator Specter. With an increase in the budget of some
    $46.1 billion for next year, bringing the total budget to
    $396.8 billion, is there sufficient funding there to carry on
    the aggressive war against al-Qaeda, wherever it may lead?
        Mr. White. I think the intent in structuring that budget--
    and Secretary Rumsfeld has testified to this and so has the
    Deputy Secretary--was that at $379 billion, I think is the
    total defense budget, that there are funds of about $10 billion
    in there that would assume that we would continue this war at
    least at its current level through 2003, and that is what the
    $10 billion was there to address, so as to make it more
    unlikely that a supplemental will be required in 2003 as it
    obviously will be required in fairly short order here in 2002.
        Senator Specter. Are you suggesting that you cannot
    anticipate the adequacy of this budget depending upon how many
    fronts you are fighting and that you may need a supplemental
    beyond this budget for fiscal year 2003?
        Mr. White. No. I think that the intent was to structure the
    budget to deal with the foreseeable level of effort that is our
    best estimate and the budget was sized accordingly.
    Consequently, there is a need for a supplemental this year. The
    intent was to organize the budget so that it would be far less
    likely next year.
        Senator Specter. The President has talked about the ``axis
    of evil'' and Secretary of State Powell made a statement that
    we are not about to go to war against Iran and that we are not
    about to go to war against North Korea. The noteworthy absence
    was Iraq. Do we have sufficient resources, General--and you may
    prefer to answer this not in a public session--in the Army
    Special Operations to carry on a military operation against
    Iraq at the same time we are fighting al-Qaeda in the various
    places now under attack?
        General Shinseki. Senator, I think any more detailed
    discussion would be best privately. But I would go back to what
    I indicated here just a few minutes ago. In terms of paying for
    the increased operations that we have right now, I am paying
    about, the Army is, paying about $365 million a month for these
    increased operations. At the rate at which we understand there
    is an inventory of funds available, that runs out in April and
    the Army would then have to be able to pay internally to keep
    whatever operations going, whether it is the current operations
    against al-Qaeda or any expansion.
        So there would be a requirement for additional funding.
        Senator Specter. You had started to say earlier, General,
    before I came back to my original question, that this budget
    would enable you to do some things you had wanted to do and
    planned to do. What are they?
        Senator Leahy. Well, I think, as I have indicated, this
    budget, there is a $10 billion increase in the 2003 budget.
    About $3.3 billion of that $10 billion goes toward health care
    programs. These are programs we have not been able to pay much
    attention to. Really, while it comes to the Army, it flows
    through the Army and goes the Defense Health Services.
        About $2 billion, $1.9 billion of that $10 billion, goes to
    compensation, which covers pay and allowances that together the
    services and this Congress has found a way to take care of our
    youngsters. About $1 billion of that goes to pricing, fact of
    life adjustments and pricing. But about $3 billion of that $10
    billion goes into programmatics, such as recapitalization of
    our Legacy Force that we have today, trucks, and about $900
    million into a variety of other small programs that, when
    brought together, come out to about $1 billion.
        So there are things that we have addressed in this budget
    that we have not been able to do in the past. After years of
    lack of attention, we will not fix it in a single budget, but
    this is a good move in the right direction.
        Senator Specter. Thank you very much, General.

                          MILITARY HERITAGE INSTITUTE

        Mr. Secretary, the U.S. Military Heritage Institute at the
    Carlisle Barracks has been waiting for the Army to award a
    contract to begin construction of the first building. The
    funding has been set forth in the initial proposals and we have
    appropriated $500,000 in the fiscal year 2002 MILCON
    appropriation bill for the next phase. They had scheduled the
    groundbreaking for November. They are still standing around in
    Carlisle waiting to do the spade work.
        When do you anticipate awarding a contract for the project?
        Mr. White. Well, I will check for the record, but my
    commitment when you and I talked about this before was that we
    were going to keep this on schedule and that is my intent. I
    was just up there last month. I will check into it, but it will
    happen.
        Senator Specter. Okay. Please let me know.
        Mr. White. I will do that.
        Senator Specter. I would appreciate it. My phone rings off
    the hook on that red line from Carlisle.
        Mr. White. If I can get you to agree to show up, I will be
    there as well.
        [The information follows:]

                          Military Heritage Institute

        Because the project's requests for proposal were over the
    program amount, the Corps of Engineers and Department of the
    Army had to obtain approval for additional funds and authority
    to award the contract. Department of the Army is working this
    proposal to resolve the funding issue, and we anticipate
    contract approval soon.

        Senator Specter. Okay. One final question about a State
    interest. The Paladin howitzer, which is manufactured in my
    State obviously, has been endorsed for acquisition by the Army
    National Guard. This may not be on the top of your agenda, but
    if you could take a look at that and give me a response in
    writing I would appreciate it.
        Mr. White. I will do that.
        [The information follows:]

                    Army National Guard Paladin Acquisition

        There are three Army National Guard (ARNG) unit groupings
    that are Paladin claimants--the Enhanced Brigades, Corps
    Artillery, and National Guard Divisions. Paladins have been
    provided, either by procurement or cascading from restructured
    active Army force units, for all Army National Guard Enhanced
    Brigades and Corps Artillery units. The Army National Guard
    Divisions are not equipped with Paladins.
        In November 2001, the ARNG requested that the Army provide
    Paladins to three selected National Guard divisions--the 40th
    Mechanized Division (California ARNG), 28th Infantry Division
    (Mechanized) (Pennsylvania ARNG), and the 49th Armored Division
    (Texas ARNG).
        The ARNG requested that the Department of the Army support
    the Congressional initiative for the procurement of 54 Paladins
    in fiscal year 2003. The Paladins were assigned as requested,
    and 54 Paladins for the ARNG were placed on the Army's fiscal
    year 2003 unfunded requirements list.
        When successfully completed, the program will provide
    Paladins for the three ARNG divisions. Any future assignment of
    Paladin howitzers to additional ARNG divisions will occur as a
    result of the cascade generated by the future fielding of the
    Crusader self-propelled howitzer.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Specter. Mr. Chairman, I have some questions to
    submit in writing if I may. Thank you very much.
        Senator Inouye. Mr. Secretary, General Shinseki, I thank
    you very much for your appearance and your testimony this
    morning. We look forward to working with you in the days ahead.
        [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. Thomas E. White
                Questions Submitted by Senator Daniel K. Inouye
                                homeland defense
        Question. Secretary White, after September 11th you were named the
    Department's Executive Agent for homeland defense. What can you tell us
    about this role and will this be a permanent mission for the Secretary
    of the Army?
        Answer. The Secretary of Defense appointed me the interim DOD
    Executive Agent for Homeland Security on October 1, 2001. Along with
    this appointment came the responsibility to accomplish three major
    objectives: unification of homeland security efforts within the
    Department and development of the plan to stand up an organization
    within the Office of the Secretary of Defense which will serve as the
    Department's focal point for homeland security policy, planning, and
    resource allocation; develop operational solutions for the future; and
    enhance Departmental cooperation with Governor Ridge's Office of
    Homeland Security and other Federal agencies in regards to homeland
    security issues.
        The Secretary of Defense will direct the Deputy Secretary of
    Defense to lead a transition effort to establish a staff, at the
    appropriate level within the Office of the Secretary of Defense that,
    when established, will assume homeland defense and civil support
    responsibilities. The leader of that organization will then assume the
    responsibilities as Executive Agent for Homeland Security. Initial
    operating capability for that organization is projected for some time
    this summer.
                        military personnel end strength
        Question. The demanding personnel tempo (PERSTEMPO) driven by the
    war on terrorism and the increased pace of deployments since the end of
    the Cold War has put a significant strain on the force and its
    families. According to your testimony, there are currently more than
    124,000 soldiers and 38,000 civilians from the Army Active, Guard, and
    Reserve stationed in 110 countries around the world. In order to
    maintain the force, to date has the Army been meeting its accession
    requirements in fiscal year 2002?
        Answer. The Army has met its accession requirements in all three
    components. For the Active Component, the year-to-date accession
    requirement through the end of February was 29,350 with 29,904
    achieved. The Army Reserve requirement was 17,008 with 17,194 achieved.
    The Army National Guard requirement was 25,132 with 27,150 achieved.
        Question. In addition to bonuses given to personnel with
    specialized skills in areas where the Army is experiencing shortfalls,
    is the Army considering targeting pay raises for personnel with
    critical skills, such as nurses, maintenance personnel, and pilots?
        Answer. The 9th Quadrennial Review of Military Compensation did
    take into consideration the issue of pay banding for specific skills,
    but suggested more study was necessary.
                          army national guard aircraft
        Question. Secretary White, the Committee has been informed that the
    Army National Guard's entire fleet of OH-58 and Huey helicopters is
    slated for deactivation over the next several months. What is your plan
    for fielding the additional Black Hawk helicopters that will be
    required by the Army National Guard to replace these assets? How great
    a shortfall does this create, with only 12 Black Hawks included in your
    fiscal year 2003 request?
        Answer. The National Guard will have more than 270 UH-1s at the end
    of fiscal year 2002, 103 UH-1s by the end of fiscal year 2003, and none
    by the end of fiscal year 2004.
        At the end of fiscal year 2001, the National Guard had 520 UH-60s,
    with a scheduled end strength in UH-60s of 686. The Guard will receive
    between 103 and 141 by the end of fiscal year 2003. The difference in
    the fiscal year 2003 numbers is attributed to the UH-60s retained by
    the 101st Air Assault Division, which prior to Operation Enduring
    Freedom were scheduled to cascade in fiscal year 2002. The Guard will
    receive the balance of 25 through fiscal year 2009.
        The replacement aircraft for OH-58 A and C model aircraft in
    divisional cavalry squadrons will be AH-64s. By the end of fiscal year
    2004, eight AH-64s will replace the 16 OH-58s in each squadron.
        The OH-58s in the Reconnaissance and Aerial Interdiction
    Detachments (RAIDs) are operated by the National Guard, funded with
    counter-drug dollars, and sustained from the Army parts stocks. Once
    the Army's OH-58 parts stocks have been exhausted, operating costs of
    the RAID OH-58s will increase, perhaps triple, as procurement of spare
    parts transitions from the Army's OH-58 supply system to commercial
    parts vendors. The transition to commercial parts vendors will require
    either a significant increase in counter-drug funding to continue
    operating the RAIDs at current operations tempo, or a reduction in the
    hours flown. We have notified the Department of Defense of this
    concern.
        Question. Has any consideration been given to leasing helicopters
    to help mitigate the Guard's aircraft shortfalls?
        Answer. Yes, leasing has been considered as an option, but the plan
    to provide the National Guard with up to 141 aircraft by the end of
    fiscal year 2003 made leasing unnecessary. A study conducted in June
    2001 showed that leasing 30 UH-60s over five years would cost the Army
    $445 million, while purchasing the same number would cost $388 million.
                                     ______

                  Questions Submitted by Senator Thad Cochran
                              composite materials
        Question. Secretary White, as you seek to develop systems that are
    lighter, yet equal or greater in strength and requiring less
    maintenance than current conventional systems, what role do you view
    composite materials playing in the Army's Transformation?
        Answer. Composite materials will play an important role in Army
    Transformation. Army laboratories are conducting basic research in the
    areas of advanced polymer composites and structures to create materials
    for Army-unique applications that are lighter and more affordable, yet
    provide improved strength, reliability, durability, and are
    environmentally friendly. These composite materials will be used to
    reduce the weight of the Future Combat Systems while maintaining
    structural strength, integrity, and system survivability. The resulting
    systems will be significantly lighter, more deployable, more
    sustainable, and more cost effective than current systems. The promise
    of polymer composites is based on their ability to withstand high-
    impact forces, leading to increased system survivability.
        Composites will play a major role in the transformation of our
    aviation systems. We have invested heavily in structures science and
    technology over the last 25 years. Our initial investments paved the
    way for Comanche aircraft to be the Army's first all composite
    aircraft. The airframe on the #1 and #2 prototypes is more than 20
    percent lighter than an equivalent metal airframe. A recently completed
    Army Science and Technology Objective (STO) has demonstrated the
    ability to further reduce weight by an additional 15 percent as well as
    reducing manufacturing labor costs by 25 percent. This technology has
    transitioned to the Comanche program and will save weight on aircraft
    #3 and each subsequent aircraft. A new Army STO is starting this year
    and is expected to make further strides in weight and affordability
    while also focusing on the issues of survivability and repair.
        In the ground combat vehicle community, a major advance in
    ballistic hull and turret structures was successfully demonstrated in
    the late 1990s. Called the Composite Armored Vehicle Advanced
    Technology Demonstrator, the technology demonstrated a 35 percent
    reduction in weight over the traditional metal armor solution. For this
    reason, the technology has been adopted for incorporation in the
    Crusader howitzer and resupply vehicle turret and upper hull structures
    and will replace major structures traditionally made from aluminum.
        Composites in the ground vehicle community likewise apply to the
    wheeled vehicle fleet--a commodity which today remains largely metals-
    based. Initiatives are underway to extend the Army's technology and
    experience from the combat world to the wheeled vehicle support fleet
    of trucks and trailers to achieve the benefits of weight reduction and
    enhanced durability. For future new trucks and trailers, the Future
    Tactical Truck Systems and 21st Century Truck are two examples of
    programs which will exploit the use of composites and pave the way for
    even broader applications of composites.
        Beyond vehicles, the opportunity for composites in Transformation
    is great. Support systems ranging from combat bridging to shipping and
    storage containers, even simple items like vehicle tow bars all derive
    significant weight savings from composites and support deployability
    goals for the future force.
        In the long term, I expect to see composite material technologies
    transition to most of our Objective Force systems through block
    improvements or major model upgrades.
                           foreign language expertise
        Question. Secretary White, in September 2000, I chaired a hearing
    in the Government Affairs subcommittee where witnesses described
    serious deficiencies in foreign language expertise among federal
    employees who work in the U.S. national security area. A recent GAO
    study, publicly released yesterday, identifies a 44 percent shortfall
    in Army translators and interpreters in six languages considered
    critical. The report also highlights significant shortages of
    cryptologic linguists and human intelligence collectors in a number of
    critical languages. Obviously, the war on terrorism presents a growing
    challenge in this arena, not only for the Army but also for other
    agencies that contribute to our national security.
        Do you see an urgent need to increase organic, advanced language
    skills? If so, how does the Army plan to meet this shortfall?
        Answer. Yes. The global war on terrorism has again demonstrated
    that even though the Army is prepared to meet anticipated challenges,
    we must have a strategy to quickly augment its linguist force to fill
    unanticipated requirements. As detailed in the Army Language Master
    Plan, the Army's strategy, currently being applied to the war on
    terrorism, is to rely on its existing linguist force in both the Active
    and Reserve Components, soldiers in non-linguist specialties who have
    the requisite language skills, and contract linguists. In addition, the
    Army has soldiers training in languages specifically to fill
    requirements for the war. Generally, the advanced language skills the
    Army requires comes from soldiers pulled from other specialties and
    contract linguists hired for their native or near-native level
    proficiency.
        Question. Secretary White, has the Army taken advantage of the
    language expertise in the DOD's National Security Education Program by
    hiring scholars or fellows from this program?
        Answer. The Army hired three individuals who have completed the
    National Security Education Program (NSEP), and the National Defense
    University hired five more. The vast majority of the Army's linguist
    requirements are for enlisted soldiers who begin their career as
    privates first class if they have a college degree upon enlistment.
    Individuals who have completed the NSEP are more suited for civilian
    positions that require a foreign language skill. The most recent
    information indicates that worldwide, only 330 Army civilians use
    foreign language skills in their jobs.
        Question. Secretary White, is the Army reaching out and utilizing
    language training resources in the academic sector and in the nation's
    ethnic communities?
        Answer. Yes. The Army routinely has soldiers attending college
    language classes, primarily for foreign language maintenance and
    enhancement. Few, if any, soldiers are sent to college language courses
    for language acquisition, as it is generally believed to require four
    years of college language training to achieve the proficiency provided
    by the Defense Language Institute Foreign Language Center (DLIFLC) in
    24 to 63 weeks. Language instructors are hired from both the academic
    sector and ethnic communities for initial acquisition training at
    DLIFLC and maintenance and enhancement training. Also, as noted in the
    recent General Accounting Office report, the Army has an aggressive
    program in place to recruit within ethnic enclaves. The U.S. Army
    Recruiting Command (USAREC) has soldier-linguists assigned whose
    primary responsibility is increasing the number of skilled linguists
    enlisting in the Army. They accomplish this through education of
    recruiting and Military Entrance Processing Station personnel,
    development of relationships at colleges and universities that have
    foreign language programs, and establishment of rapport within ethnic
    enclaves. These efforts will be greatly expanded beginning in October
    2002 as USAREC has documented a requirement for nearly 800 additional
    foreign language-capable soldiers to serve as recruiters.
                             hydra-70 rocket system
        Question. Secretary White, I am concerned with the decision to
    slash funding for the Hydra-70 rocket system in fiscal year 2003 by
    nearly 84 percent, at a time when our nation's front-line forces are
    deployed with these systems in Afghanistan and other countries. This
    seems to be inconsistent with the direction provided by this committee
    last year and could put combat readiness at risk. How does the
    Department plan to maintain the combat proficiency of aviators with
    such dramatic reductions in the procurement of training rockets?
        Answer. The Army has been asked to make tough choices to move the
    military toward Transformation. This is a clear example of where the
    Department has decided to move forward and accept risk by reducing the
    amount of Hydra-70 rockets procured and move toward rocket technology
    that will give the warfighter a low-cost, precision engagement
    capability that he does not possess today. The Army anticipates no
    change to current training strategies for the next two years. However,
    we are reassessing rocket strategies as part of a continuing and
    ongoing review process. This strategy is tied closely to the fielding
    of the Advanced Precision Kill Weapon System (APKWS).
        Question. Secretary White, I understand that the rocket system
    which will replace the Hydra-70 will not be ready for fielding until
    after fiscal year 2006. How will the Army address the recapitalization
    of the 2.75-inch war reserve that is aging and less capable than the
    current production configuration?
        Answer. The Army will not fund the recapitalization of the 2.75-
    inch war reserve.
        Question. Secretary White, I understand that the Army is the single
    manager for procurement of this vital munition for all the Services.
    Based on your decision to cut procurement of the Hydra-70 rocket for
    the Army, how will you mitigate future cost increases to the Air Force,
    Navy and Marine Corps who have increased procurement of this vital
    weapon system?
        Answer. The fiscal year 2003 President's Budget sets the stage for
    the Army's transition from the Hydra-70 program to the APKWS. When
    developing the transition plan, the Army attempted to address the needs
    of our sister Services. We understand that there will be a short-term
    decrease in Army requirements for Hydra-70 rockets to provide funds for
    research and development of the APKWS. In making this decision,
    however, we recognized that there are Foreign Military Sale purchases
    of Hydra-70, as well as Air Force and Navy requirements that will be
    filled. During the transition, the Army will remain engaged with the
    current industrial base in the production of both the Hydra-70 rocket
    and the APKWS because many of the components are the same for both
    systems.
                                     ______

               Questions Submitted by Senator Christopher S. Bond
                              senior dod proponent
        Question. I understand the senior proponent at DOD for Chemical and
    Biological matters is an Army colonel. The Army is the Executive Agent
    for all DOD in this area. I am gravely concerned that this is an
    insufficient rank to break through the bureaucracy in the Pentagon to
    ensure our CBRNE resource requirements are sufficiently represented. I
    don't think the Department realizes that if our forces are unprepared
    for the next terrorist attack, be it at home or abroad there is going
    to be an uproar if it is established that we knew about the CBRNE
    threat but did not respond sufficiently to counter it. Is assigning the
    rank of colonel to the senior DOD Chemical/Biological proponent an
    indication of the priority that DOD is giving to chemical/biological/
    nuclear and radiological activities?
        Answer. Dr. Anna Johnson-Winegar, a deputy assistant to the
    Secretary of Defense, is the senior proponent in the Office of the
    Secretary of Defense (OSD) for chemical/biological matters. The senior
    military at OSD is an Army colonel who serves as Dr. Johnson-Winegar's
    deputy.
        Because of the priority the Chemical, Biological, Radiological, and
    Nuclear (CBRN) program has come under since September 11, the Joint
    Requirements Oversight Council recently approved standing up an interim
    CBRN Joint Requirements Office on the Joint Staff to develop the
    proposed organization charter and strategic campaign plan.
                        civil support team coordination
        Question. Our current state of readiness in the chemical/
    biological/radiological and nuclear area is of great concern to the
    nation. In your opening testimony for the record you stated that the
    Army had ``trained and certified Weapons of Mass Destruction Civil
    Support Teams ready to assist civil authorities and had trained 28,000
    civilian first responders in 105 cities.'' However, the GAO report on
    Combating Terrorism, dated 20 September 2001, indicates that the
    National Guard Teams continue to experience problems. According to the
    DOD Inspector General, the Army's process for certifying the teams
    lacked rigor and would not provide meaningful assurance of their
    readiness. As a result the program schedule has slipped.
        I know we've got turf battles going on within the federal agencies
    and that our coordinating efforts need to be improved. It is essential
    the Department of Defense, and more specifically our military related
    homeland security efforts be coordinated with federal agencies and
    local and state civil authorities. Additionally, officials with the two
    agencies responsible for managing the federal response to a terrorist
    incident--the FBI and FEMA--continue to be skeptical about the role of
    the National Guard teams. Who do they report to? When are they
    deployed? And are they capable of effectively performing the mission in
    coordination with the other federal, state, and local agencies. Are you
    certain that the level of support and coordination between the Guard
    and the Army is sufficient to address the concerns revealed by this GAO
    report?
        Answer. Weapons of Mass Destruction--Civil Support Teams (CST) are
    organized under Title 32 and, until ordered to Title 10 federalized
    status, fall under the day-to-day command and control of the respective
    governor (through the Adjutant General). If called to duty in a
    federal, Title 10 status, CSTs report through the chain of command
    established for deploying military response forces under the respective
    unified command. In both instances, the CST's primary source of
    tactical directives is taken from the on-scene incident commander--
    typically a first responder from the affected area who has primary
    responsibility for the overall response and preliminary recovery
    operations at a suspected or actual incident scene.
        There are three circumstances under which CSTs will deploy. The
    first circumstance is immediate response. Circumstances which in the
    view of the commander are so obviously urgent that immediate action is
    required to protect life/limb/property and in which there is
    insufficient time to seek authorization from higher authorities. All
    commanders have the obligation to take decisive action in response to
    an obvious circumstance, while simultaneously informing their chain of
    command of the situation and requesting guidance or authority.
        The second circumstance is governor directed. The governor orders a
    CST to respond to incidents within their respective state or in
    response to a request for support from another state.
        The third circumstance is Presidentially directed. The President,
    in response to a governor request, or unilaterally, orders the CST to a
    federal status to respond to a specified incident.
        Since September 11, operationally certified CSTs have reported
    deployments 204 times. These responses range from full team
    deployments--such as extended operations in support of efforts in New
    York City to various suspected bio-terrorism events when required in
    less than full unit strength. None of these reported responses have
    been immediate response or Presidentially directed; rather, all have
    been the results of requests initiated by incident commanders through
    state emergency response systems. Of note, 22 of these deployments were
    undertaken in response to requests from states that do not have CSTs,
    whose CSTs were not yet certified, or in direct support of an
    operationally engaged CSTs.
        In every case, once approved/directed by the governor, CSTs
    responses have been timely and have been identified as valuable to the
    first responder community. The capabilities currently embedded within
    the CSTs support the mission to ``assess, assist, and advise'' the
    incident commander. CSTs are designed to operate in an ambiguous
    tactical environment--a scene that will by virtue of the very nature be
    chaotic, ultimately involving response elements from many agencies and
    levels. However, following response doctrine, federal assets will not
    be called upon until local and state resources are exhausted. Following
    this logic, CSTs will legitimately be engaged before the first federal
    response element arrives, but as a state asset. This has been the case
    in every operational deployment to date the CSTs have responded to.
    However, if a broad federal response was directed (either at the
    request of the governor or direction the President), procedures are in
    place to employ CSTs in direct support of the lead federal agency. As
    with any new capability, we will continue to refine both operating
    parameters, equipment, and training sets to ensure these teams remain
    both cutting edge and vital to the first responder community.
        The level of support and coordination between the Army and the
    National Guard on matters pertaining to the CST program is excellent.
    As an integrating force, the CST program has been effective, providing
    both a means and motive for further integration of the Active and
    Reserve Components. As a consequential benefit of the growth in the CST
    program, this factor reinforces the broader goals of the Army. Much has
    occurred since the GAO report you refer to was produced. First, and
    perhaps most significant, the Army leadership focused on this program,
    and as a result, an accelerated effort to train, equip, and evaluate an
    additional 17 CSTs resulted in certification in accordance with public
    law. This achievement represents an enormous accomplishment and was
    only gained through full partnership and cooperation across the range
    of the Army, as well as full support of the industry partners who
    support the Army's acquisition program. No shortcuts were taken. The
    compression of a nine-month process into essentially three months
    resulted from superior effort by all the contributing commands,
    agencies, and companies, not to mention the superb efforts of the
    states and their soldiers and airmen.
        In addition, the Army is currently conducting a Force Management
    Analysis Review (FORMAL) focused on the CST program. The FORMAL process
    directs and requires responsible staff and Major Command activities to
    participate and support issue identification and resolution. I
    anticipate that the FORMAL process will further integrate and
    institutionalize the CST program within the Army.
                                     ______

                 Questions Submitted by Senator Mitch McConnell
                             future combat systems
        Question. I have followed, and my staff has recently been briefed,
    on the ongoing Army plans for the Future Combat Systems (FCS) and the
    transformation to the Objective Force. I have great faith in the Army's
    ability to maintain the integrity and readiness of the Legacy Force
    while simultaneously transitioning to the Objective Force. I noted your
    comments today regarding the importance of FCS in integrating the
    highly complex technologies and systems that will make up the 21st
    Century Army, and I applaud your commitment to this critical process.
    What is the level of funding for the FCS during the 2003 budget year
    and for the program years following this fiscal year? How will these
    funds allow the Army to meet the complexities of the challenge at hand?
    What is the time frame for the FCS program?
        Answer. Funding for the FCS in the fiscal year 2003 budget year is
    $303.8 million and totals $5,292.8 million for the fiscal years 2004-
    2007. Funding for the FCS comes from both the Army and the Defense
    Advanced Research Projects Agency (DARPA).
        To meet the complexities of the challenge, the Army has partnered
    with DARPA for development of the concepts for the FCS. Our combined
    funding provides for the work on force concepts, requirements
    derivation, technology maturation, system integration, design
    engineering, and risk reduction leading to a first unit equipped in
    2008 and an initial operational capability of a brigade-sized unit of
    action in 2010.
        Question. Given that the FCS program is a joint Army-DARPA effort,
    could you elaborate on the role and funding level of each agency? In
    other words, could you elaborate on how much funding each agency will
    contribute and to which agencies, installations, or contractors will
    these funds be distributed?
        Answer. DARPA is responsible for execution of the Lead Systems
    Integrator Agreement through the Defense Acquisition Board for
    Milestone B, including technical, procurement, and security. The Army
    provides the overall technical support for the DARPA FCS technology
    program until transition to an Army acquisition program. The funding
    associated with the collaborative demonstration portion of the program
    is cost shared 55 percent/45 percent by the Army and DARPA over the
    course of the Memorandum of Agreement, which extends through fiscal
    year 2005. In the fiscal year 2003 budget, the Army provides $72
    million and DARPA provides $74 million towards enabling technologies.
    In addition, the Army provides $50 million and DARPA provides $48
    million toward the FCS integrated system of systems design. Each agency
    will provide $122 million towards a combined total of $244 million in
    fiscal year 2003.
        The Lead Systems Integrator team of Boeing and Science Applications
    International Corporation have several sub-contractors to include
    Strategic Perspectives, Inc.; Navigator Development Group, Inc.;
    Command Systems, Inc.; Parametric Technology Corporation; RedZone
    Robotics, Inc.; Krauss-Maffei Wegmann; and Cougaar Software, Inc. In
    addition, study contracts will be awarded to a number of industry
    partners in the areas of command and control, communications,
    computers, intelligence, sensors, reconnaissance, combat, and
    supportability systems by the end of May 2002.
        The DARPA program office is using the services of Booz Allen
    Hamilton, IIT Research Institute, Camber Corporation, Systems Planning
    Corporation, Schafer Corporation, Institute for Defense Analysis, Mitre
    Corporation, Systems Engineering Institute, CeBASE, and Commerce Basix.
        Other governmental agencies and universities involved in the FCS
    effort include the U.S. Army Training and Doctrine Command (TRADOC)
    Requirements Analysis Centers, the TRADOC Objective Force Mounted
    Maneuver Battlelab, the Communications-Electronics Command, the Army
    Materiel Systems Analysis Activity, the Tank-Automotive and Armaments
    Command, the Sandia Labs, the Applied Physics Lab, the USMC Marine
    Expeditionary Force Fighting Vehicle Analysis, the United States
    Military Academy, and the University of Texas.
        Question. General Shinseki, my staff was briefed that Fort Knox has
    been designated as the Unit of Action Center for FCS within TRADOC. Can
    you elaborate on the role that Fort Knox will play in FCS and the
    Army's transformation to the Objective Force? What roles will the Army
    Staff and TRADOC have in the FCS developmental effort?
        Answer. The TRADOC commander has chartered the U.S. Army Armor
    Center and School at Fort Knox as the Objective Force Maneuver Unit of
    Action Proponent. They will lead the development and documentation of
    requirement products that TRADOC must deliver to support the Milestone
    B decision for the FCS in April 2003. The proponent will ensure all
    aspects of force development to include doctrine, training, leader
    development, organization, materiel, and soldier are addressed in the
    Army Transformation. The Unit of Action Maneuver Battle Lab at Fort
    Knox will work in concert with the Lead Systems Integrator, Future
    Combat Systems program manager, and the Army Staff to field the first
    unit of action by the end of this decade.
                           increased operations tempo
        Question. Given the increased operational tempo and deployment of
    Army aircraft, specifically Black Hawk and Apache helicopters, how does
    the Army propose to maintain sufficient readiness and safety levels as
    it transitions larger numbers of airframes from the Active to the
    Reserve Components? Specifically, units such as the 101st Airborne have
    faced increased deployment, combat damage to airframes, fewer aircraft,
    and increased flying time per airframe. How does the Army plan for such
    units to balance maintenance and safety needs for these aircraft while
    keeping up with frequent deployment and operations tempo (OPTEMPO)
    training schedules?
        Answer. The Army will move aircraft from the Active Component to
    the Reserve Components during the Aviation Transformation Plan, Interim
    Force. Although the numbers of aircraft in active units will be
    reduced, the number of mechanics will not, which should enable these
    units to maintain required readiness and safety levels. The Army will
    also increase the number of line pilots from a ratio of one crew per
    aircraft to 1.5 crews per aircraft in divisional AH-64 attack
    battalions and the 101st UH-60 air assault battalions to provide for
    increased operational capabilities.
        We have delayed the Transformation of the 101st Air Assault
    Division due to their deployment status in support of Operation
    Enduring Freedom. We were able to mitigate the loss of a CH-47D with an
    operational readiness float (ORF) aircraft; however, this will not be
    an option in the near future because aviation transformation will
    distribute existing ORFs to fill unit authorizations. The Army will
    accept some risk in our operational aircraft fleet until we implement
    the Objective Force with the addition of the RAH-66 Comanche aircraft
    into the Army inventory. In order to sustain readiness of our aircraft,
    the Army is aggressively working to fund our spares requirement. We
    have identified an unfinanced aviation spare part requirement that we
    are working internally within the Army and the Department of Defense.
    Support to our essential Army aircraft continues to be one of our
    primary goals.
                           chemical demilitarization
        Question. The President's budget request ranks the chemical
    disposal program as ``ineffective.'' Given the numerous delays,
    inconsistencies, and other problems that have plagued the Army's
    efforts to dismantle and dispose of chemical agents at stockpiles
    across the country, as well as the clear threat that these agents pose
    to the citizens who live near them, what steps has the Army taken to
    increase the oversight and accountability of the chemical
    demilitarization program?
        Answer. The Army has consolidated the management of the Chemical
    Demilitarization Program under the Assistant Secretary of the Army
    (Installations and Environment). The Assistant Secretary has extensive
    experience in managing environmentally sensitive and complex government
    facilities and programs. The revised milestones and associated costs
    approved by the Defense Acquisition Executive in September 2001 are
    incorporated into a new set of program requirements by which the Office
    of the Secretary of Defense and the Army will monitor schedule, cost,
    and performance of the program.
        The Army has accelerated the neutralization process for disposal of
    mustard bulk agent at Aberdeen, Maryland, by as much as 1\1/2\ years.
    The Army is evaluating a similar effort to accelerate disposal of the
    bulk VX nerve agent stockpile at Newport, Indiana, and will continue to
    evaluate options at other sites. This approach will save time and
    money. The Army will continuously review options for potential cost
    savings and utilization of resources, while ensuring the safety of the
    public, workers, and environment.
        Since the inception of the program, the Chemical Demilitarization
    program has had oversight from the Centers for Disease Control and
    Prevention, the National Research Council (NRC) of the National Academy
    of Science, and the U.S. Army Center for Health Promotion and
    Preventive Medicine. In evaluation of the Alternative Technologies and
    Approaches Program, the Army Materiel Systems Analysis Activity has
    provided oversight in the area of testing, test planning, and
    operations planning.
        All major systems contracts awarded have implemented Earned Value
    Management System (EVMS) reporting requirements. EVMS provides the Army
    with insight into contractor performance versus the cost and schedule
    negotiated at contract award. With this insight, the Program Manager
    for Chemical Demilitarization (PMCD) can hold the systems contractor
    accountable for any indicators of negative performance before the
    situation becomes serious and can initiate corrective action.
        The Assistant Secretary of the Army (Installations and Environment)
    recently retained consultants who will provide advice on all elements
    of the program. They will participate in an advisory capacity in
    program reviews that evaluate and ensure that operations will be
    performed in a safe and environmentally compliant manner.
        Question. According to reports done by the Army, the Pentagon, and
    National Academy of Sciences, this risk could be eliminated much
    quicker and more safely if the weapons were disassembled and the agents
    neutralized. Why isn't the Army initiating this approach instead of
    continuing to proceed down the incineration path that has led us into
    this $24 billion boondoggle that is now predicted to be 20 plus years
    behind its original completion schedule?
        Answer. The Chemical Stockpile Disposal Program has beaten every
    destruction treaty milestone to date. The program has incinerated over
    1.4 million chemical weapons and over 16,000,000 pounds of chemical
    agent safely and without harming the public, workers, or the
    environment. The NRC has in numerous reports indicated that continued
    storage is the greatest risk to the public. Use of facilities that are
    already built and preparing for operations such as at Anniston,
    Alabama, and Umatilla, Oregon, provide the shortest path to eliminating
    that risk. However, where thorough investigation and testing have shown
    that an alternative technology can be as safe and effective, use of
    that technology is being pursued. As examples, the program manager is
    using alternative technologies for some activities of the non-stockpile
    product, and is employing the use of alternative technologies at the
    Aberdeen, Maryland, and Newport, Indiana, sites that contain bulk agent
    only. The Army is also evaluating a similar process at other sites
    containing both munitions and bulk agent.
        Studies and evaluations prepared by the Army and National Academy
    of Sciences, as well as other agencies, are all conducted with the goal
    of finding safer and more effective approaches for the disposal of
    chemical weapons. The PMCD uses the technology best suited for the
    disposal of munitions and agents at the respective locations. The PMCD
    is also working with the Assembled Chemical Weapons Assessment program,
    where neutralization followed by biotreatment is being considered for
    disposal of the stockpile at Pueblo, Colorado. Public safety and the
    reduction of risk by elimination of the stockpile are the primary
    concerns of the chemical disposal program.
                               homeland security
        Question. Nearly six months since the Office of Homeland Security
    was created, there still seems to be considerable uncertainty about how
    to accurately define ``Homeland Security.'' Could you please discuss
    the Army's role in Homeland Security? What role, if any, will Army
    training facilities play in efforts to train ``first responders'' to
    terrorist attacks? Will facilities such as Fort Knox's Mounted Urban
    Combat Training (MUCT) facility play such a role in the Army's Homeland
    Security efforts?
        Answer. A secure homeland is a national priority and the nation
    depends on Army contributions for homeland security--a mission we have
    been conducting for over 226 years. The Army's homeland security roles
    and missions have changed over the years and will continue to change to
    support U.S. strategy. Since September 11, the Army has been providing
    more than 17,000 soldiers, in state active duty, Title 10, and Title 32
    status in support of increased homeland security requirements. In
    addition to providing increased security at our own facilities,
    homeland security missions have included providing quick reaction
    forces, increased security to key infrastructure sites, increased
    security at over 400 airports across the country, and soldiers to
    augment Department of Justice and Department of Treasury border
    security missions. The Army also recently augmented security at
    national security special events such as the Super Bowl, World Economic
    Conference, and the Winter Olympics. Currently, Army homeland security
    responsibilities include two components: homeland defense and support
    to civil authorities. Although not a result of the attacks of September
    11, the Army continues to support Joint Task Force-6, a multi-Service
    organization that provides operational, training, and intelligence
    support to domestic law enforcement agencies' counter-drug efforts in
    the United States. The Army supports computer network defense
    operations. In terms of future developments, the Army plays a
    significant role in the development of the Ballistic Missile Defense
    System, specifically in the development and testing of the Ground-Based
    Interceptor and radar as well as Terminal Phase systems.
        The Army's non-negotiable contract with the American people is to
    fight and win our nation's wars. The Army prepares for these
    traditional defense functions by maintaining a combat focus with
    trained and ready units to meet warfighting requirements.
        In addition to warfighting, one of the Army's core competencies is
    supporting civil authorities. The bulk of homeland security
    responsibilities reside with various civil authorities--local, state,
    and federal. The Army, including both the Active and Reserve
    Components, is uniquely capable of supporting civil authorities in a
    full range of domestic contingencies--a mission the Army supports
    throughout any given year in response to hurricanes, forest fires, and
    other crises. Much of what the Army has done in securing the homeland
    over the past six months has involved supporting civil authorities
    whose own capabilities have been exhausted or overwhelmed. For example,
    the Army provided specialized capabilities to support other federal
    agencies at disaster sites, and the Army is providing soldiers to
    augment several federal agencies in accomplishing border security
    missions. As the capabilities of civil authorities increase, or
    security requirements are met through other means, the Army can reduce
    its commitments. In the future, the Army may play a role in training
    civil authorities to improve their capabilities, such as those of first
    responders. In doing this, in addition to improving the homeland
    security, there may be a reduced demand for military capabilities in
    the future.
        Army training facilities, specifically Army live-fire ranges, are
    the cornerstone of Army training. Army ranges are built and modernized
    according to Army operational and doctrinal needs. Once constructed,
    however, a wide variety of federal, state, and local entities find our
    ranges to be extremely beneficial and schedule to use them. Range
    managers are committed to accommodating all reasonable range use
    requests.
        The Army has recently constructed a number of world-class training
    facilities that can provide extraordinary training opportunities for
    current non-DOD users as well as future homeland security focused
    training. The Fort Knox Mounted Urban Combat Training (MUCT) facility
    as well as other facilities designed for Military Operations on
    Urbanized Terrain (MOUT) is an outstanding facility for emerging
    homeland security training requirements. These facilities offer
    flexible, interactive, instrumented, and video-captured training in
    full-scale mock cities.
        MOUT/MUCT facilities currently operate at Fort Knox, Fort Polk,
    Fort Drum, Fort Campbell, and Fort Bragg. Two more MOUT facilities are
    being built at Fort Lewis and Fort Wainwright in the next three years.
    The current Army range modernization plan includes additional MOUT/MUCT
    construction and upgrades in the next ten years. The Army's continuous
    development of realistic, flexible, adaptable training facilities will
    certainly benefit emerging homeland security training needs.
                                     ______

              Questions Submitted by Senator Kay Bailey Hutchison
                        gulf war illness (gwi) research
        Question. Secretary White, I am concerned that the proposed budget
    would slash Gulf War Illness research from $17.5 million to $5 million.
    This represents a 71 percent reduction.
        Given the recent advances in identifying the cause of this elusive
    illness, wouldn't now be the time to increase GWI research funding?
        Answer. The proposed budget for fiscal year 2003 requests an
    increase from $5 million to $10 million. This increase in funding is
    necessary to address newly identified post-deployment health issues and
    continue to expand on findings from the currently funded Gulf War
    Illnesses research program.
                 army fiscal year 2003 medical research budget
        Question. Secretary White, while I am encouraged by the overall
    level of Army spending in the budget request, I am deeply troubled by
    the proposed cut in Army medical research programs. In the two largest
    accounts--Medical Technology and Medical Advanced Technology--the
    request represents a 16 percent cut.
        Upon what are you justifying this cut?
        Answer. The reduction in funding is best explained in two parts.
    The first part relates to the cessation of funding for research into
    militarily relevant, emerging infectious diseases in developing
    countries that was initiated through two program budget decisions
    (PBDs) issued to fund this research in fiscal year 2001 and fiscal year
    2002. The Army did not request these funds through its budget process;
    nevertheless, they were applied to address infectious diseases of
    military importance. The cessation of funding in this case is not
    perceived to be a cut since these funds were not part of our core
    military infectious disease research program.
        The second part of the reduction results from transfer of the
    oversight and management of HIV research and development to the
    National Institutes of Health (NIH). This action was directed by PBD
    203C that also rescinded funding for this defense program.
        The Army is in discussion with the NIH and is in the process of
    drafting a memorandum of understanding (MOU) to continue this important
    military research under their fiscal oversight. The military research,
    development, test, and evaluation program focuses on the non-clade B
    strains of HIV, which are not high priority strains for NIH but present
    a threat to our deployed forces. We expect minimal impact to the
    current program if the NIH agrees to continue it as planned.
        Additionally, we have a variety of vaccine research programs based
    in other countries with longstanding MOUs that permit specific research
    programs. HIV vaccine research, currently underway in Thailand, must be
    continued. Our MOU with Thailand allows for the conduct of clinical
    trials required by the Food and Drug Administration. After almost a
    decade of research in that country, a Phase 3 clinical trial for a
    promising HIV vaccine is scheduled to start this fiscal year. In order
    to begin a clinical trial, funding must be committed to vaccinate
    participants, monitor their health, and provide follow-up care as
    needed. Initial discussions with NIH have confirmed support for these
    ongoing clinical trials.
                               fort bliss--water
        Question. The fiscal year 2002 Military Construction and Defense
    Appropriations Bills contained $2.8 million for studies and planning
    and design activities related to a new desalinization plant for Fort
    Bliss. It is my understanding that the Army has not yet executed any of
    those funds. As the dwindling supply of potable water at one of the
    Army's premier installations is well known, I am puzzled as to why the
    Army would drag its feet on this issue.
        Why have those funds not yet been obligated?
        Answer. The Fiscal Year 2002 Military Construction Act provided
    $1.8 million in planning and design funds to support design of the
    facility. However, the design cannot be started until required pre-
    design studies are conducted. Title 10 of the United States Code
    requires that all pre-design activities, to include studies, be funded
    with Operations and Maintenance, Army (OMA) dollars.
        The Fiscal Year 2002 Defense Appropriations Act provided $1 million
    in OMA funds for a Fort Bliss desalinization plant study and $1 million
    for a Fort Bliss water system pre-design study. This bill was not
    signed into law until January 11, 2002, and funding guidance is just
    now being provided to the field. In preparation of receiving the funds,
    the Fort Bliss Department of Public Works has made ready a Request For
    Proposal to have a contractor perform studies needed in conjunction
    with the disposal of the brine by-product of the desalination process
    through the use of brine injection wells. The Army will spend $1.8
    million to perform the injection well tests to determine the optimal
    location for these wells and to support permitting of brine down-hole
    injection process. The City of El Paso Water Utility group will perform
    studies to locate the production wells that would be required to
    support this desalination plant.
        We expect the OMA funding to be available to the installation in
    the late March timeframe. The brine injection well studies are
    currently estimated to take between 12 and 18 months to complete.
                              fort bliss--capacity
        Question. Secretary White, as you are well aware, large land areas
    for maneuver training are at a premium in the United States and,
    because of this scarcity, their use needs to be maximized. I'm sure you
    are also aware that the Fort Bliss/White Sands training area is the
    largest in the United States, yet there are no major maneuver forces
    permanently stationed at Fort Bliss. Do you see the movement of a
    division, or perhaps one of the Army's new Interim Brigade Combat Teams
    (IBCTs), to Fort Bliss to take advantage of this unmatched maneuver
    space?
        Answer. Fort Bliss is home to a robust array of U.S. Army Air
    Defense Artillery units, schools, and related activities. The Air
    Defense Artillery Center and School trains Army air defenders and Army
    leaders with a host of courses and facilities. Major units include the
    32nd Army Air and Missile Defense Command, four air defense brigade
    headquarters and headquarters batteries, seven Patriot battalions, and
    seven maintenance companies. Several of these units were relocated to
    Fort Bliss after 1995 to maximize Army usage of the range spaces there.
    Air defense missile firing requires a great amount of range space to
    safely train under realistic engagement conditions and distances, and
    Fort Bliss is well suited for this mission.
        Both Active and Reserve Component units and personnel conduct
    extensive training exercises, mobilization activities, and support
    missions at Fort Bliss. Additionally, the Army staffs, equips, and
    jointly operates other U.S. government elements at Fort Bliss such as
    Joint Task Force-6, Operation Alliance, and the El Paso Intelligence
    Center.
        Fort Bliss, like all other installations, is being considered for
    future stationing options for different units. Each installation has
    its advantages and disadvantages in terms of maneuver and range
    availability, power projection capacity, and installation support
    capacity. Fort Bliss is currently undergoing some important upgrade
    projects regarding the fielding of the Theater High Altitude Area
    Defense System, and the installation will continue to meet the
    important needs of soldiers, civilian employees, and families.
                           u.s. army south relocation
        Question. Secretary White, I understand that the Army is in the
    process of sending evaluation teams to five or six bases to determine
    their suitability to serve as the new home to U.S. Army South (USARSO).
    Will the criteria these installations be evaluated on include:
    Proximity to an international airport with direct flights to Central
    and South America? Abundant spousal employment opportunities? Existing
    infrastructure capable of absorbing USARSO, without the need for new
    construction?
        Answer. The Army is not currently evaluating any locations for a
    future home for USARSO. The Army is, however, studying the necessity of
    moving USARSO and a decision is expected soon. If a decision is made to
    move USARSO, criteria will be developed and utilized in the process of
    reviewing possible relocation sites and in making a final selection.
                       family of medium tactical vehicles
        Question. Mr. Secretary, General Tommy Franks has recently
    testified on the need to maintain the Army's Combat Systems and Combat
    Systems Support base. He described several systems that he deemed were
    ``of particular interest to the Command.'' One program he mentioned is
    the Family of Medium Tactical Vehicles (FMTV).
        I am told that there is an urgent requirement for $22.4 million for
    Low-Velocity Air-Drop (LVAD) version of the FMTV truck for a new
    Special Operations Support Battalion. As it takes eight or nine months
    to field these vehicles, should the Congress expect to see a request
    for these vehicles in the fiscal year 2002 supplemental?
        Answer. The Army has identified a new unfunded requirement (UFR)
    for conversion of the 528th Special Operations Support Battalion from
    its current standard cargo truck configuration to the LVAD
    configuration in response to evolving mission requirements. The Army
    had previously identified, funded, and filled 100 percent of its known
    LVAD requirement as part of the first five-year multiyear FMTV
    production contract with Stewart & Stevenson Services, Inc. Since the
    known requirement had been filled, there was no provision in subsequent
    contracts for production of additional LVAD models. The $22.4 million
    UFR includes the cost of special ordering 81 new LVAD vehicles plus
    engineering, fielding, and training support. This requirement was
    addressed in the initial draft of the fiscal year 2002 supplemental
    request, but was not included in the final prioritized list. It will be
    submitted for further consideration at the next available opportunity.
                           army contracting officers
        Question. Mr. Secretary, it has come to my attention that the Army
    is once again moving forward with the consolidation of its contracting
    offices. Before embarking on this path, had the Army studied the effect
    the consolidation will have on small and minority-owned businesses?
        Answer. The Deputy Assistant Secretary of the Army (Policy &
    Procurement) and the Director of the Army Small and Disadvantaged
    Business Utilization Office have worked together diligently to study
    the potential ramifications that may arise as a result of our
    consolidation efforts. One of our key goals is to identify new
    opportunities for small businesses to provide their goods and services
    to the Army. Our new organizational structure will allow the management
    team to better analyze data in areas such as credit card transactions
    to better focus our buying patterns to benefit the small business
    community. Likewise, it will be easier for the new management team to
    identify and set aside small business opportunities, all or in part, in
    many of our larger contracts as a result of our more effective
    acquisition planning processes. Additionally, we have reinforced these
    ideas in our concept and implementation plans and have clearly
    identified the need for establishing, monitoring, and achieving small
    and minority-owned business goals. The plans also identify specific
    duty positions within the new organizations for full-time small
    business program personnel who will be key players in ensuring the
    success of the program and achievement of our jointly established
    goals.
        Question. Mr. Secretary, has the Army determined if this decision
    will lead to more ``bundling'' of contracts?
        Answer. It is not our intent to increase the number of requirements
    that will be bundled. Instead, we anticipate that requirements for
    supplies or services, which are traditionally performed by one or more
    small business concerns under separate smaller contracts, will be
    maintained at the local installation level. If an increase in bundling
    does occur, our new organizational structure and management team are
    chartered to increase the opportunities for small businesses by better
    planning for the acquisition of these newly bundled requirements. In
    addition, by consolidating our larger contracts at the regional level,
    we anticipate that significant cost efficiencies can be achieved and
    that the utilization of small businesses will increase via set asides,
    multiple awards, subcontracting, etc. as these larger contracts are
    actually executed across the entire Army.
                                     ______

                Questions Submitted to General Eric K. Shinseki
                Questions Submitted by Senator Daniel K. Inouye
                                homeland defense
        Question. General Shinseki, the Army has been integral to
    protecting our homeland since September 11th, how do you envision the
    Army adapting to this growing mission?
        Answer. In addition to providing security for the homeland, the
    Army is also meeting strategic requirements around the world, fighting
    a global war on terrorism, and continuing to pursue its Transformation
    objectives. The Army is preparing for the future through
    Transformation. Transforming the institution in bold and fundamental
    ways will posture the Army for its 21st Century duties. The events of
    September 11 only add urgency to our efforts to pursue Transformation
    objectives.
        A secure homeland is a national priority and the Nation depends on
    Army contributions for homeland security--a mission we have been
    conducting for over 226 years. The Army's homeland security roles and
    missions have changed over the years and will continue to change to
    support U.S. strategy. Since September 11, the Army has been providing
    more than 17,000 soldiers, in state active duty, Title 10, and Title 32
    status in support of increased homeland security requirements. The
    missions have included providing quick reaction forces, increased
    security to key infrastructure sites, increased security at over 400
    airports across the country, and soldiers to augment Department of
    Justice and Department of Treasury border security missions. The Army
    has also recently augmented security at national security special
    events such as the Super Bowl, World Economic Conference, and the
    Winter Olympics. This commitment, in addition to ongoing strategic
    requirements, puts a strain on Army force structure and resources.
    Currently, Army homeland security responsibilities include two
    components--homeland defense and support to civil authorities.
        The Army's non-negotiable contract with the American people is to
    fight and win our Nation's wars. The Army prepares for these
    traditional defense functions by maintaining a combat focus with
    trained and ready units to meet warfighting requirements.
        In addition to warfighting, one of the Army's core competencies is
    supporting civil authorities. The bulk of homeland security
    responsibilities reside with various civil authorities--local, state,
    and federal. The Army, including both the Active and Reserve
    Components, is uniquely capable of supporting civil authorities in a
    full range of domestic contingencies--a mission the Army supports
    throughout any given year in response to hurricanes, forest fires, and
    other crises. Much of what the Army has done in securing the homeland
    over the past six months has involved supporting civil authorities
    whose own capabilities have been exhausted or overwhelmed, such as
    providing specialized capabilities to support other federal agencies at
    disaster sites and providing soldiers to augment federal agencies in
    accomplishing border security missions. As the capabilities of civil
    authorities increase, or security requirements are met through other
    means, the Army can reduce its commitments. The capabilities required
    to support civil authorities are resident in existing Army structure.
        Although not a result of the attacks of September 11, the Army
    continues to support Joint Task Force-6, a multi-Service organization
    that provides operational, training, and intelligence support to
    domestic law enforcement agencies' counter-drug efforts in the United
    States. The Army also supports computer network defense operations. In
    terms of future developments, the Army plays a significant role in the
    development of the ballistic missile defense system. The Army
    participates in the development and testing of the ground-based
    interceptor and radar as well as terminal phase systems.
        Future requirements for homeland security are being addressed by
    emerging National and Department of Defense homeland security policy
    and guidance. As homeland security roles and missions are formalized,
    the Army will continue to assess its capabilities to ensure it can meet
    all its responsibilities within the overall defense strategy at an
    acceptable level of risk.
                                     ______

                  Questions Submitted by Senator Thad Cochran
                     remote acoustic hemostasis technology
        Question. General Shinseki, hemorrhage has been identified as the
    major controllable cause of battlefield death. I am sure you agree that
    given the means, this is an area that we would like to see improvement.
    I understand that the Army Medical Research and Material Command is
    very interested in recent developments in Remote Acoustic Hemostasis
    (ultrasound) technology, given their promise to not only locate
    internal bleeding but also immediately cauterize visible or internal
    bleeding while the soldier is on the battlefield. This helps preserve
    life for follow-on medical attention.
        Do you have plans to incorporate these types of advancements into
    medical treatment variants of the Army's Future Combat Systems?
        Answer. New methods for hemostasis are among the many identified
    needs in our combat casualty care mission area. Remote acoustic
    hemostatic technology, packaged with imaging and telemedicine links, is
    one potential technology insertion for the medical treatment variant of
    the Army's Future Combat Systems (FCS). The program manager for the
    medical treatment variant for the FCS, once identified, would certainly
    include consideration of remote acoustic hemostasis as part of the
    medical mission package. Active consideration will be dependent on the
    technology reaching a level of maturation that assures Food and Drug
    Administration (FDA) approval for military applications and with
    critical design decisions for block upgrades to the FCS.
        Question. General Shinseki, if it were available, would you be
    interested in fielding this technology in support of current
    operations?
        Answer. Until the technology can be matured to the point it has
    received an FDA approval certifying that the device is safe, effective,
    and suitable for use in a field or mobile environment, the Army would
    be unable to employ it in support of current operations.
                      advanced army rapid emplaced bridge
        Question. General Shinseki, Mississippi State University and
    Seemans Corporation of Gulfport, are working with the Army to develop
    the ``Advanced Army Rapidly Emplaced Bridge,'' which is being made
    using composite material and technology. I understand that this
    composite combat bridge is 15 meters long and supports over 190 tons. I
    find it remarkable that even after failure it is still able to support
    a M-1 tank that weighs approximately 70 tons. This bridge is also
    transportable by C-130 aircraft and requires minimal manpower and
    equipment support. Considering limitations of bridges in your current
    inventory, it seems that this composite bridging system holds great
    promise to support your Transformation efforts.
        Can you provide an assessment of the need for lightweight, assault
    and support bridging in the near and long-term?
        Answer. As long as we have forces on the ground that must have the
    freedom of movement in the battle space to ensure dominate maneuver,
    there will be a requirement for both wet and dry gap bridging to
    support our combat and support forces.
        Currently, we have no wet or dry gap crossing capability for the
    Objective Force. We do envision the Objective Force having great
    mobility--this mobility will be dependent on intelligence and an
    embedded mobility capability. The Interim Force gap crossing capability
    is limited to a 13-meter bridge--the Rapidly Emplaced Bridge System.
    This aluminum bridge is military load class 30 and is transported on a
    palletized load system truck.
        As we transition to the Objective Force, the bridging of the future
    will need to be compatible with these forces. They will have to be
    light enough to be carried and launched by the new vehicle as well as
    be deployable, transportable, and mobile to move with these forces in
    stride. A goal for the gap crossing capability of the future is to
    leave the system in place rather than the leapfrogging the assault
    bridging forward and replace it with cheaper support bridging. Doing
    this will potentially have a noticeable positive impact on movement by
    reducing time, task, and manpower requirements to support mobility
    operations. The technical challenge is to get the system cost down to
    make this goal economically feasible while providing bridging systems
    that can support not only the light combat forces, but also the follow-
    on support forces. Our objective is to utilize advances such as the
    promising new materials that you referred to as well as investigate new
    launch techniques and transporting techniques.
        Question. General Shinseki, could you provide an assessment of the
    Advanced Army Rapidly Emplaced Bridge?
        Answer. By the Advanced Army Rapidly Emplaced Bridge, I presume you
    are referring to our 13 meter Composite Army Bridge (CAB). The CAB was
    a cooperative effort between the Defense Advanced Research Projects
    Agency (DARPA), the Army, the academic community, and Seemans Composite
    to provide a technical demonstrator of a graphite composite bridge to
    examine benefits provided by advanced materials such as these. The
    single-piece, 13-meter bridge has been subjected to structural strength
    testing as well as live vehicle crossing using both the Abrams and the
    Heavy Equipment Transport loaded with an Abrams. It passed these tests
    wonderfully. It will soon enter durability testing to determine how the
    system will survive a full life of crossings. A follow-on effort that
    is also with Seemans Composites is focused on developing the joints
    needed to allow connections required to fabricate longer bridges that
    can be packaged and launched by future forces. In other words, to go
    from the single piece construction of the CAB to connecting multiple
    sections together to get a longer gap crossing capability which can be
    sized to meet the gap need. These connections, in conjunction with the
    launching techniques, are the key technical barriers to realizing the
    bridging of the future. This work is also progressing well.
                                     ______

               Questions Submitted by Senator Christopher S. Bond
                          chemical/biological training
        Question. Under Public Law 103-160 all Chemical and Biological
    training of the Department of Defense is required to be conducted at
    the U.S. Army Chemical School, which is located at Fort Leonard Wood,
    Missouri. As stated in the most recent (2002) Army Posture Statement
    ``Tough, demanding training which is supported by an infrastructure
    that allows us to train, sustain, and deploy is essential to readiness.
    History has taught us and we have learned that in the end, armies fight
    the way they train.'' I understand that the number one unfunded
    priority for Training and Doctrine Command (TRADOC) is an fiscal year
    2003 Military Construction (MILCON) request for a responder training
    facility for Weapons of Mass Destruction (WMD) at Fort Leonard Wood. I
    also understand that there is pressure to reduce the current projected
    funding level from $15 million to $10 million which will ensure that
    this facility is insufficient to meet our emerging training needs
    before it starts! Already, Fort Leonard Wood trains responders for all
    four branches of the Armed Services to include the Coast Guard and its
    apparent that our future training requirements will only increase.
    Frankly, I think it is critical that we begin to ramp up our training
    resources in the critical area of chemical, biological, radiological,
    nuclear and high energy immediately. Our adversaries are not waiting to
    develop ever more lethal weapons. What assurances can you give us that
    this WMD responder facility is indeed going to be funded and at a level
    that will meet the growing demand for Chemical, Biological,
    Radiological, Nuclear, Explosives (CBRNE) training?
        Answer. Through Public Law 103-160, Section 1703, Congress
    established a Joint Service Chemical and Biological Defense Program
    (CBDP). The mission of the Joint CBDP is to provide world-class
    chemical and biological defense capabilities to allow our military
    forces to survive and sustain their missions in environments
    contaminated with chemical or biological warfare agents.
        With respect to this WMD training at Fort Leonard Wood, the current
    cost estimates depict a MILCON funding requirement for $13.5 million
    plus an additional equipment procurement requirement of $963,000 for a
    project total of $14.463 million. The project is currently ranked as
    TRADOC's number one unfunded requirement (UFR) for fiscal year 2005. As
    a new project, this requirement will compete for resources during the
    Army's fiscal year 2004-2009 Program Objective Memorandum build. We
    recognize the importance of homeland security as seen by the priority
    ranking from TRADOC for this fiscal year 2005 MILCON. We believe the
    need to establish a joint center of excellence for joint doctrine and
    training for WMD response is key to the Army's support of the nation's
    homeland defense and places this project in best position for
    resourcing.
                 ah-64a and ah-64d (longbow) apache helicopters
        Question. I understand the Army has decided not to upgrade 203
    Apache AH-64A helicopters and I'm further told that the cost of
    maintaining a dual fleet of 64A's and 64D's is projected to be $1.4
    billion over the life cycle of the AH-64A fleet. The AH-64A is a much
    better aircraft than the Cobra that it replaces, but I'm concerned
    about the long-range ability of units that field the 64A to be an
    effective force multiplier. Pilots trained in the 64A cannot fly the
    upgraded D model without going through a lengthy transition course. The
    Guard will be the recipient of these 64A's, and I'm wondering what the
    long-term plan is for these aircraft that will not be compatible with
    their 64D counterparts? Furthermore, parts priorities for Guard units
    fielding the AH-64A will most certainly be at the bottom of the totem
    pole.
        Answer. The Army began implementation of the Aviation
    Transformation Plan in January 2002. This plan provides the strategy
    and guidance necessary to transform Army aviation from a Legacy to an
    Interim Force. The initial transformation plan changes from the current
    structure to the Interim Force and includes all components of Army
    aviation. The plan divested the Army of the Legacy attack platform AH-1
    Cobra reducing the number of attack helicopter types from three to two
    in the interim structure. Constrained by funding, priorities were
    established based upon modernization, Transformation, and
    recapitalization plans.
        The Army Aviation Transformation Plan cascades the most capable AH-
    64A models to the six National Guard attack battalions and division
    cavalry squadrons. To reduce operation and sustainment costs, the
    oldest AH-64As are converted to the Longbows. This will establish a 10-
    year half-life on the Apache fleet by 2010. Modernizing the National
    Guard divisions with the AH-64A enhances the Army's war fighting
    capability. Many of the National Guard units have aviators rated to fly
    the Apache A model. As with any advanced airframe, a transition course
    will be required for aviators not rated in the Apache. These training
    requirements were studied in depth. The National Guard will be the only
    Army component with the AH-64A at completion of the Aviation
    Transformation Plan. For this reason, the National Guard will conduct
    all AH-64A aviator training at the Western Army Aviation Training Site
    in Arizona by the end of fiscal year 2004.
        In accordance with approved plans, the Comanche will start
    displacing Apaches by 2015. While the fielding schedule for Comanche is
    not finalized, there may be National Guard units that will convert from
    AH-64A units directly to Comanche units.
        The AH-64A is a very lethal airframe to which no other attack
    helicopter, short of the AH-64D and the future Comanche can compare.
    Fielding the National Guard with the AH-64A provides the Army with the
    best attack helicopter capability affordable. As evident in Operations
    Enduring Freedom and Desert Storm, the AH-64A is a highly effective
    force multiplier. The National Guard will have three AH-64D Longbow
    battalions and the Army Reserve will have two Longbow battalions. The
    combined capability of the Reserve Component attack battalions with AH-
    64A and D model Apaches provides a wide variety of combat capabilities
    to any war fighting commander in chief.
        Comparing the AH-64A to the AH-64D, the AH-64A will have
    approximately 20 percent unique airframe components of which the
    National Guard units will be the sole customer and the top priority.
    The remaining parts requirements will be resourced based on current
    operational priorities. The National Guard will continue to contribute
    to these operational deployments and when deployed, receive higher
    priority regardless of A or D model configuration.
        Question. Can we seriously expect to deploy AH-64A models in a
    combat theater once the Army has a full contingent of upgraded AH-64D
    models?
        Answer. Yes. The AH-64D is more capable than the AH-64A and offers
    digital connectivity, which the AH-64A cannot. The Apache Longbow may
    be the preferred airframe; however, as evident by current operations,
    the AH-64A will continue to offer the ground commander a combat
    multiplier. Once the Longbow fielding is complete, there will continue
    to be deployments where the AH-64A would meet operational requirements,
    as in Kosovo today. The AH-64A Apaches in the National Guard divisions
    provide the Army with a force multiplier capable of meeting many of the
    operational requirements in the future.
                                     ______

              Questions Submitted by Senator Kay Bailey Hutchison
           future combat systems (fcs) lead systems integrator (lsi)
        Question. General Shinseki, Defense News reports this week that
    eight of the ten vehicles projected to compose the Interim Combat
    Brigade Teams are too heavy to be carried by a C-130. Yet the ability
    to be carried by a C-130 is an essential characteristic. I thought one
    of the reasons the Army selected an off-the-shelf vehicle, a known
    quantity, was to avoid such problems.
        This does not bode well for the aggressive development schedule you
    have laid out for the Future Combat Systems (FCS), which will form the
    backbone of the post-2010 Army. What steps are you taking to ensure
    that the FCS development program will yield a truly transformational
    system, while avoiding similar problems?
        Answer. The U.S. Army Training and Doctrine Command (TRADOC)
    representing the user community defined the required transformational
    characteristics for the FCS design. These characteristics are stated in
    the form of requirements in the statement of required capabilities
    (SORC). The capabilities will further be refined in the FCS operational
    requirements document (ORD) that will be used for the actual design and
    testing of the system. FCS will be tested to the ORD requirements
    before production.
        The Lead Systems Integrator (LSI) was required to comply with the
    SORC in their concept proposal for FCS. The Army, partnered with the
    Defense Advanced Research Projects Agency (DARPA), selected the Boeing-
    SAIC team as the LSI to assist the Army in building FCS by the end of
    this decade. The LSI provides the integrating function of this complex
    system-of-systems approach to field an FCS-equipped Objective Force.
    TRADOC and the LSI will collaborate to ensure FCS fulfills the user
    requirements and the Army's Transformation goals.
        Question. How will the employment of a Lead Systems Integrator
    (LSI), similar in concept to the one employed for National Missile
    Defense, aid in the management of a program that is critical to both
    the Army and our national security?
        Answer. FCS is a complex group of systems, roughly equivalent to
    the ``Big Five'' systems the Army developed and fielded in the post-
    Vietnam era. However, as a system of systems, the key sub-systems of
    FCS must be integrated and fielded simultaneously within a complex
    architecture. While challenging, this is a transformational approach to
    new systems fielding. The FCS LSI serves as the integrator for FCS
    within all the systems' components and within the Objective Force
    systems' architecture. Our approach differs from that of the National
    Missile Defense in that the partners of the LSI were competed rather
    than mandated. By making a broad industry announcement and requiring
    that the system capabilities within the FCS use an open systems
    architecture between the sub-systems, our LSI approach maximizes
    competition and maintains the flexibility to integrate additional
    capabilities within the FCS as they mature. The Army's LSI approach
    enables evolutionary, spiral development acquisition to achieve
    threshold capabilities for FCS this decade while offering significant
    improvements as technology matures to ensure full spectrum dominance
    throughout the life of the system.
                       interim brigade combat team (ibct)
        Question. General Shinseki, Defense News reports this week that
    eight of the ten vehicles projected to compose the IBCTs are too heavy
    to be carried by a C-130. It is my understanding that the ability to be
    carried by a C-130 is a must-have characteristic.
        Has this requirement changed, and if not, what steps is the Army
    taking to ensure that these vehicles are ready to fight as soon as they
    roll off a C-130?
        Answer. The Army is confident that the Interim Armored Vehicle
    (IAV) will meet its transportability requirements. C-130
    transportability is one of the IAV's four key performance parameters.
    The IBCT project manager and the Military Traffic Management Command
    Transportation Engineering Agency (MTMCTEA) have worked together
    throughout the IAV program to establish requirements and address IAV
    design considerations that affect its transportability. The MTMCTEA
    also analyzed IAV proposals during source selection.
        Vehicle weight is only one transportability consideration.
    Operational mission, range and payload, axle loading, and exterior
    dimensions also bear on vehicle design. Weather, altitude, and airfield
    surface conditions may also impact operations. In total, 38,000 pounds
    is the allowable weight to fly 1,000 miles under normal operating
    conditions.
        All ten IAV configurations will fit inside a C-130 aircraft, with
    waivers for loadmaster safety aisles. The Infantry Carrier Vehicle
    (ICV) underwent a successful transportability demonstration at
    Selfridge Air National Guard Base on January 31, 2002. The ICV met day
    and night objectives for loadmaster movement within the aircraft,
    loading, tie-down requirements, evacuation, and offload access of the
    loadmaster and vehicle crew. ICV air transportability certification
    will continue with ramp axle load distribution verification and
    developmental testing beginning in April 2002. Each configuration will
    undergo a similar exercise.
        The Fire Support Vehicle and the Medical Evacuation Vehicle meet
    the total vehicle weight and the axle weight requirements in their
    fully loaded configurations. Seven of the remaining eight
    configurations meet weight requirements through cross loading of
    stowage items. For example, the empty weight of the ICV is 34,313
    pounds. The combat loaded vehicle weight, including the two-man crew,
    but not including the nine-man infantry squad, is 37,508 pounds. We are
    working to ensure combat capability upon arrival by reviewing vehicle
    hardware for weight reduction opportunities. We continue to review and
    prioritize removable vehicle equipment and stowage items.
        The C-130 can transport all of the IAV configurations. The Mobile
    Gun System (MGS), currently under development, requires re-engineering
    to minimize off-loading of equipment. An aggressive weight reduction
    program is underway and should be complete before the fiscal year 2005
    full-rate production decision. Worth noting is that the IAV's high
    degree of commonality will promote the application of MGS changes to
    other ongoing IAV production, increasing the effective combat load of
    all configurations.
                            lead systems integrator
        Question. General Shinseki, I understand the LSI contract is being
    solicited by DARPA. Does the accountability for this contract also
    reside with DARPA?
        Answer. The Defense Advanced Projects Research Agency (DARPA)
    retains the authority for this agreement through the remainder of the
    concepts and technology development phase of acquisition, currently
    scheduled to end in the third quarter of fiscal year 2003. Early in the
    program we saw several advantages in partnering with DARPA. Among these
    are the ability to leverage DARPA's culture of pursuing paradigm
    shifting innovations, the use of other transactions as a contracting
    mechanism to speed acquisition, and the ability to directly leverage
    DARPA's resources by obtaining their commitment to share in the cost of
    technology development. All of this is happening today. Aside form
    periodic program reviews with the Army leadership, we have also ensured
    coupling to the Army Vision by making key personnel assignments. The
    DARPA Objective Force program manager is an Army colonel and the Army
    has also assigned a brigadier general as the Future Combat Systems
    program manager to prepare for the transition of the Army and DARPA
    technology into the Army's acquisition program at Milestone B in 2003.
                                  fcs and lsi
        Question. How will the LSI ensure that the FCS will stay relevant
    over time as technology evolves at an ever-increasing rate?
        Answer. By using an open systems architecture, an innovative
    approach to software insertion at the point of maturity, and a
    deliberate block approach to hardware upgrades, the Army and DARPA have
    contracted for the LSI to incorporate technologies into FCS designs
    based upon technology maturity, capabilities needs, and affordability
    criteria required for FCS. The Army will program funding for succeeding
    software and hardware upgrades to ensure FCS maintains technical
    performance dominance specified in the operational requirements
    document.
        army/marine corps cooperation on the future combat system (fcs)
        Question. General Shinseki, the fiscal year 2003 request includes
    significant funding for R&D activities associated with the Future
    Combat Systems (FCS). The FCS will form the backbone of the post-2010
    Army, the so-called ``Objective Force.'' It is my understanding that
    the Marine Corps is planning to field a similar force with similar
    capabilities, just a few years after the Army. Would you please
    describe what collaborative activities the Army and Marine Corps are
    engaging in to prevent duplicative development programs?
        Answer. During the concepts and technology development phase of
    acquisition, the Army has engaged the Marine Corps requirements
    community to discuss opportunities for collaborative programs at the
    system level of the FCS. Although the Marine Expeditionary Family of
    Fighting Vehicles does not have the same deployability requirements as
    the FCS, the Marine Corps is considering the value of FCS subsystems as
    potential derivative programs to enhance Marine Corps warfighting
    capabilities in areas such as lethality.
                        unmanned aerial vehicles (uavs)
        Question. General Shinseki, I note that the request includes $46
    million for UAV research and development (R&D). What capabilities do
    current systems lack that you feel must be developed if UAVs are to
    fulfill their anticipated role in the Objective Force?
        Answer. Fiscal year 2003 R&D funding completes development of the
    Tactical Unmanned Aerial Vehicle system (Shadow 200), begins selection
    of an extended range air vehicle compatible with Shadow 200 ground
    control equipment to meet Army division and corps level requirements,
    and improves Shadow 200 target location error. Funding is also provided
    for development of advanced electro-optical/infrared and synthetic
    aperture radar/moving target indicator payloads to give the extended
    range air vehicle an all-weather sensing capability.
        The Army envisions a family of UAVs directly supporting commanders
    at all echelons and across multiple battlefield operating systems.
    Shadow 200 will satisfy the threshold requirements of the Objective
    Force brigade-level commanders. However, the Shadow 200 system cannot
    satisfy the requirements at battalion and below and division and above
    for several reasons. Shadow 200 is too large to support battalion and
    below where the requirement is for a system that is man-packable,
    operates at a range of at least 12 kilometers, requires minimal
    training to fly, and can be launched from a constrained space. Small
    UAVs and micro air vehicles are being evaluated to satisfy these
    missions as well as operations in an urban environment. Shadow 200
    lacks the range, endurance, and payload capacity required for an
    extended range/multi-purpose air vehicle to support division and corps
    level operations. The missions and roles envisioned for the extended
    range/multi-purpose UAV (long range reconnaissance, surveillance, and
    target acquisition; communications relay; armed attack; aviation
    manned--unmanned teaming; cargo lift; MEDEVAC; signals intelligence;
    minefield detection; chemical, biological, and radiological detection
    and survey; etc.) require greater dwell times, greater range, and
    larger payload capacity. Additionally, greater range requirements
    mandate a non-line of sight solution.
                                  digitization
        Question. General Shinseki, what is the status of the digitization'
    of the III Corps at Fort Hood?
        Answer. The Army is currently digitizing the divisions of III Corps
    at Fort Hood. Two-thirds of the 4th Infantry Division have been
    completed with the remaining elements at Fort Carson scheduled for
    fiscal year 2005. First Cavalry Division modernization is underway with
    completion scheduled in fiscal year 2003. The remaining corps units, at
    Fort Hood and elsewhere, are being digitized and will continue as the
    combat elements are digitized.
                          wheeled vehicle maintenance
        Question. General Shinseki, the Army is busy developing the Army of
    the future--one that will feature predominantly wheeled vehicles.
    However, your service has yet to identify a wheeled vehicle depot to
    maintain this new fleet.
        Will you consider the merits of naming Red River Army Depot a
    ``Center for Industrial and Technical Excellence'' for wheeled vehicle
    maintenance?
        Answer. Yes, the Army will consider this. However, final
    determination of repair location for each type of equipment will occur
    only after conducting the appropriate analysis to include best
    operational and cost value.
                                    hydra-70
        Question. General, the budget submission cuts funding for the
    Hydra-70 rockets from $136.7 million in fiscal year 2002 to $22.4
    million in fiscal year 2003. This represents an 84 percent cut in this
    program and consequently reduces the amount of rockets for an aircrew
    to fire in training and qualification by an equal amount, down to just
    26 rockets per crew per year. The fact that this system is used by all
    services and is the primary aerial-fired area suppression system for
    the services makes this cut even more significant.
        What is the Army's plan to bridge the gap between this system and
    the precision-guided 2.75-inch rocket that will not be fielded until
    fiscal year 2007?
        Answer. The Army has been asked to make tough choices to move the
    military toward Transformation. This is a clear example of where we
    have decided to move forward and accept risk by reducing the amount of
    Hydra-70 rockets procured and move toward rocket technology that will
    give the warfighter a low-cost, precision engagement capability that he
    does not possess today. As part of a continuing and ongoing review
    process, the Army is reassessing rocket strategies and will carefully
    manage the remaining Hydra-70 training round inventory. This strategy
    is tied closely to the fielding of the Advanced Precision Kill Weapon
    System.
        Question. How does the Army plan to maintain an acceptable level of
    competence by its aircrews in the employment of these rockets?
        Answer. To ensure that our aviators are prepared for combat, the
    Army anticipates no change to current training strategies for the next
    two years.
                           fort bliss atsa relocation
        Question. General it has come to my attention that some in the Army
    are considering moving the ATEC Threat Support Activity (ATSA) from
    Fort Bliss to either White Sands Missile Range or Dugway Proving
    Grounds.
        What is the impetus to this initiative?
        Answer. The impetus of studying the possible move of the Army Test
    and Evaluation Command's (ATEC) Threat Support Activity (ATSA) was to
    determine if efficiencies and operational synergy could be gained. ATEC
    has an ongoing study to review possible realignment of assets, which
    includes a possible relocation of all or part of the ATSA; however,
    feasibility and appropriateness of such an action has yet to been
    determined.
        Question. At what point did you plan to notify the Congress that
    such a move was being considered?
        Answer. If the ATEC study concludes that relocating ATSA is both
    feasible and appropriate to gain efficiencies and operational synergy,
    ATEC will initiate a stationing study as required by Army regulation.
    Included in this process are procedures for notifying Congress of any
    relocation efforts.

                              subcommittee recess

        Senator Inouye. We will stand in recess until March 13. At
    that time we will receive testimony from the Air Force. Thank
    you very much.
        [Whereupon, at 11:48 a.m., Wednesday, March 6, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2003

                                  ----------

                           WEDNESDAY, APRIL 17, 2002

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:18 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Daniel K. Inouye (chairman)
    presiding.
        Present: Senators Inouye, Feinstein, Stevens, Cochran,
    Domenici, and Shelby.

                             DEPARTMENT OF DEFENSE

                             Missile Defense Agency

    STATEMENT OF LIEUTENANT GENERAL RONALD T. KADISH,
                DIRECTOR

                 OPENING STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. Good morning. Today, we are pleased to
    welcome Lieutenant General Ronald T. Kadish, Director of the
    Missile Defense Agency. The purpose of today's hearing is to
    review the Department of Defense's (DOD's) fiscal year 2003
    funding recommendations for ballistic missile defense programs.
        Missile defense is, of course, a program of great interest
    to many, and one not without controversy. Indeed, the missile
    defense program is one of the most critical national security
    issues of today and for the foreseeable future.
        There is no question that the ballistic missile threat
    against our nation and our troops in the field will continue to
    grow. It has been reported that the United States could face an
    intercontinental ballistic missile threat from North Korea,
    Iran, and possibly Iraq by 2015. As the anti-ballistic missiles
    (ABM) continue to proliferate, some estimate that these
    countries could have over 1,000 Scud-type missiles within a
    decade.
        The question our country faces is how best to meet this
    threat. The administration's plan calls for a layered defense
    to intercept ballistic missiles of all ranges, in all phases of
    flight. It also calls for this missile shield to cover the
    territories and deployed forces of the United States, our
    allies, and our friends.
        This is an expensive program. The DOD fiscal year 2003
    funding plan proposes that more than $46 billion be allocated
    to missile defense over the period of 2002 to 2007. In fact,
    the Congressional Budget Office and others have estimated that
    funding for missile defense could approach $200 billion when
    all is said and done.
        This is also a complex program. Recently, the program has
    witnessed a string of successful tests, and for that, I commend
    you, General Kadish. There are still many technological and
    management hurdles to overcome, but let me assure you, General
    Kadish, this committee views the missile defense program as
    critically important to our national security, and we will do
    our best to support your efforts. Yet, given the risks and
    costs of this program, not to mention the tradeoffs that must
    be made between funding missile defense and other worthwhile
    military programs, we must be ever vigilant in our oversight.
        So today's hearing provides the committee an important
    opportunity to understand the priorities and challenges of our
    missile defense program. So General, we welcome you, and we
    welcome your testimony.
        But before we begin, let me turn to my co-chairman, Senator
    Stevens, for any opening remarks.

                        STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Thank you very much, Mr. Chairman, and I
    join you in welcoming General Kadish before our committee. He
    has been a trusted partner in this endeavor of ours to secure a
    reliable missile defense system. I want the General to know,
    those of us from our generation, who have lived through too
    many wars, are hopeful that before we depart this Earth, we
    will have a reliable defense system for the future of the
    United States. Now, since we had last convened--I am not
    predicting our leaving, by the way, but it is not that far
    away.
        Since we last convened to review these programs, several
    elements of the missile defense architecture have significantly
    changed, and we welcome your comments and views, General
    Kadish, on these program realignments. More importantly, the
    ground-based mid-course segment of the program, previously
    known as the National Missile Defense Program, has, as its
    chairman said, enjoyed notable success, and we really
    congratulate you and your people.
        You and your predecessor, General Lyles, made it clear that
    testing success must be a norm, rather than a random event, and
    these successes enjoyed in the recent testings validate the
    determination which you, and the Department, and Congress have
    worked to prove on the hit-to-kill concept.
        As a result of those successful tests, the Department
    awarded contracts yesterday to commence the installation of the
    advanced testbed facility at Fort Greeley, in my home State. I
    look forward to hearing from you today about those plans, and
    the timetable to establish the initial testbed capability.
        While the weapons side of the program involving Patriot,
    Theater High Altitude Area Defense (THAAD), and the ground-
    based interceptors have proceeded well, we face a more daunting
    challenge on the sensor side of the missile defense equation.
    We need your help today to try and understand the focus of the
    Space-Based Infrared System (SBIRS) High and SBIRS Low
    programs, I am sure my friend from Mississippi is going to go
    into that, and the path of recovery on both, if that is to be
    our course.
        General Kadish, you have been a frequent visitor to my
    State. You have earned the trust and respect of Alaskans, who
    will be partners in the construction, deployment, and operation
    of the missile defense facilities in Alaska. We will welcome
    you back any time. As a matter of fact, I will get you a
    permanent resident fishing license, if you would like. I am not
    sure our boss would like it, but we want you back whenever you
    can come back.
        I appreciate your openness and candor on all these matters.
    You have really been a direct and open senior officer, and we
    have massive respect for your capabilities.
        Thank you, Mr. Chair.
        Senator Inouye. Thank you very much.
        Senator Cochran.

                       STATEMENT OF SENATOR THAD COCHRAN

        Senator Cochran. Mr. Chairman, thank you.
        Welcome to the hearing, General Kadish. We appreciate the
    good work you have been doing in this office. You had taken
    over, I guess, almost 3 years ago, under a difficult situation,
    with constraints from the anti-ballistic missile treaty, and
    interpretations of that treaty, negotiations for demarcation
    agreements, and the like, that constrained what you could do in
    terms of testing and development programs.
        We also had difficulties getting funding for many of the
    things that go into the Ballistic Missile Defense (BMD) Office
    that we were recommending, but you have brought us through this
    difficult phase of development to a point where we are now
    seeing almost routinely successful tests of various missile
    defense technologies and systems. For that, I think we need to
    recognize the great success that has been achieved, and to
    congratulate you and all those others, both within and outside
    of Government, who are responsible for the great success.
        So I think we can look forward to a future where, as
    Senator Stevens suggests is important for us to achieve, we
    will be safe and secure from ballistic missile attack, and our
    troops and friends in the field and around the world will have
    a means of protecting themselves from theater-missiles or other
    missile attacks.
        So we want you to know that we appreciate your efforts. And
    I for one, I am going to commit to you that we will continue to
    work in cooperation with the administration to achieve the
    goals that have been set by the President, and that is to get a
    defensive system into the field as soon as possible. I think
    that is very important, not only theater systems, but a long-
    term ballistic missile defense system as well. So you have our
    commitment to do our best to help ensure that we have the funds
    to achieve that goal.
        Thank you.
        Senator Inouye. Senator Shelby.

                     STATEMENT OF SENATOR RICHARD C. SHELBY

        Senator Shelby. Thank you, Mr. Chairman. I will be brief.
    First, I ask that my statement be made a part of the record in
    its entirety.
        I just want to tell you, General Kadish, I think you have
    done a heck of a job under difficult circumstances, because the
    technology is evolving. You have shown that, and that you have
    had notable success, and I believe you will have more in the
    future. I think your tests, you will make them tougher, and
    tougher, and tougher, and I am here just to support you, and
    commend you for what you do.
        Thank you.
        [The statement follows:]

                Prepared Statement of Senator Richard C. Shelby

        Welcome General Kadish. I look forward to your remarks here
    today. In your testimony you clearly relay the fact that
    serious technology issues exist. I believe greater emphasis on
    technology development and maturation is absolutely necessary.
    Hurdles exist that must be overcome. I am one member of this
    committee, but I want to help you achieve your goals.
        Only through a focused and investment-driven strategy to
    improving the technology currently available will MDA be able
    to pursue testing that is realistic and field systems that will
    work as designed day in and day out.
        Every effort must be made to tighten the error ellipse our
    current systems produce. ``Goal-tending'' should not be an
    option. The C-band beacon must go. Focal plane array technology
    must improve. I haven't talked to any experts who believe that
    technology and hardware limitations can be overcome by software
    improvements.
        The threat is real, evolving and growing as you pointed out
    in your testimony General, and we must make the investments
    necessary to protect our fighting forces, our allies abroad and
    our own homeland from those who will attack our citizens and
    vital interests in the future. We have indeed come a long way,
    and I believe we must go all the way on missile defense.
        I support your overall fiscal year 2003 request because I
    believe it provides the necessary funding to improve technology
    and to continue robust testing regimes that will give MDA and
    our nation the best chance for success in the future. I do have
    some specific questions for you later.
        Thank you Mr. Chairman.

        Senator Inouye. Now, if I may call upon Lieutenant General
    Ronald T. Kadish.
        General Kadish. Well, thank you, Mr. Chairman. I appreciate
    the comments from everyone on a very difficult road ahead. I do
    have some prepared remarks that I would ask to be entered into
    the record, and I would just like to summarize what I have in
    those remarks.
        Senator Inouye. Without objection, your full statement is
    made part of the record.
        General Kadish. As you have already pointed out, we have
    made really significant progress in the program, since I last
    testified to this committee especially, and we spent the past
    year testing very key technologies, and their integration into
    a larger system, and restructuring our program to better
    address the challenges we face, especially in a post-ABM Treaty
    environment.
        Our budget and the basic objective of our program is to
    develop missile defense that is effective in protecting our
    country, our deployed forces, our allies, and friends from all
    ranges of ballistic missiles. We have asked for a total of $6.7
    billion for fiscal year 2003. That is slightly less than what
    we asked for last year.
        The budget we have submitted, however, for fiscal year 2003
    is very substantial, but it continues in the same range as last
    year to provide for a stability to the program. In so doing, it
    supports our program priorities for development, and our
    extensive test schedule.
        Now, let me talk about our testing progress, and give you a
    report card on our tests. As I said, we have made good
    progress, not only in our flight testing, but in our ground
    testing as well. Over the past 12 months, in hit-to-kill
    intercept tests against ballistic missile targets, we have a
    three-for-three record with our ground-based mid-course defense
    system against long-range missiles. The full record there now
    stands at four out of six. We are one-for-one with our Sea-
    based Midcourse system, a major step forward for us.
        For the Patriot Advanced Capability-3 (PAC-3) over the past
    year, we are only one for two. We did miss once; yet, overall
    for PAC-3, the record is six-for-seven against ballistic
    missile targets. So we have made good progress.
        That is not to say, however, that we have not had our
    failures--we have had some--or that we still do not have a long
    way to go. But as I pointed out, we are now at a testing
    crossroads in our program, with much success already building,
    and when success comes in increasingly more complex testing, as
    in PAC-3, for instance, we know we are on the right track.
        I predict that the pace and the complexity of our testing
    is also picking up. We have 13 more flight tests scheduled for
    the remainder of this fiscal year, of all types, together with
    10 ground tests that are significant, and 14 system-wide tests
    and exercises.
        Now, let me explain some of the changes we have made to our
    program. I want to address some key aspects very briefly, and
    then I will be happy to discuss these in more detail in
    response to your questions.
        First, why did we make the changes that we made? I think
    there are two main reasons. First, we are still facing an
    unprecedented technological challenge in bringing missile
    defense into effective use. Second, in order to do that, we
    need to speed up our acquisition processes and decision making,
    and ensure their relevancy in meeting this technological
    challenge.
        The decision cycle time for the traditional major
    acquisitions program is too long for our purposes. Both the
    threat and the technology can change during the often lengthy
    time between setting a requirement and fielding a system.
        The process changes we are making will let us adjust
    quickly to changes in both the threat and the technology, and
    hopefully shorten the time needed to field this capability;
    yet, the changes we are making affect only the development on
    portions of our program, not those dealing with service
    procurement and production, which we will continue to follow
    the more normal, traditional acquisition procedures when we
    offer them for production.
        I would like to emphasize that some have said we are doing
    away with requirements with these changes. We are not doing
    away with requirements, as we need them. We are doing away with
    the way we derive and define them, and use them in the process.
    Since we cannot know with confidence what the specific threat
    will be over time, we will try to evaluate and anticipate the
    capabilities of an adversary, and those that they might have in
    a given time frame, by setting the range of our requirements
    more broadly than in the past, and this can reduce the element
    of the surprise against our systems.
        Additionally, because the pace of technological change is
    so rapid, we have users and developers sitting down together
    under our leadership for a whole period of the development time
    to draw up what the requirements should be, and strike the
    right balance between what is needed and what is possible. I
    think that is important enough to repeat. We need to strike the
    right balance between what is needed and what is possible.
        The traditional system takes longer, because these players
    work sequentially, where requirements follow the development,
    and not simultaneously and in close concert that we are
    proposing with our processes. This approach allows for the
    early development of an effective capability, I believe, and
    one that can be enhanced over time, and nominally in a 2-year
    time period, or what we call blocks.
        This is still a disciplined, documented process that we
    intend to follow for developing ground-breaking systems, and
    one that we have used, for instance, in very successful
    programs in our country's history in, for example, the Polaris
    C-launch Ballistic Missile, and the SR-71 Reconnaissance
    Aircraft.
        Now, our management approach has also been adjusted to
    support this reduction in cycle time. As the Director, I have
    been given more authority, and we have flattened our
    organization of the Missile Defense Agency to make it more
    responsive. I continue to report, however, directly to the
    Under Secretary of Defense for Acquisition, Technology, and
    Logistics, and I am subject to consistent, frequent, and
    focused oversight.
        The Department Senior Executive Council, or what we call
    the SEC, maintains executive oversight of the program. I have
    already met with them almost once a month, on average, since
    last August. It is the council's responsibility to decide major
    issues in the program, as well as whether to move elements into
    production, and make recommendations to the Secretary on
    fielding of elements of the system once they are ready.
        The SEC's decision and mine are supported by a Missile
    Defense Support Group that was created, that also reports to
    the Under Secretary. This support group and its subordinate
    working groups combine the interests and efforts of 13
    different offices and agencies within the Office of the
    Secretary of Defense (OSD). By providing their assessment and
    advice simultaneously, we hope we can greatly reduce decision
    cycle times on this program.
        Now, our relationships with industry are very complex in
    this endeavor, but not unprecedented. The Government will
    rightly retain the responsibility for delivering this system,
    but a much closer relationship is necessary between Government
    and industry, because the cutting-edge expertise of what is
    possible will be done through the industry expertise and
    arrangements. Hence, we are bringing together what we are
    calling a National Team across all our contractors, and
    focusing whatever best and brightest talent we could find on
    this very difficult problem, from Government, academia,
    industry, and other places as well.
        Mr. Chairman, over the past years I have said we have made
    some very significant strides in our development program, as
    some of our major test events have shown; yet, we also have
    some very significant challenges ahead of us, both in defining
    and resolving the right technical issues, and in managing this
    unprecedented program, so we can ensure our missile defenses
    will become as effective as soon as possible, and will remain
    so over time.

                               PREPARED STATEMENT

        Our budget request is focused toward this goal. It provides
    the resources for continued program progress, and some
    stability, and with your continued and very valuable support,
    and that of the American people, I have every confidence we
    will be successful.
        Thank you very much.
        Senator Inouye. Thank you very much, General Kadish.
        [The statement follows:]
           Prepared Statement of Lieutenant General Ronald T. Kadish
        Good morning. It is a pleasure to appear before you today to
    present the Department of Defense's fiscal year 2003 Missile Defense
    Program and budget.
        The Department of Defense is developing effective missile defenses
    for the territories and deployed forces of the United States, allies,
    and friends. Ballistic missiles already pose a threat to the United
    States and to U.S. interests, forces, allies and friends. The missiles
    possessed by potential adversaries are growing in range, reliability,
    and accuracy. The proliferation of ballistic missile technologies,
    materials, and expertise can also occur in unexpected ways, enabling
    potential adversaries to accelerate missile development or quickly
    acquire new capabilities. Missiles carrying nuclear, biological, or
    chemical weapons could inflict damage that far surpasses what we
    experienced last September 11. The events of that day underscored the
    vulnerability of our homeland, even to assault from distant regions.
        Defensive capabilities to counter this threat cannot be deployed
    overnight. We also recognize that the threat is continually changing.
    So we are taking an approach to build missile defenses that will allow
    us to put capabilities ``in play'' as soon as practicable to provide
    the best defenses possible against the projected threat, based on
    technological progress and success in testing. After nearly a decade of
    steady developmental progress, we are deploying the first Patriot
    Advanced Capability 3, or PAC-3, missiles to give our forces protection
    against short-range threats. In the coming years we plan to introduce
    new capabilities to defeat medium- and even longer-range ballistic
    missiles.
        Over the past year, we have made considerable progress in
    demonstrating key missile defense technologies and integration
    concepts. This past January we took a significant step forward and
    broke new ground with the successful midcourse intercept of a medium-
    range ballistic missile target using a sea-based interceptor. Following
    successful intercepts of long-range targets in July and December of
    last year, and in March of this year, we gained further confidence in
    our Ground-Based Midcourse Defense (GMD) design and capability. And
    with the Airborne Laser, or ABL, we are making steady progress in the
    development of directed energy technologies by achieving record power
    levels in the last two tests and successfully completing the final
    lasing test for Laser Module-1.
        Some of our tests showed we need more work to achieve our design
    objectives. The third test late last year of the boost vehicle under
    development for the GMD element failed to launch as planned. Because a
    faster ground-based interceptor will increase significantly our
    engagement envelope, we are focusing intently to resolve the associated
    development problems. Recently, PAC-3 began a series of operational
    tests. In mid-February, PAC-3 teamed up with PAC-2 in a multiple
    simultaneous engagement test to intercept three air-breathing targets,
    but intercepted just one. And although a second PAC-3 missile failed to
    fire in a test last month, we did destroy both the missile and air-
    breather targets. Despite some setbacks, we continue to make remarkable
    strides, Mr. Chairman, and we grow increasingly confident in our
    ability to deliver effective missile defense capabilities over the next
    few years. Yet we should all recognize that there remains a long road
    ahead.
    Approach to Missile Defense
        The Missile Defense Agency (MDA) will develop incrementally a
    Ballistic Missile Defense (BMD) System that layers defenses to
    intercept ballistic missiles of all ranges in all phases of flight-
    boost, midcourse, and terminal.\1\ These increments will be transferred
    to the Services for production and deployment as soon as practicable.
    We are working with the warfighters, the CINCs, and the Services
    throughout this process.
    ---------------------------------------------------------------------------
        \1\ On January 2, 2002, the Secretary of Defense established the
    Missile Defense Agency to manage the development of effective missile
    defenses.
    ---------------------------------------------------------------------------
        Based on the results of last year's rigorous missile defense
    review, the Department has moved away from an independently managed,
    element-centric approach and established a single program to develop an
    integrated BMD System. The BMD System will consist of elements
    configured into layered defenses to provide autonomous and mutual
    support, including multiple engagement opportunities, along a threat
    missile's flight path. The Missile Defense Program supports numerous
    risk reduction activities, including flight tests, ground simulations,
    and hardware-in-the-loop demonstrations.
        Engineering complexities and operational realities associated with
    missile defense require operational and system integration as well as
    an ability to operate elements autonomously. Therefore, a key tenet of
    the missile defense program is robust, realistic testing within the BMD
    System Test Bed. This Test Bed is an integrated set of components that
    are widely dispersed among operationally realistic locations primarily
    throughout the Pacific and continental United States. While its
    specific components have independent utility, the Test Bed is designed
    to support development of missile defense elements and demonstrate an
    integrated, layered missile defense system. We will use the Test Bed
    over the next few years to validate the midcourse, boost, and terminal
    elements, including supporting sensors, and the necessary BM/C\2\ and
    communications components. This Test Bed was most recently used to test
    the Standard Missile-3 interceptor for Sea-based Midcourse Defense
    (SMD) and in fiscal year 2002 it will host additional GMD and SMD
    intercept flight tests and a major System Integration Test.
        The BMD System Test Bed includes prototypes and surrogates of the
    System elements as well as supporting test infrastructure to provide
    trajectory, sensing, interception, and BM/C\2\ and communication
    scenarios that resemble conditions under which the System might be
    expected to operate. It will enable testing against faster, longer-
    range target missiles than we are using today, and it will allow us to
    test using different geometric, operational, and element
    configurations.
        As they become available, we could use prototypes and test assets
    to provide early capability, if so directed. A decision to employ test
    assets would depend upon the success of testing, the appropriate
    positioning of Test Bed components, the availability of test
    interceptors and other assets, and the international security
    environment. Our test infrastructure, in other words, will have an
    inherent, though rudimentary, operational capability.
        Our program is now entering a new phase, moving from technology
    development to system engineering, and we face a very significant
    challenge of integrating many diverse elements into one system. We
    employ thousands of individuals throughout the United States. We also
    are collaborating extensively with all of the Military Departments and
    the Joint Staff as we investigate different basing modes and deal with
    associated operational and planning challenges. Our approach to
    managing resources is clearly an important element of our approach to
    missile defense. This committee's support for the President's ``Freedom
    to Manage'' initiative will reduce statutory requirements that can
    restrict management flexibility, allowing us to more efficiently and
    effectively execute the Missile Defense program.
    Acquisition Strategy
        The BMD System is highly complex, so we are using an acquisition
    approach that capitalizes on advances in missile defense technology and
    continually adjusts to changes in external factors (e.g., threat,
    policy, and priorities) as appropriate. We are following an aggressive
    research, development, test, and evaluation (RDT&E) acquisition
    strategy that allows us to respond to changes in the threat, manages
    changes in System technologies, and ensures progress in development and
    testing.
        The BMD System architecture will take shape based on periodic
    decisions and assessments within the MDA and the Department's Senior
    Executive Council. Annual assessments will include evaluations of
    element test performance, system architecture, technological and basing
    alternatives, and the threat. The initial goal is to provide limited
    protection against long-range threats for the United States and
    potentially our allies within the 2004-2008 timeframe, while delivering
    more advanced capabilities against shorter-range threats.
        The traditional requirements process has not worked well for
    missile defense. Missile defense is a cutting-edge development effort
    and an area where we have very little operational experience. The
    requirements definition process typically leverages operational
    experience to set system specifications many years before actual
    deployment, a process that can lead to a less than optimum deployed
    capability that does not take advantage of the most advanced
    technologies.
        Let me illustrate what I mean. The B-52 bomber that first flew in
    1952 is hardly the same aircraft that dropped bombs over Afghanistan in
    the war against terrorism. The original B-52 design, which gave us an
    early intercontinental bombardment capability, was enhanced over time
    through hardware and software improvements to meet evolving operational
    challenges. It may look the same, but today's B-52 is a very different
    aircraft.
        Similarly, we enhanced over many years the Patriot batteries we saw
    in the 1991 Gulf War. Although its capability to defend small areas was
    improved during Desert Shield, performance against Iraqi Scuds was not
    impressive. As a result, the Department initiated a follow-on
    enhancement program and replaced the original missile with a completely
    new interceptor.
        These examples illustrate that in today's dynamic security
    environment, a requirement written in a system's development phase can
    quickly become irrelevant or a one-way street that leads developers
    into a technological cul-de-sac. Five years ago, nobody could have
    written a requirement for today's Internet and gotten it exactly right.
        We, therefore, have modified our acquisition approach. In line with
    the Secretary's decision to cancel the current Operational Requirements
    Documents (ORDs) related to missile defense, we are using the ORDs as
    reference documents, but not as the final measures of development
    progress. Instead of developing a system in response to a clearly
    defined threat from a known adversary, we are looking at missile
    capabilities that any adversary could have in a given timeframe. We
    also continually assess missile defense technology options and
    availability. Using a capability-based approach to ensure that a
    militarily useful BMD System can be deployed as soon as practicable, we
    are setting initial capability standards and engaging the CINCs,
    Services, and industry. This acquisition approach supports the
    effective engineering and integration of the BMD System and ensures a
    transition of effective, threat-relevant system capabilities to the
    Services for production, deployment, and operations.
        While we are moving away from some of the rigidities associated
    with the traditional acquisition process, we are not abandoning
    discipline in development. Capability-based acquisition requires
    continual assessment of technical and operational alternatives at the
    element and BMD System levels. We will build what we can
    technologically, and improve it as rapidly as possible. Configuration
    management and risk management will continue to guide the engineering
    processes.
        In a capability-based approach that pursues parallel development
    paths, a risk management program is essential. To execute BMDS level
    risk management, we are identifying risk issues and an analytical basis
    for modifications and enhancements. This disciplined risk management
    process supports the annual review and assessment of the BMD System and
    accommodates significant user participation at the appropriate times
    during development.
        The missile defense acquisition strategy engineers and tests the
    system using a two-year capability ``Block'' approach, with the initial
    introduction of elements into the expanded Test Bed starting as early
    as fiscal year 2004. The initial BMD System capability (Block 2004)
    will evolve as technologies mature and are demonstrated satisfactorily
    in the BMD System Test Bed. This capability will be increased
    incrementally in future Blocks through the introduction of new sensor
    and weapon components, and by augmenting or upgrading existing
    capabilities.
        Each BMD System Block is comprised of selected element
    configurations integrated into the overall System BM/C\2\. There will
    be annual decision points at which time assessments will be made on the
    basis of: effectiveness and synergy within the system; technical risk;
    deployment schedule; cost; and threat. This assessment of progress will
    determine whether a given developmental activity will be accelerated,
    modified, or terminated. Implementing changes expeditiously and
    prudently maximize value from our investments and allow more rapid
    program adjustments based on threat projections and technological
    progress.
        Each subsequent Block will build on and be integrated into the
    capabilities provided by predecessor Blocks that make up the BMD
    System. This evolutionary strategy allows us to put the high
    performance technologies ``in play'' sooner than would otherwise be
    possible. Once they have been demonstrated, elements or their
    components will be available for emergency use, if directed, or for
    transfer to the Military Departments for production as part of a
    standard acquisition program.
    Program Description
        Our approach to developing missile defenses builds on the
    technological, engineering, and integration progress we have made to
    date. We are currently pursuing parallel development efforts in order
    to reduce risk in the individual RDT&E efforts and aggressively
    demonstrating technologies for integration on land, sea, air, and
    space-based elements. When a capability is sufficiently validated, that
    element or component will be ready for a decision regarding transition
    to production.
        We are also exploring new concepts and experiments for the
    development of advanced sensor suites and kinetic and directed energy
    kill mechanisms for potential sea, ground, air, and space deployment.
    In line with our disciplined walk-before-you-run, learn-as-you-go
    approach to testing, we are incorporating more realistic scenarios and
    countermeasures into the missile defense development test program. The
    Test Bed will be expanded to accommodate this aggressive and robust
    testing approach.

                             FISCAL YEAR 2003 BUDGET ALLOCATION BY WORK BREAKDOWN STRUCTURE
                                                 [TY dollars in million]
    ----------------------------------------------------------------------------------------------------------------
                                                                                    Fiscal year--
                                WBS                            -----------------------------------------------------
                                                                  2002     2003     2004     2005     2006     2007
    ----------------------------------------------------------------------------------------------------------------
    1.0--BMDS.................................................      846    1,101    1,252    1,200    1,182    1,219
    2.0--Terminal Defense Segment.............................    2,026    1,128      927    1,078    1,149    1,499
    3.0--Midcourse Defense Segment............................    3,762    3,193    3,074    3,016    2,969    2,596
    4.0--Boost Defense Segment................................      600      797    1,390    1,400    1,591    2,275
    5.0--Sensor Segment.......................................      335      373      489    1,146      900    1,008
    6.0--Technology...........................................      139      122      155      130      143      147
                                                               -----------------------------------------------------
          MDA Total...........................................    7,709    6,714    7,287    7,970    7,934    8,743
    ----------------------------------------------------------------------------------------------------------------

        The Missile Defense Program allocates resources required for the
    BMD System, including the integration of individual elements into a
    single, synergistic system to defend the territories and deployed
    forces of the United States, allies, and friends. The BMD System
    segment comprises System Engineering and Integration (SE&I), BM/C\2\,
    Communications, Targets and Countermeasures, Test and Evaluation,
    Producibility and Manufacturing Technology, and Program Operations
    (which includes Management Headquarters and Pentagon Reservation).
    Funding in this segment provides resources to define, select, test,
    integrate, and demonstrate the elements in the Terminal Defense,
    Midcourse Defense, Boost Defense, and Sensor segments. The tasks
    included in this segment are those that will benefit the entire BMD
    System, not just a particular element or program. This segment also
    includes management efforts to ensure architectural consistency and
    integration of missile defense elements within the overarching missile
    defense mission.
        The President's Budget requests $1.1 billion in fiscal year 2003
    for RDT&E in the BMD Segment, an increase of $255 million over the
    fiscal year 2002 enacted funding level. RDT&E and military construction
    funding in this segment across the fiscal year 2003-07 FYDP is about
    $6.0 billion.

        As the central engineering component within MDA, the Systems
    Engineering and Integration activity provides the overall system
    engineering development and integration of the BMD System. SE&I
    activities will define and manage the layered BMD System
    collaboratively by providing detailed systems engineering and
    integration across the entire spectrum of System capabilities.
    Capability-based acquisition requires continual assessment of technical
    and operational alternatives at the component, element, and system
    levels. The systems engineering process involves setting BMD System
    Technical Objectives and Goals; addressing existing, emerging, and
    postulated adversary capabilities; assessing and determining System
    design and element contributions; synthesizing System Blocks;
    introducing new technologies and operational concepts; conducting
    System risk analyses; and considering impacts of potential foreign
    contributions to BMD System capabilities.
        The BM/C\2\ activity will develop and integrate the BM/C\2\ and
    communications functions for the BMD System. To provide maximum
    flexibility to the war fighter, this activity includes the development
    of specifications needed to ensure Terminal Defense, Midcourse Defense,
    Boost Defense, and Sensor segments are properly integrated and
    interoperable with external systems, to include those of allies.
    Communications funding consolidates and refines BMD system-wide
    communication links to allow components of the BMD System to exchange
    data and to permit command and control orders to be transmitted to
    weapons and sensors.
        The Targets and Countermeasures program provides capability-based
    ballistic missile targets, countermeasures, and other payloads to
    support system-testing as well as element testing across the segments.
    Standard interfaces are being defined between payloads and boosters, so
    that we can introduce different targets into BMD System flight test
    scenarios with greater efficiency. Beginning in fiscal year 2002, we
    are establishing an inventory of target modules (boosters, reentry-
    vehicles, countermeasures, and instrumentation) to shorten the build-
    cycle and support more frequent flight tests.
        The Test and Evaluation program includes the test and evaluation
    infrastructure, tools for program-wide use, and execution of system-
    level testing. Individual BMD System elements will conduct risk
    reduction, developmental, and operational testing. System level tests
    go beyond these, testing synergy, interoperability, BM/C\2\ and
    communication links across the elements. Also resourced are those tests
    conducted for the purpose of making critical measurements required
    across the missile defense regime, for example, measurements of
    adversary missile characteristics such as plume signatures, lethality
    measurements, and characterization of potential countermeasures. Such
    data collection becomes an important input to the design and
    development of effective defenses.
        Supporting robust, realistic testing requires a significant
    investment in the development and maintenance of the requisite test
    infrastructure, analytical tools, and computational capabilities.
    Because this supports both the System and all of its elements, it is
    resourced centrally at the System level. The BMD System test
    infrastructure includes a number of critical, specialized ground test
    facilities, test range facilities, launch capabilities, and
    instrumentation, such as several airborne sensor platforms and other
    mobile capabilities unique to missile defense testing. Core models and
    simulations, both for engineering and integration purposes, are also
    developed, validated, and maintained. These range from detailed
    phenomenology and lethality codes used by all the System elements to
    large-scale wargaming simulations required for BM/C\2\ and operational
    concept of operations development. A number of computational
    facilities, data libraries, and simulation facilities are also
    resourced at the System level.
    Terminal Defense Segment (TDS)
        The Terminal Defense Segment involves development and upgrades of
    missile defense capabilities that engage short- to medium-range
    ballistic missiles in the terminal phase of their trajectory. The
    missile or warhead enters the terminal phase when it reenters the
    atmosphere. This is a short phase, lasting less than a minute. Elements
    in this defense segment include Theater High Altitude Area Defense
    (THAAD), PATRIOT Advanced Capability Level 3 (PAC-3), Medium Extended
    Air Defense System (MEADS), and a sea-based terminal concept definition
    element (successor to the Navy Area activities). Additionally, other
    elements funded by the MDA are the Israeli Arrow Deployability Program,
    which includes the Israeli Test Bed (ITB), Arrow System Improvement
    Program, and studies via the Israeli Systems Architecture and
    Integration effort.
        The MDA budget allocation for TDS activities in fiscal year 2003 is
    $1.1 billion, which includes funds for RDT&E and military construction.
    The MDA budget includes about $5.8 billion in fiscal year 2003-2007 for
    the terminal defense segment. These figures reflect a decision by the
    Department to transfer to the Army all funding for PAC-3 and MEADS from
    fiscal year 2003 to fiscal year 2007.
        The Congress returned PAC-3 and MEADS to MDA for fiscal year 2002
    pending the fulfillment of congressionally mandated requirements. Upon
    satisfaction of all congressional directives, we will transfer the PAC-
    3 to the Army.

                TDS Elements
        THAAD is designed to defend against short- to medium-range
    ballistic missiles at endo- and exo-atmospheric altitudes, which can
    make effective countermeasures against THAAD difficult to employ. It
    also allows multiple intercept opportunities, and can significantly
    mitigate the effects of weapons of mass destruction. THAAD will protect
    forward-deployed U.S. and allied armed forces, broadly dispersed
    assets, and population centers against missile attacks.
        In fiscal year 2003, we will complete missile and launcher designs
    and initiate manufacturing of missile ground test units, continue
    fabrication of the first and second radars, and continue to fabricate
    and test the BM/C\2\ hardware and software. We will support robust
    ground-testing and flight-hardware testing in preparation for missile
    flights in fiscal year 2004 at the White Sands Missile Range. The
    element development phase will refine and mature the THAAD design to
    ensure component and element performance, producibility, and
    supportability. There are five major THAAD components: missiles,
    launchers, radars, BM/C\2\, and THAAD-specific support equipment.
        PAC-3 provides terminal missile defense capability to protect U.S.
    forward-deployed forces, allies, and friends. PAC-3 can counter enemy
    short-range ballistic missiles, anti-radiation missiles, and aircraft
    employing advanced countermeasures and a low radar cross-section. PAC-3
    successfully completed development testing last year, during which
    there were three intercepts of ballistic missiles, two cruise missile
    intercepts, and four multiple simultaneous engagements of ballistic and
    cruise missiles. The start of PAC-3 operational testing in February
    2002 shows that we still have work to do. In fiscal year 2003, we will
    execute activity to develop, integrate, and test evolutionary block
    upgrades. Plans include transitioning PAC-3 to full rate production to
    build up PAC-3 missile inventory and field additional PAC-3
    capabilities.
        The Department decided in December 2001 to cancel the Navy Area
    program after a Nunn-McCurdy breach. Nonetheless, the need for timely
    development and deployment of a sea-based terminal ballistic missile
    defense capability remains. We have initiated the sea-based terminal
    study directed by the Department, which we expect to conclude this
    spring.
        MEADS is a cooperative effort between the United States, Germany,
    and Italy. MEADS will provide robust, 360-degree protection for
    maneuver forces and other critical forward-deployed assets against
    short- and medium-range missiles and air-breathing threats, such as
    cruise missiles and aircraft. In fiscal year 2001, the trilateral MEADS
    activity embarked on a three-year Risk Reduction Effort. In fiscal year
    2003, MEADS will continue design and development activities for key
    system components, which includes efforts to integrate the PAC-3
    missile with MEADS.
        The Arrow Weapon System (AWS), developed jointly by the United
    States and Israel, provides Israel a capability to defend against
    short- to medium-range ballistic missiles. The Arrow Deployability
    Program allows for Israel's acquisition of a third Arrow battery and
    Arrow's interoperability with U.S. systems. The Arrow System
    Improvement Program will include both technical cooperation to improve
    the performance of the AWS and a cooperative test and evaluation
    program to validate the improved AWS performance. We will support
    additional flight-testing and supply of components for additional
    missiles to be built in Israel. Continued U.S. cooperation with Israel
    will provide insight to Israeli technologies, which may be used to
    enhance U.S. ballistic missile defenses.
    Midcourse Defense Segment (MDS)
        Midcourse Defense Segment elements engage threat ballistic missiles
    in the exo-atmosphere after booster burnout and before the warhead re-
    enters the earth's atmosphere. The Ground-based Midcourse Defense and
    Sea-Based Midcourse Defense elements of the MDS are the successors to
    the National Missile Defense and Navy Theater Wide programs,
    respectively. The Sea-based Midcourse activity includes a cooperative
    missile technology development effort with Japan. Our budget for this
    segment in fiscal year 2003 (RDT&E and military construction) is almost
    $3.2 billion, or $570 million less than the funding enacted for fiscal
    year 2002. MDS funding is about $14.8 billion across the FYDP.

                MDS Elements
        The Ground-based Midcourse Defense (GMD) will engage threat
    missiles primarily during the descent phase of midcourse flight. Our
    GMD development activity has three main objectives: (1) demonstrate
    Hit-to-Kill; (2) develop and demonstrate an integrated system capable
    of countering known and expected long-range threats; and (3) develop
    infrastructure and assets for the initial GMD components of the BMD
    System Test Bed to conduct realistic tests using operationally
    representative hardware and software and produce reliable data for GMD
    and BMD System development.
        During fiscal year 2002, the GMD element will build upon recent
    successful intercept tests by further demonstrating hit-to-kill and
    discrimination capabilities using increasingly complex and realistic
    test-scenarios. Development of the 2004 BMD System Test Bed continues
    with an upgraded COBRA DANE radar in Alaska as a temporary surrogate
    for Upgraded Early Warning Radars (UEWRs); an accelerated version of
    the In-Flight Interceptor Communications System (IFICS) and Battle
    Management, Command, Control and Communications (BMC\3\) capability;
    five ``common'' silos with sparing; Command Launch Equipment (CLE); and
    software upgrades.
        In fiscal year 2003 five Ground-Based Interceptors using a
    precursor of the objective booster and an operationally representative
    kill vehicle will be developed for installation and testing in fiscal
    year 2004. MDA will continue to develop the objective booster and
    continue with the complementary EKV activity. This objective may allow
    for a common EKV for Ground and Sea-based Midcourse Defenses. BM/C\2\
    and communications incremental prototypes will be integrated and
    demonstrated at multiple locations and assessed with user
    participation. The Prototype Manufacturing Rate Facility will continue
    in fiscal year 2003 to support a wide range of interceptor needs for
    the increased rate of flight tests. Research and development efforts
    for Block 2004 and subsequent Blocks will support the development of
    the initial GMD parts of the Block 2004 BMD System Test Bed. This
    facility will also support continued development and testing of more-
    capable interceptors, sensors, and targets.
        Sea-based Midcourse Defense will develop a ship-based capability to
    intercept threat missiles early in the ascent phase of midcourse
    flight. SMD continues to build upon the existing Aegis Weapons System
    and Aegis Light-weight Exo-Atmospheric Projectile (LEAP) Intercept
    (ALI) activities while pursuing alternative kinetic warhead
    technologies.
        In January 2002, we conducted the first of many flight tests for
    the Standard Missile 3 (SM-3) in order to demonstrate kill vehicle
    guidance, navigation, and control against a live ballistic missile
    target. The SM-3 launched from the U.S.S. LAKE ERIE, which was
    positioned in the BMD System Test Bed more than 500 kilometers away
    from the Pacific Missile Range Facility, and successfully collided with
    its target missile in space using infrared sensors. This was the first
    intercept for the hit-to-kill SMD element.
        Funding in fiscal year 2003 continues for concept definition, risk
    reduction and testing to further the development of a capability to
    defeat medium- to intermediate-range threats. The SMD project has three
    primary objectives in fiscal year 2003: (1) continue testing and
    complete ALI Flight Demonstration Project; (2) design and develop a
    contingency ship-based ascent and midcourse ballistic missile intercept
    capability based on ALI and associated technologies; and (3) continue
    an effort initiated in fiscal year 2002 to provide a ship-based missile
    defense system designed to provide an ascent midcourse phase ``hit-to-
    kill'' technology in the fiscal year 2008-2010 timeframe.
        The United States and Japan, under a 1999 Memorandum of
    Understanding, are conducting a cooperative systems engineering project
    to design advanced missile components for possible integration into the
    SMD element. This project leverages the established and demonstrated
    industrial and engineering strengths of Japan and allows a significant
    degree of cost sharing.
    Boost Defense Segment (BDS)
        The Boost Defense Segment addresses both Directed Energy and
    Kinetic Energy (KE) boost phase intercept (BPI) missile defense
    capabilities to create a defense layer near the hostile missile's
    launch point. To engage ballistic missiles in this phase, quick
    reaction times, high confidence decision-making, and multiple
    engagement capabilities are desired. The development of high-power
    lasers and faster interceptor capabilities are required to engineer
    kinetic and directed energy capabilities to provide options for
    multiple shot opportunities and basing modes in different geographic
    environments. MDA RDT&E funding in the Boost Defense Segment is $797
    million in fiscal year 2003, an increase of $197 million over fiscal
    year 2002 enacted funding, and is approximately $7.5 billion from
    fiscal year 2003 to fiscal year 2007.

        The BDS employs multiple development paths. Information derived
    from this approach will help evaluate the most promising BPI projects
    to provide a basis for an architecture decision between. The BDS will
    demonstrate the Airborne Laser (ABL) for the Block 2004 Test Bed. It
    will define and evolve space-based and sea-based kinetic energy BPI
    concepts. Also, we will evaluate space-based laser technologies. At the
    appropriate time, based on mature system concepts and technologies, we
    will initiate a focused demonstration of this concept in the Test Bed.
                BDS Elements
        ABL will acquire, track, and kill ballistic missiles in their boost
    phase of flight. Management and funding responsibility for ABL has
    officially transferred from the Air Force to the Missile Defense
    Agency. ABL integrates three major subsystems (Laser; Beam Control; and
    Battle Management, Command, Control, Communications, Computers and
    Intelligence (BM/C\4\I)) into a modified commercial Boeing 747-400F
    aircraft. ABL-specific ground support equipment also will be developed.
        Building on successful sub-system testing and the modification of
    aircraft structures, in fiscal year 2003 we will commence major
    subsystem integration and testing activities. The ABL Block 2004 phase
    culminates in a lethality demonstration (missile shoot-down) against
    boosting ballistic missile threat-representative targets and delivers
    one aircraft for integration and testing. If directed, this aircraft
    could also provide an emergency defensive capability. We plan to
    develop a second test aircraft, which will further develop this new
    technology.
        The Kinetic Energy Boost defense activity reduces the technical and
    programmatic risks of fielding a boost phase intercept capability. The
    KE Boost strategy is to define and assess militarily useful boost phase
    concepts, invest in focused risk reduction activities, and execute
    critical experiments. We will tap the brightest minds in the public and
    private sectors to define the most effective approach to killing
    ballistic missiles as they boost. We identified several lucrative
    technology candidates for immediate investment, including fast burn and
    flexible axial propulsion technologies, agile kill vehicles, early
    detection and track sensors, quick-reaction BM/C\2\, and affordable
    weapons platforms. We will assess these component technologies through
    rigorous ground and flight tests.
        We will evaluate prototype component and element configurations
    under realistic operational conditions. We will experiment using
    emerging component technologies and test infrastructure to resolve
    tough technical challenges, such as predicting the point of intercept
    and finding the missile tank in the presence of hot exhaust. When
    possible, we will exploit targets of opportunity by tracking space
    launch vehicles and test missions launched out of Vandenberg Air Force
    Base. The test data we collect from our risk reduction work and
    critical experiments will help guide decisions concerning focused
    demonstrations in fiscal year 2005.
        We are evaluating options for continuing Space-Based Laser (SBL)
    activity. The SBL project involves technology development and risk
    reduction activities in the key areas of laser output, beam control,
    and beam director design to demonstrate feasibility of boost phase
    intercept by a high-energy laser in space. These efforts leverage work
    started under previous SBL-funded technology development programs.
    Sensor Segment
        Sensors developed in this segment will have multi-mission
    capabilities intended to enhance detection of and provide critical
    tracking information about ballistic missiles in all phases of flight.
    The fiscal year 2003 budget request for RDT&E in this segment is $373
    million, which represents an increase of $38 million over fiscal year
    2002 funding. The MDA budget provides $3.9 billion for the sensor
    segment during fiscal year 2003 to fiscal year 2007.

        The Space Based Infrared System-Low (SBIRS Low) element will
    incorporate new technologies to enhance detection; improve reporting on
    ballistic missile launches regardless of range or launch point; and
    provide critical mid-course tracking and discrimination data for the
    BMDS. When SBIRS Low is integrated with other space-based infrared,
    interceptor, and surface-based radar sensors, the BMD System will have
    a capability to counter a broad array of midcourse countermeasures.
    Moreover, SBIRS Low will not carry many of the risks associated with
    forward deployed ground-based sensors, which can be vulnerable to
    attack and for which foreign basing rights must be negotiated.
        Per direction in the fiscal year 2002 National Defense
    Appropriations Conference Report, plans for Satellite Sensor
    Technology, including SBIRS Low, will be provided to congressional
    defense committees by May 15, 2002. The restructured SBIRS Low activity
    will support numerous risk reduction activities, including technology
    maturation, ground simulations, and hardware-in-the-loop
    demonstrations. Based on cost, schedule, capability, and threat
    assessments, decisions will be made regarding production of a
    demonstrated SBIRS Low capability.
        The international component of the Sensor Segment is the Russian-
    American Observation Satellite (RAMOS) project. We are cooperating with
    the Russian Federation in the area of early warning missile defense
    technologies. RAMOS is an innovative U.S.-Russian space-based remote
    sensor research and development initiative that engages Russian early
    warning satellite developers in the joint definition and execution of
    aircraft and space experiments.
        The Russians continue to review the agreement to execute the RAMOS
    project presented last July by the United States. Assuming agreement is
    reached this summer, in fiscal year 2003 we will complete detailed
    designs of the satellites and sensor payloads, begin fabrication and
    assembly of U.S. sensors and ground support equipment, and continue
    sensor software and modeling and simulation development. Launches of
    the first and second RAMOS satellites are projected to occur in fiscal
    year 2006.
    Technology
        The Technology effort will develop components, subsystems and new
    concepts based on high-risk, high-payoff approaches. The primary focus
    of this effort is the development of sensors and weapons for future
    improved missile defense platforms. Investments maintain a balance
    between providing block upgrades to current acquisition programs and
    developing the enabling technologies for radically new concepts.
        Our budget for the Technology segment in fiscal year 2003 is $122
    million (RDT&E), a reduction of $18 million from fiscal year 2002
    enacted level. Funding from fiscal year 2003 to fiscal year 2007 is
    projected to be about $697 million.

        To enable the BMD System to pace the threat, the Advanced
    Technology Development (ATD) effort is focused in four primary areas:
    (1) Terminal Missile Defense, (2) Midcourse Counter-Countermeasures,
    (3) Boost Phase Intercept, and (4) Global Defense. In addition to these
    tasks, investments are made in a strong technology base to move beyond
    the state-of-the-art in radars, infrared sensors, lasers, optics,
    propulsion, wide band gap materials, photonic devices, and other
    innovative concepts. The ATD office also works with the Systems
    Engineer and other segments to ensure seamless transition of proven
    advanced technology products into the BMD System.
    Summary
        The BMD System will counter the full spectrum of ballistic missile
    threats, capitalize on existing technologies and capabilities, and
    foster innovation. It will incrementally incorporate capabilities
    needed to detect, track, intercept, and destroy ballistic missiles in
    all phases of flight using kinetic and directed energy kill mechanisms
    and various deployment approaches. We have implemented a disciplined
    and flexible acquisition strategy to provide a timely, capable system.
    This approach protects against uncertainty by ensuring that the United
    States will have the ability to defend itself, its deployed forces,
    allies, and friends from a ballistic missile attack should the need
    arise.
        I believe the approach I have outlined here toward developing and
    deploying missile defenses can meet the growing threat and provide for
    the earliest possible fielding of effective defensive capabilities.
        Thank you, Mr. Chairman. I would be happy to answer any questions.

                            THEATER MISSILE DEFENSE

        Senator Inouye. General, several years ago, the focus of
    our missile defense program was protecting our forces in
    theater. Since then, we have refocused our attention on
    national missile defense, and justifiably so, given the threat
    to our Nation, but I am concerned that with the exception of
    the Patriot program, there are no funds for procuring any other
    theater missile defense system in DOD's Future Years Defense
    Plan. Are you concerned about this situation? If so, what can
    we do to address it?
        General Kadish. Mr. Chairman, we have a situation where we
    are on the verge of developing those very systems that you
    discussed against shorter-range missiles for our deployed
    forces. The reason why no procurement funds are allocated at
    this point in time is because they are not ready for
    production.
        I am not concerned so much about not having procurement
    funds as I am about making sure that those programs progress as
    rapidly as possible so that we can procure them. I believe in
    the next 2 to 3 years those programs will be in a position to
    add significant amounts of production money to buy those
    systems.

                   THEATER HIGH ALTITUDE AREA DEFENSE (THAAD)

        Senator Inouye. Where is THAAD at this time?
        General Kadish. THAAD is going through a redesign effort,
    and we are 2 years away from its first test, but it is making
    very good progress in our ground testing leading up to our
    first test program activities in early 2004, I believe. So in
    that particular case, if we do the right testing on the ground
    that we have programmed--which is, by the way, very expensive--
    I believe that our testing program will have a high degree of
    success to begin with, and we will be able to move rapidly to
    procure those systems.
        Senator Inouye. What is the status of airborne laser (ABL)?
        General Kadish. The airborne laser program is making
    remarkable progress; however, we had to look very realistically
    at the schedule very recently, and we are projecting a first
    attempt at shoot-down with the airborne laser in the 2004 time
    frame, in the fall of 2004 calendar year, at this point in
    time.
        We have done a number of significant ground tests in the
    airborne laser that have shown us that we should have
    confidence, once we get over the integration phase of airborne
    laser, of actually integrating the laser capability into the
    aircraft. We would have a potential for a high degree of
    success in those tests.
        We do have a delay, however, in those tests, and we are
    going to have to deal with that, but I see nothing that is
    fatally flawed in the approach at this point in time on
    airborne laser.

                                 PATRIOT PAC-3

        Senator Inouye. What is the status of the PACs?
        General Kadish. I am sorry?
        Senator Inouye. Are we ready to deploy some of them?
        General Kadish. Patriot 3s?
        Senator Inouye. Yes.
        General Kadish. Yes. As a matter of fact, we are in very
    early limited procurement of the Patriot 3s. The last time I
    looked at the numbers, I think we had over 20 missiles already
    in deployment status, potentially, and we are building those
    every month. So we are in the very early stages, but we do have
    an initial capability for Patriot 3.
        Senator Inouye. Do you know if this year our Nation will
    formally withdraw from the ABM Treaty? Can you describe for the
    committee what withholding withdrawing from the ABM Treaty
    means in practical terms for your program? That is, what key
    testing programs can now move forward, what construction and
    development programs can now be undertaken?
        General Kadish. The withdrawal from the Treaty is having a
    big effect on the program, as we look at what we can do without
    the Treaty constraints more in detail in the past few months. I
    think there are basically two emerging elements of the treaty
    that will be very apparent to us over the next 6 to 8 months.
        The first area that has developed, and I think that it is
    significant, is that we are looking very differently at our
    sensor capability, in light of the Treaty withdrawal, on our
    ability to look at radar capability, and other sensors that
    might have been prohibited by the Treaty for use in our overall
    system effectiveness. Of course, one of the rules for missile
    defense using sensors is: The closer your sensors are to the
    launching missile, the better off we are in the system's
    effectiveness.
        So this is a very important element, and one good example
    of that is the promise that using Aegis-class radars from our
    Aegis destroyers and cruisers might give us more effective use
    of our ground-based interceptors, and that was prohibited, for
    instance, by the Treaty in the past. So that is the first, most
    visible and most important area that we are feeling the effects
    of from the withdrawal of the Treaty.
        I think the second area that, of course, will be obvious,
    is that when we decide that we have enough technical and
    programmatic effectiveness, the administration and the Congress
    could decide to actually deploy the system without constraints
    to the Treaty. I would expect over the coming years that that
    one effect will be obviously very important to us.
        So those are just two examples of what is happening in
    regard to the Treaty effects on the program that I deal with
    every day.
        Senator Inouye. Thank you very much.
        Senator Stevens.
        Senator Stevens. Pardon me for going in and out, Mr.
    Chairman. There are other matters here on the floor.

                          CAPABILITY-BASED ACQUISITION

        General, I want to make sure if--that I understand this
    concept about spiral development capabilities-based
    acquisition. It is my understanding from my staff that the
    approach involves a great degree of flexibility compared to
    prior procedures, and that the Missile Defense Agency wants to
    reward successful efforts and discontinue the unsuccessful ones
    to build a missile defense architecture based on elements that
    have been proven to work and to move on when possible. Is that
    a correct summary?
        General Kadish. That is a correct top-level summary,
    Senator. There is a little bit more to this capability-based
    approach than meets the eye, and it gets very technical in the
    way we do acquisitions traditionally in the Department.
        Senator Stevens. Will this be less expensive in the long
    run, in terms of acquisition, than the older method?
        General Kadish. In my view--and this is an opinion at this
    point--it will be. There is a reason for that. What we tend to
    do in the Department with very mature technologies, for
    instance, we have been building airplanes--I think, next year,
    in 2003, it will be 100 years that we have been building
    airplanes in this country, and we have a very stylized and very
    good requirement system that has moved the state of the art of
    mature technologies, like aircraft development, very well, and
    it has given us the greatest air force in the world.
        What we are dealing with here is a situation where the
    technology is uncertain. We have been after ballistic missile
    defense for 25 years, in earnest, probably, and 40 years, and
    50 years has been the maturity of the ballistic missile itself.
        So we are not advancing a mature state of the art. In the
    requirements space process, we would spend generally the time
    and money required to meet a specific requirement that we knew
    and specified very well. In the case for an airplane, for
    instance, it might be how far it goes with a specific payload,
    and we can do that in a very orderly process, and we have many
    examples of that in the programs that are before the Congress
    today.
        In the case of missile defense, there is a little bit more
    give-and-take that is required in an unprecedented technology.
    Rather than setting a goal and not knowing whether you can meet
    it technically, and spend any amount of time and money required
    to meet that, we believe we can take it off in chunks, and do
    what is possible, and match that versus what is needed. In the
    end, I believe that that process will be a lot less expensive
    than if we went with the traditional requirements-based
    approach.
        Senator Stevens. Well, I do not want to be impertinent, but
    it sounds like you are saying that if we set the goal for a
    supersonic jet, and all three would have failed, we would have
    never had the airplane, but on the other hand, what was needed
    in 2003 was not an integrated, mature system. I am not sure how
    these parts fit together, if we abandon part of them along the
    line. Tell me, how do you fit the parts together if you abandon
    one?
        General Kadish. Well, it is not a question of abandoning.
    It is trying to set the goal such that they are achievable
    within a time frame for a specific cost. For instance, on a
    missile defense system, we would want to have a certain level
    of effectiveness in the missile defense level, and it could be
    set very high to push the state of the art, but in our case,
    the state of the art is what it is.

                           TECHNOLOGY AND INTEGRATION

        Senator Stevens. Maybe I was misled, and I guess--I think I
    can say this: At one of the briefings I asked a question, that
    is not on the record, at a classified briefing, and I asked the
    question, ``What is the problem here?'' And the answer was that
    the problem is integration of the system, not developing
    technology. Are we saying we do have technology problems now?
        General Kadish. Well, I included integration in the
    technology basket, and that might be part of the problem with
    understanding----
        Senator Stevens. I do not want to take too much time. Let
    me get a little provincial here, and ask you about the Greeley
    Testbed. Can you tell us what the schedule is, status of
    construction, et cetera? What do we see, and is there enough
    money in the budget to proceed this year, as indicated?
        General Kadish. I believe there is enough money in the
    budget to execute the program to build that testbed. We are on
    schedule. I think we are a little less than 900 days away from
    our target date of September of 2004 for that capability to be
    in place, and to use it for ground and integration testing. So
    I believe it is in pretty good shape. We are getting ready to
    issue more contracts to----
        Senator Stevens. How many interceptors will be in the first
    phase?
        General Kadish. For the testbed, it is five interceptors at
    this point, and possibly a spare, depending on what the further
    analysis tells us.

                          NUCLEAR TIPPED INTERCEPTORS

        Senator Stevens. There has been speculation in the press,
    both in Alaska and nationally, that the Office of the Secretary
    of Defense is exploring nuclear tip missile interceptors, and
    that would replace the interceptors that are currently in the
    plan. We have not appropriated any funds, nor have we
    authorized any nuclear interceptors. Are there any being
    considered in terms of this testbed?
        General Kadish. No, Senator. We have no part of our program
    that involves nuclear-tipped interceptors; however, people do
    think about those types of things across a broad range when you
    are dealing with missile defense.
        Senator Stevens. Well, I hope whoever thought about it in
    the Secretary of Defense's office is soon in a think tank.
        General Kadish. Well, the Defense Science Board indicated--
    --
        Senator Stevens. That has alarmed my people to no end, just
    absolutely no end, and I do not see any reason for it at all,
    and I would fire the guy. I am serious. We should not have
    people thinking out loud on the job, and speculating as to the
    future possibilities, when we are dealing with the reality of
    trying to get a missile defense system. It really--well, I
    cannot say that. It aggravates me. It is obvious. It makes me
    mad.

                             ANNUAL APPROPRIATIONS

        Could I ask you one last question? And that is, you are
    looking at a block development, a 2-year program for this. Are
    we going to be able to use annual appropriations on a 2-year
    block program?
        General Kadish. Yes, Senator, I believe so. We are looking
    at what we can do in a 2-year time frame from a developmental
    standpoint, and the appropriations would fall just like they
    traditionally have all the time.
        Senator Stevens. Thank you very much, Mr. Chairman.
        Thank you, General. I mean no offense, except against that
    guy who has caused us so many night calls since it has been----
        General Kadish. I have gotten a few of those calls myself.
        Senator Stevens. Yes, I am sure you have. It is just--I do
    not know. The press seems to report speculation a lot faster
    than they do fact.
        Thank you, Mr. Chairman.
        General Kadish. But I would like to make it clear, our
    primary technology right now, that we are having success with,
    is hit-to-kill, which is pure collision, kinetic energy, that
    destructs a mechanism.
        Senator Stevens. And no nuclear involvement at all?
        General Kadish. None, whatsoever.
        Senator Stevens. Thank you.
        Senator Inouye. Senator Cochran.

                              AIRBORNE LASER (ABL)

        Senator Cochran. Mr. Chairman, thank you very much.
        General Kadish, let me ask you about the likelihood of
    being able to keep the schedule on the airborne laser. I
    understand that you have a goal for a successful intercept
    using the airborne laser by 2004.
        General Kadish. That is correct.
        Senator Cochran. What is the likelihood, do you think, that
    you will be able to meet that schedule?
        General Kadish. Well, we took a real hard look at the
    schedule in the fall of this past year, and that is where we
    set our expectation in the fall of 2004, which is basically 1
    year difference from what we originally thought we could do,
    and the reason for that was that, although there was no one
    item that was causing our schedule problems to be--that you
    could point to as a significant flaw, there were a lot of
    things that were being delayed, because of the complexity of
    that particular revolutionary technology.
        So 2004 was set at about a 80 to 90 percent confidence in
    the schedule, to give us a point in time where we think that
    that kind of likelihood would produce the shootdown.
        Now, as with anything of this nature, that is our best
    estimate. We believe, with some confidence, that we can make it
    plus or minus a couple of months in that area, and we have to
    work hard to make it happen. So that is our status right now,
    but I think over the next 6 to 8 months, more data will come
    available to us, and we will have to take another look at it in
    the fall time frame.
        Senator Cochran. The budget forecast for the airborne laser
    includes about $30 million to begin procurement of a second
    airborne laser 747 aircraft, which I am told is being purchased
    from the commercial production line, rather than as a military
    purchase. Could you explain why you are taking this approach,
    and what the consequences would be if procurement of the
    aircraft does not begin this year?
        General Kadish. Well, the idea of adding the second
    aircraft has a couple of aspects associated with it that are
    pretty, I think, important to the program. The aircraft we are
    building today is a demonstration aircraft, and we have learned
    an awful lot about how to build the inside of that 747 with the
    laser. I just told you about our confidence in actually making
    that happen. What the second aircraft would give us, because of
    the lead times involved, is an ability to put a better design
    approach and capitalize on what we have learned into a second
    aircraft, to further the development of the airborne laser
    concept. So we would actually have an air frame--a commercial
    airliner, off the line, ready for our use in a few years to
    actually move this program along more rapidly than if we did
    not have that aircraft.
        So I look at it as an ability to take what we have learned
    off the demonstration aircraft, the first aircraft, start the
    process of building a better airborne laser with the second
    aircraft, and then be in a position, time-wise, not to have to
    start that process 2 or 3 years later, if we got delayed. So it
    is basically an enhancement to the overall development, and in
    my view, a risk reduction effort. Since it is a commercial
    aircraft, the risk is not as high as if we militarized or
    bought something different than a 747.

                    SPACE BASED INFRARED SYSTEM (SBIRS) LOW

        Senator Cochran. Senator Stevens mentioned the SBIRS Low
    program, the sensors that would be an important element in a
    ballistic missile capability. In your prepared testimony, you
    mention that SBIRS Low would not be subject to some of the risk
    associated with ground-based radars. You have to have a system,
    either a ground-based system--am I right--or something in space
    in order for a ballistic missile system to work. Is that an
    essential element of the system, or the program?
        General Kadish. Both radars and space-based sensors are
    important elements of our thinking about an effective system.
    If I might take a minute to explain why that is important, I
    think it would help.
        Radars, what we call X-band radars, in particular, are very
    accurate long-range radars. They suffer from the fact, however,
    that they have to be located in the right position to do their
    job. So they are very expensive, and when they are in place,
    they do a good job, but you have to put them somewhere. One of
    the rules of missile defense, as I alluded to earlier, was the
    closer they are to the launch point, the better off we are in
    terms of their effectiveness. So although they are a very
    important component, they do have their disadvantages.
        Now, when you go to space with a sensor--it is very
    difficult to put radars in space, so we look at infrared
    sensors, in this case. You can get global coverage and solve
    that geography problem with the space-based approach. Those two
    sensors working in concert also complicate the adversaries'
    ability to fool any one of them. So that is why these are
    complementary and potentially important.
        Now, from an affordability standpoint, the argument has
    been, and I think will continue to be, whether both of those
    are affordable in this sense. I do not think that we have
    enough information that is compelling enough, at least to us
    right now, that says we ought to choose between radars and
    space-based sensors. At this point, we need to know a little
    bit more about the space-based sensors by putting them on
    orbit, experimenting with them, and then deciding whether or
    not, either technically or for affordability reasons, we ought
    to make those trades. So that is why we want to carry both of
    these efforts together at this point.
        Senator Cochran. It was disturbing to me last year that we
    saw some changes in the budget on SBIRS Low. We provided some
    language in conference with the House that gave the
    administration some latitude to make a decision along the lines
    that you are suggesting would be appropriate. Does this budget
    contain sufficient funding to help achieve that goal, or will
    we have to add additional funds to move this program along so
    that we can actually have a sensor developed and placed in
    space, so we can test it and see how it works?
        General Kadish. At this point, I think, from a 2003 and a
    2002 perspective, we might have to add some more money. We just
    provided the committee a report, I believe, in the last couple
    of days, of what our plans are to restructure SBIRS Low, and
    then as a part of that report, I believe we indicated that we
    will put forth a reprogramming in fiscal year 2002, and adjust
    the program in the out-years to accommodate this new
    restructure.
        So we will probably have to look at adding some money in
    the 2002 time frame, with a reprogramming action, to lower the
    risk in this program, to the degree that we feel comfortable
    with. Those numbers and that effort will be a separate action
    coming to the committee.

                                     ARROW

        Senator Cochran. Okay. Last year, Congress appropriated $40
    million to set up a co-production capability in the United
    States for the Arrow missile. You have requested another $5
    million this year. How important is it to the Arrow program to
    have this co-production capacity in the United States?
        General Kadish. Well, we believe it was very beneficial to
    the Arrow program to have that capability to co-produce Arrow
    in the United States, as basically a very straightforward
    reason, in my view.
        We have worked with the Israelis to buy--I believe the
    number is 200 Arrow missiles and three batteries, and the
    current arrangement is for Israel to make about two missiles
    per month in the process. That very low rate of production
    limits their ability to populate those batteries in a time
    frame that we would like. So this co-production effort with the
    United States allows us to do more production per unit time,
    and, therefore, fill out those batteries sooner than would
    ordinarily be done.
        Senator Cochran. I recall from a visit to Israel that there
    were some simulations and some tests that were being managed in
    concert with our capabilities in Huntsville, Alabama. Do you
    think that this program provides some benefits for us in terms
    of understanding technologies, and contributes to our
    development of ballistic missile capabilities?
        General Kadish. I believe it does, and it has. There are
    some things we learned from the Arrow program that have been
    very useful to us, and I expect that that will continue.
        Senator Cochran. We talk about sharing information and some
    of the benefits of the ballistic missile program with other
    allies as well. We have talked about Russia; we have talked
    about Japan.

                               ALLIED COOPERATION

        There is a specific program, the Medium Extended Air
    Defense Systems (MEADS) program, that involved, I think,
    Germany and Italy at one point, and the funding has not been
    forthcoming at levels that were earlier anticipated. But my
    question is: Is the collaboration with allies in these specific
    instances that I have mentioned--is it beneficial, or have we
    done enough of it at this point to really know whether we have
    benefits that we can derive from working closely with trusted
    allies on these issues?
        General Kadish. I think it is very beneficial to continue
    to work with our allies on missile defense technology. It is a
    difficult road to go down in this area because of the
    restrictions that tend to be put on the high technology that we
    have now for export controls, and other reasons, but I believe
    that one of the chief stumbling blocks, in my view, at least,
    is that the ABM Treaty specifically prohibited us from engaging
    our allies against--especially against long-range missile
    defense technologies. With our withdrawal from the Treaty, that
    window opens for us, so that we could look even broader among
    our allies for help in even specific technologies that might be
    useful to us, as well as share ours with them.
        So I believe that there will be a more intense look at
    allied cooperation in our program as we go forward in the
    coming weeks, months, and years.
        Senator Cochran. Thank you, Mr. Chairman.
        Senator Inouye. Thank you.
        Senator Shelby.
        Senator Shelby. Thank you, Mr. Chairman.

                                 SMALL BUSINESS

        General Kadish, referring to the Missile Defense National
    Team, I want to discuss your funding plans briefly, and the
    role of small business. I believe it is critical to ensure that
    the expertise and capabilities that reside in our small
    business technical base that supports the Major Defense Agency
    (MDA) remains strong and viable.
        In supporting the Missile Defense National Team (MDNT), I
    hope a situation does not arise that would require you to
    migrate funds away from equivocal programs and offices like the
    Ground-Based Midcourse Program Office. Such funding issues
    might have a far-reaching impact on systems engineering and
    technical assistance contractors who contribute to the success
    of our missile defense and space programs.
        Concern exists, especially in the smaller contract
    families, that migrating funds to support MDNT might lead to a
    migration of talent away from small business. With these
    concerns in mind, can you discuss how you plan to fund the
    Missile Defense National Team during the remainder of 2002, and
    beyond?
        General Kadish. Well, Senator, I might just state up front
    that the small business community is extremely important to us
    across a broad range of efforts within missile defense.
        Senator Shelby. So much of the talent lies there, does it
    not?
        General Kadish. Well, an awful lot of talent lies there,
    and some of our problems are making sure we get at it, both for
    short-term and long-term needs. Although not directly related
    to the systems engineering activity, we have a very active
    broad-range small business program and an innovative research
    program that I think we are going to spend at least $130
    million on this year.
        Now, with regard to the elements, specifically ground-
    based, the source of the funds for the National Team idea, I
    think we have accommodated without effect to the rest of the
    program, because of the----
        Senator Shelby. Without migrating the funds?
        General Kadish. Without migrating funds. Now, there are
    always puts and takes, and daily decisions that many thousands
    of people make, so I am not sure I can say categorically that
    something did not get moved around for whatever reason;
    however, that is not our intent.
        But I want to make clear that the National Team idea is
    very circumscribed in its function, in that it does--it helps
    us do the engineering required for a multi-faceted, ground-
    based, sea-based, multi-service type of system that we could
    have a potential to integrate. So I do not see this to be a
    very large operation in the future. If it does, I think it
    probably got out of control.
        So somewhere in the neighborhood of $80 million to $130
    million a year is what I have been looking at for the specific
    systems engineering activity, and that is accommodated within
    our budget activities.
        One of the characteristics that, unfortunately, we are
    trying to find out how to deal with with small business is: The
    nature of the National Team is to get individuals from
    companies into this engineering environment, and we want the
    best. And to get into that environment, they have to sign very
    stringent conflict of interest clauses, which prohibit them
    from being used in any competition or any other future work
    that we might put out to the larger industry.
        So that represents a very high opportunity cost to each one
    of the companies. Do they put their best people in that
    environment or not? That has been a struggle for all the
    companies, not just the small business, and we are working our
    way through that, but there is no intent to exclude them. Quite
    the contrary. We need the best, and we go wherever we can to
    find them. If they can meet the requirements, then they are in.

                                 PATRIOT PAC-3

        Senator Shelby. On the Patriot, the PAC-3, would you
    discuss the status of the conditions being met, that is,
    especially the issue of full funding for PAC-3?
        General Kadish. The full funding for procurement?
        Senator Shelby. Yes. In other words, your 2003 budget
    request again supports moving the PAC-3 program to the Army.
    Are you--you are very familiar with all of this. And what is
    the issue--where are we on the issue of full funding?
        General Kadish. Well, this tennis match we have between
    whether it is in our budget or the Army's budget really gets
    confusing sometimes even to me, but where we are with Patriot
    (PAC-3) is that we have money in the budget, whether it is in
    our budget or the Army's budget, depending on where the
    transfer was made, for, I believe, 1,100 missiles. I will have
    to get you the exact number.
        Senator Shelby. It is 1,159 missiles, but the Army
    requirement is at least 2,200 missiles.
        General Kadish. Those are inventory objectives----
        Senator Shelby. Okay.
        General Kadish [continuing]. Of the Army. The way these
    programs work, the Department and the Congress either fund the
    inventory objective or they do not, so it is a stake in the
    ground.
        Now, we are in discussions with Mr. Aldridge and the Army
    about who is going to make and how we are going to make the
    full rate production decision on PAC--on Patriot 3, and I think
    in that process, and in the 2004 budget process, particularly,
    adjustments will be made to the total inventory. So I think
    that process is under control, but is not fully vetted yet in
    terms of what the number is really going to be.

                   THEATER HIGH ALTITUDE AREA DEFENSE (THADD)

        Senator Shelby. And I have run--well, I have a minute or
    so. I will go to the THAAD program. I understand it is doing a
    lot better.
        General Kadish. Well----
        Senator Shelby. I would like your comments on it.
        General Kadish. All the indicators--we restructured that
    program, and I have been criticized for being way too
    conservative in putting in a lot of ground testing in the
    process, but I think that is the right thing to do. What we are
    seeing in THAAD right now is the coming to fruition of those
    plans that we have made to ensure that when we get the flight
    tests, we have every chance of being successful and move
    rapidly to various flight tests.
        What is key to that is the ground testing of the piece
    parts, and then into larger assemblies, and into the final
    assembly, and that takes time. It takes time, and it takes
    money.
        So we are spending that capital now, the time and money,
    and we are asking you for, I think, $950 million next year for
    this, and to be patient with us in actually getting through
    this early, very critical design phase.
        Senator Shelby. Are you fairly confident that we are now on
    the right track?
        General Kadish. I believe we are. We are 22 percent done in
    the program, and we are ahead of costs, and ahead of schedule,
    but that does not mean much to me now. I want to wait until we
    are 85 percent done, and be ahead of costs and ahead of
    schedule, but all the trends are in the right direction.
        Senator Shelby. Thank you, Mr. Chairman.
        Senator Inouye. Thank you.
        Senator Domenici.
        Senator Domenici. Thank you very much, Mr. Chairman.

                            MISSILE DEFENSE SPENDING

        It is nice to see you again, General. From the information
    that I have put together, the Missile Defense Agency, since
    1985, has spent $73.5 billion in research and development, and
    on various forms of missile defense. Critics will point out
    that after this spending, there remains no deployed missile
    defense system in the United States or overseas. How do we
    answer that question?
        General Kadish. Well, I think there are two answers in the
    way I try to discuss that issue. The first is that that level
    of spending, in an unprecedented endeavor called missile
    defense, has gotten us to the point where we are today, and
    that point is that we are at a program and technological
    crossroads where I believe that we are increasingly confident
    that hit-to-kill can work, and that the next step is to make it
    work reliably enough to make it effective, and we are on the
    verge of doing that.
        So to the degree that the country has spent the treasury in
    this regard, we, I think, have done very well getting to the
    point we are at now. We can argue about whether we should have
    gotten there earlier, based on some of our management
    activities, but on balance, that investment is starting to pay
    off.
        In regard to a deployed missile defense capability, we
    declared--it was a small step, but a large one at the same
    time. We declared Patriot 3 capable with 16 missiles back in
    September, and we are building that inventory now. So from a
    hit-to-kill perspective, we do have our first field capability,
    as small as it is, but we now set that bar as a milestone to
    our journey to an effective missile defense.
        Senator Domenici. General, the data from the MDA shows that
    the annual appropriations of all forms of missile defense
    almost doubled from the end of President Clinton's
    administration through the Bush administration.
        What measures have been taken to ensure that the controls
    over this increase funding request will remain intact and
    adequate? Does part of the increase under President Bush result
    from the budget request being more fully funded, in terms of
    being able to accomplish declared goals for various programs or
    not?
        General Kadish. I think the controls that we have on the
    spending of the money are as tight as they have been all along.
    In fact, we are paying an awful lot of attention to that, and
    our statistics on obligation rates and expenditure rates are
    meeting all the targets that we set for them.
        I do think, in regard to your last question, that increase
    represents more of a full funding of our efforts, as opposed to
    an increase in our activity, in the short term. Now, we will
    change that over time, as we look at boost phase and things of
    that nature, but our strategy really has been to make sure that
    we can fund what we are doing today, and move as rapidly as we
    can with the program.
        Senator Domenici. I have another round. When I come back, I
    will ask them.
        Senator Inouye. Senator Feinstein.
        Senator Feinstein. Thank you very much, Mr. Chairman. I
    would like to ask that my statement be placed in the record, if
    I might.
        Senator Inouye. So ordered.
        [The statement follows:]

                 Prepared Statement of Senator Dianne Feinstein

        Thank you Mr. Chairman, and thank you General Kadish for
    joining us today. I am pleased to be here today as well, as I
    have many questions regarding missile defense. When Deputy
    Secretary Wolfowitz testified before this committee on March
    27th of this year, I voiced some of those questions in the
    broader context of our overall national defense strategy.
        Today's discussion affords us the opportunity to delve
    deeper into the details of the program, and as we all know, the
    devil is in the details.
        We are currently fighting an asymmetrical global war on
    terrorism that requires a shift in our strategic thinking. This
    war has forced us to confront the old cold war mentality that
    is so prevalent in defense circles, and instead embrace change
    in force structure and procurement.
        Unfortunately, it appears that our current missile defense
    program may in many ways represent the old way of doing
    business.
        I am concerned that the testing, cost and strategic arms
    control implications of the Administration's current missile
    defense plans may detract valuable resources from more pressing
    security needs, such as the war on terrorism.
        The price tag associated with this year's Research,
    Development, Testing and Evaluation program for missile defense
    has produced considerable sticker shock for many of us on this
    committee.
        I, for one, am far from convinced that we have achieved the
    technical maturity required to field an effective missile
    defense system. Systems such as SBIR's Low (Space Based
    Infrared) are, by some estimates, more than a decade away from
    being operationally deployable. Additionally, our testing
    criteria frequently fails to accurately replicate real world
    intercept scenarios, including countermeasures. There also
    remains much debate over the warhead options available, in
    particular the validity of the ``hit to kill'' approach being
    proposed.
        Perhaps of greatest concern to me is the misdirection of
    funds for an expensive, ``feel-good'' system that does not
    adequately address the potential threats we face.
        Do we, for example, face a greater threat from an incoming
    ballistic missile, or from a ``dirty'' radiological bomb that
    was smuggled into a U.S. port in a shipping container?
        Or for that matter, what are we doing to defend against the
    possible threat of a homicide bomber in downtown Washington, DC
    or San Francisco?
        In a time of limited budgetary resources we have an
    obligation to use the taxpayers funds wisely.
        I look forward to discussing these important issues with
    you so that I may get a better understanding of your proposed
    funding and implementation plan.
        Thank you.

                          NUCLEAR TIPPED INTERCEPTORS

        Senator Feinstein. I would like to continue along the lines
    that Senator Stevens did, who indicated his strong opposition
    to any nuclear tipping of these missiles. I have before me the
    April 11th article in The Washington Post, General, which
    rather clearly states that the Secretary of Defense has opened
    the door to the possible use of nuclear-tipped interceptors in
    a national missile defense system, and that the chairman of the
    Defense Science Board has received encouragement from Secretary
    Rumsfeld to begin exploring the idea as part of an upcoming
    study of alternative approaches to intercepting enemy missiles.
        I want to concur with Senator Stevens. I want to say that I
    find that just absolutely inexplicable, how we would even
    explore the use of nuclear-tipped interceptors, with what they
    might do with radiological fallout to people, and to countries.
    If that is the case, I think that that really makes this whole
    national missile defense system just a reprehensible effort.

                                     COSTS

        We are spending $7.5 billion this year on research that
    still nobody knows is really workable on a consistent basis. So
    I really want the record to reflect what I believe would be the
    American reaction to this as well, as just being
    unconscionable, and really one not to be countenanced at
    virtually any cost.
        Secretary Rumsfeld also announced in January a
    reorganization of our missile defense efforts, creating the
    agency that you head, and the current 2002 defense
    authorization bill, including several new reporting
    requirements that were applied to the ballistic missile defense
    organizations, and various other organizations, such as the
    Director, Operational Test and Evaluation. It has some
    oversight or review of the missile defense program.
        My question to you, General Kadish, is when do you expect
    to finish the report to Congress on cost, schedule, testing,
    and performance goals for ballistic missile defense programs
    required in Section 232 of the 2002 defense bill, which was due
    on February 1 of this year?
        General Kadish. Senator, we are trying very hard to meet
    all the reporting requirements levied on us last year, and to
    do it in a way that makes sense. If I remember right, that
    particular report, we believe we satisfied with the actual
    submission of the budget.
        Now, I think there was some discussion with the
    documentation that we actually submitted to the Congress that
    supported our budget activity. If that is not sufficient, I
    will have to go back and look at it, but that is my
    recollection at this point.
        Senator Feinstein. Would you mind then resubmitting that
    portion of that submission to us, which answers the provisions
    of Section 232, in your opinion?
        General Kadish. To the best of our ability, yes, Senator.
        Senator Feinstein. I would appreciate that. Thank you very
    much.

                                     RADAR

        In earlier years, General, we were told that the X-band
    radar on Shemya was critical to the effectiveness of the
    program. Now, your R-2 documents show that you plan initial
    development of a test X-band radar, but it is unclear if it
    will be at Shemya Island or not.
        Where will this be located? If it is not at Shemya, how
    will this affect the contingency capability you plan to deploy
    at Fort Greeley? And is it not correct that even with an
    upgraded Cobra Dane radar on Shemya Island, the contingency
    capability will be severely limited in its discrimination
    capabilities?
        General Kadish. Let me take the last part of your question
    first, if you do not mind. A contingency capability is
    basically that; that is, it is a lot less than what we would
    like to have in any of the systems, should we find it useful to
    declare that capability. Certainly, some more testing needs to
    go.
        It will have, in my view, some inherent countermeasure
    capability, but it will not be what we would have postulated
    with the previous National Missile Defense (NMD)-type program,
    with the big X-band radar at Shemya, if that is certainly the
    case. But that does not mean it does not have capability to
    offer a very, very basic defense. So in a more classified
    forum----
        Senator Feinstein. So you are saying it would not limit its
    discrimination capabilities.
        General Kadish. It would limit the discrimination
    capability, but the capabilities it would have would be
    sufficient for what we expected it to do, which would be a lot
    less than what we had with the NMD architecture that we
    previously talked about.
        So if we decide through testing and our evaluation of the
    system that that testbed has the capability to be used, this
    will all come out and be very well understood by the decision
    makers.
        Senator Feinstein. All right. What about its location at
    the--of the X-Band Radar (XBR) at Shemya?
        General Kadish. We have, today, a prototype X-band radar at
    Kwajalin Island. It is there for a lot of reasons, but it is
    not the ideal place for our test program to have that X-band
    radar.
        So two things have been happening. The first is, the idea
    of having the radar at Shemya, against an operational mission
    in the Pacific, it was an ideal location, just because if you
    look on a map where Shemya is in Alaska, it is the closest U.S.
    territory to North Korea, for instance. So that was a very good
    location from an operations standpoint.
        We would like, but no decision has been made, to move to a
    deployment activity that would include that type of radar, so
    it is not there in our budget. What is there is an idea that we
    want to build another X-band radar for our test program, and we
    have not decided where that radar should be just yet, whether
    it would be better in the Hawaiian Island area, whether it
    would be useful at Shemya for test purposes, or someplace else,
    to include a mobile X-band radar on some sort of a sea-based
    platform. We are in the process of trying to decide what to do
    about that, and we have not made the final decisions on it yet.
        There are advantages to each one of those locations for
    different reasons.
        Senator Feinstein. So Shemya may be in the picture. May I
    ask this question? If it is not Shemya, how is this going to
    affect the contingency capability you plan to deploy at Fort
    Greeley?
        General Kadish. The contingency capability that might
    reside at Fort Greeley would be a lot less than if we had an X-
    band radar in that part of the world.
        Senator Feinstein. Can you quantify that for us----
        General Kadish. Well, let me put----
        Senator Feinstein [continuing]. In terms of dollars, or any
    way you can in an unclassified setting, to quantify it?
        General Kadish. What X-band radars and sensors give us of
    that nature is the ability to watch a threat warhead very
    precisely, and measure things in very minute ways. Let me give
    you an example.
        If we had an X-band radar that we might use for the THAAD
    program here in Washington, we can see the rotation of a golf
    ball over Seattle in our data. So it is a very useful thing to
    have. To get the kind of distances we need up in the missile
    defense architectures against long-range missiles, these have
    to be very powerful radars. If you do not have them, then you
    are relying only on the sensors that are less precise than an
    X-band radar, which is the kill vehicle--the infrared sensors
    on the kill vehicle itself, and some early warning radars that
    are less accurate in the process, like the Cobra Dane radar
    that we might have at Shemya today. So the idea of an X-band
    radar addition would be very, very precise information to guide
    that interceptor better than would ordinarily be done.
        However, even with those X-band radars not as part of the
    architecture, there is, we believe, a good capability inherent
    in the kill vehicle and our early-warning radars to provide us
    a missile defense capability should testing prove it to be
    effective. I do not know how to say it any better than that. It
    is not what we want, but it is useful.
        Senator Feinstein. So you are saying that the expenditure
    for Fort Greeley would remain the same----
        General Kadish. It would remain the same.
        Senator Feinstein [continuing]. Even if it was not at
    Shemya?
        General Kadish. The expenditure for Fort Greeley would
    remain the same. If we wanted to add a radar, it would be an
    increment of hundreds of millions of dollars above what we are
    requesting right now to do Shemya. I think the X-band radar----
        Senator Feinstein. Other than using Kwajalin.
        General Kadish. Other than using Kwajalin, which is out of
    position for operational uses.
        Senator Feinstein. So we could anticipate that there is
    going to be an additional amount.
        General Kadish. I think that as we look at deploying more
    effective missile defenses beyond the testbed, where we would
    prove the integration of this system to ourselves, in my view,
    it would be more resources required to do that. Yes.
        Senator Feinstein. Mr. Chairman, I guess my time is up. I
    did have a couple more questions. May I submit them, please?
        Senator Inouye. Without objection.

                               MDA SPENDING DATA

        General Kadish, to date, the committee has not received any
    spending data from your agency for fiscal years 2001 and 2002.
    Will you assure the committee that prior to our markup of the
    fiscal year 2003 bill that we will receive spending data from
    your agency?
        General Kadish. Yes, Mr. Chairman. I will guarantee it as
    soon as we can.

                               NAVY AREA DEFENSE

        Senator Inouye. I appreciate that. General, as you may
    recall, during deliberations of the 2002 defense bill, the
    Pentagon notified the committee that it would cancel the Navy
    area-wide theater missile defense program. This decade-old
    program was designed to launch intercept missiles from ships to
    shoot down incoming warheads, but after having spent about $2.4
    billion, and then with expectations that the program might
    exceed estimates by more than 30 percent, the Pentagon said,
    ``That is it.'' However, we have been advised that such a
    system still exists.
        Earlier this year, the Commander-in-Chief of the U.S.
    Pacific Command testified to Congress that terminating the
    area-wide program was a blow to their plans of deploying
    ballistic missile defense as quickly to the Pacific theater.
    The Navy area program was our only ballistic missile defense
    system that used the explosive warhead found on--to destroy a
    target versus a more technically complex hit-to-kill technology
    found on the other BMD systems. Some argue that using explosive
    warheads would be more effective against, again, certain
    threats, such as Scuds, and less costly. What do you think is
    the future of this program? Is it completely dead?
        General Kadish. Mr. Chairman, we are in the process of
    going through a very intense look at what we need to do in
    light of the Navy area program cancellation right now. I would
    like to talk to you more about that in probably 3 or 4 weeks
    when we get the final decisions made there, but I would like to
    say this about the approach we are taking: We realize that the
    Navy area program had a very specific and very valuable
    contribution to missile defense, especially because it is
    mobile, and a forced-entry requirement exists.
        The problem we were having was that we were trying to
    integrate an infrared sensor with a radar sensor, and even
    though the blast fragmentation part of this might add value to
    it in certain circumstances, we could not make it work without
    spending a lot more time and money on it. At the same time, we
    were advancing our understanding of the hit-to-kill process.
        So what we are doing right now is: We are taking a very
    comprehensive look at all of our systems, and what we can do to
    solve the Navy area void that was created from an operational
    perspective. We are not ready to tell you what those answers
    are, because we have not made the final decision, but they look
    very promising in our ability to cover the threats that Navy
    area was supposed to cover, and hopefully can do it in a time
    frame that is not too far out of line with where we were going
    with Navy area to begin with.
        So if you would indulge me, I would like to wait maybe
    until the end of May to report to the committee on exactly what
    we can do there, and if we can do it earlier, we will.
        Senator Inouye. General, because of the sensitive nature of
    the next question on countermeasures, I will be submitting them
    for your consideration.
        General Kadish. Thank you.
        Senator Inouye. Senator Cochran?
        Senator Cochran. No further questions, Mr. Chairman.
        Senator Inouye. Senator Feinstein.

                                     THREAT

        Senator Feinstein. I have one other question. Just one
    quick statement: Being a Californian, and being very concerned
    as a member of the intelligence committee about the possibility
    of a dirty bomb coming in in a cargo container, and in spending
    time in Hong Kong last week with the chief executive and the
    port people to see how feasible it really is to push our
    borders to create a system internationally of search, certify,
    and sealing these containers, that, to me, seems the threat we
    face. And this seems such an unrealistic area, I just cannot
    point out to you the point/counterpoint of the world we live
    in, and the world you live in now.
        I just have to believe that the terrorist wars that we are
    in are not going to end anytime soon--in other words, for the
    next decade--and the improbability of a missile coming at us
    from a rogue nation that cannot be met with a reprisal that
    would certainly be so strong, and is so strong that it is an
    effective deterrent to such an attack, whereas we have no
    deterrent to protecting our borders from what is a very real
    threat, it kind of boggles my mind. I know this is not your
    problem, and I appreciate the work you are doing.

                                  COST CONTROL

        Let me ask this last question. The 2003 budget has a lot of
    money for missile defense, and what I would like is your
    assurance that the program will stay on budget. For example,
    critics claim the cost estimate of the airborne laser testing
    subset is projected to increase from $10 billion to $23
    billion. I would like to know from you whether you believe that
    is true or false, and whether this program will stay on budget.
        General Kadish. Well, Senator, we are doing everything we
    can to make sure that our programs execute the way we plan
    them, but we are in a technology area, especially when you talk
    about something as revolutionary as an airborne laser
    capability, never been done before, certainly from an airplane.
        I am not sure I can guarantee you that we will not miss our
    estimates on what it takes to do these types of things, but
    what I can tell you is that everything that we are trying to do
    is--we are going to manage as best we can to ensure we bring
    that capability in for as little dollars as possible, and we
    are working every day to do that.
        Sometimes we are going to fail, but I do not know really
    what the ultimate cost of that capability is going to be right
    now, because we are at some of the critical phases of the
    program. But right now, the costs are under control, to the
    best of our ability. The indicators look like we are going to
    slip the schedule to the 2004 time frame, but even with that,
    we have a pretty clear idea of what needs to be done, and what
    dollars are required to make it happen.
        If we do not meet those goals, we will be back here next
    year telling you why, but we are doing our best.

                                     THREAT

        Senator Feinstein. Of course, it will not do anything for
    our problem with containers, 6 million a year which come into
    this country, and less than 1 percent searched. You do not have
    to answer that. It is just----
        General Kadish. On a personal note----
        Senator Feinstein. I do not mean to be difficult for you,
    but it is just--I mean the real world that I see out there, and
    the world that this meets, are just so different, it is
    unbelievable.
        General Kadish. Well, Senator, if I could offer to you, we
    have some views of the threat that I would be more than happy
    to share with you in a classified forum that may give you a
    different perspective.
        Senator Feinstein. I would like that very much, if you
    would, please. I would appreciate it. Thank you.
        Mr. Chairman, thank you.
        Senator Inouye. Senator Domenici.
        Senator Domenici. Well, I might just say to the
    distinguished Senator from California, I did not visit any
    foreign countries recently to get information, but I would say
    to you, reference to such a threat as containers coming into
    America, and the enormous quantity and numbers, et cetera, as
    one of the new threats we have to confront, I would urge that
    you or your staff have one or more of the national laboratories
    brief you on the kind of technology that is in the process of
    being developed just for that kind of thing.
        Now, nobody had pushed them heretofore, because this was
    just a natural offshoot of some research. Now, obviously,
    somebody cares. We have so much potential out there in these
    fields, but we did not care about it. There were other things
    with higher priority, like the one you just brought to our
    attention here, but I think you will find in the sciences that
    there is tremendous breakthroughs on how they are going to do
    that, and tell you pretty well how long it will be before these
    things are fully developed, et cetera. I think it would be very
    helpful, and I thank you for listening.

                       SCIENTIFIC WORKFORCE AVAILABILITY

        General, let me ask you: You are involved in leading a
    program that probably develops as much American science and
    technology as any other program we have. We pride ourselves
    with the space program, it is a science-based program, but they
    are doing--95 percent of what they are doing is the same thing
    being repeated, with some improvements, and a few new research
    prospects. But we are asking you all to do something very, very
    different. And I wonder if your program is suffering from,
    maybe I would call it brain drain, or maybe I would say there
    is not sufficient talent out there to appropriately bid these
    projects, and do the work in the fastest time frame.
        I am of the opinion that almost everything the United
    States is doing that requires a lot of scientists, a lot of
    physicists, a lot of engineers, we are running behind, because
    we just do not have enough. Your program is going to require a
    cadre of the most esoteric applications of physics, and
    dynamics, and other things. What is your assessment in that
    regard?
        General Kadish. Well, Senator, we get many tens of
    thousands of people working on the program right now, and they
    are doing a wonderful job for us, and they are very talented
    individuals. But as we look down the road to what we need to
    do, and where we need support from the country at large, I
    worry about it a lot, getting the types of talent we need to
    sustain that effort, and to make it better.
        The National Team idea of trying to focus talent, going out
    to the national laboratories as much as we can, hiring folks
    that would not ordinarily be in Government to come into
    Government, to help us with this problem, is a challenge that
    we are trying to face up to right now.
        In fact, if you read closely the letter that authorizes the
    Missile Defense Agency, signed by the Secretary in January, one
    of the key statements in that letter that I pay a lot of
    attention to is, is to try to get the best and the brightest to
    sustain the effort, and we are setting in process whatever we
    can think of to do that.
        Senator Domenici. Well, General, I would suggest to you--
    and, Mr. Chairman, I would suggest, if we can--that we permit
    you to use whatever you can of your program to excite young
    brainpower. We are not getting enough young people enthused
    about physics, and chemistry, and engineering, so if different
    agencies are trying to excite them, it would seem to me that
    without an awful lot of money being required, you could do some
    of your programs in ways that some post-docs, maybe double or
    triple the number of post-docs you have on these programs,
    because that is the way to get young talent hooked, and I use
    that word in its better sense, not just a pejorative sense, to
    get them interested.
        I would ask, if you are not too busy, if you might assign
    that to someone from the standpoint of working with the
    universities and laboratories on either post-docs, or guys who
    are still getting their doctorate, and have as many of them as
    you can, men, women, and minorities, get into this observation
    mode, with a bit of the excitement that comes from this.
    Obviously, there is a lot of excitement.
        General Kadish. Yes, Senator. In fact, that is a pretty
    good idea that we probably need to add to our toolbox here, and
    look at a little bit longer range than we might look for right
    now. In fact, let me get back to you on that, and tell me what
    you--tell you what we are going to do about it.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Domenici. Thank you very much.
        I have three other questions that I will submit for the
    record, Mr. Chairman.
        Senator Inouye. Without objection, so ordered.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                Questions Submitted to General Ronald T. Kadish
                Questions Submitted by Senator Daniel K. Inouye
                           overcoming countermeasures
        Question. General Kadish, many argue that the most difficult
    technical challenge facing our missile defense program is developing
    methods to overcome enemy countermeasures. How do you respond to
    critics who claim we are building a very complex, expensive missile
    defense system that can be foiled by inexpensive countermeasures such
    as simple balloon decoys or chaff?
        Answer. The Ballistic Missile Defense System (BMDS) addresses the
    countermeasure challenge two ways--by a layered defense and by
    evaluating the threat target in many different and complementary ways.
    The BMDS will provide a capability to engage ballistic missile threats
    in all phases of flight. This includes opportunities to engage threats
    in their boost phase before they deploy the midcourse type of
    countermeasures mentioned in the question. The BMDS will employ sensors
    with multiple phenomenologies from which several discrimination
    features can be generated. Thus the countermeasures mentioned make
    identification of the warhead more challenging, but not impossible.
        Question. General, this situation appears somewhat similar to the
    ``arms race'' mentality of the Cold War: we counter their weapons, they
    counter our countermeasures and so on. Is there any way to avoid such a
    ``race?''
        Answer. The question of avoiding an arms race is one the Department
    has had to deal with in all mission areas. Countermeasures are part of
    the natural evolution of any military capability. Most weapon systems
    we have today are susceptible to countermeasures. All weapon systems
    will be scrutinized by potential adversaries and probed for weaknesses.
    In addition, the ``action-reaction'' cycle is not a new phenomenon, nor
    is it limited to the development of weapon systems. It also occurs in
    operational strategy and tactics. We can, however, slow this cycle by
    applying appropriate security measures to our development efforts. To
    the extent we can limit an adversary's understanding of our defensive
    capabilities, we can restrict their ability to develop countermeasures.
        Question. Will future tests of our missile defense system feature
    more complex decoys and other countermeasures?
        Answer. Yes. Our testing gets progressively more challenging. The
    BMDS will be tested against the threat capabilities of potential
    adversaries as described in the Adversary Capabilities Document. Tests
    will be designed to employ realistic scenarios and countermeasures. As
    projected threats become more complex, we will conduct tests with
    increasingly more stressing decoys and countermeasures.
        Question. General, press reports indicate the Department is
    considering using nuclear-tipped interceptors as part of our missile
    defense system. Do you have any thoughts on this matter?
        Answer. MDA is not designing, developing, or testing nuclear-tipped
    interceptors. It is Administration policy that we develop our missile
    defense program using non-nuclear ``hit-to-kill'' technologies. Our
    recent flight test history shows that we have proven that ``hit-to-
    kill'' is a viable approach. Our current challenge is to show that our
    missile defense elements work reliably in increasingly complex
    environments. Our Ballistic Missile Defense System Test Bed is intended
    to demonstrate just that.
                            the management challenge
        Question. General Kadish, you have said that managing such a
    complex program as missile defense is every bit as challenging as some
    technology issues we face. To help meet that challenge, the Department
    established a new Missile Defense Agency, though this has come with
    some controversy. General, what are the key management challenges you
    face and how will the creation of this new agency help you manage the
    missile defense program?
        Answer. The primary management challenge I face is moving the
    program from element-centric to system-centric focus, integrating the
    formerly independent development efforts into a single system and
    facilitating the transitions during the acquisition cycle. This
    emphasizes the importance of communicating our vision to agencies
    external to the Missile Defense Agency (MDA): the Services, OSD, the
    Joint Staff, and the Congress. We are attacking this management
    challenge using a combination of new and more traditional acquisition,
    oversight, and coordination processes. When the Secretary of Defense
    renamed the Ballistic Missile Defense Organization the Missile Defense
    Agency, he did so in order to underscore the national priority placed
    on missile defense, and the need to provide the authority and structure
    consistent with development of a single, integrated missile defense
    system. In order to meet the uniquely complex and unprecedented
    challenges of developing the Ballistic Missile Defense System, the
    Secretary will look to the Senior Executive Council (SEC), chaired by
    the Deputy Secretary along with the Service Secretaries and the Under
    Secretary for Acquisition, Technology and Logistics, for policy and
    programming guidance. In addition, the Under Secretary has created the
    Missile Defense Support Group and an associated Working Group for
    independent analysis and advice to the SEC and the MDA Director. These
    groups will help in developing a shared understanding of the BMDS and
    its progress. Through their advice and guidance, they will also help me
    manage the missile defense program. In order to communicate our vision
    to Congress and to help you understand our activities, we will submit
    the BMDS RDT&E Selected Acquisition Report (SAR), reports to Congress,
    our detailed annual Budget Justification documentation, frequent
    briefings and information to fulfill Sec. 232 (c) and (d) of the
    National Defense Authorization Act for Fiscal Year 2002.
        Question. Concerns have been raised about the MDA's new acquisition
    process restricting internal DOD and Congressional oversight. General,
    can you assure the Committee that Congress will have complete,
    unfettered oversight of the missile defense program, as it does for any
    other acquisition program?
        Answer. Yes. Internally, the Department has structured the program
    to better manage a very complex set of challenges, and provide for more
    focused oversight of MDA. MDA is reviewing all statutory and regulatory
    requirements in DOD 5000 and assessing how best to meet these
    requirements. Externally, our accountability will be just as
    transparent as in the past. There is no reduction in Congressional
    oversight. MDA continues to be subject to the federal acquisition
    system but is tailoring the traditional acquisition process to: (1)
    incorporate lessons-learned, (2) better align with best commercial
    practices, and (3) manage risk more prudently. Congress will continue
    to receive reports and have oversight of the single BMDS Major Defense
    Acquisition Program (MDAP) through the BMDS RDT&E System Acquisition
    Report, budget submissions, reports to Congress, and hearings. The
    reports will cover the entire BMDS program of development. Once force
    structure and production decisions have been made, the relevant
    procurement information will be available through normal Service
    channels.
        Question. What is the status of the ``national industry team'' and
    how will this team support your efforts to manage the program? Do you
    anticipate that the members will continue to participate fully once
    missile defense systems go into production?
        Answer. Although the Missile Defense National Team (MDNT) is in its
    initial build-up phase, the majority of the team is in place and
    working. The MDNT is comprised of Government, Federally Funded Research
    and Development Centers (FFRDC), System Engineering and Technical
    Assistance (SETA) contractors, and an industry team comprised of major
    defense contractors that are experienced in the development,
    integration and production of defense systems. The MDNT industry team
    members are currently assessing the existing capabilities of the
    missile defense elements so the MDNT can design and assess an
    integrated system. If changes are necessary, the MDNT industry team
    will, in collaboration with the rest of the MDNT members, propose
    modifications to existing elements and/or new program efforts to the
    Government. (The Government is the determination authority for any
    approved programs/modifications and maintains Total System Performance
    Responsibility (TSPR) over the BMD System.) The recommendations will be
    vetted using a Configuration Control Process chaired by the Government.
    As changes and new programs are approved, MDA will provide program
    direction to the element program managers. The MDNT, including the MDNT
    industry components, will continue to function after the elements go
    into production. As these elements deliver capabilities, the MDNT will
    assess those contributions to system performance. In addition, the MDNT
    will be continuing to design improvements to the system as threats
    change and technologies evolve.
                                   abm treaty
        Question. General, are there any tests or programs funded in your
    fiscal year 2003 request that would cause a violation of the ABM
    Treaty, were we to remain a party to the treaty?
        Answer. Treaty compliance determinations depend on the specifics of
    the activities to be undertaken and on the interpretation of the
    particular treaty provisions applicable to those activities. Since it
    is not necessary to determine whether MDA activities after June 13,
    2002 comply with the Anti Ballistic Missile (ABM) Treaty, the
    Department of Defense is not undertaking the lengthy analysis required
    to answer such hypothetical questions. The expiration of the ABM Treaty
    will provide needed flexibility and eliminate impediments for all areas
    of our BMD program. For example:
      --Testing of ABM components (to support the development of a
            Ballistic Missile Defense System to defeat long-range or
            ``strategic'' ballistic missiles) will no longer be limited to
            designated ABM test ranges (the United States presently has
            two: Reagan Test Site and the White Sands Missile Range in New
            Mexico). This will allow our agency to test missile defense
            elements and components wherever that testing makes the most
            sense.
      --The numerical limitations on ABM components (i.e., missiles,
            launchers, and radars) set forth in the ABM Treaty, such as no
            more than 15 ABM test launchers at ABM test ranges, will no
            longer constrain our program and activities. This eliminates
            the need to divert resources to dismantling ABM components,
            such as ABM test launchers, before new ones can be constructed
            in order to remain under the treaty's artificial ceiling.
      --Testing and deployment of missile defense components can be done in
            any basing mode (i.e., sea-based, space-based, air-based, and
            mobile land-based), all of which are currently prohibited by
            the ABM Treaty. This will allow greater flexibility in both the
            testing and the deployment of our missile defense systems. The
            result should be greater protection for the United States,
            forward deployed forces, and our allies.
      --The concurrent testing of ABM and non-ABM components will no longer
            be prohibited. This will allow the testing, and ultimately the
            deployment, of our missile defense systems in ways in which
            they will be working together with other missile defense and
            non-missile defense components (e.g., radars) to maximize
            missile defense effectiveness and thus provide greater
            protection.
        The limitations of the ABM Treaty on transferring ABM technology to
    other nations will expire with the Treaty. This will greatly enhance
    our ability to engage in cooperative programs with other nations to
    develop, produce, and operate a more capable BMD System.
        Question. General, you testified to Congress last year that the
    Airborne Laser shoot down test in 2004 would be the first to ``bump
    up'' against the ABM Treaty. Since that test has been delayed to 2005,
    what is now the first test or activity that would have violated the
    Treaty?
        Answer. MDA plans for Integrated Flight Test (IFT)-7 (which
    occurred in December 2001) to use an Aegis radar at the Reagan Test
    Site to track the interceptor and to use the Multiple Object Tracking
    Radar (MOTR) radar at Vandenberg Air Force Base to track the target
    were cancelled by the Secretary of Defense after he determined they
    would violate the ABM Treaty. Plans to use an Aegis radar and the MOTR
    radar in the same manner in IFT-8 (which occurred in March 2002) were
    similarly cancelled by the Under Secretary of Defense after he
    determined, consistent with the prior decision of the Secretary, that
    they would also violate the ABM Treaty. MDA also planned to use an
    Aegis radar in both IFT-7 and -8 to view the strategic ballistic
    missile target as it was being launched from Vandenberg Air Force Base.
    These plans raised complicated questions of treaty compliance that
    could not readily be resolved. Given the complexity of the compliance
    issues involved, the Under Secretary of Defense directed MDA to cancel
    plans to use the Aegis radar in this manner since, even if approved,
    some could nevertheless argue that it was a violation of the ABM
    Treaty. The next flight test in the series, IFT-9, will be conducted no
    earlier than July 2002, after the expiration of the ABM Treaty. We plan
    to use an Aegis radar in IFT-9 to view the strategic ballistic missile
    target as it is being launched from Vandenberg Air Force Base in order
    to help us determine whether Aegis can provide early warning of missile
    attacks and guide interceptor missiles to their targets. After
    assessing the outcome of that test, we will consider ways to more fully
    integrate it into our Ground-Based Midcourse Defense tests. The Aegis
    data from IFT-9 is also needed to develop targeting software for the
    entire missile defense system and to improve the operational realism of
    our testing. As in IFT-7 and -8, questions about whether this type of
    Aegis participation in MDA integrated flight tests would be consistent
    with the ABM Treaty were never resolved within the Defense Department.
    The MOTR is no longer needed for IFT-9 due to high confidence of
    similar data being available from other sensors, sensors that
    participated successfully in IFTs 7 and 8.
        It should also be noted that MDA will begin interceptor silo
    construction in Alaska in late June 2002. Questions about whether these
    and other portions of the Alaska Test Bed were consistent with the ABM
    Treaty were never resolved within the Defense Department.
                       missile defense program execution
        Question. General Kadish, missile defense programs received
    significant funding increases last year, including programs such as the
    Airborne Laser and the Theater High Altitude Area Defense missile. Are
    you satisfied that these and other programs under your control are
    meeting their spending targets for fiscal year 2002?
        Answer. I am fully confident that these and other MDA Program
    Elements will meet their spending targets. Attached is a forecast that
    shows our plan to obligate close to 90 percent of the funds available
    to MDA in fiscal year 2002.

    ----------------------------------------------------------------------------------------------------------------
                                                                                                           Forecast
                                                          Approp      Program    Released      Actual      End 1st
                     Program Element                      Amount      Amount      by OSD    Obligations      Year
                                                                                                         Obligations
    ----------------------------------------------------------------------------------------------------------------
    THAAD............................................     872.481      846.901     846.901      642.265      823.317
    NAVY AREA........................................     100.000       96.184      96.184       57.856       97.700
    BOOST SEGMENT....................................     608.863      587.824     587.824      364.484      567.847
    MIDCOURSE SEGMENT................................   3,820.534    3,675.994   3,475.994    1,725.920    3,444.897
    SENSORS SEGMENT..................................     340.600      319.610     319.610      230.451      301.804
    PRMRF............................................       6.571        6.571       6.571        4.100        6.571
    BMD SYSTEM.......................................     819.084      793.062     793.062      327.145      743.354
    PAC-3 (RDT&E)....................................     129.100      131.415     131.415       46.343      112.455
    BMD TECHNOLOGY...................................     141.090      140.799     140.799       31.543      115.652
    MGMT HQ--BMDO....................................      27.758       25.673      25.673        2.917       25.673
    TERMINAL SEGMENT.................................     203.344      193.308     193.308       38.502      178.106
    SMALL BUSINESS (SBIR)............................  ...........     145.102     145.102        7.000      129.141
    PAC-3 (Proc).....................................     736.574      731.455     671.455      377.361      241.380
    MILCON...........................................       8.299        8.169       8.169        1.250        6.355
    UNDISTRIBUTED REDUCTION..........................     (39.000)  ..........  ..........  ...........  ...........
                                                      --------------------------------------------------------------
          TOTAL......................................   7,775.298    7,702.067   7,442.067    3,857.137    6,794.252
    ----------------------------------------------------------------------------------------------------------------
    Notes: (1) Obligation and Expenditure data as of 31 March 2002. (2) Program Amount equals Appropriation Amount
      less Congressional reductions to include SBIR.

                 controversial programs: navy area-wide defense
        Question. General, based on a recommendation from the Pentagon, the
    Congress last year eliminated funding for the Navy Area Wide program.
    Everyone agrees that there still exists the need for a Navy theater
    missile defense. What is your plan to replace the Navy Area Wide
    program?
        Answer. When the Navy Area program was cancelled, the Under
    Secretary of Defense (Acquisition, Technology, and Logistics), USD
    (AT&L), tasked the Missile Defense Agency, in close consultation with
    the Navy, to address sea-based terminal ballistic missile defense
    capability as part of the integrated Ballistic Missile Defense System
    (BMDS). We have completed an in-depth review of potential options for
    development and fielding of a sea-based ballistic missile defense
    capability and will provide you with details of the new effort once USD
    (AT&L) has approved them.
        Question. General Kadish, we have heard that the Navy Area Wide
    program was particularly important for meeting the threat in the
    Pacific. How do you respond?
        Answer. I fully agree that sea-based ballistic missile defense
    provides an important and needed capability for the Pacific. Of
    particular note, a sea-based capability will provide ballistic missile
    defense in circumstances where deployment of land-based defenses may
    not be possible, such as underdeveloped theaters of operation and
    forced early entry operations.
        Question. When do you expect we can field a theater missile defense
    system in the Pacific, other than in Korea?
        Answer. The Sea-based Midcourse Defense (SMD) element of the
    Ballistic Missile Defense System (BMDS) could provide a capability for
    the Pacific Theater with a limited production off-ramp decision in
    fiscal year 2004 with a sea-based option by late fiscal year 2006.
    However, with additional funding, an emergency capability could be
    available as early as fiscal year 2004.
        Question. Some argue that the ``explosive warhead'' technology
    found on the Navy Area Wide missile is better against some threats than
    the ``hit-to-kill'' vehicles found on our other missile defense
    weapons. Do you agree?
        Answer. The lethality community assessed the merits and demerits of
    both blast-fragmentation warheads and hit-to-kill technology earlier
    this year. Blast-fragmentation warheads have advantages in engagements
    where the target is maneuvering (e.g. maneuvering air breathers like
    cruise missiles). However, the current state of blast-fragmentation
    technology renders it impractical for exoatmospheric engagements of
    longer-range threats. In addition, the energy imparted to the target in
    the high-speed collisions resulting from intercepts of medium- and
    long-range ballistic missiles is several orders of magnitude larger for
    direct body-to-body hits compared to fragments hitting the threat. Hit-
    to-kill is an environmentally ``clean'' kill, better against Weapons of
    Mass Destruction, technologically proven, has lots of energy without a
    warhead or nuclear effects.
                  controversial programs: sbirs-low satellite
        Question. General Kadish, the Defense Department is in the midst of
    radically restructuring the Space-Based Infra-Red Satellite system.
    What is the status of this effort and can we expect a complete report
    on the program prior to our mark up of the fiscal year 2003 Defense
    Appropriations bill?
        Answer. The Department has restructured the SBIRS Low effort as an
    element of the Ballistic Missile Defense System. MDA will develop SBIRS
    Low using a capability-based acquisition approach and spiral
    development processes. Existing contracts are being modified and a new
    contract with TRW is being definitized for the development work. This
    restructure is described in a report delivered to the Congressional
    defense committees on 15 April 2002.
        Question. General, your budget requests about $294 million for the
    SBIRS-Low program in fiscal year 2003. Given the possibility that there
    may be radical changes to the program, how do you know that this figure
    is correct?
        Answer. The restructure of the SBIRS Low activity is already
    underway. A letter contract was awarded to TRW to begin work and will
    be fully definitized later this fiscal year. For fiscal year 2003, we
    will pursue parallel development work on Block 2006 satellites
    supporting the Test Bed and development work on Block 2008 satellites
    incorporating next-generation sensors and other components. The $294
    million budget request in fiscal year 2003 adequately funds the
    restructured program. We will address out-year funding adjustments to
    support the restructured program as part of our fiscal year 2004-2009
    planning process.
        Question. Some argue that a land-based radar system can replace the
    Space-based system. Do you agree?
        Answer. No. An effective BMDS capability will eventually require
    the appropriate mix of both land-based radar and space-based infrared
    sensors. Although a land-based radar system could provide an initial
    capability against near-term adversary capabilities along limited
    projected threat delivery corridors, MDA believes that SBIRS Low must
    proceed on the current development path to provide a credible
    capability against projected countermeasures for four reasons. First,
    although a large number of land-based X-band radar systems placed at
    strategic locations around the world could provide much of the sensor
    capability that a BMDS needs, radar effectiveness is limited against
    some projected adversary countermeasures. Second, an all-radar strategy
    using forward-deployed land-based radars relies on foreign basing in
    specific regions. The uncertainty in the U.S. ability to secure host
    nation agreements in the specific regions required is a very
    significant issue. Third, land-based radar is inherently limited to
    above-the-horizon sensing. Fourth, as adversary capabilities
    proliferate, threat delivery corridors increase to the point that a
    space-based system, that can track attacks from any point on the globe,
    becomes an essential element in the BMDS sensor mix. A BMDS with both
    land-based radar and SBIRS Low would provide the integrated sensor
    performance that an effective BMDS needs. Land-based radar and SBIRS
    Low's infrared technology are complementary and the combination is
    expected to be highly effective against countermeasures.
        Question. How would the costs of a land-based radar system compare
    to a space-based system? Is a land-based system feasible from an
    international political perspective?
        Answer. The most desirable mix of sensors is dependent on their
    integrated performance, cost, risk, and national need. MDA is currently
    evaluating integrated sensor performance, including some sensors that
    have previously not been considered due to ABM Treaty limitations.
    Therefore, the relative cost of land-based radar and a space-based
    infrared system is not known at this time.
        Although the possibility of a land-based defense for allies has not
    been formally discussed, there is no reason at this time to rule out
    such a system from an international political perspective.
                   controversial programs: the thaad missile
        Question. General Kadish, last year's Defense Appropriations
    Conference Report directed that no funding for the Theater High
    Altitude Area Defense (THAAD) missile program be used ``to accelerate
    THAAD pre-production or deployment unless the Secretary of Defense
    certifies to [Congress] that threats to our national security or
    military forces warrant otherwise.'' Is there funding in your fiscal
    year 2003 THAAD budget request for pre-production of extra missiles,
    radars, or other items not essential for the test program?
        Answer. There is $40 million in fiscal year 2003 associated with
    the THAAD element acquiring 10 additional test configuration missiles
    for the BMDS Test Bed. These test missiles will include telemetry/
    safety instrumentation and were originally planned to be acquired later
    in the baseline program. Fiscal year 2003 funding is needed to meet a
    delivery schedule in fiscal year 2006 versus fiscal year 2008, as
    defined in the current baseline. There is no fiscal year 2003 funding
    non-missile components that are not essential to the currently planned
    Block 04 flight test program. (Note: the decision to acquire those
    additional assets would occur in fiscal year 2004).
        Question. General Kadish, your budget request includes the purchase
    of 10 additional THAAD missiles beyond the amount needed for the
    testing program. Why is the purchase of these missiles necessary?
        Answer. The 10 test-configuration missiles will support BMDS Test
    Bed risk reduction initiatives such as supplementing the minimal
    missile spares for early qualification testing, additional controlled
    flight tests, and earlier availability of production representative
    spares. Acquiring these missiles will give the program flexibility to
    build on successful flight tests or repeat flight tests in which
    anomalies occur.
                                     ______

                   Questions Submitted by Senator Tom Harkin
                              nuclear interceptors
        Question. According to recent press reports, the administration is
    investigating the option of using nuclear interceptors for mid-course
    missile defense. What would be the health effects of a nuclear
    explosion at likely intercept points?
        Answer. MDA is not designing, developing, or producing nuclear-
    tipped interceptors.
        Question. What would be the radioactive fallout over what area?
        Answer. Since no part of MDA's program involves nuclear
    interceptors, I cannot answer this question.
        Question. What would be the effects on the ground and on satellites
    of an electromagnetic pulse, the blast, and other phenomena due to the
    explosion?
        Answer. Since no part of MDA's program involves nuclear
    interceptors, I cannot answer this question.
        Question. Could a nuclear missile defense system allow a nation
    with ICBM's to cause a nuclear explosion without using a nuclear
    warhead of their own?
        Answer. Yes, a non-nuclear threat intercepted by a nuclear-tipped
    interceptor would likely result in a high-altitude nuclear detonation.
    However, no part of MDA's program involves nuclear interceptors.
        Question. Would a nuclear interceptor require development of a new
    nuclear weapon?
        Answer. No part of MDA's program involves nuclear-tipped
    interceptors.
        Question. How could a nuclear interceptor be tested?
        Answer. Since MDA's program does not involve nuclear interceptors,
    we have not explored testing of nuclear interceptors.
        Question. Would the tests violate the Nuclear Test Ban Treaty?
    Would they violate the Comprehensive Test Ban Treaty?
        Answer. Unless the tests involved actual nuclear detonations, they
    would not violate either the Limited Test Ban Treaty or the
    Comprehensive Test Ban Treaty.
                        fort greely and early capability
        Question. The administration has proposed building missile defense
    sites in Alaska not only for testing but also for a limited emergency
    defense capability by 2004. What types of interceptors do you plan to
    deploy at Fort Greely? Will those interceptors have been tested as part
    of the Integrated Flight Test program by 2004? Will operational testing
    for the interceptors have begun by 2004?
        Answer. The Boeing Company, the prime contractor for the Ground-
    based Midcourse Defense (GMD) element, selected Orbital Sciences
    Corporation and Lockheed Martin Missiles and Space as its
    subcontractors to develop candidate boosters for consideration in the
    BMDS Test Bed. Lockheed Martin will build and integrate an upgraded and
    modified version of the existing Boeing Ground-Based Interceptor (GBI)
    boost vehicle design. Orbital will build and integrate a second source
    booster vehicle using existing or slightly modified versions of
    existing Orbital boost vehicles. MDA will test versions of the boosters
    in two non-intercept booster vehicle tests beginning in February 2003.
    MDA plans to test these vehicles against targets in IFT-14 and IFT-15,
    planned for 1Q and 2Q fiscal year 2004, respectively. No booster test
    launches are currently planned at Fort Greely.
        The Secretary of Defense's January 2, 2002 memorandum states that
    MDA is responsible for Developmental Test and Evaluation. When a
    decision is made to transition an element's block configuration to a
    Service for procurement and operation, an Operational Test Agent will
    be assigned, and Operational Test and Evaluation will be conducted at
    the end of the transition phase of acquisition.
        Question. Will X-band radar or SBIRS-Low be in place by 2004 that
    can track missile trajectories from North Korea to the United States?
        Answer. Neither an XBR nor SBIRS Low satellites will be in place by
    2004. MDA is refining the requirements for a test XBR at this time, and
    will begin environmental analysis of the proposal as soon as it is
    sufficiently defined. MDA plans to initiate development of the Test XBR
    in fiscal year 2003 and proposes that the Test XBR be interoperable
    with the Extended Test Range (ETR) Test Bed as soon as possible. Both
    the Test XBR and the ETR test bed are independently useful and would
    each help the development of missile defense. The first SBIRS Low
    satellites are planned to be launched in the 2006/2007 timeframe,
    providing limited coverage on such trajectories.
        Question. What reason will we have for any confidence that in 2004
    we could defend against even one missile with simple countermeasures?
        Answer. With treaty restrictions lifted, the opportunity exists to
    bring in additional sensors to enhance tracking, discrimination, and
    identification of reentry vehicles. Technology initiatives, like the
    ``Critical Measurements Program,'' provide data to refine radar
    discrimination algorithms aiding identification of the reentry vehicle
    among debris and intentional countermeasures.
        Question. What is the budget for fiscal year 2003 and for future
    years for missile defense work at Fort Greely?
        Answer. Fort Greely Estimate: Fiscal year 2003--$209.453; fiscal
    year 2004--$136.725.
        Notes: 1. Fiscal year 2003-fiscal year 2004 funding is based on
    estimates in fiscal year 2003 Budget Estimate Submission (Feb 02) R-3
    Exhibits and 1391s. MDA had not definitized the contract with Boeing at
    the time of the fiscal year 2003 Budget Estimate Submission.
        2. As stated in the R-3 Exhibit: ``The funding specific breakouts
    within the Prime Contractor/Boeing section of the R-3 are an estimate.
    At the time of the fiscal year 2003 Budget Estimate Submission, the
    contract was not definitized for the restructured Ground-based
    Midcourse Defense capability-based acquisition strategy. In addition,
    even when definitized, the Prime Contractor has the responsibility to
    balance resources across the GMD program and allocate funding according
    to program progress. This may require the Prime Contractor to
    reallocate funding, which would change the components' estimates,
    provided in this R-3 document.''
        Question. Are there any legal restrictions against flight tests at
    Fort Greely? If so, please explain. Are you actively seeking the legal
    right to conduct flight test launches from Fort Greely?
        Answer. MDA will analyze any major federal action that may
    significantly affect the human environment pursuant to the National
    Environmental Policy Act (NEPA). We will also comply with Department of
    Defense safety requirements. In addition, we will also comply with any
    applicable Alaskan statutes and regulations. At present, we are still
    determining the feasibility and value of conducting a limited number of
    Ground Based Interceptor (GBI) flight tests from Fort Greely. If we
    determine that such tests would be feasible and of value, we will
    initiate an Environmental Impact Statement (EIS) pursuant to NEPA. We
    will not make any decision on whether to conduct flight tests from Fort
    Greely until an EIS is completed and evaluated. Nevertheless, the GMD
    test facilities at Fort Greely will assist in the development of an
    effective GMD regardless of whether flight tests are ever conducted
    from Fort Greely.
        Question. I understand the January 2, 2002 memo outlining the
    creation of the Missile Defense Agency says it is a DOD priority to
    ``use prototype tests assets to provide early capability.'' The memo
    also exempts missile defense from traditional testing requirements.
    Section 232(f) of the fiscal year 2002 Defense Authorization bill
    requires a plan for demonstrating each critical missile defense
    technology ``before that technology enters into operational service''
    and requires the Director of Operational Test and Evaluation to
    ``monitor the development of [this] plan . . .'' Do you plan to
    demonstrate each critical technology before entering any early
    contingency capability into operational service, and will the testing
    be monitored by the Director of Operational Test and Evaluation?
        Answer. As prototypes and test assets become available, they could
    provide early contingency capability. A decision to deploy test assets
    to provide early contingency capability would depend upon the success
    of testing as well as other factors. MDA will conduct development
    testing. This testing characterizes the technical capability and
    military utility of the technologies, technical integration and
    progress toward making recommendations for transition and procurement
    of a missile defense element or system.
        The Director of Operational Test and Evaluation (OT&E) will monitor
    testing. The Director, OT&E will annually review and report on the
    adequacy and sufficiency of the MDA test program during the preceding
    fiscal year. The Director, OT&E, is on the Missile Defense Support
    Group (MDSG) and will advise USD (AT&L) and the Director, MDA
    throughout the development and transition phases.
        Question. What restrictions are in place to ensure that the
    Pentagon does not continue spiral development of ``test assets''
    indefinitely, avoiding the ``transition'' phase described in the
    January 2 memo and thus the requirement to produce Operational
    Requirements Documents?
        Answer. The missile defense program is subject to extensive,
    periodic departmental and congressional oversight. MDA will continue to
    provide detailed budget justification materials, an annual BMDS RDT&E
    Selected Acquisition Report (SAR), reports to Congress, and recurring
    congressional briefings. In addition, MDA is subject to independent
    review from agencies such as GAO. The Department will also conduct
    detailed and frequent reviews of the program. It is not our intent to
    systematically develop operational assets from RDT&E. This does not
    mean that test assets could not be used in an emergency, nor does it
    mean that we would not develop the test infrastructure that could later
    be used as part of the operational infrastructure. Our program plans
    include transitioning militarily useful developed capability to the
    Services for production, which would be governed by an ORD. The
    Secretary specifically charged the Senior Executive Council (SEC),
    chaired by the Deputy Secretary of Defense, to oversee MDA as it
    transitions programs to the Services for procurement. MDA reports to
    the SEC at least annually, and these reviews verify that MDA
    transitions effective capabilities to the Services for procurement and
    terminates systems that do not deliver the anticipated performance.
                           organization and oversight
        Question. What independent operational or developmental testing is
    now planned for missile defense technologies? When in the developmental
    process will the independent testing occur? Who will conduct it?
        Answer. When the Senior Executive Council (SEC) decides that a
    block configuration of an element of the BMDS is ready to enter the
    Transition phase, an Operational Test Agent will be designated. Focused
    operational testing will be conducted prior to the end of the
    transition phase.
        Question. Who will certify that a missile defense technology is
    ready for production?
        Answer. When an element of a BMDS block capability has adequately
    demonstrated sufficient technological maturity, MDA and JTAMDO will
    jointly assess its military utility. Upon a recommendation from the
    Director, MDA, that the BMDS or a BMDS element should be considered for
    transition to production, and after approval by the Senior Executive
    Council, USD(AT&L) will establish necessary product teams to support a
    production decision by the DAB. USD(AT&L), as the Defense Acquisition
    Executive, would sign any resulting Acquisition Decision Memorandum for
    an element's production.
        Question. Please explain in detail how a ``capability-based''
    requirements process and a capability-based ORD would work. How would
    these requirements relate to actual and significant threats?
        Answer. In the classic CJCSI 3170 ORD generation process, the user
    lists desired system performance characteristics that are heavily based
    upon current estimates of the threat and assumptions about the state of
    technological maturity. Once written, the ORD then undergoes a lengthy
    validation, review and approval process. The ORD is rarely changed, and
    changes can take several years to implement. A key weakness of this
    approach is its heavy reliance upon very precise threat and technology
    estimates. While both the intelligence community and industry offer
    their ``best-guess'' at the time, projections in these two critical
    areas are noted for high rates of change due to their dynamic
    environments. The current system does not accommodate this change well.
    ORD-based acquisition is well designed for procurements involving well-
    known technologies, proven systems, sizable production runs,
    established operational experience, and single-Service acquisition.
    None of that yet exists for missile defense. For example, a weakness is
    that classic ORDs tend to be single element (e.g., satellite, aircraft,
    ship, missile, or weapon) focused. This can downplay recognition that
    an element might be a component of an overall larger system with
    mutually supporting elements, and result in artificially high
    performance thresholds being set. In the ``capability-based''
    requirements process the user, tester, and developer work together,
    rather than sequentially, to develop the right balance between what is
    needed and what is possible. Once a military useful capability has been
    demonstrated and validated, it is captured in a capability-based ORD
    that then guides procurement and production. The capability-based ORD
    is simply a specialized version of the existing CJCSI 3701.1B formatted
    document. In lieu of system performance estimates however, operational
    performance characterizations are used. In keeping with the capability-
    based approach, the threat is described in terms of technological
    capability, rather than addressing threat systems of specific
    adversaries. This will prevent designing missile defenses to ``point
    solutions'' that could prove not to match actual threats. Other facets
    of the standard ORD that speak to the suitability and supportability of
    the system remain unchanged. Further, as the system element transitions
    to a Service, the capability-based ORD will be brought through the
    traditional Joint Requirements Oversight Council process.
        The capability-based approach defers commitment to procurement
    until a capability is actually demonstrated. It allows trade-offs to be
    made during development, and it can adjust to changes in the threat and
    to advances in technology during the period of development. It
    accelerates the process to field a BMD capability by deferring areas
    that can be improved over time to later builds. Moreover, by
    recognizing elements are part of an overarching BMDS, it expands the
    capability trade space across the entire system. The result provides
    sufficient flexibility to balance effectiveness against cost, and gives
    greater overall responsiveness to address changes in the threat as they
    occur.
        Question. Both the Pentagon and the Congress have been well served
    by the independent assessments of the panels headed by Gen. Larry
    Welch. Will the MDA continue to get unclassified assessments from the
    Welch panel and/or from similar panels?
        Answer. The MDA leadership values General Welch's insight and
    objectivity. We are currently making use of his expertise and advice by
    including him on our Red, White and Blue countermeasures/counter-
    countermeasures evaluation process. We plan to continue to do so in the
    future.
        The newly-formed Missile Defense Support Group and Working Group,
    as well as others such as the Defense Science Board, RAND Corporation,
    National Academies of Science and Engineering, and JASONs will serve as
    independent assessment panels for MDA.
        Question. If so, will those assessments, or unclassified versions
    of classified assessments, be made public, as they sometimes were in
    the past?
        Answer. To the extent possible, consistent with security
    considerations, we intend to make the results of these assessments (or
    an unclassified version of them) public on a case-by-case basis.
        Question. What is the current status and funding of the Red, Blue,
    and White teams created to increase the robustness of the
    countermeasures element of the missile defense testing program, and how
    are they being integrated into the MDA's missile defense development
    program?
        Answer. Fiscal year 2002 funding for the Countermeasures/Counter-
    countermeasures (CM/CCM) program is $18.62 million. Funding for fiscal
    year 2003 is $30 million. The CM/CCM program now features two separate
    adversary teams, Red and Black, to identify potential countermeasures.
    The Red Team, limited to open source information on the Ballistic
    Missile Defense System (BMDS), provides an ``outsider's'' view of the
    BMDS and its potential susceptibilities. The Black Team, with full
    access to all technical information on the BMDS, provides an
    ``insider'' aspect. The White Team approved the first adversary
    countermeasure on January 31, 2002. The Blue Team is currently
    assessing the performance of the BMDS against this countermeasure and
    developing potential solutions to mitigate risks.
        The CM/CCM program transitions Blue Team solutions with significant
    potential to improve the performance of the BMDS against
    countermeasures to a development and test program to demonstrate
    capability improvements. Solutions that successfully demonstrate the
    potential to improve our capabilities against countermeasures may then
    be programmed for integration into BMDS block upgrades.
                                     ______

                Questions Submitted by Senator Dianne Feinstein
                                nuclear warheads
        Question. Recent media reports indicate we may be once again
    considering the use of nuclear-tipped warheads as part of a national
    missile defense system. Many feel this new initiative indicates there
    are problems with the ``hit to kill'' approach (no dedicated warhead,
    rather a kinetic impact). Additionally, a nuclear detonation at any of
    the three flight trajectories (boost, mid-course or terminal) will have
    grave consequences in terms of EMP (electro-magnetic pulse)
    interference with satellites, as well as nuclear fall-out over
    populated areas. Given the negative strategic, political and health
    ramifications of such a proposal, should we be considering it as an
    option?
        Answer. MDA is not designing, developing, or producing nuclear-
    tipped interceptors. In fact, one of the benefits of a layered missile
    defense system is the potential to intercept ballistic missiles in the
    boost phase, so that the scenario described could be avoided
    altogether. Matters related to your question are under the cognizance
    of DTRA.
                                     costs
        Question. The 2003 defense budget request contains a significant
    amount of money for missile defense. Given the high costs that have
    already been projected for strictly RDT&E (Research, Development,
    Testing and Evaluation), can you assure us the program will stay on
    budget? For example, critics claim the cost estimate of Airborne Laser
    (ABL) testing, a subset of missile defense, is projected to increase
    from $10 billion to $23 billion.
        (Source--Phil Coyle, former DOD head of testing and evaluation).
        Answer. We are doing everything we can to make sure that our
    program activities are executed the way we plan them. However, there
    are a number of uncertainties in the missile defense technology
    development area, especially in the area of airborne laser development.
    This is a revolutionary, unprecedented development activity involving
    cutting-edge technologies. Precise estimates of costs and schedule
    projections for this type of development activity are not realistic.
        MDA is committed to manage as best it can to ensure the development
    of an Airborne Laser capability in a fiscally responsible manner.
    Currently, costs are under control.
                                     tests
        Question. General Kadish, in prior statements you indicated you
    would conduct monthly testing in order to either prove or disprove the
    technologies required for a missile defense system. While the rate of
    testing appears to have increased, the quality of the tests continues
    to be a source of contention. Can you confirm that we have in fact
    embarked on an aggressive testing schedule that will adequately address
    the real world intercept and decoy scenarios a missile defense system
    may face? At our current rate of testing and development, when do you
    think we will have the technological maturity to fully field an
    effective missile defense system?
        Answer. I can confirm that we are on an aggressive testing
    schedule. As an illustration, in the last 10 months we conducted 14
    flight tests. In the next 5 months, we plan to conduct 12 more flight
    tests. Our aggressive test philosophy is based on adding complexity
    such as countermeasures in a step-by-step fashion over time. This
    approach allows us to make timely assessments of the most critical
    design risk areas. It is a walk-before-you-run, learn-as-you-go
    development approach with testing in more realistic operational
    scenarios occurring later in the test cycle. Testing activities are
    stepping up the pace and provide critical information that reduces
    developmental risk and improves our confidence that a capability under
    development is progressing as intended. While our tests show
    increasingly capable systems, the timeline to deploying parts or all of
    the BMD System is dependent upon the needs of the nation. As prototypes
    and test assets become available, they could provide early capability.
    As in all defense systems, the military utility of a proven capability
    will be a major factor in deciding whether and when it is deployed. Our
    concept calls for the Secretary, with input from the Senior Executive
    Council, and based on recommendation by the Director, MDA, and the
    Military Services, to decide whether to use RDT&E assets for a
    contingency or emergency deployment. For other than an contingency or
    emergency deployment (i.e., to transition an element to procurement and
    operations), the Director, MDA, would recommend that the element should
    be considered for transition, and after approval by the Senior
    Executive Council, USD(AT&L) would establish necessary product teams to
    support a production decision by the DAB. USD(AT&L), as the Defense
    Acquisition Executive, would sign any resulting Acquisition Decision
    Memorandum for an element's production.
                            general/budget oversight
        Question. Secretary of Defense Rumsfeld announced in January a re-
    organization of our missile defense efforts, creating the Missile
    Defense Agency, which you head. The current fiscal year 2002 Defense
    Authorization bill included several new reporting requirements that
    were applied to the Ballistic Missile Defense Organization and various
    organizations, such as the Director, Operational Test and Evaluation
    (DOT&E), that have some oversight or review responsibilities for our
    missile defense program. When do you expect to finish the report to
    Congress on cost, schedule, testing and performance goals for ballistic
    missile defense programs required under Section 232 of the fiscal year
    2002 defense bill, which was due on February 1 of this year?
        Answer. We believe we have satisfied that requirement with the
    details provided in our annual budget submission, delivered to Congress
    earlier this year. The fiscal year 2003 budget estimate provides
    information on long-term program goals. Specifically, the estimate
    provides funding requirements for the next six years, by year. It also
    provides schedule, including hardware and software deliveries, to the
    extent known, and planned decision points and test events for all
    program activities at least through completion of the planned testing
    and evaluation of the prototype.
                             test bed/x-band radar
        Question. In earlier years, we were told that the X-band radar on
    Shemya Island was critical to the effectiveness of the national missile
    defense. Now your R-2 documents show that you plan ``initial
    development of a Test X-Band Radar (XBR),'' but it is unclear if that
    will be at Shemya Island or not. Where will the Test XBR be located? If
    it is not at Shemya Island, how will this affect the ``contingency
    capability'' you plan to deploy at Fort Greely? And is it not correct
    that, even with an upgraded COBRA DANE radar on Shemya Island, the
    ``contingency capability'' will be severely limited in its
    discrimination capabilities?
        Answer. The revised GMD program concentrates on development of the
    initial GMD parts of the BMDS Test Bed by the end of fiscal year 2004
    rather than on deployment of a specific system. As we examine the
    overall BMDS and potential architectures for the expanded RDT&E
    program, MDA has not determined the optimal location for an XBR. It
    would be premature to commit to any specific site as part of the BMDS
    Test Bed if it were not going to be part of an operational system. As
    such, the decision on the XBR at Shemya can be postponed.
        The critical functions to be performed by an XBR are to detect,
    acquire, track, and discriminate. Other radars and surrogates will be
    included in the Test Bed--such as the COBRA DANE, the Navy's AEGIS, the
    XBR-P at RTS, and the FPQ-14 Radar in Hawaii--and contribute to the
    performance of these functions to a greater or lesser degree.
    Discrimination is the function done most effectively by the XBR, but
    even this function can be performed in part by the EKVs on-board
    sensors and computer. Even in a system that includes an XBR, the final
    discrimination and target selection will be performed by the EKV. Any
    contingency capability will provide a militarily useful capability that
    we do not now possess against the threat expected at that time.
                             oversight and test bed
        Question. All of this work to construct the test bed is being done
    under RDT&E, rather than under Military Construction. You are, you say,
    now using a ``spiral development'' process, where you will use block
    upgrades to gradually improve existing capabilities. Also, following
    Secretary Rumsfeld's January announcement, you are exempt from several
    oversight requirements, such as producing Operational Requirements
    Documents, or ORDs, until you enter the transition phase after a
    decision has been made to procure the system. Given the ``Block''
    nature of your approach, and your intent to have the capability to
    field other test systems beyond the interceptors at Fort Greely with
    ``contingency capabilities,'' at what point in the process does the
    ``Block'' upgrades shift from RDT&E to Military Construction budgets,
    from exemption from ORDs to requirements for them? Is there anything to
    stop you from, under the RDT&E budget and spiral development, adding
    five more ``test'' interceptors every two years, until you have fielded
    20 or 40 or 100 interceptors, without ever entering the transition
    phase, without ever using Military Construction funds, and without ever
    being required to produce an ORD?
        Answer. The fiscal year 2002 Authorization Act authorized the
    Missile Defense Agency to use RDT&E funds for construction projects to
    establish and operate the Missile Defense System Test Bed. The
    authority was capped at $500 million. This cap would not allow the
    Missile Defense Agency to periodically add RDT&E funded ``test''
    interceptors or other testing infrastructure without Congressional
    action to extend the authority to use RDT&E funds for construction of a
    multi-element Ballistic Missile Defense System Test Bed. The missile
    defense program is subject to extensive, periodic departmental and
    congressional oversight. We will continue to provide detailed budget
    justification materials, an annual BMDS RDT&E Selected Acquisition
    Report (SAR), reports to Congress, and recurring congressional
    briefings. In addition, we are subject to independent review from
    agencies such as GAO. The Department will also conduct detailed and
    frequent reviews of the program. While test assets could be used in an
    emergency, our program plans include transitioning militarily useful
    developed capability to production, which would be governed by an ORD.
        Furthermore, while the Test Bed could provide a limited contingency
    capability, it could not meet the requirements for missile defense as
    envisioned by the National Missile Defense Act of 1999. Formal
    procurement and operation require a capability-based ORD. The ORD will
    be developed in the transition phase and be based on capability
    definitions determined in coordination with the Services. The
    capability-based ORD will be brought through the traditional Joint
    Requirements Oversight Council (JROC) process prior to the Procurement
    and Operations phase.
                                midcourse budget
        Question. Although it is somewhat difficult to track because of the
    switch away from individual system budgets to more broad Terminal,
    Midcourse, and Boost phase budgets, it seems that after a very large
    increase in the budget in fiscal year 2002 for the Midcourse Defense
    Segment, that budget is now being reduced fairly dramatically, from
    $3.76 billion to $3.19 billion. What is the reason for such a drop in
    funding? Are you having trouble actually spending all of the
    substantial increases in funding that you got this year? That overall
    budget, however, also shows an enormous increase by 2005 in the budget
    for the Sea-based Midcourse Defense, from $426 million in fiscal year
    2003 to $742 million on 2005. What is the justification for that
    increase?
        Answer. MDA has requested funding necessary to carry out the
    described tasks in both fiscal year 2002 and fiscal year 2003. The
    higher spending in fiscal year 2002 is due in part to the ramp up of
    the BMDS Test Bed development and construction. MDA is not having
    trouble spending the funding that was authorized and appropriated. In
    fact, we expect to obligate over 90 percent of these funds by the end
    of fiscal year 2002. The increase in funding for the Sea-based
    Midcourse Defense (SMD) element of the Ballistic Missile Defense System
    between fiscal year 2003 and fiscal year 2005 can be attributed to the
    fact that SMD Block 2008/2010 will be engaged in concept definition
    work in fiscal year 2003/2004, with the actual engineering of the SMD
    Block 2008/2010 beginning in earnest in fiscal year 2005. This is in
    addition to the ongoing development of the Aegis LEAP Intercept 2004
    Test Bed.
                                     ______

                Questions Submitted by Senator Pete V. Domenici
                                 airborne laser
        Question. General, it has come to my attention that since MDA took
    over the ABL program from the Air Force, testing for knocking down an
    in-flight ballistic missile has been pushed back by one year to 2004.
        Would you please comment on what lead to this schedule change in
    ABL testing, and would you outline what the modified testing program
    will look like?
        Answer. The ABL program was restructured to meet MDA's management
    strategy of lower risk and higher schedule confidence for all Ballistic
    Missile Defense System (BMDS) elements. The schedule for the original
    ABL acquisition strategy focused on one test aircraft, the PDRR
    aircraft, now called Block 2004 ABL. The strategy was to immediately
    transition to an Engineering and Manufacturing Development aircraft
    followed by a production decision. This was an aggressive schedule,
    relying upon the ability to make a production decision with only a
    limited amount of actual flight test data from one aircraft. The
    strategy also called for rapid prototyping to enhance capability
    between the PDRR and the EMD/production representative systems.
        The new MDA ABL strategy seeks more actual flight test data and
    technology maturity through the development of a more advanced
    prototype. This spiral strategy will reduce concurrency, provide
    increased duration for testing, and extend manufacturing durations for
    unique high energy laser and optical components.
        Question. Also, it is my understanding that MDA plans to apply the
    principles of spiral development to ABL. Could you give us a sense of
    how this will impact the overall schedule of the program, and how will
    it help get ABL into operation sooner?
        Answer. Spiral development is an iterative process where the user,
    tester, and developer continually interact, providing ongoing feedback
    to help develop the best capability within a block increment. This
    process facilitates more timely capability trades and reduces decision
    cycle time. This process can accelerate ABL to operational status
    sooner than the previously used requirements-based approach since the
    warfighter can accept the system at a given point during development,
    once a militarily useful capability has been demonstrated, rather than
    forcing the expenditure of extra time and funds to reach inflexible,
    predetermined requirements.
        Question. Two final questions on ABL--first, are you proceeding
    with lethality tests at Kirtland Air Force base? Secondly, could you
    tell me about the changes MDA has proposed to the ABL Environmental
    Impact Statement? I understand that MDA held public hearings on this
    issue just this week in Albuquerque and I am curious to know if you
    received any feedback on those hearings.
        Answer. Yes, we are proceeding with lethality tests at Kirtland Air
    Force Base as planned.
        MDA is preparing a supplement to the 1997 Final Environmental
    Impact Statement (FEIS) to cover specific proposed test activities and
    locations identified since the FEIS. These activities include ground
    tests of the tracking and beacon illuminator lasers, and the surrogate
    high energy laser over a 12-15 km distance at Edwards AFB. They also
    include flight tests of the lasers using airborne target boards at
    White Sands Missile Range.
        In general, there was little public concern raised at the public
    scoping meetings held as part of the Supplemental EIS environmental
    review process. A total of four public scoping meetings were held: two
    in California (Lancaster, CA on April 1, and Lompoc, CA on April 3) and
    two in New Mexico (Albuquerque on April 15 and Las Cruces on April 17).
    No one provided comments for the record at the public meetings in New
    Mexico. Five people provided comments at the California meetings. Two
    spoke in favor of the proposed action, and three people indicated
    concerns about potential impacts.
                                  wsmr testing
        Question. As you know General, White Sands Missile Range hosts
    testing for both the Theater High Altitude Area Defense (THAAD) and the
    Patriot Advanced Capability 3 (PAC-3). Could you talk about what you
    have learned from the data you collected following the PAC-3 testing in
    February? I understand that it missed its cruise missile target, have
    you determined why? Is this a serious setback for your plans to proceed
    with full-rate production of PAC-3?
        Answer. The mission conducted in February was a partial success, as
    the majority of objectives were met or partially met. The principal
    focus of the test was to assess PAC-3 performance in a simultaneous
    engagement against multiple air-breathing threats. The most stressing
    of the three engagements was the successful intercept with a PAC-2
    missile of an attacking aircraft employing a weave maneuver and
    electronic countermeasures. Another PAC-2 engaged, but failed to
    intercept the subscale airbreathing threat (ABT) due to a radar
    transmitter fault just prior to warhead fuzing. The fault interrupted
    the terminal guidance processing, and prevented uplinking the fuze-
    enable command to the interceptor. The system went into auto-recovery
    (within one second) in time to support the successful PAC-2 engagement
    of the aircraft. The PAC-3 engaged, but failed to intercept the cruise
    missile, due to the Fire Solution Computer incorrectly calculating the
    Predicted Intercept Point. This led to inaccurate missile cueing. We
    have determined that the missile performed nominally, however without
    an accurate cue the target remained outside the field of view of the
    missile seeker. The Army Lower Tier Project Office and the prime
    contractors have reviewed the OT-3 data and have charted a course for
    both near-term and long-term improvements to the PAC-3 Missile Software
    and Ground System Software. Operational testing of PAC-3 is continuing
    and we remain on track to conduct a production decision review of the
    PAC-3 element this fall.
        Question. With respect to THAAD, when will you resume testing and
    what factors will determine this? Is full-rate production still on
    target for 2008?
        Answer. THAAD Flight Testing will resume at WSMR in the 4th quarter
    of fiscal year 2004. Prior to flight testing, THAAD is undergoing
    rigorous ground testing over the next two years to ensure the highest
    probability of success in developmental and operational flight testing
    with production representative missiles and radars. To vastly improve
    quality, reliability, and producibility, every component of the THAAD
    missile, radar, BM/C2 and launcher was redesigned over the past two
    years, and will culminate in a Critical Design Review in early fiscal
    year 2004. Additionally, engineering level testing (wind tunnel, shock,
    vibration, thermal, and other environmental and hardware-in-the-loop
    testing) is occurring over the next two years to verify designs as they
    are being completed. I am confident that should the Department decide
    to field THAAD in its current configuration as part of our BMDS block
    construct, we will be able to enter the production phase by 2008, if
    not earlier.
                                     ______

               Questions Submitted by Senator Christopher S. Bond
                                      sbir
        Question. On January 29, 2002, Senator Kerry and I sent a letter to
    Secretary Rumsfeld concerning a provision in the Fiscal Year 2002
    Defense Appropriations Act (H.R. 3338/Public Law 107-117) that exempted
    the Department of Defense's ballistic missile defense programs from
    full participation in the Small Business Innovative Research (SBIR)
    Program. On March 1, 2002, I received an interim response. I have yet
    to receive a final response from the Department. When will this
    response be forthcoming and does the Missile Defense Agency (MDA)
    intend to honor its full contribution to the SBIR program in lieu of
    the exemption contained in Public Law 107-117?
        Answer. The OSD Comptroller's Office has advised us that the final
    reply, dated April 17, 2002, has been forwarded to you and Senator
    Kerry. MDA intends to fully participate in the SBIR program in fiscal
    year 2002 and the Department's response reflects this commitment.
        Question. As the fiscal year 2003 appropriations process is
    underway, will MDA assure that the agency will not seek any reduction,
    legislatively or otherwise, in its SBIR obligations for fiscal year
    2003? Will MDA also notify me immediately if MDA becomes aware of any
    proposed or pending legislative provision that would limit MDA's SBIR
    obligation for fiscal year 2003?
        Answer. MDA is not seeking any reduction to its SBIR requirement
    for fiscal year 2003. However, the OSD Comptroller has initiated a
    legislative proposal to clarify the fiscal year 2002 language, should a
    similar provision appear in the fiscal year 2003 legislation, to ensure
    that any SBIR limitation for MDA can only be interpreted as a floor,
    not a cap, thus leaving fully available the flexibility for the
    Department to increase the MDA's SBIR participation to the full amount
    required by the SBIR Act.
        Question. At the National Defense Industrial Association in April
    2001, Mr. Richard Sokol of MDA made a speech on your behalf citing
    successes that the Ballistic Missile Defense Organization (the
    predecessor to MDA) has had with the SBIR and the Small Business Tech
    Transer (STTR) Program. What is MDA doing to strengthen these programs
    and how is MDA assisting the development and commercialization of
    technologies and products developed through these programs?
        Answer. MDA considers the Small Business Innovative Research (SBIR)
    Program a valuable resource. MDA considers SBIR a significant
    opportunity to reach out to the Small Business Community for products
    that will support our mission, and supports the dual-use nature of the
    SBIR as being advantageous to MDA and the nation. The MDA program
    roadmap will be employed to identify the opportunities where SBIR can
    be made a partner. To strengthen the program, an MDA SBIR Steering
    Group, under the direction of Rear Admiral Paige, has been empowered to
    lead this process, while an MDA SBIR Working Group has been established
    to provide coordination for SBIR topics, evaluations, and execution.
    MDA conducts an extensive outreach program, participating in
    conferences and trade shows around the country to specifically
    encourage Small Business participation in the MDA SBIR Program.
                                     ______

              Questions Submitted by Senator Kay Bailey Hutchison
                              airborne laser (abl)
        Question. General, the President's budget submission reflects a
    restructuring of the ABL program. Are you confident that the Boeing-led
    contractor team will be able to follow this more realistic plan?
        Answer. MDA conducted an extensive program assessment for the ABL
    element and restructured the program to reduce risk and increase
    schedule confidence. We are confident that the current schedule can be
    maintained, provided no unforeseen technical challenges arise. We will
    continue to evaluate the program to ensure satisfactory progress.
        Question. ABL appears to be a system that holds great promise for
    destroying missiles in the boost phase. With its impending entry into
    service--and realizing that some facilities will have to be constructed
    to adequately house this new system--when will the site selection be
    made for the ``bed down'' location for this system and when will the
    criteria for this selection be identified?
        Answer. I deferred this question to the Air Force, as they are the
    responsible agency. They have provided the following information.
    Determining the criteria for selection of the ABL ``bed down'' location
    is an ongoing process and the responsibility of the Air Force's gaining
    command, Air Combat Command. The process will optimize aircraft,
    mission, and operations requirements to identify usually 2 to 3
    potential locations. This process is underway for ABL but not complete.
    The notional timeline for ``bedding down'' the ABL contains several
    significant events: conducting a site survey of candidate locations-
    approximately 1 year, completing environmental requirements such as an
    impact statement--approximately 2 years, and constructing facilities--
    approximately 2-3 years. Site selection will come after the completion
    of the environmental impact statement process. However, the timing of
    events is determined by working back from the ``bed down'' date. The
    attached chart was provided by Air Force.

                              SUBCOMMITTEE RECESS

        Senator Inouye. General Kadish, on behalf of the committee,
    I thank you very much for your testimony this morning.
        This subcommittee will stand in recess until April 24,
    2002, when we will receive testimony regarding the Department's
    Guard and Reserve programs.
        So thank you very much, General.
        General Kadish. Thank you, Mr. Chairman.
        [Whereupon, at 11:41 p.m., Wednesday, April 17, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    April 24.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2003

                                  ----------

                           WEDNESDAY, APRIL 24, 2002

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:12 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Daniel K. Inouye (chairman)
    presiding.
        Present: Senators Inouye, Dorgan, Kohl, Stevens, Cochran,
    and Domenici.

                             DEPARTMENT OF DEFENSE

                             National Guard Bureau

    STATEMENT OF LIEUTENANT GENERAL RUSSELL C. DAVIS,
                USAFR-NG, CHIEF
    ACCOMPANIED BY:
            LIEUTENANT GENERAL ROGER C. SCHULTZ, USAR-NG, DIRECTOR, ARMY
                NATIONAL GUARD
            BRIGADIER GENERAL DAVID BRUBAKER, USAFR-NG, DEPUTY DIRECTOR,
                AIR NATIONAL GUARD

                 OPENING STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. Ladies and gentlemen, first, my apologies
    for being late. As you know, I am very, very seldom late, but
    we did have an emergency.
        Today the subcommittee will receive testimony from General
    Davis, General Schultz, and General Brubaker of the National
    Guard. They will be followed by a panel from the Reserves
    consisting of Admiral Totushek, General McCarthy, General
    Sherrard, and General Plewes.
        Gentlemen, our active component commanders are fond of
    stating that the country cannot go to war without the
    contributions of the Guard and Reserve. We have seen the
    evidence since September 11th. Guard and Reserve forces have
    fulfilled missions that have grown somewhat familiar over the
    last 10 years. The contributions of the Guard and Reserve
    forces in the area of airlift, aerial refueling, civil affairs,
    security forces and medical support reflect the design of our
    military force structure.
        Perhaps less typical since September 11th is the
    mobilization of the Guard and Reserve forces to conduct
    antiterrorism, force protection and other missions to augment
    or replace active units that are currently deployed. This
    aspect of mobilization reflects preparations for the
    continuance and perhaps expansion of the global war on
    terrorism.
        The Department of Defense is currently weighing how best to
    draw down Guard and Reserve mobilization to a level of 80,000
    personnel from the authorized level of 101,000 and still
    sustain the support necessary for active duty forces. This
    morning we look forward to hearing from our witnesses
    concerning the management of this draw-down, and the
    involvement of the Guard and Reserve in Operation Noble Eagle
    and Enduring Freedom.
        Also of concern to the committee are the longstanding
    issues of fielding of Guard and Reserve equipment and manpower
    funding. Today our witnesses will tell you how the fiscal year
    2003 budget meets those needs.
        I was prepared to call upon Senator Stevens at this point,
    but he is at a very important leadership meeting at this
    moment, but I will call on Senator Cochran.

                       STATEMENT OF SENATOR THAD COCHRAN

        Senator Cochran. Mr. Chairman, thank you very much. I am
    very pleased to join you in welcoming our distinguished panel
    of witnesses today, the Chiefs of the National Guard and
    Reserve Forces of the United States. We appreciate very much
    your dedicated service in support of our national security
    interests. We know that all of you have been participating in
    leading the mobilization of large number of forces, 81,000 I
    think is the current number, in support of deployments around
    the world where our forces are needed now to help protect the
    interests of the United States, and we appreciate your
    dedicated service and your leadership very much. We look
    forward to your testimony and talking with you about the budget
    request that has been submitted for continued support of our
    National Guard and Reserve forces.
        Senator Inouye. Well, shall we begin our hearing with
    General Davis.
        General Davis. Thank you very much, Mr. Chairman and
    Senator Cochran, distinguished members of the committee. It's a
    real pleasure for us to be back here today and an honor to talk
    to you about the National Guard.
        Today the National Guard is deployed all over the world, as
    you both alluded to in your statement, and it is very key that
    we understand where we can play and how we can play as
    guardsmen in support of our national security interests both at
    home as well as overseas. Being unique as the Guard is with
    both a Federal mission and a State mission, it has been a
    challenge since September 11, to say the least.
        We are very busy at the State level. The State active duty
    personnel are being involved in providing force protection and
    security. We are equally as aggressively involved with those
    same kinds of issues in our Federal status, out at Fort McNair.
    The augmentation to the soldiers at Fort McNair have been some
    of our national guardsmen, as they have been all over the
    country.
        Because we are deployed in multiple statuses, it's
    sometimes confusing to people about how the Guard operates, but
    with the outstanding leadership of the adjutants general and
    the Governors in the States, they make it work. At the same
    time, we are able to respond to national requirements and have
    soldiers deployed in northern Washington, southern Washington,
    in Kosovo as well as in Bosnia. As a matter of fact, we have
    had the second opportunity to have command of the Task Force
    Eagle in Tuslik.
        So as we deploy around the world, we want to make sure we
    are doing a number of things for our soldiers and airmen, and
    taking care of them is one of our top priorities, making sure
    they have the things that they need.
        Our priorities in the National Guard start with national
    security here at home, homeland security. That has been our
    mission since 1636 and we continue to do it today, defense of
    the homeland. We are very busy in that mission.
        During an earlier part of the year and last night I had the
    opportunity to be with Senator Stevens at an outstanding dinner
    that was held for Olympians. We had 4,000 people on the ground
    at Salt Lake City during the Olympics to assure that it came
    off without a glitch, and it did, in part because of what the
    Guard did, because they were just part of a major team and
    effort by the State, at the Federal level, and throughout the
    whole military establishment.
        So we are very aggressively involved in homeland security,
    combat air patrols which have been recently reduced, and the
    National Guard has been a large part of that, as well as other
    missions, securing facilities all over this country. So our
    number one mission is homeland security. We want to make sure
    we do that.
        Having said that, though, it is important that we have
    full-time manning of the Guard to ensure that we can take care
    of those men and women who are deployed. Increasing the folks
    deployed to 50,000, Army and Air guardsmen being involved, we
    need to take care of their families at home, we need to take
    care of their records, their pay records and all those things
    at home. We need the full-time manning to do that, to maintain
    the equipment so it is ready to deploy, to make sure that we
    have the right training preparation for our soldiers and
    airmen. Full-time manning remains one of our highest
    priorities.
        Next is modernization and recapitalization of equipment,
    and you talked to that, sir, in your comments, Mr. Chairman.
    You talked about making certain that we had equipment that's
    there, that's prepared to go, we have the right spares, and we
    have the right depots to support. We are replacing some of our
    older equipment with newer equipment, and it has to be
    compatible, consistent and interoperable with the active
    component equipment.
        And last but certainly not least, a major issue for us in
    quality of life is the facilities in which our young people
    work. We don't want them to come into facilities that they are
    not proud of, because that's where they spend much of their
    time during a drill weekend. They are able to accomplish their
    missions if we have the right kinds of facilities and equipment
    that goes in them to perform the mission. We need to secure at
    an even greater level weapons as an example, so we do that, and
    we work that pretty hard.
        So these are our top priorities, these four priorities,
    homeland security, full-time manning, modernization and
    recapitalization of equipment, and our quality of life issues
    in terms of our infrastructure and facilities.
        Thank you for the opportunity to come before your
    committee, and we have asked to join us today and it has been a
    little relief for us, but I did ask, if you don't mind, sir, I
    would like to introduce a couple of special guests we have with
    us today.
        Command Sergeant Major Frank Lever, who is the senior
    enlisted advisor for the Army National Guard, a South Carolina
    guardsman, and as soon as he opens his mouth, you will have a
    little sense of who he is and where he is from, an outstanding
    individual who is the Command Sergeant Major for the State of
    South Carolina National Guard.
        Senator Inouye. Welcome.
        General Davis. Command Chief Valerie Benton, who is our
    senior enlisted advisor of the Air National Guard. She came to
    us from the great State of Wisconsin where she had previously
    been on tour a number of years on active duty.
        The two of them have been out doing great work for the
    Guard, great work for our soldiers and airmen. They have been
    out to most of the airports throughout the country to look at
    the missions they are doing. They have gone out with the
    soldiers in other missions, with the airmen in other missions,
    as well as overseas. So we are really pleased to have them on
    board.
        It is very key for recruiting and retention, an issue we
    will talk to a little later on today, that we have these two
    folks as well as a large number of their peers at the State
    level talking to our soldiers and airmen. Many issues come up
    as a result of the high op tempo and the level of deployment
    that we have now, so it is very important for us to get the
    feedback on how those soldiers are doing and what kinds of
    issues they are involved in. Many family issues come up during
    that time, many spousal issues come up, so that has been a
    major issue for us, so we are glad to have them on board and we
    thank them for joining us here today.
        Thank you very much, Mr. Chairman, and I stand by to answer
    any questions you may have.
        Senator Inouye. Thank you, General Davis. Now may I call on
    General Schultz.
        General Schultz. Thank you, Mr. Chairman and Senator
    Cochran, and members of this committee. We begin by saying
    thanks. Command Sergeant Major Frank Lever and I have the honor
    of serving as part of the leadership team for the Army National
    Guard. What sets us apart, Mr. Chairman, is our members,
    soldiers, we are 350,000, and their families.
        And today as we talk to you about a different pace across
    the Army Guard, our employers as well are part of this team
    serving our Nation. What's special about them all, they are
    volunteers.
        Today, Mr. Chairman, I am saying to you that the Army Guard
    will meet its end strength. Today we are over just a little bit
    in our prior service and our non-prior service enlistments,
    which is good news really. Our retention is higher than
    originally planned, which is good news really. But I want to
    note, I watch end strength very carefully and it's possible for
    us today in the Army Guard to overdrive our strength to the
    point that we wouldn't have enough money to pay for the
    membership. And so I very carefully watch how many soldiers we
    have in the States as we roll off the national figures, are
    members of the Army National Guard, so I will not overdrive the
    end strength. But I just want you to know, we will meet our end
    strength with quality soldiers from across this Nation.
        Now the Chief has already mentioned our priority for full-
    time manning, and I want the members of this committee to know
    with your support last year, and as you consider what full-time
    manning means to the Army National Guard and our readiness, as
    you consider the number that would be distributed to States,
    last year's growth in military technicians and active Guard and
    Reserve members went to the States and territories, and the
    District of Columbia. We kept none of those members on Title X
    tours, they went to the field as they promised last year they
    would.
        Mr. Chairman, you know well the pace of activity in the
    Army today and the Guard today and we have tremendous depth in
    our organizations. We are not hurting in terms of the activity
    or tempo of things, but I want you to know, the pace is up a
    bit. Last year we trained in 89 countries.
        It has been my intent to scrub all the work load across all
    the States and territories so that everyone shares a part of
    the mission. And as we talk about training or deployment or
    missions, it's our sense that we have the capacity in this team
    properly managed, and properly scheduled, to satisfy the needs
    of our Nation.
        As we talk about the mobilization cap in the Army today,
    we're capped at 26,000 members in the Guard and Reserve. The
    Guard has just slightly over half of that 26,000. We are
    planning missions for more than that, as you are aware, so we
    have the potential to go beyond the 26,000, but today we're
    staying within the mobilization limits driven of course by
    circumstances that are beyond our reach inside the Army or the
    Guard.
        Mr. Chairman, some years ago you recall we talked about
    integration in the Army and some would argue today that unit
    integration has gone to a level that many never expected. As
    the 29th Division's Virginia-based headquarters comes back home
    from Bosnia, members of the 155, Senator Cochran being from
    Mississippi, they were also a part of that rotation, with
    outstanding duty to the person, and the employers and their
    families supported that rotation.
        I have not had one complaint from an employer so far in our
    rotational schedule which is now increased, but we're alert to
    long-term implications of deployments that run 6 months, 12
    months and perhaps even beyond, very sensitive to that. And I
    just say that as long as we plan years in advance, tell the
    employers, tell the families, tell our members what's expected,
    it's my anticipation that we will be able to maintain the
    strength across the Army Guard and maintain mission capacity as
    well.
        As I talk with you about mobilization since September 11, I
    just want to reinforce one point, and that is integration in
    our Army is really important. That means equipment must be
    compatible, for example aircraft, trucks, and communications
    systems. On very short notice our members are called to active
    duty these days, and so the point you raised at the opening is
    something that resounds across our formation to be sure.
        Mr. Chairman, the Guard and Reserve appropriations, this
    committee has helped us with that requirement in the past and I
    want you all to know that as we talk about the support of your
    committee, those items of equipment go to the field, they go to
    the units and they change the readiness of our units. Last
    year, for example, we bought trailers for trucks, we had the
    authorization through the normal process budget activity to buy
    the tractors, so we took the appropriation from this committee
    and applied it to the trailers, which is really the complete
    system when you think about total requirement.
        My final point, Mr. Chairman, there is a story that the
    Army Guard is reluctant to change and I just want to say, we
    are converting today from combat arms duty, 21,900 soldiers, to
    new duties, to support related jobs. And we can take all of
    those kinds of new skills and apply them to homeland security
    missions and we could also deploy them around the world as the
    Army requires.
        Mr. Chairman, on behalf of our soldiers, I say thanks.
        Senator Inouye. Thank you very much, General Schultz.
    General Brubaker.
        General Brubaker. Mr. Chairman and members of the
    committee, on behalf of the 108,000 citizen airmen of the Air
    National Guard, I wish to thank you for the opportunity to be
    here today. Because of your past support the Air National Guard
    is trained and equipped to instantly respond to America's call
    to arms. For the past 7 months we have been engaged in
    continuous operations fighting side by side with our total
    force partners in a war on three fronts. The volunteer spirit
    of our Air National guardsmen and women guarantees we will
    continue to fight for as long as it takes.
        The first aircraft scrambled in the skies above our
    Nation's Capital on September 11th were Air National Guard F-
    16s returning from a training mission. Within hours, 18 tanker
    wings were generated, 34 fighter units were ready, and 179
    missions were flown on the first day. As of today we have
    logged over 100,000 hours and over 30,000 sorties. In addition,
    thousands of combat support personnel across every major
    functional area have leaned forward to serve around the world
    and at home.
        The Air National Guard currently provides more than 25,000
    men and women to operations Noble Eagle, Enduring Freedom, and
    the Aerospace Expeditionary Force. Today those members include
    over 6,000 volunteers, 17,000 mobilized men and women, a
    sustained 1,300 Aerospace Expeditionary Force (AEF)
    participants as well as over 18,000 full-time technicians and
    11,000 Active Guard/Reserve Program (AGR) personnel who support
    our day-to-day operations. The Air National Guard makes this
    remarkable contribution to our Nation's defense in large part
    because of this committee's exceptional support, especially in
    providing funds for our National Guard and Reserve equipment
    account. This assistance is absolutely essential in order to
    provide us with the modern equipment and transformational
    capability that we seek, and quite frankly, our readiness
    levels depend on it.

                          LIGHTNING II TARGETING PODS

        Procurement of 24 additional Lightning II targeting pods
    remain our number one priority. This capability will greatly
    enhance our ability to support combat taskings. In addition,
    increased antiterrorism, force protection requirements are also
    necessary to reduce the threat to our units and satisfy Air
    Force taskings.

                                     KC-135

        When congressional authorization released up to 100 wide
    body tankers in the fiscal year 2002 budget, we now have the
    additional possibility of replacing our aging E models with
    both flow-down KC-135-Rs from the active duty fleet, as well as
    new tankers for selected Air National Guard units.

                                      C-17

        In regards to the C-17, we are progressing with the
    conversion at Jackson, Mississippi. We continue to work towards
    a fiscal year 2004 bed down, but manpower and some equipment
    shortages still remain significant. We support the Air Force's
    C-17 multiyear procurement which should enable more units to be
    assigned to the Air National Guard. In that same light, we
    believe that our Air National Guard fighter units are ideally
    suited to fly both the F-22 and joint strike fighter.
        Experience has shown that given the opportunity, the Air
    National Guard can do any mission. It is imperative that we be
    included up front in future unit equipped bed down plans in
    order for the total force to meet the challenges of tomorrow.

                                QUALITY OF LIFE

        Two of our quality of life priorities, family readiness and
    support and the child care alternatives pilot test program are
    not funded. We are placing untold pressures on the families of
    our Air National Guard members as they serve their country
    selflessly. Today nearly 50,000 Air National Guard member
    families are in immediate need of dedicated full-time family
    readiness and support services.

                               HOMELAND SECURITY

        On a final note, we are a capabilities based force that is
    ready to answer our Nation's call at home or anywhere around
    the world. As we continue to identify and redefine roles and
    missions in regard to homeland defense, we must remember that
    our homeland security capabilities derive from our warfighting
    capability. The Air National Guard is certainly prepared to
    play a significant role in this vitally important area but we
    must also be allowed to use our combat proven capabilities to
    continue to support other major wars and contingencies
    throughout the world.

                               PREPARED STATEMENT

        With your continued support, the Air National Guard will
    remain an indelible part of American military character as a
    powerful expeditionary force, domestic guardian and caring
    neighbor, protecting the United States of America at home and
    abroad.
        Thank you once again for all you do for the Air National
    Guard.
        [The statement follows:]
       Joint Prepared Statement of Lieutenant General Russell C. Davis,
       Lieutenant General Roger C. Schultz, and Brigadier General David
                                    Brubaker
               national guard posture statement--fiscal year 2003
                     protecting america at home and abroad
                               executive summary
        ``America was not built on fear. America was built on courage, on
    imagination and an unbeatable determination to do the job at hand.''--
    --(President Harry S. Truman--January 8, 1947)
        The job of safeguarding our national security is fulfilled through
    the courage and determination of our diverse and capable Armed Forces.
    The National Guard, an integral component of our Armed Forces, is
    committed to supporting our national security strategy at home and
    abroad.
        Our goal in this year's Posture Statement is to highlight the
    unique and critical capabilities of the Army and Air National Guard.
    This Executive Summary is intended to give you a clear and concise
    overview of our top legislative priorities for fiscal year 2003. As we
    accomplish the business of the National Guard in 2002, you will see
    that our vision encompasses the future protection of this country. The
    attached compact disc provides as a more detailed reference tool for
    use throughout the year.
        I hope you will invest the time to read this summary. In return, we
    will illuminate the most important issues facing the men and women of
    your National Guard as they strive to meet the challenge of protecting
    America's interests at home and abroad.
    Full-Time Manning
        The National Guard remains an organization of predominately part-
    time citizen-soldiers and airmen. However, about 17.5 percent of our
    total Army and Air National Guard structure is manned full-time. This
    professional cadre of military technicians and full-time military
    personnel provides the core of experience and stability necessary to
    maintain our facilities and equipment, train our personnel, and
    administer the daily operations of our force.
        At one time, these personnel were sufficient to meet the demands of
    the National Guard's missions during the Cold War. Since the Gulf War,
    the Total Force Policy of our national military strategy has
    accelerated National Guard integration with the active component
    services in performing daily missions at an increasing pace.
    Correspondingly, the demands placed upon the National Guard have grown,
    stressing the ability of our full-time forces to support these
    missions. The additional capability required to fulfill our traditional
    role in Homeland Security further exacerbates the problem of keeping
    pace.
        Providing enough full-time personnel to maintain our operational
    momentum is our most pressing need in the evolving new threat
    environment. It is also the lynchpin to readiness. Our full-time cadre
    is the bridge to rapid surge capability and the transformation from
    peacetime to wartime posture. Army National Guard full-time support
    authorizations presently fulfill only 57 percent of the total validated
    requirement. This places at risk the National Guard's ability to
    provide adequate physical security, an initial response capability, and
    a community presence for an anti-terrorist/force protection capability.
    Homeland Security
        America's history, heritage and community ties have always given
    the National Guard cause to execute our constitutional mission ``To
    provide for calling forth the militia to execute the laws of the union,
    suppress insurrections, and repel invasions'' (Art. 1, Sec. 8, Clause
    15). The unfolding events since September 11th have given new urgency
    to that enduring language.
        Our dual status as a state resource that can be accessed for
    federal roles makes the National Guard a cost-effective and uniquely
    flexible instrument of national defense. This is how we protect America
    at home and abroad. The military discipline, training and equipment
    provided by the United States Congress is used frequently in virtually
    every state and district to respond to civil emergencies. Responding to
    a Homeland Security incident is comparable in many ways to responding
    to any other disaster. It requires many of the same disciplined and
    trained personnel and command and control resources we already employ
    in our wartime role.
        Strengthening the security of the American homeland will be a joint
    operational endeavor requiring unprecedented integration between all
    appropriate state and federal, civil and military capabilities. The
    National Guard brings to this effort a unique level of experience and
    expertise in these areas. Its dual state-federal mission has provided
    it with an unmatched level of domestic civil-military operational
    experience. In addition, the National Guard Bureau's long-standing
    position as the nexus between state and federal military organizations
    makes it a natural base upon which to build the stronger federal-state
    integration that will be required for the future.
        As we prepare the nation for wartime, we must refine the National
    Guard's role with more clarity in respect to its relationship with the
    Department of Defense. The National Guard is best situated to
    coordinate the efforts of local, state, and federal agencies so as to
    provide the nation with the best possible disaster response
    capabilities.
    Modernization/Recapitalization
        Our National Guard, like every modern military force, is dependent
    on state-of-the-art equipment. In the past, our equipment has been
    ``cascaded'' down from the active component services as they
    modernized. Consequently, the National Guard typically operates and
    maintains the oldest equipment in an already aging fleet. The stability
    of our workforce gives us an edge when maintaining this aging
    equipment; however, no matter how skilled the mechanic, aging equipment
    and a lack of spare parts can and does result in lost readiness. It
    becomes less cost-effective to maintain equipment that has aged to the
    point where there is no longer any appreciable return on investment.
    For this reason, it is important to modernize and/or recapitalize our
    existing capability as the best option to ensure we remain
    interoperable with other U.S. Armed Forces.
        As we engage in integrated operations with our active component
    counterparts, interoperable equipment becomes even more critical.
    Because the Total Force is interdependent, our success in supporting
    the mission is complicated by the fact we often have disparate
    equipment. When the active component transforms to achieve more modern
    capabilities, it will be doubly hard for the National Guard to keep
    pace. As a result, we recommend the Total Force be viewed as a total
    transformational force in order to retain interoperability and to
    maintain full-spectrum capability.
        America can no longer afford to wait a generation for modern
    equipment to ``cascade'' down to the National Guard if it wants to
    maintain the Total Force as an integrated structure. When our military
    modernizes to improve its capabilities, we must include the National
    Guard as a full partner. When new threats create new technologies and
    new responses, integration demands inclusion of the National Guard.
    Infrastructure/facilities
        Like people and equipment, infrastructure is critical to the
    readiness of the National Guard. Providing an efficient work
    environment is a key ``quality of life'' issue. Aging facilities and
    outdated utilities are a drain on resources, absorbing disproportionate
    maintenance costs and degrading the efficiency of the workplace.
        The National Guard has more than 3,000 facilities in 2,700
    communities in every state, territory and the District of Columbia. Our
    sites lack the extensive infrastructure (dormitories, hospitals,
    schools etc.) typical of active component posts and bases; they rely
    upon the community for this support. As a result, our facilities tend
    to be highly visible and are a shared community resource.
    Unfortunately, many of them are rated among the lowest in terms of
    quality and readiness status.
        To merely maintain them in their present condition is a significant
    challenge in the neighborhood of $350 million per year. To recapitalize
    and upgrade the readiness of all ARNG facilities would require a 341-
    year cycle at present levels of support. The current Department of
    Defense standard for recapitalization is 67 years. At the 67-year rate,
    the ARNG requires approximately $1.5 billion from fiscal year 2003 to
    fiscal year 2007.
        New and urgent missions such as the Weapons of Mass Destruction/
    Civil Support Teams levy additional requirements for new construction
    to counteract threats to Homeland Security. Nevertheless, the Advanced
    Division Redesign Study, the Interim Brigade Combat Team concept, and
    other organizational constructs are transitioning the National Guard
    from a Cold War force to the lighter leaner force the future requires
    with new correspondingly tailored facilities in which to train.
    Summary
        We have sketched our top concerns as we continue to achieve our
    goal to ``Protect America at Home and Abroad.'' The goal itself is a
    reflection of our constitutional duty to provide for the ``common
    defense''. Our priorities mirror the means to execute that obligation.
    We hope that you will use the attached compact disc to view a much more
    detailed discussion of these priorities as they relate to the Army and
    Air National Guard respectively. You will also find a comprehensive
    description of the significant programs and mission-areas of the
    National Guard.

                                              Russell C. Davis,
              Lieutenant General, U.S. Air Force Chief, National Guard.
                               protecting america
        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 ensures the full commitment of our nation.
        Following independence, the authors of the United States
    Constitution empowered Congress to ``provide for organizing, arming,
    and disciplining the militia.'' However, recognizing the militia's
    state role, the Founding Fathers reserved the appointment of officers
    and training of the militia to the states. Throughout the 19th century
    the size of the Regular Army was small, and the militia provided the
    bulk of the troops during the Mexican War, the early months of the
    Civil War, and the Spanish-American War. In 1903, important national
    defense legislation increased the role of the National Guard as a
    Reserve force for the United States Army. National Guard aviation
    units, some of them dating back to World War I, became the Air National
    Guard, the nation's newest Reserve Component in 1947.
        Our dual constitutional role means our duties do not end at the
    federal level but extend to the states as well. Under state law, the
    National Guard provides protection of life, property and preserves
    peace, order and public safety. These missions are accomplished through
    emergency relief support during natural disasters such as floods,
    earthquakes and forest fires; search and rescue operations; support to
    civil defense authorities; maintenance of vital public services, and
    counterdrug operations.
        Since the founding of the National Guard militias, we have embraced
    the fundamental and enduring goals of maintaining the sovereignty,
    political freedom, and independence of the United States, with its
    values, institutions, and territory intact; protecting the lives and
    personal safety of Americans, both at home and abroad; and promoting
    the well-being and prosperity of the nation and its people.
    National Guard in our Communities
        We are first and foremost an institution of people-soldiers,
    airmen, civilians, families and employees. The National Guard is the
    military face of the nation representing a familiar presence in many
    communities throughout 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 that they see routinely, 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 more than
    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.
    State and Federal Calls to Service
        This community connection brings a unique perspective to the
    culture of the National Guard making it the logical choice for national
    priorities like executing Homeland Security, countering Weapons of Mass
    Destruction (WMD), supporting counterdrug activities, and defending
    against cyber-terrorism. The Army and Air National Guard embrace their
    Constitutional dual-role as both a federal and state force. A role
    that, because of recent events, is increasing at all levels.
        National Guardsmen are under the command of the state governors
    unless the President specifically orders them into federal service.
    Whether they are serving in a state or federal status, members of the
    National Guard bring critical skills and resources to bear during both
    local and national emergencies. When a crisis occurs that overwhelms
    the capabilities of local authorities, the Army National Guard and Air
    National Guard respond to assist as needed. In fiscal year 2001, local
    governments requested emergency support 365 times to assist victims of
    disasters such as hurricanes, floods, fires, droughts, ice storms,
    tornadoes, and terrorist attacks. In response, the Army National Guard
    and Air National Guard provided 382,000 man-days in a State Active Duty
    status to reduce the suffering of affected civilian populations by
    providing requested and required support (e.g. security, power, heat,
    water, transportation, food, shelter and emergency engineering
    support).
        September 11, 2001 was a typical day for the National Guard. There
    were 12,400 National Guardsmen assigned in federal and state missions
    at home and abroad. Over 450 were in State Active Duty status fighting
    forest fires, protecting our communities from natural disasters, such
    as floods and storms, providing drinking water or electrical power, and
    other domestic missions. Nearly 12,000 soldiers and airmen were
    deployed in support of Commanders in Chief or Service requirements
    world-wide in a variety of combat and combat support missions, Bosnia/
    Kosovo, Southern and Northern Watch in Southwest Asia, and the enduring
    air sovereignty mission of Air National Guard and 1st Air Force air
    defense units.
        Within minutes, Air National Guard fighter units were leveraging
    critical combat skills and equipment while performing combat air patrol
    missions, including Presidential aircraft escort, over the nation's
    skies. In New York, National Guard soldiers and airmen responded
    immediately. In all more than 3,000 National Guardsmen supported
    efforts at the World Trade Center site. Eighteen Air National Guard
    refueling wings, multiple strategic and tactical airlift units (C-5, C-
    141 and C-130), along with Army National Guard aircraft, provided
    necessary lift support to the combat air patrols, consequence
    management activities and Enduring Freedom response requirements.
    National Guard units provided rescue support, civil engineers,
    communications and power generation capability, air traffic control,
    medical teams, chaplains and other service support operations, i.e.,
    food and shelter service, public affairs and command and control
    entities.
        Since that tragic day, an additional 19,500 soldiers and airmen
    have been called-up to react to the emergencies resulting from the
    attacks and the continuing war against terrorism. Thousands of other
    National Guard members have also responded by volunteering each day for
    duty. The National Guard's unique Civil Support Teams have responded to
    more than 200 suspected chemical/biological incidents in which they put
    their cutting edge training and technology to precisely the use
    Congress envisioned. In addition, Active Component military
    installations were provided National Guard soldiers for additional
    force protection and critical asset protection.
        Finally, the National Guard responded to the President's request to
    provide airport security to more than 400 airports across the nation.
    Today, the National Guard is not only performing these missions, but
    also deploying combat and support units in operations to defeat
    terrorism around the world. Only two months after the attack on
    America, the National Guard deployed 5,209 personnel on State Active
    Duty and more than 40,000 soldiers and airmen worldwide. This has
    translated into a three-fold increase in our operational tempo since
    the September 11th attacks.
                             national guard bureau
        Under Title 10 of the United States Code, the National Guard Bureau
    is the channel of communications between the military departments and
    the National Guard throughout the 54 states and territories of the
    United States.
        The Chief, National Guard Bureau serves as the senior uniformed
    National Guard officer responsible for formulating, developing and
    coordinating all policies, programs and plans affecting more than half
    a million Army and Air National Guard personnel. Appointed by the
    President, the general serves as the principal adviser to the Secretary
    and Chief of Staff of the Army, and the Secretary and Chief of Staff of
    the Air Force on all National Guard issues.
        The National Guard Bureau leadership also works closely with the
    Joint Chiefs of Staff. Members of the National Guard serve full-time on
    the Joint Staff to facilitate coordination on substantive issues
    pertaining to the National Guard. The National Guard Bureau works in a
    collective manner throughout the Department of Defense to create a
    seamless Total Force.
        For the National Guard to function effectively, NGB maintains
    strong ties with all state and federal activities. Maintaining our
    basic freedoms and providing critical life saving support at all levels
    requires a National Guard that is trained, equipped and ready. It also
    requires the administration, coordination and leadership of a National
    Guard Bureau that is directly connected to all the people it serves.
        This diagram illustrates the interconnectedness and complexity of
    our organization. A complete listing of State Adjutants General can be
    found in the Appendix.
                         a legacy in homeland security
        The National Guard is proud of the legacy of Homeland Security
    handed down by past generations of Citizen Soldiers and Airmen. From
    the first militia in 1636, to the Air National Guard sitting runway
    alert in the 1950s, to the Army National Guard's Nike missile defense
    batteries during the Cold War, to the missions we serve today, Homeland
    Security continues to be part of the heart of your National Guard.
    Defending our Home
        On September 11, 2001, thousands of Americans perished in the
    Pentagon, the World Trade Center and aboard four hijacked airlines.
        This act has brought home the realities of terrorism. This vicious
    attack has also brought to light a fundamental circumstance of our
    situation. That circumstance was best expressed by Secretary of Defense
    Donald H. Rumsfeld, ``We cannot and will not know precisely where and
    when America's interests will be threatened, when America will come
    under attack, or when Americans might die as the result of aggression.
    We can be clear about trends, but uncertain about events. We can
    identify threats, but cannot know when or where America or its friends
    will be attacked. We should try mightily to avoid surprise, but we must
    also learn to expect it. We must constantly strive to get better
    intelligence, but we must also remember that there will always be gaps
    in our intelligence. Adapting to surprise--adapting quickly and
    decisively--must therefore be a condition of planning.''
        The National Guard has time-honored experience responding
    effectively to surprises ranging from wildfires, flashfloods, and
    tornadoes to riots and other emergencies. This was well demonstrated on
    September 11. We moved quickly to stand shoulder-to-shoulder with the
    civil responders, and remain a vital component of the recovery process.
    The machinery of accessibility is working just as it was designed, and
    the National Guard is able to promptly and flexibly meet the levy of
    both the President and the governors in responding to the needs of the
    nation and the individual states. Our dual status is proving to be a
    particularly useful feature of our organization, permitting National
    Guardsmen to be a federal military resource under Title 10 of the USC,
    or a state-controlled law-enforcement and consequence management tool
    under Title 32 of the USC or applicable state laws for State Active
    Duty. Consequently, there are a number of things that functioned
    smoothly as currently designed.
        Large numbers of military personnel and equipment were brought
    rapidly to bear on the mission. Even after the on-site civilian
    Incident Command structure was lost in the collapse of the World Trade
    Center, the New York National Guard was able to effectively receive and
    fill requests for support from the New York Fire Department ``second
    team'' once they were up and running.
        National Guard forces were employed across state lines. New Jersey
    National Guard readily joined in support of the recovery efforts.
        Due to the unique institution of the New York Naval Militia, the
    governor of New York was able to gain access to Navy and Marine Corps
    Reserve assets inside his state as they were needed. The governor was
    able to successfully integrate requested federal forces into the
    response. Although specific to New York, this concept may provide a
    model for integrating the participation of other Reserve Components
    into a governor's response in other states.
        We are proud to have been the ``bench'' for the brave firefighters,
    emergency medical technicians and law enforcement officials at the
    scene of the disasters. We provided medical personnel to care for the
    injured, military police to assist local law enforcement officials, key
    asset protection, transportation, communications, logistics, and a
    myriad of other support functions. We are making our resources
    available as needed, to restore order, stability, and safety to our
    fellow citizens.
        When required to do so, National Guard troops were brought rapidly
    into federal status. Maryland Army National Guard military police units
    were very quickly brought on duty and dispatched to provide security at
    the Pentagon within 24 hours of the attack. Air National Guard fighters
    were on the scene within minutes. Indeed, our immediate execution of
    the President's airport security mission, while remaining under the
    control of the state governors, demonstrated the special speed and
    flexibility of the National Guard even under Title 32.
        On September 27th, President Bush asked the governors to call up
    over 7,000 National Guardsmen to supplement security at the nation's
    420 commercial airports for up to six months. The first National
    Guardsmen were on duty the very next day. Their purpose is not only to
    stop terrorists but also to restore the faith and confidence of the
    public in commercial air travel until more permanent arrangements can
    be made. On November 9th, President Bush authorized an additional 25
    percent manning added for the holiday period until January 6, 2002. Our
    commercial airline industry is a key link in the national economy and
    vital to our nation's interests. The President has invited America to
    ``Get on board, do your business around the country.''
        As of November 26, 2001, over 48,000 National Guardsmen from 54
    states, territories, including the District of Columbia and Puerto
    Rico, had been called to federal service in support of Operations
    ``Noble Eagle'' and ``Enduring Freedom''. We are responding as we are
    designed--``dual-missioned.''
        We are ready and prepared to ``call out more of the National
    Guard'' to ensure that the business of this country can continue to
    function without fear or interruption. There are challenges facing the
    National Guard as it implements and evolves its Homeland Security role.
    None are insurmountable. The mission of the National Guard, like all
    other military organizations, is driven by the roles and capabilities
    needed to meet the threat; and the resources that must be allocated to
    sustain needed capabilities. With support, the National Guard will meet
    the challenge to be ready for all aspects of the important Homeland
    Security mission.
    Preventive Defense
        Preventive Defense is one of the National Guard's federal roles
    that also contributes to homeland security. We are uniquely positioned
    to promote democratic practices abroad and find ourselves in frequent
    demand for overseas cooperative defense programs through the State
    Partnership Program.
                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 nations' 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 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 National Guard's success in promoting democracy abroad
    is the result of the State Partnership Program. To date, 32 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 33 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 National
    Guard members in building these bridges of friendship, we promote
    political ``buy-in'' on national security strategy at the local level.
        Sharpening the military skills of our National Guard members 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 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.
        As part of the National Guard's State Partnership Program, National
    Guard personnel participate in various command-sponsored activities.
    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, U.S. Southern Command's Traditional
    Commanders in Chief 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 National
    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.
    Future of the National Guard in Homeland Security
        Virtually every policy expert in Washington seems to agree that the
    National Guard is a central military institution for the security of
    the homeland. This is a sentiment echoed in the Hart-Rudman report, by
    former generals, and respected authorities all across the spectrum. We
    agree. To arrive at that end state, however, it is not necessary to
    turn the National Guard inside out.
        Various commentators have said that the National Guard should be
    reoriented, reorganized, retrained and re-equipped. In truth, the
    National Guard needs to be empowered for success on both the home front
    and the warfront--precisely where it has always been oriented.
    Initiatives such as the Army National Guard Division Redesign Study
    (ADRS) are underway to help resolve these questions.
                Dual Mission Orientation
        The enduring value of the National Guard has always been its
    orientation on both protecting the lives and property of Americans here
    at home and on going to war to support American interests globally.
        The National Guard has participated with distinction in every major
    armed conflict of this nation and this mission should never be
    diminished. The special utility for the nation is that in addition to
    being a critical war-fighting asset, the National Guard is also a
    crucial source of local and state emergency response support. Both are
    critically important to the nation. Keeping both missions together is
    critical to the future strength of the National Guard. The resources,
    personnel, equipment, and training provided to accomplish the war-
    fighting role are in most cases the same resources that are needed and
    allow the National Guard to accomplish the local and state support
    role.
        One specific example of this ``dual-missioned'' capability is found
    in the combat capability of our F-16's flying over America. Since day
    one, these units rely heavily on Precision Targeting Pods for visual
    identification while at the same time using this critical equipment in
    their Aerospace Expeditionary Force Air Superiority role in Operation
    Southern and Northern Watch overseas.
        The National Guard is willing to take on a greater role in
    performing the Homeland Security mission, however it is more important
    than ever that it maintain its Total Force combat and combat support
    mission capability. All enemies of the United States take note when the
    National Guard is deployed in combat because the enemy identifies the
    National Guard as the grass roots support of the local people in that
    conflict. The National Guard constitutes the local community and the
    state government support of any war effort that our country engages in.
        The capacity of the National Guard Bureau to effectively maintain
    awareness, conduct coordination and provide guidance and resources to
    the National Guard must be strong to meet the needs of Homeland
    Security. The new National Guard Bureau Office of Homeland Security is
    one step in that direction and was an important asset in the nearly
    overnight execution of the airport security mission. As the National
    Guard's part in the security of the homeland solidifies, the National
    Guard Bureau's demonstrated capability and many years of successful
    experience in effectively coordinating across 54 states and territories
    will be put to good use.
    Assessing National Guard Roles In Homeland Security
        As a force consisting of both Army and Air Force assets the
    National Guard Bureau has a wide variety of capabilities that are
    available to support the many facets of Homeland Security. The seven
    mission areas that have been identified within the Homeland Security
    area are: (1) Combating Terrorism; (2) Military Assistance to Civilian
    Authorities; (3) Responding To Chemical, Biological, Radiological,
    Nuclear and high-yield Explosives Incidents; (4) Missile Defense; (5)
    Critical Infrastructure Protection; (6) Information Operations; and (7)
    Protecting the Nation's Sovereignty.
        The National Guard, with its community-based state-organized
    structure, is uniquely qualified and situated to provide a timely
    response. With a military focused force and established command,
    control and communications, National Guard structure addresses these
    mission areas as the front line for the Department of Defense in
    Homeland Security.
                Combating Terrorism
        The National Guard is the primary provider of immediate military
    resources, including units and personnel at the local and state level
    in the combating of terrorism. Again, because they are deployed in the
    state and have an immediate command, control and communications
    capability they can respond quickly to support local and state
    authorities. Within the state, the Adjutant General and the state
    National Guard possess the local knowledge of the terrain, the assets,
    the vulnerabilities and the local and state agencies. This expertise is
    a powerful tool in combating terrorism and, as such, it may be in the
    best interest of the nation to use this expertise when the application
    of federal military assets is required. The National Guard can assist
    in the mission of combating terrorism by providing a coordinated and
    mutual supporting approach. This approach provides appropriate
    assistance at the local/state levels and, as required, at the national
    level. It reinforces the primary mission of the National Guard to
    provide combat ready forces for the United States Army and Air Force.
        While the National Guard can and does provide force protection and
    other mission support, much of the National Guard's capability for
    combating terrorism lies in the realm of consequence management. There
    are a number of capabilities within the National Guard that could be
    brought to bear on the terrorist threat before an attack occurs.
    Specifically, because of its unique capability to provide military
    support to law enforcement agencies, the National Guard is also well
    positioned to play an important role in the detection and prevention of
    terrorist attacks. In much the same way that today's National Guard
    assets are so effectively employed in the war on drugs, they could
    similarly be employed in the war on terrorism. Special military
    equipment and skills have fought drugs with surveillance, aviation
    support, inspections and information analysis. In another example,
    Mobile Vehicle and Cargo Inspection Systems, which typically are
    employed in the search for drugs, were recently employed to enhance
    border security. The National Guard is prepared to move beyond
    consequence management to more broadly leverage our assets for
    employment in other phases of the war on terrorism. As an example, the
    193rd Special Operations Group from Harrisburg, Pennsylvania is
    currently deployed in both the war on drugs as well as the War on
    Terrorism--providing high-demand psychological operations capability.
                Military Assistance to Civilian Authorities (MACA)
        Daily the National Guard is on the front line providing federally
    trained and equipped forces for the states and local communities in
    this critical area. Activities included in this mission are law
    enforcement support, assistance during civil disturbances, counterdrug
    support, and combating terrorism. The National Guard is a unique
    military force because it can act on missions outside the framework of
    posse comitatus. This applies as long as they are under the control of
    the state.
        In the subset of military support to civilian authorities, the
    National Guard is renowned for providing assistance in disaster-related
    civil emergencies. The immediately responsive manpower, equipment, and
    command, control and communications are always the governor's first
    call when local, state or regional capabilities need additional
    support. The ability of National Guard forces to operate across state
    lines was perfectly demonstrated when the state of West Virginia fought
    floods using National Guard assets from five states under provisions of
    the Emergency Management Assistance Compact. The National Guard works
    closely with the local and state emergency managers and their national
    Federal Emergency Management Agency network responding to natural
    disasters (forest fires, floods and storms) and other actions where
    consequence management is necessary.
                Consequence Management
        In the past three years, the National Guard, with the help of
    Congress, the Department of Defense, and the Army, has established a
    new capability to support local, state and federal authorities in
    dealing with the consequences of a chemical, biological, radiological,
    nuclear or explosive terrorist event. Thirty-two Weapons of Mass
    Destruction Civil Support Teams (CST) have been established. Our newly
    certified Civil Support Teams provided Weapons of Mass Destruction
    support in their operational debut during the September terrorist
    attacks.
        The 32 CSTs will provide state and local authorities specialized
    expertise and technical assistance to the incident commander to: (1)
    Assess the situation; determine the type of weapon used and the likely
    consequences; (2) advise the incident commander on potential courses of
    action; and (3) assist the local incident commander's response strategy
    with cutting edge technology and expertise.
        Operationally, these teams are under the command and control of the
    governors through their respective Adjutants General. However, the
    National Guard Bureau provides national operational procedures and
    operational coordination to facilitate the employment of these teams to
    provide depth and backup capability to states currently without a full-
    time CST. After some difficult starts these teams have very rapidly
    progressed through a team effort by Department of Defense, U.S. Army
    and the National Guard Bureau to reassure the states that these teams
    have achieved the highest state of readiness.
                Missile Defense
        Missile Defense (MD) is expected to be a major mission for the
    Department of Defense. As currently planned, the Department of the Army
    has the overall responsibility for the ground-based, mid-course element
    of the proposed missile defense system. The Army National Guard would
    provide personnel to man significant portions of the ground-based
    element.
        The current plan is for the Army National Guard to be the force
    provider for the U.S. Army Ground Based Midcourse Segment of MD, not
    the proposed MD Test Bed. Approximately 300 Active Guard and Reserve
    personnel will support missile defense in various states, including
    Alaska and Colorado. If a decision to employ a missile defense system
    is made, the Army National Guard will provide the operational force.
                Critical Infrastructure Protection
        In the mission area of Critical Infrastructure Protection the
    National Guard has the capability to expeditiously provide personnel
    and units throughout the entire nation and its territories. This may be
    required in an environment where much of our military force, to include
    the National Guard, has already been deployed overseas while terrorist
    activities may require significantly increased vigilance at home.
        Because of the dual state and federal status of the National Guard,
    and the fact 23 of the Adjutants General are also the head of their
    State Emergency Management Agency, a good deal of focus and expertise
    on infrastructure protection already exists in the National Guard and
    could be a strong basis upon which to build future, broader capability.
                Information Operations
        The National Guard has units and capabilities assigned in both the
    Army and Air National Guard in this mission area. The Army National
    Guard units are assigned to the 54 states and territories, plus three
    additional teams work under the guidance of the Army's Land Information
    Warfare Activity, a part of the U.S. Army Intelligence and Security
    Command. The National Guard has a Joint Web Risk Assessment Cell that
    scans defense web networks to determine risk and provide assessments
    for follow-on action. In addition to the capabilities of the combat
    information operation units, the National Guard also has Vulnerability
    Assessment Teams and Field Support teams that provide enhanced
    protection.
        The Air National Guard is currently expanding its role in
    information operations with the establishment of a new ``assurance''
    unit in Washington State and a new unit in Maryland in partnership with
    the National Security Agency.
                Protecting the Nation's Sovereignty
        From its inception, the National Guard has been involved in
    protecting the sovereignty of the nation. Today portions of that
    mission are carried out by the Air National Guard in performance of the
    air defense mission conducted through First Air Force and other units.
    First Air Force, an Active-Duty Numbered Air Force operated extensively
    by members of the National Guard, coordinates with units operating
    throughout the continental United States. While a land attack is not
    considered a significant threat, the National Guard plays a key part in
    the plans for the land defense of the United States. Additionally, the
    National Guard (Army and Air) is an integral part of the ongoing
    counterdrug efforts wherever they are conducted. The National Guard is
    also assisting port and border control authorities to safeguard our
    nation's borders.
    National Guard Counterdrug Program
        Continuing our mission of defending America from the flow of
    illegal drugs, approximately 3,500 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 in fiscal year 2001. Illegal drug profits are
    often used to finance the work of terrorists. Consequently our fight
    against illegal drug use is a fight for our children's future and
    homeland security.
        The National Guard recognizes that the nation's illicit drug crisis
    is not exclusively a problem of demand or supply, but stems from both.
    Because drug abuse continues to threaten the health of our citizens as
    well as our national security, each National Guardsman knows that our
    neighborhoods and schools are battlefields where the struggle is waged
    one precious life at a time.
        In an effort to reduce drug demand, the National Guard's State
    Demand Reduction Programs are a leading edge ``force multiplier''
    focused on assisting schools, parents, and anti-drug community-based
    organizations. Serving as drug-free role models, soldiers and airmen
    provide a positive influence to young Americans who increasingly face
    drugs, crime, and violence in our nation's school systems. As a partner
    of the Community Anti-Drug Coalitions of America, the National Guard
    serves as a powerful catalyst for state and community-based mentoring
    programs, parenting groups, speaker bureaus, Adopt-A-School, Red
    Ribbon, and Parents' Resource Institute for Drug Education (PRIDE)
    projects.
        Our personnel continuously 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 the effort to reduce drug supply within the continental 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.
    They perform duties such as posting watch on our nation's borders,
    preparing and interpreting intelligence materials, detecting and
    eradicating marijuana, performing non-intrusive inspections at U.S.
    ports of entry, and translating court-ordered wire tap tapes into
    English for use in federal prosecutions of drug-related crimes.
        In our federal role, we support our Commander-in-Chief by detecting
    and monitoring attempts to smuggle narcotics into the United States.
    Members of the National Guard fly on the Airborne Warning and Control
    System (AWACS) and the Patrol Orion aircraft to identify suspected and
    known drug smuggling aircraft in the Caribbean and South America.
    Parallel to this mission, National Guard members on federal active duty
    orders collect and report near-real-time narco-trafficking
    intelligence, provide radar surveillance support to the U.S. Customs
    Service Air Marine Interdiction Coordination Center and the Joint
    Southern Surveillance Reconnaissance Operations Center. In addition,
    the National Guard provides mechanical and logistical support to the
    U.S. Air Force Counter drug Radar Surveillance and Control sites in
    Colombia and Peru.
        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 the cost effectiveness of our program. This
    goal will be accomplished by increasing support to Law Enforcement
    Agencies via specialized technology, specialized military skills, and
    counterdrug training. The second goal of the National Guard counterdrug
    Program is to support drug reduction efforts 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 increasing the
    amount of training for counterdrug personnel, and conducting annual
    reviews of existing regulations and policies.
        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 so that drug use will
    continue to decrease.
    Summary
        The National Guard has tremendous quick response capability to
    support the local, state and federal agencies in accomplishing the
    Homeland Security mission. The National Guard Bureau, through the
    Adjutants General, is the primary line of communications between the
    several states and territories and the Department of Defense on
    military matters. It has been performing this role at the local, state
    and federal level since its inception nearly 365 years ago. With the
    necessary resources, the National Guard will continue to protect and
    defend our nation against all enemies foreign and domestic.
                         on guard for the 21st century
        As we continue to advance the role of the National Guard in the
    21st Century, there are numerous concerns over shortages and
    authorization levels in critical areas such as modernization of major
    weapon systems and adequately compensating our personnel. Funding must
    increase in order to meet new and expanding requirements.
        The National Guard must recruit, train, and retain people with the
    broad skills and good judgment needed to address the dynamic challenges
    of the 21st century. Having the right combination of imaginative,
    highly motivated military and civilian personnel at all levels is the
    essential prerequisite for achieving success. Advanced technology and
    new operational concepts cannot be fully exploited unless we have
    highly qualified and motivated enlisted personnel and officers who not
    only can operate these highly technical systems, but also can lead
    effectively in the highly complex military environment of today. That
    environment needs the commitment of not only citizen-soldiers, but of
    every American.
        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 being involved in national
    defense is rapidly taking on new dimensions. As we transform our
    organization, we must ensure 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.
        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 must provide good quality of life programs and
    training on state of the art equipment to ensure we recruit, deploy and
    retain the quality force our country deserves.
    Full-time Support
        National Guard full-time support functions are diverse and cover a
    wide range of unit-level activities that include administration,
    training, logistics, recruiting, and retention. Our full-time force
    contributes to our success in fulfilling our role in the National
    Military Strategy. National Guard full-time Active Guard and Reserve
    (AGR) members and military technicians are uniformed soldiers and
    airmen who serve as links between state and local communities and
    provide different workplace roles to support the nation's defense
    posture. Full-time support personnel are essential to the
    interoperability of the National Guard and active component and act as
    readiness multipliers during periods of increased demands and limited
    resources. The Army and Air National Guard have both recently submitted
    increased full-time support requirements.
        Full-time support personnel are also critical to the National
    Guard's ability to perform its federal and state roles. They are the
    single, most important element to our readiness capability providing
    stability and corporate knowledge at every level of command.
        The number of National Guard full-time technicians and Active Guard
    Reserves must increase in order to meet new and expanding requirements.
    Maintaining a Military of Dedicated Professionals
        The challenges faced by the National Guard in attracting and
    retaining National Guard members differs in several respects from that
    of the Active Component Services. For example, we are often constrained
    by where an individual lives and works. Unlike Active Component
    members, who are accustomed to frequent moves during a military career,
    the men and women of the National Guard have civilian commitments and
    responsibilities, in addition to their military duties, that tie them
    to the local area. Hence, we must target our efforts in the areas and
    regions where vacancies exist.
        Our current economic 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.
        The Office of the Assistant Secretary of Defense, Reserve Affairs
    lists the following as reasons that Service members leave or consider
    leaving the National Guard and Reserves: civilian job and family
    conflicts, pay problems, lack of recognition, limited advancement or
    promotion opportunities, and work not challenging. The National Guard
    must provide a challenging, caring environment with upward mobility to
    retain our members. We must also look to not only retain the Service
    member, but also retain his or her family.
        Members of the National Guard expect to continue their civilian
    career even after agreeing to join. Thus, their military
    responsibilities may take a secondary role, behind their primary
    profession and means of support.
        The National Guard has implemented a number of programs in an
    effort to retain our personnel. We've added more recruiters, conducted
    a national advertising campaign, and expanded education incentives.
    Additionally, we have implemented Aviation Continuation Pay and special
    salary rates for aviators, as well as authorized special pay and
    enlistment bonuses for critical specialties. Continued support for our
    most effective recruiting incentives, including enlistment bonuses, the
    Army College Fund, Aircrew Incentive Pay, and the Loan Repayment
    Program, will help us continue to meet future manpower requirements.
                National Guard Family Program
        National Guard families are as crucial to the success of a soldier
    or airman as readiness is to a mission. The support of families help
    citizen soldiers and airmen perform at their optimum level whether in
    the field, in the sky or at their civilian jobs. In an effort to
    increase the awareness that family programs provide critical support to
    the families of our deployed troops, the National Guard declared 2000
    the Year of the Family. To assist families in this challenging journey,
    state Family Program coordinators, community managers, full-time Family
    Readiness and Support employees, and volunteers give guidance and
    information on how to cope with the demands of their loved ones in the
    military.
        State Family Program coordinators and volunteers work together to
    promote family member volunteerism, family readiness groups and
    networks, quality of life issues, and to facilitate 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. The Air National Guard has recently
    identified the need for and begun hiring dedicated family readiness and
    support personnel at the wing level.
        Though every family is different, there is one constant. All are
    concerned for the safety of their family member serving in unknown
    parts of the world and here at home. The act of terrorism on the United
    States has placed National Guard men and women in positions of
    increased high alert to protect this nation. Personal and Family
    Readiness Guides are available for both Army and Air National Guard
    members and their families. This guide gives the families various
    checklists and tools to help them plan. The Guard and Reserve Family
    Readiness Programs Toolkit, which is a comprehensive set of resources,
    is also a product available to families.
        A key component to keeping National Guard families ready is to make
    sure the lines of communication are open with their National Guard
    members. Advances in technology have made this an easier task than the
    days of simply writing letters. Today, National Guard members can email
    their families on an almost daily basis depending upon their mission.
    Others may also have the opportunity for video-conferencing, thus being
    able to see their loved ones face-to-face. This technique of
    communication affords comfort to the family as well as the National
    Guard member, helping retain a highly trained and experienced force.
        It is important to remember the total National Guard family. A
    Guard Family Youth Symposium was held in 2001 that gave National Guard
    teens and youth the opportunity to come together as a unique group. The
    group gathered for five days in Washington, D.C. to discuss issues that
    were important to them as children of National Guard members. The group
    returned to their states with new energy, ready to reach out to other
    teens coping with the deployments of parents and life as a youth in the
    National Guard family.
                Employer Support of the Guard and Reserve (ESGR)
        To foster positive employer-National Guard partnerships, the
    National Committee for Employer Support of the Guard and Reserve (ESGR)
    was chartered by Presidential proclamation in 1972 under the Office of
    the Secretary of Defense. It is the sole agency within the 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.'' The ESGR is comprised of a community-based volunteer
    network of over 4,500 members, who serve on 54 committees (in every
    state, the District of Columbia, Guam, Puerto Rico and the Virgin
    Islands), implementing employer support programs within their local
    communities. 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 National Guard and
    Reserve.
        Today, in terms of both manpower and force capability, the Reserve
    Components comprise nearly half of the Total Force. As a result,
    employers are being asked to sustain a much greater level of employee
    absence and related consequences. We have long recognized that without
    the dedicated patriots who employ the men and women of the National
    Guard, our militia could not perform at the magnificent level we see
    today. In fact, 2001 was the National Guard's Year of the Employer. Our
    soldiers and airmen sacrifice when they answer the call to duty, and in
    a parallel manner, so do their civilian employers.
        ESGR recognizes certain difficulties for employers stem from
    military duty that is aggravated by the increased operational tempo.
    These difficulties could be minimized by modification of Department of
    Defense employment processes. Such adjustment would reaffirm a
    partnership of mutual respect and open communication between military
    and civilian employers. These adjustments might include such items as
    improving management of the duration of military service and making
    military recall procedures more responsive to employer needs.
        Sustaining employer goodwill and support is essential to ensuring
    the availability and readiness of the Reserve forces. This partnership
    for the military is not just a mutual benefit--its a necessity.
        We will continue to partner with the National Committee for
    Employer Support of the Guard and Reserve 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.
        It is because of the exceptional people in our units that we
    continue to overcome these challenges. It is the commitment of our
    people that is the heart and soul of the National Guard. While we've
    put more on our members' plates, we've done it smart and with attention
    to bonuses, grade relief, grade enhancements, and employer and family
    support.
    Equal Opportunity and the ``Year of Diversity''
        The Chief of the National Guard Bureau (CNGB) has concluded that
    the longstanding Equal Opportunity efforts of the National Guard should
    be augmented by an increased focus on diversity. The National Guard has
    designated year 2002 the ``Year of Diversity.''
        The National Guard Bureau's Equal Opportunity Division (NGB-EO) is
    a Joint Staff office comprised of both military and civilian personnel.
    The NGB-EO vision is: ``To create and sustain an environment in the
    National Guard that values inclusiveness and professionalism; to offer
    all personnel an equal opportunity for success; to enable the National
    Guard to meet its federal and state mission by taking full advantage of
    the demographic realities of the Twenty-First century.''
        The CNGB and the Army and Air National Guard Directors have all
    launched diversity initiatives designed to strengthen the norms of
    inclusiveness that are essential to keeping our National Guard an
    effective, highly diverse, mission-ready organization. These
    initiatives include targeted training programs and curriculum designed
    to promote these inclusive norms.
        Diversity goals are both right and smart. The Year of Diversity is
    an opportunity to plan and take action to position the National Guard
    for future growth, as well as a time to celebrate gains through
    diversity.
    National Guard Youth Programs
        Consistent 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,
    leveraging its existing infrastructure in the states, so there is great
    value added with a minimum of additional resources.
        ChalleNGe is a congressionally mandated 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 with 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.
                  the army national guard director's overview
        During fiscal year 2001, our nation suffered one of the most
    horrific acts of war on American soil. To those whose sacrifices and
    selfless service purchased for us the privileges of freedom, democracy,
    and unmatched opportunity, we pay tribute and express a deep sense of
    gratitude. The events of September 11 clearly demonstrated that when
    called, the Army National Guard (ARNG) is there to respond at home and
    abroad.
        Two hours after the attacks, Army National Guard soldiers began
    arriving at the site of the World Trade Center in New York City,
    providing site security and engineering support to clear away the
    rubble. That same evening, military police of the Maryland Army
    National Guard arrived at the Pentagon in Washington, D.C., to provide
    security around the crash site. Soon after, we sent soldiers to our
    nation's airports to take back the skies from terrorists, restoring
    American citizens' peace of mind.
        ARNG soldiers represent their communities as college students,
    teachers, police officers, lawyers, firefighters, doctors, moms, dads,
    sons and daughters. These everyday people are what makes the Army
    National Guard so special.
        Our units have capabilities unrealized by the American people. Even
    with the unexpected events of September 11 and its subsequent
    requirements, we are barely scratching the surface of what the Army
    National Guard can do. Our soldiers are deployed throughout the world
    in support of Operation Noble Eagle and Enduring Freedom, in addition
    to the normal ongoing training missions, exercises and peacekeeping
    operations. These are all in support of our National Military Strategy
    and represent a small percentage of the more than 350,000 ARNG
    soldiers.
        These missions mean soldiers are absent from their families. The
    families' willingness to endure these hardships to support their
    soldiers is critical to the effectiveness of the force. The sacrifices
    these ARNG families endure should not go unnoticed by our nation.
        Another crucial element of our success is the employer. In
    recognition of this, the National Guard celebrated 2001 as the ``Year
    of the Employer''. The missions our citizen-soldiers perform are
    important to national security and world stability. However, when these
    missions take soldiers out of their workplace, especially for extended
    periods of time, employers can and often do experience hardship. It is
    a tremendous sacrifice that employers make and that sacrifice is
    recognized.
        The National Guard Bureau has declared 2002 as our ``Year of
    Diversity''. I plan to leverage demographic shifts in order to
    capitalize on the diverse talents of the American people. The ARNG will
    recruit, train, retain, qualify and advance a force that reflects
    America, acknowledging the contributions of all its members to enhance
    our service to community, state and nation.
        The fiscal year 2003 Posture Statement provides you with an update
    on what the ARNG has been doing, the progress we are making and how we
    will help meet the needs of the country as defined in our National
    Military Strategy. Some of the major issues addressed are equipment
    modernization, operational tempo, readiness, full-time manning and
    resourcing.
        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 while still
    maintaining the support of families and employers versus our ability to
    sustain acceptable readiness. The strides made by the ARNG in 2001 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 ARNG a very special
    organization indeed.
        The nation relies on the ARNG now more than ever to accomplish an
    increasing number of vital missions. We owe it to our soldiers to
    provide them with the best equipment, best training and a dedicated
    full-time support staff. As the Director of the Army National Guard, I
    will ensure that our soldiers are adequately resourced as a premiere
    fighting force, ready to defend our national interests. Our ability to
    be ready when called upon by the American people is, and will always
    be, our top priority and our bottom line.

                                              Roger C. Schultz,
                  Lieutenant General, GS Director, Army National Guard.
                         the army national guard today
        America's goals are to promote peace, sustain freedom, and
    encourage prosperity. Our world role provides a basis for a network of
    friendships and alliances with other countries to flourish. History
    shows repeatedly that the prosperity of America is linked to the
    prosperity of others. America's involvement in the world also
    contributes directly to global peace and freedom. The Army National
    Guard provides an essential service to achieve these goals, as it helps
    assure friends and allies of an unwavering U.S. commitment to freedom
    now and in the future.
    The Army National Guard in Stability and Support Operations
        The Army National Guard deployed over 21,000 trained and ready
    personnel in more than 85 countries in support of regional war fighting
    Commanders in Chief (CINCs). These deployments include sending soldiers
    to peacekeeping operations in the Balkans, Southwest Asia, Operation
    Joint Forge (Bosnia), Operation Joint Guardian (Kosovo) and Operation
    Desert Spring (Kuwait/Saudi Arabia). This represents an increase in
    deployments of more than 8 percent over fiscal year 2000.
        Reliance upon the Army National Guard continues to increase for
    fiscal year 2002, during which over 24,000 Army National Guard soldiers
    will be deployed worldwide in more than 89 countries and participate in
    more than 75 Chairman, Joint Chiefs of Staff and CINC sponsored events.
    This represents an increase in deployments of more than 12 percent over
    fiscal year 2001 and 20 percent over the two years prior (2000/2001).
                U.S. Joint Forces Command Exercises (JFCOM)
        Prior to fiscal year 2001, the Army National Guard did not
    participate in Joint Forces Command Exercises (JFCOM). Beginning in
    fiscal year 2001 nearly 900 service members participated in JFCOM
    exercises such as Joint Task Force Exercise and Unified Endeavor. Army
    National Guard division and brigade headquarters participated in both
    multi-service (category 2) and Joint Force (category 3) exercises.
    These exercises improve skills in joint interoperability areas and
    prepare units to participate in higher echelon exercises.
                U.S. Southern Command (SOUTHCOM)--Central and South America
        As the lead command in the New Horizons Nicaragua, Engineering
    exercise in fiscal year 2002, the Army National Guard will deploy more
    than 3,200 personnel in support of the SOUTHCOM Chairman, Joint Chiefs
    of Staff (CJCS) exercise program. The Army National Guard provided
    extensive support to Active Component (AC) forces in SOUTHCOM through
    the Overseas Deployment for Training (ODT) program this past fiscal
    year.
        In fiscal year 2001, Army National Guard aviation aircrews and
    support personnel from Alaska and Iowa provided general support for New
    Horizons. The Army National Guard aviators completed a multitude of
    missions in the Central American countries of Honduras, Guatemala and
    Paraguay during fiscal year 2001. During fiscal year 2001, the Army
    National Guard deployed nearly 3,500 soldiers to support Central
    America 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)
        In fiscal year 2002, more than 11,000 Army National Guard soldiers
    will participate in more than a dozen exercises in addition to
    supporting annual infantry and engineer Opposing Force (OPFOR)
    rotations in the Combat Maneuver Training Center-Europe in Germany. The
    Army National Guard will also provide direct and general support
    maintenance units to perform readiness enhancing annual training
    periods at the Equipment Maintenance Center-Europe.
        Additionally, the Army National Guard will provide Combat Service
    (CS) and Combat Service Support (CSS) functions across the spectrum to
    include aviation maintenance, military police, signal, medical, Judge
    Advocate General (JAG), chaplain, finance, public affairs and engineer
    facility support. Total Army National Guard support to Europe during
    fiscal year 2001 exceeded 13,000 soldiers.
                U.S. Central Command (CENTCOM)--Middle East
        The Army National Guard support to CENTCOM through the ODT program
    increased to nearly 900 service members in fiscal year 2001. This
    number will grow to more than 1,000 in fiscal year 2002. This support
    primarily consists of military intelligence, military police, Special
    Forces and communication efforts in support of Active Component (AC)
    exercises, e.g. INTRINSIC ACTION, LUCKY SENTINEL, NATURAL FIRE, IRON
    COBRA and BRIGHT STAR.
                U.S. Pacific Command (PACOM)--Asia
        Bilateral and multinational training exercises require Army
    National Guard participation in the Pacific Theater. During fiscal year
    2002, the Army National Guard will deploy more than 3,200 soldiers to
    participate in three major Joint Chiefs of Staff exercises in Korea and
    Japan. Also linguists, engineers, aviation, maintenance, and public
    affairs will provide support to CINC Pacific (CINCPAC) and CINC Korea
    (CINCK) in non-exercise events. In fiscal year 2001, more than 2,600
    Army National Guard personnel participated in these exercises.
                U.S. Special Operations Command (SOCOM)
        The Department of Defense has a number of Special Operations Forces
    to include Navy Seals and USAF Special Operations Wings. The majority
    of The Army's Special Operations capability resides in the Army
    National Guard. As key players in the National Military Strategy, the
    19th and 20th Special Forces Groups (located in 15 states) will provide
    more than 800 personnel in support of AC Special Forces missions during
    fiscal year 2002 as a result of operational deployments throughout the
    world.
        Both 19th and 20th Special Forces (SF) Groups supported CJCS
    Exercises and Joint Combined Exercise Training (JCET) in several
    Theaters with a total of 1,411 soldiers deploying on 28 missions to 18
    countries. In the Pacific Theater, the Army National Guard Special
    Forces provided 510 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, 254 participated in CJCS
    Exercises and JCETs in Korea. In the U.S. Southern Command, the Army
    National Guard Special Forces supported TRADE WINDS and CABANAS CJCS
    Exercises as well as conducting JCETs with 506 soldiers in Honduras,
    Jamaica, Argentina, Antigua, and Trinidad.
                Major Exercises in the Continental United States (CONUS)
        Army National Guard units throughout the country trained as part of
    the combined arms team in several major CONUS exercises. More than
    17,700 soldiers from 158 units trained on mission essential tasks
    through participation in exercises such as ROVING SANDS, GOLDEN COYOTE,
    ROLLING THUNDER, GRECIAN FIREBOLT, PURPLE DRAGON, ROAD RUNNER, PHANTOM
    SABER and GLOBAL PATRIOT.
    Operation Joint Forge (OJF)
        Soldiers from the Colorado and Wyoming Army National Guard's 1022nd
    Air Ambulance Company deployed to Bosnia to provide aerial medical
    evacuation support for Stabilization Forces 9 (SFOR 9). The 1022nd AA
    provided four UH-60 Blackhawk helicopters, aircrews and support
    personnel during this Presidential Select Reserve Call-up deployment in
    support of peace keeping efforts in the region
    Military Support to Civil Authorities (MSCA)
        Army National Guard aviation continues to a play vital role in our
    Military Support to Civil Authorities (MSCA) missions. Army National
    Guard aviation assisted in extinguishing numerous forest fires during
    fiscal year 2001. Army National Guard aviation assisted local, state
    and federal law enforcement agencies in countering the trade and
    cultivation of illicit drugs within the borders of the United States.
        Army National Guard aviation crews and assets were some of the
    first to respond during the tragic events that occurred on Sept. 11,
    2001, in New York City, Pennsylvania and Washington, D.C. Army National
    Guard Aviation was on a high state of alert immediately following these
    events.
        In New York, the Army National Guard provided 23 utility aircraft
    to assist in the recovery efforts near the site of the World Trade
    Center. Another mission was to provide transportation for the
    deployment of rapid response teams to virtually anywhere in the
    country, as requested.
        The Pennsylvania Army National Guard had 33 aircraft standing by on
    a 15-minute response time from various airfields around the state.
    Their capabilities included mass casualty evacuation and fire fighting.
        The Air Ambulance Company from the District of Columbia National
    Guard was on site to support the 24 hours per day recovery operation at
    the Pentagon. Within hours of the attack, five aircraft and multiple
    crews deployed to the site to provide support. The crews were rotated
    every 12 hours on the grounds of the Pentagon to ensure aircrew
    endurance and aircraft availability.
        The Army National Guard will continue to provide vital aviation
    support to Homeland Security efforts.
    Operation Desert Spring (ODS)
        The Army National Guard continues to provide aviation support to
    Operation Desert Spring in Kuwait. Aviation Task Force 211, consisting
    of aviation crews from the Utah, Wisconsin and Indiana Army National
    Guard, deployed in August 2001. Army National Guard AH-64 Apaches and
    UH-60 Blackhawks provide essential aviation support and force
    protection to the Operation Desert Spring mission in Southwest Asia.
    Military Intelligence Operations
        In fiscal year 2001, Army National Guard Military Intelligence (MI)
    soldiers and units performed approximately 96,769 man-days of support.
    Operations ranged from language support in Mongolia to tactical
    intelligence support in the Balkans operations.
        Army National Guard MI soldiers and units supported all the
    Regional Commanders in Chief (CINCs) and their Major Subordinate
    Commands both inside and outside the continental United States. Army
    National Guard MI soldiers participated in joint exercises in Japan and
    acted as watch officers in Korea and for Joint Task Force Bravo in
    South America.
        The Army National Guard MI role in Balkans operations continues to
    grow. Teams and individuals augment active Army MI Battalions while the
    National Guard continues to stand-up tactical MI units to provide
    organic support to deploying National Guard Divisions. Army National
    Guard MI elements continue to provide essential MI mission and language
    augmentation to all Department of Defense elements, the Defense
    Intelligence Agency and the Department of Justice.
    Information Operations Operational Support
        The Army National Guard continues to develop full spectrum
    Information Operations (IO) teams to support the broad range of Army
    missions. The Army National Guard IO Field Support Teams (FST's)
    provide tactical IO planning capabilities to the Army's divisions and
    corps. These FST personnel deployed in support of Army exercises, joint
    missions, and contingency operations.
        The Army National Guard, in partnership with the Combined Arms
    Center (CAC) at Fort Leavenworth, KS and Norwich University in Vermont
    is a key player in the development of Information Operations Training
    for the Army. Both network security technical training and Tactical IO
    Planning Courses are provided through the Vermont Training Battalion.
    Recently, the Army's first Functional Area 30 Qualification Course was
    developed in conjunction with the Army National Guard.
                the army national guard preparing for the future
        The War on Terrorism has focused the Department of Defense on the
    role of the military in Homeland Security. The Army National Guard is
    uniquely positioned to provide immediate support to domestic first
    responders in times of crisis. In the aftermath of the terrorist
    attacks of Sept. 11, 2001, Army National Guard soldiers provided a
    variety of supporting roles including site security, medical support
    and nuclear, biological and chemical site testing.
        The Army National Guard also provided more than 7,000 soldiers to
    augment airport security in more than 400 airports. Additionally, the
    Army National Guard was called upon to provide critical infrastructure
    protection to ammunition and chemical storage depots as well as
    augmenting security for numerous electrical, nuclear and transportation
    assets nationwide.
        To continue the critical work of our country a number of needs must
    be looked at. The Army National Guard has defined 11 key organizational
    goals that are critical to focus our support of the nation's defense.
    These goals are:
        Manning.--Develop and execute an Army-wide integrated human
    resource system to acquire, distribute, manage, compensate, retain and
    transition people, enabling the Army National Guard to provide combat
    ready units.
        Organizing.--Provide the maximum possible number of missioned Army
    National Guard 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 Army National Guard unit readiness, modernization and force
    relevance.
        Readiness.--Ensure all Army National Guard units are resourced to
    attain and sustain readiness levels needed to meet Commanders in Chief
    (CINC) mission requirements and deployment timelines.
        Sustaining.--Provide appropriate and efficient support for
    personnel, equipment and operations to accomplish all Army National
    Guard 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.--100 percent of all Army National Guard 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 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.
        Resourcing.--Secure resources for all statutory and critical
    requirements. Achieve parity by Force Package across all components to
    provide trained and deployable forces for The Army and CINCs.
        The future years will present a variety of challenges for the Army
    National Guard. As we continue transitioning to the full spectrum force
    of choice, critical shortfalls in equipment modernization, real
    property maintenance and military construction must be addressed. The
    Army National Guard will continue taking a more active role as the
    traditional defender of our nation, at home and abroad.
                               manning the force
    Army National Guard Full-Time Support
        To meet the challenge of the future years, the Chief, National
    Guard Bureau recognizes that additional Full-time Support
    authorizations are the number one priority for the Army National Guard.
    The National Guard does not currently have the full-time authorizations
    or the funding to adequately support readiness requirements for
    organization, administration, instruction, recruiting and training,
    maintenance of supplies, equipment and aircraft and other daily support
    functions. Full-Time Support levels directly impact readiness and are
    required to efficiently and effectively transition from peacetime to
    wartime posture. Full-Time Support personnel are critical links to the
    interoperability of the Army's components. Additional Full-Time Support
    personnel are the most serious funding challenge faced by the Army
    National Guard.
    Recruiting and Retention
        Operational demands on the Armed Forces have taken a toll on active
    military personnel. Since the end of the Cold War, the Armed Forces
    experienced a reduction of total personnel while our security strategy
    has increased the demands placed on the reserve forces.
        To meet the increasing mission requirements on the Army National
    Guard, we must not only attract but also retain our soldiers. In an
    effort to diversify the force, the Army National Guard has developed
    several new programs to reach previously under-represented populations
    in our communities. One such program is an Army National Guard-
    sponsored youth program that provides a life skills curriculum for
    financially disadvantaged youth. The second program is a series of Army
    National Guard-sponsored diversity career fairs. The third program is
    an English as a second language course taught in Army National Guard
    readiness centers
        The Army National Guard's fiscal year 2003 end strength objectives
    include achieving a selected reserve strength of 350,000--36,579
    commissioned and warrant officers and 313,421 enlisted personnel. To
    attain this goal, enlisted gains are programmed at 60,504 with officer
    gains at 3,627. Enlisted losses are projected not to exceed 62,333.
    Enlisted Personnel Recruiting and Retention
        Enlisted personnel recruiting and retention were continuing success
    stories for the Army National Guard during fiscal year 2001. Enlisted
    accessions for the year exceeded the program objective of 60,252 by
    totaling 61,956 or 102.8 percent of the goal. Non-prior service
    accessions at 33,091 were 109.8 percent of the objective while prior
    service accessions at 28,865 represented 95.8 percent of the objective.
    These statistics reflect an accession mix of 53.4 percent non-prior
    service enlistments and 46.6 percent prior service enlistments. The
    overall Army National Guard loss rate through the end of fiscal year
    2001 was 19 percent versus an overall objective of 18 percent.
    Educational Assistance
        Educational assistance continues to be an effective tool in
    improving recruiting and retention efforts in the Army National Guard.
    Increasing a soldier's educational standing not only benefits soldiers
    in their civilian lives but also helps the Army National Guard improve
    its quality and readiness objectives. During fiscal year 2001, $9.1
    million in tuition assistance was provided to 42,063 soldiers. In
    fiscal year 2002, the Army National Guard expects to provide $11.3
    million in tuition assistance to more than 30,000 soldiers and has
    increased the semester hour rate to match the rate offered by the other
    military Services.
    Officer Accessions and Retention
        The total officer strength at the end of fiscal year 2001 was
    36,579. Officer end strength was 821 short of the programmed objective.
    The Army National Guard continues to have a higher than expected loss
    rate among Army National Guard officers. Some of this is attributed to
    resignation from the Army National Guard due to family pressures,
    Operational Tempo (OPTEMPO) and better income opportunities offered in
    the civilian sector.
        The shortage of company grade officers in the Army National Guard,
    particularly at the rank of captain, results in a large number of
    lieutenants and warrant officers occupying captain positions. Our
    company-grade shortfall in units creates a detrimental effect on Unit
    Status Reporting, and thus in our overall readiness posture, unit
    morale and unit climate.
        The Army National Guard continues to employ a number of measures to
    combat the critical shortfall in company grade and warrant officers.
    Measures targeted for execution include developing a robust advertising
    campaign; creating an officer/warrant officer recruiting and retention
    course; changing the coding for officer losses to ascertain reasons and
    identify patterns associated with junior officer attrition;
    capitalizing on alternate commissioning sources for increased
    accessioning into the Army National Guard; and identifying and
    resourcing programs to assist in the acquisition of new officers. These
    initiatives will contribute to the Army National Guard's ability to
    effectively man the force with quality officers and warrant officers.
    Warrant Officer Personnel Management
        The Army National Guard continues to address significant challenges
    in warrant officer accession and personnel management. Of significant
    concern is the critical shortage of technical service warrant officers
    and the impact this has on unit readiness. Currently the assigned
    warrant officer strength is 81 percent fill of the authorized strength.
    Technical warrant officer strength is down to 71 percent, while
    aviation warrant officer strength has fallen slightly below
    requirements to 95 percent.
        In an attempt to address the declining strength within the
    technical warrant officer specialties, the Army National Guard is
    currently pursuing alternatives to mitigate the shortfall in our
    warrant officer strength.
    Medical Readiness
        Identified in the Medical Readiness Campaign Plan, the Army
    National Guard Medical Strategic Goals for fiscal year 2003 are to
    support deployment of healthy soldiers, support deployment of the
    medical units, and facilitate family care. To achieve these goals, the
    mission of the Army National Guard Medical Team is to promote medical
    readiness of the Army National Guard, assuring that forces are ready
    and deployable for federal, state and community missions.
        The plan includes six focus areas. (1) Health Services Access/
    Policy; (2) Health Care Operations; (3) Medical Personnel Management;
    (4) Medical Force Modernization; (5) Quality Management; and (6)
    Preventive Medicine.
        These initiatives allow the Army National Guard to accurately
    provide medical information for the partial mobilization, and State
    Active Duty calls to assist soldiers with the best possible health care
    coverage. Health care operations paved the way in tracking medical
    readiness data through the Medical Protection Occupational System
    (MEDPROS), allowing unit commanders and state headquarters to monitor
    the medical readiness of their soldiers.
        Medical Personnel Management evaluates the critical Military
    Occupational Skills (MOS) that the Army National Guard needs to acquire
    or retain. The Army is transitioning many of the enlisted medical MOSs
    to the Health Care Specialist, known as the 91W. Proactive planning in
    Medical Force Modernization has placed the Army National Guard as the
    leader in the number of individuals currently trained as a 91W. Quality
    Management and medical standards for physical profiles is a high
    priority in attaining medical deployability for our soldiers.
    Preventive Medicine is a key force multiplier.
                 organizing the army national guard for success
        We have long recognized that transformation of the U.S. military is
    essential to meet the new strategic era and the internal and external
    challenges facing America. Today the Army National Guard works
    tirelessly to ensure that we are properly organized, trained, equipped,
    and postured to provide for the effective defense of the United States.
    The current array of ARNG forces provide the governors with a wide
    range of capabilities to deal with Homeland Security issues. These
    capabilities will be enhanced in the near future as additional Chemical
    and Military Police structure is activated.
    Integrated Division concept
        The Army National Guard Division Redesign Study included a proposal
    to form two integrated Active Component/Army National Guard divisions.
    Each integrated division consists of an Active Component headquarters
    and three Army National Guard enhanced Separate Brigades (eSBs). On
    December 2, 1997, the Secretary of the Army approved establishing a
    mechanized division headquarters at Fort Riley, Kansas with a forward
    element at Fort Jackson, South Carolina and an infantry division
    headquarters at Fort Carson, Colorado. The 24th Infantry Division (-)
    and the 7th Infantry Division (-) formally activated on October 16,
    1999.
        The division headquarters are non-deployable and tailored to
    provide training and readiness oversight and evaluation of assigned
    eSBs. The eSBs selected for the 24th Infantry Division (-) 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 and Partnering of Active Component and Army National Guard
            units
        Teaming is a program that pairs selected Active Component and Army
    National Guard units for mutual support of operational requirements.
    Teamed units participate in mutually supporting operational training
    events that enhance readiness and complement each unit's individual
    strengths.
        Currently, teaming is limited to divisional units. The teamed
    divisions under III Corps are 1st Cavalry Division with 49th Armored
    Division (Texas), 38th ID (Indiana) with Fort Carson, Colorado and 34th
    ID (Minnesota) with 4th ID. Under XVIII Corps are 3rd ID and 28th ID
    (Pennsylvania), 10th Mountain Division and 29th ID (Virginia), and the
    101st Air Assault Division with the 42nd ID (New York). Under V Corps
    is the 35th ID (Kansas) with Fort Riley, Kansas. Under I Corps is the
    2nd ID with the 40th ID (California).
                       equipping the army national guard
        For National Guard forces to operate and fight alongside their
    Active Component counterparts as a seamless force, they must be
    equipped with either the same equipment as the Active force or highly
    compatible equipment.
        The Army National Guard is dealing with the reality of aging and
    obsolete equipment. 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 some equipment that is a substitute for the
    more modernized equipment. For example, units are training with VRC-12
    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.
        Providing the Army National Guard with modernized equipment and
    associated training packages to operate equipment is essential to
    maintaining the capabilities of the Army National Guard. The Army
    National Guard equipment on-hand readiness posture improved in the last
    year, but equipment interoperability with the Active Component remains
    years away. Current programs are slowly modernizing, but the resources
    needed to meet requirements are not keeping pace. A significant
    consequence is equipment on hand continues to age at a faster rate than
    can be offset by modernization--increasing maintenance and operational
    costs. Although the Army National Guard continues to receive new and
    cascaded vehicles to maintain its fleet, the inventory still contains
    old equipment that cannot perform to mission requirement standards.
    Artillery
        The modernization of field artillery units to M109A6 Paladin,
    Multiple Launch Rocket Systems (MLRS) and Highly Mobile Artillery
    Rocket Systems (HIMARS) are significant initiatives. By the end of
    fiscal year 2001, the Army National Guard had fielded 18 M109A6 Paladin
    battalions. Thirteen Army National Guard divisional battalions still
    require Paladin to modernize. Due to a funding shortfall from fiscal
    year 2000 and fiscal year 2001, the MLRS conversion program will be
    delayed. Army National Guard MLRS is programmed to complete conversion
    in fiscal year 2005. The fielding of Highly Mobility Artillery Rocket
    System (HIMARS) to the Army National Guard is tentatively scheduled to
    begin in fiscal year 2005. The Advanced Field Artillery Data System
    fielding began in fiscal year 2001 and completes Army National Guard
    Field Artillery digital communication modernization in fiscal year
    2009.
    Bradley Fighting Vehicle
        The Army is now fielding the M2/3A3 version of the Bradley Fighting
    Vehicle (BFV). The desired end-state for the Guard to achieve
    interoperability with the active digitized force is the M2/3A2ODS
    version. The Army National Guard currently has the first production
    models consisting of the M2/3A0, M2/3A2, and some M2/3AODS.
        Congress appropriated $165 million in fiscal years 1998-1999 to
    procure M2A2ODS and M3A2ODS Bradley Fighting Vehicles for the 218th
    enhanced Separate Brigade (eSB), South Carolina Army National Guard.
    This begins to address the need to provide the eSBs with upgraded BFVs,
    and the further cascade M2A2's into Army National Guard divisions.
    Follow on fiscal year 2000 and fiscal year 2001 Congressional
    appropriations were provided to complete the fielding of the 30th eSB
    (North Carolina Army National Guard) and the 48th eSB (Georgia Army
    National Guard) in fiscal year 2002 and fiscal year 2003.
        The overall Bradley force will still have eight battalion sets
    unfunded to complete the heavy eSBs and the Armored Cavalry Regiment.
    The other seven heavy eSBs are currently equipped with M2A2/M3A2 and
    M2A0/M3A0 systems and M1A1 Abrams tanks. Initiatives are under way to
    upgrade the remaining armor from M1A1 tanks to M1A1HA.
    Air Defense
        Two Army National Guard Avenger Battalions were fielded complete
    sets of the Forward Area Air Defense Command and Control System
    (FAADC\2\I) and Sentinel Radar. The remaining seven corps Avenger
    battalions will be fielded with the FAADC\2\I and Sentinel Radar from
    fiscal year 2002 through fiscal year 2007.
        Currently, there is no funding to support fieldings to the Army
    National Guard eSB Batteries or Divisional Battalion. However, the
    263rd Army Air and Missile Defense Command (AAMDC) will field the
    remainder of its Air and Missile Defense Command and Control System
    (AMDCCS) equipment in fiscal year 2002, as a result of the decision
    made by Congress to accelerate fielding by five years.
    Digitization
        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. Army
    National Guard units assigned to the III Corps will receive the
    required ABCS applications by fiscal year 2004. However, to make the
    ABCS applications interoperable and functional, units will require a
    digital pipeline. The Enhanced Position Location Reporting System
    (EPLRS) is the network backbone that supports ABCS applications until
    the Joint Tactical Radio System (JTRS) is fielded to the Army National
    Guard. The current Future Years Defense Plan (FYDP) does not have
    resources for these requirements.
    Communications
        One of the top Army National Guard equipping priorities is to
    replace obsolete Vietnam era VRC-12 series radios with SINCGARS, an
    essential element to Army interoperability. The fielding plan has a
    window from June 2000 through June 2004 for all 15 eSBs, eight National
    Guard Divisions, and all other support units. Currently all 15 eSBs
    have SINCGARS radios. The 29th Division (Virginia) has completed
    SINCGARS fielding as the first of the eight Guard divisions. Two more
    divisions will finish early in 2002. In addition, the echelons above
    division field artillery brigades and Air Defense units that support
    early deploying forces, are receiving SINCGARS SIP/ASIP radios.
    However, if not fully funded, the Army National Guard may have to wait
    until the Joint Tactical Radio System fielding starts in fiscal year
    2007 for the cascade of older SINCGARS from the AC to fully purge the
    VRC-12 series radios from the Army National Guard.
    Javelin
        The Javelin is the new infantry anti-armor weapon system that is
    critical for a self-defense capability for light forces and mechanized
    infantry. The current budget addresses 100 percent of the Army National
    Guard Javelin requirements for the eSBs and Special Forces Groups.
    However, fielding to the Army National Guard eSBs and SF Groups will
    not be scheduled to begin until the third quarter of fiscal year 2004,
    with completion expected during the first quarter of fiscal year 2006.
        Fielding for the Army National Guard divisions, separate infantry
    battalions and corps engineer battalions is planned to continue through
    the fourth quarter of fiscal year 2008. However, this is dependent on
    the availability of systems. Once the initial quantities run out, the
    fielding of Javelin to those remaining Army National Guard units stops.
    Small arms
        The ARNG received 2,105 MK-19 Grenade Machine Guns (GMG) in fiscal
    year 1999, 2,030 in fiscal year 2000 and 308 in fiscal year 2001. We
    are scheduled to receive 1,092 MK-19s during fiscal year 2002 and 700
    during fiscal year 2003. This will complete the fielding to the
    enhanced brigades and divisions.
        The Army National Guard started receiving the M240B Medium Machine
    Gun during the third quarter of fiscal year 2000. Fielding of the eSB
    follows beginning in the second quarter of fiscal year 2001 and ends in
    the second quarter of fiscal year 2002. Remaining Army National Guard
    units will receive the M240B beginning in the third quarter of fiscal
    year 2002.
        The M4 Carbine fielding to Army National Guard eSBs began in the
    third quarter of fiscal year 2000 and continues through the third
    quarter of fiscal year 2002. This leaves an unfunded requirement of
    39,541 M4s for Army National Guard units.
        The Army National Guard is scheduled to receive 31,546 M249 Squad
    Automatic Weapons (SAWs) by the third quarter of fiscal year 2003. This
    will fill 84 percent of requirements. The Army National Guard will
    begin fielding 3,168 M16A4 rifles in the first quarter of fiscal year
    2003 and complete with a final fielding of 23,849 in the fourth quarter
    of fiscal year 2006.
    Night Vision Goggles (NVG)
        The Army National Guard is short Night Vision Goggles for both air
    and ground units. The current inventory represents only 33 percent of
    the Army National Guard requirement for NVGs. This shortage adversely
    impacts a unit's ability to train for and conduct night operations. The
    older PVS-5 NVGs, used as substitutes for the PVS-7Bs NVGs, are
    inadequate and limit the unit's ability to maneuver under the cover of
    darkness with the same agility as PVS-7B equipped units.
        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 will begin after 2002.
    Protective Masks
        Fielding of new and cascaded M40 Protective Masks, M42 Protective
    Masks, and M41 Protective Mask Test Sets has been completed.
    Additionally, the M42 is being upgraded to the M42A2.
    Family of Medium Tactical Vehicles (FMTV)
        Fielding to modernize the current 2-ton and 5-ton fleets will not
    be completed until fiscal year 2024. Each time funding for this program
    is decreased, the fielding timelines are extended for Army National
    Guard units. Units continue to use cascaded vehicles coming from the AC
    that in many cases increase the technology gap rather than close it.
    Since the Army decision to field the FMTV, the Army National Guard has
    received less than 1 percent of the required 5-ton vehicles and less
    than 2 percent of the required 2-ton vehicles of the new series. The
    remaining 97 percent are the older models.
        The Army National Guard completed the fielding of 168 FMTVs to
    field artillery, transportation and quartermaster units in fiscal year
    1999. The second phase of fielding to the Army National Guard is
    scheduled to start in fiscal year 2001 and conclude in fiscal year
    2003. The third phase will begin after fiscal year 2003 and continue
    through fiscal year 2008. The Army National Guard will receive an
    additional 2,030 FMTVs for fielding to First Digitized Corps Army
    National Guard units. Other Procurement Army (OPA1) is the source of
    funding for the second phase of FMTV fielding.
        The Army National Guard is programmed to receive 1,034 M1078 Light
    Medium Tactical Vehicles (LMTVs) to modernize high priority units. The
    Army National Guard received the initial fielding of 380 LMTVs during
    the fourth quarter of fiscal year 2001.
    Generators
        The Army National Guard has less than 60 percent of its required
    tactical power generation equipment and equipment on-hand is more than
    20 years old. The majority of this shortfall lies in the smaller 3 KW
    and 5 KW models.
        Current fielding of the newer models of the tactical quiet
    generator (TQG) addresses Force Package 2 unit fieldings of 3 KW
    generators. The 5-60 KW TQG fielding through fiscal year 2007 will
    finish Force Package 3. Fielding of Force Package 4 units will start in
    fiscal year 2008 and fiscal year 2009. The Army National Guard needs to
    upgrade and improve its aging inventory of generators and accelerate
    the fielding of TQG to more units within the Army National Guard.
    AH-1 ``COBRA'' and UH-1 ``HUEY'' Retirements
        Aviation modernization remains among one of the highest priorities
    for the Army National Guard. It has become critical because of the
    Army's expedited retirement programs for the Vietnam-era AH-1 and UH-1
    helicopters. Even after receiving cascading aircraft from the AC and
    delivery of previously funded aircraft, the Army National Guard will
    still be short more than 200 UH-60 Blackhawks.
        All AH-1s were retired at the end of fiscal year 2001; however, the
    modernized AH-64s and RAH-66s to replace them are not available. To
    overcome this shortfall and to provide a means to maintain minimum
    readiness in the units affected, the Army has approved the use of OH-
    58A/C scout aircraft as a ``bridge'' over the modernization gap. These
    units will have minimal combat capability during this period.
        The following units are affected: six Divisional Attack Battalions,
    Air Troops in eight Divisional Cavalry Squadrons, and two Attack
    Companies in the 278th Armored Cavalry Regiment's Air Squadron.
    Additional AH-64A replacement aircraft are expected to begin cascading
    from the active Army in fiscal year 2002, but the RAH-66s for the ACR
    and Divisional Cavalry units will not be available prior to 2011.
        All UH-1s must retire by the end of fiscal year 2004. The Army
    National Guard has already begun to reduce the on-hand inventory. This
    accelerated retirement schedule, combined with the continued grounding
    of many of the UH-1s due to the mast replacements, will present a
    substantial challenge to the Army National Guard for both unit and
    aircrew readiness. Currently, from fiscal year 2000 through fiscal year
    2007, the Army National Guard will retire more than 700 UH-1s, while
    scheduled to receive less than 170 UH-60 replacements during the same
    period. To address this problem, the Army and the Army National Guard
    have identified a critical need to increase the rate of UH-60
    procurements from the current schedule of 10 per year to about 30 per
    year. However, these increases are currently unfunded.
    UH-60 Air Ambulance ``BlackHawk''
        Development of modernized versions of the Army's MEDEVAC Air
    Ambulance helicopters has been a National Guard development priority
    for more than seven years. Currently, eleven of the Army National
    Guard's fifteen Air Ambulance companies have been modernized. The Army
    National Guard also has one Air Ambulance Detachment with four UH-60Q
    Blackhawks. Only four of the companies are resourced at 100 percent (15
    UH-60s). The remaining four companies are equipped with UH-1 Iroquois,
    which will be retired from service by fiscal year 2004. This reflects
    an overall shortfall of approximately 82 UH-60s.
        An Army National Guard initiative for testing several variant
    prototype aero-medical platforms, using Tennessee Army National Guard
    aircraft, has resulted in Army approval of UH-60Q and HH-60L Air
    Ambulance designs for future requirements. There is now a formal Army
    program to eventually convert or procure these advanced UH-60Q and HH-
    60L designs for all Army and Army National Guard Air Ambulance units.
    CH-47D Cargo Helicopters
        The Cargo Helicopter CH-47D is programmed for modification to the
    ``F'' model. This improvement includes upgraded engines, drive train,
    and avionics. The Army program to upgrade current cargo helicopters to
    a fully modernized CH-47F configuration remains under funded. This will
    result in about two-thirds of the Army National Guard cargo fleet being
    modernized CH-47Fs, while the remaining one-third of the Army National
    Guard structure, plus Army training and float aircraft, remain as
    unmodified CH-47Ds. Because the Future Transport Rotorcraft (FTR) is
    now unlikely to be available for an extended period, the Army National
    Guard remains hopeful that the CH-47F program will eventually be
    extended to a full procurement objective of 431, in order to convert
    all Army CH-47Ds to the CH-47F configuration.
    Summary
        The Army National Guard remains an integral part of the Army's
    force structure. It has the majority of the artillery force and CS/CSS
    infrastructure. The enhanced separate brigades have reached, or are
    soon programmed to reach, the same modernization level as their Active
    Component counterparts. The Army National Guard has a traditional role
    in Homeland Security and overseas theater engagement missions, and
    supporting disaster relief. Despite the efforts of a number of
    programs, a significant lag will remain for several years in replacing
    the Army National Guard's overage tactical wheeled vehicle fleet,
    upgrading its tactical communication systems, and filling other
    equipment shortages that are most useful in Homeland Security and
    overseas mission support. Current programmed procurement through fiscal
    year 2007 will not fill the existing shortages nor replace current
    obsolete equipment.
                             resources to readiness
        The resourcing goal of the Army National Guard is to secure
    adequate funding, enabling the organization to meet all statutory and
    critical funding requirements. The Army National Guard readiness goal
    is to provide trained and deployable forces for The Army and Commanders
    in Chief (CINCs), thus the phrase ``resources to readiness.'' Our
    intent is to improve our readiness through funding parity within each
    Force package for all Army Components.
    Resourcing Priorities
        By prioritizing limited resources, our ``First to Deploy'' forces
    receive the highest funding in order to have the capability to meet the
    CINC's requirements. This resourcing strategy ensures our early
    deploying units have the funds, people and equipment necessary to meet
    the Defense Planning Guidance deployment criteria, and greatly enhances
    overall readiness. Lower priority units, such as our eight combat
    divisions, are funded to meet baseline readiness goals at the
    individual, crew and squad levels of training.
        Prioritization of resources, in terms of personnel assessment,
    equipment procurement, maintenance, training, and full-time support
    personnel support are the factors that determine readiness and
    capability across our force. The relatively new Army National Guard
    Weapons of Mass Destruction Civil Support Teams (CSTs) sustain
    appropriate levels of readiness to meet mission requirements. The
    number of units within the CST community will continue to increase
    based on National Defense requirements. Other high priority/early
    deploying units recently experienced a temporary decline of 3.9 percent
    in readiness due to structure additions. Focused resource management
    will cause these units to achieve readiness goals. Our enhanced
    Separate Brigades (eSBs) experienced an increase of 4.9 percent in
    readiness over the past 12 months. The eight divisions decreased 3.6
    percent due primarily to personnel training shortfalls.
        While adequate OPTEMPO funding is crucial to the continued
    readiness of our force, it is impossible to underestimate the impact of
    full-time manning shortages on the overall readiness of the ARNG.
    Military Technicians are integral to improved equipment readiness;
    Active Guard and Reserve soldiers in units are key to training and unit
    management. Full-time manning is our highest priority for improved Army
    National Guard readiness.
    Budget Appropriations
        Three appropriations apply directly to the Army National Guard:
    National Guard Personnel, Army (NGPA), Operations and Maintenance, Army
    National Guard (OMNG), and Military Construction, Army National Guard
    (MCNG). The Army National Guard is also funded by individual states for
    state-related functions. These three appropriations fund specific
    requirements as defined in congressional appropriation language, but
    should not be confused with the total costs of operations. Some support
    costs, including most equipment acquisition, are provided through other
    appropriations. The fiscal year 2002 appropriated funds for the Army
    National Guard is $8.2 billion, which represents approximately 10.1
    percent of the Army's $81.1 billion budget.
        The fiscal year 2003 President's Budget seeks to fund the steadily
    increasing pace and variety of operations. These rapidly occurring
    events include tremendous strides in Active Component Army--Army
    National Guard integration, ongoing support to peacekeeping efforts in
    the Balkans, and the recent expanding role in Homeland Security.

                          ARMY NATIONAL GUARD RESOURCES
                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                            Fiscal year--
                                                       ---------------------
                                                           2002    2003 (PB)
    ------------------------------------------------------------------------
    Personnel.........................................      4,044      5,131
    Operations/Maintenance............................      3,734      4,137
    Military Construction.............................        401        102
    ------------------------------------------------------------------------

    Contingency Operations
        The Army National Guard is a stakeholder in The Army's
    transformation. We continue to be called upon to provide an increasing
    number of soldiers and units each year to support the Army's role in
    Contingency Operations (CONOPS). Army National Guard soldiers are
    supporting Contingency Operations in Bosnia, Kosovo and Southwest Asia.
    Funds for these operations were transferred to the Army from the
    Overseas Contingency Operation Transfer Fund (OCTOF) during the fiscal
    year 2003 Program Decision Cycle.
        The OCOTF funds were transferred to the Army in fiscal year 2002
    and distributed in the out-years. The Bosnia, Kosovo and Southwest
    operations missions have been ongoing for a few years and are
    considered stabilized. Consequently, the Office of the Secretary of
    Defense directed the OCOTF funds be transferred to the Services'
    appropriations. ARNG support for these operations has provided a team
    effort for The Army in support of national defense. Deploying ARNG
    soldiers are conducting pre-mobilization training during Annual
    Training and Inactive Duty. Additional training days (incremental
    costs) for these deployments were funded from the OCOTF in fiscal years
    2000 and 2001. The ARNG is scheduled to continue to support these
    missions and will work closely with The Army to ensure that incremental
    costs are reprogrammed to train, equip and deploy these soldiers as an
    Army of One.
        The ARNG will command the Task Force in Bosnia for the
    Stabilization Force 12 though 15 planned rotations. The projected
    deployment force structure figures are still being debated based on the
    ARNG and Active Component mix.
        While deployed, Army National Guard soldiers are mobilized in a
    federal status and paid from the active duty military pay accounts.
    Incremental military pay funding is 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
    manned full-time--between 40 to 60 percent--to support normal state
    training. Incremental OCOTF National Guard Pay and Allowances (NGPA)
    funding received in fiscal year 2000 and fiscal year 2001 is listed
    below.

    Overseas Contingency Operations Transfer Fund (OCOTF)

                                                                    Millions

    National Guard Pay and Allowances (NGPA):
        Fiscal year 2000..............................................   $14
        Fiscal year 2001..............................................  56.1
        Fiscal year 2002..............................................\1\ 60

    \1\ Estimate based on known missions, which must be programmed and
    funded by the Army.
    ---------------------------------------------------------------------------
                       sustaining the army national guard
        Sustainment programs directly support readiness and training and
    continue to be Defense and Army priorities. Adequate resourcing--both
    funding and full-time manning--is key to quality training and to both
    near-term and long-term readiness. Enablers such as the redistribution
    of major end items (Class VII), logistics support of the training
    strategy, depot maintenance, Command Logistics Review Team (CLRT)
    assistance visits, fielding of vital logistics automation systems,
    Single Stock Fund (SSF), and clothing initiatives form the backbone for
    continued sustainment support for fiscal year 2002. Sustainment overall
    is adequately resourced in fiscal year 2002 and the logistics community
    has set goals to effectively use these resources to sustain existing
    logistical operations while planning for future challenges.
    Redistribution of Major End Items
        The Army National Guard equipment on-hand readiness posture
    improved this past year, but complete equipment commonality with the
    Active Component is years away. The Army National Guard boosts
    equipment readiness by redistributing assets throughout the states. New
    fieldings, displaced equipment and repair programs are vital to Army
    National Guard modernization. Even with these programs, there remains a
    modernization gap between the active Army and the Army National Guard.
    Service life extension programs will be critical necessities for the
    Army National Guard as the Army moves toward the Objective Force.
    Logistics Support of the Training Strategy
        The Army National Guard logistics community is a critical player in
    maintaining the training strategy by ensuring equipment readiness.
    Equipment readiness is supported with Operational Tempo (OPTEMPO)
    funding. The Army National Guard goal is to resource all combat units
    at the platoon level and other units to the level organized. The fiscal
    year 2002 funding provides for platoon training (176 miles) of enhanced
    separate brigades and individual/crew/squad (ICS--100 miles) of Army
    National Guard divisions. OPTEMPO provides the resources for soldier
    training support, repair parts, fuel, and organizational clothing and
    individual equipment--all of which are critical elements of the Army
    National Guard training plan. OPTEMPO funding must keep pace with the
    increasing requirements of maintaining the legacy equipment that
    continues to reside in the Army National Guard. These older systems
    drive up operating costs as they move beyond the end of their
    programmed life. The Army National Guard has established the Advanced
    Turbine Engine Army Maintenance (ATEAM) program that overhauls AGT 1500
    tank engines to approved depot level standards. This program will
    continue to produce tank engines in fiscal year 2003 to support Army
    National Guard CTC rotations and reduce maintenance downtime for the M1
    Abrams tank fleet.
    Depot Maintenance
        The depot maintenance program continues to be an integral part of
    Army National Guard sustainment. Equipment qualifying for depot repair
    increases by 24 percent during fiscal year 2003 and is attributable
    primarily to an increase in Army National Guard aviation modernization
    programs and rebuild of the Army National Guard's aged tactical wheeled
    vehicle fleet. The fiscal year 2003 program will allow the Army
    National Guard to execute depot maintenance on the following key
    programs by quantity: six M88A1 tank recovery vehicles, 24 AVLB Combat
    Bridging Systems through the Anniston Army Depot, 56 HEMTT Series of
    Vehicles, nine M198 155 mm Towed Howitzers, and one M102 105 mm Towed
    Howitzers.
        The Army National Guard's five Readiness Sustainment Maintenance
    Sites (RSMS) will continue to be leveraged to repair trucks, trailers,
    and electronic equipment. Four of the 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 RSMS sites are located in Kansas, Mississippi, Texas, Maine,
    and Oregon. All five sites performed work for the Army National Guard
    before being selected as an RSMS.
    Single Stock Fund (SSF) Initiative
        The Army National Guard is participating in the Single Stock Fund
    (SSF) initiative. This is a Department of the Army business process
    engineering change to improve and streamline the Army's logistics and
    financial processes for primarily Class IX repair parts. The
    implementation of SSF has progressed through Milestones 1 and 2.
    Milestone 3, which will capitalize the unit authorized stockage list
    (ASL) into the Army Working Capital Fund, is scheduled for completion
    in June 2003.
        Implementing SSF, will be a major cultural and operational change
    for the Army National Guard. It will generate numerous procedural and
    systemic changes. Some of the Army National Guard processes currently
    under revision to accomplish SSF transition include fielding a software
    program to support control of direct funding at unit level and credit
    management assistance to support increased unit buying power. The Army
    National Guard directorate staff continues to work closely with
    Department of the Army, Army Materiel Command, other Major Area
    Commands, and the states to facilitate a smooth transition to SSF.
    Soldier Support
        The ARNG continues to struggle to provide adequate protective
    clothing to our soldiers in all modes of operations. Many National
    Guard soldiers have been activated since September 11 and are standing
    duty in places not imagined in the recent past. Soldiers are guarding
    places such as bridges, nuclear power plants, and other sensitive
    assets in the United States. They are also protecting our borders
    through enhanced security at checkpoints. Soldiers serving in lower
    priority units who have not been fielded with cold weather clothing
    perform much of this duty. Since much of the duty is performed in
    inclement zones, such equipment has become essential. Much has been
    accomplished to meet the challenge, but far more remains to be done.
    Army National Guard Safety Program
        The foundation of the Army National Guard's Safety Program can be
    found in the four pillars of safety--leadership, discipline, standards
    and risk management.
                Risk Management
        Every day, the Army National Guard responds to the nation's needs.
    Applying solid risk management principles is critical to protecting our
    soldiers as they accomplish their missions. All Army National Guard
    personnel must be trained in the risk management process and use it as
    a primary tool in all mission planning. Formalized in Army doctrine,
    integrated in the safety program, risk management is the principal
    accident prevention process.
                Safety Training
        Effective training is key to the prevention of accidents and
    injuries. In fiscal year 2001, the Army National Guard provided more
    than 500 interactive Explosive Safety training packets (CD-ROMs) to
    state safety offices. Safety training videos for Hazard Communication,
    Fall Protection, and Blood-borne Pathogens are available to Army
    National Guard units through their respective State Safety and
    Occupational Health Offices. The use of distance learning and automated
    technology formats are being analyzed and proposed as viable training
    to support requirements at the local level.
                Ground Accidents
        The Army National Guard experienced 20 Class A, and four Class B
    ground accidents in fiscal year 2001. This is an increase of three
    Class A accidents and a decrease of one Class B accident compared to
    fiscal year 2000. These accidents resulted in the deaths of 18 Army
    National Guard soldiers and two civilians. Fourteen deaths occurred in
    Privately Owned Vehicle accidents, and two in Army Motor Vehicle
    accidents. Four deaths resulted from personal injuries. Excessive
    speed, fatigue, failure to wear seatbelts and failure to follow
    procedures all contributed to these accidents in some manner. The Army
    National Guard will continue to promote education, awareness and
    countermeasures to combat future accidents.
                Aviation Safety
        Aviation accident prevention is the priority in the Army National
    Guard Aviation and Safety Division. Every aviation maintenance action
    and operational program pivots on safe flying. Army National Guard
    Aviation Safety provides proactive advisement by applying knowledge
    from lessons learned, tracking trends, providing training, and most
    importantly by visiting units, facilities and operations. Combining
    these methods with proven Risk Management Processes provides for a
    successful countermeasure program.
        Each commander and unit safety personnel have been given a
    standardized assessment tool called the Aviation Support Activity
    Accident Prevention Survey (ASAAPS). The ASAAPS is a survey tool that
    can help prevent accidents and the repeating accidents that others in
    the military and the private sector have experienced.
                        training the army national guard
        The Army National Guard's fully integrated strategy for training
    individuals, leaders and units in live, virtual and constructive
    environments ensures we are prepared to meet wartime deployment
    readiness requirements and Homeland Security missions.
    Training Sites and Centers
                Combat Training Centers
        The Army National Guard participates in all of the Army's Combat
    Training Centers (CTC); the National Training Center (NTC), Fort Irwin,
    California; the Joint Readiness Training Center (JRTC), Fort Polk,
    Louisiana; the Combat Maneuver Training Center (CMTC), Hohenfels,
    Germany; and the Battle Command Training Program (BCTP), Fort
    Leavenworth, Kansas. 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 Army
    National Guard CTC Program involves the scheduling of Army National
    Guard 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.
                National Training Center (NTC)
        The OPFOR at the NTC has changed over the years to reflect the
    opposition U.S. Forces may encounter when forward deployed. Opposing
    forces may be encountered throughout the entire area of operations of
    the NTC. This includes the Aerial Port of Debarkation (APOD) at
    Southern California Logistics Airport, the railhead at Yermo, Fort
    Irwin Military City and any area between. Units encounter Civilians on
    the Battlefield (COB), media role players, and organized OPFOR up to
    regimental sized. A high level of rigor is achieved at the NTC through
    the capabilities of the OPFOR and provides U.S. forces with the
    toughest training available.
        The 11th Armored Cavalry Regiment (ACR) provides soldiers and
    equipment for the NTC OPFOR. Army National Guard units from Arizona,
    Nevada and Montana are assigned to the regiment to augment these active
    duty soldiers. The Army National Guard combat arms units that conduct
    OPFOR augmentation rotations at NTC benefit from the high OPTEMPO of
    the 11th ACR and receive excellent force-on-force training during the
    rotation.
                Joint Readiness Training Center (JRTC)
        The Joint Readiness Training Center (JRTC) located at Fort Polk,
    Louisiana, hosts light infantry and special operations forces from all
    components of the armed forces. The Army National Guard receives one
    brigade size rotation each year. These rotations are all allocated to
    the seven light infantry enhanced Separate Brigades (eSBs). The 45th
    eSB (Oklahoma) is scheduled to attend in fiscal year 2002 and the 53rd
    eSB (Florida) is scheduled to participate in fiscal year 2003. The Army
    National Guard receives and allocates two rotations annually. These
    rotations are allocated to the eSBs based on the unit's relative
    calendar proximity to scheduled JRTC rotations. Training opportunities
    exist for Combat Arms and Combat Service and Support units to augment
    BLUFOR and OPFOR units.
        Army National Guard soldiers from New York, Connecticut,
    Massachusetts, South Dakota, Texas and Alabama combined to form
    Aviation Task Force Liberty Bell. These Army National Guard aircrews,
    support personnel and Air Traffic Service personnel completed the Army
    National Guard fiscal year 2001 rotation at the Joint Readiness
    Training Center (JRTC) in Fort Polk, Louisiana. The Task Force deployed
    with 26 helicopters, including UH-60s and CH-47s, plus ground support
    equipment.
                Battle Command Training Program (BCTP)
        The BCTP is the Army's capstone Combat Training Center. It provides
    command and battle staff training for brigade, division and corps
    commanders, their staffs, major subordinate commanders and staffs, and
    supporting special operating forces. All National Guard brigades and
    divisions will participate in BCTP or BCBST rotations both as stand-
    alone exercises and in support of Active Component divisions and Corps.
        During fiscal year 2001 the Army National Guard executed three
    stand alone BCTPs, 12 BCBSTs and supported eight Active Component
    exercises with Field Artillery, Combat Support and Combat Service
    Support brigades, battalions and companies.
        During fiscal year 2002, 14 Army National Guard brigades will
    conduct BCBST rotations. Two Army National Guard divisions will conduct
    BCTP rotations, ten Field Artillery brigades and many CSS units will
    also participate in Active Component, BCTP rotations.
                National Guard Professional Education Center
        The LaVern E. Weber National Guard Professional Education Center
    (PEC) is the power projection platform for training the National
    Guard's full-time support force. Lieutenant General LaVern E. Weber's
    vision was to create a facility to train the full-time support force of
    the National Guard. To accomplish that vision, PEC is home to 5
    separate training centers, which include the Human Resource and
    Readiness Training Center, the Quality Training Center, the Logistics
    Training Center, the Strength Maintenance Training Center, and the
    Marksmanship Training Center.
        During fiscal year 2001, these 5 training centers trained nearly
    8,000 personnel through residence courses, distributed learning, and
    mobile training teams. The Professional Education Center will establish
    an Information Technology Training Center in fiscal year 2002 to keep
    pace with the ever changing and increasing technological needs of the
    National Guard.
    Distributed Learning
        Making training locally available generates more training
    opportunities. It reduces the time a soldier is away from his home
    station, eliminates excess travel time and per diem costs, and is
    accomplished in less time. However, traditional resident training will
    remain the appropriate method for many types of training, including
    initial entry, initial OES/NCOES leadership and equipment-intensive
    training.
        The goal of Distributed Learning (DL) in the Army National Guard is
    to improve readiness by providing local access to training and
    education--anytime, anywhere. Supporting this goal, the Distributed
    Training Technologies Project (DTTP) was formed to meet three missions:
    (1) Improve readiness, (2) Improve command, control and communications,
    and (3) Explore the concept of shared use; making the classrooms
    available on a space available--reimbursable basis.
        The strategy to achieve these missions is based on developing and
    synchronizing five essential components: hardware (network and
    classrooms), courseware, staff and faculty training, support services,
    and business operations.
                Courseware
        To meet the Army and ARNG's Military Occupational Skill
    Qualification (MOSQ) needs, the Army Training and Doctrine Command
    (TRADOC) is redesigning 525 MOSQ courses over a 12-year period ending
    in fiscal year 2010. The ARNG Professional Education Center is
    redesigning 70 ARNG functional courses and National Guard unique
    courseware to improve individual sustainment and collective task
    training.
                Hardware (Network and Classrooms)
        Critical to the success of Distributed Learning is GUARDNET XXI, a
    robust and dynamic telecommunication infrastructure that combines
    voice, video, and data requirements. GUARDNET XXI connects the National
    Guard Bureau with the state and territorial State Area Commands
    (STARCs). Using this infrastructure, the National Guard Distributive
    Training Technology Project (DTTP) expands training access through the
    installation of DL-capable classrooms at Army National Guard training
    sites, armories, and surrounding communities. To date, 291 classrooms
    of a planned 481 have been installed nationwide.
                Business Operations
        Because many DL classroom facilities, and in particular, the DTTP
    classrooms, are designed for multi-use operations, the overall
    management and administration of the venues is particularly important.
        Guidance is being provided to the state's senior leadership to
    assist them in fostering teaming relationships with other public/
    private/state/federal agencies aimed at leveraging resources,
    information, and strategic partnerships. DTTP's shared use initiative
    promises significant collaboration between government and non-
    governmental organizations, and uses financial, contractual, marketing,
    and consultative support resources. Appropriate business practices
    associated with classroom use by non-military organizations and
    individuals will become standard across the DTTP system.
    The Army School System (TASS) Transition
        The Army School System (TASS) is a multi-component organization of
    TRADOC, the Army National Guard, and the U.S. Army Reserve schools
    organized to deliver Military Occupation Skills Qualification (MOSQ)
    Reclassification, Noncommissioned Officer Education System, Officer
    Education System, and functional courses. TRADOC, Army National Guard,
    and USAR have separate areas of responsibility for specific TASS
    missions. However, the Army National Guard contributes facilities,
    equipment, and instructors to support courses conducted by the other
    components under Cross Component Resource (CCR) memorandums of
    agreement.
        The future success of TASS will depend heavily upon the
    implementation of DL products, refinement and development of new
    innovative programs of instruction, and a multi-component schoolhouse
    that supports the TRADOC Transformation. Army National Guard and USAR
    instructional, training development and budget management staffs are
    combining efforts to build a future TRADOC that delivers seamless
    training to standard for institutional training to the Army.
    Funding of New AND Displaced Equipment Training in Fiscal Year 2001
        A total of $7.656 million was funded and distributed to the Army
    National Guard to support new and displaced equipment. These funds
    supported a total of 27 system fieldings for six major Combat Systems,
    six major Combat Support/Service Support Systems and 15 other systems.
        In fiscal year 2002, validated new equipment training and displaced
    equipment training funding requirements totaled $10.8 million. However,
    only $2.1 million of $8.4 million in critical requirements are funded,
    leaving a $6.3 million Unfunded Requirement (UFR) as validated by the
    Department of the Army.
        The UFR will adversely affect preparation for the First Digitized
    Corps (FDC) exercise and the ability of the Army National Guard to
    demonstrate digitization capability. Without adequate funding for
    required new equipment training and displaced equipment training, many
    states will not be able to receive critical equipment.
    Army National Guard Distributed Battle Simulation Program
        The Army National Guard has a congressional mandate to expand the
    use of simulations, simulators and advanced training technologies in
    order to increase training opportunities for members and units and
    establish a program to minimize post-mobilization training time
    required for combat units. The challenges for the Army National Guard
    are to develop mechanisms and processes that efficiently and
    effectively integrate and synchronize individual and collective
    training requirements; provide infrastructure and expertise to plan and
    execute home station training; provide methodologies to incorporate
    Training Aids, Devices, Simulators, and Simulations (TADSS) into live,
    virtual, and constructive training environments; and contribute to
    improved readiness.
        To satisfy these requirements and address readiness and training
    gaps, the Army National Guard has developed the Distributed Battle
    Simulation Program (DBSP). The DBSP mirrors the Active Component Battle
    Simulation program for conditions of Army National Guard training
    environments by providing training infrastructure and TADSS
    integration. The Army National Guard intent is to continue the
    internally funded managed growth of the program in fiscal year 2002 and
    fiscal year 2003 and to work to gain additional Army resources in the
    out years.
    Army National Guard Aviation Training Sites (AATS)
        The Army National Guard's 4 Aviation Training Sites are designated
    as national training assets for the Army. The Eastern Army National
    Guard Aviation Training Site (EAATS) is located at Fort Indiantown Gap,
    Pennsylvania. The Western Army National Guard Aviation Training Site
    (WAATS) is located at Silver Bell Army Heliport in Marana, Arizona. The
    High Altitude Aviation Training Site (HAATS) is located in Gypsum,
    Colorado. Both the EAATS and WAATS are regional simulation sites,
    offering simulation support to the Army in UH-1H, UH-60, CH-47D, and
    AH-64 helicopters.
    Aviation Combined Arms Tactical Trainer
        The Army National Guard has developed an Aviation Reconfigurable
    Manned Simulator (ARMS) as a cost-effective solution to enhance flying
    safety and readiness. This system was developed with the mutual
    cooperation and support of the U.S. Army Aviation Center (USAAVNC) and
    the Army's Simulation, Training and Instrumentation Command (STRICOM).
    It can be quickly reconfigured to each of the rotary wing airframes
    flown in the Army. The device is a collective training simulator that
    provides for a 360-degree virtual environment, a helmet mounted display
    system, accurate cockpit housing, realistic controls and essential
    panels, and tactile-interactive cockpit panels. Each ARMS provides
    training in individual and crew tasks, and focuses on collective,
    combined arms and joint service operations.
    Accelerated Officer Candidate School (OCS) Program
        The Army National Guard initiated a very successful accelerated
    Officer Candidate School (OCS) Program in 1996. 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 increased to 200 students in fiscal
    year 2001 due to forecasted training requirements submitted by the
    states, and has been increased to 400 students per year for fiscal year
    2002 and beyond.
        The shortage of company grade officers continues to be a challenge
    across The Army. In an attempt to decrease company grade officer
    losses, the Army National Guard 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 Army National Guard is also exploring
    the feasibility of submitting legislation to offer bonuses for company
    grade officers that agree to extend their service commitment.
        The Army National Guard 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. The Army National Guard 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 once
    the individual completes the required civilian or military education.
    Antiterrorism/Force Protection (AT/FP) Training
        The Army National Guard Antiterrorism/Force Protection (AT/FP)
    Program enters its third year. At least five soldiers from every
    battalion in the ARNG received training in AT/FP measures.
        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 has coordinated with the Department of the Army in
    identifying installations that require separate AT/FP plans and are
    developing a timeline for providing assistance to the states and
    installations.
                             quality installations
        The Army National Guard is unmistakably a community-based
    organization that has more the 3,000 Army National Guard Readiness
    Centers in some 2,700 communities within the 50 states, three
    territories and the District of Columbia. We also give federal support
    to the operations and maintenance of over 27,000 training, aviation and
    logistical facilities throughout the nation. The citizens of each
    community are the same guardsmen that protect us. With the quality of
    many of our facilities rated C-4, (mission performance is significantly
    impaired), it makes the Army National Guard's mission in global
    security, emergency response and giving local support to the
    communities more of a challenge each year.
    Facilities Overview and management
        The current projection for fiscal year 2003 in Real Property
    Maintenance funding, just to sustain our facilities, will be in the
    neighborhood of $350 million. Military construction (MILCON) funding is
    estimated to only recapitalize National Guard facilities on a 341-year
    cycle. This is far short of the Army's 67-year goal. The Army National
    Guard's cost to improve all of its existing facilities to C-1 is $9
    billion.
        The Army National Guard's budget request was $59 million for
    military construction in fiscal year 2001. Congress appropriated $285
    million, which increased our construction program in fiscal year 2001
    from 28 to 50 projects. These funds included construction in support of
    the Weapons of Mass Destruction/Civil Support Teams; 14 projects for
    Phase I of the Army National Division Redesign Study (ADRS); and 32
    other projects in support of the Army Facility Strategy.
        The Army National Guard Military Construction budget request for
    fiscal year 2003 outlines $100.7 million for 11 major construction
    projects, planning and design, and unspecified minor construction. The
    required increase in the budget request is due to the support of the
    Army National Guard Division Redesign Study.
        Although the Army National Guard received a proportional share of
    Army's military construction dollars, the Army National Guard still has
    an unfinanced requirement of $580 million for fiscal year 2003. If our
    unfinanced requirements were equal to our budget request, we would be
    able to fund over 50 additional construction projects.
        As part of the post-Cold War strategy of making the service
    ``light'' enough to move thousands of troops anywhere in the world in a
    matter of days, the Chief of Staff of the Army directed that the Army
    reorganize a medium force between the existing ``light divisions, and
    ``heavy'' division. Called the Interim Brigade Combat Team (IBCT), it
    is programmed as an Army National Guard Brigade currently scheduled for
    stationing in Pennsylvania. About $100 million of military construction
    is currently programmed to support the reorganization of the
    Pennsylvania Army National Guard.
        The IBCT is an example of how we are working with the Army to
    reshape the way we do business. The Army National Guard continues to
    work toward revamping facilities to meet the needs of evolving missions
    such as Weapons of Mass Destruction/Civil Support Teams, the Army
    National Guard Division Redesign and the Interim Brigade Combat Team.
    Additionally, we are actively engaged in providing anti-terrorism force
    protection for all of our citizen soldiers. To fully implement all of
    these changes the Army National Guard's construction focus in fiscal
    year 2003 will be adapting and building facilities to meet these new
    requirements.
                The Real Property Development Plan (RPDP)
        The Real Property Development Plan (RPDP) Initiative gives the
    Department of the Army a more accurate view of the quality and quantity
    of facilities the Army National Guard needs to successfully complete
    its missions.
                A Planning Resource for Infrastructure Development
                        Evaluation (PRIDE)
        PRIDE, a data base management tool, has been implemented by all 50
    states and three territories. This tool provides the states and the NGB
    with excellent data management and analysis for decision support in the
    infrastructure community.
                Installations Status Report--Infrastructure (ISR I) Program
        Installations Status Report (Infrastructure) Program (ISR I)
    provides conditions and costs associated with the Army National Guard
    infrastructure. It gives the Army National Guard concrete justification
    to explain current funding levels for sustainment, repair, maintenance
    requirements, predict future major construction funding requirements
    and provides Congress information to justify increasing appropriations.
        In fiscal year 2001, the results of the Installation Status Report
    measured a new military construction requirement of $10.8 billion for
    the Army National Guard. In addition, a $9 billion repair backlog
    resulting from years of under-funding was also substantiated.
    Facilities sustainment for fiscal year 2001 was funded at about $224.4
    million. ISR shows that the true requirement is $810 million, which
    means facilities continue to deteriorate and the repair backlog
    continues to increase.
    Significant Real Estate Acquisitions
        The constrained MILCON environment also makes it imperative that
    the Army National Guard use all resources available to seek out, plan
    for, and design facilities with our future missions in mind.
                Barbers Point, Hawaii
        The Army acquired a portion of the former Navy Barbers Point,
    Hawaii. This has proved a tremendous factor in resolving shortfalls in
    the stationing of units and equipment in the Hawaii Army National
    Guard. This 150-acre acquisition allows the Hawaii Army National Guard
    to consolidate four dislocated 29th Infantry Brigade units and a
    maintenance operation. The new location will reduce soldier travel time
    and provide facilities to conduct mission essential operations.
                Ravenna, Ohio
        Acquisition of a portion of the former Ravenna Army Ammunition
    Plant by the Ohio Army National Guard has greatly resolved shortfalls
    in maneuver training area to battalion level. This 16,164-acre
    acquisition will facilitate Armor, Mechanized Infantry and Engineer
    unit training
                Minden, Louisiana
        The Louisiana Army National Guard's acquisition of a portion of the
    former Louisiana Army Ammunition Plant has greatly resolved shortfalls
    in training area availability. This 12,896-acre acquisition will
    facilitate Transportation, Dismounted Infantry and Engineer unit
    training.
                Twin Cities, Minnesota
        An acquisition that will facilitate Mechanized Infantry Battalion,
    Signal Corps and Military Police unit training, is the purchase of
    1,245-acres of the former Twin Cities Army Ammunition Plant. The
    Minnesota Army National Guard's move has greatly resolved shortfalls in
    training area and travel time to existing training areas.
    The Army National Guard Environmental Program
        The Army National Guard Environmental Program is a critical support
    piece of our Quality Installations. Supporting the readiness of Army
    National Guard soldiers and units, the program obtains and provides
    resources, guidance and policies that emphasize responsible stewardship
    of the land and facilities to the states and territories who then
    assure compliance with federal, state and local environmental laws.
    This is accomplished by promoting the Army's environmental goals in
    compliance, conservation and restoration efforts nationwide.
                Energy Conservation Investment Program (ECIP) Environmental
                        Program
        The Energy Conservation Investment Program (ECIP) provides MILCON
    funding for energy and renewable energy projects greater than $500,000,
    which can show significant energy savings. The Army National Guard
    awarded its first ECIP project at the Arkansas Army National Guard
    headquarters in Little Rock for $790,000 in energy upgrades. Two
    additional ECIP projects--a wind turbine project at Camp Williams,
    Utah, and energy improvements at Gowen Field, Idaho--are waiting
    funding.
        The Army National Guard Energy Working Group has been selected as a
    team winner in the 2001--23d Annual Secretary of the Army Energy and
    Water Management Awards and as a team winner in the 2001 Federal Energy
    and Water Management Awards.
                Compliance
        The Army National Guard continues to improve guidance and policy on
    a myriad of complex regulatory challenges to ensure compliance in an
    efficient, consistent and cost-effective manner. We are committed to
    meeting the Department of Army goal of having no new enforcement
    actions. It is likely, however, that the Army National Guard will
    continue to receive enforcement actions due to the aging infrastructure
    combined with inadequate Sustainment, Restoration and Modernization
    funding.
        In fiscal year 2001 the Army National Guard developed a strategy to
    support the use of mobility refueling vehicles. The Army National Guard
    supports a large fleet of these vehicles, which are used to transport
    bulk amounts of oil on public highways. These vehicles must abide by
    federal regulations determined by the Environmental Protection Agency
    as well as the Department of Transportation. This strategy provides
    guidance to the states and territories on a Fuel Management Plan, which
    stresses safe environmental practices. With proper implementation, this
    strategy has the potential to reduce our regulatory oversight and save
    more than $100 million in cost avoidance to construct permanent
    secondary containment structures.
        The Army National Guard has continued with the transition of
    environmental responsibilities at sites closed by the Base Realignment
    and Closure (BRAC) process. The Army National Guard has been involved
    in ensuring that properties are in compliance with environmental
    regulations and that the Army National Guard is not responsible for
    managing funding for the clean-up of the previous owners'/operators'
    actions.
        One concern is the uncertainty surrounding the regulatory framework
    for range compliance and increasing awareness of potential
    contamination or releases associated with range activities. An
    increased compliance requirement could affect current environmental
    budgets and have a significant negative impact on mission readiness if
    ranges cannot be operated due to environmental constraints.
                Conservation
        The Army National Guard Conservation objectives include improving
    the National Environmental Policy Act (NEPA) processes for various Army
    National Guard stationing and training support activities. Specific
    areas that the Army National Guard will address are the Fort Indiantown
    Gap Environmental Impact Statement, enhanced AH-64 training at the
    Western Army National Guard Aviation Training Site and the programmatic
    environmental documentation of transformation equipment fielding. The
    Army National Guard will also formalize agreements to address the more
    than 5,000 Army National Guard buildings that will reach the 50-year-
    old mark in the next three years and potentially be eligible for
    historic structure designation.
        In fiscal year 2001 the Army National Guard completed 90 Integrated
    Natural Resource Management Plans (INRPs) for training sites across the
    nation. Each INRP meets a statutory requirement, SIKES Act 1997, and
    provides benchmark and goals to sustain training on Army National Guard
    properties while being stewards of the environment.
                Restoration
        The National Guard Bureau (NGB) is tasked to execute the Army's
    Installation Restoration Program (IRP) for federally owned Army
    National Guard facilities. In addition, state owned facilities are
    encouraged to evaluate their facilities for past environmental
    contamination. The restoration program is also responsible for the
    inventory and data collection for all closed and transferred military
    ranges within the Army National Guard.
        During fiscal year 2001, the Army National Guard completed 18
    Preliminary Assessments; another 30 are currently ongoing. Twelve Army
    National Guard Site Inspections were completed and seven additional
    inspections have been initiated. Investigations continue at three BRAC
    sites: Fort Chaffee (Arkansas), Fort Indiantown Gap (Pennsylvania) and
    Fort Pickett, (Virginia).
        The Army National Guard Restoration Program is actively working at
    several locations to investigate and determine remediation requirements
    at contaminated sites. These locations include: Camp Crowder
    (Missouri), Camp Navajo (Arizona), Camp Roberts (California), the Los
    Alamitos Joint Forces Training Base (California), Safford Range
    (Arizona), Rehoboth NIKE Site (Massachusetts), and Farmingdale (New
    York). The Army National Guard achieved several successes this year
    with environmental actions. One is the Massachusetts Military
    Reservation, where the EPA accepted two decision documents for no
    further action at clean up sites.
        The Restoration program further supported coordination efforts with
    the Navy Base Closure Office at Barber's Point in Hawaii and with Army
    Materiel Command for the Ravenna Army Ammunition Plant, Ohio to help
    with land transfers to the Hawaii and Ohio Army National Guard.
        NGB is concerned about funding for investigation and remediation at
    state owned ranges that have been closed and transferred. The Army has
    placed this part of the range program under the Environmental
    Restoration, Army account, which precludes the use of the funding at
    non-federally owned facilities.
                       missioning the army national guard
        Over the past 20 months, Headquarters, Department of the Army, the
    Army National Guard (ARNG), and Forces Command used a deliberate
    planning process to mission ARNG combat structure. ARNG missions are
    derived from a variety of requirement documents in the Joint Strategic
    Planning System (JSPS). Through the Joint Strategic Capabilities Plan
    (JSCP), CINC Integrated Priority List (IPL), Functional Plans, CINC
    Theater Security Cooperation Plans (TSCP), and other cyclic JSPS
    products, all Army requirements are identified.
        The Army is transforming itself to remain the dominant land force
    in the 21st Century while continuing to meet CINC requirements in
    support of the National Military Strategy (NMS) and the National
    Security Strategy (NSS). The ARNG is an essential component of the
    Army's ability to satisfy these requirements. The ARNG missioning
    effort was included in the Army's submission to the JSCP 1998, change
    1, which was signed by the Chairman, Joint Chiefs of Staff in July
    2001. Included in the apportionment tables in this document are six of
    the eight ARNG divisions. The two remaining divisions perform a force
    generation mission not reflected in the JSCP. Additionally, the 15
    enhanced Separate Brigades (eSBs) and the two Special Forces Groups
    have been apportioned in the JSCP.
        Of the six ARNG Divisions, four are apportioned to CINCs of Major
    Combat Operations (MCO), formally called Major Theater of War (MTW).
    Two more divisions are apportioned to CINCs that are non-MTW, for
    regional contingency planning. These six divisions and the 15 enhanced
    Separate Brigades (eSBs) have single theater focus based on their
    apportionment. This focus allows for streamlining the training
    development process. The divisions and eSBs receive Mission Planning
    Guidance (MPG) from their higher wartime headquarters, develop their
    Mission Essential Task List (METL) and submit it to their higher
    wartime headquarters for approval.
        The next step in the process is for the CINCs to designate ARNG
    combat units for specific missions in their war plans based on the new
    defense strategy and its planning requirements. Work continues between
    the CINC's Staff, the Joint Staff and the Army on this effort. Over the
    next 12 months CINC planning staffs will build their war plans. The
    Army will work closely with the CINCs to ensure Reserve Component
    capabilities are appropriately integrated in these plans.
        The next effort is to apportion the divisions in the upcoming JSCP
    2002. The eight divisions will be missioned to support MCO, regional
    CINC requirements, and the Generating Force. The JSCP will reflect the
    MCO and regional CINC apportionment. To provide a Generating Force, two
    divisions would be given this mission and document this in the Army
    Mobilization and Operations Planning and Execution System (AMOPES). All
    divisions still have the on-call missions to reinforce Europe, rotate
    for Small Scale Contingencies (SSCs) in Bosnia, Kosovo, Southwest Asia,
    etc. Another step in the ongoing process is apportioning forces in
    accordance with the different requirements for the new defense
    strategy, particularly in the mission area of Homeland Security.
    Corps Packaging
        At the 122nd National Guard Association of the United States
    (NGAUS) convention in September 2000, the Chief of Staff of the Army
    (CSA) announced some of the results of the Army's deliberate planning
    process related to ARNG division missioning. The CSA announced the
    alignment of the eight ARNG divisions with the four Army corps. 40th
    Infantry Division (ID) (California) is aligned with I Corps at Fort
    Lewis, Washington. 34th ID (Minnesota), 38th ID (Indiana), and 49th
    Armored Division (Texas) are aligned with III Corps at Fort Hood,
    Texas. 28th ID (Pennsylvania), 29th ID (Virginia), and 42nd ID (New
    York) are aligned with XVIII Corps at Fort Bragg, North Carolina. 35th
    ID (Kansas) is aligned with V Corps in Heidelberg, Germany.
        By assuming the mission orientation of the aligned corps, corps
    packaging enhances the training readiness of the ARNG combat
    formations. The ARNG divisions achieve greater training and geographic
    theater focus. The association and teaming benefits with counterpart
    active divisions is an important element of the alignment. Corps
    Packaging does not however replace the higher wartime headquarters in
    the Mission Essential Task List (METL) approval process. The divisions
    receive Mission Planning Guidance (MPG) from their higher wartime
    headquarters, develop their METL, and submit their METL to their higher
    wartime headquarters for approval. Corps Packaging is used in the
    absence of a higher wartime headquarters. Under Corps Packaging, eSBs
    are also aligned under one of the Active Component Corps, providing it
    with the same benefits as the ARNG divisions. The figure below provides
    Corps Packaging in its entirety.
                the army national guard knowledge infrastructure
        Our nation is in a unique period in history where there is a great
    deal of change and opportunity. The Department of Defense is moving to
    take advantage of these changes and capitalize on the opportunities as
    they are presented. The Department of Defense knows that it must
    transform its business processes and infrastructure to enhance
    capabilities and free up resources to support war fighting and the
    transformation of military capabilities. To accomplish this, the
    Department of Defense's Quadrennial Defense Review Report states,
    ``organizational structure will be streamlined and flattened to take
    advantage of the opportunities that the rapid flow of data and
    information present.''
        At the nucleus of this effort for Department of Defense is the
    opportunity to exploit knowledge management. The Army National Guard
    readily embraces the opportunities associated with knowledge management
    by building a robust knowledge infrastructure (KI). Our KI supports all
    missions to include the National Guard's traditional mission of
    Homeland Security.
        For the Army National Guard to meet the needs of this century, we
    are using the technologies that facilitate our connection to all
    concerned activities. Embracing the central role of information
    technology through knowledge infrastructure efforts, the Army National
    Guard is fully committed to taking advantage of opportunities provided
    by information age concepts and technologies.
        The Army National Guard has devoted considerable effort in the past
    two years to increase high-speed Internet access. Recently, the Army
    National Guard significantly increased the available bandwidth, or
    allowable data flow, to the non-classified internet protocol router
    network (NIPRNET). Three of the seven Army National Guard Network
    (GuardNet) centralized distribution points or hub sites now have more
    than triple the amount of previously allowable data flow. The remaining
    four hub sites will be connected to the NIPRNET by March 30, 2002, thus
    resulting in improved Internet access.
        High-speed information access will make significant contributions
    to such areas as Distributed Learning (DL), electronic publications and
    forms, training simulation and World Wide Web technology applications.
    In addition, the ARNG is in the process of coordinating the
    installation of a dedicated secret internet protocol router network
    (SIPRNET) connection at each of the 54 STARCs in order to enhance the
    ARNG's classified communications capabilities.
        The ARNG leadership is committed to sustaining the KI that exists
    in the ARNG today. The ARNG, using data collection via the
    Headquarters, Department of the Army information technology metrics
    submission process, will focus scarce information technology resources
    to areas that are critical to both mission accomplishment and knowledge
    management.
    Security
        Last year, Army National Guard embarked upon a four-phased approach
    to firewall implementation. Phase I involved purchasing and physically
    deploying two firewalls for each state. The second phase was to fully
    configure the firewalls at GuardNet's Defense Information Systems
    Agency (DISA) connection and Phase III involved configuring the state's
    connection to GuardNet, also called the ``front door'' firewall. Both
    phases II and III are complete.
        The final phase of this deployment is configuring the state's
    connections to external networks, also called the ``back door''. By the
    end of fiscal year 2002, the Army National Guard commits to
    accomplishing this final phase of extending the GuardNet perimeter to
    those back doors and meeting DISA security standards for all
    connections to GuardNet.
    Video Services
        The Video Operations Center continues to improve the technology of
    the Army National Guard's video teleconferencing (VTC) systems. When
    time and distance are roadblocks to communication and productivity,
    video conferencing is an excellent tool for bringing people together
    with a visual message.
        The Army National Guard 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, Virginia. States must work through the Video Operations
    Center at the Army National Guard Readiness Center to plan and conduct
    their local events. One other significant upgrade to the Army National
    Guard'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.
        Today, there are over 330 VTC centers throughout 50 states and
    three territories that aid in facilitating a wide range of state and
    national missions including training and family support. There are 257
    Army National Guard distributed learning centers to facilitate training
    soldiers, educating university students, and supporting government/
    civilian business conferences.
        The Army National Guard plans to establish clear, reliable video
    teleconference on desktop computers and secure VTC to all states and
    territories by October 1, 2002. Costs for these projects are expected
    to run at about $4 million for the secure VTC and $500,000 for the
    desktop VTC. Army National Guard leaders are committed to providing
    soldiers and employees with the state-of-the-art information technology
    (IT). The future of IT is here and the Army National Guard continues to
    be a leader in establishing the cutting edge of IT. The goal is to
    position GuardNet as the premier network security model for the Army,
    which is being considered as the network to support the Homeland
    Security mission.
    Logistics Automation Systems
        Army National Guard Logistics Automation and Logistics Standard
    Army Management Information Systems (STAMIS) are essential to force
    sustainment and readiness. These systems provide requisition financial
    data, equipment readiness reporting, OPTEMPO mile execution, asset
    visibility, resource stewardship, property accountability, centralized
    clothing records, and maintenance execution information.
        Fiscal year 2002 will mark a very busy year in Army National Guard
    logistics systems, building on the successes of fiscal year 2001. In
    fiscal year 2001 the Army National Guard successfully consolidated 54
    Army National Guard Corps/Theater Automated Data Processing Service
    Center (CTASC) sites to 4 regional sites and successfully completed
    systems acceptance testing of the Integrated Materiel Automations
    Program (IMAP).
        The Program Manager STAMIS and the Army National Guard will begin
    fielding Global Combat Service Support-Army/Tactical System (GCSS-A/T)
    to the 50 states and 4 territories in fiscal year 2002. This will be a
    landmark fielding. The Army National Guard will field a new Army STAMIS
    at the same time as the Active Component, bringing forth the vision of
    ``An Army of One.''
        This fielding of GCSS-A/T includes the Integrated Logistics
    Analysis Program and Property Book Module (SPR). The Integrated
    Logistics Analysis Program brings a very powerful analysis tool to the
    Army National Guard. Additionally, the Army National Guard is changing
    the way it is doing business in the management of Organizational
    Clothing and Individual Equipment with the implementation of the
    Central Issue Facilities.
    Reserve Component Automation System (RCAS)
        The Reserve Component Automation System (RCAS) infrastructure
    fielding was completed ahead of schedule, providing a wide area network
    that links National Guard and Reserve units in all 50 states, three
    territories and the District of Columbia. The latest software increment
    added force authorization and modernization, training, human resources
    functionality, and introduced mobilization planning. Increments 6, 7,
    and 8 will be fielded by fiscal year 2003 when the project transitions
    to Post Deployment Life Cycle Support.
    Personnel Information Transformation
        The Army National Guard's (ARNG) active participation in the joint
    service initiative Defense Integrated Military Human Resources System
    (DIMHRS), the Army initiative Integrated Total Army Personnel Data Base
    (ITAPDB), the Personnel Electronic Record Management System (PERMS),
    and the disaster recovery and Continuous Ongoing Operations Plans
    (COOP) development ensures seamless operation of personnel actions
    affecting ARNG soldiers.
        The development of ITAPDB, a cross-component personnel database,
    will be used by the ARNG, the Active Army and the Army Reserve to
    migrate like-type and cleansed data to DIMHRS. This migration strategy
    ensures the transference of quality data into DIMHRS, enabling the Army
    to deploy a joint-service personnel/pay module consisting of integrated
    data and functionality.
        Additionally, efforts are underway to capture current detailed
    metadata information at the Department of the Army level that will link
    to a metadata repository at the Department of Defense (DOD). These
    repositories will provide the Services comprehensive and detailed
    information of all legacy data definitions, architecture, application
    processes, site capabilities and locations. This information will be
    required when developing disaster recovery plans and establishing
    joint-service COOP sites, as well as serving as historical
    documentation.
        Several near-term objectives will be accomplished by leveraging
    recent IT initiatives. Army Knowledge Online (AKO) provides a secure
    portal to access electronically stored images of soldier personnel
    records. With funding of the state-level PERMS project and state-level
    processing of ARNG enlisted records, every soldier in the Army will be
    able to view his or her Official Military Personnel File (OMPF) online
    via their secure AKO account.
        AR-PERSCOM, PERSCOM, EREC, and NGB (officers only) will provide
    OMPF online this fiscal year. Activation of other applications is
    within easy reach; Army Selection Board System (ASBS), field to file,
    and eFile. These PERMS-based initiatives give the components the
    ability to electronically transmit individual documents and entire
    OMPFs via secure internet from the soldier in the field to higher
    headquarters and DA levels.
                                    summary
        The morning of September 11, 2001 changed every American's world.
    For those who lost loved ones we can only imagine the pain and sorrow.
    While the Army National Guard cannot alter the course of history, we
    can continue to help heal those who are suffering and ensure we are
    prepared to respond to the changing demands of our world.
        The Army National Guard continues to provide mission ready units to
    the governors and to the President to fight our nation's wars. Our dual
    status has proven to be an enduring principle as we find Guardsmen on
    duty here at home as well as overseas in Kosovo, Afghanistan and other
    locations. We must guard against further attacks at home, while we
    prepare for a campaign abroad.
        That is precisely the role of today's Army National Guard. For
    almost 365 years, the citizen-soldiers of the Army National Guard have
    been the solid shield that has defended America at home, and the sword
    of power that America has wielded overseas in support of all her wars.
    Today is no different.
                   the air national guard director's overview
        This is a critical time in our nation's history--a time of war.
    This is also a time when we must transcend trivial differences and
    diversified positions to prosecute and prevail against a vicious,
    irrational and unprincipled enemy.
        This is a time when we must focus all our leadership, energy,
    character and resources to bring and sustain the best-trained and
    equipped Air National Guard (ANG) men and women to America's defense at
    home and effective operations abroad.
        This is a time when we all must stand together--united, prepared,
    persistent and undeniably patriotic--as ``one Nation under God,
    indivisible''--at all costs, under any conditions.
        It was September 11th that marked time for these and all subsequent
    generations of Americans. On 11 September 2001, the world stood still--
    but not the Air National Guard--nor our brothers and sisters in the
    Army National Guard and the countless thousands of other citizens who
    immediately responded to deter an unseen enemy from further assaults
    and destruction. As the events of September 11th unfolded, the Air
    National Guard, through years of preparation, training and commitment
    launched to our nation's emergency and desperate call for help. These
    Air Guard men and women brought with them the character and core values
    of generations of citizen soldiers and airmen. The volunteer spirit
    that answered the emergency bell to fire the first ``shots heard around
    the world'' on Lexington Commons in April 1775--rapidly responded to
    the ``shock heard round the world'' on 11 September during the brutal
    attacks in New York, Washington, DC, and Pennsylvania. While life
    changed forever on that tragic day, our Air National Guard volunteerism
    remains steadfast and reliable--even after nearly 5 months in 24/7
    operations.
        The patriotic Air Guard spirit was seen in the cockpits of fighter,
    tanker and airlift crews within hours of the attacks--operated by both
    full-time and traditional guard men and women. The Air Guard spirit was
    seen out the cockpit and passenger windows of Air Force One as the
    147th Fighter Wing rejoined to provide critical protection and escort
    our Commander-in-Chief.
        That same undaunting spirit is flying and fighting in distant
    lands; operating in dangerous, deplorable conditions; following the
    enemy deep into their own territory to stop the reigns of terrorism at
    its very core--guarding America from abroad in Operation Enduring
    Freedom. For those critics who have held the position that Air National
    Guard forces aren't available or responsive enough, they need only talk
    to the 193rd Special Operations Group from Harrisburg, Pennsylvania.
    These men and women who operate a High Demand Low Density weapon
    system, deployed just days after the attack to operations in these
    regions where they remain today--fighting the information and
    psychological war over enemy airspace.
        In addition, our Air Guard tankers are the critical enablers of the
    tactical fighter and bomber sorties that have forced the Taliban and
    its supporters to retreat from major strongholds in Afghanistan. The
    air war over Afghanistan is directly impacted by the efforts of our
    dedicated Air Refueling units.
        We will see greater participation of our Air Guard fighters in
    operations that take the fight against terrorism to places far from our
    shores--while protecting our homeland as part of a combined Total Force
    response.
        On 11 September, prior to the attacks, the Air National Guard was
    already committed dramatically to critical and ongoing Aerospace
    Expeditionary Force (AEF) operations in Operation Northern Watch,
    Southern Watch, the Balkans, and continuing to fight the war on drugs.
    The Air National Guard was already fighting fires raging in our states
    and supporting National Science Foundation missions in sub-arctic
    conditions. We had already contributed extensively to increasing
    requirements--all with meager 1984 endstrength numbers. We will
    continue these contributions--``Always ready--Always there.''
        On 11 September, the Air National Guard--became dual-missioned--
    fighting a war on three fronts. With growing mobilization authority,
    the Air National Guard provides more than 25,000 men and women to
    Operation Noble Eagle, Enduring Freedom and AEF. Today those numbers
    include nearly 10,000 volunteers, 10,000 mobilized men and women, and
    sustained 1,300 AEF participants--many under partial mobilization and
    volunteerism.
        In Desert Storm we activated nearly 16,000 proud Air Guard men and
    women. In Bosnia, our contribution was close to 8,000 and Kosovo--
    4,000. We have--in 5 short months--already nearly doubled our Desert
    Storm peak and tripled or better the other remaining major conflicts or
    wars of the last decade alone. The nature and timing of this war puts
    the Air National Guard in a very unique and positive leadership
    position. We will leverage and exercise this position. It is our
    destiny. It is our heritage. We have become a leader in this new
    world--during a decidedly new American experience.
        Today, our nation contemplates fundamental changes or shifts in the
    way we continue to ``ensure domestic tranquility'' and ``provide for
    the common defense.'' The hand we've been dealt for our future security
    environment cries out for greater involvement of our Air National Guard
    units. This new security environment demands a strong focus on Homeland
    Security issues, 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,
    transnational threats, terrorism, and humanitarian operations.
        The Air National Guard is represented in all 54 states and
    territories by 88 Flying Wings and 579 Mission Support Units, with over
    108,000 proud and skilled people--68 percent of whom are Traditional
    National Guard members--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 ``blue'' budget and 1.8 percent of the
    Department of Defense budget.
        Over the last decade, the Air National Guard has significantly
    changed in both relevance and accessibility. Since 1990, the Air
    National Guard contributions to sustained Total Force operations have
    increased 1,000 percent with over 85 percent of all activity in support
    of CINC or service requirements. 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.
    Air National Guard support to all United States Air Force operations
    over the last decade has increased from 24 to 34 percent of the Total
    Force aircraft employed. Contingency support has dramatically increased
    from 8 percent in 1993 to nearly 22 percent today. Prior to September
    11th, the number of Active Duty days per ANG member (above the 39-day
    obligation) had increased on the average by 12 more--all based on the
    volunteerism of our dedicated citizen airmen. Today, that number of
    days has grown as our men and women clamor to respond to our nation's
    call to the war on terrorism.
        During this year's critical call by our nation, the Air National
    Guard became increasingly important and forever relevant. We have all
    felt the sting of these events, and none of us should ever forget the
    lesson. We must be properly resourced. We must be modernized. We must
    be appropriately trained. We must continue to be ready while we always
    retain our citizen airman heritage.

                                             David A. Brubaker,
                Brigadier General, Deputy Director, Air National Guard.
                          the air national guard today
        The Expeditionary Aerospace Force Given the demand for aerospace
    forces over the past 10 years, the Expeditionary Aerospace Force (EAF)
    was designed as a--flexible force structure to ensure that on-call,
    rotational forces can effectively meet both our steady state and ``pop-
    up'' commitments, while giving our people more predictability and
    stability in their deployment schedules.
        The EAF includes both deployable and non-deployable war fighting
    and support forces. The associated 10 Aerospace Expeditionary Forces
    (AEF) are deployable packages of aerospace power. The Air National
    Guard was critical to the concept from the beginning.
        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 46 percent of the C-130 intra-theatre lift and 35
    percent of the KC-135 steady state air refueling AEF requirement. Of
    the Air Guard's 37 combat-coded fighter units, all six A-10 units, all
    six F-15 units, all four F-16 Block 40 units, the one 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 have been even
    more robust in EAF Cycle 2--especially with the advent of the War on
    Terrorism--when every combat-coded Air National Guard fighter unit was
    aligned to participate, including eight Air Guard Precision Guided
    Munitions (PGM) equipped units. In Cycle 2, a total of 22 ANG F-15 and
    F-16 units were prepared and scheduled to fly the air superiority
    mission until the events of September 11th. In addition, during Cycle
    2, as a result of the War on Terrorism, the Air National Guard will
    fill many Active Duty shortfalls. The events of 11 September have, for
    the short term, adjusted the AEF rotations and the ANG contributions in
    both numbers and duration. We expect to return to the AEF construct
    during AEF 3 or 4 this year.
        The Air National Guard conducts AEF rotations using a unique
    ``rainbow'' concept that moves people through rotations while leaving
    aircraft and equipment in place. This effort reduces the TEMPO strains
    on citizen airmen, their families and employers while streamlining the
    logistics requirements.
        In Cycle 1 of the AEF, Air National Guard contributions across all
    operational mission requirements ensured a significant reduction in
    Active Duty TEMPO. For example, with a four-fold increased contribution
    of Air National Guard Precision Guided Munitions capability, the Air
    National Guard decreased the Active Duty TEMPO by 18 percent. With an
    Air National Guard contribution increase in eight of nine mission
    areas, the Active Duty TEMPO was reduced in seven of nine areas. The
    only area where both Active and the Air Guard experienced an increase
    in TEMPO was intra-theatre lift.
        The Air National Guard is busy. Our people are volunteering above
    Desert Storm peak levels with nearly 75 percent of our total workdays
    supporting Commanders in Chief (CINC) and service requirements around
    the world. Our men and women are proud of their contributions. We
    support ``real world'' missions that reduce the TEMPO requirements on
    our active component by at least 10-15 percent in almost every major
    mission area. Since September 11th, 2001, the Air National Guard has
    become even more critical to the execution of the full spectrum of Air
    Force missions. Tulsa's 138th Fighter Wing has been deployed to fly
    missions over Iraq five times since 1996. The 138th's most recent
    mission was in the Summer of 2001. South Carolina's 169th Fighter Wing
    is currently deployed in support of Operation Enduring Freedom.
        With the fielding of the Air National Guard's number one Combat Air
    Force modernization priority--Precision Guided Munitions (PGM)
    capability with the LITENING II Targeting Pods and Situational Data
    Link (SADL) capabilities--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. Our transformational
    systems and processes to find and acquire effective capability proved
    invaluable in Post September 11th Combat Air Patrols as well as combat
    operations in Afghanistan.
        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.
        The bottom line is that in 30 months--or two complete cycles of the
    AEF--nearly half the Air National Guard knows first hand what it means
    to be an Expeditionary Aerospace Force concurrent with our role as
    guardians of our sovereign airspace. 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. The Air National Guard is picking up
    more and more regular Air Force missions.
    The War on Terrorism
        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.
        On the 11th of September 2001 the Air National Guard proved its
    capability to be dual-missioned, protecting America on three fronts. At
    0830 on September 11, 2001, the Air National Guard was actively serving
    abroad with over 4,000 people already deployed during the first two
    weeks of September in support of CINC or service requirements. We had
    1,204 people deployed on an AEF--representing 59 different Wings across
    six different weapon systems for a total of 158 aircraft. At 0845, with
    the launch of two Air National Guard units, the Air National Guard
    became dual-missioned. Within minutes of the Hijack notification, two
    Air National Guard F-15/F-16 units launched from alert status, one Air
    National Guard F-16 unit launched from a training sortie.
        The Air National Guard contribution did not stop there. Within
    minutes, intense coordination occurred between the Air National Guard,
    the Active Component Air Force and the Federal Aviation Administration.
    The 1st Air Force Operations Center staff increased from 38 to 153
    personnel. The Air National Guard Crisis Action Team acted as a
    coordinating force at Andrews Air Force Base.
        At the urgent request of the National Command Authority, the first
    aircraft scrambled in the skies above the National Capitol were Air
    National Guard F-16 Block 30s returning from an AEF training mission.
    Within hours, 18 Air National Guard Tanker Wings, were generated; 34
    Fighter Wings were ready with 15 already flying, and 179 missions were
    flown in the first day. The Air National Guard is still there side-by-
    side with the Active Duty Air Force, Air Force Reserve, Marines, Navy
    Reserve and others.
        We continued to be a vital asset as Air National Guard units
    transported critical federal emergency personnel, civil support teams,
    blood, human organs, chaplains, communication equipment, civil
    engineers, and medical teams. Seventy aero-medical crews were alerted
    some responded to New York, the District of Columbia and Pennsylvania.
    Still other Air National Guard personnel were sent to operate air
    traffic control towers, provide heavy equipment or work in more than 88
    command and control centers across the United States of America.
        By the end of November 2001, Air National Guard Fighters on all
    three fronts logged nearly 16,000 flying hours in almost 4,500 sorties
    with a daily average of 84 hours a day. Our tankers flew over 5,000
    hours in almost 1,000 sorties for an average of 75 hours a day. Almost
    25,000 Air Guard warriors met this ``dual-mission'' tasking--nearly
    double our Desert Storm Contributions and six times our Kosovo
    commitment. At first, Air National Guard fighters covered nearly 90
    percent of the Operation Noble Eagle tasking, but this is expected to
    normalize to 50-60 percent with the addition of increases in Active
    Duty Air Force participation along with other service support. Twenty-
    four hour Combat Air Patrols and Alerts stress Air National Guard
    fighters, personnel and training requirements. As such, we need to
    examine alternative sharing relationships with others equally capable
    of filling this role.
        In addition to our Noble Eagle participation, Air National Guard
    EC-130s provide the nation's Commando Solo support in Operation
    Enduring Freedom. Other critical Air National Guard forces are
    currently employed in these operations against the war on Terrorism.
    Over 4,200 of our 5,300 Security Forces were mobilized with an
    additional 800 on Military Personnel Appropriation days. All four Air
    National Guard intelligence Squadrons were mobilized early along with
    Ground Theater Air Control Systems and Air Operations Groups.
        In practical terms this has proven that the Air National Guard is
    an essential element of the Total Force charged with protecting and
    defending America at home in addition to their primary role in forward
    deployed combat and combat support operations.
                the air national guard preparing for the future
        These unprecedented contributions by your Air National Guard all
    have occurred at a time when we have reduced our endstrength numbers to
    1984 levels. Over the last two years we've taken some major steps to
    ``fix'' ourselves and build an organization that meets the demands of
    that period's strategic environment and the growing expeditionary
    requirements. That was, however, before September 11, 2001. We will
    need to re-examine our structure again--this time to see if we have
    enough for all the taskings we are expected to fulfill. We have already
    seen a growing requirement of nearly 7,350 full-time and endstrength
    increases to sustain Force Protection and Homeland Security
    requirements.
        Interestingly, we were better positioned for our response on
    September 11th because of our Quadrennial Defense Review deliberations
    last winter and spring. Our objectives then proved accurate in
    September. Air National Guard Homeland Security capability is derived
    from our wartime taskings, training, skills and equipment. Combine this
    with our position and experience within the local communities to
    provide the ``dual-missioned'' role that brings a powerful weapon in
    America's arsenal. The Air Guard leadership also recognized the
    critical link between our State Adjutants General in the effectiveness
    of militarily support to civil authorities. However we need to be
    mindful that all additional responsibilities in this area of Homeland
    Security need to be accompanied by appropriate additional resources as
    we retain--and always must--our federal war fighting role.
    Space, Intelligence and Information Operations
        The Air National Guard mission in Space and Information Warfare
    mission areas is growing. Air National Guard Space Squadrons currently
    operate or support critical elements of the nation's Integrated Threat
    Warning/Attack Assessment mission, satellite operations, and command
    and control structure. A fledgling Information Warfare capability is
    taking shape as new initiatives in cyber warfare are being developed
    and will take advantage of Air National Guard capability in over 20
    states. Four Air National Guard Intelligence Squadrons currently
    provide essential Signals and Imagery intelligence capability to Major
    Commands and our war fighting CINCS.
        As the Air National modernizes to support current mission
    requirements, the environment for training must keep pace. The
    increased use of Precision Guided and Stand Off weapons will drive
    changes in the airspace and range requirements to properly and safely
    train. The greater emphasis and capability for night operations and use
    of Night Vision Goggles, for example, will create a need to fly in
    special use airspace with ``light's out'' creating unique challenges
    for operating in the National Airspace System. The potential
    contentiousness and length of time it can take to establish new, or
    modification to existing airspace makes it essential to identify
    requirements as early as possible. For example, the Colorado Airspace
    Initiative came to a successful conclusion only after seven years of
    development and negotiations. The Air National Guard remains committed
    to provide the training environment necessary to maintain the readiness
    of our force; and to balance those needs against public concerns
    through the process that seeks continued public involvement.
    Recruiting and Retention
        During fiscal year 2001, the Air National Guard was faced with many
    of the same recruiting challenges that have confronted all the other
    service components over the last few years--a robust economy and a low
    unemployment rate. For the period of fiscal year 1997 through fiscal
    year 2000, the ANG met or exceeded its recruiting goal two out of four
    years--especially in fiscal year 2000, where increased and well-placed
    recruiting assets helped the ANG exceed its goal by 3.5 percent. Due to
    highly effective new bonus, grade, and incentive initiatives, the ANG
    experienced outstanding retention success in fiscal year 2001. As a
    result, the ANG had to adjust our recruiting efforts in July 2001 in
    order to stay within allowable tolerances of top-line end-strength.
        Our programmed end strength for fiscal year 2001 was 108,022. In
    July 2001, our assigned strength was approximately 108,419--already
    100.3 percent of our end strength. The Air National Guard Recruiting
    and Retention Team had exceeded all expectations in just 10 months of
    fiscal year 2001. This success was achieved despite the fact that the
    ANG's fiscal year 2001 end strength objective was increased over 1,300
    new positions from fiscal year 2000. The Air National Guard finished
    fiscal year 2001 at 108,486 assigned strength attaining 100.4 percent
    end strength. Starting in fiscal year 2002, the Air National Guard's
    programmed end strength has continued its growth reaching 108,400. As
    of 31 October 2001, the Air National Guard has attained 109,121
    assigned members.
        To continue to remain competitive in today's recruiting
    environment--especially due to extensive ANG requirements and
    contributions to the war on terrorism, the Recruiting staff has taken
    steps to project funds in fiscal year 2004 for two new initiatives: 100
    new recruiter authorizations for use as Air National Guard In-Service
    Recruiters (ISRs) and Military Entrance Processing Station (MEPS)
    Liaisons, and an increase of $13.7 million to the Air National Guard
    advertising budget in order to continue our National Target Campaign.
        For fiscal year 2001, the Air National Guard had the best retention
    rate among all components, all services. Our Retention Rate since
    fiscal year 1997 has averaged 89.4 percent. At the conclusion of fiscal
    year 2001, the Air National Guard's retention rate stood at 91.3
    percent, retaining more than 1,900 members over the same period last
    year.
        We have placed recruiting and retention emphasis on Air Force
    specialties where shortages exist, such as aircraft maintenance career
    fields, by offering enlistment and reenlistment bonuses, Student Loan
    Repayment Program, and the Montgomery GI Bill Kicker Program. As a
    result, in many of our critical maintenance Air Force Safety Centers,
    we have seen real strength growth from 2-6 percent over the last two
    fiscal years. These incentives have contributed greatly toward enticing
    and retaining the right talent for the right job.
        With regard to airmen career assistance services, the Air National
    Guard has a long established retention program which centers around our
    Retention Office Managers (ROM). Retention Office Managers are assigned
    to each Air National Guard wing and are responsible to the wing
    commanders for providing usable information concerning the health of
    their organization and deal with any and all retention issues and
    concerns. Through the Air National Guard Career Motivation Program,
    ROMs ensure all airmen are provided annual career interviews conducted
    by the members' supervisors and unit commanders. We have found this
    opens the communication channels and provides a platform to address
    issues or problems that, if left unattended, could result in the loss
    of valuable members.
    Quality of Life Improvements
        During the past year the Air National Guard continued to see an
    increase in Aviator Continuation Pay (ACP) take rates. Currently 450
    out of 483 eligible Active Guard Reserve pilots have signed up for the
    bonus. That equates to a 93 percent take rate. Aviator Continuation Pay
    has accomplished its goal by retaining qualified instructor pilots to
    train and sustain our combat force. Our greatest challenge will be
    pursuing legislation to eliminate the 1/30th rule as it applies to
    Aviation Career Incentive Pay (ACIP) and Career Enlisted Flight
    Incentive Pay (CEFIP). This initiative, which effects over 13,343
    officers and enlisted crew members in the National Guard and Reserve,
    is aimed at providing an incentive to our traditional aviators who do
    not qualify for the ACP for Active Guard Reserves and the Special
    Salary Rate for Technicians. Additionally our number one priority is to
    increase our traditional pilot force, which has maintained a steady
    state of 90 percent. We are also implementing recruiting procedures to
    expediently identify eligible prior-service military pilots that may be
    interested in a career with the Air National Guard.
        The past year has also seen a sustained unprecedented reliance on
    the Air National Guard since Operation Desert Shield/Storm (i.e.
    Expeditionary Aerospace Force, Homeland Security, Counterdrug, and
    Community Missions). The President and Congress both recognize that the
    requirements of Air National Guard membership in the new world order
    far exceed those during Cold War. As such, many new incentives and
    quality of life program enhancements have become law in a comprehensive
    effort to maintain the best retention in the face of the increased
    individual burden borne by our members.
        Each of these enhancements represents a significant accomplishment
    in making Air National Guard membership more attractive, one of our
    biggest priorities. Our first priority is the recent increase in the
    maximum coverage under the Servicemen's Group Life Insurance (SGLI)
    program to $250,000. On the heels of that improvement, SGLI was
    expanded to include families. The SGLI and Family SGLI programs provide
    our members a single comprehensive source of affordable life insurance.
        The recent creation of the Uniformed Services Thrift Savings Plan
    (UNISERV TSP), is another equally impressive example of far reaching
    quality of life initiatives. Under this program, all members of the
    Uniformed Services, to include Air National Guard members, are now
    eligible to supplement their retirement by participating in this
    program using pre-tax dollars, providing yet another incentive to
    continue to serve. The Personnel Policy Staff had the opportunity to
    represent the Air National Guard in the implementation of the program.
    We worked closely with our counterparts in Headquarters, United States
    Air Force and the Air Force Reserve Command to ensure a Total Force
    implementation occurred.
        The Career Status Bonus was also implemented allowing those
    entering the service after 31 July 1986, eligible for the least
    generous military retirement, to now have a chance to convert their
    retirement (Active, Guard and Reserve only) to the High Three
    retirement plan, or remain in their current plan by accepting a $30,000
    lump sum payment.
        Lastly, the TRICARE For Life legislation is an important
    enhancement that encourages our members to serve to retirement. By
    doing so, retired members who become eligible for Medicare at 65 are
    also eligible to have TRICARE as a supplement to Medicare, saving them
    significant amounts of money in their retired years. Recent
    improvements for TRICARE of mobilized Guard members will reduce the
    burdens on their families.
        This era of dramatic improvements directly translates to increased
    retention, further enhancing our ability to fulfill our federal and
    state missions while also participating in programs that add value to
    America. Building upon these successes, the National Guard Bureau
    welcomes recent congressional interest to extend TRICARE eligibility to
    Traditional National Guard members.
    The Year of Diversity--2002
        Our Human Resources Enhancement programs, in particular our
    Diversity effort has increased mission readiness in the Air National
    Guard by focusing on workforce diversity and assuring fair and
    equitable participation for all. In view of demographic changes in our
    heterogeneous society, we have embraced diversity as a mission
    readiness, bottom-line business issue. Since our traditional sources
    for recruitment will not satisfy our needs for ensuring the diversity
    of thought, numbers of recruits, and a balanced workforce, we are
    recruiting, retaining and promoting men and women from every heritage,
    racial, and ethnic group.
        Despite a 7.8 percent reduction in force between 1989 and 2001, the
    Air National Guard has continued to become more diverse, and during the
    same period of time there has been a consistent growth in the
    recruitment and retention of women. The Air National Guard diversity
    strategy is built on a foundation of leadership commitment to create an
    environment that fosters diversity. The focus of planning is on
    establishing organizational structures, education and training, and
    establishing measures of success. Leadership's continuous emphasis on
    Equal Opportunity and diversity ideals and issues is necessary to
    maintain momentum and ensure training and program implementation. In
    addition, declines in prior service accessions require increased
    emphasis on training and mentoring programs. The Defense Advisory
    Committee on Women in the Services (DACOWITS) recommended the Air
    National Guard Diversity Initiative as the ``Benchmark for all the
    Services and Reserve Components.''
        Our division's future initiatives in the areas of career
    development include the implementation of an Air National Guard formal
    mentoring process and the development of automated tools to track
    progress towards increasing opportunities for women and minorities. In
    the area of education and training we plan to develop and execute an
    innovative Prejudice Paradigm and Gender Relations training modules.
    Also, as part of our minority recruiting and retention efforts, we will
    sponsor an initiative to evaluate the retention rates of women in the
    Air National Guard to determine factors contributing to the attrition
    rate.
    Employer Support of the Guard and Reserve (ESGR)
        The success of the nation's defense is dependent on the
    availability of highly trained members of the ``Total Force''. The Air
    National Guard's mission in conjunction with Employer Support of the
    Guard and Reserve is to obtain employer and community backing to ensure
    the availability and readiness of Air National Guard forces.
        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. We
    established several goals in our ``Year of the Employer 2001''
    efforts--including an employer database that not only captures vital
    information on our Traditional National Guard employers to improve
    communication, but also the added advantage of capturing critical
    ``civilian'' skills that can be leveraged for military experience.
    These are but a few of the initiatives taking hold as we focus on the
    ``silent partner'' behind all of our men and women.
    Family Readiness and Support
        The Air National Guard has identified the importance of family
    readiness. As a major partner in the Total Force Aerospace
    Expeditionary Force (AEF) deployments, the Air National Guard
    contributes 25,000 men and women towards the Total Force requirement
    every 15 months. Since 11 September, the Air National Guard has nearly
    doubled this sustained contribution in support of Operations Noble
    Eagle and Enduring Freedom--concurrently with sustained AEF rotations.
    This means today, nearly 50,000 Air National Guard member families are
    in immediate need of dedicated full-time family readiness and support
    services--specifically information referral support and improved
    communications and education capabilities. Until this year, Air
    National Guard Wing/Combat Readiness Training Center (CRTC) family
    readiness and support was run entirely by volunteers on a mere average
    annual budget of $3,000-$4,000.
        The Air National Guard has developed a program solution in fiscal
    year 2001 to fund a full-time contracted family readiness program at
    each Wing and CRTC. While funding for fiscal year 2002 has been added
    in the fiscal year 2002 Supplemental Appropriations, there is no
    sustained funding. Properly funded and resourced, the Air National
    Guard family readiness program will significantly enhance mission
    capabilities by reducing pressures on Air National Guard personnel and
    their families as well as improve their quality of life.
        The Air National Guard has also identified a need for childcare
    alternatives. With increasing demands from Air National Guard
    Commanders and family members, the Air National Guard formed a
    Childcare Integrated Process Team (IPT) to study innovative childcare
    options for the National Guard to include drill-weekend childcare
    access. Quality, affordable and accessible childcare for Guard and
    Reserve members is an important ``quality of life'' issue, especially
    for single and dual-working spouses, just as it is for our active duty
    counterparts. The Air National Guard has proposed a pilot program in
    fourteen locations nationwide to provide a low-cost, simple approach to
    providing quality, childcare access to National Guard and Reserve
    members. At completion, an assessment of the pilot program will be
    reviewed and any necessary guidance with projected costs will be
    validated. Our Active Duty Child Development Centers (CDC) have
    recently opened their doors for National Guard and Reserve childcare
    use on a space available basis at each of their sites. However, with
    only 14 of 88 Air National Guard Wings on an Active Duty Base where
    many of the CDC's are already operating at capacity, this will probably
    provide limited opportunity for many.
    Personnel Management
        Our innovative personnel management programs, in support of the
    enlisted men and women of the Air National Guard were a total success
    during the last year. Due to recently implemented initiatives, we were
    able to promote 78 members to the grade of Chief Master Sergeant and 62
    to the grade of Senior Master Sergeant through the Temporary Floating
    Chiefs (T-Float) and Exceptional Performance Promotion (EPP) programs.
    Without these special promotion programs these individuals would not
    have been able to achieve these deserving promotions. Additional, we
    have processed well over 1,000 waivers, which covered such areas as
    enlistment, overgrade/excess assignments, and military classification
    actions. The approval of these waivers aided immeasurably in the Air
    National Guard meeting its end strength for fiscal year 2001. The
    Enlisted Grades Program was another success for fiscal year 2001. This
    program has added additional 88 Senior Master Sergeant authorizations
    to the Military Personnel Flights, which has provided enlisted career
    progression within the personnel career field.
        In fiscal year 2001, the Air Force deployed a modernized Military
    Personnel Data System. This total Air Force system [Military Personnel
    Data System (MilPDS)] is more technologically advanced, however there
    is still work to be done to bring the system to where all the Air Force
    components want it to be. Functionality that was put on hold during the
    six years of development needs to be added, and some processes need to
    be streamlined. The conversion of the system from client-server to web-
    based is pending, and the expansion of the member self-servicing
    ``module'' is on the high priority list.
        The Virtual Military Personnel Flight is the member self-servicing
    ``module'' of the MilPDS and is available to service members from their
    homes, deployed locations, or everyday places of business. Deployed in
    January 2000, it gave members on-line access to review their personal
    information; duty history and awards and decorations information; get
    retirement credit summaries; do their own proof of service letters; as
    well as, access ``fact sheets'' on many personnel programs. When it is
    complete, members will be able to update selected personnel data on
    themselves, start numerous paper processes systematically, and find
    ``fact sheet'' information on just about any personnel program in
    existence.
        The training portion of the MilPDS, named Oracle Training
    Application (OTA), falls short of the Air National Guard's required/
    desired business practice. In an effort to make the Air National Guard
    training request process easier and available to a larger body of
    people, the Air National Guard has a development effort underway to
    provide this functionality outside the currently used OTA. The Training
    & Education Application Management System (TEAMS) is expected to deploy
    in February 2002. It will be web-based and initially have a manual
    interface with the OTA, but the end goal is to incorporate the TEAMS
    functionality into OTA and eventually retire TEAMS.
        The Department of Defense has a goal to deploy integrated personnel
    and pay systems that will support all the Services and their
    components. Previous and on-going efforts laboriously moved us toward
    that goal, but the program is gaining momentum. Expectations are to
    start development at the end of fiscal year 2002 and deploy service-by-
    service with the Air Force being last in April 2006. This system,
    Defense Integrated Military Human Resources System, will replace MilPDS
    and portions of our Air National Guard-owned pay/orders/workday
    systems. This system will also include member self service, chartered
    with ease of use, it will help make some high visibility problems
    smoother; i.e., common reporting across services, cross servicing of
    members, status changes, and total military history availability.
    Distributed Learning
        The Air National Guard has firmly established Advanced Distributed
    Learning (ADL) as a primary training vehicle for our members. The Air
    National Guard also uplinks training from our three studios in
    Knoxville (Tennessee), Panama City (Florida) and Andrews Air Force Base
    (Maryland). As a forerunner in this dynamic medium, the satellite-based
    Air National Guard Warrior Network has (since 1995) transported
    training and information to our members at 203 downlink sites at our
    bases throughout the nation. In addition to training delivery and
    production, these studios also serve as full communicative links to the
    states and territories in times of national and local contingencies.
    From the Andrews' studio, we provided timely updates to the field in
    support of Noble Eagle. From the Training and Education Center in
    Knoxville, Tennessee we transported critical information for the F-16
    community concerning their new wheel and brake assembly. This training
    saved over $120,000 in costs associated with travel of a mobile team.
    We also continue to enjoy good working relations with the Federal
    Judiciary Training Network, uplinking training to all their federal
    courts.
        Many state Guard units are developing cooperative agreements with
    local industry and academia to share development of ADL products and
    reinforce community relations. Project Alert (one such agreement)
    completed the conversion of twenty-one modules of training to CD-ROM
    and Web-based training for the Defense Equal Opportunity Management
    Institute, Patrick Air Force Base, Florida and for the Army National
    Guard during the past calendar year.
        We continue to work with the Department of Defense and all federal
    training communities in developing and delivering expedient learning
    pieces. The net result of these actions is helping to increase unit and
    member readiness. The challenge is funding for the future. The Air
    National Guard needs to be positioned to compensate learners, to assist
    with computer acquisition (or accessibility), Internet access, and to
    pay for conversion of courses into a deliverable format.
                        equipping the air national guard
        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 Air National
    Guard 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 Identification, 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 Air
    National Guard preparations for this future.
    F-16 Fighting Falcon
        To stay current and relevant in our Combat Quadrangle, we continue
    to press in all four areas--especially our Targeting Pods. We have a
    plan to have the entire Air National Guard F-16 community armed with
    this precision strike capability by fiscal year 2006. After 11
    September, as we saw the benefit of these Pods for Visual
    Identification, we recognized a critical need to push these schedules
    up significantly. Support and funding have enabled us to make some
    major in-roads this year and set the foundation for continued
    improvements.
        Our F-16, pre-block 40 fleet, becomes more interoperable and lethal
    everyday, now possessing full front line combat capability. However, we
    still need to tell that capability story better. We continually find
    others who don't understand our enhanced capabilities. They assume our
    F-16 pre-block 40's are only ``near Precision Guided Munitions (PGM)''
    capable and as a result, they inaccurately place limitations on their
    use. These assumptions are quite simply dead wrong. Continued support
    is vital to our efforts to continue this critical program and remain a
    fully relevant Total Force partner. Our Block 25/30/32 jets are capable
    of employing Precision Guided Munitions by means of a self-designated
    laser-targeting pod. Our last group of pods started delivery in March
    2001 continuing through the February 2002 time frame. Combined with
    prior purchases, this will give us a total of 64 pods in our fleet. We
    still need 96 more pods to fill our one-for-one requirement.
        We are hopeful this year's funding will allow us to put a
    significant dent in this outstanding requirement. Until then, with
    ``rainbow'' sharing of existing pods, the Air Guard will have nearly
    all our pilots, weapons loaders, and maintenance crews fully trained to
    deliver--full, not near--PGM capability. In other words, Air National
    Guard Block 25/30/32 F-16's will have the same capability as the Air
    Force F-16 workhorse--the Block 40/42.
        When we add a new capability--the Theater Airborne Reconnaissance
    System or TARS these F-16's will become increasingly viable as both a
    weapons delivery system as well as an information exploitation
    platform.
        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 data link, and the high bandwidth necessary to make this
    system an all-weather, day or night sensor. We demonstrated the ability
    to gather and relay critical information through the data link to the
    Air Operations Center (AOC). The result will be bombs on target within
    single digit minutes.
        All of our Block 25/30/32 jets are 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) is
    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. To meet our
    Combat identification requirements we need to give our Block 25/30/32
    aircraft an ability to identify both allies and adversaries. A
    procurement of an Advanced Identification Friend or Foe system will go
    a long way to enhancing the F-16's combat identification capability. We
    now need full support for ``Falcon Star''--a structure modification
    program that significantly extends the service life of this airplane
    and critical now more than ever since the events of September 11th.
        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.
    KC-135 Stratotankers
        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. With congressional authorization to lease up to 100 wide body
    tankers in the fiscal year 2002 budget, we now have the additional
    possibility of replacing our aging E-models with either flow down KC-
    135Rs from the active duty fleet or new tankers for selected units.
        Bottom line--we need to continue the modernization of our tanker
    fleet. Replacing the E-models with either active duty R-models or KC-X
    wide body tankers is the best solution. However, if the KC-X version
    does not work out, then it is critical we upgrade from the aging and
    operationally unsuitable E-models as soon as possible. We have a
    consolidated plan in place 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 at a cost of $352 million per.
        With the Pacer Crag upgrade complete this summer and the Global Air
    Traffic Management (GATM) kits buy beginning, 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 affect future expeditionary operations. With nearly half the
    entire air-refueling mission, the Air National Guard must not let
    tanker modernization issues be ignored.
    C-130 Hercules
        Another concern that has surfaced in light of changing strategy
    requirements is whether or not we truly have 100 too many C-130's in
    service. Homeland Security and increasing Quick Reaction Forces
    requirements may alter force structure with a 3-front war (AEF, Noble
    Eagle, and Enduring Freedom).
        With increasing reliance on our Tactical Airlift workhorse, the C-
    130, we are still pushing to fully fund the cockpit armor requirements
    necessary to operate in hostile conditions. This armor upgrade,
    mandated by United States Central Command, will make significant
    improvements in the survivability of our fleet while supporting AEF
    taskings. We need defensive countermeasures systems and battlespace
    situational awareness capabilities that allow us to operate in hostile
    conditions and to counter the prolific infrared 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. Even as this modernization
    program continues, Air National Guard Commando Solo aircraft and crews
    are conducting operations over Afghanistan. By converting to the EC-
    130Js, we will be progressing in this ``revolutionary'' program working
    with all stakeholders to iron out the bugs that come with any new
    weapon systems. We continue to complete our C-130J conversions as
    aircraft are fielded. This program will modify the C-130 fleet through
    2013 making it viable well into this century.
        Our biggest Total Force issue remains the C-130 Avionics
    Modernization Program (AMP) development. With the award of the AMP
    contract to Boeing, the Air National Guard is fully supporting the
    System Program Office. The Air National Guard is providing the first
    aircraft, a C-130H2, to the Air Force Flight Test Center and Boeing for
    AMP flight-testing.
        The Mobility Requirement Study, Homeland Security transportation
    needs, and the Army Transformation all point to increasing reliance on
    this highly reliable mobility asset.
    C-5 Galaxy
        The Air National Guard will take all the C-5B's Galaxies that the
    Active Component Air Force wants to give us, and we'll get them and
    keep them in top shape.
        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 Re-engining Program is the second
    of the two-phased modernization of the C-5 that improves reliability,
    maintainability and availability. This effort centers on replacing TF39
    engines with more reliable, commercial off the shelf 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.
        It's critical to the national lift requirements that the C-5
    systems are modernized under the Reliability Enhancement and Re-
    engining Program and used to fill the near 55 million ton mile per day
    lift requirements for a moderate-risk capability to support the
    National Military Strategy.
    C-17 Transport
        As we contemplate an increase of C-5 Galaxies, the Air National
    Guard also needs more C-17's. With the current focus on strategic
    airlift shortfalls, many hope for an increase in C-17 fleet-wide
    numbers. As a result, we support additional C-17's for both the Air
    Force and the Air National Guard to adequately meet the full range of
    strategic lift requirements.
        The Air National Guard is striving to move the C-17 conversion
    forward at Jackson, Mississippi--replacing 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.
        Not only do we need to continue the conversion efforts in Jackson,
    the Air National Guard advocates far more C-17's in the Air Guard with
    Active Associate attached units to facilitate the crew ratio
    requirements to keep this airplane fully utilized.
        Congress and the United States Air Force are reviewing the Alaska
    and Hawaii C-17 stationing options, as well as studying other ``hubs''
    among the mid-western states.
    F-15 Eagle/F-22 Raptor
        The U.S. House of Representatives defense appropriations
    subcommittee on May 11 endorsed spending almost $4 billion in 2001 for
    continued development of the F-22 Raptor. The $3.96 billion allotment
    would pay for ten initial production planes and advance funding on 16
    more of the next-generation air superiority fighters.
        The F-22 Raptor, developed at Aeronautical Systems Center, Wright-
    Patterson Air Force Base, Ohio, is the replacement for the F-15 Eagle
    air-superiority fighter and will become operational early in this
    century. It combines stealth design with the supersonic, highly
    maneuverable, dual-engine, and long-range requirements of an air-to-air
    fighter. It also will have an inherent air-to-ground capability, if
    needed. The F-22's integrated avionics gives it first-look, first-shot,
    first-kill capability that will guarantee U.S. air dominance for the
    next three decades.
        Even once the F-22 becomes operational, F-15s will remain a
    critical warfighter. Air National Guard F-15s led the Air Superiority
    role in AEF 9 in Southwest Asia while continuing their air sovereignty
    alert requirements at home. This valuable weapon system struggles to
    remain viable versus ever more capable threats. The $26.4 million 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 National Guard F-15s are able to face the
    threats being faced during their AEF rotations.
        Future critical F-15 upgrades include the Joint Helmet Mounted
    Cueing System, Advanced Identification Friend or Foe system upgrade to
    enhance combat identification, Airborne Video Recording System to
    capture crucial Fighter Data Link information for quality mission
    debriefing employment training, engine upgrade for sustainability
    issues, and Tactical Electronic Warfare System upgrade to survive
    current and future emerging threats.
        We are still concerned with the long-term reliability and
    sustainability issues associated with this aging aircraft. In order to
    maintain our ability to provide a reliable combat ready force, the ANG
    F-15's will need to upgrade its current engines. With $40 million in
    engine funding already secured, we must stay engaged to continue this
    critical modernization strategy. With the changing demands of today, we
    need to study the future of this community and consider the
    implications of Air Force F-22 Raptor 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 Air National
    Guard in only an associate role. We feel that in order to meet the
    challenges of tomorrow, the Total Force F-22 program must expand in the
    future to include an Air National Guard presence in a unit equipped
    role.
    HH-60G Pave Hawk Helicopter
        The primary mission of the HH-60G Pave Hawk helicopter is to
    conduct day or night operations into hostile environments to recover
    downed aircrew or other isolated personnel during war. Because of its
    versatility, the HH-60G is also tasked to perform military operations
    other than war. These tasks include civil search and rescue, emergency
    aeromedical evacuation (MEDEVAC), disaster relief, international aid,
    counterdrug activities and National Aeronautics and Space
    Administration (NASA) space shuttle support.
        The Pave Hawk is a highly modified version of the Army Black Hawk
    helicopter which features an upgraded communications and navigation
    suite that includes an integrated inertial navigation/global
    positioning/Doppler navigation systems, satellite communications,
    secure voice, and Have Quick communications.
        The Air National Guard has 18 HH-60Gs at units in New York,
    California and Alaska. All aircraft now have 701c engines, Forward
    Looking Infrared Radar (FLIR), and operating 7.62 mm self-protection
    weapons.
        The self-protection system has AAR-47 Missile Warning System and
    ALE-47 Counter Measures Dispenser System to protect against Infrared
    Surface to Air Missiles. Three Air National Guard HH-60s have been
    modified. Five more are scheduled in fiscal year 2002. The Air National
    Guard is at the forefront of fielding Situation Awareness Data Link on
    the HH-60. The Situation Awareness Data Link will integrate the HH-60
    into the Combat Search and Rescue Task Force with F-16s and A/OA-10s.
    The program is scheduled to begin in fiscal year 2002 and will outfit
    all ANG. Other requirements are not funded but are validated. Funding
    can be executed immediately for near-term capability.
    A-10 Thunderbolt II
        The A/OA-10 Thunderbolt II is the first Air Force aircraft
    specially designed for close air support of ground forces. They are
    simple, effective and survivable twin-engine jet aircraft that can be
    used against all ground targets, including tanks and other armored
    vehicles.
        Basically the A-10 has a three-part requirements ``triad.'' First,
    the focus over the last year for our A-10's has been to ensure
    precision engagement capability that includes SADL, Targeting Pod
    integration, DC power, digital stores management system, and a 1760
    bus. These modifications will modernize the A-10 cockpit and allow the
    aircraft to drop precision munitions. Secondly, the ``Hog-Up'' is a
    funded Air Force Material Command initiative that is fully funded and
    will primarily replace wing spars. Lastly, current engines lack
    sufficient thrust in the medium altitude regime. With new engines the
    A-10 will be able to perform all missions with better survivability.
    The Air National Guard will complete writing the operational
    requirements for the new engine in 2002. An engine competition will
    occur after those requirements are approved.
        With all three programs, the A-10 will be able to increase its
    service life from the projected 2014 to 2028. 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.''
    Eventually the Joint Strike Fighter will replace the A-10.
    Low Altitude Navigation and Targeting Infrared for Night (LANTIRN)
        The ingenuity of Air National Guard transformation initiatives 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.
    Supporting Congress
        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
    officials, high-ranking U.S. and foreign dignitaries, and Headquarters
    U.S. Air Force inspection team travel.
        The 201st currently uses three C-22B aircraft to meet team travel
    and CODEL missions. The C-22Bs are 1964 model Boeing 727-100 aircraft,
    which are scheduled for retirement due to age and upgrade costs. The
    first aircraft has already retired and the remaining two are scheduled
    for retirement in November of 2002 and 2003. Congress recognized the
    need for replacement aircraft and provided funding in the fiscal year
    2001 budget to purchase the first C-40. The identification of ``C-40''
    is the military designation for Boeing 737s. In the fiscal year 2002
    budget Congress authorized the lease of four additional 737s.
    Negotiations are in process with the Air Force to determine the
    disposition of those aircraft. The unit has an existing requirement for
    four medium-capacity aircraft, and depending on the disposition of the
    leased aircraft, funding may be required to purchase additional
    aircraft to meet the unit's requirement.
    Summary
        This is where our Air National Guard Force is headed. This is where
    we need to go with them. The readiness levels of the Air National Guard
    depend on modern equipment availability. Adequate funding levels for
    Air Guard equipment are becoming increasingly critical.
        We 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. We can no longer wait until new weapon systems are totally
    fielded in the active component first. Compatible equipment is
    essential to reduced logistics costs and to enable Active, Guard and
    Reserve units to train and fight together.
        Our Air Guard warriors--the men and women who patrol the skies of
    Northern and Southern Iraq as part of the Aerospace Expeditionary
    Forces or AEFs, and flying critical Combat Air Patrols (CAP) sorties
    over our American cities deserve comparable equipment for committed and
    sustained contributions.
                     the air national guard infrastructure
    Air National Guard Civil Enginnering
        Air National Guard infrastructure provides the Department of
    Defense enhanced operational capacity with its presence at 180
    locations throughout the country. In fiscal year 2001, the Air National
    Guard executed 96 percent of the Military Construction program that was
    available for execution; 100 percent of its Environmental program, 97
    percent of its Real Property Service program; and 108 percent of its
    Real Property Maintenance program. The challenges in fiscal year 2003
    will be extensively connected to the War on Terrorism--as seen by the
    recently identified facilities requirements for Anti-Terrorism/Force
    Protection and iterim alert beddown. Funding will also be necessary to
    meet equipment shortfalls for both the EOD and Fire Vehicles Program.
        While over 25 major USAF facilities and bases in the Continental
    United States were closed during the 1990s, the number of Air National
    Guard facilities remained relatively constant--recognized for their
    efficiencies and operations only focus. As a result, in many U.S.
    communities today, a National Guard member and the local National Guard
    base, installation, facility or office they serve at is the only
    connection for many Americans to the U.S. military. Maintaining this
    connection to local communities is more important now than any other
    time in America's history in light of the terror attacks of September
    2001 and as the percentage of Americans who have served or have a
    family member who served in the military continues to shrink.
        Due to the nature of Air National Guard installations, Air National
    Guard members are more visible in the community than their active duty
    counterparts. Air National Guard installations do not have the
    extensive support facilities typically present on active bases such as
    dormitories, golf courses, family housing, hospitals, child-care
    facilities, schools, youth centers, commissaries or main exchanges.
    Instead, Air National Guard personnel rely on the community for this
    support. The corollary gain is that the community interacts with and
    sees men and women in uniform regularly. This connection is a key
    underpinning of the public's understanding concerning the gravity of
    the use of military force: it's not just a force from a remote and
    disconnected location but someone they see and may know on a daily
    basis.
        Another advantage of Air National Guard installations in the
    community is the ability to attract and leverage the capability of
    aviation, information technology (IT), space, engineering and other
    technical (and non-technical) personnel who are employed by these
    industries in their civilian career. They learn and develop skills in
    the civilian world and apply these skills to Department of Defense
    requirements. And as part-time employees, they do it at a fraction of
    the cost of their active duty counterparts. Additionally, installation
    presence in the community allows the Air National Guard to attract and
    retain prior-service personnel. This is particularly important for the
    Air Force--a service that spends more resources and time training its
    enlisted and officer corps than the other services. Rather than
    completely losing highly trained and skilled professionals to the
    private sector, the number and range of Air National Guard facilities
    across the country provides both full-time and part-time opportunities
    for those who want to return home but continue to serve. Additionally,
    Air National Guard community presence also provides an opportunity to
    recruit personnel to active duty.
        Air National Guard infrastructure offers strategic advantages by
    being geographically distributed throughout the country. For example,
    when Pease AFB, New Hampshire closed in 1991, the Air National Guard
    took over some of the facilities and now operates in partnership with
    the local community. Pease International Tradeport (Air National Guard
    Station) is important. Along with other Air National Guard bases such
    as Bangor International Airport (Maine), and Otis Air National Guard
    Base (Massachusetts), Pease has not only provided continued Air Force
    presence in the Northeast United States, but also provides the staging
    point for the Northeast Tanker Task Force operation to help shuttle Air
    Force aircraft and forces across the Atlantic.
        Air National Guard infrastructure co-located on civilian airports
    saves considerably on overhead because the airport or the Federal
    Aviation Administration is responsible for many of the support costs
    such as maintaining runways and operating the control tower.
    Additionally, there is no military housing on Air National Guard bases
    and minimal community support facilities requiring construction or
    maintenance. The typical Air National Guard installation, with only
    350,000 square feet of facility space on 150 acres of leased property
    with a shared runway, provides the American taxpayer with a very
    efficient basing structure. Furthermore, a contract and state employee
    workforce supervised and monitored by a small (7-10 person) federal
    workforce executes most facility operations and maintenance. This
    ``business plan'' of a small footprint operated by a largely contract
    and state workforce frees up limited resources for other priorities.
    Furthermore, innovative organizational concepts, such as ``active-
    associate'' units allow for additional leveraging of Air National Guard
    infrastructure.
        Because of its ties to the state, the National Guard has a unique
    tradition of support to U.S. communities during environmental and man-
    made disasters and crises. As the attacks on New York and Washington
    have shown, Air National Guard support of Homeland Security missions
    and responses will increase. Homeland Security includes combat air
    patrol; aircraft on alert; National Missile Defense; border security;
    counterdrug operations; chemical biological, radiological and nuclear
    response; environmental security; and information security. The
    Department of Defense and Air Force play emergency response roles in
    these missions, but the Air National Guard geographic presence across
    the nation can enhance response times and serve as staging or operating
    locations for impacted or at-risk communities. The Air National Guard
    community presence also provides day-to-day working relationships with
    first responders, with state authorities and with local communities
    prior to any potential attacks.
        The Air National Guard Civil Engineer and Services force structure
    offers ideal skills for application to emergency Homeland Security
    mission requirements. Disaster preparedness, fire protection,
    engineering planning, construction craftsmen, and force bed down
    capability is embedded at each flying wing. Additionally, a few units
    possess limited explosive ordnance disposal (EOD) capability. These
    skills can be leveraged with local community and state emergency
    response capabilities to provide expanded options to state and federal
    command structures.
        Shortly after the 11 September attacks, Air National Guard Civil
    Engineer units responded to numerous requests to support the
    requirements of the two major operations being conducted inside and
    outside the continental United States. Considerable assets have been
    provided in the readiness career field, along with power production,
    EOD, and fire protection services. To date thousands of individuals
    have been called to serve, with much more providing support through
    volunteer status. Service squadrons have been tasked to support home
    station alert missions being conducted for Operation Noble Eagle, to
    include billeting services, and food service requirements. All of these
    accomplishments are being conducted without any negative impact on
    steady state Aerospace Expeditionary Force (AEF) commitments, and day-
    to-day operations of our home installations.
        To support on-going Combat Air Patrol (CAP) and alert requirements,
    the Air National Guard has identified (and constructed) critical alert
    bed down needs at an interim cost of $21.3 million. Another $4.8
    million of interim facility requirements remains unfunded.
    Correspondingly, necessary operations and maintenance AT/FP
    installation upgrades have been identified at a cost of $104.9 million.
        Additionally, the Air National Guard is well positioned to accept
    missions transferred from the active duty. Not only do Air National
    Guard installations attract personnel separating from active duty with
    specific weapons system skills, Air National Guard installations have
    proven they can manage change by economically bedding down numerous
    missions as they are transferred from the Air Force.
    Air National Guard Environmental Program
        Supporting Air National Guard infrastructure and operations is the
    Air National Guard environmental program consisting of four pillars:
    environmental compliance, pollution prevention, conservation resources,
    and environmental restoration. The environmental compliance program
    ensures we comply with applicable federal, state, and local regulations
    and standards, including Department of Defense and Air Force
    environmental policies. The pollution prevention program allows us to
    reduce or eliminate undesirable impacts on human health and the
    environment by enacting change in the processes, practices, or products
    we use to conduct our mission. The conservation resources program
    ensures we protect natural and cultural resources. The environmental
    restoration program is designed to protect human health and the
    environment from past contamination and achieve closeout of its cleanup
    sites. A true success, the Air National Guard as completed its third
    year with zero Environmental Notifications of Violation (NOV).
    Air National Guard Military Construction
        Future challenges include sustaining, restoring and modernizing the
    facility plant. Defense facilities are durable capital assets, which if
    properly built and sustained, have life cycles ranging to 50 years and
    beyond. However, in the absence of proper sustainment, these facilities
    perform poorly and decay prematurely, and without modernization, they
    become obsolete. If properly sustained, we could expect an average
    total life expectancy of 67 years--however with current funding, the
    Air National Guard will not be able to sustain the facilities and will
    recapitalize them on a 122--not 67-year cycle. Past under-funding has
    led to the present situation where Air National Guard installations
    report C-3 (significant deficiencies preventing some mission
    performance) or C-4 (major deficiencies precluding satisfactory mission
    accomplishment) for almost all facility classes defined by the
    Installation Readiness Report.
        Many of the C-3 and C-4 ratings can only be solved through
    replacement of antiquated facilities. The current backlog of MILCON
    requirements is $2.2 billion and growing. Annual funding from Air Force
    is generally in the range of $50-$60 million which means it would take
    over 36 years to buy out just the requirements on the books today. In
    addition to these current mission requirements, there are urgent
    funding requirements to bed down new missions such as new weapons
    systems (C-17) and convert existing missions to new roles (F-16 to KC-
    135 conversions). The pending MILCON bill for these new mission
    requirements is in excess of $525 million and has the potential to grow
    even larger as a result of the Homeland Security missions in the post
    September 11 environment. Congressional help with this backlog of
    current mission and new mission requirements has been invaluable.
    Nearly 70 percent of the funding received by the Air National Guard in
    the last 10 years has come through Congressional inserts. Without these
    inserts, the Air National Guard would not be able to support our flying
    missions.
        Recent decisions to increase the fiscal year 2003 budget for Air
    National Guard installations represent a commitment to do better, but
    the cumulative deterioration occurred over the past decade, so it is
    not reasonable to expect a one-year budget increase to fix the problem.
        With the recent attacks on the homeland, Air National Guard
    installations are now recognized not only as platforms from which to
    generate force structure for overseas missions, but also as bases
    needed to protect the homeland. To successfully fulfill these rolls,
    upgrades are needed for the new Homeland Security missions as well as
    to reduce terrorist risk to the installations. New facilities to
    support alert aircraft as well as antiterrorist/force protection
    related construction requirements are needed for this new role. The Air
    National Guard has identified antiterrorist requirements such as
    upgrading/replacing perimeter fencing, relocating entry gates,
    constructing security walls, and replacing security forces facilities.
    Knowledge Network
        The Air National Guard provides a secure network environment that
    meets the information weapon systems needs of the its citizen airmen.
    We play a dual role of providing both network development and network
    operation. We design and implement the Air National Guard network
    infrastructure that complies with all Air Force and Department of
    Defense standards. We provide unit communication commanders and their
    personnel with quality and timely information to exercise control over
    their respective networks and mission systems.
        First, we design a secure, interoperable network that is capable of
    meeting the application system needs of the Air National Guard. Second,
    we protect and monitor the network and then respond to network attacks
    to ensure the availability of network systems.
        Our first and foremost priority is to ensure the integrity and
    availability of the network to our Air National Guard customers.
    Additionally, we ensure that our network is compliant with Department
    of Defense standards and interoperable. Further, we assist our base
    network control centers in securing, monitoring, and troubleshooting
    their local networks.
        In the near future, we expect to evolve our network into a more
    robust, secure, and interoperable environment. We will work hand-in-
    hand with the Air Force in developing a virtual private network (VPN)
    that provides encrypted, thus secure, information flow across the
    enterprise. We also seek to partner with the Army National Guard to
    develop crosscutting network architectures that reduce redundancy,
    enhance capabilities and provide cost savings.
                        training the air national guard
        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 war fighting
    capability.
        In AEF 9, Air National Guard pilots averaged over 2,000 hours
    flying the F-16 versus 100 for their young active duty counterparts.
    Ninety-seven percent of our Air Guard pilots have more than 500 hours
    experience in their jets compared to thirty-five percent of their
    Active Duty counterparts.
        As the Aerospace mission becomes more sophisticated, our Air
    National Guard experience and maturity provides more solutions to a
    growing total force problem especially for our 5 and 7 level
    requirements. Air Force leadership recognizes the talent we have and
    the capabilities we bring. We get the opportunity to teach and shape
    future Air Force leaders on the value of the citizen airman and the
    unique requirements of our predominantly traditional force.
        Major General Dave Deptula, former Commander at Incirlik, said it
    best: ``Forty-nine percent of the units that participated in Operation
    Northern Watch were Guard or Reserve, and you couldn't tell the
    difference between the Guard or Reserve fighter pilot on his first day
    in theater, and the active duty fighter pilot in his 90th day there.''
        We can train others well because we are trained well ourselves. Its
    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 National Guard and 16 full-time instructor
    pilots, we provide what Colonel Charlie Campbell, the Squadron
    Commander, called a ``stabilized, highly proficient instructor cadre
    with great continuity and leadership.'' His perspective was backed by
    the former 325th Fighter Wing Commander, Brigadier General Buchanan,
    who stated, ``Our partnership with the National Guard is a good way to
    strike a balance that allows us to take advantage of the Air National
    Guard's resident F-15 experience while trying to bridge our current
    pilot gap.''
    Training Requirements
        The Trained Personnel Requirement (TPR) is the process by which 3
    and 7 level Formal Training requirements are forecasted and received by
    the Air Force and its components. This process is the validation factor
    for hiring and training of instructors and the obtainment of classrooms
    and equipment. In turn, it also determines the ability to increase
    training allocations in the out years. The Air National Guard Personnel
    Force Development Division revamped the entire Air National Guard's
    formal TPR program two years ago while working in tandem with the
    Active Component, Future Force and the Readiness Team. This rejuvenated
    effort resulted in garnering 1,756 additional training allocations in
    fiscal year 2002 and 2,100 additional seats in fiscal year 2003. A
    byproduct of this renewed emphasis, over previous years, was an
    increased utilization rate from 66 percent in fiscal year 1999 to 84
    percent in 2001. This exceeded the Air National Guard goal by 4
    percent, as set by the Air Force. Additionally, in just two short years
    the Formal Training Branch has increased Air National Guard Formal
    Training allocations by 48 percent through this enhanced TPR process,
    thereby fast-forwarding our get well process by a full 18 months. This
    Herculean effort resulted in a total of 11,813 training authorizations
    for fiscal year 2003.
    Training Slots
        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 National Guard's combat
    readiness--especially as we assimilate more non-prior service
    individuals as a function of our overall recruiting effort.
    Training Bases
        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 Air National Guard 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 National Guard and
    Active Duty personnel.
    Air Traffic Control
        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
        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.
                     the air national guard safety program
        Your Air National Guard 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. The following is a short
    list of this and past year's successes:
      --As an organization we, sustained or improved both Flight and Ground
            Safety during an increase in operations.
      --Fiscal year 1998 was the first year there were only 3 Class A
            Flight mishaps. It was also the lowest Class A Flight mishap
            rate in Air National Guard history. The Air National Guard
            Aircraft Maintenance Team was winner of the Air Force
            Association (AFA) 1998 Major General Earl T. Ricks Memorial
            Trophy. Strict compliance with safety and technical directives
            equals zero mishaps. The Air National Guard had the lowest
            flight mishap rate due to maintenance practices in Air Force
            History: 0.83 percent for fiscal year 1998, best performance in
            combat aviation history.
      --Fiscal year 2000 was the second year the Air National Guard only
            had 3 Class A Flight mishaps. It was the second lowest rate
            ever in Air National Guard history and the second year with a
            mishap rate below one.
      --A full 68 percent reduction in flight mishaps over the last 4
            years. Fiscal year 2001 was our best flying safety year ever in
            the Air National Guard at 0.59 percent and no fatalities due to
            aircraft accidents.
        Despite our increased operational and personnel TEMPO and the first
    and second cycle of the Expeditionary Air Force, we have accomplished
    another outstanding safety year.
    Summary
        The Air National Guard is one of the most relevant, ready,
    responsive, and accessible reserve component assets in the Department
    of Defense today that operate on 7.1 percent of the Air Force budget.
        We in the Air National Guard are proud to serve this great nation
    as citizen-airmen. Building the strongest possible Air National Guard
    to meet the needs of the National Command Authority, CINCs and our Air
    Force partners is our most important objective. Our people, readiness
    modernization programs and infrastructure supported through
    congressional actions are necessary to achieve this vital objective.
        Since the end of the Cold War, Air National Guard forces have been
    increasingly deployed in support of the full range of operations. We've
    proven ourselves accessible, capable and relevant over the last decade
    culminating in the responsiveness on September 11, 2001. We have
    consistently proven our capability to train and deliver full spectrum
    air and space power across a wide requirement. We were ready to fight
    and win our nation's wars. We were always there to support ongoing
    contingency operations. We are fighting a war on terrorism. We continue
    to shape the environment through state-to-state partnerships and
    exercises. We will always and respond in a moment's notice as we did on
    11 September, to domestic emergencies and Homeland Security. The Air
    National Guard continues to expand how we see our future missions and
    ourselves.
        We count on the support of the Citizens of the United States of
    America 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. We will remain an indelible part of American
    military character as an expeditionary force, domestic guardian and
    caring neighbor.
                 chief, national guard bureau closing thoughts
        As you can see from this posture statement, the citizen-soldiers
    and airmen of the National Guard provide the nation with a tremendous
    asset. They form units trained and ready to conduct or support combat
    operations. At the same time, their dedication, military skills and
    equipment are available to governors for the protection of the lives
    and property of our citizens on our own soil. We are America's hometown
    military presence and are committed to the welfare and freedom of our
    communities.
        The National Guard's unique dual status gives America's leaders a
    spectrum of options with which to provide for the security of our
    nation. Hopefully, this publication has been helpful to you in better
    understanding some of the complex ways in which that occurs.
        If, however, you have any further questions about the National
    Guard, who we are, how we operate or what we can do, I hope that you
    will feel free to raise them with those of us at the National Guard
    Bureau.

        Senator Inouye. Thank you very much, General. Before
    proceeding with my questions, I would like to note that General
    Davis has served this Nation in the military for over 43 years
    and I gather that this may very well be your last time you will
    be testifying here. If that is so, on behalf of the committee
    and for that matter on behalf of the United States Senate, I
    thank you very much for the service you have rendered to our
    Nation, for your leadership, your courage and valor. We will
    always treasure them, sir.
        General Davis. Thank you very much, Mr. Chairman.
        Senator Inouye. General Davis, the supplemental bill that
    we have before us calls for the mobilization of 8,000 Reserve
    and National Guard, which would require the services to
    demobilize about 21,000. How do you plan to reach these levels
    when you have all these new assignments that you have been
    provided?
        General Davis. Sir, what we have done initially is look
    again at the units that have been alerted for mobilization and
    this hundred-plus thousand includes soldiers and airmen at
    least in the Guard and other services who have been alerted,
    and they have scrubbed that again and decreased some of that so
    we have not alerted them.
        We have also followed through in both the Army Guard and
    the Air Guard to scrub all the people who are on active duty in
    a mobilized status to see if some of them are being utilized as
    well as they need to be or could be and if we really have a
    requirement for 80 people and maybe we have 100 mobilized to
    make sure that we can take care of folks when we have
    difficulty during winter months because of people having colds
    and are not able to report to duty. So we are scrubbing those
    numbers to try to get them down. We will do that with some
    difficulty but I think we will be able to achieve the
    objectives.
        If we have continued requirements, though, it's going to be
    very difficult for us to do that. What we have tried to do and
    thus far been able to accomplish is make sure that if we
    demobilize somebody, we are demobilizing him because we no
    longer require their services, giving them ample opportunity
    and notification they will be demobilized. We have to be
    sensitive to the fact that many of them will be returning to
    their jobs. They have to give notification to the jobs before
    they return, and certainly we want to make certain as they
    reintegrate with their families, particularly those who have
    been deployed away from home, we want to make sure we give them
    adequate notification and preparation time for both the member
    as well as his or her family.
        Senator Inouye. In other words, demobilization will take
    some time.
        General Davis. Yes, sir, it will take some time. Initially,
    we have taken some of the units that were alerted for
    mobilization and withdrawn the notification, and looking at and
    working with the active component, both Army and Air, to see if
    we can utilize any different capacity or a different way the
    active component soldiers or airman can fulfill some of these
    requirements, sir.

                          DOMESTIC AIR COMBAT PATROLS

        Senator Inouye. The Air National Guard has been tasked with
    domestic air combat patrols and I guess that has also been
    called upon for demobilization. What sort of air combat patrols
    are you carrying out in this war?
        General Davis. I'll hand that one to General Brubaker.
        General Brubaker. We are continuing our air combat patrols
    over the United States. We are downgrading to a lesser amount
    of those patrols. That has freed up folks that can be
    demobilized and we're doing what we call strip alerts now at
    several sites.
        Senator Inouye. Will that be enough to carry out the
    mission?
        General Brubaker. Yes, sir, it will.
        General Davis. Sir, we've done much of that with
    volunteers, and in the early part it was done all with
    volunteers, people who were able to come out and fly for 2 or 3
    days and then go back to their regular jobs. Many of the folks
    like myself would do it on the weekends and evenings, so we
    stood the 24-hour alerts and 24-hour combat air patrols, and we
    were able to do it with volunteers. At some point we had to
    mobilize some of the folks to do it. As we decrease that, we
    think we can sustain much of it now with volunteers or people
    doing their regular duty. It is not as heavy a requirement as
    we had had in the past, I think.
        Senator Inouye. As we note the number of troops in the
    Balkans and also in Afghanistan, some of us have been concerned
    that the forces are being overused, overtaxed. Is that a real
    concern?
        General Davis. As General Schultz said and I will defer to
    him shortly, we pay a lot of attention to that, sir. We look at
    home soldiers in each State, how many soldiers in each skill
    are being tasked for the missions in Afghanistan and in Bosnia,
    and much of that is Army Guard, the bulk of that is Army Guard,
    sir. As we look at that, we don't see any real strains.
        Now we do have some issues in some of our high-demand low-
    density MOSs, as well as the FACs and the rescue business in
    the Air Guard. As we look at those, we see some potential there
    for it, and so we're looking to see what we can do to
    accommodate it.
        General Schultz. Senator, one example is, Bosnia's
    Stabilization Force mission, we discussed the 29th Division
    perhaps staying in country longer than the originally planned 6
    months and we said no. We have an obligation to the members, to
    the soldiers and their employers that once the mission was
    over, they would return rather than just extending in theater.
    And so I think as long as we use a rotational policy that has a
    sense of discipline to it, we're going to be okay, which means
    sharing or balancing the work load literally across all the
    units, and I think that's the way to work through this
    question.
        Senator Inouye. Soon after September 11th when we began our
    war on terrorism, employers throughout the land were very
    helpful and cooperative. Is this support still standing, is it
    staying?
        General Davis. Yes, sir, we think it is. As we talk to our
    members, and we're going to continue to do surveying of them to
    assure ourselves where we are. The National Committee for the
    Guard and Reserve has a new very energetic leader and he has
    come on board and moved out very rapidly. So we are doing a
    large number of events with employers.
        An example of the kinds of things we were doing before the
    29th Division deployed overseas, they had an employer support
    event in Maryland, one in Virginia, one up in Massachusetts and
    Connecticut, and that is where the soldiers who were part of
    that deployment were. Down in Mississippi where they had the
    155th Army Brigade, we had some events down there to let
    employers know what the soldiers are doing, or what the airmen
    are doing in the case of the Air Guard. So we have been very
    aggressive.
        A number of us in the senior leadership have been involved
    in those signing ceremonies. I was out at Xerox Document Center
    here about 2 months ago at one of those events, and we've had
    our folks all over the Nation. We are concerned about it, but I
    think people understand today that this threat is still there,
    so we are trying to continue to educate employers about that,
    and we aren't aware of any major issues we have. We have an
    individual issue here and there and we work those pretty
    aggressively, but we are not aware of any major issues we have.
        On a long time continuum, next 2 years or so, given the
    fact that it's a long protracted effort certainly to fight the
    terrorists, we could see some lessening of support. At this
    point we don't feel we are, and we have talked to the folks at
    the National Committee level as well as the individual State
    committees, and we're not seeing any lessening of it, sir.

                                ARMORED BRIGADE

        Senator Inouye. Thank you. Senator Cochran.
        Senator Cochran. Mr. Chairman, thank you very much. General
    Davis, we appreciate very much your mentioning of the good
    work, and General Schultz too, that the armored brigade from
    Mississippi has done in Bosnia, with the contribution you're
    making to maintain stability in that region of the world.
        It's interesting for me to note, gentlemen, I went down to
    look at the training that was underway there in preparation for
    that mission, and this was really a lot different from what
    those soldiers normally do. In an armored brigade, you think of
    tanks and activities in the field, gunnery and the like, but
    they had recreated a village and a post where they would
    actually be living in Bosnia, so they could get used to the
    environment and get accustomed to the challenges they would
    face in that environment.
        To what extent do you think that might detract, if it does
    at all, from the regular responsibilities or the normal
    responsibilities that a unit like that would have, a combat
    unit being assigned a mission of stabilizing a region and
    inspecting trucks and personnel on the streets and that kind of
    thing?
        General Davis. Sir, one of the things we pride ourselves is
    being part of the full spectrum military. We can go from one
    end, the high end acting aggressively, fighting, pursuing an
    enemy, to the other end doing such things as humanitarian, so
    we do that full spectrum.
        In the case of the 155th, that mission is what we call a
    dismounted mission. They normally would be in tanks and in
    Bradleys as an armored unit would be. This is what we call a
    dismounted mission, they are not in those vehicles. So it's
    more of a mission that they can train to with special training.
    Prior to deploying, though, I would say that they did go back
    following this mission rehearsal exercise down at Fort Polk,
    they do go back home and they do go back and fire at the
    highest level, maneuver levels with their tanks and with their
    Bradleys. So they are fully qualified.
        And these folks as it develops while they were in Bosnia,
    had an opportunity to go out and exercise some of the equipment
    that was in Bosnia, to actually go out and fire the equipment,
    and some of it hadn't been fired in over 1 year, as well as get
    their skills back up to speed.
        One of the difficulties with peacekeeping, peacemaking
    missions, is that very quickly it can turn into a wartime
    situation. All we need is an attack, and that can happen, so
    they have to transition very rapidly. So they have got to keep
    those skills up.
        During their off-duty time when they are not on duty in the
    rotation schedule they had where they would be on duty for a
    period and then they would be in a training day, and on those
    training days they went back to train on these same skills.
        I would like to have General Schultz comment on it, because
    it has been one of those things which we were concerned about,
    how their skills would deteriorate. It will deteriorate, but I
    would suggest given the training methodologies we have, it will
    deteriorate at a much slower rate because of the kind of
    training.
        General Schultz. Senator Cochran, as you know, the 155th
    Armor Brigade is a first rate outfit. They have been to the
    National Training Center. The skills we apply in Bosnia are
    slightly different but they are not all lost in terms of the
    leadership requirements. Lots of skills will transfer and
    result in high payoff tasks from the day-to-day mission in
    Bosnia to the likes of a mission for the 155th to deploy
    somewhere else in a combat arms setting.
        I would also say that if we think about that brigade just
    in this example, we expect that they would deploy a little
    later, should they be called on short notice to bring the
    brigade's full set of equipment to another theater. And so we
    change the plans in terms of our expectations just slightly so
    that we factor in, we know they're in Bosnia but they will
    deploy perhaps to another mission on a little later schedule
    than we had originally planned.
        So we manage that from a national level about which
    brigades are in a rotation like Bosnia and which ones are
    expected to deploy very early for their combat mission.
        Senator Cochran. I'm not sure the extent to which the
    National Guard is involved in this and so I'm asking this to
    just get information, but I know on the Mississippi Gulf Coast
    and in Alabama and Florida, we have had a combat identification
    evaluation exercise underway and various bases, even civilian
    airports are being used by military forces not only from the
    United States but observers from the United Kingdom are
    involved, defense industry people are there, and what they're
    doing is testing and evaluating new technologies and combat
    information and identification systems and procedures. The
    joint forces command has actually been responsible for this
    exercise. It ends tomorrow and I was wondering whether National
    Guard units were involved or if you were in any way involved in
    that activity.
        General Brubaker. Sir, I have heard of the exercise and the
    evaluations going on. I believe our First Air Force and NORAD
    folks are involved, but beyond that I do not know. I am happy
    to report back.

                                      C-17

        Senator Cochran. The Reserve forces and the National Guard
    in particular are going to be undertaking more and more
    responsibilities for airlift. Can you talk about the C-17s,
    which are going to be based, I think the first Guard unit to
    have them will be in Jackson, Mississippi, and we are very
    proud of that and we are trying to be sure everything is done
    that needs to be done to get ready so that the timetable of
    2004 that you mentioned can be met.
        To your knowledge, is the budget request that's before the
    committee in this submission sufficient in regard to the
    infrastructure needs, the manpower needs, and the flying hour
    expenses that will be required in order to carry out the
    mission of accepting and keeping these airplanes flying and
    people up to speed so they may contribute as expected?
        General Brubaker. Sir, we're working with the Air Force, we
    feel like more manpower and more flying hours is needed, and we
    are engaged with the Air Force to try to increase the funding
    to do that.

                      C-17 BASING IN JACKSON, MISSISSIPPI

        Senator Cochran. I notice that you mentioned in your
    statement, I wrote down that you said that with respect to the
    C-17 basing in Jackson, Mississippi, that manpower and
    equipment shortages remain significant. I hope you can tell us
    if not right now, maybe for the record some specific needs that
    you see that ought to be met in this funding cycle in order to
    deal with those manpower and equipment shortages.
        General Brubaker. Yes, sir, I would be happy to detail
    those for you.
        Senator Cochran. Thank you very much. Thank you, Mr.
    Chairman.
        [The information follows:]

                      C-17 Basing in Jackson, Mississippi

        Plans and preparations for the conversion of the 172nd
    Airlift Wing's (AW) assigned aircraft from 8 C-141s to 6 C-17s
    continue to progress. With aircraft deliveries projected for
    fiscal year 2004, key facility construction, infrastructure
    upgrades, and equipment purchases have been accomplished to
    date. However, both near- and long-term funding shortfalls
    remain to be resolved.
        Two equipment requirements could not be funded in the
    fiscal year 2003 President's Budget: maintenance training
    device support equipment ($1.28 million) and composite shop
    equipment ($250,000). Procuring these long-lead items in fiscal
    year 2003 is necessary to ensure equipment availability for
    172nd AW personnel to train with and to properly maintain the
    new C-17 aircraft.
        A larger funding issue involves manpower and flying hours
    in fiscal year 2004 and beyond. The funds programmed for the
    172nd AW's C-17 mission are not much different than the
    currently authorized 1,175 military personnel (of whom 288 are
    full-time) and approximately 2,900 annual flying hours. These
    numbers do not reflect how the Air Force is operating the C-17.
    Active duty C-17s are programmed at approximately 1,400 annual
    hours per aircraft (vice the 480 hours per Air National Guard
    aircraft). In addition, the C-17 maintenance concept involves
    frequent home station inspections that require more manpower
    and 24-hour operations.
        In order for the 172nd AW to meet the Air Force utilization
    rate for the C-17, additional manpower and approximately 9,000
    annual flying hours would be required. The resulting annual
    bill for the 6 C-17 aircraft is estimated to be $64 million.
    Air Force, Air Mobility Command, and Air National Guard
    officials are working to alleviate the shortfall, but the
    prospects are limited. In the absence of additional Air Force
    funding or manpower to support the 172nd AW flying at the
    Active Air Force utilization rate, the newly procured C-17
    aircraft will not reach their full airlift potential nor will
    the 172nd AW be able to effectively contribute to worldwide
    airlift requirements that are increasing.
        One point to clarify, the 6 aircraft to be delivered to the
    172nd AW in fiscal year 2004 are part of the original 120-
    aircraft buy. Should procurement of 180 C-17s be realized, the
    Air Force plans to base a total of 8 aircraft at Jackson.

        Senator Inouye. Senator Dorgan.
        Senator Dorgan. I regret I was delayed for your testimony,
    but I have reviewed your testimony and let me thank you for
    your service and thank you for the service of the men and women
    who serve under you.

                   AIR NATIONAL GUARD IN FARGO, NORTH DAKOTA

        I would like to ask a question of General Davis and General
    Brubaker about the issue of planes available for the Air
    National Guard. You're well familiar with what I'm going to ask
    you about, I'm sure. The Air Guard in Fargo, the Happy
    Hooligans, as you know, are one of the best in the world. They
    have won three William Tell events, two Hughes awards, they
    have flown more hours air cover in this country since 9/11.
    They are I think the best pilots, by having demonstrated that
    in three William Tell awards and they fly the oldest airplanes.
    We have been working with the Air Force for some time on the
    airplane issue, and we're about out of time on the current F-
    16s. We're scheduled to get some old Block 25s that I
    understand won't be maintained past the next several years, so
    it's a real problem that we have been working on. Can you tell
    me where we are on that issue?
        General Davis. First off, we agree with you, the Happy
    Hooligans have done a great job and we are all very proud of
    their track record over the years. I date back to the mid-60s
    with my relationship with the 119th. As we are transitioning to
    the F-22 and to the joint strike fighter in the longer term,
    we're looking at which aircraft will be available and right now
    it looks as if some of the aircraft will be available when we
    start cascading or moving downstream with the F-22 coming on
    board and there will be some additional aircraft available.
    Right now, we just don't have the right mix of aircraft
    available for the National Guard.

                                      F-15

        We have looked at the Air Force, we are working very
    closely with them in providing more F-15s to the National Guard
    in the air defense mission as they become available. This would
    be contingent upon the rate at which we bring on board the F-
    22, sir, which is the replacement aircraft for the F-15 in the
    air superiority mission.
        Senator Inouye. May I interrupt? There is a vote going on.
        Senator Dorgan. Are we moving the F-15s at this point, do
    you know?
        General Davis. We have moved some of our earlier A models
    which had not been modified, but I think now we are on hold, as
    best I am aware at this point.
        General Brubaker. We have moved some A models, as General
    Davis points out. There will be some more movement and I would
    just like to say that we're going to examine opportunities to
    get some of those that are retiring and possibly transition
    some of the units sooner than what is currently planned. I
    think you will find we will be very aggressive about it, but
    I'm anxious to work with you on that.

                        GUARD AND RESERVE MODERNIZATION

        Senator Dorgan. I think that every year this Committee has
    to add money for the Guard and Reserve modernization and
    operation, and we are happy to do that. I think as perhaps my
    colleagues have said, we get more bang for the buck in
    investment in the Guard and Reserve than anything else we do,
    in my judgment, and I am immensely proud, as are all Americans,
    of what the men and women in uniform have done for this country
    for many, many decades, but especially proud since 9/11. I have
    been around the country and seen the men and women at these
    bases with their eyes filled with pride for what they are doing
    to serve our country in the cause of freedom, and we thank you
    and ask you to thank them for us. Thank you very much.
        General Davis. We thank the committee for the outstanding
    job that you all have done in allowing us to have additional
    funding to keep some of those older weapon systems up to speed.
    We have been able to maintain a large number of them with some
    capabilities which exceed the capabilities of the newer
    aircraft that they're flying in the active component, so thank
    you to your committee for that kind of support over the years.
    It has not been just 1 or 2 years, and certainly the IIF
    systems and all that were recently placed on our F-15s in the
    Air Guard and the pods we have, precision guided munitions,
    which have allowed us to remain in the fight and participate
    very actively alongside our active component as well as our
    Reserve partners in the military operations that we undertake
    so often. I wanted to make certain to thank you for that kind
    of support. It's that and the kind of support we get in the
    Army Guard which allow us to be up front full-time players in
    this business. Thank you very much, Senator.
        Senator Stevens [presiding]. Senator Kohl.
        Senator Kohl. Thank you, Senator Stevens. I will be brief.
    I have a single question I would like to ask you, Mr. Davis.

                               CIVIL SUPPORT TEAM

        We have learned that when it comes to reacting against
    terrorism, time is of the essence, and everybody feels, every
    State feels that we cannot wait. One area that I'm very
    concerned about is the State of Wisconsin's lack of a National
    Guard Civil Support Team. Thirty-two States across the country
    have civil support teams, including our neighboring States of
    Illinois, Minnesota and Michigan. I believe that Wisconsin,
    like these other many States including our neighboring States,
    deserves to have and needs to have a fully equipped team
    integrated into the State's emergency response system.
        So my question of you, General, is when will Wisconsin get
    a National Guard Weapons of Mass Destruction Civil Support
    Team?
        General Davis. Well, as you stated very amply, sir, we have
    32 teams throughout the Nation and those teams, the initial 10
    were done based on the Federal Emergency Management Agency
    (FEMA) regions and then an additional 17, and then 5 additional
    teams were just announced this past fall. Those teams and their
    locations and basing are designed to provide coverage for folks
    here in America, in the United States. At the current time the
    Department of Defense feels that those teams are adequate, 32
    teams are adequate in terms of their ability to cover the
    population base here in the United States and provide the kinds
    of services they provide which are basically assessment, and
    they will help go out and find out what the problem is and then
    assist the folks in augmenting and bringing in additional help.
        At this point, sir, as far as my knowledge is, they don't
    plan to have any additional teams. Those teams will be in place
    and as we speak now we have some 26 of them certified, 26 of
    the 27 teams certified, and the other 5 teams are in the
    process of moving along. So I don't think I'm able to answer
    your question specifically, sir, in terms of when, because the
    current plan by the Department of Defense is to have 32 teams.
    It is not a call we make. We staff the teams, we train the
    teams and we implement the program, but those selection sites
    and all are made at the Department of Defense level and as far
    as I am aware, there will be no more teams. I realize there is
    a bill introduced----
        Senator Kohl. Clearly it's a disappointment for me to hear
    that from a State that doesn't have a team, so I would like the
    opportunity to perhaps follow up with you on that.
        General Davis. We will be happy to, sir.
        Senator Kohl. I thank you.
        Senator Stevens. General Davis, the department provided us
    little information about the tragic accident that ended in the
    death of four Canadians in Afghanistan. Could you give us any
    more information about that?
        General Davis. No, sir, I don't think I'm able to. One of
    the things we have done with that, as we do with other
    accidents, Senator Stevens, is we do a full-blown
    investigation. This one is additionally complex, I guess, in
    the sense that the Canadians are concerned about it and they
    also are doing their own independent investigation, so I
    wouldn't be able to comment beyond that, sir. I think it's
    premature to second-guess a lot of what went on beyond what's
    already been stated.
        We are approaching this as we do with any tragic accident.
    We certainly feel very badly and want to express our sympathy
    to the Canadians for their loss and those who lost their lives,
    as well as those who were very seriously injured, but our
    process is to have a team appointed to investigate, as you are
    aware, and to await their results. If we try to comment on it,
    we would be doing it at best anecdotally, sir, so I think it is
    probably best that we wait until that investigation is done. I
    would hope that somewhere in the investigation process that the
    Department will be able to come back and provide you members of
    Congress with some additional information, sir.
        Senator Stevens. We will be very interested because of the
    fact that it was a National Guard F-16 as I understand it, and
    the people have raised some questions where it's concerned.
        General Schultz, General Brubaker, we have a significant
    number of people now that have been mobilized and I am
    interested to know with this level of mobilization what is
    happening in terms of retention, recruiting, readiness and
    family problems. Can you give us a breakdown?
        Let me start with you, General Schultz. What effects is it
    having on the Army Guard?
        General Schultz. As of today, Senator, we're exceeding our
    strength objectives, so in terms of both the enlistments and
    the retention our figures are up slightly from even those that
    we planned for. We deal, of course, with families on a
    volunteer basis, and while certainly across the country we're
    dealing with some family issues and some employer issues, but
    to date we have clearly had the support of everyone on the
    missions that we have been asked to be part of, which is a good
    news story.
        Long term, what I'm seeing, it's probably a little early to
    anticipate that we have figured out all of the second and third
    order kinds of permutations here of sustained missions like we
    currently have. We are sending soldiers on duty just for the
    period that they're required and then return from a
    mobilization status to their normal traditional Guard status.
    And as long as we discipline that process, I think we will be
    all right.

                                  MOBILIZATION

        Senator Stevens. We are having some questions from the
    private sector in terms of how long it's going to be. There is
    a time limit on this mobilization, isn't there?
        General Schultz. In the case of the partial mobilization,
    we have authority up to 2 years to call our members, and
    current Office of the Secretary of Defense (OSD) policy is we
    will call them for 12 months. And what we're saying is that
    even 12 months isn't long for certain missions, and then we
    ought to have something less than 12 months, and so some are
    180 days, and we are even considering rotations shorter than
    that. But today we have a 6-month and a 12-month rotational
    policy in the Army.
        Senator Stevens. What's your situation, General Brubaker?
        General Brubaker. Sir, I would echo General Schultz's
    comments. We're proud to serve, we have a lot of patriotism
    from our folks out there, they are happy to serve and be there,
    but when they are not being used, we need to get them home, and
    I think that's the primary issue.
        Senator Stevens. My staff tells me that the net result of
    these mobilizations will be that you have a shortfall of $1.3
    billion, assuming that the current level of manning is
    maintained. Are we prepared for that, or have you requested
    money to fund that shortfall and should we expect this to come
    down over the balance of this year or will it affect fiscal
    year 2003?
        General Davis. Yes, sir. We had a discussion about this a
    bit earlier. One of the things we're doing in looking at some
    of the units we've alerted for mobilization, not actually
    calling them up, and looking at reexamining the possibility of
    using active components of soldiers, sailors, airmen and
    marines for those missions. And I think that we will continue
    to scrub all of the people we have on duty, and as General
    Brubaker and General Schultz said, when they have completed the
    mission that they are called for, release them and let them go
    home. If you need them in 5 months or 6 months, you can always
    call them back during that 2-year period, but if they are not
    actively performing the mission on a given day or the next
    couple weeks or so, we ought to really look at and consider
    that. So we are scrubbing all our folks who are on duty, and
    working with the Air Force and the Army to make sure that if we
    don't need them and are not going to use them for a while, then
    let them go back home.
        Senator Stevens. General, we have to stand in recess. They
    tell me I have just a few minutes to make the vote. Pardon us.
        Senator Inouye [presiding]. I have been told that Senator
    Domenici has a few questions to ask. In the meantime, I want to
    ask some about health care. I have been told that some of the
    personnel are having problems with that. Is that so?
        General Davis. Yes, sir, they are, particularly in remote
    areas, rural areas primarily. There are a number of healthcare
    providers who don't accept TRICARE, they won't participate in
    the program because of some of the historical things, not
    getting sufficient funding for it, paper work, and taking too
    long to recover their funding, so we have had some problems in
    that area.
        One of the things the Department of Defense has done,
    though, as part of the mobilization, they have waived the $300
    per family, they have also allowed up to 15 percent above the
    normal funding or reimbursement that's allowed for a given
    medical procedure or a given hospital visitation or doctor's
    visitation.
        So we have experienced some problems in that area, sir.
    They are being very aggressively looked at as we speak, and we
    have had significant improvement in that from where we were
    immediately following September 11, but there are some problems
    that still remain in that area, sir.
        Senator Inouye. General, the Guard has faced considerable
    challenges in defining and coordinating this homeland defense
    and civil support missions. Since 9/11 and the subsequent
    creation of the Office of the Director of Homeland Security,
    has the Guard's role in civil support matters become more
    defined?
        General Davis. Yes, sir, it is better defined and we are
    working very aggressively with that office. General Fred Reese,
    the vice chief, has had the rose pinned on him for that. These
    meetings continue with them. We have worked very closely with
    the Federal Aviation Administration (FAA) and now with the
    Transportation Security Agency as we work our way through a lot
    of those issues.
        The standing up of the Northern Command, we have a cell of
    people who work that issue on a daily basis, and we have people
    who are meeting with them as they develop their manning
    documents and all. One of the difficulties in that arena is we
    don't have manning, additional manning for that command as we
    staff the command. I have asked both directors to scrub their
    documents and see if we can come up with some personnel for
    that and as General Schultz said, the additional AGRs and
    technicians for both the Army and Air have to be put at the
    unit level to improve readiness. That was our commitment to you
    all here that that was what we would do, and that is what we
    have done.
        But as we get more involved in the homeland security
    mission, be it the national missile defense and we have a
    portion of the ground piece there, or some of these other
    missions, we don't have full-time manning for that, so we will
    probably have to come visit with staff and work our way through
    that.
        But it is becoming better defined. We still have a long
    ways to go in that arena, sir. Historical things we have done
    in terms support to first responders, we're still doing an
    awful lot of that, still working with it and still doing some
    training. So it is much better defined than it was, but we
    still have a long ways to go, sir. And that to me, I think from
    my perspective, would be if something were to evolve over the
    next few years, I don't think we will be able to say that this
    is what it is and this is how it works. I think we will have a
    good handle on it, probably an 85 to 90 percent solution, but
    the rest of that is going to come in an evolving fashion.

                                    MISSIONS

        Senator Inouye. My final question is a repeat. Are you
    really confident that the Guard and Reserves will be able to
    carry out their missions with 80,000?
        General Davis. Yes, sir. If we can't carry them out with
    80,000 then the missions will go somewhere else. If we need
    more than 80,000, then the system I think will respond to that.
    It has historically. As you are aware, we have authorization to
    go up to 1 million personnel as far as partial mobilization,
    and I think the decisions will be made as appropriate there.
        Right now we are being asked to do a number of missions, as
    an example some of the security missions, and one of the
    concerns we have is the op tempo of the active component also,
    not just the National Guard. So it is really a total Army
    solution or total Air Force solution, so we are concerned about
    how busy they are and how much activity they have as well as
    how much activity the Guard and the Reserve have.
        And we may end up--as we have looked and reexamined the
    threat, at the force protection levels that are required, we
    have decreased those force protection levels significantly in
    my opinion, and as a result of that we don't require as many
    people to perform those missions. Should there be another
    incident or an event, then that could change things
    dramatically, sir, and at that point we may well need more than
    80,000.
        Senator Inouye. Thank you, General, and may I now recognize
    Senator Domenici.
        Senator Domenici. Thank you very much, Mr. Chairman, and
    thank you for holding this meeting, which is very apropos to
    what's going on in the world.
        Generals, let me just open by saying that personally I wish
    I had a lot more time. We do have too many assignments and very
    seldom will anybody hit the issue that surrounds you all and
    that is, how are you going to change permanently because of the
    terror in the world? I would assume that we are going to be
    making, you are in your respective institutions going to be
    making some short-term changes which you have already made, but
    I would assume that somehow or another you are going to be part
    of a longer term change, which has the potential for changing
    very little in assigning you similar missions to what you have
    now, or changing a great deal and having very different
    missions than you have right now. Would either of you or all of
    you care to address that reality and just talk about it for a
    minute or 2?
        General Davis. I think we will do some changing. I'm not
    really sure what direction it will take. There is a thought
    process among some folks that we should take the National Guard
    and give them the homeland security mission and be done with
    it. Many of us do not share that view, because we feel it's the
    Nation's job, not just the National Guard's. It's the Army's
    job, not just the National Guard component of the Army, and the
    same thing with the Air Force and the other services.
        One of the difficulties we see when you give a mission
    which is just a plain domestic mission here, most of our
    soldiers as we talk to them, and mine is anecdotal as I go
    around in Bosnia as well as out in the several States and all,
    and talk to soldiers and airmen, they all joined the Guard but
    they want to be part of the Air Force, they want to be part of
    the Army. If part of the Army is to deploy, they want to
    deploy. They want to go do the missions in the Sinai, and go do
    those other missions. In many of those missions our young
    people are standing in line and ready to go as General Brubaker
    said, and General Schultz said.
        So there's one thought process that they would give all of
    that to the Guard. I don't share that because I think it is the
    Nation's business and I think the nature of what we're doing
    has changed significantly and we are going to need to have the
    whole Nation participate in this, not just the military.
        Senator Domenici. But you're going to have an assignment
    within that, General, you're going to be doing something within
    that American situation that you have just described, you will
    have a role.
        General Davis. Absolutely we will have a role.
        Senator Domenici. Let me put it another way. Is your role
    going to be primarily to match up with the military that are
    full-time military and their plans, is your principal job going
    to be to be adjunct to backing your three respective nodes, or
    are there going to be some different jobs than that?
        General Davis. We may have some different jobs. As General
    Schultz talked to a little earlier----
        Senator Domenici. I'm sorry if I missed it.
        General Davis. No problem, sir. We are converting some
    units out there in our force structure as we try to redesign,
    but as we convert those, we can convert those to whatever it is
    that we need for specialized units. We think the bulk of the
    folks in both the Army Guard and Air Guard ought to be
    dedicated to what we call a dual mission, a mission to augment
    the active component and go overseas and do whatever we do as
    part of the active Army or part of the Air Force, as well as do
    missions back home.
        We do that now in civil disturbance. Young people were out
    here on the streets earlier this year and were not required
    this time, but from the National Guard in D.C., they came and
    did that mission. There are also those same young people that
    are deployed overseas to do missions alongside the active
    component. We feel that the Guard can best be utilized by doing
    both of those missions, because our young people will join the
    Guard and we think they will stay in the Guard for a long-term
    career if we can give them those kinds of options. If we tell
    them they are going to go to do just strictly domestic missions
    and stay here, they will do that I think for a while, but long-
    term sustainment I don't think will be very rewarding.
        General Schultz. If I could, Senator, just do a brief recap
    from the Army Guard perspective. Today we are increasing
    military police units, chemical units, engineer units, aviation
    units in the Army Guard. We're looking--every State today has
    computer emergency response teams as an example, information
    operations teams. Just a few years ago they didn't even exist.
    We find tremendous skills across our formation in our units.
    Now, soldiers are coming to us with acquired skills perhaps in
    many respects, but we have a tremendous capacity in the Guard
    today to answer some of the information operations kind of
    departments, network defense and so on.
        We are also looking at making some of our units lighter.
    Tanks and Bradleys will be less, perhaps wheeled vehicles will
    be more in some of our units. And as I talk with you about
    major change across the Army Guard, I am doing this in concert
    with the support of our adjutants general.
        Senator Domenici. I know we are going to run out of time, I
    am and I have two or three more, but Brigadier General, did you
    want to comment?
        General Brubaker. No, sir, I couldn't add more than what
    General Davis said.

                                FIRST RESPONDER

        Senator Domenici. I have four New Mexico questions and I
    will submit them and you can answer them in due course, and I
    just want to ask two last questions.
        Right now in the United States, about 120 cities, most of
    them would be identified as major cities but there are some
    medium sized ones, have gone through the first responder
    preparation. Are you aware of first responder preparation? It's
    sponsored and paid for by the Federal Government. Are you part
    of the first responder team in any of these cities as they sat
    down over the last 2\1/2\ years? Are you there for a disaster
    that might be somebody polluting the city water, which would
    cause kind of a riotous situation in that town, and you have
    some of your people in that State? Could you share that with
    us?
        General Davis. Yes, sir, the National Guard has been
    involved in those, the adjutants general, the commanders of the
    Guard, they have been involved in those as well as their
    emergency preparedness folks in the National Guard, they have
    been involved in many of the exercises, most of the exercises.
    They have gone through an iteration where they look at the
    Guard being called up to participate and do serve at specific
    tasks, be it isolating a given area where there is
    contamination and that kind of thing, or providing emergency
    services in conjunction with the local first responders. So we
    have been working with first responders in that regard.
        Early on we did some training, and the decision was made to
    transfer that over to Justice, so the essence of some of that
    is between Justice and FEMA, they have conducted those, but
    yes, sir, we have been involved in those in the several States.
        Senator Domenici. The military actually ran the first wave
    of first responder, and something happened to move it to
    Justice, I guess they changed the appropriation.
        I want to say to the chairman and co-chairman on the
    record. One of the largest expenditures of money that comes out
    of a non-defense subcommittee has to do with first responder
    preparation in America and it might be as much as $650 million,
    which goes to these cities when they prepare a game plan for an
    emergency. That takes into consideration the hospitals, the
    doctors in the community, the police and the firemen. And they
    put it together in such a way that if they had a problem, this
    is how we would respond.
        I think it's very important that we inquire of the Defense
    Department how they see their mission with reference to first
    responder activities, because you already have a first
    responder being put together, you don't need to reinvent it,
    unless somebody challenges it as being inappropriate for that
    particular problem. And I think it would probably be important
    that wherever National Guard and Army can be part of it, just
    from the manpower and the helping with the kinds of things that
    are going to occur in these cities, it would be a rather good
    use and rather important, but I just give that to you.
        Generals, let me say, on the 23rd day of April, the USA
    Today had an article that said, ``the United States is all over
    the map on homeland defense.'' It describes a very uneven and
    sometimes inadequate response in different States to the
    problem of homeland security. Some States have no budget
    resources, some have no staffing, some have no expertise, and
    some have none of these. Does the National Guard and the
    infrastructure in each State provide an essential resource to
    lead the response of each State to provide homeland security,
    and why is the National Guard not being tasked with this
    mission in various States? At least we should be advised if you
    are not going to, because some States are not doing anything,
    they have no resources to become part of this.
        Wrap-up question. Does the National Guard infrastructure in
    most States possess the human and material resources to lead
    that effort and then, does the $4.1 billion that the Secretary
    of Defense requested in 2002 emergency supplemental that we're
    going to be considering soon, does it adequately fund the
    National Guard's mobilization and homeland security
    requirements? So I'm finished. You can probably take a couple
    minutes.
        General Davis. Where homeland security resides in a given
    State is that State's decision, sir; we don't participate in
    that. We have a very small office we've taken out of hide, I
    made a comment a bit earlier, that the additional full-time
    manning that we have gotten in the past 4 to 5 years, we have
    placed that, with the commitment to the committee, placed that
    at the unit level to improve and increase readiness.
        As we stand up our homeland security operation at the
    National Guard bureau, we will need some additional full-time
    manning for that, we do not have it at this present date and
    don't have the funding for that. So as the States decide where
    homeland security resides, and many of them have given it to
    the National Guard, to the adjutant general to deal with, but
    many others have not. They have put it in emergency management,
    which does not reside, in those States where it does not reside
    with the adjutant general.
        So that's, there is no consistency in how we are
    approaching this and that had been part of the problem. At the
    national level we don't have adequate resources to do that, to
    do the planning or to issue to them for the planning.
        Senator Domenici. And there is none of that money in the
    $4.1 billion?
        General Davis. As far as I know, there is none in there,
    no, sir.
        Senator Domenici. Thank you, Mr. Chairman.
        Senator Inouye. Thank you. Senator Stevens.

                              EQUIPMENT SHORTAGES

        Senator Stevens. Generals, we got this report of, I think
    it was your report on equipment shortages for the Guard and
    Reserve. We were told that the Army Guard and the Army Reserve
    were in the worst position, shortfalls exceeding 20 percent,
    with the balance around 10.8 percent. With these mobilizations
    we have been talking about, how are we handling that? It almost
    seems to us like there is some units that are just totally left
    behind, they are short of equipment, they will never be
    mobilized if they are short of equipment. How are we treating
    this from a point of view of fairness in allocating the
    shortfalls? Has it been a factor in terms of your operation
    since 9/11, these shortfalls?
        General Schultz. Senator Stevens, it has, and to give you
    an example, radio gear that our units are currently not in
    receipt of, and so during the mobilization process, we bring
    those units up to speed on the latest radio equipment that they
    may use in theater, as one example.
        So as I talked in the opening about compatibility of
    equipment, what we have are dated legacy force kind of
    equipment, older trucks, older generation systems. So during
    the mobilization process, if there is a major compatibility
    problem, then we bring them up to speed. It has been an issue,
    without a doubt.
        Senator Stevens. Are there some units that are just
    allocated shortages so they will never be called up?
        General Schultz. Not on our part at all, not intentional
    for sure. Of course we have some very, very dated vehicles, and
    we keep track of those systems, but that doesn't mean they
    won't deploy; it just means that they would operate with
    equipment that has many hours, many miles, and so forth.
        Senator Stevens. When you're that far behind in money,
    where do you get the money if you're $1.3 billion behind
    already?
        General Schultz. We take what we have, Senator, and place
    those units on active duty. That's how the process works.
        Senator Stevens. How about you, General Brubaker?
        General Brubaker. Sir, I believe our equipment shortfalls,
    although substantial, don't keep us from deploying any of our
    folks.
        General Davis. We do some cross-matching as well.
        Senator Stevens. But if you look at the regular units, they
    go over there with the latest equipment. You can't disperse
    your people into places that are utilizing the latest equipment
    unless they too get it. How do you get it?
        General Davis. In some instances we deploy, as an example
    at Prince Sultan, a lot of the equipment is already in place,
    vehicles and that kind of thing, so we essentially fall in on
    the equipment. Sometimes it's necessary for us to do some
    additional training after we get our folks in country, cross-
    trained on the equipment, and vehicles are an example.
    Sometimes we haven't operated those vehicles and they are a bit
    complex, so we will spend a day or so training on that,
    hopefully before we deploy, but if not, after we deploy and get
    in place, so we can operate.
        Senator Stevens. I didn't understand that. I understood
    that when units deploy, they took their equipment with them.
    General, your units take their planes with them, don't they?
        General Brubaker. Yes, sir, we do, but we share equipment
    among our units, but our aircraft are kept and maintained well
    enough to deploy.
        Senator Stevens. Well, I'm a little worried about that
    report about shortfalls, and I don't know how we play catch-up
    with shortfalls when we have all these additional demands, and
    we are going to have to get some basic briefings on how the
    money that we have been asked for now, if the money we have
    been asked for now can't catch up the units that were on the
    shortfalls then we are not expanding out to the kind of full
    mobilization that we were led to believe you are going to do.
    And we're not going into the full-time manning that are your
    targets.
        I don't really have a feeling for how you are handling the
    shortfalls and the full-time manning at the same time, it's the
    same money. Are you going to be able to do both, General Davis?
        General Davis. Well, sir, it's going to be very difficult.
    One of the things we do when we deploy, opening new bases for
    example, we take equipment and we take it from all units,
    active, Guard and Reserve units, and we put it on the ground
    just to sustain the rotation of aircraft in and out of country.
    When we do that, yes, this is going to create some shortfalls,
    because there is not much spare equipment that we have. As a
    result of that, there will be shortfalls. As we get ready to
    deploy a unit, we will take equipment from other units, other
    Guard units typically and sometimes from active units, to give
    to them so they can go and have all the equipment they need,
    primarily ground support equipment for aircraft, loaders and
    that kind of thing.
        We try to leave a lot of that in country. As an example, we
    have a number of our security forces units in the Air Guard who
    have been called up. A lot of their night vision gear and a lot
    of their other high tech equipment is being left in place as
    they rotate back to the States, so they're going to have
    shortfalls there. It's a combination of those kinds of things,
    sir, that give us the shortfall. At some point we need to
    reconcile the books and get adequate equipment for that, but we
    have equipment to operate at home and there are some shortfalls
    there, so when we deploy we make them shorter, so I agree with
    your concern about the situation, and we can get back with you
    on that.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Stevens. Thank you very much, Mr. Chairman.
    Gentlemen, I'm sorry the schedule caused me to be late.
        General Davis, as I'm sure was expressed already by the
    chairman, I want to thank you for your service. You have been
    not only an excellent Chief of the Guard bureau, but you have
    developed into a good friend, and we wish you the best and
    hopefully we will see more of you along the way, but thank you
    very much. And I thank all of you for what you are doing for
    our Guard.
        Senator Inouye. 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 Lieutenant General Russell C. Davis
                Questions Submitted by Senator Pete V. Domenici
                            counter drug operations
        Question. The New Mexico National Guard Counterdrug Support
    Taskforce makes a critical contribution to the narcotics interdiction
    effort along our border. It also works throughout the community to help
    ``high risk'' students through its Drug Demand Reduction Program.
    Local, state, and federal law enforcement officials have all testified
    to the positive and direct impact that the Task Force has had on their
    counterdrug efforts. Despite these proven results, I am concerned about
    the fluctuations that have occurred in the Counterdrug budget over the
    past few years.
        As you may know, the New Mexico Counterdrug Taskforce is
    responsible for seizing millions of dollars in illegal narcotics and
    arresting hundreds involved in this illicit trade.
        Given the increased homeland security demands being placed on the
    Guard, can New Mexicans expect the Taskforce to sustain or even improve
    these lofty statistics, and help keep drugs out of their communities?
        Answer. Many of the homeland security missions proposed for the
    Guard have significant overlap with the Guard's well-established
    counterdrug program. These areas of overlap include arrival-zone denial
    operations (of unwanted cargo and individuals), aerial and ground
    reconnaissance and observation (primarily of border areas but also of
    urban or rural areas of interest), and case support/intelligence
    analysis. By virtue of its well-established working relationship with
    key law enforcement and first-responders at the local, state and
    federal level, the Guard's counterdrug program may be viewed as a model
    for proposed homeland security operations.
        Increased homeland security demands will definitely not diminish
    the Guard's ability to assist law enforcement and community
    organizations to keep our citizens drug-free. In fact, the fundamental
    similarities shared by both counterdrug and homeland security
    requirements merit a closer look on how to better synchronize efforts
    between both missions to derive maximum value.
        Question. How will the operations tempo of the Taskforce be
    affected by the additional homeland security operations of the Guard?
    Does the current budget allow you to maintain a strong counterdrug
    operation?
        Answer. Budget fluctuations make it difficult for the New Mexico
    National Guard Counterdrug Support Taskforce (and similar task forces
    in all other states and territories) to sustain or improve support to
    law enforcement agencies and community based organizations working to
    disrupt the trafficking and use of illicit drugs. These budget
    fluctuations not only prohibit sustained and much-needed military
    support to civilian authorities, but also break faith with Guard
    members who are hired and dismissed in short order due to these funding
    swings.
        The Deputy Assistant Secretary of Defense for Counternarcotics
    (DASD-CN) is the responsible agency for DOD Counternarcotics funding
    and policy oversight for the National Guard's Counterdrug efforts.
    DASD-CN's annual President's Budget (PB) submissions for National Guard
    Governor's State Plans for domestic support have been flat to negative
    in real dollar terms for the past several years. Although Congress
    added $36-$50 million annually in the appropriation process, the
    program lost over 1,200 personnel between fiscal year 1999 and fiscal
    year 2002 based on recent military pay and allowance increases
    outpacing annual congressional adjustments. The fiscal year 2002
    Governor's State Plans program is currently budgeted at $197.2 million
    including congressional and DOD adjustments. The DASD-CN fiscal year
    2003 President's Budget request was submitted at $162.3 million. To
    remain within budget an additional 335 soldiers and airmen must be
    terminated by October 1, 2002, for a total of over 1,535 personnel
    released from duty since September 30, 1999.
        The level of support the National Guard can provide is limited by
    three primary factors: (1) The number of available and qualified
    soldiers and airmen; (2) The number of agencies each state determines
    it can effectively support; and (3) Available authorization and
    funding. A recent survey of state Counterdrug Coordinators found that
    approximately 4,850 personnel would be required to support current law
    enforcement and community-based organization requests for assistance.
    The fiscal year 2003 President's Budget request will support 2,265
    personnel. Currently, 32 U.S.C., Sec. 112 that authorizes National
    Guard CD operations, caps the number of Governor's State Plans
    participating personnel at 4,000.
                               150th fighter wing
        Question. The 150th Fighter Wing of the New Mexico Air National
    Guard at Kirtland Air Force Base plays a critical support role for the
    joint services in Defense System Evaluation (DSE). Because of its
    increased operations tempo due to the war in Afghanistan, the Air Force
    has taken away the Block-40 version F-16s from the 150th and replaced
    them with Block-30s. I am concerned about how this might impact the
    future of the important DSE mission of the 150th Fighter Wing.
        It is very important that the joint services have a highly
    dependable testing asset for their aircraft. The Air National Guard has
    long provided this critical service. Will the National Guard be able to
    keep up its testing mission in the future after the F-16? How can we
    ensure this mission continues?
        Answer. The 150th Fighter Wing's DSE program plays a valuable role
    in developmental testing of various air defense systems operating from
    the air, ground, and sea. A primary role of the air defense systems is
    to defend against fighter aircraft. Therefore, a major portion of the
    test regime at Kirtland is to validate performance against fighters
    which the 150 FW does extremely well. The characteristics of the F-16
    Block 30 are virtually identical to the F-16 Block 40. The conversion
    will have no noticeable impact on the current DSE mission.
        Today, and more so in the future, air defense systems need to be
    capable against a variety of threat platforms: short/medium/long-range
    missiles, cruise missiles, fighters, bombers, unmanned air vehicles, in
    stealth and non-stealth configurations. As the 150 FW aircraft mission
    evolves from F-16 Block 40 to F-16 Block 30 and on to the next
    generation fighter aircraft, like the F-35 (JSF), the DSE mission will
    be able to leverage that platform for its test support mission. The 150
    FW will continue to be a viable Total Force partner in the air
    expeditionary force and will be able to provide the test support as
    required.
        Question. How can we ensure that as the Air Force moves to the F-22
    and the Joint Strike Fighter (JSF), that the Air National Guard will be
    able to provide the critical testing that will be needed?
        Answer. The 150th Fighter Wing's DSE program plays a valuable role
    in developmental testing of various air defense systems operating from
    the air, ground, and sea. A primary role of the air defense systems is
    to defend against fighter aircraft. Therefore, a major portion of the
    test regime at Kirtland is to validate performance against fighters
    which the 150 FW does extremely well. The characteristics of the F-16
    Block 30 are virtually identical to the F-16 Block 40. The conversion
    will have no noticeable impact on the current DSE mission.
        Today, and more so in the future, air defense systems need to be
    capable against a variety of threat platforms: short/medium/long-range
    missiles, cruise missiles, fighters, bombers, unmanned air vehicles, in
    stealth and non-stealth configurations. As the 150 FW aircraft mission
    evolves from F-16 Block 40 to F-16 Block 30 and on to the next
    generation fighter aircraft, like the F-35 (JSF), the DSE mission will
    be able to leverage that platform for its test support mission. The 150
    FW will continue to be a viable Total Force partner in the air
    expeditionary force and will be able to provide the test support as
    required.
                                     ______

               Questions Submitted by Senator Christopher S. Bond
                                northern command
        Question. Defense Secretary Donald Rumsfeld announced the creation
    of a new Northern Command charged with caring for direct defense of the
    United States, a decision that he called ``the most significant reform
    of our nation's military command structure'' since World War II. Such a
    claim creates expectations in the public and amongst the military
    itself that the United States is indeed better protected against the
    threat of terrorism, and that ``transformation'' is afoot. Has the
    Department of Defense indicated what the role of the National Guard and
    Reserve will be in this new Command? Were you involved in the decision
    making process that led to this command?
        Answer. The Department of Defense has given some limited
    indications what role the National Guard will fulfill at this time. The
    stand up of NORTHCOM is an ongoing issue and one that has yet to have
    SECDEF approval to include the National Guard role within the new
    command.
        The National Guard through the National Guard Bureau Homeland
    Security Office (NGB-HS) detailed a handful of guardsmen to provide
    input for the Implementation Planning Team. Having said this the
    National Guard Bureau and National Guard is not in the decision making
    process; we provide technical advice as two of the seven reserve
    components.
        NGB-HS has endeavored to articulate the role of the National Guard
    and to ensure that the NORTHCOM planning team understands that this is
    a primary mission accomplished by the National Guard.
                                      cbrn
        Question. In a recent GAO report (dated September 2001) it was
    reported that specialized National Guard teams, known as Weapons of
    Mass Destruction Civil Support Teams, have been developed to assist
    state and local authorities in responding to a terrorist incident
    involving weapons of mass destruction. However, there are numerous
    problems with readiness and deployability. According to the DOD
    Inspector General the Army's process for certification lacks rigor; the
    program schedule has slipped; and there are no plans to arrange for
    dedicated aircraft to get the teams in position. Can you tell us what
    has happened since this GAO report was released? Are our troops
    adequately equipped to respond to Chemical, Biological, Radiological,
    and Nuclear (CBRN) attacks at home and abroad?
        Answer. The problems cited in the GAO report, which was principally
    based on the earlier DOD Inspector General report, were being
    aggressively worked at the time of the report and have been largely
    resolved.
        A rigorous formal certification process involving analysis of
    readiness factors by U.S. Army Forces Command, the National Guard
    Bureau (NGB), the Army Secretariat and Army Staff (HQDA), and reviewed
    by several staff elements of the Office of the Secretary of Defense
    (OSD) was used to certify the 27 WMD-CST authorized in fiscal year 1999
    and fiscal year 2000. The first CST was certified by the Secretary of
    Defense in July 2001, and the last in April 2002. These teams have been
    extremely busy and effective in responding in U.S.C. Title 32 status
    since the terrorist attacks of September 11, 2001. As of today, teams
    have performed more than 400 missions in support of requests from state
    and local authorities. An additional 5 teams, authorized in fiscal year
    2001, have begun their initial individual and unit training and are
    expected to be certified by the end of calendar year 2002.
        By law, the WMD-CSTs may only operate in the United States, its
    territories and possessions, Puerto Rico and the District of Columbia.
    They are adequately equipped to respond to CBRN attacks. Not all
    certified WMD-CSTs have Mobile Analytical Laboratory System (MALS) yet
    due to an ongoing reassessment of the acquisition strategy. In the
    interim, these teams have been equipped and trained in a technique
    referred to as the Dismounted Analytical Process (DAP). As technology
    in the area is rapidly changing, numerous improvements to WMD-CST
    equipment are being investigated and/or procured.
        Concerning the airlift deployability issue, it is still true that
    no aircraft are ``dedicated'' to support the WMD-CST mission. A number
    of WMD-CST response actions in U.S.C. Title 32 status, which ordinarily
    would not meet requirements for operational lift with U.S.C. Title 10
    assets, have been supported with airlift when that was necessary, but
    some issues in this area are still being worked. NGB, HQDA, the Joint
    Staff and U.S. Transportation Command (TRANSCOM) are defining a process
    and priority system to address the problem.
                                     ______

           Questions Submitted by Lieutenant General Roger C. Schultz
                Questions Submitted by Senator Pete V. Domenici
                             counterdrug operations
        Question. The New Mexico National Guard Counterdrug Support
    Taskforce makes a critical contribution to the narcotics interdiction
    effort along our border. It also works throughout the community to help
    ``high risk'' students through its Drug Demand Reduction Program.
    Local, state, and federal law enforcement officials have all testified
    to the positive and direct impact that the Taskforce has had on their
    counterdrug efforts. Despite these proven results, I am concerned about
    the fluctuations that have occurred in the Counterdrug budget over the
    past few years.
        As you may know, the New Mexico Counterdrug Taskforce is
    responsible for seizing millions of dollars in illegal narcotics and
    arresting hundreds involved in this illicit trade.
        In a recent GAO report (dated September 2001) it was reported that
    specialized National Guard teams, known as Weapons of Mass Destruction
    Civil Support Teams, have been developed to assist state and local
    authorities in responding to a terrorist incident involving weapons of
    mass destruction. However, there are numerous problems with readiness
    and deployability. According to the DOD Inspector General the Army's
    process for certification lacks rigor; the program schedule has
    slipped; and there are no plans to arrange for dedicated aircraft to
    get the teams in position. Can you tell us what has happened since this
    GAO report was released? Are our troops adequately equipped to respond
    to Chemical, Biological, Radiological, and Nuclear (CBRN) attacks at
    home and abroad?
        Answer. Many of the homeland security missions proposed for the
    Guard have significant overlap with the Guard's well-established
    counterdrug program. These areas of overlap include arrival-zone denial
    operations (of unwanted cargo and individuals), aerial and ground
    reconnaissance and observation (primarily of border areas but also of
    urban or rural areas of interest), and case support/intelligence
    analysis. By virtue of its well-established working relationship with
    key law enforcement and first-responders at the local, state and
    federal level, the Guard's counterdrug program may be viewed as a model
    for proposed homeland security operations.
        Increased homeland security demands will definitely not diminish
    the Guard's ability to assist law enforcement and community
    organizations to keep our citizens drug-free. In fact, the fundamental
    similarities shared by both counterdrug and homeland security
    requirements merit a closer look on how to better synchronize efforts
    between both missions to derive maximum value.
        Question. How will the operations tempo of the Taskforce be
    affected by the additional homeland security operations of the Guard?
    Does the current budget allow you to maintain a strong counterdrug
    operation?
        Answer. Budget fluctuations make it difficult for the New Mexico
    National Guard Counterdrug Support Taskforce (and similar task forces
    in all other states and territories) to sustain or improve support to
    law enforcement agencies and community based organizations working to
    disrupt the trafficking and use of illicit drugs. These budget
    fluctuations not only prohibit sustained and much-needed military
    support to civilian authorities, but also break faith with Guard
    members who are hired and dismissed in short order due to these funding
    swings.
        The Deputy Assistant Secretary of Defense for Counternarcotics
    (DASD-CN) is the responsible agency for DOD Counternarcotics funding
    and policy oversight for the National Guard's Counterdrug efforts.
    DASD-CN's annual President's Budget (PB) submissions for National Guard
    Governor's State Plans for domestic support have been flat to negative
    in real dollar terms for the past several years. Although Congress
    added $36-$50 million annually in the appropriation process, the
    program lost over 1,200 personnel between fiscal year 1999 and fiscal
    year 2002 based on recent military pay and allowance increases
    outpacing annual congressional adjustments. The fiscal year 2002
    Governor's State Plans program is currently budgeted at $197.2 million
    including congressional and DOD adjustments. The DASD-CN fiscal year
    2003 President's Budget request was submitted at $162.3 million. To
    remain within budget an additional 335 soldiers and airmen must be
    terminated by October 1, 2002, for a total of over 1,535 personnel
    released from duty since September 30, 1999.
        The level of support the National Guard can provide is limited by
    three primary factors: (1) The number of available and qualified
    soldiers and airmen; (2) The number of agencies each state determines
    it can effectively support; and (3) Available authorization and
    funding. A recent survey of state Counterdrug Coordinators found that
    approximately 4,850 personnel would be required to support current law
    enforcement and community-based organization requests for assistance.
    The fiscal year 2003 President's Budget request will support 2,265
    personnel. Currently, 32 U.S.C., Sec. 112 that authorizes National
    Guard CD operations, caps the number of Governor's State Plans
    participating personnel at 4,000.
                             arng patriot battalion
        Question. The 150th Fighter Wing of the New Mexico Air National
    Guard at Kirtland Air Force Base plays a critical support role for the
    joint services in Defense System Evaluation (DSE). Because of its
    increased operations tempo due to the war in Afghanistan, the Air Force
    has taken away the Block-40 version F-16s from the 150th and replaced
    them with Block-30s. I am concerned about how this might impact the
    future of the important DSE mission of the 150th Fighter Wing.
        One of the issues that I have long been concerned about is
    underfunding for the New Mexico Army National Guard Patriot Battalion.
        Can you give me an update on the readiness of the battalion?
        Answer. The New Mexico ARNG Patriot battalion is in an unready
    status and has been for the past seven years.
        ARNG Patriot battalions are required to have 15 launchers. The New
    Mexico battalion is authorized only five launchers and has only three
    ``on-hand.'' This adversely impacts unit readiness as soldiers must
    have the necessary equipment to train to standard. There is no Army
    plan to field this unit with additional launchers above the five
    authorized. They are scheduled to receive two launchers that are
    currently on loan to Greece in 2004.
        There is a shortage of assigned and qualified personnel. The
    battalion is authorized 413 soldiers and is currently at 46 percent
    strength with 32 percent of soldiers trained and qualified.
        Question. Will the battalion be able to conduct its wartime mission
    and does it have the necessary repair parts to bring all of its
    necessary equipment to a working status?
        Answer. The New Mexico ARNG Patriot battalion in not able to
    conduct its its wartime mission under its current structure. The
    battalion was organized as a non-doctrinal battalion and is not
    structured to deploy with its equipment. Consequently, the unit has
    insufficient equipment ``on-hand'' to conduct its wartime mission. This
    also makes collective training at the unit level difficult. New Mexico
    will continue to report an unready status until additional resources
    are provided.
        New Mexico does not have the required repair parts and appropriate
    funding to keep their equipment in a working status. Presently, there
    is a $14 million unfinanced requirement for technical repair parts that
    allows for plug-and-play diagnostics of the launchers.
                                     ______

               Questions Submitted by Senator Christopher S. Bond
                                   misconduct
        Question. On December 21, 2001 USA TODAY documented that misconduct
    often goes unpunished under deficient state-by-state Guard disciplinary
    codes: Rosters are padded with ``phantom'' soldiers. Within individual
    National Guard units, as many as 20 percent of soldiers reported on the
    rolls are no longer with the service, meaning that if Guard units were
    called up, they might not be fit for duty. Is this true? Is the
    National Guard ready to put combat ready divisions into a major armed
    conflict?
        Answer. This is not true. The USA TODAY article misrepresented
    strength reporting and accounting in the the Army National Guard. The
    widespread, systematic inflation of unit strengths by unit commanders
    for the purpose of misleading federal authorities is not evident from
    either the General Accounting Office (GAO) analysis of recent trends,
    inspector general reports over the last five years, or our own internal
    review and oversight.
        In any large organization there are efficiencies to be garnered and
    we have taken the appropriate steps to ensure diligent oversight in
    this area. We have an internal reporting process to ensure that
    soldiers who are not participating, i.e. soldiers not getting paid, are
    systematically identified and action is taken to bring them back as a
    drilling member or separate them. Currently, this population represents
    less than three percent of the authorized endstrength of the ARNG.
    Inversely, this means that 97 percent of our soldiers are participating
    in some capacity.
        Question. Additionally, serious misconduct by top officials is an
    issue. Guard generals have committed serious offenses at twice the rate
    of regular Army and Air Force generals during the past five years. In
    recent years, serious allegations have been confirmed against nine
    states' top officers as well as the general who oversees the Guard.
    These range from drunkenness and sexual misconduct to filing false
    paperwork and misusing government planes. How do you explain this?
        Answer. The percentage of Army National Guard (ARNG) general
    officers (GO) who have allegations substantiated against them is
    virtually the same as it is for Active Component GOs for the most
    recent 2 years. During the past 3 years, less than 10 percent of the
    allegations against ARNG GOs were substantiated. Regarding the
    instances that have been reported recently in the newspapers, we have
    found the author's information on specific misconduct cases is factual,
    but outdated. Therefore, his conclusions are not relevant to our
    present situation. In the cases cited, every individual was held
    accountable. The federal recognition and confirmation process is
    similar to the selection and confirmation process used for active duty
    officers. While the State Governor has the option to retain an Adjutant
    General (AG) who is not federally recognized, none of the currently
    serving AGs are in a non-federally recognized status for misconduct.
    Given the current procedures that are in place, I am confident it is in
    a Governor's best interest to sustain the quality of AG's now serving.
                                    Reserves

    STATEMENT OF LIEUTENANT GENERAL THOMAS J. PLEWES, USAR,
                CHIEF OF ARMY RESERVE
    ACCOMPANIED BY:
            VICE ADMIRAL JOHN TOTUSHEK, USNR, CHIEF OF NAVAL RESERVE
            LIEUTENANT GENERAL JAMES E. SHERRARD, USAFR, CHIEF OF AIR FORCE
                RESERVE
            LIEUTENANT GENERAL DENNIS M. McCARTHY, USMCR, COMMANDER, MARINE
                FORCES RESERVE
        Senator Inouye. Our second panel will consist of Lieutenant
    General Plewes of the Army Reserve, Vice Admiral Totushek of
    the Naval Reserve, Lieutenant General McCarthy of the Marine
    Corps Reserve, and Lieutenant General Sherrard of the Air Force
    Reserve. I would like to welcome all of you and look forward to
    your statements. Welcome, gentlemen.
        The chair now recognizes Lieutenant General Plewes, for the
    Army.
        General Plewes. Thank you, Mr. Chairman, members of the
    subcommittee, and a good morning to you. Thank you for the
    opportunity to testify in behalf of the citizen soldiers of the
    Army Reserve who are successfully serving around the world in
    the ongoing war against terrorism thanks to your commitment to
    our men and women.
        I would like to express our gratitude to you for your
    continuing support of our commitment to readiness. Our
    readiness was a direct factor in our ability to respond as
    quickly and ably as we did to the call to duty immediately
    after September 11 and with additional unit call-ups just days
    after the terrorist attacks. This commitment to readiness
    enabled us to cut down our mobilization preparation for our 470
    activated units to a time frame of about 24 to 48 hours, as
    compared to about 20 days for Desert Storm.
        Success in the Army Reserve on the war on terrorism
    continues to be possible because of that focus on readiness, a
    focus that you have enabled us to have. The 15,000 citizen
    soldiers that are currently mobilized were trained and ready
    when the call came.
        The Army Reserve is playing a vital role in the war on
    terrorism and will continue to do so for as long as necessary
    for wherever it will take us. Our readiness levels remain high
    and these levels remain high with a continued focus on full-
    time support personnel, the full-time reservists and civilians
    whose mission it is to support our troop program units when
    attending drills. Thanks you this year for adding 298 full-time
    soldiers and 250 military technicians. Our challenge for the
    future is to continue hopefully to add to that number.
        We mentioned equipment modernization and recapitalization
    and shortfalls earlier. This certainly remains a priority for
    the Army Reserve. Filling the two Blackhawk units that we have
    established with Blackhawks and expanding into the Pacific
    where we have a clear requirement for Blackhawks is a priority.
    Adding to our biological detection systems for homeland
    security missions, Family of Medium Tactical Vehicles (FMTVs)
    and High Mobility Multipurpose Wheeled Vehicle (HMMWH) that
    carry our troops to the battlefield, and as already mentioned,
    radios, so that we can talk to our counterparts in the Guard
    and Active components.
        In the past you have recognized the need for equity in
    equipment, and we are grateful for that support. Our core
    capabilities, combat support and combat service support, are
    equipment dependent, and this emphasis on equipment allows us
    to focus our role in the Army's transformation as being part of
    the Army worldwide.
        We willingly accept and face the challenges now confronting
    us as they will present themselves in the future and the key to
    our success continues to be a high state of readiness, which is
    directly affected by everything we do. Thank you for the
    opportunity to appear before you and I look forward to
    answering any questions you may have.
        [The statement follows:]
           Prepared Statement of Lieutenant General Thomas J. Plewes
                                  introduction
        Mr. Chairman, members of this subcommittee, thank you for the
    opportunity to testify on behalf of the nearly 360,000 men and women
    serving in Army Reserve units and as individual mobilization assets--
    all soldiers of The Army.
        As I appear before you today, there are Army Reserve citizen-
    soldiers on duty, on all fronts of the global war against terrorism--
    defending our homeland and our fellow citizens, supporting the battle
    against the terrorists wherever they may hide, and bringing assistance
    to those who have long suffered from their oppression. We have been in
    this war since it was brought upon our Nation. We will be there when we
    finish it--an indispensable and strategically responsive force, an
    essential component of The Army.
        Before I continue, I wish to convey my sincere appreciation to this
    subcommittee for its sustained, consistent, and strong support of
    citizen-soldiers. By asking me to discuss the challenges we face, you
    clearly demonstrate your concern for our Reserve forces and how well
    they can fulfill the missions assigned to them.
        The opportunity to testify before this subcommittee comes at a time
    when the challenges we faced before September 11 have increased in
    number and complexity. Not only must we wage and win this war but we
    must concurrently transform our Army while we wage war. Yes, the
    challenges that The Army faces are great. Do we shy from them? Never.
    To back away is not something done by American soldiers. The men and
    women of the Army Reserve exemplify this spirit, the spirit of Hometown
    U.S.A. That unstoppable spirit can be found throughout the Army Reserve
    today.
        When last I addressed this subcommittee, I discussed with you how
    the Army Reserve, the Army National Guard and the Active Army were full
    and equal partners in the fully focused American Force that is the most
    responsive ground combat force in the world. I told you that wherever
    the Army has gone, so, too, has gone the Army Reserve, and that
    wherever the Army is today, so are we. I also told you that the U.S.
    Army today cannot perform its missions or meet its mission goals
    without the Army Reserve, that we were being utilized more frequently
    than ever before as an indispensable Army partner--one increasingly
    committed to our national defense in several important ways.
        The events of September 11, now seven and a half months ago, have
    dramatically proved all that I said last year.
        As unimaginable horror came to our country, Americans rose to the
    occasion. Among the great heroes of that day were many Army Reservists.
    They displayed the highest qualities of courage and selflessness,
    whether that meant rushing into the Twin Towers, helping injured
    comrades out of the burning Pentagon or organizing rescue and recovery
    activities regardless of personal safety concerns. Some lost their
    lives in the performance of their duty.
        While flames and smoke still rose from the Pentagon and the World
    Trade Center, thousands began to come forward. They had not been called
    up yet. They just knew their country needed them: they did not wait to
    be asked to serve.
        Behind these citizen-soldiers came thousands more Army Reserve men
    and women under the partial mobilization ordered by President Bush on
    September 14. They responded with remarkable speed, faster than
    previous planning had envisioned. And as General Tommy Franks,
    Commander-in-Chief of U.S. Central Command, said of them, ``they came
    trained and ready to do the work.''
        Yes, Army Reservists have been on the frontlines of this war since
    it began. We continue to be decisively engaged in the global war
    against terrorism, every place that the war is being waged.
        Seven and a half months after the attacks, there are some 474 Army
    Reserve units and about 15,000 Army Reserve soldiers on duty, doing
    what needs to be done. They are accomplishing our core competency
    missions, as well as other assignments. They are part of the more than
    81,000 members of the nation's combined reserve components on duty
    today, critically engaged in defending the homeland. All of them put
    aside their own lives and concerns for the good of the nation. No acts
    of terror could ever deter patriots like these. As Winston Churchill
    said of Reservists, they truly are ``twice the citizen,'' prepared to
    serve and defend at personal sacrifice for themselves, their families,
    their employers and their communities for the good of the Nation. Their
    spirit and resolve remains undaunted.
        The bulk of those called up are in support of Operation Noble
    Eagle, helping with the recovery from the attacks or engaged in the
    defense of our homeland. The missions being performed include: force
    protection and security at installations and facilities, intelligence
    and investigation support, training and training validation,
    headquarters augmentation, garrison support and legal support,
    communications, postal and personnel support, engineer support,
    historical documentation, logistics and transportation operations.
        The Army Reserve also has units and soldiers in support of
    Operation Enduring Freedom, the operation taking the war to the
    terrorists and bringing assistance to the long-oppressed people of
    Afghanistan. These mobilized forces include public affairs, military
    intelligence, civil affairs, medical and other combat support and
    combat service support specialties. We also continue to fill
    headquarters and agency-level requests for Individual Ready Reserve and
    Individual Mobilization Augmentee soldiers to support current
    operations.
        The men and women on duty today and those who may be called forward
    tomorrow understand the task that lies before them, how difficult it is
    and how long the struggle ahead may be.
        Along with their own abilities and dedication, the citizen-soldiers
    of the Army Reserve went into this fight from a position of strength.
    Recurring deployments since the Gulf War have given our units a great
    deal of experience in being able to mobilize quickly and effectively. A
    decade earlier, we learned the importance of family support and
    employer support programs. These programs were in place when this new
    conflict began and have been an absolutely essential part of our
    activities today. Because of our integral involvement in Army
    Transformation, we have become accustomed to innovative thinking and
    this has facilitated our finding solutions to ever-changing situations.
        It has been often said that everything changed on September 11, but
    much remains the same. What was important for an Army Reserve in
    transformation is also important for an Army Reserve in transformation
    while at war. The transformation we were undergoing before September 11
    was to prepare for the sort of uncertainty and evolving world that we
    now have.
        Our priorities before the attacks remain our priorities today:
    sustaining and improving our already high level of readiness; obtaining
    more full-time support, which is essential for readiness; improving our
    infrastructure so that our outstanding soldiers work and train in the
    modern facilities they deserve; acquiring modern equipment so that we
    can not only support Army Transformation but also support the Army
    warfight; and building on successes in recruiting and retention to
    ensure we have the force necessary to do what our nation requires of
    us.
        I like to use the five R's when I discuss our priorities:
    Recruiting, Retention, Readiness, Relevance and Resources. Because of
    all that the men and women of the Army Reserve have accomplished in the
    last decade and certainly as of result of all we have done for the Army
    and the Nation since September 11, I believe there is now a sixth R:
    Respect. Today's Army Reserve and today's Army Reservists have gained
    the respect of both those they serve alongside and those they serve.
    Respect is hard to earn and can be easy to lose. The citizen-soldiers
    of the Army Reserve have no intention of losing what they worked on so
    long and so well to earn.
                            recruiting and retention
        Recruiting and retention is an area of highest importance to the
    Army Reserve. 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 this
    subcommittee has provided us. We certainly would be remiss if we did
    not thank this subcommittee 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. We met our mission before the end of fiscal year
    2001, before September 11. We are going to make mission again in fiscal
    year 2002.
        Although successful in overall mission numbers, we continue to
    experience difficulty in attracting and retaining qualified individuals
    in certain critical wartime specialties, particularly within the Army
    Medical Department. Your continued support on behalf of recruiting and
    retention incentives, expanding the 90 day rotation policy to cover all
    but full mobilization, allowing for innovative readiness training and
    the funding of continuing educational opportunities will help make this
    success story complete.
        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 taking the following measures:
      --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. Career counselors
            talk to Army Reservists about joining the Active Guard Reserve
            (AGR) program, training to become warrant or commissioned
            officers, and sharing other 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.
        We recently initiated the first of these activities by transferring
    responsibility for the prior service mission from the Recruiting
    Command to the Army Reserve. This transition is a three-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 lifecycle 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 Army 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, ensure prior service
    soldiers are provided opportunities in our units, and assist our
    commanders in delivering recruiting promises. Phase II, which began
    October 1, 2001, increased the total Army Reserve Retention and
    Transition Division (RTD) mission to 10,000 prior service transfers. We
    continue extensive collaboration with USAREC to ensure a smooth
    transition of these responsibilities.
        To support these efforts, the Army Reserve uses 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.
        The Army Reserve developed the Commander's Retention Program to
    correct this shortcoming. 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 Troop Program Unit attrition by nearly
    nine percentage points. The enlisted attrition rate in fiscal year 2001
    was 28.8 percent.
        The Army Reserve is also experiencing a 4,200 company grade officer
    shortfall. The active Army has a shortfall of these junior leaders,
    too. 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.
        The Army Reserve will successfully accomplish its 41,700 recruiting
    mission for fiscal year 2002 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 affect 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 and experience 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 competitive compensation and benefits.
        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
        Our readiness on September 10, 2001--the highest measured readiness
    in Army Reserve history--enabled us to respond in the decisive and
    rapid manner that we did on September 11 and in the days, weeks and
    months that followed.
        The Army Reserve's readiness posture continues to improve. As of
    January 2002, 74 percent of our units meet deployment standards, a 6
    percent increase over the previous two years. It is imperative that we
    preserve our readiness, personnel and equipment to continue to meet our
    operational requirements.
        Our Force Support Package (FSP) units, those which are scheduled
    for early mobilization, average 85 percent deployable readiness. With
    your assistance, the Army Reserve continues to achieve a high number of
    units rated as 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 Limited resources require the Army Reserve to manage
    risks in an attempt to achieve the proper balance between current and
    future readiness. In the past, the Army worked to protect near-term
    readiness at the cost of modernization and infrastructure. During the
    past couple of years, Army Transformation sought to leverage the
    benefits obtained through science and technology, recapitalization, and
    similar investment opportunities.
        In regards to medical and dental readiness, the picture for the
    Army Reserve continues to improve. The Federal Strategic Health
    Alliance (FEDS-HEAL) program is filling in the gaps and allowing
    commanders to provide mandated medical and dental readiness services.
    The provider network continues to grow. A robust dental network of more
    than 15,000 was recently added to the provider panel and a further
    expansion with academic dental clinics (dental schools, hygienist
    schools) is pending. During Calendar Year 2001, more than 18,100
    requests for services were submitted, most during the last quarter.
    Most were for physical examinations and other services (dental and
    immunizations). More than 1,100 were for dental screening and
    treatment. In January 2002, over 4,000 requests were submitted.
        The 2001 Quadrennial Defense Review supports maintaining force
    structure while balancing competing requirements such as modernization,
    recapitalization, and operations and maintenance. Equipment readiness
    demands the right kinds of equipment, fully operational, properly
    maintained, mission capable, in the hands of the forces that will
    employ them. Commensurate with equipment readiness considerations is
    the Army Reserve's personnel readiness goal of improving 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 Education (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.
                                   relevance
        The relevance of the Army Reserve is unquestioned today. The
    capabilities that we possess are in great demand.
        For example, we have about 120 Military Police units of various
    sizes and types, from Criminal Investigation Division detachments to
    Internment and Resettlement Brigades. We have now called up about half
    of these units. They are on duty now: serving in the Balkans, engaged
    in Homeland Defense missions and conducting operations in other parts
    of the world. There are more than 200 Army Reserve Military Police
    soldiers on duty at Camp X-Ray in Cuba or otherwise participating in
    the detainee operation. Those MP units not yet employed are leaning
    forward. Those units know how critical their capabilities are and
    expect they, too, will be called up.
        Our other commitments did not cease when the war on terrorism
    began. We have nearly 800 Reserve soldiers supporting contingency
    operations in Operations Joint Forge and Joint Guardian (Bosnia and
    Kosovo) in the European Theater. Since 1995, more than 17,000 Army
    Reservists have participated in our operations in Bosnia and Kosovo or
    in support operations in neighboring countries.
        In the last five years, we have had more than 27,400 Army
    Reservists supporting operations worldwide. Overall, in fiscal year
    2001, the Army Reserve conducted more than 100,000 soldier deployments
    to 64 countries operationally and for exercises. We provided a total of
    3.7 million man days in the United States and abroad. Our deployments
    abroad ranged from Central America and Southwest Asia to places like
    East Timor and now Afghanistan and Cuba.
        Furthermore, the Army Reserve did this at the same time that it
    achieved its highest readiness status in history. 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.
        Worldwide deployments are nothing new for the soldiers of the Army
    Reserve. 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 that wherever the Army deploys,
    so, too will the Army Reserve.
        When not working alongside their active Army, Army National Guard
    and sister services, Army Reserve soldiers honed their always-in-demand
    skills on exercises.
        Two examples of these were the annual TRANSLOTS exercise in June
    2001 and ROVING SANDS 2001. In the first exercise, more than 2,200
    soldiers from 27 units used landing craft to unload equipment and truck
    supplies to the ``front lines.'' More than half of the units for
    TRANSLOTS came from the Army Reserve, to include the executive agent
    for the exercise, the 143rd Transportation Command from Orlando, Fla.
    More than 2,600 Army Reservists from 51 units were significantly
    involved in the joint theater air and missile defense exercise, ROVING
    SANDS.
        The Army Reserve provides contributory support to the Army on a
    daily basis. 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, something 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, IL, 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 is in the Army Reserve's
    core competency of training, enabling the Army to return soldiers to
    combat divisions. Army Reserve soldiers are fully integrated into every
    aspect of training, providing 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,
    WI, 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) or a functional course by taking an
    interactive, distance-learning course, developed and taught by ARRTC.
        The ARRTC has successfully piloted one distance-learning or DL
    course in the summer of 2000 which was broadcast to 12 locations,
    qualifying Army Reserve and Army National Guard soldiers in their MOS.
    I envision that in an age of evolving technology, we will soon have
    connectivity to all of our locations, thus enhancing the
    interoperability between active and reserve component units worldwide
    by reinforcing the premise that as we train together, we fight
    together, all as part of one Army team.
        Your continued interest and support of the Army National Guard
    Distributed Learning project and its expansion to include the Army
    Reserve will greatly enhance the individual and collective training
    readiness of The Army.
        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, many of whom are corporate and community
    leaders, 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 an AR-PERSCOM website, 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.
        The Strategic Storage Site (SSS) is such an initiative to better
    facilitate deployment response times. The program is designed to place
    select Army Reserve combat support/combat service support equipment
    into strategically located controlled humidity storage facilities
    within the continental United States and outside the continental United
    States. This program improves responsiveness and materiel readiness,
    and extends the life of the legacy equipment at reduced cost. About 37
    percent of a typical Army Reserve unit's equipment that is not required
    for peacetime training can be positioned in strategic storage to be
    available for contingencies. The initial Strategic Storage Site is a
    150,000 square foot facility at Gulfport, MS, which was resourced in
    the fiscal year 2002 appropriations bill. The Army Reserve is
    appreciative of this congressional support and is examining another six
    locations strategically located to support the Reserve units. Sites
    inside the continental United States will be established near large
    metropolitan areas with consideration to location and types of
    equipment, such as engineer, medical, signal and transportation, needed
    to support homeland defense and disaster relief.
    Consequence Management
        Our presence throughout America and our commitment to America,
    combined with the civilian-acquired skills of our soldiers and the
    capabilities of our units, are all key factors that enhance our
    abilities to manage the consequences of a domestic terrorist event. We
    have been preparing and training ourselves, our Army National Guard
    partners and other federal, state and local agencies to effectively
    respond to this mission long before September 11.
        For example, four months before the terrorist attacks on America,
    Army Reserve units were key participants in two major back-to-back
    Weapons of Mass Destruction (WMD) response training exercises,
    Operation Dangerous Wind 2001 and Consequence Island 2001. The first
    exercise was held May 7-17 at the Regional Training Site--Medical at
    Fort Gordon, GA. Following immediately was Consequence Island 2001,
    held May 18-26 at the Euripedes Rubio Army Reserve Center in San Juan,
    Puerto Rico.
        These exercises allowed federal, state and local agencies to hone
    the coordination and other skills necessary to respond to a WMD-related
    emergency. Although the Army Reserve is not a ``first responder'' in
    the case of a WMD incident or natural disaster, we know that our Combat
    Support and Combat Service Support capabilities are the very
    capabilities that are much in demand by both civil authorities and by
    The Army. A listing of the units that participated in these two
    exercises gives an indication of some--but not all--of the capabilities
    we have to provide: 883rd Medical Company (Combat Stress), Roslindale,
    MA, 1982nd Medical Detachment (Surgical), Niagara Falls, NY, 1883rd
    Medical Team (Infectious Disease), Chamblee, GA, 427th Medical
    Logistics Battalion, Forest Park, GA, 369th Combat Support Hospital,
    Puerto Nuevo, PR, 407th Medical Company (Ground Ambulance), Fort
    Buchanan, PR, 597th Quartermaster Company (Field Services), Bayamon,
    PR, 346th Transportation Battalion, Ceiba, PR, and the 311th
    Quartermaster Company (Mortuary Affairs), Aquadilla, PR.
        The 311th Quartermaster Company that trained for a domestic
    terrorist event during Exercise Consequence Island 2001 in May was the
    same company that I discussed earlier, the one that deployed to the
    Pentagon as part of Operation Noble Eagle in September.
        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 9 of the 15 reconnaissance platoons called
    for in Defense Reform Initiative Directive 25. One of the Army's two
    Biological Integrated Detection System (BIDS) companies is in the Army
    Reserve. That unit, the 310th BIDS Company, has already been activated
    for participation in Operation Enduring Freedom. The requirement for
    increased biological detection capabilities has resulted in the
    proposal to create additional Army Reserve BIDS companies, which will
    stand up over the next several years. One of these, the 375th BIDS
    Company, is a high demand/low density unit that requires state-of-the-
    art BIDS equipment. This unit, which officially activates in September
    2003, will be in strong demand for both defending the homeland and
    protecting U.S. forces against biological attacks in combat theaters.
        Residing within the Army Reserve are 68 percent of the Army's
    medical assets. 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. The Army
    Reserve contains 50 percent of resourced Mortuary Affairs 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 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. 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
        Information Operations (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. We use IO to defend
    our own information and information systems while disrupting those of
    the enemy.
        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 is also 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
    fourth 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 out its niche in this
    evolving area of cyber warfare by creating the Reserve Information
    Operations Structure. This organization was activated on October 16,
    2001, 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 located 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
        The Army Reserve greatly appreciates your support in providing
    resources to enhance our readiness and relevance; however, we still
    face several challenges. At the outset, I would like to emphasize that
    many of our resourcing challenges are a consequence of our being
    victims of our own achievement. Successfully executed operations lead
    to additional operations, thus increasing operating tempo and personnel
    tempo costs. This places stress on personnel, equipment and facilities
    with bills that ultimately must be paid. Both people and equipment wear
    out faster under frequent use. For example, units deployed in Somalia
    took 10 months to restore their equipment to predeployment levels.
    Multiple, concurrent and sequential commitments erode warfighting
    readiness.
    Full-Time Support
        An increase in Full-Time Support (FTS)--Active Guard/Reserve (AGR)
    and Military Technicians (MILTECHs)--is essential to improve Army
    Reserve readiness. Given the competition for resources, one of the
    greatest challenges facing the Army Reserve today is obtaining the FTS
    authorizations and funding 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 2002
    transformation of The Army's go to war structure included eliminating
    approximately 234 Title XI Active Army authorizations from Army Reserve
    units. As a coordinated ``Army'' decision, the Army Reserve AGR end
    strength was increased by 182 in fiscal year 2003 to accommodate the
    loss of Title XI soldiers. The revised ramp end strength is 16,265. 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.
        Current resource levels have allowed us to reduce past FTS
    shortfalls by almost a thousand, both AGRs and MILTECHs. The Army
    Reserve utilized the 300 additional AGRs authorized in fiscal year 2002
    to restore Title XI soldiers that remained unfunded.
    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 the
    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 years 2000 and 2001, 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.
                                    summary
        As we approach the eight-month mark since September 11, the men and
    women of the Army Reserve are serving proudly and performing their
    duties in the manner expected, professionally and skillfully. They are
    fully backed by their families, by their employers, by their comrades
    at home and by a united nation. They have leaders who understand their
    needs and who are working to meet those needs and to prepare for the
    future.
        The citizen-soldiers of the Army Reserve, confronted with attacks
    to Americans on American soil for the first time in our lives, have
    answered the nation's call and are adding a new chapter to our 94-year
    history of service. It is a great chapter but it is not yet completed.
    It may take a long time to finish but we know the part we have in it.
        Our part was clearly stated by the Commander-in-Chief when he
    signed the proclamation for National Employer Support of the Guard and
    Reserve Week 2001 on November 9:

        ``We're fighting a war on many fronts. It's a diplomatic war, it's
    a financial war. The military is performing brilliantly in Afghanistan.
    And we could not win the war without the help of the Guard and the
    Reservists.''

        The citizen-soldiers of the Army Reserve are proud of their country
    and of the role they play in its defense and in winning the war forced
    upon us. As our citizen-soldiers have always done, they have come
    forward, without hesitation, at a moment of crisis and danger to our
    country. Although today's Army Reservist is more ready, better trained,
    more adaptable and more relevant than ever before, we readily admit
    that we cannot surpass the love of country and willingness to sacrifice
    of all those who have served before us. Those great American citizen-
    soldiers passed to those who serve today a tremendous responsibility--
    to uphold their legacy of defending this nation, its citizens and its
    freedoms, no matter what it costs. We proudly and confidently accept
    that responsibility.
        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. United we stand--united we will win.
        Thank you.
     On Target, Online--Strategic Funding Priorities for the Naval Reserve
                                    foreword
                           naval reserve association
                   the association voice of the naval reserve
        The Naval Reserve is responding to a recall of Reservists
    unprecedented since the Korean War. These Naval Reservists are
    supporting the mission needs of our Navy and joint operations around
    the globe. It has often been said by the Naval Leadership that the Navy
    cannot perform its mission without the Naval Reserve. In addition to
    personnel readiness, a critical part of this support involves units
    that operate equipment and systems that are compatible and
    operationally relevant.
        If Reserve forces in general, and the Naval Reserve in particular,
    are to be immediately effective and totally integrated with the
    operating forces, they must have first-line, compatible, and modern
    equipment. They must be trained on and have utilized these systems and
    equipment ``prior to the fight.'' It is well recognized that equipping
    Reserve forces with older, noncompatible equipment and systems results
    in increased training, logistics and supply costs. In the end, this
    does not support optimal readiness, utilization, or war-fighting
    capability of either the Active Duty Fleet or Reserve forces.
        There has been an alarming trend over the past few years of
    significantly decreasing funds in the Defense budgets and in the Navy's
    budget in particular. As a result, the availability of dollars for
    Naval Reserve equipment and systems has faded. This trend must be
    reversed if the Department of Defense and the Navy are serious about
    keeping a front-line, well-equipped, fully-integrated and compatible
    Naval Reserve Force to defend our nation.
        Appropriately ``equipping the Naval Reserve'' is at the top of the
    priority list for the Naval Reserve Association. As a result, we are
    proud to present this publication that outlines the most pressing
    equipment and system needs of the Naval Reserve. This publication will
    be distributed to every member of Congress in the hopes that they will
    consider this data and address these needs in upcoming and future
    Defense budgets.

                                            Forwarded by the 23,000-plus
                                            members of the Naval Reserve
                                            Association residing in all 50
                                            States and territories of the
                                            United States.

        The Naval Reserve Association--The Premier Professional
    Organization for Naval Reserve Officers, Committed to Supporting a
    Strong Navy and National Defense, While Providing Outstanding Service
    to Its Members.
                                    overview
                                Department of the Navy,
                       Office of the Chief of Naval Operations,
                                                        Washington, DC.
    Naval Reserve Association,
    1619 King Street,
    Alexandria, VA 22314.
        Our primary mission--before and after September 11--has been to
    support the Navy and Marine Corps team throughout the full range of
    operations, from peace to war. At this time, it is war. Fortunately,
    the Naval Reserve is well trained, ready and dedicated to achieving the
    nation's objectives. But many of our Naval Reservists are trying to do
    their jobs with aging, inadequate equipment.
        During the early months of Operations Noble Eagle and Enduring
    Freedom, we have mobilized more than 10,000 skilled Reservists and
    deployed Naval Reserve personnel and equipment around the world. Yet,
    as we progress with these mobilizations and deployments, crucial
    operational and communication issues persist.
        For instance, our aircraft and our information technology tools
    fall far short of our nation's capabilities and requirements. Naval
    Reserve aviators are providing almost 100 percent of the Navy's intra-
    theater logistics support--but are doing so with C-9 aircraft that are
    more than 30 years old, require expensive maintenance and no longer
    meet international noise abatement requirements. New C-40A Clippers are
    gradually replacing them, but the pace of procurement is glacial.
    Rebuilding the logistics aircraft fleet is my number one unfunded
    priority.
        The Naval Reserve Force that has long focused on interoperability
    with the Fleet and carrying out active duty missions now finds itself
    battling with outdated systems. It is time to remedy budget shortfalls,
    upgrade essential hardware and aged facilities, and strengthen our
    lines of communication. Thus, this booklet describes our specific
    unfunded priorities in aircraft, information technology and military
    construction.
        Committing to these improvements will improve our compatibility
    with the active duty Fleet, reduce long-term costs and most
    importantly, contribute to the safety, well-being and readiness of our
    most valuable assets--our Sailors.

                                              John B. Totushek,
              Vice Admiral, U.S. Naval Reserve, Chief of Naval Reserve.
     supporting the fleet from the air and sea: meeting strategic funding
                                   priorities
        From Naval Air Station/Joint Reserve Base Fort Worth, TX, Naval
    Reserve Fleet Logistics Support Squadron 59 is flying four of the
    newest class of logistics aircraft in the Navy's Fleet: the C-40A
    Clipper. These include the two newest Clippers, named ``Spirit of the
    Pentagon'' and ``Spirit of New York City,'' which are ferrying Sailors
    and equipment to the Fleet worldwide in support of the War on Terror.
        The C-40A Clippers, introduced to the Naval Reserve in April 2001,
    fly higher, faster, farther, and can carry a greater load than the
    aging C-9 Skytrain, long the airlift workhorse of the Navy. As the
    military version of the Boeing 737, the Clipper can be configured to
    fly either 121 passengers or eight pallets of cargo totaling 80,000
    pounds. In its ``combi'' role, the Clipper can be configured to
    accommodate up to three cargo pallets plus 70 passengers on its main
    deck. The pilots and crewmembers of VR-59 give the Clipper an
    enthusiastic thumbs up, citing the aircraft's lower maintenance
    requirements, greater fuel efficiency, longer ``legs,'' and outstanding
    versatility.
    C-40A Aircraft Procurement Leads Naval Air Reserve Equipment Priority
        The introduction of the C-40A into the U.S. Naval Reserve--and its
    continued production--is vital to the nation's military readiness. Our
    seven Naval Air Reserve squadrons provide 100 percent of worldwide, in-
    theater medium and heavy airlift for the Fleet. The Navy could not meet
    its global operational commitments without the Naval Reserve's airlift
    capabilities.
        Without the C-40A, the Navy could soon lose its ability to conduct
    airlift operations in European and Western Pacific airspace due to
    noise abatement requirements now being phased in. The aging fleet of C-
    9 Skytrains, nearly a quarter of which are more than 30 years old, does
    not meet these requirements. Engine and avionics upgrades not only
    would be costly but also would degrade the C-9's performance to an
    unacceptable level. Clearly, the answer is to replace the C-9's with C-
    40A's as quickly as possible. The Naval Reserve has taken delivery of
    its first four C-40A's and currently has contracts for two more. As a
    side note, the Naval Aviation Museum in Pensacola, FL, in February 2002
    accepted delivery of a recently retired Naval Reserve C-9 as a
    ``relic'' with more than 54,000 airframe hours--the highest-time
    aircraft in the museum.
        To maintain the pace of C-40A acquisition, the Naval Reserve needs
    an additional $186 million appropriated in fiscal year 2003 for three
    additional Naval Reserve C-40A's and associated support equipment.
    Eventually, the entire fleet of C-9's must be replaced.
    Maritime Patrol Aircraft Need Upgrades for Modernization
        Seven Naval Reserve maritime patrol squadrons make up almost 40
    percent of the Navy's maritime patrol fleet and conduct surveillance,
    counterdrug, anti-surface warfare, and anti-submarine warfare
    operations. Reserve patrol squadrons provide three aircraft and crews
    deployed overseas at all times to support the deployment requirements
    of the Navy. The Naval Reserve's P-3C Orion aircraft need a number of
    upgrades to achieve parity with their active duty counterparts.
        Half of the Naval Reserve's P-3's still use an acoustical
    processing system first developed more than 30 years ago, which
    degrades the patrol aircraft's anti-submarine warfare performance and
    capabilities. Transitioning from antiquated analog technology to
    digital processing technology is essential for these aircraft to
    perform successfully their missions. Lockheed-Martin's Block
    Modification Upgrade Program (BMUP) will replace these obsolete
    avionics components. In fiscal year 1997, Congress authorized funding
    for eight BMUP's for Naval Reserve P-3's. An additional $33 million is
    needed in fiscal year 2003 for three more BMUP's.
        The Aircraft Improvement Program (AIP), an off-the-shelf upgrade
    developed by Lockheed Martin, is needed to enhance the P-3's ability to
    retrieve and/or to send information via satellite, ground station, or
    surface ship. The program, also, enhances the P-3's ability to classify
    properly targets at long range and improves the aircraft's weapons
    delivery capabilities. Funding has been authorized for only two of the
    42 upgrades needed by the Naval Reserve, and $28 million is needed to
    purchase two more upgrade kits in fiscal year 2003.
    Strike Fighter Upgrades to Provide Fleet Compatibility
        Three of four Naval Reserve F/A-18A Hornet squadrons provide strike
    fighter support to the Fleet. The Navy's only tactical air platform
    originally designed for multiple missions, the F/A-18 conducts carrier-
    based strikes, provides close air support, and carries out air combat
    operations. In addition to providing fleet air defense and force
    projection, the Hornet is, also, capable of deploying sea mines. The
    Naval Reserve's fourth Hornet squadron provides adversary training to
    the Fleet, simulating enemy aircraft tactics and giving Navy aircrews
    the kind of real-world training that simulators can't provide.
        The three strike fighter squadrons need to be retrofitted with
    Boeing's Engineering Change Proposal 560R1, a software and hardware
    upgrade kit that will give the F/A-18A precision-guided munitions
    capability. In the 1991 Persian Gulf War, about nine percent of the
    weapons used were precision guided; by early 2002, in Operation
    Enduring Freedom in Afghanistan, the figure was up to 60 percent.
        Without this upgrade, which affects the mission computers, radar,
    armament controls, system wiring and control stick, Naval Reserve F/A-
    18's are not compatible with the rest of the Navy's carrier-based
    strike fighters. Though current funding has supported the purchase of
    kits for two F/A-18 squadrons, an additional $36.6 million in funding
    is needed in fiscal year 2003 to upgrade the third squadron.
    C-130T Avionics Modernization to Standardize Aircraft
        The C-130T provides the Navy with the capability to move heavy or
    oversize cargo in support of forward-deployed forces around the world.
    A typical equipment loadout could include aircraft engines, helicopter
    rotor blades, large ship repair parts, missiles, or personnel. The
    Naval Reserve's current inventory of 18 aircraft operates from New
    Orleans, LA; Point Mugu, CA; Washington, DC; and Brunswick, ME. One
    aircraft is now forward-deployed to Bahrain in support of Operation
    Enduring Freedom.
        The navigation, communications, and flight equipment on these
    aircraft are based on 1970's technology. In addition to being obsolete
    in today's digital environment, the gear is expensive and labor
    intensive to maintain.
        The Avionics Modernization Program will upgrade and standardize the
    cockpit configurations for the C-130T's. It will replace 17 separate
    obsolete avionics systems on each aircraft and will satisfy
    international flight requirements for operating in global airspace.
    Boeing has been awarded a multibillion dollar contract to upgrade
    nearly 500 U.S. Air Force C-130's, and the Naval Reserve could
    piggyback on this contract to acquire the improved components at
    reduced cost should funding be appropriated. The estimated procurement
    cost to begin the upgrade process is $1.9 million, with a total of $100
    million needed to modify all 18 aircraft.
    Adversary Aircraft Provide Real-World Training, but Require Upgrades
        The Naval Reserve provides nearly 100 percent of the Navy's
    adversary training. In addition to utilizing the F/A-18A Hornet for
    adversary training, the Naval Reserve, also, employs the F-5 Tiger to
    simulate potential enemy aircraft. The F-5 simulates older threat
    fighters such as the MiG-21 Fishbed, which is flown by the air forces
    of dozens of Third World countries. The F/A-18A simulates newer threat
    fighters such as the MiG-29 Fulcrum and the Su-27 Flanker, used by most
    of the former Soviet-bloc nations and such nations as Iran, Iraq, and
    China. To improve the adversary training provided by the F-5's, its 25-
    year-old avionics package needs to be replaced with Northrop Grumman's
    APG-66 Radar. Not only will these upgrades more accurately simulate
    potential enemy aircraft, but also the new radar will enhance safety.
    Avionics upgrades for 12 F-5's will cost $47 million in fiscal year
    2003, and an additional $3.73 million is needed to install the APG-66
    Radar on three aircraft.
        Another necessary avionics upgrade for the F-5 is the installation
    of an integrated Global Positioning System (GPS) in each aircraft.
    Congress has mandated that this upgrade--a navigation safety issue--be
    installed by 2005, but no funding has been put in place for these
    aircraft. Procurement of GPS for the F-5 will cost $8.1 million.
    SH-60B Helicopter Upgrades Needed
        Versatile SH-60B Seahawk helicopters are designed for anti-
    submarine and anti-surface unit warfare. While the Naval Reserve's
    helicopters are among the oldest in the Fleet, three newer versions of
    the SH-60B were accepted in fiscal year 2001, and three more will be
    added to the Naval Reserve in fiscal year 2002. A new Reserve
    helicopter squadron (HSL-60) stood up in Mayport, FL, in April 2001.
    While this is good news, even these ``new'' helicopters are relatively
    old and need upgrades to provide the best support to the Fleet.
        Specifically, the Naval Reserve requires four Forward Looking
    Infrared (FLIR) kits. These kits will increase night detection
    capabilities by five-to-eight times and will improve the ability to
    detect, monitor, and track targets covertly at night and in low
    visibility. Naval Reserve aviators will be better able to target
    suspected drug traffickers operating small, fast boats that are
    otherwise extremely difficult to detect with conventional radar, as
    well as performing Fleet-critical anti-surface warfare missions. No
    funding has been authorized to cover the $5.6 million procurement. A
    total of $7 million is needed in fiscal year 2003 to purchase and
    install the four FLIR kits.
    Littoral Surveillance System
        The Littoral Surveillance System (LSS) began in 1997 as a Naval
    Reserve initiative to provide improved surveillance information to
    battlefield commanders in real or near-real time. Information (in the
    form of imagery, signal intelligence, electronic intelligence, and
    human intelligence) is presented in a single, comprehensive,
    coordinated display. This capability emerged from the existing Mobile
    Inshore Undersea Warfare mission of providing similar information as
    part of coastal surveillance operations.
        Later in 2002, LSS will begin its initial operational training in
    coastal areas throughout the world. The system uses the latest
    computerized technology to gather, refine, and process information from
    a wide variety of sources in the air, on the surface, and under the
    surface of coastal waters. It can communicate with many existing
    command and control systems used by the Department of Defense and can
    be adapted to those developed in the future. The system deploys on a
    series of highly mobile, heavy-duty HUMVEE's.
        LSS is today's information system for tomorrow's battlefield. To
    maintain the pace of development of the Littoral Surveillance System
    for full deployment, the Naval Reserve needs additional funding of $30
    million in fiscal year 2003.
    Naval Coastal Warfare
        Naval Coastal Warfare Reserve units responded to several crises
    during 2001. Immediately following the terrorist attack on the guided
    missile destroyer Cole, units mobilized and began to provide force
    protection in the Arabian Gulf. Following the attacks on Sept. 11,
    these units shifted into high gear.
        Today, 17 Reserve units are deployed around the globe and at home,
    providing vital antiterrorism and force-protection capabilities. The
    demand for these units is high.
        Since September, a $132 million equipment procurement and upgrade
    package was submitted for these units as part of the President's
    Defense Emergency Response Fund. Ultimately, $46 million was
    appropriated. To complete readiness upgrades and to buy needed
    equipment, $86 million is required in fiscal year 2003 to bring these
    units to a readiness level appropriate for their current missions.
    Summary
        The delivery of the first four C-40A Clippers to the Naval Reserve
    is a tremendous success story, but it is only the first step in
    modernizing the Naval Reserve's air and surface assets. Every day, the
    men and women of the Naval Reserve are supporting the Fleet by
    providing antiterrorism and force protection, logistics support, strike
    fighter support, adversary training, maritime patrol, search and
    rescue, and counter-narcotics operations. By investing in much-needed
    upgrades, the Naval Reserve can achieve equivalence with their Active
    Duty counterparts, while providing support in a safe, efficient manner
    for many years to come.
                  upgrading information technology and systems
        In autumn 2001, Naval Air Facility Washington became the first Navy
    command to roll out the long anticipated Navy-Marine Corps Intranet
    (NMCI), marking the trend away from numerous isolated networks to a
    single Navy network. The immediate beneficiaries were more than 1,400
    drilling Naval Reservists and the personnel of five squadrons, more
    than 2,000 people using more than 600 computers.
        These Reservists are now doing their work using high-performance
    computers on a high-speed network that has much-improved security. Any
    unresolved issues are immediately addressed through a centralized help
    center and network operations center located in Norfolk, VA.
        A tenant on Andrews Air Force Base, Naval Air Facility Washington
    includes both active Navy and Naval Reserve commands. In preparing to
    implement NMCI, the Naval Air Facility had to work with 45 separate
    computer systems, eliminating duplication while taking a strategic
    approach to upgrading hardware and software. As such, the test facility
    represents a microcosm of the issues faced in overhauling the Navy and
    Naval Reserve's aging and disparate IT infrastructure.
        The Navy is using the lessons learned by the Reservists and their
    Active Duty counterparts at the Air Facility to implement NMCI across
    the rest of the Navy. In addition, other federal organizations are
    studying the results closely, as Congress has indicated its desire that
    all federal agencies develop similar agency-wide intranets.
    Requirements of the Fleet Driving IT Upgrades
        Providing support to the Active Duty Fleet is one of the driving
    forces behind the push for IT upgrades in the Naval Reserve. The Navy-
    Marine Corps Intranet will replace the Navy's numerous shore-based
    networks and equip the Department of the Navy with access,
    interoperability, and security for the Navy's information and
    communications by providing voice, video, and data services to Navy and
    Marine Corps personnel. The five-year contract for NMCI was awarded in
    October 2000 to a consortium of companies led by Electronic Data
    Systems, Inc.
        To fully utilize NMCI, Naval Reserve facilities must upgrade both
    antiquated software and hardware. The Reserve must obtain the
    equipment, storage capacity, and bandwidth necessary to allow quick and
    easy access to information. Existing or ``legacy'' systems will have to
    be abandoned or significantly upgraded.
        The Navy's goal is to move Navy processes to the Web. Therefore,
    Naval Reservists must have the ability to take advantage of a Web-based
    Navy. Naval Reserve IT infrastructure must provide better access to all
    drilling Reservists and their full-time support counterparts in a
    secure, user-friendly atmosphere.
        Among other IT initiatives is the introduction of the Common Access
    Card, a ``smart card'' that is replacing the military ID card. It not
    only will serve as an identification card but also will enable access
    to computer networks and systems. Furthermore, it will serve as an
    access key to buildings and controlled spaces. In the future, each card
    could contain access to the card holder's service record, including
    medical records.
        All service members, Active and Reserve, will receive such a card;
    and the Naval Reserve must have the necessary software and hardware in
    place to utilize it.
    IT Efforts Hampered by Older Technology
        So rapid are the advances in Information Technology that what is
    cutting edge today can become obsolete in a matter of months. Imagine
    the challenges of using the current Naval Reserve IT infrastructure and
    systems, most of which are based on 1980's technology.
        Just months ago, the Naval Reserve was working toward a goal of
    achieving parity with the Active Duty Fleet on IT issues. Today, the
    Naval Reserve must, also, respond to emerging Navy-wide IT initiatives.
    Add to that the Navy's planned warfare strategy, based heavily on the
    inter-operability of information technology; and the upgrading of the
    Reserve's IT infrastructure becomes even more critical. Additional
    funding for IT remains one of the Naval Reserve's top priorities.
    Successful Naval Reserve Initiatives
        Despite IT funding shortfalls, the Naval Reserve has implemented
    several initiatives. The Naval Reserve Skills Online program, launched
    in the fall of 2000, allows drilling Reservists to enter their military
    skills and experience and pertinent civilian skills into a database
    that is accessible by Fleet Reserve Liaison Officers. By providing a
    searchable database to the Fleet, Reservists meeting certain criteria
    can be located and contacted quickly to provide support. This system
    was adapted from an off-the-shelf program originally developed for the
    Office of the Assistant Secretary of Defense for Command, Control,
    Communications, and Intelligence. It is, also, used by the Air Force
    Reserve, the Army Reserve, and the Coast Guard Reserve.
        Another success story is the building and expanding of the Naval
    Reserve Network. Created to support data transmission, e-mail and
    Internet access, the Naval Reserve Network initially connected only a
    few Naval Reserve sites. It has expanded to a total of 174 sites, 83 of
    which are Naval and Marine Corps Reserve Centers. In a unique
    partnership with the Marine Forces Reserve, the Naval Reserve was able
    to take advantage of economies of scale on both system router equipment
    and data lines. Connectivity and performance have improved dramatically
    each year. In addition, the system is compatible with Active Duty
    systems; and it is now being integrated into the Navy-Marine Corps
    Intranet.
        The Naval Reserve is continuing to develop the New Order Writing
    System, which is expected to streamline the cumbersome procedures for
    requesting and delivering orders and travel arrangements. The single
    Web-based system will replace four other systems and is expected to cut
    significantly the current 60 days wait-time for orders.
        The Naval Reserve is currently working with such companies as EDS,
    Worldcom, Raytheon, Microsoft, Cisco, Compaq, Novell, UNISYS, Dell,
    Lockheed Martin, and Oracle to bring Reserve Force IT capabilities into
    the 21st century using a combination of off-the-shelf and specially
    designed solutions.
    The Cost of Doing Business
        Upgrading Naval Reserve IT infrastructure is necessary to provide
    efficient, cost-effective support to the Fleet in the 21st century. Not
    only will upgrades allow the Naval Reserve to interface rapidly with
    the Fleet, but also they will streamline operations while improving
    quality of life for Reserve Sailors by making them more productive and
    by reducing the amount of system downtime.
        IT upgrades will, also, benefit in long-term savings through
    efficiency and fewer maintenance requirements. Unfortunately,
    additional funding is needed right now just to sustain current
    capabilities--$6.1 million is needed in fiscal year 2003 to operate the
    current antiquated systems at their minimum level and current capacity.
    An additional $15.7 million is required to update existing systems to
    allow them to perform new and enhanced capabilities.
        The Navy and Naval Reserve are in ongoing negotiations to determine
    appropriate funding levels for NMCI. However, $2.0 million is required
    in fiscal year 2003 for network infrastructure not associated with NMCI
    services. Two much-needed initiatives--one to provide classified access
    to selected Reserve centers around the country prior to NMCI
    implementation and the other to allow Reservists to access common Naval
    Reserve applications on any computer--are driving this requirement.
        Additionally, $1.5 million is needed to establish and maintain a
    Continuity of Operations/Disaster Recovery Plan for mission critical
    systems. Lastly, an additional $.6 million is needed to create Naval
    Reserve-specific applications that can be accessed on the Web.
    Summary
        With Naval Reservists among the first to test the Navy-Marine Corps
    Intranet, the Department of the Navy has underscored the importance of
    equipping the Reserve component with the best in IT infrastructure. The
    Naval Reserve has proceeded with several IT initiatives in an effort to
    overcome the difficulties incurred by operating systems based on 20-
    year-old technology. With the Naval Reserve Skills Online program and
    the New Order Writing System, the Naval Reserve is giving its personnel
    the tools they need to work more efficiently while providing improved
    support to the Fleet.
        Naval Reserve leadership is working hard to meet IT mandates set by
    the Active Duty Navy; but it is hampered by older platforms and
    systems, as well as a critical shortfall in funding. The Naval Reserve
    needs additional funding right now just to maintain its current IT
    infrastructure, and will need even more in the future to enhance and
    modernize existing systems.
        The challenge--whether we are called upon to operate in peacetime,
    on one war-fighting front, or several skirmishes--is to provide the
    Navy with the right Reservist at the right time with the right
    equipment every time. The only way to assure that we can do so is by
    upgrading and integrating into our Force today's sophisticated
    technological tools.
     reserve facilities & infrastructure: improving quality of service and
                                quality of life
        A flight of U.S. Naval Reserve F/A-18 Hornets roared overhead, and
    the U.S. Navy Band New Orleans thumped out a martial tune as Naval
    Reserve Center Meridian, MS, was dedicated in July 2000. Among those in
    attendance were retired Congressman G.V. ``Sonny'' Montgomery, for whom
    the building is named, and retired Rear Admiral Thomas F. Hall, former
    Commander, Naval Reserve Force.
        The new Reserve Center replaced a decades-old, dilapidated facility
    in Jackson, MS. By co-locating onboard Naval Air Station Meridian, the
    new facility not only saves considerable operating costs, but also
    provides its Sailors with enhanced quality of life and quality of work.
        Even greater cost savings and improved amenities will be realized
    by another facility currently under construction, the Joint Armed
    Forces Reserve Center in Orlando, FL. This facility, which will serve
    Naval Reserve, Marine Corps Reserve, Army Reserve, and Army National
    Guard units, is the first of its kind. A similar facility is planned
    for Naval Air Station/Joint Reserve Base New Orleans.
    Additional Funding for Real Property Maintenance Necessary to Ease
            Critical Backlog
        The Naval Reserve owns and maintains 1,224 structures covering
    6,800 acres throughout all 50 states. The average age of these
    facilities is 33 years, and their general readiness condition is
    useable but degraded. Naval Reserve facilities include office
    buildings, hangars, runways and ramp areas, fuel and equipment storage
    areas, maintenance and training buildings, utilities and power
    generation.
        The Naval Reserve has worked hard to manage its resources wisely,
    reducing infrastructure and cutting costs while trying to maintain
    current facilities to provide Reservists with the quality of service,
    quality of life, and the quality of workplace that they deserve and
    need to support fully the Active Duty Fleet.
        Consistent underfunding of the Naval Reserve Sustainment,
    Restoration, and Modernization Account has resulted in a critical
    backlog of maintenance and repair. Additional funding planned for
    fiscal year 2003 will reduce the amount of backlogged work to $54
    million by the end of fiscal year 2007.
    Demolition of Old Facilities
        Budget constraints present a constant challenge to the Naval
    Reserve. As it attempts to maintain the proper size and composition of
    the infrastructure needed to administer and train personnel properly,
    the Naval Reserve needs to maintain and operate equipment in a safe
    environment while providing day-to-day support to the Fleet.
        Since before the personnel drawdown began in the early 1990's, the
    Naval Reserve has been working to reduce its infrastructure and to
    utilize facilities more efficiently and effectively. For example, the
    number of Reserve Centers has been reduced by 50 percent since fiscal
    year 1975; and the 40 percent decrease in Naval Reserve personnel
    during the 1990's was matched by a 30 percent drawdown of Reserve
    Center inventory.
        The demolition of excess facilities--such as outdated buildings,
    water towers and piers--is one means of reducing the facilities
    maintenance impact. In fiscal year 1999, the Navy created a Naval
    Reserve Demolition Program with initial funding of $1 million per year
    for five years. Because this has proven to be an inadequate funding
    level, an additional $3.98 million is needed in fiscal year 2003 for
    planned Reserve Force demolition projects.
    Building to Meet the Needs of Today's Sailors
        The bulk of the Naval Reserve's Military Construction budget goes
    to operations and training facilities. Additional funding is necessary
    for infrastructure improvements. By reconfiguring existing facilities
    and building new ones, the Naval Reserve is working to meet the
    changing needs of today's Sailors.
        Many older Naval Reserve facilities have classroom configurations
    that no longer reflect training methods employed today. Manning
    standards have changed, as have the ways in which Sailors work and
    receive training. Most of the Naval Reserve Centers were built prior to
    age of the personal computer. The original builders of Reserve Centers
    had no notion of workstations or the requirements for Local Area
    Networks. These inappropriate building designs not only reduce the
    efficiency of the personnel working in them but also degrade the
    Sailors' quality of life and work.
        In addition, Antiterrorism Force Protection (AT/FP) measures
    require modifications and upgrades to our stand-alone Reserve Centers.
    All of our facilities must become AT/FP compliant.
        The Naval Reserve has numerous expansion and reconfiguration plans
    in place, from building additions to Reserve Centers to modifying
    hangars and other facilities. A total of $51.6 million is reflected in
    the fiscal year 2003 budget for these six projects.
    Joint Service Facilities: the Way of the Future
        Through outsourcing, privatization, and regionalization, the Naval
    Reserve is working to minimize infrastructure costs where it can. The
    Naval Reserve fully supports the Joint-Use Reserve facilities concept
    as outlined in Department of Defense directives. The Joint Service
    Reserve Component Facility Board reviews all Naval Reserve facilities
    requirements annually for joint use, and the opportunity for
    consolidation with nearby activities is considered in the design of any
    new facilities.
        As mentioned earlier, the Joint Armed Forces Reserve Center in
    Orlando, FL, now under construction, and the planned Joint Armed Forces
    Reserve Center in New Orleans, bring economies of scale and significant
    cost savings to the Reserve Components. The wisdom of the Joint Reserve
    Base concept has been proven at Naval Air Station/Joint Reserve Base
    New Orleans, LA; Naval Air Station/Joint Reserve Base Fort Worth, TX;
    and Naval Air Station/Joint Reserve Base Willow Grove, PA.
        While $7 million for Phase I funding of the new Joint Armed Forces
    Reserve Center in New Orleans was provided by Congress in fiscal year
    2001, and $10 million for Phase II in fiscal year 2002, an additional
    $9 million is needed for the completion of Phase III of the project in
    fiscal year 2003.
    Summary
        The Naval Reserve has embraced Joint Reserve facilities as the way
    of the future to ensure cost-effective infrastructure that will
    contribute to an improved quality of life and work for Reserve Sailors.
    A direct benefit will be an improved quality of service to the Fleet.
    In addition, the Naval Reserve is actively working to reduce
    infrastructure and to cut costs through demolition of excess
    facilities, reconfiguring current facilities, and construction of new
    facilities to meet today's standards. Additional funding is critical to
    the Naval Reserve's success in these areas.

    Summary: Unfunded Requirements Air and Sea Naval Reserve--Fiscal Year
    2003

                                  (In millions)

    C-40A Acquisition (3 aircraft)....................................$186.0
    P-3C Orion Upgrades...............................................  61.0
    Upgrade F/A-18....................................................  36.6
    C-130T Avionics Upgrades..........................................   1.9
    F-5 Avionics and Radar Upgrades...................................  58.8
    SH-60B Helicopter FLIR kits.......................................   7.0
    Littoral Surveillance System......................................  30.0
    Naval Coastal Warfare.............................................  86.0
                                                                      ______
          Total Air & Sea Programs.................................... 467.3

    Summary: Unfunded Requirements Naval Reserve Information Technology--
    Fiscal Year 2003

                                  (In millions)

    IT Budget Shortfalls fiscal year 2003.............................  $6.1
    Update Existing Systems...........................................  15.7
    Network Infrastructure............................................   2.0
    IT Force Protection/Continuity of Operations......................   1.5
    Naval Reserve Specific Applications...............................   0.6
                                                                      ______
          Total IT Unfunded Requirements..............................  25.9

    Summary: Unfunded Requirements Reserve Facilities & Infrastructure--
    Fiscal Year 2003

                                  (In millions)

    Demolition........................................................  $4.0
    Joint Armed Forces Reserve Training Centers.......................   9.0
                                                                      ______
          Total Reserve Facilities & Infrastructure...................  13.0

        The Corporations listed below have partnered with the Naval Reserve
    Association in mutually supporting Naval Reservists, their families,
    and our military for a strong national defense. They provide first-line
    equipment and services to all of the military components. We are
    indebted to them and are honored to work with them as highly valued
    members of the Corporate/Association/Military TEAM.

    Lockheed Martin
    The Boeing Company
    Gulfstream Aerospace
    Northrop Grumman Corporation
    Kaman Aerospace Corporation
    DRS Technologies
    BAE Systems
    Northrop Grumman Avondale
    Sikorsky Aircraft Corporation
    USAA
    Raytheon Systems Company
    Seabury & Smith, Inc.
    MBNA America
    CES, a California Corporation
    Rosen Associates Management Corp.
    Aquilasm Group of Funds
    First Virginia Bank
    Science & Engineering Associates, Inc.
    Military.com
    CACI International Inc
    First USA Bank, N.A.
    SES, Inc.

        Senator Inouye. Thank you very much.
        We will now call on Vice Admiral Totushek.
        Admiral Totushek. Thank you, Mr. Chairman. I appreciate the
    opportunity to appear before the committee this morning. I
    would like to take this opportunity to once again thank the
    committee for the strong voice of support you have given to the
    Reserve and Guard components by the numerous initiatives that
    you have supported in the last year.
        I have submitted my statement for the record and I intend
    to just summarize it in my oral statement.
        Senator Inouye. Without objection, the full statement is
    made part of the record.
        Admiral Totushek. Thank you. I would just like to summarize
    a couple points quickly, if I may.
        Since the attacks on the Pentagon and New York City, we at
    the height of our recall reached 10,000 naval reservists and
    this time we recalled them mostly individually and primarily in
    the areas of security and force protection. We also recalled
    people for intelligence, Seabee and other missions, but
    primarily we recalled people to provide force protection for
    our naval forces around the world.
        As none of us sitting around this table this morning are
    going to be able to predict how long this crisis is going to go
    on, we have taken a look at and are currently demobilizing
    naval reservists so that we can answer sustainment issues as we
    go forward with the war on terrorism.
        Homeland security of course is going to be one of our
    important future missions and we are looking right now at the
    role that the Naval Reserve will be able to take in that
    regard. In order for the Naval Reserve to continue to provide
    the kind of support that it has in the past and during this war
    on terrorism, we have critical equipment needs, as do some of
    my brethren who are sitting at the table.
        In our case it comes down to the C-40s to replace our aging
    C-9 force, which supports our Navy AFLOAT Component Commanders
    around the world. We need additional boats for our Navy coastal
    warfare units. Our P-3s and C-130s need updating in order to
    keep them compatible with the active Navy force. We also have
    issues where our F-18s and our helicopter force need upgrading
    so that we are compatible, but we're not asking for new
    equipment there.
        We have already mentioned the Guard and Reserve component
    analysis which showed that we are moving to a position of being
    about $15 billion short in equipment across the Reserve
    components. The Naval Reserve is about $2 billion of that
    backlog.
        I believe you have received a copy of a publication done by
    the Naval Reserve Association. It's called On Target On Line,
    and gives the Naval Reserve strategic funding priorities. I
    won't go into all that but we need this type of equipment to be
    able to continue the fight the way we have been taking it to
    the enemy.

                                    MANPOWER

        I would just like to say one quick thing about my highest
    priority, and that is our manpower in the Naval Reserve force.
    While we will meet our end strength goal this year, we are
    having a difficult time with recruiting. We are largely and
    have been in the past a veteran force. In other words, about 75
    percent of all the people we bring into the Naval Reserve force
    are veterans. Since the war on terrorism started, those people
    who have made the decision to leave active duty, and they are
    way down at these times because of the success the Navy has had
    in retaining people, but those people that are leaving have
    made up their mind to not be part of our war on terrorism and
    want to get on with other parts of their civilian life. We
    don't see a large number of them coming into the Naval Reserve
    right now. So we're down to about a 50 percent veteran
    recruiting staff right now.
        We could use some more advertising to help us get people
    that have not been in the Reserve before, or have not been in
    the Navy before they come on active duty, and we could use some
    additional support for our recruiters out there.
        Finally, Mr. Chairman, let me say that it has been my
    pleasure to command this wonderful force of citizen sailors who
    have been out there supporting our country, especially since
    September 11th. Our mission has remained the same. We are the
    major support for the Navy-Marine Corps team in times of peace
    and war, and of course right now that's war. It has been a
    pleasure for me to lead this force. I look forward to your
    questions.
        [The statement follows:]
                Prepared Statement of Vice Admiral John Totushek
        Mr. Chairman, I appreciate the opportunity to appear today to
    discuss the Naval Reserve and our role in Operations Enduring Freedom
    and Noble Eagle. There are really two distinct aspects of Naval Reserve
    support of the war effort: the first deals with the immediate aftermath
    of the attacks. Even before the mobilization, more than 230 Naval
    Reservists began immediately assisting in any way they could.
        Within hours following the attacks on the Pentagon and on New York,
    Naval Reservists responded:
      --Chaplains were on duty in Washington administering to the needs of
            Pentagon personnel and their families;
      --Naval Reserve F/A-18s were flying combat air patrol missions in
            Texas;
      --A Reserve helicopter squadron training in northern Virginia was
            providing Medevac support at the Pentagon;
      --Naval Emergency Preparedness Liaison Officers began working with
            civilian authorities in rescue and relief efforts;
      --A Naval Reserve augment unit began round-the-clock support for the
            New York City Port Authority;
      --Reservists--from intelligence specialists to law enforcement and
            physical security personnel and more--began showing up to
            provide support to their gaining commands in Washington;
      --and phone lines lit up in New Orleans and Washington with
            Reservists volunteering for recall to active duty.
        The second aspect is the mobilization itself. The numbers change
    daily, but we've recalled approximately 10,600 personnel. The majority
    of these Naval Reservists have been recalled individually based on
    specific skills; primarily law enforcement, security and as cohesive
    units of the Naval Coastal Warfare command. Other skills reflected in
    the mobilization include medical, supply, intelligence and other
    specialties. There is a Naval Reserve C-130 based in Bahrain that last
    month moved approximately one million pounds of mission critical
    equipment. We are providing an additional logistics aircraft to support
    personnel and equipment movement throughout the fleet, and our newest
    Naval Reserve C-40A logistics aircraft are ferrying men and equipment
    to the Gulf with great reliability.
        I found it interesting that one of the frequent comments heard in
    the immediate aftermath of the Sept. 11 attacks on our country was that
    the Navy and the Naval Reserve--and the armed forces in general--would
    have to change the way we do business.
        The attacks left the impression in some circles that our military
    was not prepared for what had happened, that we were not equipped to
    deal with new realities and that a fundamental rethinking of our
    training and our mission was in order.
        I believed then, as I do now, they were wrong. And our response
    since the moment of the attack has been proving them wrong. The fact is
    that our Sailors--and the Marines, airmen, and soldiers in our sister
    services--are well trained to respond to a terrorist crisis at home, to
    track down enemies of freedom abroad--and well suited to carry out
    their roles in Homeland Defense.
        While none of us knows how long we will need to tap into this
    reservoir of talent, it is heartening that--once again, as in Desert
    Storm--many Naval Reservists stepped up and volunteered for recall in
    the early days of the crisis.
        As a nation, before Sept. 11, we already knew that we lived in a
    troubled world. Now we know how dangerous the enemy in that world can
    be. And we know how vulnerable an open society such as ours can be to
    those who seek to do us harm.
    The Price of Liberty
        The patriot John Philpot Curran said in 1790, ``The condition upon
    which God hath given liberty to man is eternal vigilance.'' This
    passage provides as much relevant guidance for us today as it did then.
        The question is this: what can the Naval Reserve do in support of
    eternal vigilance?
        Two things are certain: we are ready--ready to live in freedom,
    ready to pay the price for freedom and we are capable.
        Every day, the Naval Reserve maintains facilities in every state.
    Every day, we support operations and exercises on a global basis. As
    you read this statement, Naval Reservists are deployed in support of
    operations in the Arabian Gulf, in Bosnia/Kosovo, in the Caribbean and
    South America, in Korea, throughout Europe, and afloat on every ocean.
        Today's Naval Reserve Force consists of 34 air squadrons, including
    a carrier air wing, a maritime patrol wing, a helicopter wing and a
    fleet logistics support wing. We operate 26 ships, including 9
    frigates, 10 mine hunter coastal patrol ships, five mine
    countermeasures ships, one mine control ship and a tank landing ship.
    Further strength lies in additional fleet support units. Among the most
    notable of these are 2 Naval Coastal Warfare Group staffs, 22 Mobile
    Inshore Undersea Warfare units, 14 Inshore Boat units and 9 Harbor
    Defense Command units; 12 construction battalions, 12 cargo handling
    battalions, four fleet hospitals, and many other units.
        The force that we deploy is highly educated. Nearly 11 percent of
    our enlisted members have college degrees, and more than 97 percent
    have a high school diploma. Within the Reserve Force officer ranks,
    nearly 35 percent have master's degrees, and more than nine percent
    have a doctorate.
        The state of the Naval Reserve is strong, and our fundamentals
    remain unchanged. Let's take a look from three perspectives:
      --Alignment of the Chief of Naval Operations' (CNO) top priorities
            and the Commander, Naval Reserve Force's (CNRF) top priorities.
      --Our progress and achievements over the past year, and how our
            ships, aircraft and people are being employed.
      --Our goals for the future. Congressional support of these
            initiatives and upgrades will keep our Naval Reserve Force
            strong and integrated into the active Force.
    Goals
        Our first--and most immediate--goal is to assist the CNO in his
    providing a capable and effective Naval force and to help in
    prosecuting and winning the war on terrorism. Our supporting goals
    complement this primary one and align with the CNO's following
    priorities:
        Manpower and personnel.--Just as the active Navy competes for
    people, the Naval Reserve makes every effort to attract and retain the
    best, and to reduce first-term attrition. The Reserve Force focuses on
    retaining our best people, recruiting to fill future needs, and
    sustaining end strength. Through a combination of leadership training,
    financial and educational incentives and career decision surveys, we
    watch closely and encourage the career paths of our talented
    Reservists. We continue to support health care protection for mobilized
    reservists and families. Similarly, our recruiting efforts have been
    strengthened this year with the addition of new recruiters, a new
    advertising campaign, new incentives to recruit the best candidates,
    and by the ability to recruit in the 21-25 year old non-prior service
    market. Our main recruiting concern at this time is that the sense of
    renewed patriotism following the attack upon our homeland did not
    translate into hikes in enlistment contracts. The major change Naval
    Reserve recruiting has experienced since September 11, 2001 is the
    decrease in Navy Veteran (NAVET) recruiting from about 80 percent of
    SELRES accessions having been Navy veterans to around 55 percent. We
    believe that this is due to the desire of many sailors to remain on
    active duty to support our nation's war on terrorism. Reserve
    recruiting is closely monitoring this trend. Coupled with the efforts
    outlined above and the renewed thrust into the non-prior service
    market, reserve recruiting is combating the downward trend in NAVET
    affiliations. Naval Reserve recruiting is currently well ahead on
    officer recruiting.
        Current Readiness.--The active force has benefited from additional
    funding for training and maintenance and continually reviews the
    balance between requirements and resources. On the Reserve side, we're
    using Just-In-Time Training to support homeland defense requirements.
    Specifically, the Naval Reserve has established the Law Enforcement
    Specialist Course in response to force protection mobilization
    requirements. Personnel who have been mobilized are being sent to the
    two-week course in Willow Grove, Pennsylvania, and Fort Worth, Texas.
    Graduates will receive a certificate and Joint Qualifications Booklet
    to bring back to their gaining command. When the booklet is completed,
    they will earn the Navy Enlisted Qualification for Enlisted Law
    Enforcement Specialist. Training is also taking place through the new
    Navy Learning Network, as well as in non-traditional settings such as
    the Senior Enlisted Academy and Navy Apprentice Schools.
        Future Readiness.--The Navy makes continuous investments for the
    near-, mid-, and long-term. These include investments in training,
    technology and new equipment. The Naval Reserve strives to upgrade its
    equipment, with acquisitions such as the new C-40A aircraft, F/A-18 and
    P-3 upgrades, and building a new Information Technology structure.
        Alignment and Fleet Support.--The CNO has set as a priority the
    unification of systems, processes and organizations, which increases
    support to the Fleet. The role of the Naval Reserve is fleet support,
    and we are aligning our systems, processes and organizations to serve
    our primary customer: the active force.
    2001 Achievements
        Our current mobilization has gone much smoother than in Operation
    Desert Storm, due to changes put into effect in the 1990s, and the
    extremely hard work put in by our Reserve and active duty personnel.
    With that said, the mobilization alone doesn't reflect the whole story
    of success in the past year.
      --Naval Reservists supported Fleet operations and exercises
            throughout the year. Naval Surface Reservists provided over
            15,000 man-days of direct support to Fleet exercises in
            Bahrain, Germany, Korea, Iceland, Italy, Norway, Istanbul,
            Thailand and Puerto Rico.
      --Naval Reserve Force frigates continued to make the same six-month
            length deployments as the their active Navy counterparts,
            focusing on counter-narcotics interdiction and exercises such
            as UNITAS, BALTOPS, and CARAT. Naval Reserve Force Frigates
            were on station in either the Caribbean or Eastern Pacific
            supporting drug interdiction operations for 356 days during
            calendar year 2001. The U.S.S. STEPHEN W. GROVES proved to be
            one of the Navy's most productive counterdrug units. During her
            deployment, GROVES interdicted three go-fast boats, interrupted
            one significant smuggling event, detained 10 suspects, and
            recovered 3,600 pounds of cocaine.
      --VAQ-209 continued to support tactical electronic warfare deploying
            to Saudi Arabia for six weeks as part of Operation Southern
            Watch.
      --Naval Reserve P-3 and E-2 squadrons provided year-round patrols
            supporting Counter-Drug detection and monitoring operations in
            the Caribbean and Eastern Pacific.
      --Naval Coastal Warfare Reserve (NCW) Units were in high demand
            during 2001. Before 9/11 units deployed to the Arabian Gulf and
            Vieques, PR in vital AT/FP missions. Units also participated in
            exercises Bright Star, Northern Edge, Natural Fire, and CARAT.
            Subsequent to the homeland attacks, 17 full units within the
            NCW organization mobilized and deployed both at home and
            overseas. The demand for this robust capability by warfighting
            CINCs is so great; NCW will expand to include units both in the
            Active and Reserve component. The Reserve NCW organization will
            provide valuable training and operational expertise as the
            Active and Reserve component emerge as important segment of
            Homeland Security.
      --Naval Reserve Strike Fighter and Adversary squadrons provided 100
            percent of Fleet adversary training (more than 9,000 hours in
            2001).
      --More than 30 Naval Reserve divers participated in an historic
            expedition to raise the Civil War Ironclad Monitor from 240
            feet off the coast of Cape Hatteras, N.C.
      --Reserve Carrier Air Wing 20 (CAG-20) embarked three squadrons and
            staff on U.S.S. NIMITZ for a 54-day circumnavigation of South
            America during a coast-to-coast homeport change.
      --In fiscal year 2001, our logistics aircraft flew more than 4,450
            missions, transporting 172,220 personnel and 14 million pounds
            of cargo in direct support of Navy fleet operations worldwide.
            Presently, there is a Naval Reserve C-130 transport flying out
            of Bahrain supporting the war effort in Afghanistan, as well as
            several C-9, C-20 and C-40 flights per week in direct support
            of deployed forces in theatre.
      --We took delivery of our first four C-40A Clippers: the last two
            were named ``Spirit of New York City'' and ``Spirit of the
            Pentagon.''
      --We began to roll out the long-anticipated Navy-Marine Corps
            Intranet, which over a five-year period will equip the Navy
            with access, interoperability and security for the Navy's
            information and communications by providing voice, video and
            data services to Navy and Marine Corps personnel. The Navy's
            first site was our own Naval Air Facility Washington.
    The Future
        With a mobilization underway--and mindful of President Bush's
    caution that the war on terrorism could last for years--the near-term
    future of the Naval Reserve will be focused on continuing to sustain
    the Navy's warfighting capabilities. Given the uncertainty of how the
    war might develop, the challenge for the Naval Reserve will be to
    remain flexible in adapting existing capabilities--both function and
    structure--to meet evolving and previously unanticipated requirements.
        Yet, the Navy's requirements for Reservists to support the war are
    in addition to its need for Reservists to conduct ``normal'' peacetime
    operations, including exercises, training, watch standing and
    administrative duties.
        While the Navy's demand for Naval Reserve longer-term capabilities
    are not clear, there are some implied and important Reserve roles.
    Homeland Security will create demand for capabilities to guard the
    nation's borders, and the Reserve Components are being considered for
    this major role. Further, a recently published Quadrennial Defense
    Review indicated that future forces would be shaped to meet an expanded
    list of threats, and that the Department of Defense would transform
    itself simultaneously. These have the potential of adding to Navy's
    challenges at a time when it is fighting the war and otherwise
    maintaining a forward presence worldwide. The Naval Reserve will
    undoubtedly play a part.
        In addition, to continue supporting the Fleet, our long-range plans
    include upgrading our aircraft, implementing information technology
    improvements, and maintaining our real estate holdings.
      --Aircraft upgrades.--The introduction of the C-40A Clipper into the
            Naval Reserve is maintaining our worldwide intra-theater
            logistics lift support for the Fleet. Without these aircraft,
            the Reserve could not conduct its essential airlift operations
            in foreign airspace. The C-40As are slowly replacing the fleet
            of aged C-9s. Four C-40A's have been delivered to the Naval
            Reserve and two additional C-40A's will be delivered by the end
            of this year. The C-40A delivery begins the process of
            increasing safety, improving compatibility and meeting
            environmental requirements. Our goal is to replace all 27 of
            our aged Navy C-9 aircraft and 2 Marine Corps Reserve C-9
            aircraft at a rate of three per year.
          My aging, but well maintained, P-3 aircraft assets are in need of
            modernization upgrades in the form of Block Modification
            Upgrade Program (BMUP) and Aircraft Improvement Program (AIP)
            kits. These kits provide new mission computers and acoustic
            sensors to achieve a common P-3C configuration with our fleet
            counterparts.
          In addition, two of our four 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 12 additional ECP-560 kits to outfit our third F/A-18
            squadron.
      --Navy and Marine Corps Intranet.--The NMCI is an opportunity for the
            Reserve Force to show the way in integrating the best in
            Information Technology. We are replacing disparate 20-year old
            systems with a unified system accessible by fleet commanders
            and Reserve units alike.
      --Real estate maintenance and management.--With the Naval Reserve as
            a landlord for 1,224 structures (average age of 33 years) on
            6,800 acres in all 50 states, and Puerto Rico, maintenance and
            efficient management are issues of continued concern.
    Summary
        Our primary mission--before and after Sept. 11--has been to support
    the Navy/Marine Corps Team throughout the full range of operations,
    from peace to war. At this time, it is war. Fortunately, we are a well-
    trained force dedicated to enduring freedoms. In the words of Edmund
    Burke, ``The only thing necessary for the triumph of evil is for good
    men to do nothing.'' I am very fortunate to have good men--and women--
    in my Force, and we are truly fighting the good fight and meeting the
    threats posed to us, as we must. As the War on Terrorism unveils we
    will all be called to serve. The Naval Reserve is ready to answer the
    call.

        Senator Inouye. Thank you very much, Admiral. General
    Sherrard.
        General Sherrard. Mr. Chairman, Senator Stevens, indeed, it
    is my pleasure also to represent the 74,000 plus men and women
    of the Air Force Reserve in telling you a little bit about our
    accomplishments of last year. Thanks to the great support of
    this committee we were able to achieve more than 105 percent of
    our recruiting goal and achieve an end strength of almost 101
    percent. And our retention numbers I'm very proud to tell you
    for last year were 89 percent overall, with a high of 92
    percent in the officer, and our career enlisted maintaining 91
    percent.
        With the tragic events of September 11th, the whole world
    changed, as we all know, and I'm very proud to say as my
    colleagues have already expressed before, and my friends in the
    Marines will express after me, the men and women of our Reserve
    forces along with all our fellow active members stepped
    forward, and were so very proud to know that they stood there
    ready to do the duties that they had in fact agreed to do many
    many years ago, and were able to do that.
        In doing that I will tell you that today we have more than
    12,800 Air Force Reserve members activated, more than 2,300 of
    them in the Area of Responsibility (AOR). We currently have
    demobilized 98 individuals, that is all we have demobilized,
    sir, and we continue to have between 2,400 to 2,600 on average
    volunteers working today supporting Operations Noble Eagle and
    Enduring Freedom, as well as other requirements that the Air
    Force has that we are so very proud to say that as full team
    partners and players, we are allowed to do those missions.

                            RECRUITING AND RETENTION

        I would also tell you that we have some concerns and
    challenges, and as was just mentioned by Admiral Totushek,
    recruiting and retention remains number one, because people are
    our number one issue. And as we go through the recruiting and
    retention, the fact that stop loss has been implemented, there
    are fewer active duty members that are separating, our
    recruiting efforts are truly very large this year. Thanks to
    the support the committee has given us in the past with the
    additional 50 recruiters, I am confident we will be successful.
    We are currently over 100 percent, actually at 102 percent of
    our end strength, but that again, realizing that stop loss
    certainly helps with your recruiting and retention efforts, we
    will have to continue to make certain that when stop loss in
    fact starts to ease that we will have to work very hard to
    maintain our numbers.

                             CURRENT BONUS SYSTEMS

        In doing so, I would tell you that one of our key goals is
    to maintain those members of experience that we have. All of
    our current bonus systems stop with the bonus period at the 20-
    year point. I personally believe that it is very very important
    that we retain those members from the 20-year point to their
    high year tenure if they are enlisted, or to their mandatory
    separation date on the officer side. It is critical. This
    experience base is what America has made an investment in each
    one of us, and we must retain these talents.
        Likewise, I would tell you of the great concerns of what
    impact stop loss will have in the future is still unknown. The
    small numbers that have been released to date are such that it
    is very difficult to make any assessment as to losses we may
    have in the future as we come off of that and start our
    demobilization process when the requirements no longer exist.
        The other key point I want to make, and this is a thanks,
    but that is a concern also, we say thanks to the employers for
    their great support but it's also a concern in our sustainment
    of that high level of interest that the employers have taken in
    our members and the support they have provided.

                                EMPLOYER SUPPORT

        We continue to need, just as my colleagues have expressed
    before me, full-time support. As we have gone through the
    changes that September 11th has created in our force, we have
    found that we, in fact, do need more full-time support,
    particularly at our host locations, to do the things that we're
    being asked to do.

                                 MODERNIZATION

        We will need to continue to modernize our force so that
    we're relevant and able to do the things that the active force
    expects us to do, and that our weapon systems are compatible
    and can deliver the precision munitions that, in fact, are
    necessary for us to carry out the very, very challenging tasks
    that face us.
        I thank you and the committee for your continuing support
    and I stand ready, sir, to answer any questions that you may
    have.
        [The statement follows:]
         Prepared Statement of Lieutenant General James E. Sherrard III
        Mr. Chairman, Senator Stevens, and distinguished members of the
    Subcommittee, I appreciate the opportunity to appear before you today.
    Thank you for your continuing support, which has helped your Air Force
    Reserve address vital recruiting, retention, transformation/
    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 war fighting Commanders in
    Chiefs (CINCs), whenever an immediate and effective response is
    required to meet the challenges of today's world.
        The Air Force has enjoyed over 30 years of unparalleled Total Force
    integration success. Today, Air Force Reserve Command (AFRC) members
    are performing in almost every mission area within our Air Force
    including the war on terrorism, and we plan to seek involvement in all
    future mission areas, as they evolve. Key to our successes, to date, is
    the fact that AFRC is a very dynamic organization in a rapidly changing
    environment, and we are finding new and advanced ways to seamlessly
    link all our forces in both peace and war.
        In the Air Force Reserve, our priorities are People, Readiness, and
    Transformation/Modernization and it is toward these key areas that our
    attention is focused to assure that our members are provided the full
    spectrum of training opportunities which ensure they achieve and
    enhance their war-fighting skills and capabilities. We put people
    first, emphasize readiness, and continue to seek balanced, time-phased
    transformation/modernization and infrastructure programs.
        People are our most important asset. In an effort to retain our
    best and brightest, we must continue 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 must ensure that there is open dialogue among the troops
    and from the troops through their appropriate chain of command to me to
    insure we're meeting their needs while fulfilling the needs of our Air
    Force in the best manner possible. More than ever, we need to continue
    to partner with you to ensure we maintain the strongest air force in
    the world.
        Today's Air Force is a fantastic 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, the Air Force Reserve will be there. During my comments
    today, I will discuss the status of many of our Air Force Reserve
    programs.
                               highlights of 2001
        Until September 11th, fiscal year 2001 had been shaping up to be
    one of our most productive ever. Our key goals had been to achieve our
    authorized manning levels, continue to improve retention of our
    talented members, meet the extensive Reserve commitments to the
    Aerospace Expeditionary Force (AEF) and execute our Flying Hour Program
    as authorized in the fiscal year 2001 Defense Budget. The hard work of
    the men and women of the Air Force Reserve assured we attained our
    goals and, even more, met the many additional challenges presented
    following the September attacks.
        We exceeded our fiscal year 2001 end strength authorization;
    achieving a final manning percentage of 100.6 percent of our authorized
    end strength. This was possible only through outstanding efforts of our
    recruiters, who accessed 105 percent of our recruiting goal, and with
    the superb assistance of our assigned personnel who help tell our story
    of the true value of service to country. Likewise, we exceeded our
    command retention goals for officers, first-term airman, second-term
    airman and career airman by achieving retention rates of 92.1 percent,
    81.7 percent, 79.6 percent and 91.4 percent respectively. The overall
    command retention rate of 89.3 percent is the result of great teamwork
    by members, first sergeants, supervisors and commanders who led us to
    this exceptional achievement.
        We are also very proud of our Air Expeditionary Force contributions
    in 2001. We have met virtually 100 percent of both aviation and combat
    support commitments, deploying 14,000+ personnel in volunteer status in
    the current 15-month AEF cycle (1 Dec 2000-28 Feb 2002). The challenge
    for 2002 will be to meet ongoing AEF commitments, with volunteers,
    while striving to support the additional demands required to support
    Operations Noble Eagle and Enduring Freedom, from a Reserve force which
    has had much of its operations and combat support mobilized for
    homeland defense and the war on terrorism.
        Through the dedicated efforts of our operators and maintainers,
    along with assistance from our support personnel, AFRC flew 99.5
    percent of the Operation and Maintenance (O&M) funded portion of our
    flying hour program. Due to the lack of available cargo and passengers,
    we, like our fellow active duty and ANG partners, were unable to fly
    the full Transportation Working Capital Fund (TWCF) commitment.
    However, overall, this was our best year of flying hour execution
    within the past five years.
        Air Force Reserve Command personnel participated in several key
    operational exercises in which combat training events were accomplished
    by our members, while critical command and control processes were
    tested and evaluated to determine overall readiness of our military
    forces. Pacific Warrior was a medical exercise conducted in Hawaii in
    which AFRC was the lead Air Force agent. Deployment and redeployment
    consisted of 72 missions, 1,030 passengers and 445 short tons of
    equipment and supplies. Ground and aeromedical patient care and
    evacuation was conducted utilizing all deployable specialties assigned
    within the Air Force Medical Service. More than 1,000 patients were
    treated and 533 patients were evacuated by aeromedical missions. Over
    400 patients were moved via C-130 aircraft in the tactical phase and
    130 patients were moved in the strategic phase. Additionally, units
    performed a pre-F\3\ (form, fit and function) on proposed new manpower
    packages to validate proposed innovations in aeromedical support.
        Exercise Consequence Island was a large Veterans Administration and
    Federal Emergency Management Agency-sponsored exercise in Puerto Rico
    to evaluate United States response capabilities to a Weapons of Mass
    Destruction attack. A big emphasis was on post attack health care
    delivery and aeromedical evacuation. AFRC provided the majority of
    airlift and aeromedical evacuation capabilities. The long hours and
    changing dynamics of the exercise proved to be very realistic, and the
    hard work, dedication, and problem solving abilities demonstrated by
    our Reserve forces made the exercise a big success.
        Another operation with heavy AFRC involvement this past year was
    Operation Palmetto Ghost, which is the resupply mission for Army
    counter-drug operations in the Caribbean. Each quarter, this
    requirement calls for a significant number of strategic and tactical
    airlift sorties, as well as a Tactical Airlift Control Element (TALCE)
    for command and control on the ground. Though this mission is not
    assigned specifically to the Air Force Reserve, we stepped up to
    provide the majority of the airlift support with C-5s, C-17s, C-141s,
    and C-130s, and provided 100 percent of the TALCE support.
        The past year saw the Reserve enhance their continued role in
    training pilots for all Air Force components. As the Air Force
    determined a requirement to increase the production of fighter pilots,
    it became evident that our training capability needed to increase as
    well. To meet that demand, the Chief of Staff of the Air Force directed
    the Air Force Reserve to convert a combat flying unit to a training
    flying unit. The 944th Fighter Wing at Luke AFB, Arizona now trains
    active duty, Air National Guard, and Air Force Reserve Command pilots
    in all phases of the F-16 formal training program. This program
    utilizes its unit-equipped aircraft and instructor pilots assigned to
    the 302d Fighter Squadron and the instructor pilots assigned to the
    301st Fighter Squadron, the Air Forces' only associate F-16 training
    organization. This associate squadron is an integral part of the
    overall Air Force training capability. Through its use of highly
    experienced instructor pilots, it is truly the benchmark upon which all
    future operational training needs will be measured.
        The Air Force Reserve Associate SUPT (Specialized Undergraduate
    Pilot Training) Instructor Pilot Program is managed by the 340th Flying
    Training Group at Randolph AFB, Texas. They provide administrative
    control for Reserve flying training squadrons at six Air Force bases;
    Laughlin, Randolph, and Sheppard in Texas, Columbus AFB, Mississippi,
    Moody AFB, Georgia, and Vance AFB, Oklahoma. The units are associate in
    nature and belong to the host active duty flying training wing for
    operational control. They provide programmed flying training support
    for all phases of SUPT. Overall, the AETC/AFRC Associate Instructor
    Pilot Program provides 16 percent of all Air Force SUPT training
    capability.
        September 11, 2001 changed life in the United States forever, and
    its impact on Air Force Reserve operations will also be felt for a long
    time to come. Perhaps more so than any other potential scenario for
    military operations, it highlighted the huge importance and unique
    missions of the Air Force Reserve.
        Air Force Reserve aeromedical evacuation (AE) aircrews were among
    the first to respond and provided almost half of the immediate AE
    response that was provided. Tragically, we found there was little need
    for their service. The larger need was in mortuary affairs support, of
    which the Air Force Reserve provides more than 75 percent of our Air
    Force's capability. One hundred eighty-six trained Reservists
    immediately stepped forward, in volunteer status, for this demanding
    mission. Reserve airlift crews were among the first to bring in
    critical supplies, equipment and personnel, including emergency
    response teams from the Federal Emergency Management Agency (FEMA),
    fire trucks, search dogs, and earth moving equipment. F-16 fighters and
    KC-135 air refueling tankers immediately began pulling airborne and
    ground alert to provide combat air patrol support over major U.S.
    cities. They were quickly joined by our Airborne Warning and Control
    System (AWACS) aircrews and our C-130 aircrews under the direction of
    NORAD in support of Operation Noble Eagle.
        The response of our Reservists in this time of crisis has been
    simply overwhelming. Over 12,400 Air Force Reservists have been
    mobilized, and thousands more continue to provide daily support as
    volunteers.
        More than three thousand of those mobilized are Individual
    Mobilization Augmentees (IMAs), providing critical support to the
    Unified Commands, MAJCOMs, and various defense agencies supporting
    Homeland Security efforts. Required support functions span the entire
    breadth of Reserve capabilities--security forces, civil engineering,
    rescue, special operations, strategic and tactical airlift, air
    refueling, fighters, bombers, AWACs, command and control,
    communications, satellite operations, logistics, intelligence, aerial
    port, services, and medical. Never have I been so proud to be part of
    the outstanding group of patriots who make up the Air Force Reserve
    Command.
        Equally important to the Air Force Reserve Command's ability to
    meet the requirements being levied on us is family and employer
    support. Their sacrifices and support make it possible for our members
    to carry out their duties in such a spectacular manner.
                            recruiting and retention
        As previously highlighted, significant progress has been made in
    Air Force Reserve recruiting and retention. However, my principal
    concern today remains attracting and retaining high quality people.
    Recruiting
        In fiscal year 2001, the AFRC exceeded its recruiting goal for the
    first time in five years. Also, we surpassed our fiscal year 2001 end
    strength by achieving a final manning percentage of 100.6 percent of
    our authorized end strength. This was possible only through outstanding
    efforts of our recruiters, who accessed 105 percent of our recruiting
    goal, and with the superb assistance of our assigned personnel who help
    tell our story of the true value of service to country. Several
    initiatives contributed to Reserve recruiting success. In fiscal year
    2001, Air Force Reserve Command (AFRC) with great Congressional support
    increased recruiter authorizations by 50, instituted a new call center,
    redesigned the web site, launched a ``Prior Service Other'' advertising
    campaign, and re-energized the ``Get One Program'' in which current Air
    Force Reserve members give recruiters referrals. Air Force Reserve
    recruiting leads all other services in monthly accessions with 3.55 per
    recruiter.
        While fiscal year 2001 was an outstanding year for Reserve
    recruiting, fiscal year 2002 is shaping up to be a very demanding year.
    After September 11th, ``Stop Loss'' was initiated for all service
    members. Historically, reserve recruiting directly accesses 25 percent
    of eligible members (i.e. no break in service) separating from active
    duty which accounts for a total of 30 percent of annual AFRC
    accessions. Recruiting will have to make up that part of the goal, more
    than 3,000, from other sources including ``non-prior'' and ``prior
    service other'' (i.e. Air Force separatees with a break in service or
    accessions from other services) applicants until stop loss is lifted.
    Once lifted, we expect there will be challenges in filling many vacated
    positions.
        One of the biggest challenges for recruiters this year is Basic
    Military Training (BMT) quotas. With recruiting services increased
    emphasis on enlisting non-prior service applicants, BMT allocations
    have not kept pace. This problem is projected to worsen this year as a
    result of stop-loss since more non-prior applicants will have to be
    accessed to offset the decrease in members separating from active duty.
    We are working diligently to increase our number of BMT allocations and
    explore solutions to address BMT shortfalls.
        A new recruiting initiative we are currently implementing focuses
    on bringing back retired military members. We are actively encouraging
    retired members to continue serving their country by returning to
    active service in the Air Force Reserve.
        By accessing retired military members, the Air Force Reserve and
    Total Force benefit by gaining personnel with proven experience,
    training, and leadership talents. Moreover, we save valuable training
    dollars and benefit from the specialty skills, experience and knowledge
    these individuals already possess. Once returned, members earn
    additional pay, retirement points, years of service, and promotion
    opportunity serving active reserve duty. Accessed members may continue
    serving as long as eligible under High-Year Tenure (HYT) guidelines,
    Mandatory Separation Date (MSD), or until age 60. This scenario
    presents a ``win-win'' situation for the member and the Air Force and
    allows valued service members the ability to continue serving while
    providing a vast amount of technical and mentoring experience to our
    USAFR. We are processing our first applicants and have discovered a
    couple of obstacles to effective implementation along the way.
    Retention
        The Air Force Reserve exceeded Command retention goals for first
    term airman, second term airman and career airman during fiscal year
    2001. Again, it was the team effort of the members, first sergeants,
    supervisors and commanders that led us to this exceptional achievement.
        At the end of CY 2001, Air Force Reserve Command was paying
    enlistment/reenlistment bonuses in 67 percent of its traditional
    reserve enlisted specialty codes and 50 percent of the enlisted
    individual mobilization augmentee specialty codes.
        The Air Force Reserve is currently exploring the possibility of
    expanding bonus authorities for air reserve technicians and certain
    career fields for active Guard and Reserve members. These initiatives
    are designed to enhance both recruiting and retention of key,
    experienced Reserve component assets who are vital to our ability to
    continue to meet the Air Force taskings needed to support the war
    fighting CINCs. Additionally, special duty pay initiatives are also
    being studied for later implementation for senior enlisted positions
    such as command chief master sergeants and unit first sergeants.
    Quality of Life Initiatives
        To provide increased financial benefit to its members, the USAFR
    began enrollment of its members in the congressionally authorized
    Uniformed Services Thrift Savings Plan in October 2001. This program
    allows members to augment their retirement income through ``401(k)''
    type investment accounts.
        To better provide insurance benefits for members, we began
    implementation of the family coverage Service Member's Group Life
    Insurance (SGLI) program. This program allows the spouse and children
    of a service member to be covered for specified SGLI insurance coverage
    amounts. The enhanced coverage program allows service members and their
    families to take advantage of a comprehensive insurance package that
    might not be otherwise available to them.
        In summary, the matter of recruiting and retention is an issue of
    major concern to me, and we are taking positive steps to address
    ongoing recruiting and retention challenges as I lead the Air Force
    Reserve in this new millenium.
                   readiness and transformation/modernization
    Readiness
        As full participants in the Total Air Force, our readiness remains
    fair overall. At present, the Air Force as a whole is in the process of
    addressing a significant decline in readiness levels due to sustained
    OPTEMPO, cumulative effect of chronic underfunding, declining skill-
    level manning and aging equipment. It will take several years of
    significant investment to restore readiness through substantial and
    sustained recapitalization of people, equipment, infrastructure, and
    ``info''-structure. Operations Noble Eagle and Enduring Freedom will
    also require a reconstitution period to regain pre-attack readiness
    levels. Reserve units have comparable equipment in quantities
    proportional to their active duty counterparts and participate in day-
    to-day operations, exercises, and training. Reserve units train to
    active duty standards and receive regular inspections from their
    gaining major commands.
        Our 70 assigned F-16s, using the information being provided through
    the LITENING II targeting pod combined with Global Positioning System
    (GPS) software enhancements, provide a remarkable precision munitions
    delivery capability. This outstanding capability, combined with the
    information being provided through the Situational Awareness Data Link
    (SADL), give our pilots a capability that is acknowledged as one of the
    weapon systems of choice for combat missions. We have seen in
    operations in Southwest Asia, both in Iraq and most recently in
    Afghanistan, how this capability in the hands of our experienced pilots
    provides combatant commanders the ability to conduct attacks against
    ``time-critical targets'' in conjunction with the Predator. The F-16
    pilot can put a laser mark on the target for confirmation by the
    Predator controller. So now, the Predator and its controller are
    operating as a Forward Air Controller from a remote location.
        Our B-52 aircrews were among the first to deploy in support of
    Operation Enduring Freedom. Their efforts have been superb and clearly
    demonstrated the value of this weapon system in today's arsenal of
    capabilities. While the B-52 was first built 50 years ago, it shows, on
    a daily basis, it has a ``mean bite'' and remains the enemy's ``worst
    nightmare''.
    Transformation/Modernization
        As AFRC continues to work within the Active Component structure,
    transformation/modernization is key to our ability to provide like
    capability for deployed operations and homeland defense. This is true
    across our airlift/special mission areas, as well as with our bomber,
    fighter, and aerial refueling aircraft.
        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, autopilot replacements and night vision
    compatible aircraft lighting systems. Specifically for the HC-130, we
    have equipped nine HC-130's with the APN-241 navigation ground map
    radar to improve aircrew survivability and weapon system reliability.
    Also in the combat search and rescue area we are beginning the upgrade
    of the forward-looking infrared for the HH-60G helicopter fleet.
        AFRC equipment is compatible to support all applicable Air Force
    missions. One exceptional highlight is the 10 WC-130H aircraft at
    Keesler Air Force Base, MS soon to be replaced by 10 WC-130J models.
    These aircraft and crews are specially trained and equipped to
    penetrate severe storms while collecting and transmitting data to a
    special ground station. The extensive meteorological data necessary to
    track and forecast the movement of these severe storms requires a
    dedicated aircraft with special equipment and crew.
        There are 52 O/A-10 aircraft assigned to the Air Force Reserve
    inventory. Plans call for upgrading all A-10 aircraft with the revamped
    precision engagement program that will incorporate Situational
    Awareness Data Link, targeting pods, and smart weapons capability. This
    precision engagement modification, with its major upgrade in
    communications, is a key stepping stone that will be key to keeping the
    current ground attack fighters (F-16, F-15E and A-10) compatible with
    the next generation of information intensive ground attack system, the
    Joint Strike Fighter.
        AFRC's 70 KC-135E/R aircraft provide about 13 percent of the Air
    Force's KC-135 aerial refueling capability. In an effort to increase
    reliability and sustainability, the Air Force began a KC-135 engine
    retrofit in 1996. There are 16 AFRC KC-135E aircraft requiring upgrades
    to the KC-135R configuration.
        In addition, transformation/modernization of the avionics and
    navigation systems on all Air Force KC-135 continues, including those
    in the AFRC inventory. Called Pacer CRAG (compass, radar and global
    positioning system), the project provides for a major overhaul of the
    KC-135 cockpit to improve the reliability and maintainability of the
    aircraft's compass and radar systems.
        The project also meets the congressionally mandated requirement to
    install the global positioning system in all Defense Department
    aircraft. As an added safety measure for formation flying, a traffic
    collision avoidance system (TCAS) will be installed. TCAS will give
    pilots the ability to actively monitor other aircraft and will provide
    advance warning of possible mid-air collisions.
        In 2002 we will continue to work closely with Air Mobility Command
    to finalize the Air Staff led Mobility Tiger Team beddown plan for the
    C-17 aircraft and establish viable, long-term replacement missions for
    our C-141 locations. Currently our C-141s are scheduled to leave the
    inventory starting in fiscal year 2004. AMC is working hard to insure
    Reserve mobility experience is preserved and follow-on missions for
    these units are a top Air Force priority. A great deal of work remains
    to be done and senior leaders at Air Force Reserve Command are engaged
    at every level. Already funding has been secured to ensure our C-141
    manpower is retained; operation and maintenance dollars will follow
    once replacement missions are finalized in the 2004 program.
                                  new missions
        In the 21st Century, the U.S. Air Force anticipates deriving its
    strength from the flexibility and diversity of its integrated Active
    Duty, Air Force Reserve, and Air National Guard more than ever before.
    Optimum use of Air Force component resources is critical in providing
    the complete potential of American aerospace power. Future campaigns
    will include new ways to optimize the active, Reserve, and Guard
    components to make the best use of our resources and people and to
    build on a foundation of high standards and strong cooperation among
    the components.
        September 11th attacks have brought homeland security to the
    forefront with the publication of Executive Order 13228 establishing
    the Office of Homeland Security. Total Force components are being
    called upon to counter a new class of foreign and domestic terrorist
    threats with both defensive and offensive actions. Air Force Reserve
    Command has begun the process of identifying and coordinating the
    extent of its role and participation in Homeland Defense. Among
    foreseeable needs relating to this vital mission are augmentation of
    existing security forces, firefighters, and home station operational
    support personnel, both full-time and traditional reserve.
        Both AFRC and Air Force Space Command (AFSPC) see space as a
    growing mission area in which AFRC can help support the Department of
    Defense and national requirements. To that end we will maintain our
    work with AFSPC in the determination of long-range plans in space
    operations and support. We currently provide over eight percent of
    total Air Force Space Capability and have the capacity to contribute
    even more within this growing mission.
        Our 310th Space Group at Schriever AFB, Colorado provides direct
    war fighter support to 14th Air Force at Vandenberg AFB, California. In
    addition, many AFRC squadrons and units have been established within
    AFSPC to provide full mission support, including satellite operators
    that provide support for Global Positioning System and Defense Support
    Program surge requirements.
        The 6th Satellite Operations Squadron, the only unit-equipped space
    squadron in AFRC, operates the Defense Meteorological Satellite Program
    in support of both the Commerce Department and the National Oceanic and
    Atmospheric Administration.
        Full- and part-time operational augmentation to the Space-Based
    Infrared Radar System at Buckley AFB, Colorado, the Satellite
    Operations Center at Vandenberg AFB, California, and the 17th Test
    Squadron at the Space Warfare Center at Schriever AFB, Colorado, round
    out our current involvement in the space mission area. As we develop
    our synergistic relationship with AFSPC, we continue to look at
    additional mission area projects for potential implementation.
        AFRC has one existing Air Operations Center (AOC) supporting
    organization--the 701st Combat Operations Squadron, March ARB,
    California. This unit represents approximately 33 percent of the
    current AOC units, with active component units in Korea and Germany,
    and Air National Guard units in Missouri and New York. Plans for at
    least three additional AOC units are projected for this year and
    beyond, with one additional tasking for an AFRC organization. All
    command and control units will provide equipment and/or manning support
    for an eventual 19 AOC units for aerospace command and control
    operations worldwide. Eventual crew and equipment standardization will
    promote effective aerospace command and control in the United States
    and abroad.
                                 final thoughts
        The Air Force Reserve supports the Air Force mission to defend the
    United States through control and exploitation of air and space by
    providing global reach and global power. As we have repeatedly
    witnessed, the Air Force Reserve Command plays an integral role in the
    day-to-day Air Force mission and is not a force held in reserve for
    possible war or contingency operations.
        The events of September 11th clearly changed our normal manner of
    business as we continue to fulfill the needs of our Nation, maintain
    our increased vigilance, and prepare for the unexpected. As we are
    presented with new and challenging missions, I remain confident in the
    tremendous capabilities of Reservists to measure up to the task.
        While this new mission activity continues, we need to keep our
    focus--assess the impact of Stop Loss on our operations, provide
    adequate funding for continuing activations, and keep an eye on
    sustaining our recruiting efforts. The challenge will be to retain our
    experience base and keep our prior service levels high.
        Based on the actions of Reservists over the past year and
    especially since September 11th, I'm sure the challenge will be met by
    the outstanding men and women assigned to Air Force Reserve Command. It
    is these hardworking, professional and patriotic individuals who are
    the heart and soul of the command. Our accomplishments during this past
    year are the accomplishments of everyday Americans who are proud to
    serve.
        In summary, Air Force Reserve Command is committed to meeting our
    people, readiness and transformation/modernization challenges, to
    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.

        Senator Inouye. Thank you very much, General Sherrard. We
    just had another vote, so that's why Senator Stevens has left.
    General McCarthy.
        General McCarthy. Thank you, Mr. Chairman, members of the
    committee. It is a great honor for me to appear and to report
    to you on the status of your Marine Corps Reserve. I challenged
    the Marine Corps Reserve when I assumed command last June to be
    ready, willing and able, and I believe that they have amply met
    and demonstrated that level of capability.
        We have gone through since September 11th a very measured
    call-up of reserves from the Marine Corps Reserve. We have
    called about 4,400 at our height, we are somewhere in the
    neighborhood of 4,300 plus now. The Commandant, as we say,
    scrubbed us with a wire brush in terms of scrutinizing the
    requirements so we did not call up anybody who was extra or
    excess, and I believe we met that challenge.
        We are now going to demobilize about 500 of those marines
    over the next couple of months and I am working with my fellow
    force commanders to make sure that we do that in the most
    responsible way so that we don't negatively impact either
    individual marines who have made a commitment to us by coming
    on active duty, or their employers, who have made the sacrifice
    of supporting them.
        The focus of our call-up has been on combat units. We have
    called infantry battalions, heavy lift helicopter squadrons,
    and a number of individuals, but primarily units, and those
    units have filled a variety of missions, continue to do so, and
    again, proven their worth as part of the total force of the
    Marine Corps.
        We do have some equipment issues which I have outlined in
    my written statement and again, they involve modernizing
    primarily our equipment, but I would tell you that with some
    very, very small shortfalls, if we had to go to war today with
    the equipment we have, your Marine Corps Reserve would achieve
    its goals and would meet its mission. But we do that in large
    part because of the past support we received from this
    committee, and I guarantee you that any future support that the
    committee sees fit to provide, we will put to the absolute
    highest and best use.
        I look forward to being able or at least trying to respond
    to any questions that you or the committee may have. Thank you,
    sir.
        [The statement follows:]
          Prepared Statement of Lieutenant General Dennis M. McCarthy
                                  introduction
        Chairman Inouye, Senator Stevens and distinguished members of the
    Committee, it is my privilege to report on the status and the 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 for ensuring the common defense, but also a genuine concern
    for the welfare of our Marines and their families.
                        your marine corps reserve today
        The Marine Corps Reserve continues to make an extraordinary
    contribution at home and abroad, most evident now during this time of
    crisis. Today we have 172,600 Marines in the Active Component and
    another 39,558 in the Selected Marine Corps Reserve (SMCR). This force
    can be expanded by drawing from the 60,000 Marines who serve in the
    Individual Ready Reserve (IRR). As an integral part of our Total Force,
    Reserve Marines augment and reinforce the Active Component by
    performing a variety of missions in wartime and in peacetime.
        The Marine Corps Reserve today is a daily use force, not just
    dedicated solely to supporting a Major Theater War effort. Our
    contribution to Total Force requirements, measured in terms of work-
    days, has doubled from an average of 150,000 work-days per year, to
    well over 300,000 in recent years. This fiscal year, the Marine Corps
    Reserve is assuming the Marine portion of the United American States
    (UNITAS) deployment around South America, a major OPTEMPO relief
    effort. The goal is to assign the UNITAS deployment to the Reserve
    every other year. We are using the Reserve for manpower augmentation to
    Active and Reserve staffs, units, and exercise forces by providing
    short-term and full-time 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 OPTEMPO relief operations, Joint and Combined Exercises,
    and essential combat, combat support, and combat service support
    training. To meet Total Force training and support requirements,
    sufficient funding in Special Training and ADSW-AC is critical.
    Operations Noble Eagle and Enduring Freedom
        The mobilization of our Reserves for the Global War on Terrorism
    (GWOT) has been a very deliberate and prudent process. The Commandant
    of the Marine Corps, General Jones, has stressed the need to scrutinize
    and validate every request for Reserve support. The priority mission
    for the Reserve is to augment and reinforce the operating forces;
    therefore, the Marine Corps must remain judicious in committing its
    Reserves to ``other'' missions. The relatively low number of mobilized
    Marines reflects this prudent approach.
        The partial mobilization authorized by President Bush gave the
    Marine Corps full access to the IRR. This pool of trained and
    experienced Reserves has always been particularly important to the
    Marine Corps to fill critical individual augmentation requirements. In
    order to avoid disrupting the lives of our IRR members and their
    families, our goal has been to activate those Marines most ready and
    willing to serve. Our Reserve Career Management Team added a database
    link to their well-established website for individual reserves to
    identify themselves and their skills and their availability for
    activation. The database has been used to assess individuals with
    specific skills and fill validated requirements.
        At the end of March, 4,400 Marine Reserve personnel were activated
    in support of the Global War on Terrorism. The missions assigned to our
    Reserves in the GWOT are a clear reflection that Marine Forces Reserve
    (MARFORRES) possesses capabilities across the full spectrum of military
    operations.
      --A detachment from Marine Aerial Refueler Transport Squadron 234 is
            forward deployed providing support for operations in theater.
      --Two provisional security platoons have relieved two Fleet Anti-
            terrorism Security Team (FAST) platoons of the security mission
            at U.S. Naval Base, Guantanamo Bay, Cuba. This mission has
            become even more critical since the arrival of Joint Task Force
            (JTF) 160 and the detainees.
      --Marine Heavy Helicopter Squadron (HMH) 772 is preparing to deploy
            its CH-53's and personnel with the 24th Marine Expeditionary
            Unit.
      --2nd Battalion, 23rd Marines serves as a ready reaction force in
            support of Homeland Security.
      --2nd Battalion, 25th Marines serves as an integral part of 2nd
            Marine Division.
      --Civil affairs and intelligence detachments are augmenting I and II
            Marine Expeditionary Force (MEF) staffs, along with detachments
            from our MEF Augmentation Command Elements.
        Our close partnership with the U.S. Navy has been evident in the
    mobilization process. When two platoons from Company B, 1st Battalion,
    23rd Marines were mobilized in early November, their Navy Reserve
    Program Nine corpsmen were mobilized on the same timeline and deployed
    with the Marines to Guantanamo Bay. This success from one of our first
    unit activations has carried over to subsequent activations and is
    directly attributable to the close coordination of our Marines and
    their Navy counterparts. Also, for the first time we have activated the
    Medical Augmentation Program, which provides active duty Navy personnel
    to support certain SMCR units.
        The ability of the Reserve to rapidly mobilize and integrate into
    the active component in response to the Marine Corps' operational
    requirements is a tribute to the dedication, professionalism and
    warrior spirit of every member of Marine Forces Reserve.
                           marines and their families
        Our future success relies firmly on the Marine Corps' most valuable
    asset--our Marines and their families. From provisional security
    platoons manning the fence line at the U.S. Naval Base, Guantanamo Bay,
    to a reaction force ready to respond to terrorist attacks on American
    soil, the men and women of your Marine Corps Reserve are ready, willing
    and able to answer the call to duty.
    Recruiting and Retention
        We need your continued support to attract and retain quality men
    and women in the Marine Corps Reserve. While we experienced a surge in
    prior service recruiting after Sept. 11, finding the right people to
    serve as Marines remains a challenging endeavor. This year our prior
    service recruiters were integrated with Marine Corps Recruiting Command
    (which has always had our non-prior service recruiting mission) to
    provide more synergy in our overall recruiting effort. Our mission is
    to find those potential Marines who choose to manage a commitment to
    their family, their communities, their civilian careers, and the Corps.
    While such dedication requires self-discipline and personal sacrifices
    that cannot be justified by a drill paycheck alone, adequate
    compensation and retirement benefits are tangible incentives for
    attracting and retaining quality personnel.
        During the past fiscal year we achieved 102 percent of our
    recruiting goals for both prior service and non-prior service Marines.
    It was not easy! Our retention rates for Reserve enlisted Marines who
    stay beyond their initial obligation are also improving. We do,
    however, still have some work to do in keeping non-prior service
    Reserve Marines in a satisfactory participation status for the full
    length of their obligated drilling commitment. The incentives provided
    by Congress, such as the Montgomery G.I. Bill (MGIB) and the MGIB
    Kicker (Kicker) educational benefits, enlistment bonuses, medical and
    dental benefits, and commissary and exchange shopping privileges, have
    helped us to attract and to retain capable, motivated, and dedicated
    Marines, which has contributed to the stability of our Force.
        The MGIB and the Kicker, which provide up to $600.00 per month for
    college, are our most popular incentives. But, they compete with more
    lucrative educational enticements offered by the National Guard. 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 it helped to level the field of competition
    between the Guard and the Reserve Component.
        Many of our Reserve Marines serve initially in the Active
    Component, which contributes significantly to our total force concept.
    We staff transitional recruiting stations at Marine Corps bases and
    stations to begin the prior service recruiting process before Marines
    leave active duty. Congressional support for increased educational
    benefits and reenlistment and affiliation bonuses in fiscal year 2001
    helped us attract these Marines to join and to stay in our units.
    During that year, not only did we exceed our enlisted accession goal,
    but unit attrition decreased by two percentage points to 27.1 percent,
    well within our target range.
        Maintaining overall SMCR end-strength at 39,558 (including 2,261
    Active Reserves) will ensure 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. The
    current Marine Forces Reserve force structure also reflects a small
    tooth-to-tail ratio with a minimal number of active duty personnel in
    support of a majority of deployable warfighters.
        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 who remain affiliated. The
    CMT staff provides record reviews and counseling, offers career
    guidance, and communicates 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 ADSW opportunities using the Reserve Duty
    On-Line (RDOL) database. RDOL replaces the Reserve Career Management
    Support System and allows units to advertise billet vacancies and ADSW
    opportunities and provides units with online visibility of Marines who
    are actively seeking Reserve career options. RDOL will also be the
    linchpin in our effort to leverage the civilian job skills of our
    Marines. We want to stratify the IRR to tap into skills not associated
    with traditional Marine Corps military occupational specialties but
    needed for special assignments. The RDOL will include the capability to
    capture and maintain data on civilian job skills, as well as allowing
    Reserve Marines to identify their periods of availability.
        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 Reserve Order Writing System (ROWS),
    fielded just last month, which integrates our orders request and
    writing systems and facilitates reconciliation of funding obligations,
    thereby expediting orders and travel processing for our Reserves coming
    on active duty. We actively participate in development of the Total
    Force Administration initiatives, a Marine Corps program to update and
    further automate our Manpower Management System.
        The U.S. Navy continues to directly support MARFORRES personnel
    readiness by providing over 2,700 medical, dental, religious, and naval
    gunfire support staff. I enthusiastically support the Navy plan to fund
    a full 15-day annual training for these sailors in fiscal year 2002 and
    out. Our joint training is essential to the successful accomplishment
    of our training and operational mission.
    Quality of Life
        Our Commandant has made it clear that combat readiness and personal
    and family readiness are inseparable. We are aggressively working to
    strengthen the readiness of our Marines and families by enhancing their
    quality of life (QOL).
        One of our top concerns is the provision of an affordable health
    care benefit for Reserve Marines as they transition to and from periods
    of active duty, which we believe is necessary to support the increased
    use of the Reserve. Switching into and out of TRICARE clearly adds to
    the burdens the families bear when the Reserve member is called away.
        Our many MARFORRES Marine Corps Community Services (MCCS) programs
    and services are designed and being developed to reach all Marines and
    their families regardless of geographic location; a significant and
    challenging undertaking considering the geographic dispersion of our
    Marines and their families throughout the United States and Puerto
    Rico. One area of which I am particularly proud is our Marine Corps
    Family Team Building program. During the past three years we have made
    a considerable commitment and investment in building, training, and
    supporting family readiness teams--comprised of Marines and
    volunteers--at sites and units across the Force. In short, these teams
    are vital to our family readiness efforts prior to, during, and after a
    deployment or mobilization. Our other MCCS programs include chaplain
    delivered retreats; physical fitness and healthy lifestyle programs;
    children, youth, and teen support; and continuing education programs
    just to name a few. Much work remains to extend MCCS programs and
    services to our unique Force, but even today MCCS is positively
    impacting our mobilization readiness.
        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 5,750 funerals in 2001 and we
    project to support approximately 7,000 funerals this year. The
    authorization and funding to bring Reserve Marines on active duty to
    perform funeral honors has particularly assisted us at sites like
    Bridgeton, MO, where we perform several funerals each week. We
    appreciate Congress exempting these Marines from counting against
    active duty end strength. Furthermore, as a result of the increase in
    funeral honors, we have realized increased operations and maintenance
    costs associated with vehicle maintenance and fuel for transportation
    of funeral honors duties and for the cleaning and maintenance of dress
    uniforms. Continued support for military funeral honors funding, in our
    Military Personnel and Operation and Maintenance accounts, is critical
    to ensuring mission success in this most worthwhile endeavor.
        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, the Corps, and the public that we
    serve, thereby strengthening our ethos of ``Once A Marine, Always A
    Marine.'' The Marine For Life program has entered the formal
    acquisition process and initial operational capability with at least 50
    Hometown Links across America will be achieved by this summer.
                               current readiness
        The general state of readiness in the Marine Corps Reserve today, I
    am happy to report, is good. This condition is attributable to the
    spirited ``can do'' attitude of our Marines, and increased funding in
    the procurement and operations and maintenance (O&M) accounts provided
    by the Congress in fiscal year 2002. Most important, we remain ready
    and prepared to augment the Active Component in support of standing and
    crisis action requirements.
        Maintaining current readiness levels into the future will require
    continued support as our equipment continues to age at a pace which,
    unfortunately, exceeds replacement. Within our Reserve aviation
    community our ``youngest'' platform is the UC-35 at 4 years, followed
    by the AH-1W Cobra at 9 years, CH-53E at 14 years, KC-130T at 16 years,
    F/A-18A at 18 years, and F-5 at 29 years. Our oldest platform and ones
    which have exceeded programmed service life include the UH-1N at 31
    years (20-year service life) and the CH-46E at 35 years (20-year
    service life with ``SR&M'' extension to 30 years). Maintaining these
    aging legacy platforms requires increased financial and manpower
    investment with each passing year due to parts obsolescence, higher
    rates of equipment failure, etc. Aircraft maintenance requirements are
    increasing at an approximate rate of 8 percent per year. For example,
    for every hour the CH-46 is airborne, it requires 37 man-hours of
    maintenance.
        The situation within our Reserve ground community, while not as
    dire as the aviation force in terms of nearing or exceeding service
    life, is a growing concern. The average age of our LVS fleet is 15
    years, LAV's are at 16 years, ROWPU at 17 years, HMMWVA1 at 17 years,
    5-ton trucks at 20 years, M-198 at 19 years, and AAV at 29 years. ROWPU
    has exceeded its programmed service life and our 5-ton trucks are at
    the end of their service life. Maintaining these aging legacy platforms
    requires increasing financial and manpower investments for the reasons
    cited earlier.
        In addition to equipment aging, O&M expenses are also being driven
    upwards by increasing equipment utilization rates brought about by
    greater integration and support to the Active Component, both in
    peacetime and more recently in support of the GWOT. Obtaining increased
    O&M funding is only part of the solution; we are also pursuing various
    measures internally to mitigate these trends focusing on better
    business practices. One example is transferring unit non-essential
    equipment to central storage locations for preservation and
    maintenance.
        One of our most immediate readiness challenges is providing
    adequate NBC protective equipment for our individual Reserve Marines.
    MARFORRES maintains NBC protective equipment in quantities sufficient
    to outfit the Force. Recently, however, a serviceability review
    resulted in a significant portion of the inventory being ruled
    unserviceable. The events of Sept. 11 and subsequent have justifiably
    elevated the importance of addressing this deficiency. The fiscal year
    2003 President's Budget does not include sufficient funding for this
    requirement; however, the Commandant has formally recognized this as a
    deficiency.
        We are thankful for and remain confident the additional funds
    provided by Congress in fiscal year 2002 will ensure the continuing
    readiness of the Marine Corps Reserve, and we seek your continued
    enthusiastic support in this President's Budget.
                                 infrastructure
        Investment in infrastructure has been a bill-payer for near-term
    readiness for most of the last decade. Maintaining and modernizing our
    training center infrastructure has become extremely challenging.
    MARFORRES units are located at 185 sites in 47 states, plus the
    District of Columbia and Puerto Rico. Over 75 percent of the reserve
    centers we are in are more than 30 years old, and of these, about 35
    percent are over 50 years old. Our costs for facilities operations and
    maintenance have increased 20 percent in less than three years. Rising
    infrastructure costs, largely beyond our control, challenge our finite
    resources.
        The present Military Construction, Naval Reserve (MCNR) backlog is
    $205 million. Our fiscal year 2003 President's Budget submission for
    Military Construction, Naval Reserve, $12.1 million, is slightly higher
    than the fiscal year 2002 enacted level. The fiscal year 2003 request
    addresses our most pressing requirements--$6 million for a new Reserve
    Training Center in Savannah, GA; $2 million for a tank maintenance
    facility in Syracuse, NY; and $4.1 million for a vehicle maintenance
    facility in Waco, TX. The overall condition of Marine Corps Reserve
    facilities continues to demand a sustained, combined effort of
    innovative facilities management, a proactive exploration of and
    participation in Joint Facility projects, and a well-targeted use of
    the construction program.
        After Sept. 11, we accelerated our Vulnerability Assessment
    program, completing a two-year effort in six months. This assessment
    identified $33.6 million in projects over the next three to four years
    to resolve anti-terrorism/force protection (AT/FP) deficiencies at the
    42 sites that we own or otherwise have responsibility for site
    maintenance. We will strive to fund these AT/FP requirements in the
    future.
                        modernization and transformation
        In recent years the Marine Corps has made a deliberate choice to
    fund current readiness over recapitalization and transformation. It is
    well documented that this practice has led to a downward spiral in
    which we annually invest more funds for operations and maintenance to
    maintain aging equipment leaving insufficient funds for new equipment
    procurement. Generating savings to reinvest in procurement, while
    essential for recapitalization and transformation efforts, should be
    accomplished with great care, with existing legacy systems scrutinized
    using a business and risk management approach.
        The following modernization priorities represent low investment/
    high pay-off capabilities, closely linked to Marine Corps operational
    concepts and doctrine, relevant to the combatant commanders, and
    essential to the survival of our Marines in combat.
    Modernization
                F/A-18A ECP-583
        Our top modernization priority remains unchanged from fiscal year
    2002: upgrading our fleet of 48 F/A-18A Hornet aircraft with
    Engineering Change Proposal (ECP)-583. This Marine Corps Total Force
    program encompasses 76 aircraft, including 28 Active Component
    aircraft. This ECP converts early lot, non-precision, day fighter/
    attack aircraft into F/A-18C Lot 17 equivalent aircraft capable of
    employing the newest generation of air-to-air and air-to-ground
    ordnance, including JDAM, JSOW, SLAM-ER, AIM 9X, capable of operating
    day or night. The ECP replaces the APG-65 radar with the APG-73, adds
    GPS to the navigation suite, replaces radios with ARC-210 and digital
    communication system (DCS), installs new mission computers and many
    other components.
        The Chairman, Joint Chiefs of Staff stated in recent testimony ``we
    need to find ways to modernize and integrate legacy systems where it
    makes sense.'' This initiative clearly makes good sense from a business
    perspective. For the relatively low cost investment of $4.3 million per
    aircraft, the combatant commanders will have access to an additional 76
    relevant war-fighting assets. Secondly, with numerous F/A-18C aircraft
    nearing service life limits, upgrading these aircraft helps to mitigate
    the DON's TACAIR downward inventory situation. Third, it is supportive
    of a goal outlined by the Secretary of Defense in recent testimony--to
    move our military forces from unguided munitions to combat formations
    armed with precision-guided capabilities.
        Congress has funded 52 aircraft ECP-583 upgrades through fiscal
    year 2002 with 24 remaining unfunded (2 AC/22 RC). The fiscal year 2003
    President's Budget funds $11.7 million. We seek to accelerate program
    completion and request your support.
                CH-53E Helicopter Night Vision System
        Our second modernization priority also remains unchanged from
    fiscal year 2002: upgrading our fleet of 21 CH-53E helicopters with
    Helicopter Night Vision Systems (HNVS). This Marine Corps Total Force
    program encompasses 153 aircraft, including 132 Active Component
    aircraft. The primary component of the HNVS is the AN/AAQ-29 Forward
    Looking Infrared (FLIR). HNVS ``expands the envelope'' by providing
    improved night and all-weather capability. The importance of having a
    robust and capable heavy lift capability has been on display in
    Afghanistan where the Corps' CH-53E's transported 15th and 26th
    MEU(SOC) Marines and supplies hundreds of miles inland to austere
    operating sites. Our expeditionary nature will lead us to equally
    challenging environments in the future. To operate effectively and
    within safe margins mandates our CH-53E's be equipped with HNVS.
    Congress has funded 72 HNVS through fiscal year 2002 with 81 remaining
    unfunded (70 AC/11 RC). The fiscal year 2003 President's Budget funds
    $1.2 million (2 HNVS). We seek to accelerate program completion and
    request your support.
                Initial Issue Equipment
        On the ground side, next to NBC protective equipment, our most
    important priority concerns the need for adequate initial issue
    equipment for our individual Reserve Marines. Individual issue
    equipment includes body armor, cold weather items, tents, and modular
    lightweight load-bearing equipment (MOLLE). Every unit assigned to
    MARFORRES may be called upon, as indeed some of our units already have
    been, to support the GWOT. Equipment shortfalls could lead to delays in
    deploying mobilized Marines. The fiscal year 2003 President's Budget
    provides $9.6 million which funds part of the deficiency.
    Transformation
        As directed by QDR-01, we are participating in the comprehensive
    review of Reserve forces. In the process we will look at possible new
    missions and organizations for our Reserve force to better integrate
    with the Active Component in support of the National Military Strategy.
    We conducted a similar internal review in 2001 at the direction of our
    Commandant. Regardless of what changes may result, we know that certain
    challenges will remain.
                                   conclusion
        The Marine Corps Reserve is ready, willing and able to answer our
    Nation's call to duty in the Global War on Terrorism, as has been so
    well demonstrated by the mobilization and integration of Reserves into
    the Active Component. However, our readiness has come at the expense of
    investment in our infrastructure and modernization. Congress'
    consistent and steadfast support has directly contributed to our
    success. The Marine Corps appreciates your continued support and
    collaboration in making the Marine Corps and its Reserve the Department
    of Defense model for Total Force integration and expeditionary
    capability.

        Senator Inouye. Gentlemen, I assure you that all your
    prepared statements will be made part of the record and your
    exhibits will be placed on our file.
        Before proceeding, I would like to note that the Chief of
    the Army Reserve, Lieutenant General Plewes, this may be your
    last appearance, after having served for 35 years. On behalf of
    the Senate, I thank you very very much for the service you have
    rendered to all of us. We appreciate it very much.

                             PRIVATE SECTOR SUPPORT

        General Plewes. Thank you, Mr. Chairman.
        Senator Inouye. At the time of 9/11 the level of support in
    the private sector was exceedingly high. Has that level of
    support continued, can you tell me?
        General Plewes. Let me just start off by saying yes, it has
    not only been high, but it's remarkably much higher than we saw
    for example during Desert Storm. I think in large part, people
    do understand that this is a war on terrorism that's very close
    to home.
        We have over 200 employers both in the private sector and
    Government sector who are doing things that they did not do
    before, such as making up the difference in pay for our
    reservists who have been called up. That's much larger than
    anything we have seen before. So, there is a ground swell of
    strength.
        The question that was discussed with the previous panel I
    think is a valid one, and that is, as this goes on can we
    sustain that level? I think for some time you can if we do this
    wisely and we make it known that the call-ups are of a definite
    duration, and perhaps get into the business of giving them
    further advance notification of call-ups. We have done things
    very easily so far, and I think we can retain that level of
    support.
        Senator Inouye. Admiral.
        Admiral Totushek. My evidence is that we have ongoing
    support from our employers, the same kinds of evidence that
    General Plewes talked about. I think the issues are to continue
    to communicate with them, to make sure they understand that we
    are going to need a level of support from the Reserve for some
    time, and then the key is to get people back just as soon as we
    don't need them any longer.
        Senator Inouye. General Sherrard.
        General Sherrard. Yes, sir, I echo those comments. Sir, I
    would tell you also, equally important to note is the number of
    State and local municipalities who, in fact, have taken steps
    during this particular activation to provide support to their
    members.
        But I also would like to go back to something the first
    panel said too. We will need to be very careful as we start the
    demobilization process, to do it in a time phased fashion that
    protects the members as well as not jeopardizing the great
    support that those employers have given to us to date. That
    will take some very careful planning on our part and we are
    postured to do that today and it really requires close close
    communication and that will be the key to success.
        Senator Inouye. General McCarthy.
        General McCarthy. Senator, I would like to join in all of
    those remarks and my experience is the same.
        I just point out that in the Marine Corps Reserve, about 40
    percent of our enlisted marines are college students, and one
    of the things that we are seeing this time that we didn't see
    in 1990 as much is great support by educational institutions in
    supporting the young men and women who have to leave school
    because they are mobilized. That has really been gratifying and
    we have expressed our thanks to a lot of institutions who have
    supported our students in that way. We talk about employers,
    sometimes we forget about educational institutions.

                                   RECRUITING

        Senator Inouye. I think it's becoming very apparent that
    this war on terrorism, that it will be a bit longer than some
    have anticipated, and I note that two of you have indicated
    you're having problems on recruiting. What can this committee
    do to alleviate that problem?
        Admiral Totushek. I think one of the big things we need to
    do as a Nation is to continue a robust advertising campaign for
    all the military. It seems that our country, and actually I
    think 9/11 brought us into a sense of reality about what it is
    going to take to protect our country in the future, but I think
    we need to continue with a robust advertising campaign, and I
    frankly don't think we are quite at the levels we need to be.
        Senator Inouye. Will the campaign for the regular help the
    reserves too?
        Admiral Totushek. Yes, sir. I think that the message needs
    to be that we need people both full-time and part-time, and
    that message needs to be gotten across all the components.
        Senator Inouye. Anybody else?
        General Sherrard. Yes, sir. Sir, I would tell you that that
    is very important, but also I think we need to make certain
    that we look for advertising capability that supports our
    independent components, because of where we are localized and
    that is one of the key points for the Air Force Reserve in
    particular, is that you're recruiting for a local area, and
    while you may try to have a nationwide campaign, the fact that
    the members do not have that much flexibility to travel to and
    from.
        And the other I would tell you is that, which the committee
    was so gracious in the recent past to give us some additional
    recruiters, it's key that we retain those and work very hard to
    keep that force going. The smaller size of the active force,
    the smaller size of the members of the active force that can
    separate, certainly will impact on the numbers of prior service
    members, which as Admiral Totushek mentioned earlier, we both
    really rely on that ability and that number of members to come
    into our force. It's going to be important that we have the
    advertising capacity to reach out and touch all those areas.
        General Plewes. Sir, if I could just add there, the Army
    National Guard is having great success this year in our
    recruiting and in our retention and we are in fact at this
    moment over strength. And we have asked our recruiters if you
    will, to slow down our recruiting and turn their attention to
    helping the active service build its delayed entry program.
        So we don't have that problem this year, I'm not quite sure
    about the future, but we clearly need to have the underpinning
    of a strong basis of advertising and it needs to be conducted
    on a team basis.

                                  HEALTH CARE

        Senator Inouye. Do we have any health problems with the men
    and women who have been mobilized? I notice you have indicated
    that there are companies in the private sector that make up
    difference in pay for some. Do some provide health care
    coverage? What about the rest of them?
        General Plewes. My assessment is that the health issues, at
    least in the Army Reserve, is much better than it was 10 years
    ago, and that's the only basis of experience I have. During
    Desert Storm we lost somewhere between 20 and 25 percent of
    soldiers because of family problems, and now it's down to about
    9.9 percent, so it's much better off. We are particularly doing
    a better job of educating our soldiers.
        I think that there is more things that we can do still. We
    still have a huge problem in the dental area. We don't have
    good dental care programs, and where there's insurance
    available, it's not a strong program, I don't believe. So we
    need additional help in the dental area. We still have too many
    soldiers who show up with dental problems.
        Admiral Totushek. We're finding that as far as health care
    is concerned, that the people that are the most disadvantaged
    by the current program are those people that are remote and the
    ones that are on active duty. So as we mobilize people from
    areas where you don't have a large TRICARE community, educating
    basically the healthcare providers in that area about TRICARE,
    a lot of them just don't want to bother with bureaucracy, it's
    one of the most difficult ones for the provider to be able to
    make its claim through, they basically push back on us. So
    that's the biggest problem I see concerning health care.
        General Sherrard. Sir, if I might, one of the concerns that
    we have seen in our activation are in fact the period that
    we're asking the members to be activated, which then drives
    them to a particular type of medical care that their families
    are being provided. And I will share, as John just mentioned,
    those that live in remote areas have experienced some
    difficulty in finding some of the proper care.
        We have had a very small number of cases, and I mean
    literally one or two where we have had some fairly catastrophic
    health problems with one of the family members of an airman
    that was activated. We have been working with the current
    system to provide that protection and I will tell you that the
    employers, again, have been very very supportive and they have
    sustained that medical support for that member so that we did
    not put that family in harm's way or that particular individual
    in harm's way and jeopardize their health.
        General McCarthy. I would just add, Senator, the support of
    employers has really been good but as we brought more people
    into the TRICARE system from home communities where the member,
    the Marine may be off to Camp Lejeune where the coverage is
    great but his family is still in Columbus, Ohio, and I'm not
    picking on Columbus except that I'm from there, but you know,
    someplace where TRICARE is not a big provider, we have seen
    more and more issues raised.

                         ADDITIONAL COMMITTEE QUESTIONS

        And those are the kind of things we saw before mobilization
    with our inspector instructor staffs, the active duty members
    who support a reserve unit. Now we're seeing it increasing
    somewhat with reserve families who are being brought into the
    TRICARE system. So we really do have some work to do, but the
    Office of the Secretary of Defense in their mobilization policy
    really did some good things with regard to TRICARE. I applaud
    their efforts and I agree with the first panel, I think people
    are working hard on this, but we have a ways to go.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
           Questions Submitted to Lieutenant General Thomas J. Plewes
               Question Submitted by Senator Christopher S. Bond
                       biological detection capabilities
        Question. I am very interested in the Army Reserve's biological
    detection capabilities given America's ongoing War on Terrorism and the
    current world situation. I understand the Army Reserve will activate a
    biological detection unit in Missouri during 2003. For the record,
    please explain the Army Reserve's current and planned future biological
    detection capabilities, suggest how the activation of the Missouri
    biological detection unit will impact current capabilities for
    supporting homeland security and global missions, indicate whether or
    not the unit's biological detection equipment will be fully funded in
    fiscal year 2003, and recommend how this Subcommittee might best assist
    the Army Reserve with its biological mission?
        Answer. Currently the Army Reserve Biological detection capability
    has one Biological Detection System (BIDS), the 310th BIDS Company,
    located at Fort McClellan, Alabama. This unit consists of 186 personnel
    and has 35 biological detectors in the BIDS Non-Developmental Item
    Configuration and has the capability of detecting 4 Biological agents
    in 45 minutes.
        Future Army Reserve plans call for a total of 11 biological
    detection companies. Seven of the companies will be comprised of Army
    Reservists and the other four will be multi component companies that
    will include Army Reserve and Active Component soldiers. The remaining
    units will be activated between fiscal year 2003 and fiscal year 2009.
    All of the units are programmed to be equipped with the Joint
    Biological Point Detection System (JBPDS) that is capable of
    identifying 10 agents in 15 minutes.
        The first unit to be fielded with the JBPDS will be the 375th BIDS
    Company, in St. Louis, Missouri. This unit will participate in Homeland
    Security (HLS), small scale contingencies, and major combat operations.
    It will cost approximately $42 million to activate this company. The
    JBPDS BIDS program is only partially funded; there is a $28 million
    shortfall requirement to fully equip this unit to maximize its
    readiness. The activation of this unit will set the standard for all
    future Active and Reserve bio detection units.
                                     ______

              Questions Submitted by Senator Kay Bailey Hutchison
                strategic storage of equipment for army reserve
        Question. I understand that the Army Reserve conducted a detailed
    analysis of its equipment maintenance and storage program and that they
    are presently implementing key elements of the program. Can you explain
    the results of the study, the concept for strategic storage of
    equipment, and the technology that it employs to mitigate the threat of
    moisture-induced corrosion?
        Answer. The Army Reserve completed an extensive study that examined
    issues critical to sustaining and maintaining its $5.7 billion of
    equipment. The purpose of this study was to look at where Army Reserve
    logistics is and to gain a better understanding of how to move the
    Army's largest combat support element into the future. The findings of
    this study, which looked specifically at the 77th Regional Support
    Command in New York and New Jersey, provided scientific recommendations
    on how the Army Reserve can implement better business practices,
    outsource some logistics services while leveraging our core
    competencies, redesign and modernize Equipment Concentration Sites and
    Area Maintenance Support Activities, leverage automation technology,
    and establish Strategic Storage Sites.
        Controlled Humidity Protection (CHP) technology was one of the key
    elements in the redesign of our Equipment Concentration Sites and the
    establishment of Strategic Storage Sites. CHP technology in equipment
    storage facilities not only has the potential for greatly reducing the
    cost to maintain the equipment, but it can also improve our ability to
    be a strategically responsive and ready force.
        We believe that this concept of strategic storage which is
    essential to achieve strategic responsiveness is oriented towards
    supporting Army Transformation. A complex methodology to identify
    equipment assets required for unit training readiness and those assets
    only needed to support wartime authorizations has been implemented.
    This will involve placing only wartime assets into CHP facilities that
    are strategically located near major seaports and metropolitan areas.
    This concept allows 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 strategic
    responsiveness.
        Question. Most importantly, has the General Accounting Office or
    any other government audit agency looked at the return on investment
    from such a program?
        Answer. The General Accounting Office looked at the use of
    Controlled Humidity Protection (CHP) 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.
            increase of full-time support of army guard and reserve
        Question. I recall that the Army validated the need to increase
    Full-time Support (Active Guard/Reserve plus Military Technicians) to
    improve Army Reserve unit readiness and established ramps to climb to
    the ``high-risk'' threshold of these requirements. What is the annual
    requirement to support this increase?
        Answer. First, let me say that the Army Reserve appreciates the
    support that they received from Congress last year with Full-time
    Support (FTS). The Active Guard/Reserve (AGR) ramp is projected to last
    until fiscal year 2011 when it is expected to reach through the ``high
    risk'' threshold of 16,263 endstrength. The current AGR endstrength is
    13,406 which is 2,675 below the Army's validated requirement. The Army
    Reserve has an $11.4 million shortfall for the fiscal year 2003 portion
    of the ramp and a $28.9 million shortfall to pay for the 13,588
    soldiers requested. The annual funding requirement for 300 AGRs is:
    $11.4 million for fiscal year 2003, $13.5 million for fiscal year 2004,
    $14.2 million for fiscal year 2005, $14.6 million for fiscal year 2006,
    $15.1 million for fiscal year 2007, $15.7 million for fiscal year 2008,
    and $16.2 million for fiscal year 2009.
        The fiscal year 2002 Army Reserve Military Technicians (Miltechs)
    endstrength is 7,344 which is 1,646 below the Army's validated
    requirement of 8,990 Miltechs. To alleviate this shortfall, the Army
    established a nine-year ramp to achieve the ``high-risk'' full-time
    manning (FTM) levels by fiscal year 2009. Congress recognized the
    severity of this shortfall and responded in December 2001, by
    allocating an increase of 250 Miltechs for fiscal year 2002 in the
    fiscal year 2002 National Defense Authorization Act, but only
    authorized funding for this increase in fiscal year 2003 and fiscal
    year 2004. The annual funding requirement for 250 Miltechs is: $8.0
    million for fiscal year 2003, $8.0 million for fiscal year 2004, $8.1
    million for fiscal year 2005, $8.3 million for fiscal year 2006, $8.6
    million for fiscal year 2007, $8.9 million for fiscal year 2008 and
    $5.4 million for fiscal year 2009.
        Question. How long are the ramps projected to last and what portion
    has the Army funded?
        Answer. The Army Reserve ramp is projected to last until fiscal
    year 2011 for the Active Guard/Reserve soldiers (AGRs) and fiscal year
    2009 for the Military Technicians (Miltech). The Army intends to fully
    resource the ramp in fiscal year 2004-09 during this programming cycle.
    Congress has resourced the fiscal year 2001-02 Ramp by adding 598 AGRs
    and adding 900 Miltechs. Fiscal year 2003 is currently pending
    Congressional mark. The endstrength goal is 16,263 AGRs and 8,990
    Miltechs.
                        equipment status of army reserve
        Question. I am well aware of the relevance of the Army Reserve and
    the truism that the Army cannot perform its mission without the Army
    Reserve. The very structure of the Army demands that the Army Reserve
    remain constantly ready to support the active forces across the entire
    spectrum of operations. What equipment shortfalls are severely
    hampering the Army Reserve's ability to accomplish this mandate?
        Answer. I would like to thank the Committee for helping to address
    our equipment shortfalls. The Army Reserve is ready to serve in the
    ongoing war on terrorism thanks to your commitment to fund equipment
    requirements. As you know, the Army Reserve's core competencies, combat
    support (CS) and combat service support (CSS) are equipment dependent.
    This emphasis on equipment focuses on our role in the Army's
    Transformation and the Army's war fight. While we have many items of
    required equipment that enable us to do our mission, our effectiveness
    is dependant on our ability to achieve our modernization goals.
        Key CS/CSS systems are critical to the Army Reserve's ability to
    meet the full range of missions. Shortages of distribution platforms
    such as tactical vehicles and materiel handling equipment impede rapid
    force projection. The Family of Medium Tactical Vehicles (FMTV), Rough
    Terrain Cargo Handlers (RTCH), High Mobility-Multipurpose Wheeled
    Vehicles (HMMWV), 22.5 Ton Semi-Trailer, Heavy Expanded Mobility
    Tactical Trucks (HEMTT), Palletized Load Systems (PLS), All-Terrain
    Lifting Army Systems (ATLAS), All-Terrain Cranes (ATEC), and Theater
    Support Vessels (TSV) are systems that are critical to maneuver
    sustainment.
        Shortfalls in logistics automation Standard Army Management
    Information Systems (STAMIS) such as the Global Combat Support System
    (GCSS)-Army, the Transportation Coordinator Automated Information for
    Movements System Two (TCAIMS II), and Movement Tracking System (MTS)
    degrade efficient logistic support and prevent total asset visibility.
    Major shortages also exist in petroleum and water distribution systems
    and communications equipment such as the High Frequency Radio. In
    systems that provide maneuver support to our combat forces, the Army
    Reserve's capability is degraded by shortages of Biological Integrated
    Detection Systems (BIDS), Deployable Medical Systems (DEPMEDS),
    Tactical Fire Fighting Trucks (TFFT), tactical bridging, night vision
    devices and force protection vehicles such as Up-Armored HMMWV's. The
    fielding of these new distribution platforms and logistics automation
    systems coupled with the recapitalization of existing legacy systems
    allows the Army Reserve to meet the deployment vision outlined by the
    CSA.
        Question. What is being done to address these shortfalls?
        Answer. The Office of the Chief, Army Reserve works closely with
    Headquarters, Department of the Army to ensure that equipment
    requirements for the Army Reserve are recognized and incorporated into
    planned procurements. New procurement for many Army Reserve shortfalls
    is identified in the P-1R, an exhibit to the President's Budget. This
    Army procurement plan must be monitored closely to ensure proper
    execution. The greatest risk facing the Army Reserve in support of the
    National Military Strategy is the potential deferment of key combat
    support (CS) and combat service support (CSS) procurement programs
    identified in the P-1R over the Future Years Defense Program (FYDP).
        Due to limited resources, equipping and modernizing of the Army
    Reserve remains a challenge. In the last ten years, the Army Reserve
    has averaged less than 6 percent of the annual Service Procurement (P-
    1R) Projection. Additionally, the balance of dollars expended favors
    funding major combat weapon systems, thus promoting an acquisition
    philosophy that severely affects the capability of the Army Reserve to
    fulfill its wartime mission. At the same time the Army Reserve provides
    31 percent of the CS and 45 percent of the CSS assets at echelons above
    corps to support the warfight. The Army Reserve requires a steady state
    funding rate commensurate with projected requirements to curtail the
    erosion of readiness and to ensure interoperability.
        Currently, the Army Reserve is short $2.1 billion of mission
    essential equipment with a large portion of the on-hand equipment well
    past the Economic Useful Life (EUL). This figure only depicts current
    shortfalls; it does not modernize the Army Reserve. For example, to
    move to the objective requirement for High Mobility Multi-purpose
    Wheeled Vehicles (HMMWV) our Force Packages 1 and 2 units require
    additional funding of $66 million with the total for all Force Packages
    at $431.4 million.
        The logistics modernization strategy must focus on developing and
    procuring systems that provide the key capabilities for soldier and
    weapon systems they will support, i.e., increased mobility,
    survivability, and agility. Significant reductions in the logistics
    footprint will not be attained unless key CS and CSS enablers are
    procured in sufficient quantity to support the plan.
                       family of medium tactical vehicles
        Question. General Tommy Franks has recently testified on the need
    to maintain the Army's combat systems and combat systems support base.
    He described several systems that he deemed were ``of particular
    interest to the Command.'' One program he mentioned is the Family of
    Medium Tactical Vehicles (FMTV). I am told that the Army Reserve has
    only 287 two and a half ton FMTVs on hand against a requirement of more
    than 13,000 new trucks and that there is an urgent requirement for $151
    million for all versions of FMTV Trucks for the Guard and Reserve. What
    is the specific requirement for these vehicles?
        Answer. The current Army Reserve requirement for the Family of
    Medium Tactical Vehicles (FMTV) is 13,148. Currently there are 291
    vehicles in the Army Reserve inventory, leaving a shortfall of 12,857.
    The 13,148 total includes multiple variants of both the Light Medium
    Tactical Vehicle (LMTV) requirement of 4,433 and the Medium Tactical
    Vehicle (MTV) requirement of 8,715. The projected fielding of the FMTV
    between now and fiscal year 2009 includes 4,616 vehicles, leaving a
    projected shortfall of 8,532.
        The FMTV consists of a common truck chassis that adapts to several
    configurations. The vehicle is available in a both a van and cargo
    version and offers a 2.5T and 5T payload capacity. The FMTV supports
    Army Transformation replacing over-aged, maintenance intensive, World
    War II era designs with modern, state-of-the-art technology that is
    fully interoperable with Active Component equipment. The FMTV performs
    line haul, local haul, mobility, supply and other Combat Support and
    Combat Service Support (CS/CSS) missions. FMTV can operate worldwide on
    primary and secondary roads and trails in support of all Army
    operations.
        Question. If Congress can find the money to fund this requirement,
    what will the Guard and Reserve be able to do that they cannot do now?
        Answer. The Active Guard/Reserve represents over 80 percent of the
    Army's total transportation force structure. The Family of Medium
    Tactical Vehicles (FMTV), a critical equipment component for Army
    Transformation, allows the Army Reserve to more effectively meet
    mission requirements by offering reduced Operational and Sustainment
    costs, full interoperability with Active Component equipment, a reduced
    logistics footprint, and increased deployability. Although the FMTV's
    payload capacity is the same as existing equipment, onboard
    diagnostics, ultra-reliable and common parts, and increased off-road
    capability provide units with nearly 100 percent mission availability
    rates, making the vehicle more effective than existing equipment.
        Additional funding for the procurement of Medium Tactical vehicles
    directly enhances unit readiness by increasing interoperability and
    capability of Army Reserve units to support overall mission
    requirements. The average age of our current Light-Medium Tactical
    Vehicle fleet is approximately 28 years or 13 years past its Economical
    Useful Life (EUL). Many of our trucks are approaching 40 years old.
    Without funding, the Army Reserve will continue to operate aging
    equipment resulting in increased maintenance costs and reduced mission
    capability/deployability. As such, the FMTV is critical in mitigating
    serious readiness issues.
                                     ______

               Questions Submitted to Vice Admiral John Totushek
               Questions Submitted by Senator Christopher S. Bond
        Question. The recently released ``National Guard and Reserve
    Equipment Report for Fiscal Year 2003'' projects Reserve Component
    equipment shortages of over $15 billion next year. With the country
    relying heavily on its RC's to fight the War on Terrorism, we could be
    sending our NG and RC members into combat without the best tools to
    maximize safety and success.
        VADM Totushek, I have been briefed that the ``National Guard and
    Reserve Equipment Report for Fiscal Year 2003'' projects a Reserve
    Component shortfall of over $15 billion next year, with over $2 billion
    in the Naval Reserve. This deeply concerns me because of the degree in
    which we're relying on our NG and Reserve Components in the war. If we
    send forces into war with older, less-modern equipment we could be
    putting them into danger needlessly. VADM Totushek, please give us your
    top three examples of unfunded equipment and explain any adverse
    effects on the war effort that they might create if left unfunded?
        Answer. If additional funding were to become available for Naval
    Reserve equipment modernization, our top three priorities would be:
        (1) C-40A Procurement.--Replacement of twenty-seven aging C-9B and
    DC-9 aircraft with the C-40A aircraft (Boeing 737-700). Without funding
    for the C-40A, the Naval Reserve will be forced to operate the aging
    and less capable C-9B/DC-9 transport aircraft (average age of over 28
    years) and eventually will be excluded from air space as Global Air
    Traffic Management/Communication, Navigation and Surveillance
    requirements and noise reduction mandates are instituted around the
    world. To date, six aircraft have been funded.
        (2) P-3 BMUP/AIP Modifications.--Upgrade of the Reserve P-3C
    aircraft with the Block Modification Upgrade Program (BMUP) and/or
    Aircraft Improvement Program (AIP) would make the Reserve P-3 force
    common with the active P-3 force. BMUP is common with the P-3C Update
    III configuration, and this commonality has capability, training and
    logistics benefits. Without AIP installed, the Naval Reserve's P-3C
    aircraft are less relevant and less capable in comparison to active
    component aircraft and therefore are less demanded by the warfighter.
    Thirteen BMUP aircraft are required to achieve an all Update III
    Reserve force. Further, some of the Reserve Update III aircraft need
    conversion to AIP, including funding for the non-recurring engineering
    required to convert a BMUP aircraft to the AIP configuration. To date,
    the Naval Reserve has twenty-nine Update III configured aircraft, of
    which eight are BMUP aircraft and two are AIP capable.
        (3) Naval Coastal Warfare Equipment.--Procurement of small boats
    and other table of allowance equipment and supplies to support the
    forty-five units of the Naval Coastal Warfare force. Many NCW units are
    currently deployed throughout the world in support of the war effort.
    These units provide coastal surveillance and force protection support
    to bases and other Navy operating areas around the world. Without
    additional funding, the readiness of these units will be reduced and
    future sustainment jeopardized.
        Question. Starting in fiscal year 1997, the Congress made a
    conscious attempt to reduce miscellaneous National Guard and Reserve
    Equipment (NGRE) allocations with the intent to force the services to
    start funding Reserve equipment requirements from their own budgets.
    The Navy budget has consistently fallen short of this goal and, as a
    result, the Naval Reserve has a $2.1 billion equipment shortfall in
    fiscal year 2003.
        VADM Totushek, starting in the fiscal year 1997 Defense
    Appropriations Bill, the Congress directed the services to start
    funding Reserve Component equipment requirements from their own service
    budgets. How has the Navy funded your equipment requirements? Were your
    requirements better addressed through the miscellaneous NGRE Account
    than through the current service budget process?
        Answer. As the National Guard and Reserve Equipment Appropriation
    (NGREA) has been reduced from $200 million in fiscal year 1997 to just
    $10 million in fiscal year 2002, the Navy, because of higher priority
    Active component requirements, has been unable to correspondingly
    increase its Reserve Component's procurement funding accounts to offset
    for the NGREA decrease. The result is that with the dramatic reductions
    in NGREA, the Naval Reserve has less funding to support its many
    equipment modernization and recapitalization requirements.

                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                       1997    1998    1999    2000    2001    2002
    ----------------------------------------------------------------------------------------------------------------
    NGREA...........................................................   199.7    78.7    60.0    19.9     5.0     9.9
    P-1R............................................................    11.7    32.0    34.0   105.9    17.1    21.9
    ----------------------------------------------------------------------------------------------------------------

        Question. The Naval Reserve moved a Mobile Inshore Undersea Warfare
    (MIUW) Unit from Kansas City to Whiteman Air Force Base last year. This
    MIUW is in the process of becoming the first unit to receive the
    Littoral Surveillance capability to receive, process, and display, in
    real-time, data received from national, theater, and tactical sensors
    to interface with naval command, control, communications, computers,
    and intelligence and weapons control systems. It can be deployed
    onboard a ship or deployed to a remote location to support operations
    plans or crisis response.
        VADM Totushek, I understand that the first Littoral Surveillance
    System is to be located at Whiteman Air Force Base in Missouri. What is
    its current status? How do you envision the system being used to
    support the War on Terrorism?
        Answer. Mobile Inshore Undersea Warfare (MIUW) Unit 114 moved from
    Kansas City to Whiteman Air Force Base last year. The Littoral
    Surveillance System (LSS) equipment for the unit is currently awaiting
    a modification at the Northrup Grumman facility in Baltimore and should
    be completed during fiscal year 2003. The LSS unit will be shipped in
    the Summer of 2003 after the new secure facility for MIUW 114 is
    completed.
        Question. Does it have any role in homeland defense/security?
        Answer. The Littoral Surveillance System (LSS) may play a role in
    the war on terrorism and also support homeland defense/security. LSS is
    a Navy program developed to provide a robust end-to-end capability to
    receive, process, and display, in real-time, data received from
    national, theater, and tactical sensors. It also has the capability to
    interface with naval command, control, communications, computers, and
    intelligence and weapons control systems. It may be deployed onboard a
    ship or deployed to a remote location to support operations plans or
    crisis response. As a land based, portable version of the Naval Fires
    Network, it is likely to play a prominent role in future operations,
    including the war on terrorism and homeland defense/security.
                                     ______

              Questions Submitted by Senator Kay Bailey Hutchison
                        c-40 aircraft for navy reserves
        Question. VADM Totushek, as you are well aware, the cargo carrying
    capacity of the much relied upon Navy Reserve aircraft is becoming more
    and more limited because of the aging of the C-9 fleet. To address this
    concern, the Navy has begun to procure new C-40 aircraft to eventually
    replace these aging airframes. In fact, these C-40s are being heavily
    relied upon to support the ongoing operations overseas because the C-9
    has severe structural and avionics limitations to conduct these
    overseas operations. I know that VR-59 at NAS JRB Fort Worth received
    the first three of these C-40 aircraft for the Naval Reserve. However,
    VR-59 has a requirement for four aircraft. When can the squadron expect
    to receive its fourth aircraft?
        Answer. The squadron did in fact receive a fourth aircraft last
    year. That aircraft was later transferred to VR-58, in Jacksonville, FL
    to stand up a second C-40 squadron to better serve the needs of the
    Navy. It is not yet known when VR-59 will ultimately receive its fourth
    and final C-40 aircraft as the Naval Reserve Basing Plan calls for the
    remaining five C-9 squadrons to transition to C-40 aircraft (3 per
    squadron) first.
        Question. Since the Navy Reserve has only procured six C-40s to
    replace the 27 C-9s in its inventory, what is the plan to acquire
    additional C-40s?
        Answer. Four additional C-40A aircraft are presently programmed for
    the Naval Reserve in the FYDP (three in fiscal year 2006 and one in
    fiscal year 2007). Twenty-one additional C-40s are required to
    modernize the Naval Reserve Logistics (VR) Force. Navy recognizes this
    requirement and is doing its best to fund additional aircraft in light
    of competing demands.
                        fa-18a aircraft in navy reserve
        Question. Vice Admiral Totushek, Fighter Attack Squadron 201, based
    at NAS JRB Fort Worth, is one of three Naval Reserve squadrons
    requiring an avionics upgrade to be able to deliver precision-guided
    munitions. Without this upgrade, this squadron will not be compatible
    with the rest of the Navy's carrier based fighters and hence will not
    be fully capable of performing its strike, close air support, and air
    combat missions. What is the status of the program and when are your
    squadrons scheduled to receive this upgrade?
        Answer. VFA 201, 203, and 204 are the Naval Reserve F/A-18A Hornet
    squadrons that provide strike fighter support to the Fleet. The
    squadrons conduct carrier-based strikes, provide close air support, and
    carry out air combat operations. Engineering Change Proposal (ECP) 560
    consists primarily of avionics and hardware upgrades, which allow the
    F/A-18A to process and utilize the updated versions of the F/A-18C
    software and accessories. After modification, the resulting F/A-18A+
    aircraft have the same warfighting capabilities as Lot 16 (pre-Radar
    Upgrade) F/A-18C aircraft, which are seven years newer. This ECP
    enables the F/A-18A+ aircraft to employ all current and future planned
    air-launched weapons. Further, this ECP enhances operational and
    logistics commonality between the F/A-18A and C aircraft, reducing the
    logistics tail and solving many current obsolescence issues. Finally,
    to the operational commander it becomes a single point solution.
        Under the current funding profile Fighter/Attack Squadron 203
    (Atlanta) will complete the ECP-560 modification in July 2002 and
    Fighter/Attack Squadron 204 (New Orleans) is scheduled to be complete
    in August 2003. At the present time, the ECP-560 upgrade for Fighter/
    Attack Squadron 201 (Fort Worth) remains unfunded.
        Question. If a squadron does not receive this Boeing Engineering
    Proposal 560 upgrade, what missions will these aircraft be capable of
    performing and what on missions will they be realistically employed?
        Answer. Because of their limited warfighting capabilities, the
    operational CINCs chose not to use F/A-18A aircraft in Operation Allied
    Force. F/A-18A's saw limited combat operations during Operation
    Enduring Freedom. That is because without the ECP-560 upgrade, the
    aircraft is unable to perform the full range of mission requirements
    specified by the operational CINCs.
        Without ECP-560 upgrades, F/A-18A aircraft are unable to drop
    precision weapons such as the Joint Direct Attack Munition (JDAM),
    Joint Stand-Off Weapon (JSOW), or launch the AIM-120 AMRAAM missile. In
    addition, unmodified aircraft would lack the HAVEQUICK radio that
    employs frequency hopping or anti-jamming technology. Having this
    capability is critical to operating in the combat zone.
        The bottom line is that without the ECP-560 upgrade and as
    ``legacy'' weapons are phased out, the F/A-18A will no longer be
    operationally relevant nor an employable asset for the CINCS.

                              SUBCOMMITTEE RECESS

        Senator Inouye. Thank you. General Plewes, we wish you a
    very happy and productive future. Gentlemen, we thank you very
    much for the testimony, and we will stand in recess until we
    meet on May 1 at 10 a.m. to receive testimony concerning the
    fiscal year 2003 budget request of the Department of the Navy.
        [Whereupon, at 11:58 a.m., Wednesday, April 24, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    May 1.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2003

                                  ----------

                             WEDNESDAY, MAY 1, 2002

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:06 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Daniel K. Inouye (chairman)
    presiding.
        Present: Senators Inouye, Stevens, Cochran, and Hutchison.

                             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 Inouye. The committee is pleased to welcome the
    Secretary of Navy, the Honorable Gordon England; the Chief of
    Naval Operations, Admiral Vernon Clark; and the Commandant of
    the Marine Corps, General James Jones. Thank you for being here
    this morning.
        When we met in this forum last year, it was under very much
    different circumstances. It was your first appearance before
    us, Mr. Secretary, and at that time we were anxiously awaiting
    Secretary Rumsfeld's strategic review and the President's
    budget request.
        Much has changed in 1 year, perhaps not in the way the
    Department of Defense (DOD) is conducting its business, but
    certainly in the world we live in. The attacks of September
    11th changed the world as we know it, and have brought new
    challenges to our military forces.
        I wish at this time to commend the men and women of the
    Navy and Marine Corps for their selfless service in the war on
    terrorism across the globe. They are the backbone of the
    military and our most valuable resource.
        For many years, I have expressed my concerns about
    readiness. It seems this year, however, by making some tough
    choices, you have begun to address these chronic shortfalls,
    and I wish to applaud this effort and look forward to hearing
    more about it.
        I am concerned, however, about your ability to meet the
    Navy and Marine Corps' long-term modernization requirements
    with the resources requested. While the Department of Defense's
    overall procurement budget increases by 10 percent, the Navy's
    increases by only 3 percent. This is the smallest increase of
    all the services.
        Two of your most critical modernization programs are
    suffering from instability. The first is Navy shipbuilding.
    Your critics have been particularly vocal this year, decrying
    the critical lack of shipbuilding dollars. As the shipbuilding
    budget shrinks by 15 percent in 2003, they argue that budget is
    short-sighted, putting the Navy's future dominance and the
    Nation at risk. We recognize, however, Mr. Secretary, that
    accelerating shipbuilding programs before they are ready can
    lead to cost increases that put these programs at risk.
        The second program, arguably one of the most vital to the
    Marine Corps modernization, is the V-22 Osprey. I understand
    that important decisions have been made about restarting the
    test program, and I hope, General Jones, you will be able to
    provide us with some insight into this matter.
        Time and again this committee has demonstrated its
    commitment to our naval forces, and once again, we face great
    challenges as we attempt to strike an appropriate balance
    between the needs of today and the investments of tomorrow. So,
    I look forward to hearing your remarks today and working with
    each of you to ensure that we maintain the finest naval forces
    in the world.
        Before we proceed, may I turn to the co-chairman of this
    committee, Senator Stevens.

                        STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Mr. Chairman, I join you in welcoming all
    three witnesses and commending them and people under their
    command for their marvelous job they are doing and have done
    since September 11th.
        Let me start off with just a personal comment. There was an
    item in the U.S. News and World Report that I would use my
    position on this committee to somehow or other retaliate
    against the two Senators from Maine because they did not
    support our State's position on drilling on the Arctic coastal
    plain. That is totally untrue, unfair, and unfounded.
        But in any event, I wanted to assure you, as members of the
    Department of Defense, I would never try to use my position
    here to harm anyone, let alone the Department of Defense.
    Anyone who knows my relationship to your Department would know
    that's just totally untrue and I regret that it was published.
        I do want to tell you I think, Mr. Secretary, you've got a
    real winner in your new Assistant Secretary. Our loss is your
    gain. So, I hope that Mr. Young is doing a fine job for you.
        Admiral Clark, we have witnessed the extraordinary
    circumstance in this air campaign over Afghanistan, in that
    much of the air operations on that landlocked country was
    projected from your carriers. I do not think many people
    understand the significance of that. The campaign validated
    once again the importance and the dramatic power of mobile sea-
    based platforms, and the success of the campaign reflects the
    value of the training and engagement overseas.
        In the past 90 days, Senator Inouye and I have taken
    delegations to Central Asia, the Far East. On both trips, we
    came back very impressed with the performance of our forces and
    particularly those under the command of you two as a General
    and Admiral.
        The work of our overseas Commander In Chiefs (CINCs),
    particularly that of General Joe Ralston and General Franks and
    then Admiral Denny Blair there in the Pacific, made possible, I
    think, this overwhelming success in Afghanistan.
        On that basis, I have just led into what I want to raise
    with you in the opening statement here again, the significance
    of maintaining the integrity and organization of the naval and
    marine forces dedicated to the Pacific. Maintaining the role of
    the third fleet and the marine force in the Pacific sends a
    vital signal I think to our partners and friends in the Pacific
    region. Senator Inouye and I have maintained a constant pattern
    of trips through the Asian region to assure our friends in that
    area that the United States intends to maintain a very vital
    defense presence in the Pacific in order to assure peace in our
    region. I know that you understand and heard of our views
    before, but in all matters on defense, there is no disagreement
    between the chairman and me on the importance of this issue of
    the continued defense force in the Pacific. No matter where we
    went, from China to Indonesia to the Philippines, they all say
    the same thing. We are maintaining the peace in the Pacific and
    without our really robust presence, that would deteriorate very
    rapidly.
        Thank you very much, Mr. Chairman.
        Senator Inouye. I thank you, sir.
        Senator Cochran.
        Senator Cochran. Mr. Chairman, thank you very much.
        Welcome to the committee. Our panel of witnesses is an
    impressive array of talent and professional leadership in our
    Navy and Marine Corps, and we appreciate very much the great
    work that you are doing to help protect the national security
    interests of the United States.
        Mr. Chairman, I think something that we need to recognize
    right away when we point out that while we must be prudent in
    the appropriations process, the clear and present need for more
    ships cannot be ignored. And I am hopeful that we can find a
    way in this committee and the authorization committee as well
    to move out at a more rapid pace in the authorization and
    funding of more ships for the Navy and Marine Corps team.
        I know that the recent announcement of the DD-X program and
    the selection of Northrop-Grumman and Raytheon, the team that
    will lead that effort, has to be encouraging to shipbuilders.
    We are very pleased in our State of Mississippi that Northrop-
    Grumman is going to be a part of that team, and talking to the
    leaders at that facility, I know that this is an important step
    in dealing with the industrial base challenge that we have as
    well. We need to be sure that we maintain the capacity to build
    first-class ships, ships that are second to none, and that's
    what I think the DD-X program intends to do, to create a
    framework for a new family of ships to ensure that our sailors
    and Marine Corps personnel are able to carry out their missions
    in the future as well as continue in the present.
        So, I look forward to discussing these and other issues
    with the panel today. We thank you very much for your
    cooperation with our committee.
        Senator Inouye. Mr. Secretary.

                         STATEMENT OF SECRETARY ENGLAND

        Secretary England. Mr. Chairman, thank you very much, and
    Senator Stevens, Senator Cochran, it is a pleasure to be here.
    I thank you for the great relationship we have with your
    committee. We genuinely appreciate your help and your
    friendship and your support of our naval services. And thanks
    for the opportunity to be here today.
        Before I make my comments, I do have a request of this
    committee. It is a simple, yet potentially powerful request,
    and I know the President would support this recommendation to
    you. I would recommend that the defense appropriations bill be
    the first appropriations bill passed by the second session of
    this 107th Congress. This action would frankly send a very
    strong signal to our men and women in uniform. It would send a
    strong signal to our fellow citizens. It would send a strong
    signal to our friends and allies, and equally important, it
    would send a very strong signal to our foes. So, I would
    appreciate your consideration of that request, and I thank you
    for that consideration. I think this simple action would be a
    very powerful message around the world, and so I make that
    recommendation to you today.
        First, let me comment that I have with me, of course,
    Admiral Clark and General Jones. I want to comment that over
    the last years we have become a very close team, a very close
    leadership team for our naval services, and we work that way as
    a very close team. I am pleased to report to you that all
    issues of importance to our naval forces we jointly discuss and
    arrive at decisions. So, this is indeed a true leadership team,
    and I can tell you I am absolutely pleased and privileged to
    serve with both of these magnificent officers.
        As you commented, the naval services are, indeed,
    performing magnificently for the people of America. The
    decisive advantage of combat power at sea has been clearly
    demonstrated in our war against terrorism and, as you
    commented, even for deep inland targets. In my judgment, this
    will be a crucial element of our naval forces as we move into
    the future, taking the fight to the enemy and sustaining that
    effort over time was and will continue to be critical to our
    national security.
        I do, however, have to also comment to you that this is not
    the naval services acting alone. We are part of this integrated
    team, a joint effort, and we are very proud of how seamlessly
    we work with all the other services, including the Coast Guard
    in terms of homeland defense.
        By the way, much of this is made possible by prior actions
    of this committee making this equipment and this interface
    available to us, and I thank you for those prior
    appropriations.
        Now, regarding the President's proposed budget for fiscal
    year 2003, I can first tell you without hesitation that the
    budget accurately reflects the priorities that were set by this
    naval leadership team before you today. The three of us agreed
    that we must keep faith with our people by providing them the
    pay and benefits they so richly deserve and must also ensure
    that our forces remain trained and ready to carry out our war
    on terrorism.
        So, to this end, we did, Mr. Chairman, prioritize our
    spending on critical readiness elements such as adequate flying
    hours and steaming days, spare parts, preventative maintenance
    and replenishing our stockpiles of precision weapons. That was
    our first priority.
        These were difficult choices to make, but I believe we
    indeed made the right choices for fiscal year 2003. We cannot
    fix every problem in 1 year, so we did prioritize our funding.
        Now, the Chief of Naval Operations (CNO), the Commandant,
    and I also agree that efficiency in our business practices is
    more important than ever before. Mr. Chairman, you commented
    about conducting DOD business. I will tell you we are
    conducting our business differently in the Department of the
    Navy. We are striving for efficiency and effectiveness, and we
    do this every day and it is showing up in terms of how we are
    now funding our programs. So, business practices are very
    important and I can tell you this leadership team is absolutely
    dedicated to that objective.
        I will tell you that this year I believe we have built a
    foundation as we go forward for the Navy. Most of our programs
    now--in fact, all of our programs--we have fully funded our
    programs. We still have some prior year shipbuilding bills to
    pay, which is very important to us, but we have addressed the
    fundamental programs now to go forward and to build our great
    Navy.

                               PREPARED STATEMENT

        So, I look forward to discussions with this committee
    during the question and answer period. Thank you very much for
    the opportunity to make a few comments.
        [The statement follows:]
                    Prepared Statement of Gordon R. England
                    navy-marine corps: the power of teamwork
                                  introduction
        The Navy/Marine Corps Team continues to provide extraordinary
    service and value to our country. Our contributions in the ``War
    Against Terrorism'' have been significant and important in the overall
    success of U.S. military forces. Naval Forces have demonstrated the
    reach of their lethal power deep into the enemy heartland. Operating
    beyond the traditional littoral, we have destroyed the enemy in areas
    that they previously considered sanctuaries.
        Our forces have been effective and Congressional support has been
    essential. In fiscal year 2002 the Congress supported the President's
    amended budget for the Navy and Marine Corps. In fiscal year 2003, we
    are again requesting your support of the President's Budget to continue
    the Navy and Marine Corps improvement in areas previously under-funded,
    sustain our force, and continue the transformation in the way we fight.
        The following sections of this statement describe the dramatic
    improvement the fiscal year 2003 President's Budget will provide for
    the Department of the Navy. Significant accomplishments of Naval Forces
    in the past year, and some of the detail of our plans for the future
    supported by this budget request are also described.
        In assessing our request, it is important to note that our focus is
    on sustaining and further developing the effective and lethal Naval
    Forces that are part of a broader networked Joint warfighting
    architecture. Numbers are important, but as Naval Forces are already so
    well illustrating, warfighting capabilities go beyond mere numbers. It
    used to require multiple aircraft to strike a single target. Now a
    single aircraft can strike multiple targets. Networked systems and
    sensors may be more important today than the sheer number of weapons
    and platforms. Our focus is on warfighting capability and sustaining an
    effective and properly resourced force. The Navy and Marine Corps are
    going to continue to work with the other military services to determine
    the best path to transformation and the best aggregate warfighting
    capabilities for our country.
    fiscal year 2003--a dramatic improvement for the department of the navy
        The fiscal year 2003 budget request, building on improvements in
    the Fiscal Year 2002 Department of Defense Authorization Act,
    represents a dramatic improvement for the Department of the Navy.
    Although the Department of the Navy still had to make difficult
    priority decisions, the final request represents the best mix possible
    among competing priorities. In this budget request, the highest
    priority items are pay and benefit improvements for our most valuable
    resource; namely, people and providing them the necessary spares, tools
    and munitions to carry out the nation's requirements. The following is
    the listing of the priority funding in fiscal year 2003 for the
    Department of the Navy:
      --Personnel salary and benefits are improved approximately $4.1
            billion in MILPERS accounts. This represents improvements in
            salary, health care, housing allowance and increased sea pay
            both in amount and number of military personnel covered. In
            this budget, civilian health care is also on an accrual basis
            and that administratively adds $750 million to this budget in
            Operation and Maintenance and working capital accounts that was
            not accounted for in prior years.
      --Operation and Maintenance and working capital accounts are
            increased by $3.4 billion. This increases funds for steaming
            and flying hours, including spares and depot/contractor repair
            of major systems. This funding does not, however, include any
            cost directly associated with Enduring Freedom.
      --Munition accounts are increased $973 million which is allocated
            predominately to tactical land attack Tomahawk cruise missiles
            and precision ordnance delivered from Navy and Marine Corps
            ships and aircraft.
      --The airplane account is increased by $323 million. Although the
            number of attack airplanes remains the same as in fiscal year
            2002, the total number of airplanes declines due to the mix of
            airplanes being procured in fiscal year 2003.
      --The RDT&E accounts increased by $1.1 billion reflecting the need to
            continuously invest in the future and to incorporate new
            technologies into our naval services.
      --The total number of ships in fiscal year 2003 is 7, consisting of 5
            new construction ships and 2 conversions. The conversions
            consist of modifying 2 ballistic missile submarines into 2
            modern cruise missile platforms that provide a transformational
            capability to the Navy and the Nation. Prior year shipbuilding
            is funded in the amount of $645 million. Additionally, pricing
            for new construction ships has been increased by $400 million
            as a management approach to help avoid future cost growth.
        Our objective in fiscal year 2003 to fund more robustly all of our
    operational accounts across the Department of the Navy to assure that
    our men and women in uniform have all the necessary resources to
    provide forward presence and to support the President's call for action
    in support of the ``War Against Terrorism.'' This necessitated some
    difficult choices and continues to leave the naval services with a
    smaller number of new construction ships than desired and an airplane
    force that continues to age beyond the age of our surface ships. In
    addition, the Department of the Navy is disinvesting in older systems
    that no longer provide combat capability commensurate with their cost.
      leading the way: navy-marine corps operations in the global war on
                                   terrorism

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

                     Sea-based Forces in a Post-9/11 World
        The ``War Against Terrorism'' illustrates the value of Naval Forces
    and the importance of Sea Basing.
    Naval Forces
        Provide global continuous presence
        Have no need to obtain base access
        Quickly put potent ground forces ashore in a crisis area
        Quickly strike enemy targets throughout much of the world
        Operate and sustain from secure sea bases
        Enable U.S. and allied forces to get into the fight
        Remain on-station indefinitely
        Influence events ashore from the sea
        Extend U.S. power and influence deep into areas that enemies might
    consider secure

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

        On September 11, 2001, U.S.S. Enterprise and her battlegroup were
    returning from a successful deployment to the Arabian Gulf. By next
    morning, Enterprise was within reach of Afghanistan, ready to launch
    and sustain precision strikes against enemies hundreds of miles from
    the sea.
        Enterprise was not alone. In Australia, the Sailors and Marines of
    the Peleliu Amphibious Ready Group/15th Marine Expeditionary Unit
    (Special Operations Capable) cut short their port visit and sailed for
    the Arabian Sea. U.S.S. Carl Vinson steamed at high speed to join
    Enterprise on station while surface combatants and submarines prepared
    Tomahawk missiles for long-range strikes, established maritime
    situational awareness, and prepared for interdiction operations. U.S.S.
    Kitty Hawk prepared to leave her homeport in Japan, to serve as an
    innovative special operations support platform. Off the east and west
    coasts of the United States, U.S.S. George Washington and U.S.S. John
    C. Stennis took station along with more than a dozen cruisers and
    destroyers, guarding the air and sea approaches to our shores. Shortly
    thereafter, the hospital ship USNS Comfort joined USNS Denebola in New
    York City to support firefighters and recovery workers. Marine
    Chemical-Biological Incident Response Force (CBIRF) and Explosive
    Ordnance Disposal (EOD) teams deployed to support local authorities in
    New York and Washington, D.C. Naval Intelligence, in conjunction with
    Coast Guard Intelligence, immediately began monitoring civilian ships
    approaching the United States and assessing the potential terrorist
    uses of the seas around the world.
        When the nation called, the Navy-Marine Corps team responded--with
    speed and agility, and with lethal, combat-credible and sustainable
    forces. On September 11th, as on every other day of the year, sovereign
    Naval Forces were on watch ``around the clock, around the globe''.
        In 2001 as in the past, the Navy-Marine Corps Team operated
    extensively representing U.S. interests throughout the world. In the
    Pacific, forward-deployed Naval Forces based in Japan, the West Coast
    and Hawaii continued to assure our allies in the region, deterring
    threats and coercion. The Navy-Marine Corps team also supported United
    Nations Transition Assistance East Timor (UNTAET) humanitarian
    assistance efforts.
        In the Mediterranean, Navy ships operated with friends and allies
    in over 85 exercises. Marines in Sixth Fleet MEUs provided presence
    ashore in Kosovo and served as the Joint Task Force Commander's ready
    reserve. In South America, Marine elements participated in riverine and
    small unit training. The annual UNITAS deployment promoted regional
    security cooperation and interoperability with regional Naval Forces.
        In Southwest Asia, we maintained continuous carrier presence
    throughout the year, conducting combat operations in support of
    Operation Southern Watch over Iraq. Surface combatants continued
    Maritime Interdiction Operations (MIO), supporting U.N. economic
    sanctions against Iraq for the tenth straight year. Marines from the
    15th and 22nd MEUs trained and exercised with friends and allies
    throughout Southwest Asia.
        These familiar ``peacetime'' operations demonstrate two enduring
    characteristics of the Navy-Marine Corps team that have been essential
    in launching the war on terrorism:
      --The ability to provide assured, sea-based access to the battlefield
            unfettered by the need to negotiate base access.
      --The ability to project power from the sea to influence events
            ashore--tailored, flexible, relevant power that is critical to
            the Joint Force Commander's ability to fight and win.
        When combat operations began in October, these characteristics made
    the Navy-Marine Corps team leading-edge elements in the joint campaign.
    Against a dispersed, entrenched enemy in a landlocked nation, hundreds
    of miles from the nearest ocean, strikes from the sea were in the
    vanguard. Carrier-based Navy and Marine aircraft provided the
    preponderance of combat sorties over Afghanistan while Tomahawk cruise
    missiles fired from ships and submarines struck communications and air
    defense sites. In the days that followed, the Navy and Marine Corps
    worked seamlessly with the other services to sustain carrier strikes
    deeper inland than ever before. Carrier aviators flew, on average 6-
    hour missions over Afghanistan, covering distances equal to missions
    launched from the Gulf of Mexico to Chicago and back. Maritime patrol
    aircraft flew over Afghanistan to provide unique reconnaissance and
    surveillance capabilities in direct real time support of Special
    Operations Forces (SOF) and Marine units on the ground. U.S.S. Kitty
    Hawk excelled as an interim afloat forward staging base (AFSB) for SOF.
    Ships and submarines supported by Naval Intelligence established
    maritime situational awareness over a huge area, and began the most
    extensive Maritime Interdiction Operation (MIO) ever to interdict
    terrorist leaders and material.

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

        Against a landlocked nation, hundreds of miles from sea * * *
      --70 percent of combat sorties were flown by naval air.
      --Tomahawks from submarines and ships key in taking down air defense
            and command nodes.
      --Navy P-3's provided critical surveillance and reconnaissance over
            Afghanistan.
      --Sea based Marines--using organic airlift--moved 400 miles, deep
            into Afghanistan.

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

        Marines established the first conventional ground force presence in
    Afghanistan. Elements of two MEUs and a Marine Expeditionary Brigade
    Command Element moved from their ships using organic Marine and Navy
    lift to create a tailored Marine Air Ground Task Force (MAGTF) ashore.
    Light, agile and self-sustained, Marines established security in a
    hostile environment and assured access for follow-on forces. Navy
    Seabees improved runways, enhanced conditions at forward operating
    bases far inland, and established detainee camps.
        Submarines provided tactical and persistent intelligence,
    surveillance, and reconnaissance (ISR). Sea based aircraft, ships, and
    submarines brought down enemy defenses from a distance. Carrier strike
    aircraft, in conjunction with Air Force bombers and tankers and guided
    by SOF on the ground, destroyed the enemy's ability to fight. Having
    assured access and sustainment from the sea; Marines, Navy SEALs,
    Seabees, and Army SOF worked with local allies to free Afghanistan from
    the Taliban regime and al-Qaeda terrorist network.
        In Operation Enduring Freedom and the global ``War Against
    Terrorism'', on station Naval Forces were first to respond, first to
    fight, first to secure U.S. interests. These operations exemplify the
    decisiveness, responsiveness, agility and sustainability that are key
    to Naval Services.
        Operations in the ``War Against Terrorism'' make clear important
    lessons as we move to transform the nation's military force and
    capabilities. Transformation is not just about revolutionary new
    hardware and technologies. Quantum improvements in warfighting
    effectiveness also come by coupling evolutionary improvement in
    existing systems to new ways of thinking--innovative operational
    concepts, doctrine, tactics and intelligence--and through new ways of
    using them together. Here are some examples of this potent combination,
    and the dramatic improvement in capabilities over just the past decade:
      --Unprecedented long-range precision strikes from carrier aviation,
            effectively supported by Air Force tankers. In Desert Storm our
            strikes were less than 200 miles on average; in Afghanistan
            they were often 600 miles or more inland.
      --Seamless command and control across a joint task force engaged in
            global operations.
      --Seabased Marine operations, arriving and staying light, with the
            ``rear area'' largely aboard ships.
      --Expeditionary flight operations were conducted from Kandahar, over
            400 nm inland. These operations included helicopters and VSTOL
            fixed-wing aircraft, making the AV-8B the first U.S. tactical
            strike aircraft to conduct operations from a base in
            Afghanistan.
      --Direct real time intelligence and reconnaissance operational
            support of Ground Special Operations Forces by P-3 maritime
            patrol aircraft.
      --Continued refinement of Tomahawk as a timely tactical weapon. In
            Desert Storm, it took about 3 days to program a new mission
            into a Tomahawk missile. In Afghanistan, some missions were
            programmed in less than half an hour.
      --Marriage of precision munitions with real-time targeting to make
            aircraft precision ``airborne artillery''. Precision munitions
            became the most commonly used ordnance. Ninety-three percent of
            the ordnance expended by the Naval Forces in Afghanistan was
            precision munitions.
      --Long-term surveillance and real-time targeting from unmanned aerial
            vehicles (UAVs).
      --Inherent flexibility, as an aircraft carrier's traditional mission
            was changed on short notice to become an afloat forward staging
            base for joint Special Operations Forces (U.S.S. Kitty Hawk).
      --Integrated use of attack submarines in a networked force.
      --Versatile surface ship combat operations, from Tomahawk launch and
            projecting air defense projection overland with the Aegis
            system; to escort duty, maritime interdiction, littoral
            interception operations, and search and rescue.
      --Perhaps the most remarkable change is that Naval Forces from the
            sea are operating in the Eurasian heartland well beyond the
            littorals, striking an enemy in what he considered sanctuary.
    Around the World, Around the Clock
        Even as the world moves on through these turbulent times, it is
    clear that the global commons--the oceans--will continue to matter
    greatly to the United States of America: as a pathway for transport and
    commerce; a source of oil, minerals, foodstuffs, and water; a rich
    venue for research and exploration; a road to our allies and friends as
    the leader of a global maritime coalition; an extensive though not
    infallible zone of defense; and--above all--an arena from which to
    operate as we seek to dissuade, deter, and, if required, fight and
    defeat our enemies. The power of the Navy/Marine Corps Team in
    defending our country is inestimable!

            sailors and marines: investing in the heart of the team
        Key to our force, and the heart of the team are our Sailors,
    Marines, and civilian workforce. These are our most valuable resource.
    Our Navy and Marine Corps need talented young Americans who want to
    serve their nation and make a difference. In return for their service,
    we offer them rich opportunities for leadership, growth, and
    achievement.
        Sailors.--We continue to make solid progress in recruiting the
    right people, reducing attrition, increasing reenlistments, and manning
    the Fleet. Navy recruiting goals were met in 1999, 2000, and 2001. As a
    result, a greater number of initial service school seats are filled,
    providing better trained Sailors to the Fleet, and Fleet manning
    continues to improve.
        Sailors are staying Navy in record numbers. First term retention is
    now at 57 percent. The Navy continues to make progress in combating
    attrition of first-term enlistees with 8.5 percent fewer first-term
    attrites in fiscal year 2001 than the previous year. Opportunities for
    advancement have improved. Our battle groups are being fully manned
    earlier in the inter-deployment training cycle, deploying with the best
    manning levels in years. We have begun filling increased manpower
    requirements in areas such as Anti-Terrorism/Force Protection (AT/FP).
        Improving officer retention remains critical to our efforts to
    achieve a steady-state force structure. Strong leadership at all levels
    and increased personnel funding have produced recruiting and retention
    advances. The Navy will continue to invest in Quality of Service and
    build a 21st century personnel system.
        The Navy wants to give Sailors greater choice in their assignment
    process. The Navy has taken a number of initiatives to make the process
    more Sailor-centered, including a Sailor Advocacy Program that has
    expanded outreach to Sailors by their personnel managers. We also want
    to be able to shape careers and the force--in skills and paygrade--to
    meet future as well as current requirements. For these reasons, the
    Navy supports several initiatives in this year's budget cycle. A
    gradual increase in our enlisted top six-paygrade mix (E4 through E9)
    to reflect the skills requirements of increasingly complex ships and
    aircraft, and legislative initiatives such as enhanced career pay and
    distribution incentive pay to help compensate for the arduous nature of
    an expeditionary Service.
        Marines.--The Marine Corps has either met or exceeded its accession
    goals since June 1995. During 2001, aggressive recruiting has allowed
    the Marine Corps Recruiting Command to exceed its quotas again. As a
    result, the Marine Delayed Entry Pool (DEP), the recruiting reservoir,
    is in excellent shape. For the third consecutive year, the Marine Corps
    experienced lower post-boot camp first-term attrition.
        Marine Corps retention was very encouraging in fiscal year 2001.
    More first term Marines re-enlisted than at any other time in the
    history of the Marine Corps, easily reaching our goal to re-enlist 26
    percent. The Marine Corps also achieved a better military occupational
    speciality mix than in previous years. This strengthens the future of
    our enlisted career force and provides commanders with the most
    qualified Marine by rank and experience. Highly successful retention
    programs such as the Selective Re-enlistment Bonus (SRB) are addressing
    shortages in specialty areas. Officer retention has improved
    substantially with a 15 year low of 8.3 percent attrition during fiscal
    year 2001. Aviation Continuation Pay (ACP) has assisted in improving
    officer retention.
        For the past decade, the Marine Corps has continued to aggressively
    examine its force structure. This is necessary to ensure proper
    staffing of our operating forces and the efficient and effective use of
    Marines and Civilian Marines in combination with business reform
    initiatives for our supporting establishment functions. To date, mainly
    as a result of business reform initiatives such as out sourcing and
    privatization, we have made substantial progress to increase manning in
    the operational forces with approximately 2,500 Marines identified to
    shift from the supporting establishment to operating forces billets. As
    we complete our A-76 studies and continue the implementation of
    Activity Based Costing/Activity Based Management in our supporting
    establishment process, we expect some additional Marines may be shifted
    to the operating forces. However the new security environment has
    increased our operating forces needs. We have responded with the
    permanent activation of the 4th Marine Expeditionary Brigade (MEB)
    (Anti-Terrorism/Force Protection), consisting of 2,400 Marines out of
    our total end-strength of 175,000 active duty Marines in order to
    assure we access, train and retain a new, robust tier one anti-
    terrorism/force protection force capability. The immediacy of the 4th
    MEB requirement resulted in initial manning using highly trained
    Marines from previously existing but already under staffed operating
    force units. Marines from the 4th MEB were quickly deployed in 2001 and
    are deployed today to provide this new capability for joint force
    missions in the European Command and Central Command Areas of
    Operation. The nature of the change in our national security
    environment, both overseas and here at home, requires we sustain this
    increase in Marine Corps end-strength.
        Quality of Service.--The Navy and Marine Corps continue to believe
    that both quality of life and quality of the work environment are
    important factors in retaining Sailors, Marines, and their families.
    This includes compensation, medical care, family housing, retail and
    commissary services; recreation programs, community and family
    services; training and education; as well as elements of the work
    environment such as tools, supplies, and facilities. Congress has
    supported many improvements in these areas.
        Professional development and training is one of our key focus
    areas. The Navy has launched Task Force EXCEL (Excellence through
    Commitment to Education and Learning) an initiative to create a
    ``Revolution in Training'', leveraging distance learning technologies,
    an improved information exchange network, and a career-long training
    continuum to fully realize the learning potential of our professional
    force. The Navy College Program and the Marine Corps Lifelong Learning
    Program directly support career-long emphasis on the professional
    development needs of our Sailors and Marines. Continuous learning,
    including an increased reliance on advanced distance learning systems
    such as the Marine Corps' Satellite Education Network (MCSEN) and the
    MarineNet Distance Learning Program, is needed to keep our Sailors and
    Marines on the cutting edge. The Navy-Marine Corps team owes those who
    promise to serve the best possible training throughout their Naval
    Service experience so they can succeed and prosper in their
    professional and personal lives.
        Force health protection is an integral part of readiness and is one
    of Navy Medicine's primary missions. Navy Medicine has implemented a
    comprehensive organizational strategy to prepare for, protect against,
    and respond to threats or attacks. The medical establishment is
    coordinating with sister Services, the Veterans Administration, Federal
    agencies, and civilian healthcare support contracts through TRICARE to
    combine our efforts for increased efficiencies. Programs are in place
    to ensure the health of Sailors and Marines; protect them from possible
    hazards when they go in harm's way; restore the sick and injured, and
    care for their families at home.
        Reserves.--Some 89,000 Navy Reservists and 39,558 Marine Corps
    Reservists serve today. The effective integration of reserve elements
    with active components is indispensable to military readiness and
    personnel tempo in the ``War Against Terrorism.'' We have recalled over
    10,000 Navy and Marine Corps Reservists as of December 2001. The Marine
    Corps Selected Reserve contributes approximately 25 percent of the
    force structure and 20 percent of the trained manpower of the total
    Marine Corps force. The Navy Reserve constitutes 19 percent of the
    Navy's total force, providing all our inter-theater airlift and inshore
    undersea warfare capability.
        The Naval Reserve came within two percent of its authorized end
    strength in 2001 and is adding recruiters in fiscal year 2002 to help
    meet goals. The Marine Corps Reserve continues to meet its authorized
    end-strength, although the challenge to recruit company grade officers
    for service with Selected Marine Corps Reserve (SMCR) units is
    increasing. A Reserve Recruiting and Retention Task Force meets
    quarterly to develop and implement ways to meet the ``right Marine in
    the right place'' standard.
        Civilian Workforce.--The Department of the Navy employs about
    182,000 U.S. citizen civilian workers and nearly 3,500 foreign national
    employees. This is about 149,000 fewer civilians than were employed in
    1989, a reduction of 45 percent. Now the Department of the Navy faces
    an employment challenge shared across the Federal Government: shaping
    the workforce to ensure that we have the right people, with the right
    skills, in the right jobs to help us meet the challenges of the future.
    In an age of rapid technological change, attracting the best available
    talent is essential. We are building on the successes of Navy and
    Marine Corps commands to identify and expand the use of best
    recruitment practices to attract high quality individuals at entry and
    mid-career levels. At the same time, we are examining and using other
    innovative workforce shaping strategies to ensure that we have a
    civilian workforce able to take its place as an integral part of the
    total force.
             current readiness: operating the navy and marine corps
        The success to date of the Navy and Marine Corps in the war against
    terrorism attests to progress made in current readiness. Sailors and
    Marines were ready and had the tools they needed on 11 September. We
    have worked hard to redress the shortfalls in training, maintenance,
    spare parts, ordnance, and fuel that have burdened our operating forces
    in the recent past. The fiscal year 2002 budget was the best readiness
    budget in a decade. The fiscal year 2003 Budget will continue to ensure
    that readiness meets mission requirements.

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

                           SAME SHIP, NEW CAPABILITIES
    DDG-51 (1991):                              DDG-95 (keel laying July
                                                 2002):
        SPY-1D................................    SPY-1D(V) littoral radar
                                                   upgrade
        5'' gun...............................    New 5'' gun upgrade for
                                                   Extended Range Guided
                                                   Munition (ERGM)
        Standard (SM-2), Harpoon, Tomahawk        SM-2, BLK IIIA, IIIB, IV
         missiles.
        PHALANX close in weapons system.......    Quad pack Sea Sparrow
                                                   missile (2003)
                                                  SLQ-32(V)2 Electronic
                                                   Support Measures
        SLQ-32(V)2 Electronic Support Measures    Link 16, Tactical Data
         (ESM).                                    Information Exchange
                                                   System (TADIXS) B
                                                   networks
        Link 4A, 11, 14.......................    Flight deck, hangar, two
                                                   LAMPS Mk III helos
        Flight deck, no helicopter............    Fiber Optic Data
                                                   Multiplexing System
                                                  Self Contained Breathing
                                                   Apparatus
                                                  Redundant Independent
                                                   Mechanical Start System/
                                                   Full Authority Digital
                                                   Control
                                                  COTS Zonal Electrical
                                                   Distribution System
                                                  COTS improvements to
                                                   radars, and sonars
                                                  Battle Force Tactical
                                                   Trainer
                                                  Cooperative Engagement
                                                   Capability (CEC)
                                                  NULKA, Electronic Decoy
                                                  Joint Tactical Information
                                                   Distribution System
                                                  Combat Direction Finding
                                                   BLK I
                                                  Remote Mine Hunting System
                                                  IT-21 Integrated Ship
                                                   Networks System

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

        The ships and aircraft joining the Fleet and Marine forces are the
    best in the world. In 2001, the Navy launched the next aircraft
    carrier, Ronald Reagan (CVN 76), commissioned our newest amphibious
    ship, U.S.S. Iwo Jima (LHD 7) and continued to take delivery of
    sophisticated Arleigh Burke-class guided missile destroyers, and F/A-18
    E/F Super Hornets. While current DDGs and F/A-18s may look from the
    outside much like earlier models, by design they bring significant
    increases in capability as the classes evolve.
        Ship and Aircraft Build Rates and Modernization.--Given current
    practices and the age of our systems, there is a steady-state
    requirement to procure 180-210 aircraft and 8-10 ships each year to
    sustain current force levels over the long term. However, we are also
    at a juncture of transitioning to new systems such as F/A-18E/F, LPD-
    17, DD(X), E-2C RMP, and others. We are investing in connectivity and
    interoperability to leverage our existing assets while we lay the
    foundation for future modernization.
        The Navy has 5 new ships and 2 major conversions requested in the
    fiscal year 2003 budget, and substantial additional shipyard/conversion
    work: 2 DDG's ($2.4 billion) including Advanced Procurement for a third
    ($74 million); 1 Virginia Class Submarine ($2.2 billion); 1 LPD-17
    ($604 million); 1 T-AKE ($389 million); Incremental LHD-8 Funding ($253
    million); 2 SSGN Refuelings and Conversions ($1.0 billion); 1 SSN
    Refueling ($360 million); and DD(X) ($961 million).
        Although we plan to procure additional ships in the out years,
    fiscal year 2003 is not the best time to further accelerate ship
    procurement quantities. There is substantial work in many of the
    nation's shipyards for SSGN conversions, SSN engineering refueling
    overhauls, and new construction already underway. For example, there
    are 36 new ships already authorized and under construction.
        The Navy could use additional DDG's, and they are the most
    appropriate candidate for additional procurement. The Navy would also
    like to move as quickly as possible to the DD(X) hull in order to
    reduce operating costs and improve capability and survivability. While
    the Virginia design is nearing completion, there was no prior year
    advance procurement funding available to support building a second
    Virginia Class submarine in fiscal year 2003. Delivery of U.S.S.
    Virginia in 2004 will allow the class design and ship testing to
    complete before beginning the increased production of two Virginias per
    year later in the FYDP. We are not ready for rate acceleration this
    year. The LPD-17 design is still not complete. Four ships are already
    funded with advance procurement for another 2 ships. Although we need
    to replace our older amphibious force ships, LPD-17 is not yet ready
    for rate acceleration. Design work is just starting on the T-AKE lead
    ship and 3 T-AKE's are already appropriated. Across the FYDP the Navy
    will fund 11 Cruiser conversions. Cruiser conversion offers an
    affordable way to add fleet capability and ultimately we plan to
    convert 27 Cruisers.
        We are keenly aware of the critical need to address ship and
    aircraft recapitalization and plan to do so in future years budget
    submissions. Some shipbuilding programs have been delayed due to
    developmental challenges and we would expect to have more flexibility
    to recapitalize our ship accounts in the future. The challenge of
    recapitalization today is exacerbated by the immediate and compelling
    need to rapidly make whole and sustain the current Navy and Marine
    Corps ability to fight today's wars, which this budget addresses in
    great part. We had to make some very difficult choices, however, we are
    making the right choices within available dollars. At the present time,
    given the age of Navy aircraft, the Navy would place a higher priority
    on increasing aircraft procurement rates over ships.

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

                           SAME NAME, DIFFERENT PLANE
    The original 1978 F/A-18A:                  The F/A-18E and F delivered
                                                 today:
        17,700 pounds of static thrust per        22,000 pounds of static
         engine                                    thrust per engine
        Speed >1.7 Mach                           Speed >1.8 Mach
        Sidewinder, Sparrow, Harpoon, General     JDAM, AMRAAM, Maverick
         Purpose Bombs                             capable
        M61A1 cannon                              New radar upgrades (AN/APG-
                                                   73)
                                                  New radio suite
                                                  Joint Standoff Weapon
                                                   (JSOW)
                                                  Single Channel Ground and
                                                   Airborne Radio System
                                                   (SINCGARS), Link 16
                                                   networks
                                                  Greater payload
                                                   flexibility
                                                  Shared Reconnaissance Pod
                                                   (SHARP) (2005)
                                                  Improved displays, night
                                                   vision
                                                  Upgrades to Advanced
                                                   Targeting Forward Looking
                                                   Infrared (ATFLIR) pod
                                                   (2003)
                                                  Upgraded mission computer
                                                  AN/AYQ-9 stores management
                                                   system
                                                  Improved range, endurance
                                                  Improved maneuvering
                                                   limits
                                                  Joint Precision Approach
                                                   and Landing System (2006)

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

        Prior topline constraints, coupled with increased operational
    requirements over the last decade, forced the Marine Corps to defer
    investment in equipment modernization. As a result of this
    ``procurement pause'', many Marine Corps weapons, vehicles, and support
    systems are approaching or have exceeded block obsolescence. The fiscal
    year 2003 budget allows the Marine Corps to begin to make more
    appropriate levels of investment in ground equipment modernization and
    transformational programs such as the Advanced Amphibious Assault
    Vehicle (AAAV), LW155, High Mobility Artillery Rocket System (HIMARS),
    and Common Aviation Command and Control System (CAC\2\S). Sustainment
    of this increased level of investment is absolutely critical to the
    continued success of the Navy-Marine Corps team.
        Readiness challenges.--We have made major strides in improving
    current readiness with the strong Congressional support in the fiscal
    year 2001 supplemental and fiscal year 2002 budget. But challenges
    remain. Our task is to sustain readiness funding while focusing clearly
    on three challenges in current readiness:
      --The aging of assets--particularly aircraft and amphibious ships--
            due to inadequate replacement levels.
      --The demands of the ``War Against Terrorism.''
      --The maintenance of shore infrastructure.
        The Aging Fleet.--The aging of ships and aircraft may be one of the
    main factors contributing to increased readiness costs. Naval aviation
    poses the most profound challenge. Our aviation force now contains the
    oldest mix of type/model/series aircraft in naval history, yet it is
    these same aircraft that are routinely employed in combat overseas. For
    the first time, our average aircraft age exceeds the average age of
    combatant ships, contributing to a corresponding increase in the cost
    of operations and maintenance.
        The average age of our ships is 16 years which is near optimum for
    ships with a service life of 30 years. However some ships, particularly
    older aircraft carriers and our amphibious force ships, are reaching
    the end of their service lives, often requiring unprogrammed repairs,
    necessitating unplanned funds for urgent maintenance. In part because
    of these costs, we moved to retire some ships, such as some Spruance-
    class destroyers, before the end of their service life. Further,
    capable ships reaching service mid-life, like the oldest of our Aegis
    cruisers, require modernization to remain operationally viable.
        Global tasking and the ``War Against Terrorism'' continue to stress
    our aviation force readiness. As a result, the F/A-18 has been flown
    well in excess of planned utilization rates. More than 300 aircraft
    will require service life extensions earlier than planned or budgeted.
    Similar situations apply to F-14s, EA-6Bs, P-3Cs, SH-60s, and virtually
    every other aircraft in the fleet. The majority of Marine Corps
    airframes are over 25 years old.
        In developing the fiscal year 2002 budget, the Department moved
    nearly $6.5 billion from other Navy programs to the current readiness
    portion of the Navy baseline program for fiscal year 2002-2007, shoring
    up the Flying Hour Program, Ship Depot Maintenance, Ship Operations,
    and Sustainment, Recapitalization, and Modernization (SRM) accounts.
    The fiscal year 2002 defense budget made substantial investments to
    bring readiness accounts to required levels. We sustain this focus in
    fiscal year 2003 with an additional increase of $3.4 billion in
    Operation and Maintenance and working capital accounts.
        Selected readiness issues in the ``War Against Terrorism''.--Recent
    combat experiences underline the importance of certain assets and
    capabilities in high demand but short supply. While the EA-6B Prowler,
    the EP-3E Aries II electronic warfare aircraft and P-3C Orion Anti-
    Surface Warfare Improvement Program (AIP) aircraft offer theater
    commanders extraordinary capabilities, higher than planned usage rates
    results in adverse effects on service life, maintenance costs, and
    aircrew tempo.
        Precision Guided Munitions (PGM) have become the preferred munition
    of modern warfare. Unanticipated high usage rates during the war in
    Afghanistan, coupled with years of under investment in ordnance, have
    caused serious shortfalls. This is a critical path item that we are
    addressing to sustain our effort in the ``War Against Terrorism'' and
    we increased munitions accounts in fiscal year 2003 by $973 million
    allotted predominately to Tactical Tomahawk missiles and precision
    guided munitions delivered from the air.
        Current operations reinforce the need for sustainable access to
    training and testing ranges. We are dedicated to finding ways to
    enhance readiness through creative technologies. While an increasing
    amount of training and testing can be done using computer simulations
    and other information technologies, live practice on actual ranges will
    in some cases remain essential at the right time and place in the
    training cycle. Maintaining access to ranges requires a comprehensive
    approach that balances legitimate community and environmental concerns
    with the need for realistic training and testing.
        Shore Infrastructure.--Real property maintenance and military
    construction accounts suffered in past years to maintain forward-
    deployed forces. Department of Navy's shore infrastructure's
    recapitalization cycle recently exceeded 130 years, our deferred
    sustainment is $573 million and our Sustainment Restoration and
    Modernization (SRM) funding has been significantly below the private
    industry average. In fiscal year 2003 the Department is making
    significant increases in (USN $221 million, USMC $81.6 million) SRM.
    With this effort, our recapitalization rate will be driven down to 83
    years by the end of the FYDP, and the lowest readiness (C\3\/C\4\)
    areas are projected to be eliminated by 2013.
        The Marine Corps made significant progress in ensuring that its 15
    major bases and stations maintain solid training facilities while
    providing an improving Quality of Service for Marines and their
    families. The MILCON program replaces or improves over 950 homes and
    provides new Bachelor Enlisted Quarters for over 1,000 Marines and
    their families. The program also addresses facility deficiencies
    providing maintenance and training facilities. While Marine Corps
    military construction is below the level necessary to sustain the DOD
    goal of a 67-year replacement cycle, the Marine Corps has made great
    strides in sustaining their facilities.
        For most of the last decade, real property maintenance, military
    construction and family housing were bill payers for near-term
    readiness. Recent top line increases have allowed the Department to
    make progress in these important areas however, there is still a great
    deal of room for improvement. In the area of facility sustainment, the
    Marine Corps will achieve the goal of C\2\ readiness ratings in all
    facility-type areas by 2010; however, currently 57 percent of Marine
    Corps infrastructure is at the lowest state of readiness (C\3\/C\4\).
    While the DOD goal for plant replacement is 67 years, the Marine Corps
    recapitalization rate for fiscal year 2003 is 125 years.
        There is good news in the area of bachelor and family housing. The
    Marine Corps level of investment in bachelor housing has increased from
    $84 million in fiscal year 2002, to an average of $243 million per year
    across the FYDP. This increase in investment, coupled with the Marine
    Corps decision to build barracks in accordance with a waiver-approved
    2x0 room standard, allow the Marine Corps to achieve our goal to
    eliminate inadequate barracks by 2010. The Marine Corps 2001 family
    housing master plan identified close to 17,700 inadequate family
    housing units with the majority of those units requiring significant
    revitalization or replacement. Increases in Basic Allowance for
    Housing, combined with traditional military construction projects and
    public-private ventures will allow the Marine Corps to eliminate
    inadequate family housing by fiscal year 2005.
                    future readiness: transforming the force
        The Navy and Marine Corps transformation vision is fundamentally
    about balanced capabilities rather than specific ships, airplanes,
    weapons systems or other technologies. The concepts of Network Centric
    Warfare (NCW) and Seabasing will fundamentally transform Joint
    warfighting. NCW will be part of every system and operation in the
    future and will tremendously extend the capabilities of individual
    platforms or systems by expanding the knowledge base, sensor and weapon
    reach, and ability to quickly react. Seabased operations will
    capitalize on NCW and the maneuver space afforded by the sea. Seabasing
    provides a full naval force package, integrated across the amphibious
    task force, carrier battlegroup, force, and combat logistic force.
    Sustained at sea, seabased forces will provide the Joint Force
    Commander with persistence in the battlespace and the capability to
    rapidly project power and influence well inland without the encumbrance
    of vulnerable fixed bases. As the overarching architecture unifying the
    forces and systems within an area of operations and reaching back to
    other forces ashore, NCW and seabasing will be the central tenant of
    Navy and Marine Corps experiments and program developments.
        Navy and Marine Corps priorities for transformation are centered on
    capabilities that support Naval Operational Concepts: assuring and
    sustaining access; projecting power from forward-deployed combat
    credible forces; deterring aggression; and sustaining logistics from
    sea-based forces while minimizing our footprint ashore. Transformation
    activities will be focused on Information Technology (IT) through
    networks, sensors and information processing. Future capability
    requirements are determined through the Battleforce Capabilities
    Assessment and Planning Process developing strong links between
    technology developers, requirements offices, and concept development
    and experimentation organizations.
    Forces to Support Operations in a Changed World
        The ``War Against Terrorism'' and the emerging world ahead requires
    a transformational vision of emerging requirements. We envision the
    need for forces that are more dispersed and provide simultaneous
    application of sea control, strike, forcible entry, SOF, sea based
    missile defense, dispersed logistics, strategic deterrence, and
    Maritime Interdiction Operations (MIO). These forces will swiftly
    defeat any adversary's military and political objectives, in anti-
    access area denial or other asymmetric environments.
        Evolutionary and transformational improvements in platforms,
    concepts and technology now in the Fleet provide more combat capability
    per unit than ever before. Yet there remains a ``quality in quantity
    (of platforms)'' as global readiness, presence and mission needs
    change. A balanced force would reflect in part the following
    considerations:
      --Surface ships.--We will need to distribute surface ship combat
            power to face global terrorist network threats, take advantage
            of our network capabilities, and undertake demanding tasks
            around the globe. Emergent missions may translate to a new
            demand for additional surface combatants--some of which may be
            new concept ships focused on littoral warfare and others on
            Theater Missile Defense capabilities.
      --Amphibious capability.--Although the Marine Corps forcible entry
            amphibious lift requirements remain 3.0 Marine Expeditionary
            Brigade (MEB) assault echelon equivalents, the fiscal year 2003
            budget and FYDP funds 2.5 MEB of lift which is in accordance
            with the QDR.
      --Submarines.--The submarine force structure is the minimum
            identified by JCS and other studies. Real world taskings stress
            this number.
      --Support/Sustainment Requirements.--Global demands implied by new
            operational concepts may require additional logistics/
            replenishment assets.
        Transforming to the ``Force-netted'' Fleet.--FORCEnet is the
    architecture and building blocks that integrate sensors, networks,
    decision aids, weapons, warriors and supporting systems into a highly
    adaptive, human-centric, comprehensive system. DD(X), CVN(X), SSGN,
    Virginia-class SSNs, San Antonio-class LPD, and Multi Mission Aircraft
    (MMA) are examples of platforms netted for the future. Warfighting
    effectiveness will be achieved through transformational technologies,
    innovative operational concepts through experimentation, and a focused
    procurement program, to realize major increases in our Naval Force's
    combat performance and achieve battlespace dominance.
        While FORCEnet provides the overarching architectures, critical
    subset applications are already being procured--in particular,
    Cooperative Engagement Capability (CEC) and Naval Fires Network (NFN).
    CEC enables real time exchange of fire control quality data between
    battle force units, enabling all to have the identical picture, and to
    conduct cooperative engagements.
        Ultimately, with a common integration of networks, sensors,
    weapons, and platforms--networked warfighters can achieve battlespace
    dominance through knowledge superiority and cyberspace exploitation.
    Today's Fleet already has much of tomorrow's capabilities and we are
    pressing ahead to advance these groundbreaking capabilities.
        Key Acquisition Programs: The Transformational Bridge.--In addition
    to the highly capable systems now entering the Fleet, we are making
    substantial investments in programs that are the bridge to the
    transformed Naval Forces of the future. Programs include the DD(X)
    family of ships, CVN(X), Joint Strike Fighter (JSF), Virginia-class
    SSN, MV-22 Osprey and San Antonio-class LPD. The Navy will also convert
    four Ohio-class SSBNs into cruise missile carrying submarines (SSGNs)
    with special operations capabilities, as well as begin to procure a
    replacement for the aging P-3 series reconnaissance aircraft, such as
    the MMA. These programs are integrated with other ongoing
    transformation efforts to move toward the netted potential of Network
    Centric Warfare. For example, the Joint Tactical Radio system (JTRS)
    revolutionizes wireless communications; CEC successfully completed
    OPEVAL in May 2001; IT-21 is in 182 of our ships; Link 16 is in the
    Fleet, and Navy-Marine Corps Intranet is integrating the information
    backbone of the Naval Service.

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

                         Concepts Key to Transformation
        Experimentation--to realize revolutionary and incremental change
        New Manning Concepts--for ships and squadrons
        Technological innovation--speeding the pace of development and
    insertion
        Expanded use of unmanned vehicles--above, on, and below the ocean
        Sea based forces
        All-Electric Warship design--could revolutionize the platform from
    ship design to sensor performance to tactics

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

        These platforms are coupled with ``process'' transformation, such
    as improved business practices and spiral development, which will
    enable short notice innovation and technology insertion on subsequent
    units in a class. Thus the programs we are launching--DD(X), Virginia-
    class SSN, CVN(X), and others--are important not only for the
    capabilities they will bring initially, but also as the bridge to even
    more revolutionary capabilities downstream.
        The DD(X) Family of Ships. DD(X), along with CG(X), and the
    Littoral Combat Ship (LCS), will introduce complementary technologies
    for 21st century warfighting success. Designed from the keel up to be
    part of a netted force, these three new members of the Navy's surface
    combatant fleet will provide precision and volume fires, theater air
    defense and focused mission capabilities supporting littoral access.
    The DD(X) program will provide a baseline for spiral development of
    technology and engineering to support a range of future ships, such as
    CG(X) and LCS, to meet maritime requirements well into the 21st
    century. Some of the most transformational technologies include the
    Integrated Power System, Multi-Function and Volume Search Radars,
    Advanced Gun System, and a Total Ship Computing Environment. These
    technologies will enable the fleet to operate more efficiently because
    of reduced life cycle costs resulting from fuel and manpower savings.
        Future Aircraft Carrier (CVNX). The future carrier force, our
    centerpiece of global access, will incorporate the best of our
    transformation technologies. Each CVNX will provide 50 years of service
    life with growth margin to accommodate advanced equipment and systems
    that permit flexible response options to wide-ranging roles and
    missions. With a new more efficient nuclear propulsion plant, open
    systems architecture, state of the art C\4\I and greatly expanded
    electrical capacity, these ships will host a future air wing (including
    UCAV/UAV) capable of generating sorties required to strike 1,000+
    aimpoints per day. CVNX will remain a premier national asset for
    forward presence, mobility/crisis response, and sustained force
    projection.
        Amphibious Warfare. The building blocks of our future expeditionary
    capabilities--the Advanced Amphibious Assault Vehicle (AAAV), MV-22
    Osprey aircraft, JSF, and a new generation of modern ground equipment--
    allow us to operate from farther over the horizon and deeper into the
    littorals. High Speed Vessels (HSV) and new lighterage will be key
    components of the Seabasing concept. The new AAAV will have triple the
    water transit speeds of older Amphibious Assault Vehicles. MV-22 will
    ultimately increase expeditionary airlift capacity by a factor of three
    while quadrupling range. This will increase joint lethality while using
    greater standoff range to reduce risk to the force. The JSF will
    provide a joint aircraft that avoids unnecessary duplication, yet
    provides leap-ahead technology in an interoperable system.
        The Marine Corps assault echelon amphibious lift requirement
    remains at 3.0 MEBs. It shapes the future amphibious force with the
    number and type of ships required for a flexible warfighting
    capability. The planned force will form ARGs reconfigured or tailored
    to smaller sized independent elements during ``split-ARG/MEU(SOC)''
    operations. The San Antonio-class LPD 17 is designed to be a principal
    ARG platform, supporting a range of expeditionary capabilities
    discussed above.
        Virginia Class Attack Submarine. The first of a new class of attack
    submarine, Virginia (SSN-774), is being built today. Building a ship as
    quiet as the current Seawolf class, this program has received awards
    for cost reduction and efficiency, but with a 30 percent lower total
    ownership cost and modular design allowing for spiral acquisition and
    insertion of future technologies.
        Combat Logistics. This force is well on its way to completing its
    own transformation from six ship classes down to three classes of
    modern, highly capable, multiple missioned platforms. The newly awarded
    Lewis & Clark-class Dry Cargo/Ammunition ships (T-AKE), the first of a
    twelve ship class, will eventually replace the aging T-AFS and T-AE
    platforms, providing increased capacity and combat load flexibility.
        Assets. Prepositioning supports all four services. The current MPS
    program combines the capacity and flexibility of prepositioned sealift
    with the speed of strategic airlift. We continue to pursue both our
    Maritime Prepositioned Force Enhancement (MPF(E)) and Maritime
    Prepositioned Force Future (MPF(F)) programs, enhancing Navy Fleet
    Hospital, Naval Mobile Construction Battalion and expeditionary
    airfield capabilities. The long-term prepositioning program, MPF(F),
    will provide a more robust capability for rapid delivery and
    sustainment of Marine forces ashore. It will be more expeditionary and
    contribute significantly towards integration of the seabase in order to
    project naval combat power from the sea in support of joint operations.
        Helicopters. All Navy helicopter missions are being consolidated
    into the MH-60R and MH-60S platforms. These platforms will have a
    common cockpit and common airframe, with equipment tailored to
    particular missions enabling a decrease in the number of maintenance
    personnel required.
    Technology and Experimentation
        Investing in Technology.--Transformation requires substantial
    investment in S&T to swiftly and effectively leverage emerging
    opportunities. In fiscal year 2003 we increased the investment in RDT&E
    accounts by $1.1 billion. Enhanced capability will be achieved via
    prioritized investments focusing on networks, sensors, weapons and
    platforms. Continued investment in S&T is essential in this time of
    extraordinarily rapid technological change and to ensure
    technologically superior naval capabilities will be available when
    required. The Navy's Warfare Centers and Navy Systems Commands, along
    with leading researchers in the Naval Research Laboratory and the Naval
    Postgraduate School, as well as the nation's universities and industry,
    continue to forward fresh and innovative ideas for investigation and
    development. These will include:
      --Integrated Power Systems (IPS).--Electric propulsion, envisioned
            for future surface and submarine platforms, will enable
            integrated powering of all propulsion, combat systems, and ship
            services, thus enhancing warship capability.
      --Unmanned Vehicles and Distributed Sensors.--Naval UAVs will provide
            the battlegroup and MAGTF commanders with essential near-real
            time imagery and data required to support ISR requirements
            independent of, or in concert with, the use of manned aircraft
            or limited Joint Theater or National Assets. Furthermore, $76
            million for Unmanned Underwater Vehicles begins to provide
            similar capabilities in the underwater environment.
      --Intelligence.--Navy and Marine forces will enhance their organic
            intelligence capabilities by accessing and leveraging National,
            Theater, Service, and coalition intelligence assets and support
            through a comprehensive ISR network. Emerging threats and
            strategic environments demand broadened intelligence
            capabilities to support forces engaged in combat against
            asymmetric threats, international terrorism, military
            operations other than war, operations in urban environments and
            IO.
        Space.--The Navy and Marine Corps will continue to pursue the
    maximum use of space to enhance our operational capabilities. We look
    to leverage existing systems and rapidly adapt emerging technology.
        Ballistic Missile Defense.--A viable theater and area sea based
    ballistic missile defense system is important to assure the safety of
    U.S. forces and the flow of U.S. forces through foreign ports and air
    fields when required. Sea based missile defense can also allow us to
    assist allies and friends deterring coercion and threats. We must solve
    the technical issues to field an effective system.

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

                   Key Investments for Netted Warfare Success
        FORCEnet--the overarching structure for Network Centric Warfare
    systems, including
      --Naval Fires Network (NFN)
      --Cooperative Engagement Capability (CEC)
      --Expeditionary Sensor Grid (ESG)
      --Expeditionary C\5\ Grid (EC\5\G)
      --Common geotemporal reference of networked knowledge (4D-Cube)
        Information Technology for the 21st Century (IT21)
        Navy-Marine Corps Intranet (NMCI)
        SSGN
        Organic Mine Countermeasures (OMCM)
        Maritime Prepositioning Force (Future) (MPF(F))
        E-2C Radar Modernization Program (RMP)
        Unmanned Aerial Vehicles (UAVs)
        Unmanned Combat Air Vehicles (UCAVs)
        Unmanned Undersea Vehicles (UUVs)
        Advanced Electronically Scanned Array (AESA) Radar
        E-2C Radar Modernization Program (RMP)
        Link-16 network
        Multifunction Information Distribution System (MIDS) data link
        Distributed Common Ground Station
        Joint Tactical Radio System (JTRS)
        Lightweight Mobile Satellite Terminals
        Unit Operations Center
        Mobile User Objective System

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

        Joint/Fleet Experimentation.--The path to transformation will
    involve a robust program of experimentation and concept development
    with new capabilities and operational prototypes while pursuing S&T
    efforts. We have ongoing initiatives to translate concepts such as the
    Navy's Network Centric Warfare (NCW) and the Marine Corps'
    Expeditionary Maneuver Warfare (EMW) into reality. This summer's
    Millennium Challenge 2002 exercise will include experiments by each
    Service, coordinated together by Joint Forces Command.
        Fleet Battle Experiments (FBEs).--NWDC and the Marine Corps Combat
    Development Command (MCCDC) develop and refine future warfare ideas,
    tactics and doctrine in areas such as knowledge superiority and access,
    time critical strike, organic mine countermeasures, autonomous
    operations, littoral anti-submarine warfare, platform and war fighter
    protection, missile defense, enhanced modeling and simulation
    developments and expeditionary logistics. Navy FBEs and Marine Corps
    Advanced Warfighting Experiments test these new doctrines and ideas in
    the field, assess the utility of new technologies, explore new
    operational capabilities and organizational arrangements, and feed the
    empirical results back to the development commands. Both Services are
    collaborating to ensure that Navy and Marine Corps future development
    and transformation is completely compatible and complementary.
    Leveraging Organizational Capital
        Organizational Alignment.--Alignment means having all our
    organizations acting coherently to achieve our overall objectives. To
    extract the maximum advantage from our resources and provide a high
    rate of return on our investments, we need to know our core
    requirements and state them accurately. Our continued success also
    requires organizational speed and agility to capitalize on new
    opportunities.
        To this end the Navy took significant steps to align its
    organizations more effectively. The Commander, U.S. Fleet Forces
    Command (CFFC) was created to integrate policies and requirements for
    manning, equipping, and training all fleet units. Reorganized
    directorates tied closely to the fleet now lead the warfare
    requirements generation (N7) process while the resources and assessment
    group (N8) validates and prioritizes those requirements in the
    programming and budgeting process. The Navy has also established
    advocate organizations for Fleet and ashore readiness (N4), to ensure
    that readiness issues have a higher profile in the Planning,
    Programming, and Budgeting System (PPBS) process. The Navy has closely
    examined organizational alignment options for enhancing delivery of IT,
    IO and space capabilities to the Fleet. The Department intends to
    consolidate and align existing space, IT and IO commands to provide
    this management structure in direct support of our Fleets.
        Better Business Practices.--Key to achieving transformation is
    changing the Department's business practices, finding efficiencies, and
    moving bureaucracy dollars to the battlefield. To buy greater numbers
    of ships and aircraft a balance needs to be struck between the
    competing demands of current readiness, procurement, innovation, and
    experimentation. Better business practices are essential for freeing up
    resources for enhanced procurement and transformation. All Navy
    leaders, uniformed and civilian, are now thinking in terms of maximum
    productivity, minimum overhead, and measurable output. Every dollar the
    taxpayers entrust to us for the Nation's defense needs to be spent
    wisely.
        Navy processes and organizations that equip, maintain, train and
    otherwise support operational forces are beginning to transform in
    concert with the 21st century Naval Force. These processes and
    organizations will be agile, responsive and cost effective. They
    provide for rapid identification, testing and introduction of new
    technologies to stay ahead of the threat, streamline development cycle
    times, optimize Human System Integration, and provide customer support
    second to none. Our future readiness and force structure will introduce
    new systems using spiral acquisition programs and better business
    practices that allow for introducing innovative and transformational
    technology improvements into successive units of similar classes. By
    implementing these practices we will be able to shift more dollars into
    combat capability.
        The Marine Corps has taken major steps to improve its business
    practices through the comprehensive implementation of Activity Based
    Costing and Management (ABC/M) methods at all of its installations.
    These efforts for achieve efficiencies and enable increased
    productivity at lower costs. These steps enable more rapid
    transformation of Marine Corps warfighting enhancements.
        We are also working to replace other business processes and to
    revise the current Program Planning Budget System (PPBS). Efficient
    organizations are clearly more effective, and we need to work
    continuously to improve processes throughout the naval services.
    Prosecuting the war is our first priority, but our area of
    responsibility includes the business of war and overseeing the vast
    infrastructure that supports warfighting. We cannot fully prosecute the
    latter without fully improving the former.
                                    summary
        At the dawn of the 21st century, the Navy and Marine Corps are
    uniquely positioned and configured to respond to the challenges the
    Nation faces. Steeped in a tradition of operating deployed, Naval
    Expeditionary Forces assure access, swiftly responding to threats to
    U.S. interests often in areas where access may be restricted, withheld,
    or denied. Naval Forces fight and win; they are capable of initiating
    and sustaining nearly unlimited combat operations on the sea, land, and
    in the air without the burden or liability of a logistics tail or host
    nation support. Once again in Operation Enduring Freedom and ``War
    Against Terror'', on station Naval Forces were first to respond, first
    to fight, and first to secure U.S. interests.
        Naval Forces are continually transforming. We are building on a
    winning team, leveraging both current and transformational
    capabilities. The ability to transform is at the heart of America's
    competitive advantage.
        We are the finest Naval Force in the world. While we face the
    challenges of recruiting and retaining the best people, maintaining
    adequate force structure, recapitalizing an aging infrastructure, and
    fighting both symmetrical and asymmetrical threats, we are clear of
    purpose, focused on the future, and confident in our capabilities. By
    successfully meeting the challenges outlined above, we remain ready to
    assure allies and friends, deter potential adversaries, and defeat
    enemies while providing our nation the most flexible instrument of
    military capability.
        The fiscal year 2003 President's budget request continues to build
    on the improvements funded in fiscal year 2002. With continued strong
    Congressional support we will continue this year, and in coming years,
    the transformation and recapitalization of our Nation's already potent
    Naval Forces.

        Senator Inouye. Admiral Clark.
    STATEMENT OF ADMIRAL VERNON E. CLARK, CHIEF OF NAVAL
                OPERATIONS
        Admiral Clark. Thank you, Mr. Chairman, and good morning,
    Senator Stevens and other distinguished members of the
    committee. With your approval, we submitted a formal and a
    written statement. I have a few brief comments, if that could
    be made part of the record, sir.
        Senator Inouye. Your full statement is made part of the
    record.
        Admiral Clark. It is a pleasure to be here. I look forward
    to these hearings because we get to tell our story and have
    frank discussions about the priorities for our Navy and the
    naval service.
        Mr. Chairman, I would like to align myself with the
    Secretary's comments regarding the appropriation bill this
    year. We so appreciate the chance to be here and talk about the
    priorities and areas where concerns exist. But the early action
    by this committee, I assure you, would be an incredible signal
    for the men and women serving on the point. So, I would like to
    align myself with the Secretary's comments.
        I also wanted to align myself with your comments, Mr.
    Chairman. As you were speaking, I was running down my notes,
    and I wrote my comments yesterday on the airplane coming back
    to Washington. And I started out by saying a lot has happened
    since I was here last year. A lot has occurred since last June
    when we appeared before you. Certainly 9/11 and all of these
    events have led us into a period where the leadership is
    speaking to and about the first war of the 21st century.
        Senator Stevens, aligning myself with your comments, I
    believe it is absolutely true that events since last September
    have driven home in a very powerful way why we have a Navy, why
    it is important for the Nation to invest in our Navy.
        Certainly the events of 9/11 changed our lives. I was in
    the Pentagon that day, and we lost 42 members of the Navy
    family inside the Pentagon. Many people know about that part of
    it. They are not aware that we also lost 10 members of the Navy
    family in airplanes that were flying that day that went into
    the buildings in New York and in the Pentagon. It has changed
    our life.
        Since last year, the U.S.S. Cole is no longer in the repair
    yard. Widely reported, she is back in the fleet.
        I just wanted to report to you this morning that the men
    and women serving in the Navy are responding with pride and
    dedication and they make me very proud, and I know that you are
    proud of them too. We appreciate your visits to them. Sometimes
    we are inclined to use words like these are first-ever kinds of
    events. I would say that with regard to the service of our
    people today, they absolutely are following in the example of
    those that have gone before them. And I am telling members of
    the greatest--Tom Brokaw's definition of the greatest
    generation--I am telling all of them they would be
    extraordinarily proud of their successors. Our young men and
    women are performing superbly in large part because of the
    assistance and the support from this committee.
        This budget is in my view the best readiness budget that I
    have ever seen since I have been in the military. This budget
    follows the priorities, as the Secretary has said, that we have
    laid out. I am convinced that these priorities were correct,
    that they are correct. I believe that it is correct, Mr.
    Chairman, to ensure that we are taking care of the Navy that
    the taxpayers of this Nation already bought and paid for.
        I believe that the readiness budget that we are acting
    under in fiscal year 2002 and the one that has been requested
    in fiscal year 2003 will create the foundation in the days
    ahead that will enable us to continue the kind of performance
    that we are seeing in Afghanistan. The details of that conflict
    and our actions over there are well known. I appreciate your
    comments about them. I will not say more about them this
    morning unless we want to talk about them in response to
    questions.
        But since 9/11, the Navy--and I am careful to make sure
    that people understand that we do not do this alone. We do it,
    first of all, the Navy-Marine Corps team and part of the joint
    team. I believe, though, that the Navy actions have been
    central to the Nation's ability, our military's ability, to
    protect the interest of freedom around the world. So, we are
    proud to be part of this Navy-Marine Corps team and proud to be
    appearing here before you today.
        The President said we were going to keep the enemy on the
    run, and it is my conviction and I know that it is the
    conviction of General Jones that to do that, you need the
    components of the naval service, that we have got to be out and
    about, and we are today and we are ready to do that tomorrow.
        This budget has involved difficult and tough choices. It
    does not cover all of the modernization requirements that we
    have. I would prefer that it did. I would like it to be
    different than it is. But I want to be held accountable for the
    priorities that were established in the recommendations that I
    made to the Secretary of the Navy and the Secretary of Defense.
    Hold me accountable for those priorities. They are where I
    believe they ought to be. I believe that the focus of this
    budget is correct, that we pursue the global war on terrorism,
    we pursue the necessary and vital changes that were required
    for people and to support our people and to ensure that the
    current readiness needs were met.
        In our building, transformation is a buzzword. I guess we
    all talk about transformation today, and sometimes in the past
    the terms were different. But I just want to say that we are
    working new operational concepts. But for us the future is
    about the ability to sustain credible combat power in the far
    corners of the Earth. I believe that it is absolutely necessary
    that we remain able to take the sovereignty of the United
    States of America where we need to take it without a permission
    slip from some other country and that we are able, Senator
    Stevens, to conduct the kind of operations that you referred
    to, certainly unprecedented in our time to conduct operations
    that are routinely 7 to 100 to 1,000 miles from the ship.
        I want to say that the Navy has received most of the press
    about those kind of operations. I want to say that the Marine
    Corps F-18s have been flying alongside of us off of those
    carriers, and we are proud that they are on our team.
        So, the future is about being able to sustain that kind of
    combat power.
        This budget moves us to the future. There are key programs
    involved before you, key aviation programs and key and vital
    programs in ships, shipbuilding. Certainly DD-X, the Down-
    select announced this week, is vital to our future, and I
    believe that DD-X will, in fact, define the nature of the
    United States Navy and its ships for the next 30 to 40 years.
    That is my conviction.
        In the end, we are here today to decide and to discuss how
    much Navy our Nation needs to be out and about to deal with the
    challenges that we face today.
        There are words that are well known to us from our past,
    and they go like this: life, liberty, and the pursuit of
    happiness. On the Internet today and on billboards around the
    country, there is a sign going up that shows naval forces at
    work. And the words are modified a little bit from those that
    we know so well. They say this: life, liberty, and the pursuit
    of all who will threaten it. That is who we are and what we are
    about. That is what our young men and women are about today.
    They are a proud lot and I know that this committee is proud of
    them because your actions have enabled them. We so appreciate
    your support. And I want to say to this committee that I am
    privileged to serve with an awesome generation of young
    Americans, and I am privileged to serve our Nation at a time
    like this.

                               PREPARED STATEMENT

        I thank you again for the opportunity to be here and look
    forward to your questions, sir.
        [The statement follows:]
                 Prepared Statement of Admiral Vernon E. Clark
        Mr. Chairman and members of the subcommittee, I appreciate this
    opportunity to appear before you. Your support of America's Navy has
    been vital to accomplishing our missions around the world--including
    swift and effective response to the attacks of 11 September 2001--and I
    thank you.
                               strategic context
        The Global War on Terrorism is America's first war of the 21st
    century. Violent horizons lie before us, harboring profound challenges
    including the threat of cyberwar, weapons of mass destruction,
    continued international terrorism, and the havoc accompanying failed
    states. Importantly, such threats do not replace the specter of state-
    on-state conflict. They add to the danger and uncertainty, providing
    new sparks to already combustible situations.
        This terrorist-filled world is more dangerous in many ways than
    that which existed when we faced the global strike and sea denial
    capabilities of the Soviet Union. We no longer counter a peer adversary
    that maintains order within its geopolitical orbit. Rather, the
    international landscape today is comprised of multiple actors whose
    interests form a complex pattern of interwoven and explosive tensions.
        Potential adversaries today include other states, informal
    alliances of states, and terrorist elements that range from state-
    sponsored to state-opposed. Such terrorists may be local actors or
    integrated into global federations dedicated to the export of killing.
    Catalysts motivating potential enemies include religious fervor,
    political ideology, aspirations of regional dominance, dedication to
    fomenting domestic revolutions and, conversely, efforts at sustaining
    domestic order by deflecting internal tensions outward.
        Little is certain in this new world beyond the fact that such
    tensions can be expected to lead to repeated crises, quite often with
    minimal warning or predictability regarding size, location, or
    intensity. It can also be presumed that given America's peerless
    military power, strikes against our nation, people, or interests will
    be delivered in an asymmetric manner, such as the attacks that took
    place last September in New York and Washington, or the previous
    October in Yemen against U.S.S. COLE.
                        navy's role in the 21st century
        Forward deployed naval forces will continue to be a vital part of
    America's defense as we move into the 21st century; a time during which
    the range of threats will in all likelihood grow in volatility and
    unpredictability. Thus America's Navy must remain prepared to conduct
    combat operations anytime, anywhere with maximum effectiveness and
    minimum risk.
        Yet accomplishing our missions has become steadily more
    challenging. Our Navy's force structure declined 41 percent since 1991,
    from 538 to 315 ships, while the Global War on Terrorism has increased
    the call for forward-deployed naval forces. The introduction of a new
    class of smaller combatant--the Littoral Combat Ship (LCS)--will help
    ease the strain and could lead to a war-sustaining fleet of
    approximately 375 ships.
        The current pace of operations is very high. Approximately half of
    the fleet is at sea every day. Nearly one-third of the fleet is
    deployed forward around the world while the remainder is operating off
    our coasts, conducting training or homeland defense missions with the
    United States Coast Guard.
        In view of this taxing requirement, we are exploring innovative
    methods of increasing the presence and striking power of naval forces.
    One construct is to complement Amphibious Ready Groups with surface
    combatants and submarines, producing Expeditionary Strike Groups
    equipped to destroy terrorist elements wherever they may be found.
        We are also experimenting with flexible manning techniques to
    produce greater efficiencies in conducting prolonged on-station
    missions, such as guarding international straits or other locations of
    exceptional strategic value.
        At home, fleet commanders are taking measures to minimize the loss
    of readiness that traditionally occurs between deployments.
    Historically, deployed readiness has been achieved at the expense of
    the non-deployed segment of our force structure. That is no longer
    acceptable and, thanks to Congressional support, we have made
    significant progress over the past several years in correcting long-
    standing shortfalls in spare parts, munitions, and training.
        Fiscal year 2003's budget submission continues that trend, adding
    $2.7 billion to manpower accounts, $2.8 billion to operations and
    maintenance accounts, over $1 billion to research and development, and
    over a half billion dollars to procurement. We have also programmed
    $2.6 billion to buy munitions and $1.3 billion for homeland defense.
    Navy transformational concepts
        Sustaining warfighting effectiveness in this uncertain strategic
    environment will require continued global presence by sovereign naval
    forces that are prepared to counter whatever capabilities the enemy may
    bring to bear. Quantity has a quality all its own in this regard, and
    our Navy will remain on-station around the world, prepared to fight and
    win.
        The dynamic and unpredictable nature of potential enemies demands
    that we continually develop new and more effective capabilities to
    prevent crises and--should deterrence fail--project offensive and
    defensive power ashore. The 21st century Navy must be strategically and
    operationally agile, technologically and organizationally innovative,
    networked at every level, highly joint, and effectively integrated with
    allies.
        Three core operational concepts are key to achieving Navy
    transformation: the application of precise and persistent global
    striking power, the ability to assure access to the littorals and
    project defense overland, and the capability to conduct sustained
    operations from sea bases.
        Precise and persistent global striking power is the offensive
    element of the 21st century Navy. Its effectiveness is derived from
    network-centric operations in which platforms and sensors are fully
    integrated to form seamless warfighting knowledge. Situational
    awareness generated from this network provides rich understanding of
    the adversary that enables the tailored application of power, allowing
    our forces to sustain the initiative, disrupt enemy timelines, and
    deliver operational success.
        Concurrently, the ability to assure access to the littorals and
    project defense overland provides battlefield dominance, assuring
    allies and deterring adversaries. Such battlefield dominance exploits
    expeditionary sensor grids that sweep from seabed to space, cueing
    coordinated air, surface and subsurface combatants to neutralize enemy
    threats. This element of naval power relies upon control of the seas,
    allowing us to guard the flow of trade while identifying, tracking, and
    intercepting threats long before they reach our shores.
        Finally, leveraging the mobility and security of ships on the vast
    oceans in the form of sea basing assures the effective projection of
    sovereign American power. At the operational level of war, sea basing
    serves as a secure foundation from which to project expeditionary
    warfare, while minimizing the requirement to stage vulnerable forces
    and supplies ashore.
        Achieving Navy transformation will include both new procurement and
    aggressive modernization. Nearly 60 percent of the ships in the Navy
    today will be in the fleet in 2020. Thus a significant portion of
    Navy's transformation will occur within existing hulls, placing an
    emphasis on new systems and capabilities that can be inserted through
    modernization. These upgraded platforms will complement new ships and
    aircraft joining our fleet.
        Examples of exciting new technologies that will accelerate our
    transformation toward a fully networked Navy include the DD(X)
    destroyer and its related family of ships, Joint Strike Fighter,
    Unmanned Aerial Vehicles, Unmanned Underwater Vehicles, Tactical
    Tomahawk, Advanced Gun System, Theater Ballistic Missile system,
    Cooperative Engagement Capability, Navy-Marine Corps Intranet, and SSGN
    strike submarine, among others. These systems, in turn, will be
    employed in innovative ways via concepts validated in the Fleet Battle
    Experiment series coordinated by the Navy Warfare Development Command
    in Newport, Rhode Island.
        As it progresses, the process of Navy transformation will yield a
    dispersed and networked fleet that enhances deterrence, assures access,
    conducts precision strikes, gathers real-time intelligence, exercises
    joint command and control, and leverages the priceless advantage of sea
    control. In short, it will be a fleet that serves as the leading edge
    of America's defense--around the world, around the clock.
                         navy readiness and procurement
        As promised in previous testimony, Navy's budget funds manpower and
    current readiness first and fullest because those accounts are key to
    mission accomplishment around the world. Our operational success in
    Afghanistan is a direct reflection of these investment priorities, as
    supported by Congress.
        To sustain the size of the current fleet, we would need to buy an
    average of 180-210 aircraft and nine ships a year. We are currently
    procuring significantly less than that. The fiscal year 2003 budget
    will, if approved as submitted, provide just five ships and 83 naval
    aircraft.
        Harvesting efficiencies within our Navy is key to increasing
    procurement and we will focus a major effort toward that goal over the
    next two years. Failure to free such resources would have a profoundly
    negative effect on the fleet.
        Naval aviation, in particular, would suffer as that community faces
    the greatest near-term challenges. Our current aviation force contains
    the oldest mix of type/model/series aircraft in naval history. Yet
    these aircraft are being tasked to unprecedented levels in on-going
    conflict. The F/A-18 force, for example, has been flown well in excess
    of planned utilization rates and more than 300 F/A-18 aircraft will
    require service life extensions earlier than planned. The best way to
    address such problems is to introduce new aircraft into the fleet as
    soon as possible.
        While our surface and subsurface combatant fleet is, on average,
    fairly young, the rate of ship recapitalization bears watching. The
    following chart illustrates the dramatic decline in authorized ships
    since 1980.

        The impact of the current low procurement rate goes beyond force
    levels. It adversely affects the stability of our defense industrial
    base, and we are paying a premium in program cost due to the small
    number of units being built.
        On a more positive note, maintenance and modernization efforts are
    progressing well due to solid increases in current readiness funding
    over the past several years. The PB-03 budget requests the following
    additional dollars over fiscal year 2002's budget: $804 million for
    ship operations and maintenance, $119 million for flying operations and
    maintenance, $276 million for combat and weapons support, and $310
    million for base support.
        Additionally, the ships and aircraft being developed are superb and
    will serve us well as the core capability of our force in the coming
    decades. DD(X), CVN(X), JSF, FA-18E/F, LPD-17 and the VIRGINIA-class
    SSN present impressive technological leaps in warfighting capability,
    innovation, and reliability. Program specifics include:
        DD(X)/CG(X)/LCS.--Maritime dominance in the 21st century requires a
    naval force capable of projecting power and defeating anti-access
    threats. To accomplish these missions, the future surface naval
    combatant force will consist of four elements: DD(X) advanced multi-
    mission destroyers that provide precision strike and volume fires;
    CG(X) advanced cruisers to achieve sustained air superiority against
    airborne threats and ballistic missiles; agile Littoral Combat Ships to
    defeat enemy defenses such as mines, small boats, and submarines; and
    today's AEGIS fleet kept current through the insertion of developing
    technologies. Cutting-edge systems integral to this family of ships
    include the Advanced Gun System, Multi-Function Radar/Volume Search
    Radar, Integrated Power System electric drive, and revolutionary hull
    forms.
        CVN(X).--The fiscal year 2003 budget provides RDT&E and advance
    procurement for the first CVN(X). CVN(X) will replace U.S.S. ENTERPRISE
    in fiscal year 2014 when that ship is in her 53rd year of commissioned
    service. Design objectives for the CVN(X) class include a significant
    reduction of total ownership costs during the carrier's 50-year
    expected service life, reduced manning, and incorporation of a flexible
    infrastructure that will allow the insertion of new capabilities as
    they evolve.
        JSF.--The Joint Strike Fighter contract was signed in 2001. It will
    provide an aircraft with unprecedented stealth and range to the fleet
    as part of a family of tri-service, next-generation strike aircraft
    with an emphasis on commonality and technological superiority at an
    affordable price. The fiscal year 2003 budget supports procurement of
    the initial variant in fiscal year 2006.
        F/A-18E/F.--The F/A-18E/F will replace older F/A-18s and all F-14s.
    There is extensive commonality of weapons systems, avionics, and
    software between F/A-18 variants, and the infrastructure supporting the
    Super Hornet builds upon existing organizations.
        LPD-17.--Although we have experienced design and production
    difficulties with the lead ship, we remain fully committed to this key
    program. LPD-17 supports vital littoral warfighting requirements and
    promises relief from the escalating costs of our aging amphibious
    ships. The LPD-17 class will replace four older classes of ships and
    serve as a central element of future Amphibious Ready Groups/
    Expeditionary Strike Groups. We need to accelerate development of these
    ships as rapidly as design and production facilities will allow.
        VIRGINIA-class submarine (SSN-774).--This class will replace LOS
    ANGELES-class (SSN-688) attack submarines as they leave the fleet. SSN-
    774s are designed for multi-mission littoral operations, as well as
    traditional open-ocean anti-submarine and anti-surface missions. They
    will also incorporate new technologies as they become available,
    ensuring future effectiveness. The fiscal year 2003 budget procures one
    submarine per year and continues RDT&E. This pace of procurement will
    have to be increased beyond the current FYDP to maintain the required
    attack submarine force level over the long term.
                        sailors: our most valuable asset
        Winning the Global War on Terrorism is our primary goal, and Navy's
    fiscal year 2003 budget prioritizes manpower and current readiness
    above future readiness and infrastructure needs for that reason. As
    noted earlier, fiscal year 2003's budget submission adds $2.7 billion
    to manpower accounts over fiscal year 2002 levels and an additional
    $2.8 billion in operations and maintenance funding.
        Thanks to the unequivocal support of Congress--including increases
    to base pay and bonuses, retirement reforms, and better medical
    benefits--Sailors are staying Navy in record numbers. In 2001, we
    retained 58 percent of all eligible Sailors at the end of their first
    enlistment, 67 percent of Sailors with 6-10 years of Service, and 83
    percent of Sailors with 10-14 years of Service. Additionally, 1,512
    more Sailors were advanced in 2001 than the year before.

                                      ENLISTED REENLISTMENT RATES (AS OF 28 FEB 02)
    ----------------------------------------------------------------------------------------------------------------
                                                                        Zone A (<6     Zone B (6+ to  Zone C (10+ to
                                 Oct-Feb                                  years)         10 years)       14 years)
    ----------------------------------------------------------------------------------------------------------------
    Fiscal year:
        2000 (percent)..............................................            49.7            62.8            81.8
        2001 (percent)..............................................            58.8            67.6            83.5
        2002 (percent)..............................................            64.4            75.5            86.2
        2001-2002 Comparison (points)...............................            +5.6            +7.9            +2.7
    ----------------------------------------------------------------------------------------------------------------

        The Navy also met our overall recruiting goals in fiscal years
    1999, 2000, and 2001, and this year we are well ahead of the record-
    setting pace of fiscal year 2001. Thanks to these successes, battle
    groups are deploying better manned than ever before.
        We are winning the battle for people, but important challenges
    remain. Officer retention in most line communities is below required
    levels and recruiting shortfalls exist in officer specialty areas and
    critical enlisted ratings.
        We are also dedicated to continuing the fight against attrition.
    The annual attrition rate for first-term Sailors has been reduced from
    over 14 percent to 10 percent since 1998, retaining thousands of young
    men and women for service. Yet we can--and will--do better. Concerned,
    involved leadership is central to minimizing attrition without
    compromising standards. To make this happen, I have directed Navy
    leaders to take every measure to ensure our people succeed and prosper.
        Key to achieving that goal is cultivating a command climate
    throughout the Navy that offers plentiful opportunities, encourages
    participation, and is conducive to personal and professional growth. We
    are striving to minimize the increased wartime operational tempo of the
    fleet via careful planning and innovative training. This is the first
    time in modern history that the Services have faced a prolonged
    conflict with an all-volunteer force, and we must protect the integrity
    of our fleet.
        Two initiatives have been launched during the past year to help us
    fully utilize our Sailors' potential:
        Task Force EXCEL (Excellence through our Commitment to Education
    and Learning) is making impressive progress in developing processes,
    policies, and structures to fully realize the capabilities of every
    Sailor. Seventeen ratings are currently under review to find ways to
    expand professional learning, earn certifications that are recognized
    by the civilian community, and enhance personal growth. The goal is to
    provide a comprehensive development plan for every Sailor based upon
    education that takes place in the classroom and on the internet, as
    part of a culture of continual learning.
        Project SAIL (Sailor Advocacy through Interactive Leadership) is a
    new program that will have a major impact on how the Navy assigns our
    personnel. Using a team detailing process that includes Sailor
    advocates, enhanced internet connectivity, and billet incentivization,
    Project SAIL will strengthen efforts to find the best set of orders for
    every one of our Sailors, leading to assignments that are both
    professionally rewarding and personally fulfilling.
        The shared focus of these initiatives is an appreciation that
    combat success in the 21st century will rely heavily on knowledge
    management derived from a highly educated and motivated volunteer
    force; a force that is empowered in their career decisions and
    encouraged to contribute to a climate of warfighting excellence.
                      conclusion: a commitment to victory
        Our national leaders have repeatedly told the American people that
    the war against terrorism will be neither easy nor short. In addition
    to targeting international terrorist networks, the President has
    singled out states sponsoring terrorism for military action should they
    threaten international peace.
        This struggle promises to be global in scope and simultaneous in
    execution. It will require the full might of America's armed forces. In
    pursuing victory, the United States Navy--forward deployed, highly
    capable, and poised for action--will play a leading role.
        I thank the subcommittee for your continued strong support of our
    Navy and our Sailors. Working together, I am confident that we will win
    the Global War on Terrorism, leading to a more stable and peaceful
    world.

        Senator Inouye. Thank you very much, Admiral Clark.
        General Jones.
    STATEMENT OF GENERAL JAMES L. JONES, COMMANDANT, U.S.
                MARINE CORPS
        General Jones. Mr. Chairman, thank you for the privilege of
    making a very few remarks in a preliminary fashion prior to
    answering your questions. I would like to just make three quick
    points.
        The first one is that I would like to reemphasize a point
    that the Secretary made a few minutes ago about the partnership
    in the leadership of the Department. It is something that I am
    very proud of, very proud to be a part of, and it is real and
    tangible. And I think this partnership is being felt throughout
    not only the Navy and the Marine Corps, but the civilian sector
    of our Navy Department.
        Operationally, I would tell you that the Navy and the
    Marine Corps team is stronger than ever before. I value my
    partnership with the CNO. There is not a day that goes by that
    we do not check our notes and make sure that the partnership
    and the team is strong, and we are going to do even more things
    in the year ahead to celebrate that contribution that we make
    to the joint effort, but also the power of teamwork that comes
    from a close association between two very natural allies and
    very, very longtime friends.
        The Marine Corps is moving along on a transformation axis
    that supports that, the joint warfight. I would just like to
    comment on four characteristics of that transformation because
    for me the transformation is more than just leap-ahead
    technologies. That is certainly one of them. Tilt rotor
    technology, the dramatic advances that we are making in our
    communications and intelligence gathering fields, the power of
    reach-back technology, which allows us to reduce the exposure
    of our sailors and marines on the ground and at sea. All of
    those things are very exciting.
        There is also an institutional transformation with major
    manpower reforms. I would submit, Mr. Chairman, and members of
    the committee that certainly one of the most transformational
    things that has happened to the armed forces of the United
    States in the last 50 years has been the all-volunteer force.
    We are still learning to deal with this very capable force. To
    the Marine Corps, this means a lot of manpower reforms that
    focus on our recruiting and retention. We have said it many
    times, but we recruit marines; we retain families.
        Operational transformation. We saw just a hint of how far
    we have come in a short period of time with the 1st Marine
    Expeditionary Brigade with two Marine Expeditionary Units in
    Afghanistan. The headquarters for that brigade, Mr. Chairman,
    had fewer than 60 people. Ten years ago it would have been 350
    people or 400 people. That is the power of the kind of
    transformation that we are talking about.
        It has been reported in the press and it is fair to say
    that the Navy and Marine Corps tactical aviation integration is
    going to be something that the future is going to meet and
    satisfy. We are very excited about the power and the potential
    of that integration. It is not necessarily new. The Marine
    Corps provides four squadrons of F-18s regularly to deploy on
    our big-deck carriers, in addition to its own Harriers on the
    amphibs. We will propose to more fully integrate the carrier
    airwings with marine aviation. That is good for the Navy, it is
    good for the Marine Corps, and it is good for the Nation.
        And finally, the last area for transformation in the Marine
    Corps is acquisition and business reforms. An example of that
    would be the tremendous transformation we are seeing on our
    bases and stations with regard to public/private ventures to
    refurbish and remodernize our housing. We are talking about
    tens of thousands of houses that potentially could be built in
    the very near future at very little expense to the taxpayer
    using these creative business relationships that we have been
    able to fashion with our partners in industry.
        With regard to the fiscal year 2003 budget, I align myself
    completely with the Secretary and the CNO. This budget
    continues to enable our emergence from the years of failure to
    recapitalize. For the Marine Corps, it adds $1.3 billion to our
    military personnel account, a half a billion dollars to
    procurement and research and development, and another half a
    million to Operations and Maintenance (O&M). It does reduce our
    MILCON account by $98 million from our fiscal year 2002 level,
    but it is still better than fiscal year 2001 by about 24
    percent. So, the trend lines are good. And we are up 20 percent
    in terms of our funds allowed for family housing, which enables
    this transformation that I spoke about briefly.
        As you know, it also provides for a targeted pay raise,
    career sea pay, and it reduces the out-of-pocket expense for
    housing from 11.3 percent to 7.5 percent, and we will achieve
    zero percent within the next 2 years.
        In this budget, we will see 25 percent real program growth
    over the fiscal year 2001 baseline for the operational forces,
    and 11 percent real program growth over the fiscal year 2001
    baseline for our bases and stations. And that is
    extraordinarily good news.

                               PREPARED STATEMENT

        So, this budget sustains our modernization and
    transformation programs. It enables me to sit before you this
    morning and tell you that it is a great time to be a United
    States Marine, and we cannot thank you enough, Mr. Chairman and
    members of the committee, for the assistance that you have
    given us in enabling this dramatic turnaround.
        I would be happy to respond to any of your questions.
        [The statement follows:]
                  Prepared Statement of General 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 your continued support. Your commitment to
    increasing the warfighting and crisis response capabilities of our
    Nation's armed forces and to improving the quality of life of our men
    and women in uniform is central to the strength of your Marine Corps.
    As a result, your Corps was ready when called upon on September 11,
    2001. We thank you for your effort in ensuring that Marines and their
    families were poised to respond to the Nation's call in the manner
    Americans expect of their Corps.
        The direction of the Corps is confident, clear, and unambiguous.
    The Corps understands its role as a force in readiness but also
    realizes that the world is changing. For 226 years, Marines have always
    been innovators in order to be ready for the next war. To assure
    success, we continually strive to be capable of rapidly adapting to new
    circumstances inasmuch as we recognize that the future is
    unpredictable.
        The President's fiscal year 2003 Budget enables the Navy-Marine
    Corps Team to fight today's war on terrorism and transform itself to be
    ready for future challenges. This budget funds our 4th Marine
    Expeditionary Brigade anti-terrorism efforts, includes pay raises and
    new combat uniforms for our Marines and provides increased health care
    for our retirees. It also allows us to harness the new capabilities
    found in tilt-rotor technology and Short Take-Off and Vertical Landing
    aircraft. We have increased funding for our operating forces in day-to-
    day operations, training, equipment maintenance, and force protection.
    Additionally, our bases and stations are sustained by the President's
    budget, which improves such critical areas as family housing and
    bachelor quarters. Furthermore, this budget's investments in ground
    equipment, ammunition and research and development will help us recover
    from prior year shortfalls.
        Marines have a vision for the future, and we are moving forward
    with the modernization and transformational efforts needed to make this
    vision a reality. We fully understand that our vision cannot be
    achieved independently of our sister Services. Each of us has our own
    critical role to play in providing for our collective security. It is
    important that each of our contributions be, simultaneously, both
    unique and complementary. In particular, the Corps stresses the
    importance of our key partnership with the Navy. The Navy-Marine Corps
    Team has never been stronger, nor more necessary for our country. In
    fact, the essence of our combined power is our teamwork.
        Americans have relied upon the Navy and Marine Corps Team to
    protect and promote the interests of the nation since our creation by
    the Continental Congress in 1775. After helping to win American
    independence, Naval Services acted time and again to ensure our freedom
    and set in motion the ascendancy of our Nation as a global power under
    the banner of democracy and its potential. During the darkest hours of
    our history, the Navy and Marine Corps Team has remained the most
    useful and most frequently used expression of our Nation's interests in
    forward presence and crisis response. Those of us who are privileged to
    serve in the Naval Services today have inherited a legacy that we are
    dedicated to preserving. Together we will continue to flourish, due to
    steadfast appreciation of our heritage and a commitment to a tradition
    of continuous innovation and change.
        Teamwork is the bond that forever joins our Services and is the key
    to our enduring success. We have progressed from wooden ships of sail,
    with embarked Marines, to modern networked Naval expeditionary strike
    forces that are forward deployed and full spectrum capable. We are a
    combined-arms force capable of ensuring America's access, including
    sustainable forcible entry operations to distant inland areas and
    austere locations. Always moving forward, we are incorporating advanced
    technologies to increase our capabilities to include exploiting the
    tremendous potential of sea control and power projection. Our
    innovation is not limited to equipment and weapons systems but is also
    reflected in the development of new operational concepts and
    organizational evolution. When crises emerge, the Nation can depend on
    the Navy and Marine Corps Team.
        Today, I will describe the Marine Corps' relevance to the current
    security environment as well as our future role as America's sea-based,
    expeditionary, combined-arms force. I will also address the Marine
    Corps' role as the Nation's medium-weight expeditionary force, bridging
    the gap between America's Special Operations Forces and the Army's
    critical land war-winning capability. The preponderance of this
    statement will focus on the Marine Corps' transformation plans and our
    vision for the 21st Century.
        the marine corps' relevance: power projection from the sea-base
        For the United States to provide its citizens with security and
    prosperity at home and abroad it must continue to lead the effort in
    maintaining international stability. One only need consider the events
    of September 11th, and the fact that 30 percent of the United States
    Gross Domestic Product is directly related to global trade, to realize
    that America's well-being is inextricably linked to the international
    order. America must continue to establish and lead efforts to maintain
    stability around the world. This challenge requires the integrated
    application of all elements of national power--economic, political,
    diplomatic, cultural, intellectual, technological, and military.
    Working in concert with the other components of national power, our
    armed forces perform a vital role in establishing and maintaining
    conditions that directly affect global stability and America's security
    and prosperity. History shows that our men and women in uniform play a
    pivotal role in our Nation's international credibility. It is not an
    exaggeration to claim that our Nation's most important gift to world
    order is found in the service of our young men and women in uniform.
    Before anything good happens in the world, they are there establishing
    the framework for peace and stability.
        Inasmuch as global stability is intrinsically tied to America's
    relationship with other nations in the world community, the United
    States benefits significantly from military to military relationships
    around the globe. However, as nations continue to raise issues of
    sovereignty, especially during a crisis, we must find new ways to
    conduct our Nation's necessary engagements and have the means to
    respond to crisis without being excessively restricted by geo-political
    issues. In the 21st Century, we are likely to see a change in the
    number and type of large, quasi-permanent American bases around the
    world as defined by the post-Cold War era. We must begin to develop
    alternatives to ensure that we are able to maintain our peacetime
    presence and our crisis response capabilities. 21st Century basing
    initiatives are issues that will have to be addressed in the near
    future.
        We cannot deter aggression, nor defeat future adversaries, solely
    with military capabilities based at home. Regional engagement requires
    presence, and there is no such thing as truly effective ``virtual
    presence.'' The inherent mobility and flexibility of Naval forces in
    providing off-shore basing options is an effective counter to
    increasing limitations to access and basing rights. America's
    stabilizing influence overseas is contingent upon our ability to
    deploy, employ, and sustain persistent military forces from the sea.
    Indeed, the Navy-Marine Corps Team's sea-based power projection
    capabilities are a cornerstone of our military's contribution to our
    enduring security and that of our allies.
        Sea-based capabilities provided by the Navy-Marine Corps Team are
    an important means for America to cultivate its relationship with the
    world, providing the advantage, both in peacetime and in crisis
    response operations, of being able to control the size of our
    ``footprint'' ashore. Sea-basing also provides the operational
    advantages of force protection, operational maneuver space, and the
    sanctity of sovereign platforms from which we can engage adversaries.
        The Navy-Marine Corps Team's sea-based capabilities have been re-
    validated over the past several months. In Afghanistan, sea-based Naval
    forces provided a significant portion of tactical air sorties and the
    initial deployment of major, sustained ground force presence, reaching
    over 600 miles inland. [See Figure 1]
        Operation Enduring Freedom has also proven the value of the Navy-
    Marine Corps Team as an important element of a Joint Force.

                                   [Figure 1]

        Important contributions were made through Marine integration with
    Special Operations Forces, the Army, and the Air Force in the areas of
    Intelligence, Surveillance, and Reconnaissance capabilities to long-
    range strike and close air support capabilities. The Marine Corps has
    demonstrated that the Marine brigade--a flexible, medium-weight,
    combined arms, expeditionary force--is not only responsive, but also a
    full and effective partner in Joint and Coalition operations.
     the marine corps' role: a scalable, sustainable, forcible entry force
        The Marine Corps provides our Nation and its Joint Force Commanders
    the full scope of military capabilities required to respond to the
    broad spectrum of threats and potential missions that confront
    America's armed forces today and in the future. For six percent of the
    Department of Defense's budget, the Marine Corps provides twenty
    percent of our Nation's ground combat maneuver battalions, tactical
    fixed-wing aircraft squadrons, and attack helicopter squadrons, as well
    as one-third of its active duty combat service support.
        If there is a lesson to be learned from ongoing operations in
    Afghanistan, it is that there is tremendous power and capability in the
    diversity of our armed forces today. Joint Force Commanders must have
    the fullest possible range of options and capabilities available in
    order to apply the desired effects, both lethal and non-lethal, in any
    given scenario. Indeed, the flexibility and robustness of America's
    armed forces is a product of the varied and unique capabilities each
    Service contributes to our Nation. Accordingly, our capabilities need
    to be complementary, not duplicative, if we are to provide the diverse
    and versatile capabilities needed to confront the uncertain threats of
    the future. Together, our Joint force forms a mosaic of integrated
    capabilities to defeat the myriad threats and challenges we may face
    today and tomorrow. Enhancing these capabilities across the force is in
    the national interest.
        Marine Air-Ground Task Forces have proven their utility in meeting
    challenges and exploiting opportunities. The versatility of the Marine
    Expeditionary Brigade is emblematic of the scalability of our Marine
    Air-Ground Task Forces. In size and capability, these brigades are
    midway between our ``light'' Marine Expeditionary Units and our
    ``heavy'' Marine Expeditionary Forces. Furthermore, our Marine
    Expeditionary Brigades can either deploy on amphibious shipping or be
    airlifted into a theater of operations to link up with equipment and
    supplies aboard Maritime Prepositioning Ships.
        While the global war on terrorism has demonstrated the current
    capabilities of the Navy-Marine Corps Team, our continuous
    transformation and modernization promise even greater future
    capabilities for the Marine Corps. Transformation is an ongoing
    process, however, not an end-state. It spans decades of innovation and
    experimentation. It is also not limited to technology, but includes
    change in our organizational structure, operational concepts, and
    business practices.
        The Marine Corps has always been at the forefront of transformation
    and innovation. Throughout our history, the Marine Corps has changed
    and evolved--from ship security, to naval constabulary, to light
    infantry, to an amphibious assault force, to an air-ground
    expeditionary team. In the past, our development of close air support,
    amphibious warfare, vertical envelopment, Short Take-Off and Vertical
    Landing technology, and maritime prepositioning have benefited our
    Joint warfighting capability. Today, the Marine Corps remains true to
    its warrior culture and continues in a tradition of change. Drawing on
    our history of transformation, the Marine Corps is moving forward with
    new concepts, innovation, and exciting experimentation. Our focus is on
    the creation of new capabilities, which will yield the operational
    advantages we seek to have in dealing with future conflicts.
         the marine corps' transformation: concepts, technologies, and
                                 organizations
        Although many think of transformation primarily in terms of weapons
    systems, true transformation results from a synthesis of new
    technologies with strategic vision, revolutionary operational concepts,
    and agile, adaptive organizations. Clearly, we must harness the
    potential military benefits of rapid advances in technology. The V-22
    Osprey is but one example of the potential of proven transformational
    technology. The path to transformation involves a robust program of
    experimentation with new concepts, capabilities and operational
    prototypes while actively pursuing forward-looking science and
    technology efforts. As we experiment and introduce new capabilities, we
    will rapidly mainstream the changes into our ready forces. [See Figure
    2]

                                   [Figure 2]

    Transformation of Operational Concepts and Better Business Practices
        Technological innovation plays a paradoxical role in military
    transformation. With each problem it solves, technological innovation
    tends to introduce new challenges and opportunities. Operational
    concepts can offset these tensions by finding the means to capitalize
    on technological strengths and also guard against creating new
    weaknesses. In light of heightened fiscal awareness and the need to be
    effective with our resources, we must reform our business practices to
    maximize available resources and develop more expedient means of
    fielding programs and equipment. With this in mind, the Marine Corps is
    committed to transforming its operational concepts and business
    practices.
        The ongoing process of conceptual change is embodied in the recent
    publication of our overarching concept, Expeditionary Maneuver Warfare.
    It is the foundation for the way the Marine Corps will conduct
    operations in the 21st Century. Expeditionary Maneuver Warfare is the
    union of our core competencies, maneuver warfare philosophy,
    expeditionary heritage, and the concepts by which we organize, deploy,
    and employ forces. It emphasizes the unique and proven capabilities the
    Marine Corps provides Joint Force Commanders and the synergy created
    when leveraged with the complementary capabilities of other Services
    and agencies. These capabilities translate into power projection
    designed to promote global security and reassure our allies and
    friends, while deterring and defeating adversaries and potential foes.
        Central to our conceptual transformation is the potential power
    represented in a future integrated sea-base. At-sea arrival and
    assembly, selective off-load, and at-sea reconstitution capabilities
    stand to revolutionize the way Naval forces project power and influence
    around the globe. Our evolving logistics concepts promise indefinite
    sustainment of Marine forces, both afloat and ashore. As well, Marine
    forces afloat typically rely upon the Command, Control, Communications,
    and Computer (C\4\) capabilities aboard amphibious shipping to provide
    critical reach-back connectivity to deployed elements of the Marine
    Air-Ground Task Force, and communications with Joint and multinational
    forces. These afloat C\4\ capabilities are crucial to the success of
    sea-basing and to achieving the full potential of Naval power
    projection.
        The Marine Corps' sea-basing strategy is yet another illustration
    of continued transformation in operational concepts. Recognizing the
    increasing limitations on future basing potential of American forces
    overseas and the simultaneous need for the United States to maintain a
    forward presence, the Navy and the Marine Corps are developing a
    forward presence strategy as an extension and augmentation of our
    concept of sea-basing. Sea-basing is the formation of Joint assets at
    sea to project and sustain combat power ashore, while reducing or
    eliminating our landward logistics footprint during combat operations.
    The sea-based presence strategy boosts forward engagement during
    peacetime by increasing the number of countries that we may visit
    without being permanently stationed at large fixed-bases in host
    nations. Marines can deploy from country to country and advance
    diplomatic and informational efforts through military-to-military
    relations, small unit training, liaison exchanges, and exercises. III
    Marine Expeditionary Force's annual Cooperation Afloat Readiness and
    Training in the Asia-Pacific region is an illustration of this concept.
        In addition to codifying overarching conceptual innovations, the
    Marine Corps is adjusting its tactics, techniques, and procedures to
    better support conceptual change. Marine Aviation Weapons and Tactics
    Squadron-1 is adapting tactics, techniques, and procedures for the
    employment of aviation operations in urban terrain--a vital, yet
    challenging environment today and in the future. Advancements have been
    made in target selection and tracking, weapon selection and employment,
    friendly unit position identification, command and control, and staff
    planning. Likewise, the Marine Corps is actively engaged in the
    development of the underlying concepts of Network Centric Warfare for
    Naval expeditionary forces. We are exploiting state-of-the-art
    information and networking technology to improve situational awareness
    and to integrate widely dispersed sensors, forces, and weapons. Network
    Centric Warfare will allow commanders to achieve mission objectives
    rapidly and decisively by concentrating the combined fire and maneuver
    of Naval forces afloat and ashore at decisive locations and times.
    Similarly, the Marine Corps led Joint Non-Lethal Weapons Directorate is
    forging the way for the development of non-lethal technologies, as well
    as the tactics, techniques, and procedures for effectively employing
    their effects. Congressional funding of the Non-Lethal Technology
    Innovation Center at the University of New Hampshire will continue to
    provide further stimulus for the experimentation and formulation of
    doctrine that guides the tactical use of these new weapons.
        Just as it is transforming its doctrine, the Marine Corps is also
    transforming its business practices. Our readiness is a reflection of
    balancing the demands of current requirements around the globe with the
    imperative to invest and be prepared for the future. This balance can--
    over the long haul--be achieved only if resources are reallocated from
    overhead and support activities to our fighting forces. To accomplish
    this reallocation of resources, we are adopting better business
    practices to achieve greater cost-effectiveness. There are several
    different avenues that the Marine Corps is taking to make this happen.
    We are streamlining organizations to eliminate redundancy and maximize
    integration. We are also reducing excess support structures to free
    resources and focus on core competencies.
        To transform our business practices, the Marine Corps must
    increasingly rely on business intelligence and associated technologies
    promoting access to information. We consider information to be a
    strategic asset, and by assuring access to information, we will improve
    the operational agility of the Marine Corps. Our efforts to promote
    enterprise management of information technology confirm our need for a
    common infrastructure that includes a shared data environment,
    realignment and consolidation of many of our information systems, and
    the search for cost-effective strategies.
        Commercialization, privatization, and out-sourcing are among the
    methods the Marine Corps has used to reduce costs, but ultimately it is
    competition between public and private sources that has led to
    increased savings. The Marine Corps has initiated competition between
    government sources and private sector commercial sources for a broad
    number of activities, best seen in the Marine Corps' application of
    such competition vis-a-vis its bases and stations. To operate our 15
    major installations--essentially providing the range of support
    services typical of a municipality--a labor force of approximately
    20,000 Marines and 14,000 civilians are employed. One of the processes
    we have used in these competitions to save money is Activity-Based
    Costing and Management. This process provided our installation
    commanders information that enabled them to save over $30 million last
    year by analytically measuring the costs of particular work and
    evaluating the performance of that work.
        Another example of turning to the private sector and using
    competition to bring down costs is the success of our new camouflage
    utility uniform. The uniform was created, tested, produced, and fielded
    by the Marine Corps--with the use of a new digital camouflage design
    technique--through a single source vendor, yielding a product that is
    superior in quality, comfort, and cost to that in existence today. We
    are extremely pleased with this innovative uniform that not only costs
    less in the long run, but is a product improvement benefiting our
    Marines. All of this was achieved within a one year period.
        Just as the Marine Corps' new utility uniform is an example of both
    tactical and business innovation, so too the transformation of
    operational concepts and business practices are seen together in our
    Integrated Logistics Capability. The Integrated Logistics Capability is
    redefining and realigning our supply and maintenance process by
    providing our logisticians with greater awareness of equipment status,
    increasing their capacity to more rapidly and effectively respond to
    logistical requirements on the battlefield. The simple objective of our
    Integrated Logistics Capability is to avoid weighing down the
    warfighters with the requirement to haul, protect, and administer
    massive amounts of supply material. The foundation of this concept and
    business practice is a revolutionary change in military methodology:
    shifting from massive inventories to small inventories. With the use of
    new technologies and practices, proven in the private sector, the Corps
    will, in essence, create a ``new order'' for its logistics enterprise
    and undertake the revolutionary changes necessary to ensure that it
    continues to be the premier fighting force in the world. Second Force
    Service Support Group at Camp Lejeune, North Carolina, is currently
    testing many of these new processes in a year long ``proof of concept''
    to validate the direction in which we are heading. These efforts will
    allow Marine logisticians to support the battlefield of the 21st
    Century with a smaller logistical footprint in a more cost-effective
    manner.
    Transformation and Modernization Through Harnessing Technologies
        With the foundation of requirements drawn from its new concepts,
    the Marine Corps is transforming its weapons systems and assets
    throughout the five elements of our Marine Air-Ground Task Forces--our
    ground, aviation, logistics, and command elements, as well as our
    supporting establishment. The following examples are but a few of our
    transformational and modernization efforts. Many of our investments
    involve modernization of existing capabilities vital to effectively and
    efficiently fulfill our core competencies. A more comprehensive
    description of the Marine Corps' entire acquisition program can be
    found in the Marine Corps' Concepts & Issues: Forging the Future Marine
    Corps.
                Amphibious Shipping for Sea-basing
        We are a maritime nation and we must capitalize on this part of our
    national character to ensure that we are ready for the challenges that
    are over the horizon. The requirement for our amphibious shipping
    remains the linchpin of the Corps' ability to influence the
    international security landscape, project power, and protect the
    Nation's interests during peacetime and crises. While it has long been
    recognized that we require an amphibious ship force structure capable
    of simultaneously lifting the assault echelons of three Marine
    Expeditionary Brigades, today's amphibious lift can support only two-
    thirds of this requirement in certain aspects of the lift footprint. I
    strongly recommend that we commit to redress this shortfall as a matter
    of urgent priority.
        We are grateful for your support in replacing four classes of older
    ships with the new LPD-17 San Antonio amphibious ship class. Delivery
    of these 12 ships to the fleet is currently planned to be complete in
    2015. However, we remain concerned about further schedule slippage in
    the LPD-17 program. Such delays compromise our ability to fulfill our
    global forward presence responsibilities and must be avoided.
    Similarly, we are concerned with replacing the LHA-1 Tarawa class
    ships. Considering the extended time-frame for ship design,
    construction, and delivery, we need to ensure now that we are ready to
    replace the Tarawa class when they reach the end of their 35 year
    service life starting in 2011. [See Figure 3]

                                   [Figure 3]

        The leases of our current fleet of Maritime Prepositioning Ships
    (MPS) will expire in fiscal year 2009, fiscal year 2010, and fiscal
    year 2011. The development of advanced Mmaritime Prepositioning
    capabilities, High Speed Vessel platforms, and new lighterage vessels,
    will significantly increase the strength and flexibility of our sea-
    based expeditionary operations. The marriage of a modern amphibious
    fleet with modern Maritime Prepositioning Shipping capable of hosting
    at-sea arrival and assembly of forces will minimize the requirement for
    access to secure ports and airfields, and give our Nation an unmatched
    asymmetrical advantage in projecting power.
                Tilt-Rotor Aircraft
        The V-22 Osprey remains the Corps' number one aviation acquisition
    priority. Recent actions in Central Asia have only reinforced the
    immediate need for this truly transformational capability. [See Figure
    4]

                                   [Figure 4]

        Tilt-rotor technology holds the promise to revolutionize aviation--
    we should not be afraid to embrace this promise. Both the Department of
    Defense's Panel to Review the V-22 Program and the National Aeronautics
    and Space Administration's Tiltrotor Aeromechanics Phenomena Assessment
    Panel concluded that tilt-rotor technology is sound and that mishaps
    have been the result of engineering deficiencies that can be solved.
    The V-22 will radically increase the Marine Corps and Special
    Operations Command's operational reach and tactical flexibility. The
    Osprey's superior range, speed, and payload will give Marines and
    Special Operations Forces the ability to accomplish combat missions and
    other operations from distances previously unattainable, with response
    times far faster than possible with other airframes. The battlespace of
    the future will demand capabilities that provide rapid and effective
    maneuver. Through the use of the V-22's increased speed and range, we
    not only improve our ability to influence the tempo of operations, but
    we provide our forces with greater survivability. These capabilities
    are the foundation for how we have planned to transform our operational
    concepts and intend to reorganize our force structure.
        We are aware of the challenges associated with the Osprey but are
    pleased that the Under Secretary of Defense for Acquisition,
    Technology, and Logistics has announced that a new comprehensive flight
    test program for the V-22 will start this Spring. This flight test
    effort will be ``event-driven,'' as opposed to being ``time-driven.''
    Both the Secretary of the Navy and the Under Secretary of Defense for
    Acquisition, Technology, and Logistics will periodically review flight
    test results to assess progress.
                Short Take-Off and Vertical Landing Aircraft
        In late October 2001, the contract was awarded for the Joint Strike
    Fighter, signaling a new era in naval aviation. The advantages of a
    stealthy strike fighter capable of taking off from an expeditionary
    base on land or at sea, fly in supersonic cruise, accomplish its
    mission with advanced sensors and weapons, then return to its
    expeditionary site are dramatic. This aircraft will transform the very
    foundations of tactical air power. It will provide the reliability,
    survivability, and lethality that our forces will need in the years
    ahead. Moreover, the Short Take-Off and Vertical Landing Joint Strike
    Fighter variant provides operational access to more than three to five
    times the number of airfields available around the world that are
    currently capable of supporting our so-called ``legacy'' aircraft. The
    Short Take-Off and Vertical Landing Joint Strike Fighter can also
    operate from both conventional carriers and amphibious assault ship
    decks, effectively doubling the number of shipborne platforms available
    for operations. As these highly capable aircraft move from sea-based
    platforms to expeditionary airfields, they can effectively decrease
    response time for missions by 75 percent and increase time-on-station
    by 50 percent. These capabilities represent a significant increase in
    strategic agility, operational reach, and tactical flexibility over
    conventional aircraft.
                Fire Support Systems
        Of critical interest to our Marine Air-Ground Task Forces is the
    status of our fire support systems on land, at sea, and in the air. We
    currently have an acute shortage of fire support. It is vital for us to
    move ahead with existing programs to provide our Marines with this
    important warfighting enhancement. Indeed, the funding, testing, and
    development of our systems are vital. The Lightweight 155 Howitzer is
    needed to replace our aging ``legacy'' field artillery weapons. The
    High Mobility Artillery Rocket System, moreover, promises to be rapidly
    deployable and will be a key part of our expeditionary operations,
    firing both precision and area munitions under all weather conditions,
    as well as extending our ground-based fire support umbrella to 60
    kilometers. In addition to these fire support systems, we need the
    Ground Weapon Locating Radar to protect our forces against our
    adversaries' counter-battery fires. We should also continue to invest
    in Naval Surface Fire Support. Remedying the fire support shortfall we
    have lived with for much of the last two decades is crucial.
                Advanced Amphibious Assault Vehicles
        The Advanced Amphibious Assault Vehicle program remains the Corps'
    highest ground acquisition priority and promises to allow high-speed
    surface maneuver from ship-to-shore as well as on land. This vehicle
    will be able to deploy to objectives from over the visual horizon, 25
    miles and beyond, and will allow our ships to remain beyond the range
    of many threat weapons and surveillance systems. It will help off-set
    an enemy's anti-access strategies and bolster expeditionary operations
    from the sea. Furthermore, the Bushmaster II 30 mm cannon will give the
    vehicle a lethal direct fire capability. The Advanced Amphibious
    Assault Vehicle will be a decisive expeditionary warfare tool for
    operations in littoral areas world-wide.
                High Speed Vessel
        High-speed, intra-theater sealift, catamaran vessels provide
    phenomenal increases in speed and tactical flexibility for our Navy-
    Marine Corps Team. Building on operational use of the Royal Australian
    Navy's HMS Jervis Bay, our Joint Venture High Speed Vessel promises to
    reap new developments that will lead to new capabilities. Additionally,
    leasing the 331-foot commercial catamaran Austal West Pac Express, III
    Marine Expeditionary Force has demonstrated the viability of such
    vessels, using it to transport Marines and their equipment to training
    exercises through out Asia--lifting 950 Marines and 550 tons of
    materiel per trip, the equivalent of 14 to 17 military cargo aircraft.
    The Navy-Marine Corps Team's current requirement is for a craft that
    can transport 400 tons of cargo, travel 1,200 miles without refueling,
    and achieve a speed greater than 40 knots. We are confident in the High
    Speed Vessels capacity to deliver these capabilities and transform our
    intra-theater mobility.
                Tactical Unmanned Aerial Vehicles
        Unmanned Aerial Vehicles have already seen extensive action in the
    war against terrorism and their use is expanding. This technology's
    potential, combined with its ability to conduct dangerous missions
    without the risk of personnel casualties, make this a truly
    transformational asset. The Navy and Marine Corps' Vertical Take-Off
    and Landing Unmanned Aerial Vehicle Engineering Development Model
    program is designed to test and evaluate various sensor packages and
    the Tactical Control System architecture for use in future Tactical
    Unmanned Aerial Vehicles. In the interim, Marine Corps Pioneer systems
    will be upgraded to perform Unmanned Aerial Vehicle functions
    (Reconnaissance, Surveillance, and Target Acquisition). Presently,
    Marine Corps Unmanned Aerial Vehicles are preparing to deploy to
    Central Command's area of responsibility.
                Aerial Refueling
        Replacement of our aging KC-130 Hercules fleet with KC-130J
    aircraft is necessary to ensure the viability and deployability of
    Marine Corps Tactical Aircraft Refueling and Assault Support well into
    the 21st Century. The KC-130J's performance features include increased
    cruising 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. In sum, the KC-130J gives us the aerial refueling
    capability required to meet our current and future tactical aerial
    refueling demands.
                Maritime Prepositioning Shipping Support Facility
        Supporting the Marine Corps' Maritime Prepositioning Shipping, the
    Blount Island facility in Jacksonville, Florida, is truly a national
    asset that must be secured for long-term use. Its peacetime mission to
    support the Maritime Prepositioning Force has been of exceptional value
    to the Corps, but its wartime capability of supporting massive
    logistics sustainment from the Continental United States gives it
    strategic significance. The purchase of Blount Island is planned for
    fiscal year 2004, when our current lease of the facility will expire.
                Command and Control
        Command and Control technologies being introduced into Marine
    operating Forces are key to making Expeditionary Maneuver Warfare a
    reality. Marine forces once ashore will utilize the Lightweight Multi-
    band Satellite Terminal, Tactical Data Network, and High Frequency
    Automatic Link Establishment Radios to link widely dispersed forces
    into the Network Centric environment. These technologies will result in
    capabilities that will greatly increase the operational agility of your
    Marine Corps.
    Transformation of Organizational Structure
        The transformation of our weapons systems and equipment as well as
    our operational concepts and business practices is a difficult task.
    Transforming how we organize ourselves is even more difficult.
    Nonetheless, building on its institutional legacy of adapting to match
    the threats and missions of a given time, the Marine Corps is
    reorganizing its structure. Furthermore, at the core of transforming
    our organization, is the optimizing of our greatest asset, our Marines.
        One of our leading examples of transformational reorganization is
    the 4th Marine Expeditionary Brigade (Anti-Terrorism). The 4th MEB (AT)
    combined our Marine Security Guards stationed at America's embassies
    around the world, Fleet Anti-Terrorist Security Teams, and Chemical
    Biological Incident Response Force with an organic aviation component,
    combat service support element, and specialized anti-terrorism infantry
    battalion, as well as a command element with dedicated planners,
    coordinators, and liaison officers for anti-terrorism operations. The
    4th MEB (AT) has had an immediate impact, deploying to our re-opened
    embassy in Kabul, as well as supporting anthrax decontamination at the
    Capitol and security at the Olympics and the State-of-the-Union
    address. In the near future, all deployable units will deploy with an
    anti-terrorism capability.
        In addition to standing up the 4th MEB (AT), we are looking at
    other organizational transformation initiatives. We are looking at
    additional ways to optimize our forces by realigning outdated
    structures to reflect new realities. Now is the time to consider how to
    best organize our forces to meet the needs of this transformational
    era.
        Similar self-examination has led to successful change in our
    supporting establishment. Three illustrations of this are Marine Corps
    Combat Development Command, the Marine Corps Intelligence Activity in
    Quantico, Virginia, and Materiel Command in Albany, Georgia. By
    reorganizing the Marine Corps Combat Development Command we have
    redefined its role in supporting Marine Operating Forces and the
    Service Headquarters. It has emerged as the Corps' home for long-range
    thinking and has taken on the role of coordinating requirements with
    the Navy as well as facilitating the Marine Corps' relationship with
    Joint Forces Command. The Marine Corps Intelligence Activity, likewise,
    has been highly successful in validating our intelligence reach-back
    concept. Exploiting both new command relationships and connectivity,
    the Marine Corps Intelligence Activity is providing timely, accurate
    intelligence to our globally deployed tactical forces. Similarly, by
    establishing Materiel Command we have created a unity of effort and
    streamlined processes for the Marine Corps' acquisition and logistics
    support functions and ground weapons/equipment life cycle management
    processes. Material Command transformation initiatives for materiel
    readiness improvements and increased visibility of total ownership
    costs will achieve significant future cost avoidance and savings. This
    allows the Installations and Logistics Department at Headquarters
    Marine Corps to more effectively concentrate on policy decisions and
    support to the operating forces and the regional combatant commanders.
    In each of these reorganizations, optimizing efforts of the men and
    women who serve our Corps has been our primary intent.
                Our People
        Our highest priority remains unchanged: Marines, their families and
    our civilian workforce. The most advanced aircraft, ship, or weapons
    system is of no value without highly motivated and well-trained people.
    People and leadership remain the real foundations of the Corps'
    capabilities.
        It is important to note that the Marine Corps operates as a Total
    Force, including elements of both active and reserve components. We
    continue to strengthen the exceptional bonds within our Total Force by
    further integrating the Marine Corps Reserve into ongoing operations
    and training. Both Marine Expeditionary Force Augmentation Command
    Elements, two infantry battalions, two heavy helicopter squadrons, two
    aerial refueler transport detachments, as well as other units have been
    mobilized to support Operation Enduring Freedom. Called to duty, over
    3,000 Marine Reservists are providing seamless support from operational
    tempo relief at Guantanamo Bay to augmentation at Camp Pendleton and
    Camp Lejeune.
        Because our people are our number one priority, safety in the
    Marine Corps is a critical concern. While it is essential to
    maintaining our readiness, it is also a vital element of the quality of
    life that we provide our Marines and their families. I am pleased to
    report that 2001 was a banner year for safety in the Marine Corps. The
    Aviation community set a record, posting the lowest Class A mishap rate
    in the Corps' history. Through education, vigilance, and command
    involvement we reduced privately owned vehicle fatalities 39 percent
    last year. And overall, we had our second lowest mishap fatality rate
    in 14 years. These are all very positive signs in our quest to
    safeguard our most precious assets, our Marines.
        One factor contributing to our safety challenge is that we are a
    young force. The average age of our Marines is 24, roughly six to eight
    years younger than the average age of the members of the other
    services. This is part of the culture of the Corps as our unique force
    structure shows 68 percent of our Marines being on their first
    enlistment at any one time. The nature of our force structure requires
    us to annually recruit 41,000 men and women into our enlisted ranks. To
    fill this tremendous demand, our recruiters work tirelessly and have
    consistently met our accession goals in quality and quantity for over
    six and a half years. The performance of our recruiters has been
    superb.
        Retention is just as important as recruiting. We are proud that we
    are meeting our retention goals across nearly all military occupational
    specialties. Intangibles--such as the desire to serve the Nation, to
    belong to a cohesive organization, and to experience leadership
    responsibilities through service in the Corps--are a large part of the
    reason we can retain the remarkable men and women who choose to stay on
    active duty. Concrete evidence of this phenomenon is seen in our
    deployed units, which continually record the highest reenlistment rates
    in the Corps. The Selective Reenlistment Bonus Program has been an
    additional, powerful tool to meet our retention goals. Increases for
    the Selective Reenlistment Bonus Program, as well as the targeted pay
    raise initiative, will go a long way toward meeting our retention goals
    and helping take care of our Marines and their families.
        While we recruit Marines, generally, we retain families. The
    effectiveness of our Marines is dependent, in large measure, on the
    support they receive from their loved ones. Our families are therefore
    vital to our readiness. Increased pay, as well as improved housing and
    health care, directly influence our families' quality of life and, in
    turn, enhances the readiness of our units. Your support of our
    families' quality of life has greatly contributed to our retention
    success. We are extremely thankful for the enactment of much-needed
    improvements to the TRICARE system for our active duty personnel and
    for our retired veterans. Thank you, as well, for continuing to support
    increases in the Basic Allowance for Housing that help our Marines meet
    the rising costs of rent and utilities within the limits of their
    housing allowances.
        This Committee has provided considerable support to our Marines and
    their families and the Marine Corps has also improved services to our
    families in hopes of further enhancing their quality of life. We have
    established Marine Corps Community Services aboard our installations to
    better provide for both our Marine families as well as our single
    Marines, who constitute nearly 60 percent of our total active force. We
    have also sought to recognize and support our Marines and families with
    special needs and I am proud to say that both the Marine Corps'
    Exceptional Family Member Program and the Military Committee for
    Persons with Disabilities were the recipients of the 2001 S. Robert
    Cohen Annual Achievement Award for their commitment to facilitating and
    coordinating support and services to families with special needs.
        Similarly, seeking to be more responsive to our Marines and to
    enhance their career opportunities, we have undertaken a number of
    manpower reforms to better manage the force. Through the personal
    involvement of commanders, career planners, and leaders throughout the
    chain of command, we have been able to meet our retention goals,
    stabilize our force, and reduce the burden on our recruiters. We are
    investing considerable resources to successfully recruit, develop, and
    retain the civilians who work alongside our Marines. Our strategic plan
    in this regard is to develop civilian career programs that integrate
    and advance technical and leadership competencies.
        We are also investing in our Marines by improving how we train and
    educate them. We believe the old adage, ``you fight the way you
    train.'' Because of this, our training exercises are becoming
    increasingly Joint and combined to provide our Marines with the
    experience that they will need when they are called upon to respond to
    crises that require them to work alongside our sister services and
    partners from other nations. Our ability to effectively operate in both
    joint and coalition environments was clearly evident in the experiences
    of the Marines of Task Force 58 in Afghanistan. However, we are
    increasingly finding that the training and mission effectiveness of our
    Marines is degraded by the many forms of encroachment on our bases and
    stations. We need your continued support to ensure that the growing
    complexity and expense of encroachment issues do not curtail our
    efforts to conduct meaningful training. Encroachment issues will
    continue to be a 21st Century problem.
        Experience, in tandem with education, is the best foundation for
    dealing with both difficulty and fortuity. Accordingly, we are not
    solely focused on training our Marines, but on educating them as well.
    We have expanded our non-resident education programs to ensure that
    greater numbers of Marines have the opportunity to better themselves.
    We are also adjusting our policies to better accommodate family
    realities--such as spouses with careers or children with exceptional
    needs--when selecting officers to attend various schools that require a
    change in duty station. We have instituted a ``National Fellows
    program'' for competitively selected junior officers and staff non-
    commissioned officers to experience the corporate world, think tanks,
    non-governmental organizations, and the workings of Congress. The
    experiences they receive will broaden perspectives and provide valuable
    insights that will strengthen our capacity to innovate and adapt in the
    years to come.
        The Marine Corps' commitment to training and education, as well as
    our commitment to our ``warrior culture,'' is reinforced in our
    recently instituted martial arts program. We have developed a
    discipline unique to the Corps and we are in the process of training
    every Marine in its martial skills. This program promotes both physical
    prowess and mental discipline. Successive levels of achievement are
    rewarded with different colored belts reflecting a combination of
    demonstrated character, judgment, and physical skill. This training
    will benefit Marines in the complex missions we face; especially in
    peacekeeping and peacemaking operations where physical stamina and
    mental discipline are vital to success. At its heart, our martial arts
    training is fundamentally focused on mentoring our young men and women
    and helping them to understand that the keys to mission accomplishment
    are often a matter of combining intelligence, strength, and self-
    control to influence circumstances, rather than simply resorting to the
    application of deadly force. The warrior ethos we instill in our
    Marines, transforms them into intelligent and disciplined warriors, and
    mirrors the Marine Corps' own transformation in equipment, doctrine,
    and structure.
                                   conclusion
        In summary, the Marine Corps' transformation is a synthesis of new
    operational concepts and better business practices, leap-ahead
    technologies, and realigned organizations. This transformation promises
    to exponentially increase the Corps' sea-based capabilities as
    America's medium-weight expeditionary force in the years ahead. Our
    capabilities, combined with those of our sister Services, form an
    integrated array that provides America with the diversity and
    versatility she needs to confront different threats and environments
    and accomplish disparate missions. In close partnership with the Navy,
    we are proud of what our Corps contributes as America's forward
    engagement and expeditionary combined-arms force. We are grateful to
    you for your leadership and for the unwavering support you provide to
    your Corps of Marines.

        Senator Inouye. Thank you very much, General Jones.
        Before we proceed, Senator Hutchison, would you care to
    make an opening statement?
        Senator Hutchison. No, thank you, Mr. Chairman. Just to say
    that I really appreciate very much your being here and I think
    you are doing a superior job, all of you.
        Senator Inouye. Before proceeding, Mr. Secretary, may I
    assure you--and I believe I speak for all members of the
    committee--that your recommendation and suggestion will be
    considered very, very seriously. We have done it in the past
    and we feel certain that we can do it again.
        Secretary England. Thank you, Mr. Chairman.
        Senator Inouye. Your recommendation will be considered,
    sir.
        Secretary England. Thank you very much, sir.

                                  SHIPBUILDING

        Senator Inouye. I believe all of us here are concerned
    about shipbuilding. Can you give us your picture as to what we
    can foresee today and in the future on shipbuilding?
        Secretary England. Yes, sir. Thank you, Mr. Chairman.
        In the fiscal year 2003 budget, we have five new ships and
    we have two very large conversions of our SSBNs to SSGNs, so
    ballistic missile submarines to conventional land attack
    submarines. Those two conversions will cost approximately $1
    billion and they are new ships to us. They will be new ships,
    and they do increase our number of ships in the force because
    otherwise they would have been retired. So, that is a
    commitment of $1 billion we put into those modifications rather
    than a new ship, but it gives us significant capability.
        Also this year we added to our current shipbuilding
    accounts $400 million. We added the $400 million because, as
    you know, in prior years we had large prior-year bills. In
    fact, in the budget this year we have put in, I believe, $645
    million for prior-year shipbuilding accounts. So, we have $645
    million to pay off prior-year shipbuilding bills, and in
    addition, then to try to eliminate that problem in the future,
    one of the steps we took was to add $400 million to our current
    programs to fully fund those programs. But that $400 million
    and the $645 million for prior-year shipbuilding, that is
    another $1 billion. So, there is another ship we did not build
    or put into the budget because we wanted to cure this problem
    going forward and we had prior-year bills.
        Now, at the same time, as the Senator mentioned, and as the
    CNO commented, we let the contract for DD-X. That is a vitally
    important program for the Navy. And as you commented, Mr.
    Chairman, it is not the number of ships we build it is the
    capability that we provide for our naval forces, and it is very
    important for us to move forward into the new ships for the
    future for the next 30 or 40 years. So, DD-X is a foundation
    program for us.
        Now, as we go forward, across our Future Years Defense
    Program (FYDP) planning, we increase the number of ships. Now,
    in the past, that was also the plan, but it never materialized,
    but I am confident that this time it will materialize because
    we have ``filled all the other buckets.'' That is, we have
    fully funded our readiness. We have fully funded our spares. We
    have fully funded our accounts, so in the future, we should be
    able to count on that money being available; that is, we should
    not have to take money out of shipbuilding to pay other bills
    because this year we have fully funded all those other
    accounts.
        So, in my view, this is a foundation year for the Navy.
    Fund the Navy we have today, do it fully, start the new
    programs. And we are also looking at other types of ships as we
    go forward because technology is making other types of ships
    available to us, and we have studies underway in terms of other
    initiatives we can take. So, I can assure you that shipbuilding
    is very important to this leadership team, and we understand
    the need to build more ships, but we also understand the need
    to build the foundation and to build the right ships as we go
    forward.
        So, that was our rationale. That is how we spent our money
    this year, Mr. Chairman, and I will tell you I am convinced
    that we made the right decisions for the future of our great
    Navy.

                                SECURITY POSTURE

        Senator Inouye. We are most pleased that the U.S.S. Cole
    will be placed back on the inventory of active ships. Are we
    going back into Yemen? If so, are you satisfied that the fleet
    and the men are prepared?
        Secretary England. I will let the CNO answer that directly,
    but I can tell you that we will in every case, no matter where
    we put our ships, wherever we port them, wherever we visit,
    security is our number one priority. So, everywhere in the
    world, we make sure we have security people on shore, on ship,
    and security around our ships. So, in every case that is our
    number one priority. I will let the CNO specifically address
    Yemen, sir.
        Admiral Clark. Thank you, Mr. Chairman. I can report to
    you, because I discussed this with my component commander in
    the region within the last 2 weeks, they have sent teams over
    to analyze the security posture in Aden. The decision to put a
    ship into Yemen would be made by the theater commander, General
    Franks. But it clearly would be made with the recommendation of
    his Navy component commander, and as I indicated we have
    discussed these issues.
        There has been no decision nor recommendation to my
    knowledge--no recommendation to my knowledge, certainly no
    decision--to move back into the utilization of Yemen as a
    refueling port. I will say that for the record I want it to be
    clear that the security posture--and this reinforces the
    Secretary of the Navy's (SECNAV's) comments--used throughout
    the world has been beefed up in every port of call that we make
    and rightly so in the environment that we are living in. So, a
    decision to utilize that port facility will be based upon the
    assessment of the threat and the assessment of the security
    structure that is able to be put in place. In order to go into
    any foreign port, you have to have the cooperation of the host
    nation, and so those evaluations and assessments to date have
    not led to a recommendation or a decision to continue or to
    return to the utilization of that port.
        One thing that has changed a great deal--and I am not going
    to say too much in an open forum about how we do this. I do not
    want any potential enemy to have a leg up or to know the
    details of what we are doing. It is a matter of open record--
    part of the budget--that we have committed significant funds to
    improve our security posture and the ability to provide mobile
    security forces for our ships around the world. So, that is
    where we stand today, sir.

                                  AAAV PROGRAM

        Senator Inouye. I thank you very much.
        General, the Afghanistan war has affirmed your
    expeditionary requirement for a high-speed ship-to-shore
    vehicle. However, the program slated to fulfill this
    requirement, the Advanced Amphibious Assault Vehicle (AAAV),
    has faced a few challenges I have been told. What is the
    present status of that program?
        General Jones. Sir, the AAAV program is actually in my
    opinion a very, very successful program. We voluntarily
    recommended a slip to fix a few things, but all of a minor
    nature. It was 2 years ago an award-winning program. It won the
    Packard Award. The Secretary is very, very familiar with this
    program. It is transformational, and from the Marine Corps'
    standpoint, the biggest transformation is the speed in which it
    will transport sailors and marines from ship to shore and also
    its onboard weapons system will be superior to anything we have
    seen in a long time. I am very optimistic that the program will
    arrive on schedule and that the technical problems have been
    overcome.
        We have to be careful though, with how rapidly we acquire
    the AAAV because it is an expensive program, but over time it
    will significantly overhaul one of the important legs of your
    Marine Corps' expeditionary capability.
        Senator Inouye. Well, I am pleased to know that it is on
    track. We have been receiving word that you had problems.
        General Jones. This was voluntarily done because it was
    prudent. We have had such great success with the service life
    extension program of our Amphibious Assault Vehicle (AAV), the
    vehicle that we will retire. By replacing the suspension system
    with the Bradley system and replacing the engine in the AAV, we
    have achieved phenomenal success, extending that vehicle's
    service life so we can take the time that we need to make sure
    that when the AAAV comes on line, it is perfect.
        Senator Inouye. Thank you.
        Senator Stevens.

                             NORTHERN EDGE EXERCISE

        Senator Stevens. Thank you very much.
        Admiral, first let me congratulate you for the Northern
    Edge exercise. I have had good reports coming out of that. I
    assume you have too. It was again a very successful exercise.
    As I said, I do not know if you have had any reports back from
    Northern Edge. Would you care to comment on that?
        Admiral Clark. Yes, sir, I sure would. I have heard reports
    back. This is an operation with the Abraham Lincoln battle
    group, as a matter of fact, and it is part of a joint task
    force exercise that is being conducted off the waters of Alaska
    with the Air Force, and there are some Army units also
    involved. This is a final certification exercise for our Navy
    units, and the reports I am receiving are that the exercise is
    going very, very well.
        Senator Stevens. Thank you very much. I think that the
    joint operation of the Army and the two operations of the Air
    Force and Navy air really give us a significant exercise at
    this time of year in particular.
        General Jones, we are about ready to have a next phase in
    the V-22. How soon are you going to let me fly it?
        General Jones. Sir, the good news is that the V-22 has been
    approved for a return-to-flight status. The Secretary and I
    attended the briefing to Secretary Aldridge, and it was a very
    proud moment I think in the Pentagon to be able to sit there
    and see all the good work that has been done in the past couple
    of years to make the engineering fixes to the V-22 that needed
    to be done. We are very grateful for the teamwork and the
    support that outside agencies like the National Aeronautics and
    Space Administration (NASA) and the independent panel performed
    for us and very satisfied, as the Secretary alluded to, with
    the industrial response.
        The return to flight of the MV-22 is currently planned for
    late May, and the CV-22s return to flight will be scheduled for
    July of this year. We would be happy to have the distinguished
    Senator fly just as soon as we get a couple of test flights
    done just to make sure everything is just the way we want it
    and we get everything just right.
        Senator Stevens. Where is it testing? Down in South
    Carolina?
        General Jones. At Patuxent River, sir.
        Senator Stevens. Patuxent.
        General Jones. Yes, sir, so very close by.
        Senator Stevens. Well, that is good.
        General Jones. Yes, sir.
        Senator Stevens. I shall pursue you.
        General Jones. I will eagerly await that pursuit, sir.
        Senator Stevens. This represents the major change in
    technology in the last half a century, and if you validate it,
    I think it is going to change the course of aviation not only
    in this country but in the world because it is a new concept
    and it gives us the advantage of helicopter lift and medium
    distance as far as fixed wing is concerned. It should change
    the investments we have to make in airfields. It should change
    the way we deploy commuter aircraft in the future. It is very
    important, I think, to the future of aviation that we prove
    that that is a very successful new technology.
        General Jones. Sir, the Secretary and I recently visited
    the plants where they are producing the aircraft and the
    changes that they have made to it, and they have completely
    redesigned and reengineered the nacelles. The Secretary is much
    more knowledgeable in this than I am, but even an infantry
    officer understands the tremendous changes that have been made
    and the spirit in which we have done this, the teamwork and
    partnership with industry. The Naval Air Systems Command
    (NNAVAIR) has been very helpful to us. All in all, it has been
    a lot of hard work, but I think, Senator, you are absolutely
    correct that this is transformational not only militarily but
    also to our commercial industry.
        Senator Stevens. Well, we thank you for all you are doing
    to make it succeed.
        General Jones. Thank you, sir.

                                 EA-6B PROGRAM

        Senator Stevens. Admiral Clark, can you tell us what this
    analysis of alternatives for the EA-6B is, and what do you
    really want to do with that? Should we look, by the way, for a
    modified version of the F/A-18 in the near term?
        Admiral Clark. The analysis was concluded this year and it
    is under review right now. But fundamentally, Senator, there
    are a half a dozen options that we could proceed with to
    replace the EA-6B.
        I believe that there is an increased sense of urgency to
    move down this path for this reason. Since we commenced the
    analysis of alternatives, the demand on this airframe is as
    high as it is for anything that we fly in the United States
    military. Of course, you are aware, I know, that both the Air
    Force and the Navy fly this aircraft.
        What is going on right now is the review. In fact, I met
    with the Chief of Staff of the Air Force this week to discuss
    this issue and the road ahead and to figure out with the Air
    Force and the Marine Corps, who also flies this platform, what
    the right answer is for us. The acquisition executive will make
    the decision. I will make a recommendation. I believe that a
    variant of the F-18 will be a strong contender to----
        Senator Stevens. I do not think we want to talk about the
    long range, but on an interim basis.
        Admiral Clark. On an interim basis, I cannot answer the
    question if it will be interim or long-term or if it will be a
    large-bodied aircraft. Frankly, these are the issues that have
    to be resolved.
        But I will tell you this, that this is the way I see it,
    that we will need this kind of capability from aircraft
    carriers, and that would lead me to believe that we would seek
    to get an approach that would be economically feasible and, of
    course, everywhere we can get to fewer variants of aircraft, we
    are trying to do that. It is a more efficient and efficient way
    for us to field the Air Force.
        So, it is under review, and I expect that we will be moving
    toward decisions in the near term. But it is a decision that
    involves three services and not just us.

                              PRECISION MUNITIONS

        Senator Stevens. Mr. Secretary and Admiral, we have been
    having some reports that the current reserve of precision
    guided missiles is fairly low. Are you concerned over this low
    inventory? Should we be doing anything in the supplemental to
    give you a chance to catch up? Are the people who are in
    training getting sufficient training in the use of these
    ordnance systems if the reserve is so low?
        Secretary England. Senator, we did use more precision
    munitions than we thought in Afghanistan, considerably more
    because up until Afghanistan--in Desert Storm about 20 percent
    of our munitions were precision. In Afghanistan it was about 80
    percent. That caught us a little bit by surprise, frankly, in
    terms of our build rates for precision munitions.
        However, we do have money in the supplemental for precision
    munitions. We also in our fiscal year 2003 budget this year
    added $1 billion for precision munitions. I do not want to talk
    numbers because of the classified nature of the numbers, but we
    are now building those munitions at a very high rate. And I
    believe the three of us are comfortable that we have now funded
    those programs and we are now basically at maximum rate for
    those munitions. So, they are coming on line very rapidly. That
    is no longer a concern, but we do need the funding, obviously,
    in the supplemental and in the fiscal year 2003 budget. That
    expenditure actually goes up in the out-years on our precision
    munitions.
        Senator Stevens. Do those two bills, the supplemental and
    the fiscal year 2003 bill, meet your needs, Admiral?
        Admiral Clark. Yes. I believe it provides the correct way
    ahead. I would like to say that part of this is brought about
    by a change in direction. I will tell you that the Navy changed
    its approach and its inventory objective over the course of the
    last 2 years to become a more precision force. That is the
    answer for the future, not just so that we can see the cross
    hairs and report it on television and, you know, we enjoy
    looking at it that way. The reason is because one precision
    round is equal to numerous general purpose rounds. So, we
    opened up a line this last year to start improving the delivery
    of these systems.
        I believe that the action taken in the budget and the
    supplemental puts us on the right path. Again, I would say to
    you that this is a discussion that is taking place with the
    Chief of Staff of the Air Force, as well as the Commandant of
    the Marine Corps. And this budget fundamentally commits another
    $1 billion to precision munitions, and it is the right answer
    and it is where we ought to be.

                                  PHILIPPINES

        Senator Stevens. Gentlemen, the chairman and I and the
    staff have just returned from a trip to the Pacific, including
    a visit in the Philippines where we went to the 60th
    anniversary of the beginning of the Bataan March, and we were
    made aware of the feelings of the Philippine community
    concerning the fact that in the past Philippine citizens were
    permitted to attend Annapolis or West Point. This Nation has a
    unique relationship to us, particularly to our generation, and
    after withdrawal of Subic, I guess that privilege was canceled.
        I would like to urge you to look into that matter and
    reconsider it. We do not want an answer now. But there were
    very few, but very meaningful members of their Filipino
    community attended our academies. The former President, Fidel
    Ramos, was a graduate of West Point. There were a series that
    were graduates of Annapolis that continued their roles in the
    Philippine military, and it is something that I think would be
    very significant to renew that relationship. But again, I do
    not want your answer. I just would wish you would take that
    suggestion back, and I think it would be made by both of us. I
    think I am speaking for both of us.
        Secretary England. We will get back to you on that subject,
    Senator.
        Senator Stevens. Let me just make a short statement, Mr.
    Chairman, and that is after these two trips we have taken, I am
    convinced that our military in this war against global
    terrorism is going into a wholly new role, and that is to deal
    with the support factor in many nations of the world to assist
    them to rid themselves of terrorism. We saw a great example of
    that in the Philippines and our people are doing an excellent
    job. They are not in the forefront. They are in the background
    advising, training, introducing people to new technologies and
    new systems.
        But it does mean that we have got to project that in what
    you are talking about now too. I want to see new aircraft
    carriers, Admiral, but I also would like to make sure that we
    are integrating into those all of the systems of the Navy, the
    use of these Unmanned Aerial Vehicles (UAVs) and the use of
    small squads trained, be they marines or others, to immediately
    assist in areas where we are called upon to dispatch assistance
    to help put down the people who are trying to really destroy
    the governments of our allies abroad.
        There is no question about it. Their targets are our
    allies. I cannot think of one single nation that is threatened
    today that is not threatened because they are our friends.
    Under the circumstances, I think it brings about a need for a
    great change in the planning of use of our forces to prevent
    crises rather than to go in after a regional war has broken
    out.
        So, I would commend to you thinking about that, and I think
    we ought to have some chance to sit down and talk to you and
    the Chairman and the Joint Chiefs and see what we might do to
    fund some special program to develop an inter-service unit or
    units that would respond to these needs.
        General Worcester in the Philippines has what I consider to
    be sort of a prototype of that operation, and he is extremely
    successful. If you have not had a briefing of some of the
    things he did there in the Philippines, you should get it
    because he demonstrated to us he was really ahead of the curve,
    ahead of all of our thinking on this matter. A very brilliant
    young general.
        But I commend to you the concept that we should fund some
    special inter-service units. I do not think they would be
    Marines or Army or Navy or Air Force. They need them all when
    we send advisors into these countries.
        Lastly I hope we can restore International Military
    Education and Training (IMET) this year. Everywhere we went,
    IMET was an issue in the Pacific, and it is unfortunate that we
    have lost IMET in so many instances. So, I hope that will be
    done.
        Thank you very much, Mr. Chairman. I do not know if you all
    would want to comment. I am not trying to cut you off, but I do
    not seek comments. General.
        General Jones. Sir, I would like to underscore just some of
    the points you made because they are fundamental to who we are
    and what we are going to be 20 and 30 years from now. We
    learned that lesson after World War II and we did very well for
    a long time, and then we took our eye off the ball and we made
    it very difficult for some of these countries to take advantage
    of some of the things we can offer. To me it is a short-term
    view if we put too many roadblocks in, in terms of access to
    our schools, not just the academy but the professional schools
    that each of the services have like command and staff college
    and our top level schools.
        In my travels, I meet a lot of senior military officials,
    and invariably they come up and they find a way to tell me that
    they graduated from the National War College or they graduated
    from the Naval Academy or they are wearing Army jump wings or
    they have been to Air Force schools. This really ties the
    community together.
        I have made a study this year of how many marine corps
    there are and riverine forces there are in the world. There are
    about 37 of them. Half of them are in South America. This year
    in July we put out an invitation to host the leadership of each
    country that claims to have a riverine force, to include the
    Russians and the Vietnamese. And they have accepted, and they
    are going to come to Camp Lejeune, North Carolina for a week.
    We have 25 countries that have agreed to send their senior
    leader, their commandant or equivalent to have, for the first
    time, a reunion of expeditionary forces, forces that are naval
    infantry. To me, this is a very powerful community that can
    develop. I know the other services have similar programs, but
    it is the first time for naval infantry.
        These associations and our outreach to them have an
    exponential benefit. It is not measured in the number of people
    that we put into it, but the quality of the training, the
    quality of the education we are able to provide, and the
    lifelong associations pay off in so many ways years down the
    road that it is well worth the investment.
        Senator Stevens. I am taking too much of your time, Senator
    Cochran, but I have made a suggestion that we consider opening
    up platoon-level training opportunities for military forces
    that would be engaged in riot suppression. One of the problems
    that led to the suspension of IMET for the Philippines was such
    an endeavor in East Timor, and it led, as we all know, to
    really sad circumstances. But those people had not been trained
    to deal with a riot or a rebellion of that type, and the result
    was disaster. We should be extending the training not only to
    the senior officers but to some of the key people that are
    involved in the overall concept of riot suppression.
        General Jones. One of the things these gentlemen are most
    interested in is exactly that question, and they have asked us
    if we would introduce them to the nonlethal weapons
    technologies that we have been perfecting. The guidance from
    the Congress was that the Marine Corps would take the lead in
    the joint program, and we have done that now for several years.
    So, we will be providing demonstrations to probably over 30
    nations who will come and study these techniques.
        Senator Stevens. Thank you very much. It is nice to have
    you all back again. Will we see you all next year? Will you all
    be back next year?
        General Jones. God willing, sir.
        Senator Stevens. Lately, with time passing so fast, there
    have been so many people stepping out and we get replacements
    that we did not expect.
        Admiral Clark. I expect to be here next year, Senator.
        General Jones. In the Pentagon, we take it a day at a time,
    sir.
        Senator Inouye. Senator Cochran.

                                  DD-X PROGRAM

        Senator Cochran. Mr. Chairman, thank you.
        Mr. Secretary, I made some comments about the DD-X program
    in my opening statement. I wonder if you could give the
    committee the benefit of your expectations for this program.
        Secretary England. Well, as I commented, Senator, this is
    the foundation program for the Navy as we go forward. There are
    really potentially three different ships in this umbrella
    program. The first one is DD-X, which is the fire support ship,
    but with very unique features, which is one of the reasons
    Northrop-Grumman won that competition. But it is also a cruiser
    missile defense ship, and also potentially the technology would
    go into our littoral combatant ships and we are looking at that
    right now.
        Senator Cochran. Specifically, could you tell us, for the
    civilians in the audience, what littoral ships are?
        Secretary England. Well, these are ships that we are
    looking at. We are studying this class of ships. So, this would
    be a class of ships that would operate very close to the shore
    and would be used for a variety of missions. So, it could be
    anti-submarine. It could be ship-to-shore support. It could be
    special forces putting our marines ashore, so a wide variety of
    likely high-speed vessels smaller than most of the ships we
    have now, but very high-speed, very agile. The requirements are
    being worked in terms of exactly what that would be, but
    conceptually it would be a smaller ship much faster, very
    agile, and be able to handle a wide range of missions. And it
    would be larger numbers than what we have in our other ships
    today. So, we would be looking at larger numbers of those
    ships.
        We are looking now in terms of how we would initiate and
    fund this program because this is a very high priority for the
    CNO, for our naval forces, and our Commandant. So, we are now,
    as part of the fiscal year 2004 budget discussions, trying to
    come to grips with how we would initiate this program quickly
    and also very quickly bring it on line.
        When I said this was a year of foundation building for our
    Navy as we go forward, this is one of the ships we are looking
    at in terms of our new Navy, along with the DD-X that was just
    awarded yesterday and a derivative of that for our missile
    defense ship, which would be a cruiser type ship, hopefully
    using the same sort of hull form.
        So, this is a very important program for our Navy as we go
    forward. Numbers are important. Everyone counts our ships every
    year, but what is important to our Navy is the capability that
    we actually put afloat, and it is important that we move into
    the new technologies and into these new programs and then
    accelerate those programs as rapidly as we can.
        Senator Cochran. Admiral Clark, as you know, the
    shipbuilding rates have the potential to drop the number of
    ships in our fleet well below the current goal of 310 ships. In
    your statement, you indicated the current low procurement rate
    ``adversely affects stability of defense industrial base, and
    we are paying a premium in program costs due to the small
    number of units being built.''
        My question is, if funding were available for shipbuilding
    for more ships, how could it be spent most effectively in the
    near term in your opinion?
        Admiral Clark. Senator, in my previous visit before this
    committee and again today, I want to be a champion for an
    improved partnership with industry, and I believe that you do
    that by solidifying the investment streams and leveling the
    investment streams. The Secretary has laid out the importance
    of DD-X and LCS, the littoral combatant ship, and the follow-on
    cruiser that is going to be a ship that we are going to have to
    have as we face the threats of the future.
        And I would just like to say, with regard to LCS, I view
    the asymmetries that are out there in the world today--an enemy
    will try to exploit the asymmetries that we have. And we need a
    ship that can deal with those near-land asymmetries, and that
    is, as the Secretary described, near-land anti-submarine
    warfare, mine warfare, and the ability to deal with the surface
    threat that will exist in the near-land area.
        I think the way we deal with this--and frankly, this is
    what the Secretary and I are attempting to do--is to redirect
    resources to ensure that we meet what I believe is the
    requirement for us to have the Navy of the future. I have
    talked about numbers, but notionally. What I have talked about
    more importantly is that we need a level investment in the
    shipbuilding arena to deal with industrial base issues. We did
    a war game with the shipyards. They have indicated that if we
    could level and get on a level investment stream, that they
    could produce between 10 and 20 percent more effectively. But
    to do that, we have to have a mechanism that allows us to have
    level investments.
        You know, when we buy a carrier, we spike the Shipbuilding
    and Conversion, Navy (SCN) account. My view is we need to be
    investing $12 billion a year in new construction in the
    shipbuilding business. That is what we need to support the Navy
    that we need in the future. So, what we can do in the short
    term to get to that is to find the resources to make a
    commitment to that and that will make us a better partner.
        Now, having said that, there are areas that if we had more
    resources, we would have been pushing different investments.
    But we established the priorities that we laid out in this
    budget and we had to take care of the current readiness
    challenges first or we would not be able to execute the
    missions and the tasks that we are taking on today in
    Afghanistan.
        Now, that leads you to several ships, and I submitted an
    unfunded list up here, DDGs on that list. I would like to have
    an LPD as soon as possible because Jim Jones needs that for his
    Marine Corps to replace ships that are currently 36, 37, 38
    years old that need to be replaced. We need to get to two
    submarines a year as soon as we can, but we did not have the
    resources to do it in this budget.

                                  FIRE SUPPORT

        Senator Cochran. General Jones, in your statement, you said
    this, ``we have an acute shortage of fire support.'' My
    question is, if we choose to address this problem in this
    committee this year, what specific programs should we consider
    funding?
        General Jones. We do have a shortage of fire support from
    both our sea platforms and also our internal Marine Corps
    assets. How we got there is a matter of record. Years ago, the
    Marine Corps terminated its reliance on heavy artillery. We
    went to the M-198 which has been a good field artillery weapon
    but not a very good expeditionarily-deployable weapon. It is
    time to replace it and the lightweight 155 is now on the
    doorstep in the final stages of its development and ready for
    production.
        This program has had its share of ups and downs but all
    development programs have this, problems associated with
    technology. We have identified the problems. We fixed them and
    we are on the verge this year of bringing this program home to
    where we can significantly make up for a portion of the
    significant shortfall that we experience in fire support
    systems on land. We also are going to do it on land by bringing
    on a new mortar, and the combination of those two, plus our
    organic air power, will fix that problem for us.
        Admiral Clark and I have talked about the shortfall at sea,
    and we are optimistic that, although it is still a ways off,
    with this new class of ships and the potential for precision
    weapons coming from the sea over extremely long ranges, that
    the expeditionary forces of the future will have that sea-based
    and land-based fire support that they will critically need in
    the years ahead that we do not have right now.

                             LPD-17 AMPHIBIOUS SHIP

        Senator Cochran. Thank you.
        Admiral Clark, the Gulf Coast shipyards at Northrop-Grumman
    has, Pascagoula, Gulfport, New Orleans, are now cooperatively
    engaged in the LPD-17 amphibious ship production. Could you
    give us your view of the program's progress and could you also
    comment on the proposed LPD-17 and DDG-51 swap between
    Northrop-Grumman Ship Systems and General Dynamics?
        Admiral Clark. Let me start with the swap and just say that
    the acquisition executive has been working on a program. It has
    been reported in the press. In fact, there is another report in
    the press this morning about the swap. And this is an effort to
    work out arrangements within industry to posture cooperating
    shipyards so that they can again get themselves in the best
    posture to most effectively and efficiently produce product. I
    am a supporter of that. If that can be arranged, I think that
    would be good for the Navy and has the appearance of being good
    for the shipbuilders. That is something that, again, is being
    worked by the acquisition executive, and perhaps the Secretary
    would like to comment on that.
        With regard to LPD-17 itself, I have said several times and
    I would reiterate again today--I alluded to it just a moment
    ago--we need LPD-17. In January, I was in the Indian Ocean
    visiting our sailors. I had the chance to see 20,000 of our
    sailors operating over there off of Afghanistan. I was on a
    ship that was built in the' 60s. That ship is too old. The ship
    is older than most of the people serving on it, and it is full
    of marines. And that ship needs to be replaced.
        There were issues about LPD-17 and the maturity of the
    program and its readiness to proceed 1 year ago, but I am happy
    to report that progress is being made and I am hopeful that we
    are going to see a great improvement in the delivery of LPD-17
    in the future--in the near future. We need that ship. We need
    it to be able to accomplish the mission in the global war on
    terrorism that I was talking about in my opening statement.
        If we are going to take the fight to the enemy--and General
    Jones and I both believe that this is a requirement for our
    Nation--the requirement to get a permission slip to go
    someplace is a problem. What we bring to the task is that we
    can take marines and we can have the kind of combat reach and
    demonstrate the kind of flexibility in combat operations that
    we have seen in Afghanistan with the United States Marine
    Corps. To do that in the future, we need LPD-17 and we need it
    as rapidly as we can deliver it.
        Senator Cochran. General Jones, can you give us your
    impression or view of the importance of LPD-17 and these types
    of amphibious ships?
        General Jones. Yes, sir, I can. It is a personal view. My
    son is a second lieutenant in the Marine Corps stationed at
    Camp Pendleton. In July of this year, he will deploy with the
    11th Marine Expeditionary Unit. One of the ships that he will
    be on will be the U.S.S. Denver. Captain Jones, me, in 1975 was
    the Commanding Officer (CO) of troops aboard the U.S.S. Denver,
    and it was old then.
        So, I have shown him where my stateroom was, and he is
    trying to maneuver so he can get those spacious quarters for
    himself and five other lieutenants that will be crammed in
    there.
        But it is time to get on with this because the sea-basing
    aspects of what the Nation is going to be able to do in the
    future in response to the threats that are facing us today and
    will face us in the future all have maritime solutions to them.
    Admiral Clark referenced this earlier in his remarks, and I
    would like to underscore that the sea-basing of American forces
    is an answer to the sovereignty issues that will face us again
    and again when it comes time where we want to do things in our
    national interest or in the interest of our allies. A single
    country can deny the United States basing, overflight rights,
    operational employment for many, many months and impair us from
    achieving our objectives. Not so on the seas.
        So, those investments in the sea-based platforms--and I am
    talking about not only the ships that we have that must be
    modernized because I think they will continue to be the core of
    our naval capability, but also very, very progressive, new
    ideas like the high-speed vessel that the Marine Corps is
    currently leasing in Okinawa. We anticipate avoiding $10
    million in fiscal year 2002 transportation costs by not having
    to use strategic airlift to haul marines from Okinawa to
    mainland Japan or Okinawa to Guam or Okinawa to the Philippines
    with this very, very high-speed capable ship. It is a
    commercial ship right now and we have leased it for 3 years,
    but it is showing tremendous dividends on how we can, from a
    sea base, project our forces so they can arrive and be
    immediately employable, sustainable, and persistent in the
    pursuit of our national objectives.
        So, I am very, very much in favor of the directions that
    our Secretary and our CNO have advocated and the priorities in
    which they are stating them.

                                    SEABEES

        Senator Cochran. Thank you.
        Admiral Clark, one of the units that we have based in
    Mississippi, the Seabees of the Atlantic fleet, are in
    Gulfport, Mississippi, and they have been deployed to
    Afghanistan. They provided services in Kandahar and at
    Guantanamo Bay, Cuba, also because of the housing there of al
    Qaeda detainees or whatever they are. The whole point of this
    is that there is a lot of stress on the availability of people
    and equipment and the like. Does this budget provide funding
    requests to ensure that the Seabees can continue to perform
    their mission and they can get where they are going and get
    back safe and sound?
        Admiral Clark. It does, Senator. Thank you for the
    question.
        I just completed a major review of the Seabee structure
    about 45 days ago. Frankly, I was looking at what the posture
    needed to be in the future. A lot of people are unaware, but
    the Seabee rotations in the past have been 7 months out and 7
    months back, the heaviest rotation schedule that any of our
    people operate under. I changed that to improve it this past
    year. That necessitated changes in our basic structure and the
    support facilities that are going to be required for them in
    their home base.
        My review points out and what I was able to discover is
    that we need all the engineers that we have. A lot of people
    are unaware of how many Navy, part of the naval team, people
    were operating in Afghanistan. At one point we had over 1,500
    people on the ground, including our Seabees. And they always
    get called.
        What is not in the budget is the out-years and that has to
    be fixed in fiscal year 2004 and we intend to do that.
        Senator Cochran. General Jones, your experience with the
    Seabees I know is obvious. Do you have any comments about the
    question that I asked of Admiral Clark?
        General Jones. Only to reinforce the tremendous need for
    that kind of unit. My first real experience with the Seabees
    was in northern Iraq in 1991 where we were tasked with bringing
    half a million Kurdish refugees out of the Turkish mountains.
    Without the Seabees, it would have been an impossible
    humanitarian task. So, I applaud their work.
        They are definitely one of the most employed units that we
    have, and I think Admiral Clark and I have talked with the
    Secretary about really looking at the total number of engineer
    units we have in the Navy and the Marine Corps, making sure
    that we use them well and we do not overuse them because they
    are really ridden hard and put up wet most of the time.

                                  DDG PROGRAM

        Senator Cochran. Mr. Secretary, my final comment and
    question. I apologize for taking more than my share of the time
    here.
        The swap that I mentioned between Northrop-Grumman and
    General Dynamics, the DDG program. What is your reaction to
    that? Do you have any comments you would like to make on it?
        Secretary England. First of all, it is important. It is
    something that we would like to do. It is not essential. We do
    believe it is a win-win for all the parties involved, and to be
    successful, it is going to have to be a win-win for all the
    parties.
        It is important because it does reduce the risk of the LPD-
    17 program. Northrop-Grumman has done a very good job of a
    program that was in trouble and they have been coming along.
    Now we are actually building the ship. So, they have done a
    good job bringing it along. But the current plan is that the
    second ship we would build at Bath, so we would start the
    learning curve all over again. That obviously introduces risk
    into the program.
        So, by doing the swap, we end up stabilizing the base at
    both yards, which is obviously desirable. Again, as the CNO
    commented earlier, it would be good for the industrial base to
    stabilize that at each yard. It would give the Navy some
    efficiencies also. So, in our judgment, this is in the best
    interest of all three parties, but we need to negotiate to a
    solution.
        As Senator Stevens said, we are fortunate. We are blessed.
    We have a great Assistant Secretary of the Navy, Mr. John
    Young, who has been working this problem for the Navy. I
    believe that that will come to a satisfactory conclusion, but
    it still has to be negotiated. In negotiations, anything can
    happen, but we are hopeful that will come to a satisfactory
    conclusion.
        Senator Cochran. Thank you.
        Mr. Chairman, I have a couple of other questions on the
    Landing Craft Air Cushion (LCAC), and their usefulness, the 155
    Howitzer that General Jones mentioned, and the composites that
    are being explored for use in our Navy, a shipbuilding issue,
    to Admiral Clark for the record. Thank you very much.
        Senator Inouye. Thank you very much.
        Mr. Secretary, Senator Hutchison had to leave, as you note,
    and she had several questions she would like to submit. All of
    us have questions.
        Secretary England. Absolutely.

                       PERSONNEL RETENTION AND RECRUITING

        Senator Inouye. But may I, before closing congratulate you
    on your first term retention record, 64 percent. I think it is
    the first time the Navy has done that. But my concern is how
    are you doing with the critical skills like pilots and
    maintenance personnel and nurses and such.
        Admiral Clark. We have always had a challenge in retaining
    people. And thank you, Mr. Chairman, for highlighting this. Can
    I give you an updated number?
        Senator Inouye. Please.
        Admiral Clark. The number for the month of March, first
    term retention, was 71 percent.
        Senator Inouye. Good heavens.
        Admiral Clark. Never in our history have we had this kind
    of retention. We have cut the recruiting goals this year. The
    Secretary just approved the second reduction this year. The
    first reduction was over 4,000 that we reduced and we just
    reduced another 1,500. I anticipate we are going to have to do
    it again.
        In pilots in the recruiting side, we have already recruited
    everybody for 2002, and we are over 80 percent in 2003. We do
    need to improve our retention in pilots. It is improving, and
    it has been improving over the course of the last year. I want
    to make sure that I highlight that those numbers are also
    reflective of the record we set in the year ending last
    September. So, these figures have improved since 9/11, but we
    had already established the best performance we had ever seen
    for the year that concluded in September. So, we are improving
    in our retention in pilots, but we can even do better there. We
    have not achieved the level of success across the board on the
    pilots and the officer programs that we have on the enlisted
    side, but we are doing dramatically better.
        Senator Inouye. Well, once again, congratulations.
        Admiral Clark. Thank you, sir.
        Senator Inouye. If I may add to Senator Stevens' report on
    our trip to Asia. I came back with certain conclusions. Number
    one, terrorism is alive and doing well, and that not all
    terrorists have beards and turbans. When one considers the
    potential in Indonesia, there are more Muslims there than all
    of Arabia combined.
        Secondly, I think that we should recall that not too long
    ago the Singaporean government uncovered a plot to destroy the
    American Embassy there, and they had in place, in stock 100
    tons of explosives. And when one considers the Oklahoma bombing
    involved just 3 tons, you can imagine what 100 tons would have
    done.
        I cannot say enough about the force we have in the
    Philippines assisting the Filipinos. I hope that we will not
    think of terrorism as just out in Arabia. It is all over the
    world, and I am happy that our troops are there to provide the
    security that we need.
        One final thought about Singapore. I think Singapore
    demonstrates the desire of Asia to have our presence there.
    They just constructed the Changi Naval Base to our
    specifications. In fact, I looked at it with some nostalgia
    because they will be able to accommodate the largest carrier
    there, and I do not think Pearl Harbor can do the same thing.
    In fact, the Changi Naval Base, in order to accommodate our
    interests, built a baseball field, and it should be noted that
    they do not play baseball in Singapore. It was just built for
    American forces. So, it just demonstrates the desire that the
    people of Asia have for our presence there, and I hope we will
    keep that in mind.
        With that, any more questions?
        Senator Stevens. I have two comments, Mr. Chairman. Senior
    Minister Lee, as a matter of fact, is in town from Singapore,
    and he I think demonstrates the type of friendships available
    in that part of the world.
        General, the Seabees and some of your people have worked on
    a small road in Metlakatla, an Indian reservation in our State,
    and I think that type of training brings home to a lot of
    people how qualified they really are. And I want to thank you
    for that.
        Admiral Clark, your comment about retention. Have you still
    got the stop loss policy on as part of that? Because they
    cannot leave.
        Admiral Clark. No. The policy was an Office of the
    Secretary of Defense (OSD) policy, but I believe we had the
    smallest number of all the services that we had held and we
    have reduced that to a very, very small number today. It is
    reviewed on a 30-day basis to make sure that we are not keeping
    anybody. I can get you the number. It is a very, very small
    number.
        Senator Stevens. I think it is marvelous and it
    demonstrates really the commitment of this new generation. As
    the Secretary said, they are extremely committed. Everywhere we
    went, I cannot tell you how much we were impressed with those
    young men and women and how on the alert they really were.
        Admiral Clark. The Secretary says the number is 170, an
    extremely small number.
        Thank you for your comments on our people. I like to tell
    folks you can tell how it is going. You look for the twinkle in
    their eye. They are extremely proud of what they are doing, and
    when you go out there and see them and talk to them, I know
    that you were able to witness that. They so appreciate it when
    they get a chance to meet with senior officials from our
    Government and from the Congress.
        I would like to pass along that one of the things that has
    happened over the course of the last couple of years here is
    that there are a lot of variables that have caused us to have
    this kind of success. But this gets back to the signals from
    the Congress. The actions taken, the increases in the budget
    that is existing in fiscal year 2002 and the projections in
    fiscal year 2003--our people are watching these indicators all
    the time, and they are evaluating these measures taken as a
    strong support of the people of the United States and the
    United States Congress. And it means a great deal to them.
        Secretary England. Let me make one comment.
        Senator Stevens. Mr. Secretary, I have got to comment about
    that because when we were overseas, if we got mail once or
    twice a month, we were lucky. These kids are in touch by
    Internet with their sweethearts and boyfriends and mothers and
    fathers and classmates every day. They are as well informed as
    any Americans I know, the ones we saw right out in the field
    with the ships. It is a new world for them. They know what they
    are doing, but they are also keeping up with the homeland in a
    way that no deployed forces have ever had the opportunity to
    do. So, I commend you not only for your people but for the way
    you are providing them with a means of access and connection to
    maintain their connections with their families at home.
        Secretary England. One comment on retention, if I could. I
    would be derelict if I did not comment on this. While it is
    true, the pay, the benefits, and all that that the Congress
    provided is very important to our people, I will tell you what
    is also equally important, and that is the respect they have
    for the leadership, and that is the two gentlemen sitting here
    at this table. I mean, their leadership goes a long way to
    these retention numbers, and we should not overlook that. We
    have magnificent people. The strength of our military for 226
    years has been our people. Our technology is important, but it
    is our people that make the difference. The leadership that we
    have, in my judgment, is a crucial difference, and that is part
    of the reason we have continuing high retention in the Marine
    Corps and an increase during Admiral Clark's reign here. I will
    tell you a lot of the credit goes right here to the gentlemen
    at this table next to me.
        Senator Stevens. If I can continue to interrupt.
        Senator Inouye. Please.
        Senator Stevens. I hope we can see more reports of people
    being recognized for what they have done. One of the things we
    did note when we came back--the chairman noted it in his
    comments when he came back--was the lack of recognition of
    distinguished and outstanding service and courage on the part
    of some of these people. There were very few medals that we
    found that had actually been issued.
        Now, I know sometimes we wait until they come home. But it
    means a great deal not only to the people who are there to know
    that their colleagues have been recognized for real acts of
    true heroism, but also it means a lot to people at home to know
    that you know what they are doing.
        I hope you are moving in, as the Air Force and the Army
    both are, to try to recognize people on a timely basis. You do
    not have to wait until they get home now. Their people see it
    on the Internet the minute they get them.
        Secretary England. We agree.
        Admiral Clark. May I just comment on that? The Secretary is
    now being modest. We have taken action to delegate the
    authority to make those kind of awards in the Operation
    Enduring Freedom so they do not have to wait until they get
    home. The commanders have been given the authority to take
    action on the scene.
        Senator Inouye. Great.
        Senator Cochran.
        Senator Cochran. I have nothing further, Mr. Chairman.
    Thank you for your generous allocation of time.
        Senator Stevens. We envy you. That is the trouble. We keep
    you around because we envy you. We wish we were having the
    experiences you are having now.
        Senator Inouye. I just want to make an observation before
    we adjourn. I have been on this committee for over 30 years,
    and if it were not for Senator Cochran, the LPD-17 would be
    ancient history. And if it were not for Senator Stevens, the
    Osprey would not be flying. So, I hope that the generations
    that will be using the LPD-17 and the Osprey would remember
    that these two fellows did it. I can tell you, if it were not
    for their persistence, you would not have it. That is for
    certain.

                         ADDITIONAL COMMITTEE QUESTIONS

        With that, once again, I thank you, Secretary England,
    Admiral Clark, General Jones.
        [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 Kay Bailey Hutchison
                               u.s.s. ``inchon''
        Question. Last year the Air Force announced that it would suddenly
    and prematurely retire a large portion of its B-1 fleet. Several
    communities were faced with the immediate loss of hundreds of jobs.
    Commendably, the Air Force stepped up to the plate and made those
    communities whole by shuffling aircraft and missions around. After
    creating a similar scenario, by announcing the sudden retirement of the
    U.S.S. Inchon, the Navy has done little to make Naval Station Ingleside
    whole. As things stand today, south Texas will lose nearly 700 sailors
    and their families. What is the Navy doing to keep the base operational
    pending a new mine warfare ship?
        Answer. Naval Station Ingleside has been identified as the future
    home of Commander Mine Warfare Command. It presently serves as the home
    for the Navy's Center of Excellence for Mine Warfare. In that capacity,
    there are numerous transformational initiatives and systems, which
    might be suited for assignment to Naval Station Ingleside. The Navy
    remains committed to development of a dedicated MCS platform to replace
    U.S.S. Inchon. This MCM initiative, coupled with future initiatives and
    requirements, should be considered for location at Ingleside, Texas.
        Question. The head of Naval Mine Warfare Command, Admiral Ryan,
    informed my staff last month that the Navy was looking within its
    fiscal year 2002 budget with the hopes of identifying $15 million
    needed to lease a catamaran. This innovative vessel would be used as an
    experimental, interim mine-warfare command and control ship. It is my
    understanding that the Navy is having difficulty identifying those
    funds. What is the status of this initiative?
        Answer. The Navy is considering the potential lease of a commercial
    derivative ship to support various transformational efforts and
    experimentation with respect to a future variant of a Mine Warfare
    Command and Control ship (MCS). The existing Mine Warfare Command &
    Control ship, U.S.S. Inchon (MCS 12), is scheduled to decommission in
    June 2002.
        The leased ship may be able to play a significant role in the
    validation of future organic mine warfare systems, and mainstreaming
    mine warfare. This leased vessel will also allow the Navy to gather
    significant data and experience with a new hull form for other ship
    designs and conduct additional naval experimentation.
        If this commercial derivative ship lease is pursued, the estimated
    lease cost is about $10 million/yr, plus $6 million/yr operating cost
    and $5 million/yr manpower cost. In the first year, about $10 million
    of non-recurring startup costs are also required. The Navy is looking
    to start this commercial derivative ship leasing effort in fiscal year
    2003. However, there is a $28 million shortfall in the fiscal year 2003
    budget. No fiscal year 2002 funds are required for this effort.
                           joint strike fighter (jsf)
        Question. I have read, with great concern, a number of reports that
    the Navy is contemplating a 30 percent reduction of JSF procurement.
    JSF is a tri-service program involving the Air Force. Have you
    determined what affect a 30 percent reduction in Navy and Marine Corps
    procurement would have on the Air Force's estimated costs?
        Answer. In response to Defense Planning Guidance the Department of
    the Navy has been hard at work on a study to analyze efficiencies and
    effectiveness of integration of Navy and Marine Corps tactical
    aviation. While a final decision to reduce the number of Joint Strike
    Fighters (JSF) procured has not been made, it is among the options the
    Department is considering. The JSF will be a more reliable aircraft
    than the aircraft it will replace, and when coupled with precision
    munitions, will be a more effective weapons system. These increases, in
    reliability and effectiveness, may enable the Department of the Navy to
    reduce the overall number of JSFs it requires.
        Impacts to the U.S. Air Force and other potential buyers are also
    being examined in the study and will be an important part of any
    decision. It would be inappropriate to comment further until that
    review is complete.
        Question. Navy sources are quoted as saying that any cuts will not
    take effect until after 2012. Does it make sense to cut a program as it
    is entering its most economical production period? Wouldn't such a move
    dramatically escalate the per-unit cost by forcing the Navy to amortize
    the cost of developing JSF over fewer airframes?
        Answer. In response to Defense Planning Guidance the Department of
    the Navy has been hard at work on a study to analyze efficiencies and
    effectiveness of integration of Navy and Marine Corps tactical
    aviation. Impacts to future buys are being looked at in the study and
    will be an important part of any decision. It would be inappropriate to
    comment further until that review is complete.
                             military construction
        Question. I am particularly troubled by the Administration's
    decision to defer, potentially, hundreds of military construction
    projects. The publicly stated rationale--a desire not to construct new
    facilities at bases that may soon be closed--is unsatisfactory. Are we
    to assume that the projects included in the budget are for facilities
    that the Pentagon has already determined will not be closed?
        Answer. No, the fiscal year 2003 military construction request
    seeks to improve the living and working conditions for our Sailors,
    Marines and their families in the immediate future. The analysis of the
    force structure requirements, resulting infrastructure requirement, and
    Base Realignment and Closure 2005 recommendations is just now
    beginning.
        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. The Department of Defense goal is to fund Sustainment
    Restoration and Modernization to reach a recapitialization rate of 67
    years by fiscal year 2010. The Department of the Navy (DON) will
    achieve this goal by the end of the FYDP. The DOD fiscal year 2002
    supplemental budget request did not include additional DON funds to
    accelerate achievement of the 67 year recapitalization rate.
                                     ______

                 Questions Submitted to Admiral Vernon E. Clark
                Questions Submitted by Senator Daniel K. Inouye
                              shipbuilding request
        Question. Admiral Clark, many of the reviews emerging from the
    Department of Defense last year differed in the number of ships
    necessary to fulfill Navy requirements. Recommended numbers ranged from
    310 to 370 vessels. Have you determined the actual number of ships
    required?
        Answer. The Quadrennial Defense Review (QDR) assumed a Navy force
    structure of about 310 ships. However, since that report, the Navy is
    developing a new concept of how we should operate to meet the demands
    of the post-9/11 environment that requires about 375 ships.
        The proposed concept of operations employs new formations known as
    Expeditionary Strike Groups, nominally consisting of three amphibious
    ships and three surface combatants. The additional ships consist
    primarily of the new Littoral Combat Ship (LCS), a member of our
    surface warfare family of ships and additional combat logistics ships
    to support the larger and more dispersed force.
        We project that we will need the same number of carriers, cruisers,
    destroyers, and support ships as in our force today. The number of
    submarines and expeditionary warfare ships is under study.
                            network-centric warfare
        Question. Admiral Clark, you have described network-centric warfare
    as a pillar of the Navy's plan for future war fighting. It aims to link
    together ships, aircraft, and installations so that they may share
    information across platforms. As you continue to ``network'' these
    countless systems, what is being done to prevent outsiders from gaining
    access to the precious information that will be shared among these
    platforms?
        Answer. Our Information Assurance (IA) program provides a
    comprehensive defense-in-depth strategy comprised of multiple layers of
    security mechanisms operated by trained system administrators,
    operators and Information System Security Managers (ISSM). This
    strategy includes:
    Firewalls
        Located at Network Operating Centers (NOCs) to screen and protect
    all information traversing the network
        Standardized firewall configuration and operating policy
    Public Key Infrastructure (PKI)
        Improved access control to network
        Encryption of data as it transits the net
        Provides authentication and ensures information integrity
    Intrusion Detection Systems (IDS)
        IDS installed at all NOCs
        Installing IDS software at the desktop
    On-Line Vulnerability Assessment
        Determines the computer security status of all deploying Battle
    Groups
        Confirms equipment and software correctly configured
        Provides systems administration training
        Full spectrum ``Red Team'' operations to test and certify equipment
    and personnel
    Information Assurance Vulnerability Advisories (IAVA)
        Expedites awareness and correction of network vulnerabilities
    Education and Training
        School House Training
      --Information System Administrator Course--trained technicians to
            administer information systems
      --Network Security Vulnerability Technician--trained technicians to
            secure information systems
      --Advanced Network Analyst--trained technicians to manage information
            systems
      --Information System Security Manager--trained technical managers to
            oversee information systems
        Other training
      --``Fly Away'' training teams to provide underway refresher training
      --CD-ROM based course on Operational Systems Security and user
            training
        Another challenge is our reliance on commercial products which we
    do not control from a design sense, but can only influence. National
    Security Telecommunications and Information Systems Security Policy 11
    (NSTISSP-11) requires all Commercial Information Assurance products
    procured by Department of Defense to be evaluated through the National
    Information Assurance Partnership Program. Influence with the
    commercial sector in meeting this requirement will greatly contribute
    to the strength of products available and the security posture of the
    Naval networks.
                military personnel fiscal year 2002 supplemental
        Question. Admiral Clark, what is the Navy's plans to review Reserve
    Component mobilizations, and, where appropriate, reduce the levels of
    personnel called up to Active Duty to meet the funding levels in the
    fiscal year 2002 Supplemental?
        Answer. Navy has demobilized to 9,400 Reservists, as of April 30,
    and is demobilizing to no more than 7,800 Reservists by June 30, in
    order to meet funding levels in the fiscal year 2002 supplemental. In
    doing so, we have retained the priorities of direct support to the
    warfighter, anti-terrorism/force protection, and intelligence.
        Question. Do you anticipate any funding shortfalls in the personnel
    accounts due to mobilization?
        Answer. An additional $171 million is required to fully fund pay
    and allowances and per diem costs for mobilized reservists.
                                     ______

                  Questions Submitted by Senator Thad Cochran
        Question. Mississippi has made significant advances in composite
    technology applications in support of our warfighters. Our industry and
    research institutions provide cutting-edge components for space, air,
    marine and ground systems. One of our pioneer firms, Seemann
    Composites, is currently competing for development of an Advanced
    Composite Sail to be installed on Virginia Class submarines. Could you
    give us your views on the role of composites in naval warfighting
    systems?
        Answer. The U.S. Navy has been investigating potential applications
    and developing the technology associated with transitioning composite
    materials and structures to surface ships and submarines for many
    years. Composite structures offer the potential to significantly reduce
    weight, life cycle costs and acquisition costs while also providing
    increased survivability due to improved electromagnetic signatures and
    resistance to weapons effects. The Office of Naval Research along with
    the U.S. shipbuilding industry has spearheaded this effort and the
    transition of composites technology to the fleet is occurring now.
    There are a number of examples of composites applications. A composite
    mast structure has been installed on the U.S.S. Radford for the past
    five years. This successful proof-of-concept helped support the
    incorporation of dual composite masts for the currently under-
    construction LPD 17 class ships. A composite helicopter hangar is being
    considered for demonstration on the DDG 51 FLT IIA. Most design work
    and testing has been successfully completed; long-term fatigue and some
    fire testing remain. Once all design and testing is successfully
    completed, and if sufficient funding is provided, a shipboard
    demonstration may be conducted. Also, an advanced sail program is
    investigating composite applications for the Virginia class submarine.
    Most significantly, DD(X) will possess a stealthy composite deckhouse
    with planar arrays and multi-spectral signature reduction.
        Question. Could you give us an update on the progress of the
    Advanced Composite Sail program?
        Answer. The Navy plans to install an Advanced Sail, in lieu of the
    current standard steel sail, on the Virginia class submarines starting
    with the fiscal year 2006-authorized hull (hull 8). In March 2000, the
    Navy determined the Advanced Sail needed to be constructed of composite
    material to maximize weight margin available for future payloads. As a
    result, the Composite Advanced Sail program was initiated within the
    advanced submarine system development budget (PE 603561N) to reduce
    risk by (a) selecting a single composite vendor early in the
    development process, (b) validating design criteria and requirements
    for thick section marine composites and (c) advancing the state of the
    art in design of thick-section marine composites.
        The Composite Advanced Sail program has narrowed the field of
    potential vendors to two: Goodrich Engineered Polymer Products in
    Jacksonville, Florida and Seemann Composites, Inc., in Gulfport,
    Mississippi. Each of the vendors was tasked to build a large
    fabrication demonstration item to prove their ability to accurately
    produce large, doubly curved, complex composite structures. These items
    have been delivered and are being evaluated to support selection of a
    final vendor by October 2002.
        The first draft of the Design Criteria and Requirements document
    has been issued based on initial results of small component testing.
    This document identifies the design loads, production test methods,
    modeling methodologies and analysis methods needed to design and build
    the Virginia Class Advanced Sail. Also, the state of the art in
    composites is being advanced by characterizing a wide range of
    commercial off-the-shelf materials in a statistically robust manner.
        In parallel, the internal sail systems arrangement has been
    approved as part of the new design SSN R&D effort. A final hydrodynamic
    shape has been selected and small-model hydrodynamic testing and
    evaluation is underway.
                                     ______

               Questions Submitted by Senator Christopher S. Bond
        Question. The F/A-18E/F Super Hornet is the Navy's next generation
    strike fighter and will provide naval aviation with an affordable
    multi-role aircraft for decades to come. Fiscal year 2003 will be the
    fourth year of a five-year Multi-Year Procurement (MYP) for 222
    aircraft. The current fiscal year 2003 President's Budget requests 44
    aircraft which is 4 short of the 48 planned for in the Multi-Year
    Procurement. This shortfall comes after a cut of 3 aircraft in fiscal
    year 2001. How do we leverage the savings and economies of scale of a
    Multi-Year Procurement if we keep cutting the purchase of the aircraft?
        Answer. The F/A-18E/F multi-year procurement contract provided the
    Navy with 7.4 percent savings when compared with single year contracts
    for 222 aircraft. Although actual multi-year savings increase and
    decrease with quantity variation, the 7.4 percent savings rate remains
    the same. Savings are calculated based on a comparison between single
    and multi-year procurements of equal quantity (i.e. 222 aircraft
    procured for 5 years at once or 222 procured in single year
    increments). If the quantity is decreased/increased, it is changed for
    both single and multi-year cases. Regardless of quantity variation, the
    Navy's commitment to multi-year procurement will always generate
    savings and economies of scale over single year procurements.
        Question. Can't we get some discipline in the acquisition process
    to free up funds for recapitalization? Why can't we limit ourselves to
    one new system in each functional area? Why so many IT systems? Can we
    divest from Navy Marine Corps Internet (NMCI) since it hasn't
    delivered? What programs could we get rid of in order to free up
    funding for readiness accounts?
        Answer. There are several processes and controls that are used
    within the acquisition lifecycle process that enable us to identify
    additional funds for recapitalization, or reinvestment into legacy
    systems.
        First, the acquisition process itself has a rigorous set of
    milestone program reviews which every program must pass through to
    ensure that required analysis and planning have been completed and that
    appropriate management controls are in place.
        Second, a number of initiatives are underway to reduce Operating
    and Support (O&S) costs during the program life cycle. Some of the more
    visible initiatives are as follows:
      --Reduction of Total Ownership Cost (R-TOC).--This initiative,
            established under Section 816 of the Fiscal Year 1999 National
            Defense Authorization Act, requires the Services to designate
            R-TOC pilot programs. These programs were given a stretch goal
            of reducing O&S cost by 20 percent by fiscal year 2005 based on
            an fiscal year 1997 baseline. Through aggressive management
            actions and innovative approaches, the Department of the Navy
            (DON) pilot programs project a cost avoidance of over $712
            million in O&S cost by fiscal year 2005 compared to a base
            amount of $5,652 million. The successful process they used was
            to establish baseline costs, identify cost drivers within the
            baseline, develop cost reduction initiatives, and develop
            metrics to measure progress toward stated goals. Besides the
            initial cost avoidance made available by the pilot programs for
            recapitalization, the lessons learned are available for use on
            other programs. These pilot programs were able to test various
            cost reduction strategies before applying these techniques
            Service-wide.
      --Cost As an Independent Variable (CAIV).--Similar to commercial
            Target Costing, CAIV has served as one of the Department's key
            methodologies for reducing total ownership cost of weapons
            systems over the past six years. It is applied during concept
            and development phases, when there is the greatest leverage
            over life cycle costs, and it sets aggressive but achievable
            cost targets for all phases. It uses rigorous trade-offs with
            continuous user involvement to arrive at an acceptable balance
            of cost, performance, and schedule, thus enabling the
            production of an affordable system which meets the warfighter's
            needs. When properly applied, CAIV is a disciplined acquisition
            management process that will reduce the life cycle cost of
            systems, thereby freeing up funds for recapitalization. All
            defense programs must have a plan in place to implement CAIV by
            the end of fiscal year 2002.
      --Performance Based Logistics (PBL).--The objective of PBL is to
            better integrate logistics and acquisition to reduce the demand
            for logistics and make the logistics support system more
            effective and efficient. Numerous contracts have been awarded
            to provide logistic support for weapons systems that have
            enhanced performance, reduced logistic support, and lowered
            costs. A direct result of PBL will be reduced O&S costs,
            improved performance for the warfighter, and freed up funds for
            recapitalization. PBL is the preferred product support strategy
            for DON programs. PBL will be implemented on all new programs
            and all fielded Acquisition Category I & II programs once the
            Business Case Analysis indicates it provides the best value to
            the warfighter.
      --Business Initiatives Council (BIC).--The Under Secretary of Defense
            (Acquisition, Technology and Logistics) along with the Business
            Initiatives Council, is soliciting and reviewing proposals for
            additional initiatives to reduce the cost of current operations
            to create further opportunities for additional investment in
            modernization of our forces. By aggressively working to reduce
            the out year support costs, the Navy and Marine Corps are
            creating the conditions for shifting these savings from the
            support line to force recapitalization and modernization.
        The quantity, scope and timing of requirements which are identified
    for new systems to satisfy make it unrealistic to be limited to just a
    single new system. The nature of the acquisition and requirements
    processes does not allow for the development of a system to be
    constantly revised as each new need is identified. Once a system plan
    reaches the designated milestone point, further modifications are
    costly and greatly retard the process.
        The current process is greatly decreasing the number of redundant
    systems, and encouraging new systems to include as many related areas
    of effect as possible. As a result of our recent alignment initiatives,
    the Warfare Integration and Assessment Division, N70, is serving as a
    horizontally aligned reviewer of all warfare programs and proposals
    within N7. N70 purposely inserts itself into the plans of the
    requirements sponsors and acts as the impartial observer to identify
    redundancies and encourage, and at times require, separate warfare
    sponsors to work together on programs, both to reduce the number of
    personnel and funding needed for a finished product, as well as
    ensuring that the Navy gets a system which will be robust, effective
    and meet warfighting requirements.
        The number of Information Technology (IT) systems began to increase
    in the early 1980s as a result of the microcomputer revolution.
    Microcomputers provided powerful yet inexpensive alternatives to the
    centralized mainframe culture, which supported relatively few systems.
    Decentralized Department of the Navy (DON) management encouraged eager
    and innovative users to take advantage of this capability, providing
    commanders the opportunity to rapidly develop and deploy automated
    solutions to manually-performed operational tasks. The result was a
    vast and disparate array of specialized IT systems and applications
    supporting the full spectrum of the Department of Defense's (DOD)
    specialized warfare and mission support areas. Our transformation
    imperative is reversing this trend as initiatives such as Navy Marine
    Corps Intranet (NMCI), Information Technology for the 21st Century
    (IT21), Enterprise Resource Planning (ERP), and Internet and World Wide
    Web technologies (Task Force Web, Extensible Markup Language (XML)) are
    now enabling the Department to streamline business processes and
    rationalize current IT systems into a smaller cross-functional
    portfolio.
        The Navy Marine Corps Intranet (NMCI) effort is well underway and
    has shown much progress since the contract was signed in October 2000.
    To date, the NMCI Information Strike Force (ISF) has assumed
    responsibility for 48,000 seats and has transitioned or ``cutover''
    over 4,000 seats. Approximately 63,000 seats have been placed on order
    with approval for an additional 100,000 expected soon.
        Significantly, it was through the NMCI contract that the Navy was
    able to cut post-September 11 information technology reconstitution
    time by more than half.
        If the Government decides to divest itself of the contract and
    cancels its requirements for all services in program years, the
    contractor will be paid a cancellation charge not over the ceiling
    specified below as applicable at the time of cancellation.

                              [Dollars in millions]
    ------------------------------------------------------------------------
                                    Cancellation
              Fiscal year              Charge       Last Notification Date
    ------------------------------------------------------------------------
    2002..........................       $85.4    1 October 2001.
    2003..........................       251.4    1 October 2002.
    2004..........................       536.9    1 October 2003.
    2005..........................       549.1    1 October 2004.
    ------------------------------------------------------------------------

        Claims could include:
      --Reasonable nonrecurring costs that would normally be amortized;
      --Non-depreciated costs of facilities acquired or established for the
            conduct of work;
      --Cost incurred for the assembly, training and transportation to the
            job site of a specialized work force; and
      --Cost not amortized because the cancellation precluded benefits to
            contractor or subcontractor learning.
        We have added significant funding to Navy readiness accounts over
    the last two budgeting cycles. While we had to make some tough choices
    as we developed the recently submitted budget, based on Navy's
    performance to date in the Global War on Terrorism, I am convinced that
    we have readiness funding about right and we are now watching to see
    the result of our increased funding before adding additional money to
    these accounts.
        Our priority is to continue to sustain the gains we've made in the
    readiness accounts as we recapitalize our Navy.
                               budget shortfalls
        Question. With significant budget shortfalls over the last 10
    years, what impact has there been on modernization and
    recapitalization? Is the force the size it needs to be, and is it as
    modern as it needs to be? What is the impact on near term readiness--
    and does PB03 budget submission properly balance the need to modernize
    with current readiness?
        Answer. Over the past decade, budget shortfalls have had a
    significant effect on Navy modernization and recapitalization programs.
    The 1997 Quadrennial Defense Review (QDR) attempted to balance the
    force structure needs of the present with the challenges of the future.
    Although the QDR did not specify a total inventory, it did specify a
    minimum of 12 Aircraft Carrier Battle Groups and 12 Amphibious
    Readiness Groups. These force structure reduced our battle force
    inventory from approximately 370 ships, to 310.
        In order to maintain this inventory a recapitalization rate of 8 to
    10 ships per year is required. The actual recapitalization rate
    experienced the last 10 years is an average 5 to 6 ships per year. In
    the long run this level of investment will deplete the inventory to
    about 240 ships.
        We are constantly reassessing our force structure and the
    requirements to modernize the force. Conflicts, such as Kosovo and the
    ongoing global war on terrorism, only intensify that process. We have
    already put considerable resources into addressing the issues to ensure
    overall numbers of ships, aircraft, submarines, munitions and personnel
    are sufficient to meet our strategic and operational commitments around
    the world. The Department remains committed to continuing full support
    of major transformational programs, like the Joint Strike Fighter,
    CVN(X), SSGN conversion, and DD(X), while continuing efforts to advance
    new technologies for weapon systems that create the ``Navy after next''
    for the new millennium.
        The 2001 Quadrennial Defense Review (QDR) assumed a Navy force
    structure of about 310 ships. However, since that report we have
    developed a new vision of how the Navy should operate to meet the
    demands of the post-9/11 environment, that requires about 375 ships.
        The new concept of operations will change the way we deploy our
    surface ships to maximize our capability and reach. Developing
    capability improvements brought to the force by programs such as
    cooperative engagement capability (CEC), electronic warfare aircraft
    (E-2C) radar modernization program (RMP) and net-centric warfare (NCW)
    will reduce the required number of surface combatants assigned to
    individual Carrier Battle Groups (CVBGs), allowing surface combatants
    to be assigned to Amphibious Ready Groups (ARGs), designating them as
    Expeditionary Strike Groups (ESGs). These new formations nominally will
    consist of three amphibious ships and three surface combatants.
    Additionally, the Navy is looking at independently deploying missile
    defense Surface Action Groups (SAGs) and strike SAGs. By reallocating
    surface combatants, we will empower our Amphibious Ready Groups with
    more capability across a greater range of conflicts, thereby increasing
    our ability to respond with combat credible force in more places
    simultaneously. Our most potent strike force remains the Aircraft
    Carrier Battle Group, but for many situations an Expeditionary Strike
    Group will provide the appropriate level of combat power.
        We intend to increase the reach of our net-centric warfighting
    capability by developing and fielding the Littoral Combat Ship (LCS), a
    small, high-speed ship. Each LCS will have a focused mission
    capability--(countermine, anti-submarine warfare and anti-swarming
    boats in near land areas) that could be plugged into each platform
    depending on the needs of a given theater. Our plan is to build this
    ship in sufficient numbers to maintain a quantity of LCSs forward
    deployed in major theaters to augment the Aircraft Carrier Battle
    Groups, the Expeditionary Strike Groups and the Surface Action Groups.
    The Navy is currently working on the development of the operational
    requirements document for the LCS.
        The fiscal year 2003 budget, guided by the defense strategy
    outlined in the latest Quadrennial Defense Review continues to build a
    force that is relevant to threats associated with the War on Terrorism,
    and fulfill our future worldwide security commitments. The fiscal year
    2003 budget request offers substantial improvements in combat
    capability, enriches the quality of life for our people, incorporates
    technological innovations more quickly and improves business practices,
    all of which help to manage and mitigate risk during these uncertain
    times. The fiscal year 2003 budget request adequately addresses our
    near term risk through investment in people and readiness, while our
    transformation and recapitalization efforts in the budget address
    emerging threats in the future. Our preparation for the future will
    enable Naval forces to concurrently project power abroad, and at the
    same time provide security to the homeland.
        Question. What are your concerns for near-term readiness? Who set
    the requirement for near-term readiness, and who validates it? Is the
    requirement being met? If there are shortfalls, are they being
    represented in your budget submission for PB 03?
        Answer. My concerns for near-term readiness revolve around our
    ability to meet the near-term readiness goals I established including
    expected Status of Resources and Training System (SORTS) goals for
    naval units as they approach deployment dates. The Deputy Chief of
    Naval Operations (Fleet Readiness and Logistics) validates our
    readiness goals. In the past, we have understated the requirement and
    then underfunded the understated requirement. Through a concerted fleet
    and OPNAV effort, we have identified what I believe to be the correct
    requirement. While we had to make some tough choices as we developed
    the recently submitted budget, I am convinced that recent additions in
    readiness funding have been correct. We are now watching to see the
    result of our increased funding before adding additional money to these
    accounts.
        Question. What is the ``right size'' for the fleet? What is your
    rationale for determining the needed force structure? What logistic
    support is needed to support the force structure you envision? Is your
    current logistic force adequate to meet that need?
        Answer. The Quadrennial Defense Review (QDR) assumed a Navy force
    structure of about 310 ships. However, since that report we have
    developed a new vision of how the Navy should operate to meet the
    demands of the post-9/11 environment, that requires about 375 ships.
    The new concept of operations will change the way we deploy our surface
    ships to maximize our capability and reach. Developing capability
    improvements brought to the force by programs such as cooperative
    engagement capability (CEC), electronic warfare aircraft (E-2C) radar
    modernization program (RMP) and net-centric warfare (NCW) will reduce
    the required number of surface combatants assigned to individual
    Aircraft Carrier Strike Groups (CSGs), allowing surface combatants to
    be assigned to Amphibious Ready Groups (ARGs), designating them as
    Expeditionary Strike Groups (ESGs). The ESGs will retain the
    traditional combined arms assault capabilities provided by the Marine
    Expeditionary Unit (MEU), and will be complemented by the strike and
    sea control capabilities provided by Aegis surface combatants in the
    near term, and DD(X) in the outyears. These new formations nominally
    will consist of three amphibious ships and three surface combatants.
    Additionally, the Navy is looking at independently deploying missile
    defense Surface Action Groups (SAGs) and strike SAGs. By reallocating
    surface combatants, we will empower our Amphibious Ready Groups with
    more capability across a greater range of conflicts, thereby increasing
    our ability to respond with combat credible force in more places
    simultaneously. Our most potent strike force remains the Aircraft
    Carrier Strike Group, but for many situations an Expeditionary Strike
    Group will provide the appropriate level of combat power.
        We intend to increase the reach of our net-centric warfighting
    capability by developing and fielding the Littoral Combat Ship (LCS), a
    small, high-speed ship. Each LCS will have a focused mission
    capability--(countermine, anti-submarine warfare and anti-swarming
    boats in near land areas) that could be plugged into each platform
    depending on the needs of a given theater. Our plan is to build this
    ship in sufficient numbers to maintain a quantity of LCSs forward
    deployed in major theaters to augment the Aircraft Carrier Strike
    Groups, the Expeditionary Strike Groups and the Surface Action Groups.
    The Navy is currently working on the development of the operational
    requirements document for the LCS.
        This concept of operations (CONOPS) envisions that these newly
    defined groupings of ships may be more widely dispersed for operations
    against terrorism and for normal peacetime missions. This may mean that
    our current combat logistics force is too small to adequately cover the
    needs of our Global CONOPS. We are still studying the exact number and
    type of logistics replenishment ships as well as alternative logistical
    CONOPS that we will need. We will continue to need about the same
    number of carriers, submarines, expeditionary warfare ships, cruisers,
    destroyers, and support ships as in our force today.
        Question. What is the ``next step'' for fleet realignment?
        Answer. The next step for fleet alignment is currently being
    studied by Commander, Fleet Forces Command (CFFC). The expected
    completion date is September 2002.
        This alignment study is considering the roles of the CFFC and the
    Fleet Type Commanders (the Commanders of the Air, Surface and Submarine
    Forces) as they evolve from the October 1, 2001 posture into one of
    several alternative futures. The goal is to integrate policies and
    coordinate requirements so that we most effectively man, train and
    equip the warfighting forces. The new alignment will take into
    consideration the revised Unified Command Plan.
        Question. What do you envision as a future alternative to the
    Vieques training area in Puerto Rico? What future requirements do you
    have to provide equivalent training for deploying forces?
        Answer. We expect the Center for Naval Analysis study on the future
    of Navy training to provide insight into the best alternatives for
    quality Navy training as a whole. After we have an opportunity to
    receive and evaluate the study, we will be shaping the way ahead for
    the 21st century. In the interim we are addressing the shortfall in
    training capability, capacity, and flexibility within the Atlantic
    Fleet area by improving our training infrastructure at multiple sites.
                                     ______

              Questions Submitted by Senator Kay Bailey Hutchison
                             t-45 training aircraft
        Question. Given the importance of training Naval aviators in
    aircraft equipped with all glass, digital cockpits, why has the Navy
    been so slow to equip a second, undergraduate pilot training facility
    with adequate aircraft?
        Answer. Naval Aviation is a key component of the Navy's capability
    to support our Nation's strategy and goals. Inherent to maintaining a
    strong Naval Aviation structure is the development of new Naval
    Aviators. The T-45 is a critical element to that process. Navy is more
    than adequately meeting pilot training requirements and the development
    of new Naval Aviators with the current configurations of T-45 aircraft.
    The retrofit of the T-45A to the T-45C glass cockpit is a focal point
    for the Navy's ongoing budget reviews and funding prioritization.
        Question. If the start of the T-45A to C cockpit upgrade program
    could be brought forward a year, would this be of benefit to the Navy?
        Answer. In light of competing priorities for resources, the
    President's budget represents the best balance of resources to
    requirements. However, if additional funds were provided, acceleration
    of the T-45A to C cockpit retrofit would provide upgraded capabilities
    to the existing T-45A aircraft.
                                     ______

                 Questions Submitted to General James L. Jones
                 Question Submitted by Senator Daniel K. Inouye
        Question. General Jones, what is the Marine Corps' plan to review
    Reserve Component mobilizations, and, where appropriate, reduce the
    levels of personnel called up to Active Duty to meet the funding levels
    in the fiscal year 2002 Supplemental? Do you anticipate any funding
    shortfalls in the personnel accounts due to mobilization?
        Answer. The Marine Corps has reviewed operational requirements
    based on the current situation and identified personnel reductions
    equaling 11.6 percent of activated Reservists. These personnel will be
    demobilized by June 30, 2002. The Marine Corps is committed to
    supporting Joint and CINC staffing needs during this activation and is
    actively engaged in identifying future needs, and an attendant plan to
    support these needs for the long term Global War on Terrorism.
        The Marine Corps Reserve component mobilization requirement is
    adequately supported by the fiscal year 2002 Supplemental.
                                     ______

                  Questions Submitted by Senator Thad Cochran
        Question. I understand that the U.S.S. Bataan Amphibious Ready
    Group LCACs that just returned from Afghanistan delivered record
    amounts of cargo from ship to shore. This effort highlights the need
    and value of LCAC and its Service Life Extension Program. Can you give
    us your assessment of how the LCACs are performing in support of the
    War on Terrorism?
        Answer. The LCAC, an essential platform in projecting decisive
    military power ashore, performed superbly while deployed with the
    U.S.S. Bataan Amphibious Ready Group supporting OPERATION ENDURING
    FREEDOM. LCAC 89 was equipped with the improved Deep Skirt, just one
    portion of the equipment upgrades provided through the LCAC Service
    Life Extension Program (SLEP). This single upgrade provided significant
    LCAC performance improvements, enabling the craft to run through
    various sea states, load conditions, beach gradients, and landing zone
    configurations. Use of the Deep Skirt allowed for quicker ship-to-shore
    movement of equipment by one to two hours and allowed operations to
    continue under adverse weather and sea state conditions that would have
    placed a non-Deep Skirt configured LCAC at risk.
        The LCAC is currently undergoing a SLEP initiated in fiscal year
    2001 to ensure the viability of the LCAC into the future. LCAC SLEP
    encompasses the following:
      --Replacing obsolete electronics with a new command module,
            introducing open architecture to facilitate low cost,
            commercial off-the-shelf insertion as technology continues to
            evolve.
      --Replacing the buoyancy box that will solve corrosion problems while
            incorporating hull improvements.
      --Incorporating enhanced engines that will provide additional power,
            capable of lifting all required Marine Corps loads, in hotter
            climates and higher sea states.
      --Replacing current skirt design with Deep Skirts that will increase
            craft performance under all operational conditions.
        To support the Marine Air Ground Task Force (MAGTF) of the next 20
    years, the LCAC must be able to operate with heavier loads, at faster
    speeds and greater distances, under adverse conditions, and with higher
    reliability. For these reasons, the LCAC SLEP is critical to projecting
    combat power ashore from over-the-horizon.
        Question. Do you feel that the installation of Deep Skirts, which
    increase LCAC performance and decreases maintenance, would enhance your
    deployed forces capabilities?
        Answer. The Deep Skirt greatly increased LCAC performance under all
    operating conditions, significantly enhancing the LCAC's capability and
    improving the overall capability of our deployed forces. The Deep Skirt
    will replace the current skirt as the craft undergo the LCAC Service
    Life Extension Program.
        LCAC 89 deployed with the U.S.S. Bataan Amphibious Ready Group
    during OPERATION ENDURING FREEDOM, was equipped with the improved Deep
    Skirt. This single upgrade provided significant performance
    improvements, enabling the craft to operate in various sea states, load
    conditions, beach gradients, and landing zone configurations. Use of
    the Deep Skirt demonstrated quicker ship-to-shore movement of equipment
    by one to two hours and allowed operations to continue in adverse
    weather and sea state conditions that would have placed a non-Deep
    Skirt-configured LCAC at risk.
        The Deep Skirt required less maintenance than the standard skirt
    currently in use. No repairs were required during 150 hours of
    operation by LCAC 89 outfitted with the Deep Skirt. The Deep Skirt's
    improved performance and decreased maintenance requirements have passed
    engineering tests and most importantly, have met the Fleet's
    requirements during OPERATION ENDURING FREEDOM.
        Question. In your statement, you state that the Lightweight 155 mm
    Howitzer is ``needed to replace our aging `legacy' field artillery
    systems''. I understand that the Lightweight 155 mm Howitzer will make
    a major impact on improving your outdated artillery capability. Can you
    provide the Committee with an update on the program?
        Answer. The LW 155 mm Howitzer program has made tremendous progress
    over the past year. All eight of the Engineering and Manufacturing
    Development (EMD) weapons have been delivered, all the required safety
    testing has been successfully completed, and the program is on track to
    support a low rate production decision later this year. During the
    battery training for the upcoming Operational Assessment (OA), more
    than a thousand rounds were fired over a 3\1/2\ day period and numerous
    emplacements, displacements, and movements were conducted. Timelines
    for the key operational requirements were routinely met and the
    exercise was completed with no significant problems or mechanical
    failures of the howitzers.
        The prime contractor has its U.S. supply team in place and is
    producing two pilot production weapons prior to the start of the Low-
    Rate Initial Production (LRIP) phase. The first of these pilot
    production weapons is undergoing integration and assembly in
    Hattiesburg, MS and will be delivered in August 2002 for testing prior
    to the planned October 2002 production decision. The Marine Corps fully
    supports the need to replace its heavy and aging M198 artillery systems
    with the LW 155 mm Howitzer, as does the Chief of Staff of the Army,
    who sees the LW 155 mm Howitzer system as a key component of the Army's
    Interim Brigade Combat Team.
        Question. How does the new howitzer compare to your existing legacy
    systems in terms of survivability, lethality, and mobility?
        Answer. The Lightweight (LW) 155 mm Howitzer is much more
    survivable, lethal, and mobile than the M198 Howitzer legacy system it
    is replacing. A cost and operational effectiveness analysis showed the
    LW 155 mm Howitzer had approximately 25 percent more combat vehicle
    kills, a five-fold increase in its counter fire exchange ratio and a 70
    percent increase in howitzer survivability. Because of its lighter
    weight (6,000 lbs. less than the M198) and independent suspension, the
    LW 155 provides a 35 percent improvement over the M198 in percentage of
    terrain traversed. The LW 155 is the only towed howitzer to have
    successfully traversed the demanding Rock Ledge Course at Yuma Proving
    Grounds, which is representative of the type of terrain found in places
    like Afghanistan.
                                     ______

               Questions Submitted by Senator Christopher S. Bond
        Question. General Jones, I understand the Marine Corps is pursuing
    participation in the Air Force's proposed multi-year procurement
    contract for the KC-130J tanker aircraft. How important is the KC-130J
    to Marine Corps operations, and what are the benefits of participation
    in the multi-year?
        Answer. The KC-130J is a force multiplier and immensely important
    to the United States Marine Corps. The KC-130 provides the only organic
    capability to refuel fixed-wing and vertical lift (helicopters, MV-22)
    aircraft in flight. The KC-130 also provides the Marine Corps the
    capability to rapidly insert and sustain combat forces and the ability
    to refuel ground and aviation assets at remote, austere landing zones,
    enabling power projection and decisive combat operations at increased
    ranges. Marine KC-130s make up almost half of the DOD tanker inventory
    capable of refueling rotary wing assets. Its combat performance during
    Operation Enduring Freedom is a testament to its unparalleled utility
    to the Marine Corps and DOD.
        Benefits of the Multiyear Procurement (MYP) are quantified in the
    form of substantial cost savings for the USAF ($420 million/13.6
    percent) and the USMC ($235.2 million/12.6 percent). This MYP makes it
    possible for the USAF and USMC to acquire aircraft at an economical
    production rate and within the fiscal constraints of the Department's
    Future Years Defense Plan (FYDP).
        This MYP will purchase 64 aircraft (40 USAF CC-130Js, 24 USMC KC-
    130Js) over the period fiscal year 2003 through fiscal year 2008. The
    USAF and USMC will take delivery of these 64 aircraft during calendar
    years 2005-2008, at a combined rate of 12, 16, 18, and 18 aircraft per
    year (respectively). The total cost of this MYP is estimated to be
    $4.29 billion (USAF: $2.66 billion, USMC: $1.63 billion).
                                     ______

              Questions Submitted by Senator Kay Bailey Hutchison
        Question. Two important Marine Corps programs have been receiving a
    great deal of press lately: the V-22 and the H-1 Upgrade programs.
    Would you give us an update on the status of the H-1 program? Would you
    give us an update on the status of the V-22 program?
        Answer. In response to the H-1 Program Nun-McCurdy breach, the
    Under Secretary of Defense for Acquisition, Technology, and Logistics
    certified the H-1 Program as of critical value to the Marine Corps and
    justified its further development. On May 2, 2002, Under Secretary of
    Defense for Acquisition, Technology, and Logistics approved the
    restructure plan for the H-1 Upgrade Program. The revised Acquisition
    Program Baseline will correct existing cost and schedule deficiencies
    in the program. All five EMD aircraft are now in flight test status and
    will be located at Naval Air Warfare Center Aircraft Division (NAWCAD)
    Patuxent River by the end of May 2002. The flight profiles for envelope
    expansion have been determined and the Bell, NAVAIR Test Team has begun
    flying envelope expansion events.
        The V-22 has had multiple separate investigations and engineering,
    software, and design reviews. The results of the investigations and
    reviews have been addressed by the V-22 Program Office (PMA-275) using
    a systems engineering approach which has lead to a comprehensive
    ``event driven'' test schedule. The Under Secretary of Defense,
    Acquisitions, Technology and Logistics, Mr. Aldridge, approved the
    acquisition strategy and acquisition program baseline which reflected
    the restructured program on May 6, 2002. Developmental test flights are
    projected to begin in May 2002. We expect to begin operational flights
    in fiscal year 2004.
        Attached is the executive summary of the report to Congress on the
    status of the V-22 Program in response to Section 124 of the National
    Defense Authorization Act for Fiscal Year 2002.
                               Executive Summary
        In response to Section 124 of the National Defense Authorization
    Act for Fiscal Year 2002, the Defense Department submits this report on
    the status of the V-22 Program. The report organizes the response into
    four general areas: Aircraft flight control system (software and
    hydraulics); recommendations of the Panel to Review the V-22 Program
    (April 2001); recommendations of the NASA Tiltrotor Aeromechanical
    Phenomena Independent Assessment Panel (November 2001); and status of
    waivers to the Joint Operational Requirements Document (ref:
    Operational Evaluation Phase I, 1999).
        Responding to the recommendations of the two CY 2000 mishap
    investigations, as well as several internal and external reviews
    conducted over the past year, the Department has reduced production and
    defined a new plan that is ``event driven'' as opposed to ``schedule
    driven.'' Key to the plan is completion of ongoing laboratory flight
    control system tests and software upgrades, verification of all flight
    crew procedures, and a comprehensive developmental flight test program
    that will thoroughly assess the aeromechanical issues and reliability
    issues raised. The developmental testing will be followed by
    operational flight tests that will demonstrate the improved
    capabilities and suitability of the aircraft, and address the tactics,
    techniques and procedure issues raised by the various reviews and the
    original flight test program. The plan also establishes a high-level
    readiness review preceding each step. Finally, the plan calls for a
    series of aircraft block upgrades with the highest priority software
    and safety improvements going into the developmental test aircraft in
    time for first flight. Important reliability and maintainability
    modifications are included in a Block A upgrade which will be the
    configuration for the first operational aircraft. Further aircraft
    capability, maintainability and availability enhancements are in Block
    B and subsequent.
        To assess the flight control system, the program conducted a
    substantial series of nominal and degraded mode tests in the integrated
    avionics and flight control software test facilities, including pilot-
    in-the-loop simulation to evaluate and validate all related crew
    emergency procedures. The program has updated the flight control
    computer software to correct deficiencies including those that were
    factors in the December 2000 mishap. Further, the program has modified
    the flight control hydraulics system to correct mission reliability
    problems in preparation for return to flight. Of the seventy-one
    ``specific'' Blue Ribbon Panel and seventeen ``high priority'' NASA
    recommendations, only eight are germane to resumption of developmental
    test flights. Of that number, all are complete as recommended. Of the
    remaining recommendations, all but four are either complete, or
    included in the test plan, the aircraft block upgrades or the logistics
    support plans. The four recommendations that are not accepted are
    listed below and discussed in detail in the report: Replacement of the
    planned aircraft ground maintenance trainers with simulators; adoption
    by the Director, Operational Test and Evaluation organization of
    standard risk categories; replacement of the Unified Numbering System
    by the Work Unit Code system for logistics; and provision of
    development funding reserves for the Program Manager.
        Of the twenty-two requirements-related waivers granted to the
    program for the Phase I Operational Evaluation (OPEVAL) in 1999, all
    but four are no longer valid, having been removed by changes to the
    requirements or subsequent improvements to the aircraft. The four
    issues are: (1) provision of an interim (vs. production representative)
    hoist; (2) a basic equivalent (vs. fully equivalent) Ground Collision
    Avoidance Warning System; (3) lack of a defensive weapon system; and
    (4) lack of anti-ice capability. None of these issues is planned to be
    resolved before the start of OPEVAL Phase II tentatively scheduled for
    fiscal year 2005. The Services are reviewing the option of delaying
    these requirements consistent with program plans.
        In summary, the V-22 program reviews have been comprehensive, the
    organizational, technical and programmatic issues are adequately
    addressed and the plan represents a rational approach to return to
    flight testing and program recovery.

                              SUBCOMMITTEE RECESS

        Senator Inouye. Our subcommittee will stand in recess until
    Wednesday, May 8, and at that time we will hear from the
    defense medical programs. Thank you very much.
        [Whereupon, at 11:38 a.m., Wednesday, May 1, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    May 8.]

                  DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2003

                                  ----------

                             WEDNESDAY, MAY 8, 2002

                                           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, Stevens, and Specter.

                             DEPARTMENT OF DEFENSE

                                 Health Affairs

    STATEMENT OF HON. WILLIAM WINKENWERDER, JR., ASSISTANT
                SECRETARY OF DEFENSE FOR HEALTH AFFAIRS
    ACCOMPANIED BY:
            LIEUTENANT GENERAL JAMES B. PEAKE, MC, USA, SURGEON GENERAL OF
                THE ARMY AND COMMANDING GENERAL, U.S. ARMY MEDICAL COMMAND
            VICE ADMIRAL MICHAEL L. COWAN, MC, USN, SURGEON GENERAL OF THE
                NAVY AND CHIEF, BUREAU OF MEDICINE AND SURGERY
            LIEUTENANT GENERAL PAUL K. CARLTON, JR., USAF, SURGEON GENERAL
                OF THE AIR FORCE

                 OPENING STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. I would like to welcome all of you to our
    hearing this morning to review the Department of Defense
    medical programs including the defense health program. When we
    put our soldiers, sailors, airmen and Marines in harm's way,
    the medical medics are deployed and are part of the fight. So
    we thank them for their very important work.
        In light of that, I would like to commend the department's
    medical services for their response to our country's crisis on
    September 11th and their ongoing service in support of the war
    efforts against terrorism. From the moment of attack, the
    medics' role has been diverse and profound, providing services
    ranging from care to injured to identification of remains, to
    testing of thousands of anthrax specimens, and for their
    recognition of supporting the war around the world, we applaud
    their efforts, serving jointly to meet the medical needs of our
    warfighters in this conflict.
        I would also like to congratulate the department for
    submitting for the second consecutive year a budget request for
    the defense health program that takes into account realistic
    cost estimates. With this budget the committee will not expect
    to see a supplemental request in fiscal year 2003 for this
    program. Senator Stevens and I, and all the members of this
    subcommittee put great value in military medicine. We look
    forward to a frank and open discussion this morning with our
    panels on the fiscal year 2003 budget request and in
    particular, the status of the TRICARE for Life benefit, which
    began this year.
        Furthermore, we understand that recruitment and retention
    of medics, both officer and enlisted, is increasingly a
    challenge for all the services. I would like to hear from you
    on your efforts to address this growing problem.
        Joining us this morning we have the Assistant Secretary of
    Defense for Health Affairs, Dr. William Winkenwerder, and we
    welcome you, sir, for your first appearance before the
    subcommittee. Your credentials are quite impressive and we look
    forward to hearing from you. From the Army, Surgeon General
    James Peake. Welcome back again. From the Navy, we have Admiral
    Michael Cowan. We also welcome you to your first hearing with
    us. Your career is quite distinguished and we look forward to
    working closely with you throughout your assignment. And
    finally, Air Force Surgeon General Paul Carlton. I am informed
    that this is probably your last appearance before the
    subcommittee since you will retire this fall, and I thank you
    for your service to the Air Force, the country, and your
    assistance to this committee. Thank you for a successful and
    distinguished career, sir.
        Before we start, may I call upon my co-chairman for any
    opening remarks. Senator Stevens.

                        STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Thank you very much. I join the chairman
    in welcoming the Secretary to this subcommittee in his first
    appearance here. Mr. Secretary, you will find this subcommittee
    has been consistently more supportive, more responsive and
    sympathetic to the needs of military medical programs than any
    other committee at any time. But because of that support, I
    think you will also find that we are diligent and relentless in
    our monitoring the success or effectiveness of programs that
    you and your surgeons general administer.
        In my experience, there are few elements of military life
    that contribute more to quality of life, retention and
    satisfaction of military personnel and their families than
    medical care. And as concerned as our subcommittee is, there is
    growing concern about the rate of growth of military medical
    costs. No item in the department's budget grew by a greater
    percentage this year than the medical programs. Controlling
    that rate of growth while maintaining access to quality care
    will likely be, and I believe it is your greatest challenge.
        We welcome the opportunity to join you in trying to solve
    these problems, but welcome you also for your hearing and your
    presentation of your plans.
        Unfortunately as I told you, I am being called to another
    meeting in just a few minutes, but Mr. Chairman, I will return
    if it's possible and as quickly as possible. I look forward to
    your testimony, Generals, and I will read it, and I regret
    missing any of it. Thank you.
        Senator Inouye. Thank you very much. Senator Stevens, as
    you know, is going on an important mission of peace, and I hope
    you succeed.
        So, may I first call upon the Assistant Secretary of
    Defense for Health Affairs, the Honorable William Winkenwerder.
        Dr. Winkenwerder. Mr. Chairman, Senator Stevens, and other
    members of the subcommittee, I want to thank you for the
    opportunity to appear before you today. As you have requested,
    I will provide a brief verbal statement and then submit my
    written comments for the record.
        Senator Inouye. The full statement is made part of the
    record, sir.
        Dr. Winkenwerder. First I wanted to say, I certainly
    welcome your support and the support this committee has
    provided over the past years, but also welcome your monitoring.
    I think that's part of your responsibility and we welcome that.
    You are also, I think, very unmarked in identifying the issue
    of medical costs and rising medical costs is a real significant
    challenge for us and I hope to be able to elaborate further on
    some of our strategies for dealing with that issue during this
    hearing.
        At the outset I want to take just a moment to acknowledge
    the heroic and exemplary contributions our military healthcare
    professionals are making around the world today. Our military
    medics are engaged in a number of diverse and challenging
    activities in support of the war on terrorism both here and
    abroad.
        In Afghanistan and elsewhere, the United States and
    coalition medical professionals provide lifesaving care to our
    troops and allies in a very austere battlefield situation. In
    the United States, our healthcare professionals work closely
    with other Federal agencies and the Office of Homeland Security
    in shaping our capabilities to respond to biological and
    chemical warfare threats here at home. And of course we
    continue to provide the finest medical care every day
    throughout the world for our active duty personnel, their
    families, and our retirees and their families.
        Everything we do within the military health system is
    designed to support our warfighters, from preventive medicine
    activities to complex multispecialty care requirements for our
    most severely ill or injured patients. This support system
    includes the design and operation of TRICARE. TRICARE was
    designed to improve continuity, quality and access to care we
    provide our beneficiaries in both military hospitals and the
    clinics, and the $7 billion in care we purchase through the
    private sector every year.
        This effort has been very successful. Virtually every
    indicator of success has moved in the right direction in the
    past few years, including increasing beneficiary satisfaction,
    increased perception of quality of care, more timely access,
    and increased use of preventive services.
        Cost growth has remained within or less than the overall
    increases in healthcare costs seen in the private sector
    without increasing out of pocket costs for beneficiaries, and
    that is an accomplishment. As you know, the private sector
    trends are in double digit figures now.
        And we have implemented a new set of healthcare benefits,
    particularly TRICARE for Life, which includes a prescription
    drug benefit for our Medicare-eligible beneficiaries, the first
    such benefit for seniors in America, and it's working very
    well.
        We're proud of these successes and yet, there is still room
    for improvement. As we move forward, we are building upon both
    the successes and the lessons learned from the past 7 years of
    TRICARE. Over the years, we have added many new requirements on
    the existing contracts. Often, our requirements were
    prescriptive, maybe too prescriptive, added costs, and did not
    provide the proper incentives for either optimal system
    performance or contractor innovation.
        The next generation of TRICARE contracts will provide these
    incentives, adopt the best practices employed in the private
    sector, and invite greater competition from the health care
    marketplace. Financial incentives are a powerful tool to
    enhance contractor performance. In the next set of contracts, I
    plan to retain financial risk-sharing elements and fee-based
    rewards that recognize various elements of outstanding
    performance, including customer satisfaction and provider
    satisfaction.
        Finally, I will insure that our new contracts enhance
    quality and continuity of care for our beneficiaries while
    minimizing any disruption in beneficiary services. Our actions
    will continue to improve the healthcare delivery system for our
    patients, improve the predictability of our healthcare budgets,
    and establish the military health system as one of the
    preeminent health systems in this country.
        I believe that's a realistic goal for us to shoot for. We
    have the opportunity to be a model for the rest of the nation,
    and I am committed to seeing this happen. I want to assure the
    committee that I will continue to consult with you regularly as
    we proceed in the development of our TRICARE contracting
    strategy.
        The President's budget request for defense health care for
    fiscal year 2003 is based on realistic cost estimates for
    providing healthcare benefits to DOD eligible populations and
    improving medical readiness. It includes appropriate growth
    assumptions for both pharmacy and private sector health costs
    to reflect our recent experience, which as I alluded to
    earlier, mirrors the private marketplace.
        As we strive to raise the performance of our health system,
    we also are reaching out to other Federal agencies to improve
    collaboration and coordination. In particular, we are working
    more closely with the Department of Veterans Affairs, (VA) and
    with several agencies at the Department of Health and Human
    Services, including the Centers for Disease Control (CDC), the
    Food and Drug Administration (FDA) and the National Institutes
    of Health (NIH). All of those other agencies are important to
    the way we do business and contribute to our success.
        We recognize that each service member actually begins his
    or her life as a veteran of military service on their first day
    of active duty. Through the Department of Defense (DOD's)
    collaboration with VA, which has a strong historical
    foundation, much has been accomplished, but there is much more
    to do--greater VA participation in TRICARE networks is a goal
    for us, simplified billing procedures for shared services,
    increased cooperation on our capital asset and construction
    plans, greater joint activity in the area of pharmacy and
    pharmacy benefit management, and Information Technology (IT)
    improvements that will permit appropriate sharing of electronic
    records. The focus of these efforts will be to identify those
    opportunities that are congruent with our respective missions
    at DOD and VA, and those opportunities that will benefit both
    the beneficiary and the U.S. taxpayer.
        Just recently we had a meeting of senior people, including
    the Deputy Secretary of VA, McKay, Under Secretary Chu, myself
    and others, and we signed some agreements that we believe are
    very important that relate to a common billing agreement among
    both departments and also a long-term IT strategic plan. We are
    at this time passing along the records of approximately 3.6
    million veterans over the last 10 years so that those clinical
    records will now be available for the VA, so it will enhance
    the easy availability of clinical records. And there is much
    more to come.
        Protecting the health of the deployed military is a
    paramount concern to the Department. To insure proper and
    continued attention to this issue, I recently established and
    am just announcing more publicly here today the Deployment
    Health Support Directorate under the Deputy Assistant Secretary
    of Defense reporting to me for force health protection and
    medical readiness. This office is charged with understanding
    how the Department of Defense can best support the health and
    medical needs of our warfighter both before, during and after
    military deployments.
        This office will serve as a conduit through which
    commanders and service members can contribute to deployment
    health policies and practices, and build a bridge from
    experiences of the past to battlefields of the future.
        Finally, to elevate the performance of our health system,
    we must continue to retain and recruit the best qualified
    medical professionals and provide a clinically rewarding
    medical practice environment. We have initiated several efforts
    to better understand the reasons that service members have for
    staying or leaving, and what factors would convince one to
    remain in the military health system. We are evaluating
    approaches to insure that we attract and retain the best
    people, including improvements in the ways in which we
    administer pay and share personnel resources across the three
    Services, and I am prepared to talk about the steps that we are
    asking the Congress to take today.

                               PREPARED STATEMENT

        As the military health system continues to meet its many
    missions and challenges, I am certain we will emerge even
    stronger. I thank you for this opportunity to appear on behalf
    of the military health system, the 8.3 million people we
    represent, the extraordinary men and women who make it the
    vibrant, innovative and high quality system that it is. I look
    forward to answering your questions. Thank you, sir.
        [The statement follows:]
                Prepared Statement of William Winkenwerder, Jr.
        Chairman Inouye, Senator Stevens, and Distinguished Members of the
    Subcommittee, thank you for this opportunity to appear before you today
    to discuss the Military Health System.
        The terrorist attacks of September 11th and the bioterrorist
    incidents that followed in October have awakened us all to a very real
    threat of terrorism. Since September 11th, we have re-examined the
    primary responsibilities of the Military Health System, refined our
    priorities and mapped a course that we must pursue in order to protect
    the health of our men and women in uniform. Our vision is to establish
    the Military Health System as the premier healthcare system in the
    country, one that meets all wartime and peacetime health and medical
    needs for the active military, retirees, their families, and other
    beneficiaries. To achieve this vision, I have established four
    priorities for 2002:
      --Improve Force Health Protection and Medical Readiness
      --Improve Performance of the TRICARE Health Program
      --Improve Coordination, Communication, and Collaboration with Other
            Key Entities
      --Address Issues Related to the Attraction, Retention, and
            Appropriate Training of Military Medical Personnel.
        I have also set specific objectives to successfully address these
    priorities, and we have instituted a focused planning process to
    monitor our progress.
        Achieving our vision requires more than just the traditional focus
    upon preventive medicine and the delivery of restorative healthcare. To
    meet the health and medical needs of our entire beneficiary population
    while meeting our requirements for the force health protection of our
    active duty personnel, we must continue to improve and seek to optimize
    our integrated system of healthcare. This integrated system consists of
    uniformed, civil service and contract medical personnel working
    together to improve the health of our beneficiaries across the country
    and around the world.
        This system must rapidly identify and mitigate potential health
    threats, and provide preventive measures and education to preserve the
    health and vigor of our population. Should these measures fail, we must
    be prepared to treat disease and restore the sick and injured to health
    through use of the most efficacious treatments that medical science can
    offer. The need for an effective, integrated system also extends beyond
    the period of active service, for those in need of rehabilitation
    following injury or illness, and for the care of our retired
    beneficiaries who have honorably served their country. All the while,
    we must continuously improve the quality of care we provide, the safety
    and satisfaction of our patients and exercise fiscal stewardship in
    managing the system.
        We must use the concepts of evidence-based medicine to ensure that
    patients receive treatments that are effective. We must continue to
    contribute to the body of medical knowledge by participating in
    scientific research, particularly in our knowledge of hazards of the
    battlefield, chemical and biological terrorist threats, and the
    operational environment.
        As we face the threat of terrorism, it is more important than ever
    that we ensure effective coordination and cooperation with other
    federal agencies and organizations with necessary expertise. These
    include the Congress, and especially the Departments of Veterans
    Affairs and Health and Human Services.
        Accomplishing this vision will require that we create and maintain
    high quality information systems, that we attract and retain high
    quality medical professionals, that we provide the necessary tools and
    training for our personnel, and that we maintain our commitment to
    achieving the vision.
                         military health system funding
        In the President's Budget Request for fiscal year 2003, the DHP
    submission is based on realistic estimates of providing healthcare
    benefits to DOD eligible populations. It includes inflation assumptions
    for pharmacy of 10.5 percent plus anticipated program growth for an
    overall increase of 15 percent from fiscal year 2002 program. Private
    sector health costs have been inflated at 7 percent to reflect our
    recent experience: anticipated program growth brings the overall rate
    of change to 12 percent from fiscal year 2002. We will manage the
    healthcare system to improve performance and contain the healthcare
    costs within budgeted amounts. We will make prudent decisions that
    result in effective performance. We seek your assistance in making
    permanent the contract management flexibility you provided in the
    National Defense Authorization Act for Fiscal Year 2002 and in
    alleviating the restrictions on moving resources across budget activity
    groups. The Department must have the freedom to move funding in
    response to where healthcare is received, either within the military
    healthcare facilities or through the private sector.
        The President's budget for the DHP consists of the following
    amounts:

                                                                    Millions

    Operation and Maintenance (O&M)...............................   $14,360
    Procurement...................................................       279
    Research, Development, Testing & Evaluation (RDT&E)...........        67
                        --------------------------------------------------------------
                        ____________________________________________________

          Total...................................................    14,706

    O&M Funding by Budget Activity Group

                                                                   Thousands

    Direct Care...................................................$4,070,811
    Private Sector Care........................................... 7,159,674
    Consolidate Health Support....................................   809,548
    Information Management........................................   666,709
    Management Activities.........................................   221,786
    Education and Training........................................   350,092
    Base Operations/Communications................................ 1,081,651
                        --------------------------------------------------------------
                        ____________________________________________________

          Total O&M...............................................14,360,271

        In addition to the DHP budget, the Military Health System is
    supported with $6.0 billion for Military Personnel (MILPERS) and $0.165
    billion for Military Construction. The fiscal year 2003 total unified
    MHS budget is $20.9 billion.
        The DOD Medicare Eligible Retiree Health Care Fund is projected to
    provide an additional $5.7 billion for the healthcare costs of
    Medicare-eligible beneficiaries, $4.3 billion for private sector care,
    $0.8 billion for direct care (O&M), and $0.6 billion for MILPERS.
        This budget request reflects implementation of accrual financing
    for the healthcare costs of Medicare-eligible beneficiaries, including
    their new TRICARE for Life benefits. This will entail both payments
    into the fund ($8.1 billion) to cover the government's liability for
    future healthcare costs of current military personnel and receipts from
    the fund (projected $5.7 billion) to pay for care provided to eligible
    beneficiaries. Our budget reflects a decrease to the DHP appropriation
    to account for the payments from the Fund and an increase to the
    military services' Military Personnel accounts to cover the
    Department's normal cost contribution. This alignment ensures
    consistency with the accrual funding for the military retirement
    pension costs under Title 10, chapter 74. We ask your help in modifying
    NDAA 2001 and 2002, which currently direct that the Defense Health
    Program make the annual contribution to the accrual fund. We recommend
    that the Military Personnel accounts make these payments. They have
    received increases for this purpose in the fiscal year 2003 Budget
    Request.
                 force health protection and medical readiness
        Even before the events of September 11th, Secretary Rumsfeld's
    Quadrennial Defense Review asserted that both terrorism and chemical
    and biological weapons would transform the strategic landscape for the
    Department. The MHS has underway numerous activities to ensure that
    preparedness, including formation of a high-level working group with
    Department of Health and Human Services representatives to improve
    collaboration on defense against biological and chemical terrorism.
    Deliberations continue on DOD policies regarding re-introducing the
    anthrax vaccine immunization program as a result of the FDA approval of
    the renovated vaccine manufacturing facility and the Institute of
    Medicine report that certified the safety and effectiveness of the
    vaccine. The MHS has also placed renewed emphasis on training military
    healthcare personnel in recognizing symptoms of and refreshing
    treatment plans for exposure to chemical and biological agents. One of
    the first objectives we set in this regard is the requirement for all
    medical personnel in the Military Health System to complete training
    appropriate for their medical skills.
        We are actively developing Investigational New Drug (IND) protocols
    and guidelines for possible use during the war on terrorism, to include
    protocols on smallpox vaccine, pyridostigmine bromide (PB) tablets,
    botulinum toxoid vaccine, and anthrax vaccine post-exposure with
    antibiotics. The MHS is developing and implementing a seamless system
    of electronic healthcare and surveillance data, integrating the entire
    spectrum from fixed facility systems to field hand-held technology. The
    deployment health system is maturing in response to a growing array of
    acute and chronic deployment health concerns, with recent added
    emphasis on environmental and occupational health surveillance. Earlier
    this year, we published new clinical practice guidelines for post
    deployment health and management, that provides our clinicians with
    important information on how to manage health care delivery for
    military personnel who return from a deployment and have health
    concerns.
        We continue to expand and improve both the vaccine healthcare
    center network to support our world class vaccine safety assessment
    program, and the deployment health clinical center network to provide
    multidisciplinary evaluation and treatment of service members with
    deployment related health problems.
                                    tricare
        This military health system (MHS) program benefit provides an
    essential link between medical readiness and everyday healthcare
    delivery. Meeting the force health protection responsibilities of the
    MHS depends upon the success of TRICARE in providing both quality
    healthcare and challenging clinical experiences for military healthcare
    providers. Important to this success is a stable financial environment.
    The President's fiscal year 2003 Budget Request for the DHP provides
    that stability.
        TRICARE Contracts.--TRICARE's success also relies on incorporating
    best business practices into our administration of the program,
    specifically our managed care contracts. Our new generation of TRICARE
    contracts will encourage best business practices by our contractors
    without over-direction by the government. We also are working with the
    Department of Veterans Affairs to make sure our future TRICARE
    contracts provide appropriate opportunities for VA participation in
    provider networks. We have listened to the advice of industry and our
    beneficiaries on how to structure these contracts and we are confident
    that the design will help us to continue providing high quality care.
    We enter this new generation of contracts with a commitment to our
    beneficiaries to further raise their satisfaction and to ensure
    continuity of quality services. We place a great deal of importance on
    contractor customer service performance--to include positive and
    negative financial incentives--to ensure that our beneficiaries are
    provided the kind and type of information and services they seek in a
    timely and accurate manner. Also, we will continue to partner with The
    Military Coalition and National Military and Veterans Alliance, who
    collectively represent the interests of more than four million current
    and former military personnel. This partnership ensures that we really
    know what our beneficiaries feel and think about the TRICARE Program.
    Their feedback helps us to better address the concerns and needs of our
    beneficiaries.
        TRICARE for Life.--Implementation of TRICARE for Life has proceeded
    exceptionally well. As in all new program startups, we have experienced
    some problems. Nevertheless, we aggressively handle each one until we
    reach a satisfactory resolution. Since the October 1, 2001, start date,
    we have processed over twelve million claims and the overwhelming
    majority of information we receive is that our beneficiaries are
    extremely satisfied with TRICARE for Life. They speak very highly of
    the senior pharmacy program as well. This program began April 1, 2001,
    virtually problem-free. Since October 1, 2001, through April 15, 2002,
    8.2 million prescriptions have been processed through the TRICARE
    retail pharmacy networks and the our National Mail Order Pharmacy
    program, providing over $415 million in prescription benefits for our
    age 65 and over beneficiary population for the fiscal year.
        Examples of the problems we identified and addressed with the
    initial implementation of TRICARE for Life include a group of 185,000
    beneficiaries inadvertently excluded from the initial data match with
    CMS to verify Medicare Part A and B coverage. This problem did not
    involve denial of benefits for these beneficiaries. Rather, Medicare
    could not forward their claims automatically to TRICARE for the first
    60 days. We have corrected this problem.
        Another example involves approximately 4 percent of potentially
    eligible TFL beneficiaries who have not revalidated their military
    benefits eligibility status as required every four years. This affected
    only family members, as retirees retain eligibility without periodic
    revalidation. The failure to revalidate eligibility (sometimes referred
    to as obtaining a new ID Card) resulted in claims being denied. We
    implemented several changes to address this issue:
      --We determined that the potential for these individuals to be
            eligible is so high that TRICARE began paying claims for these
            beneficiaries February 15, 2002. Concurrently we are notifying
            each beneficiary through personal letters and Explanation of
            Benefits messages that they must revalidate their eligibility.
            We will continue paying claims for these individuals through
            August 1, to allow them ample opportunity to update their
            eligibility.
      --The Defense Manpower Data Center developed a letter that
            beneficiaries may sign and return to validate their continuing
            eligibility. This eliminates the need to travel to an ID card
            issuing facility to obtain a new ID card. In the mean-time, DOD
            will track these beneficiaries and use every reasonable means
            to assist them with this process.
      --In addition to contacting individual beneficiaries, we will renew
            our efforts through the media, caregivers, beneficiary
            organizations, and other organizations to inform all
            beneficiaries about their TRICARE for Life opportunity.
        Sub-acute and Long Term Care.--The reform actions implemented
    through NDAA 2002 ensure availability of high-quality sub-acute and
    long-term medical care and services for all DOD beneficiaries in the
    most efficient manner. The new authority to provide home healthcare and
    respite care for qualifying active duty family members supports
    readiness through the improved quality of life for special needs
    families. Alignment of the TRICARE benefit and payment system for
    skilled nursing facility and home health care with Medicare will
    greatly improve coordination of benefits for our age 65 and over
    beneficiaries and simplify authorization and provision of medically
    necessary sub-acute and long-term care for all.
        Portability.--The TRICARE National Enrollment Database (NED),
    implemented July 2001, provides health coverage portability to all
    TRICARE Prime enrollees. NED provides a standardized beneficiary-
    centered enrollment process and eliminates the procedural and automated
    systems' disconnects that existed throughout the military health
    system, including the contractors' systems, prior to the implementation
    of the NED.
        In our continuing efforts to improve and optimize our military
    health system, the military services have developed and submitted plans
    to invest the fiscal year 2001 and fiscal year 2002 optimization
    dollars provided by Congress. Service health leaders developed the MHS
    Optimization Plan in 1999 setting forth an overarching five-year
    strategy to guide health system improvements to achieve a more
    efficient, cost-effective, world class integrated health system. The
    foundation of the optimization plan is population health improvement
    and prevention. A Special Assistant for Optimization was established at
    the TRICARE Management Activity to assist in integration of these
    efforts. A MHS Population Health Improvement Plan and Guide has been
    published which provides our clinical staffs with guidance for most
    efficiently managing the health of our beneficiaries.
        We remain focused on the quality of care delivered within military
    treatment facilities and by our TRICARE providers. We have established
    performance measures for our facilities--and measuring ourselves
    against national benchmarks for outcomes and utilization. We will
    establish a Quality Forum this year to better integrate our delivery
    system and truly become a quality-driven organization.
        Finally, there is a renewed focus on customer service and
    satisfaction in TRICARE. Our medical and line leaders regularly review
    customer satisfaction measures from around the country. We are
    assessing improvements in satisfaction with access, quality and staff
    courtesy. We introduced TRICARE On-Line in several pilot sites to
    further empower our patients, and simplify the interaction with the
    health care system--to include on-line enrollment and appointing
    services. In our next generation of TRICARE contracts, we are seeking
    to appropriately incentivize contractor performance and innovation on
    behalf of the patient.
                 coordination, communication and collaboration
        The MHS has built many strong relationships among other federal
    agencies--including the Congress--professional organizations,
    contractors and beneficiary and military service associations. These
    relationships facilitated the MHS's ability to respond in the aftermath
    of the terrorist actions of last fall. The MHS role in the new homeland
    security responsibilities will span an array of federal, state and
    local agencies and will demand effective cooperation among all
    involved. Our close working relationship with beneficiary associations
    and our contractors can be credited for the smooth implementation of
    TRICARE for Life.
        DOD's collaboration with the VA dates back many years and much has
    been accomplished. We have eight joint ventures throughout the country
    providing coordinated healthcare to VA and DOD beneficiaries. We have
    over 600 sharing agreements in place covering nearly 7,000 healthcare
    services. However, all of these agreements are not fully utilized.
    Eighty percent of VA facilities partner with us through our TRICARE
    networks. It should be noted, that the level of participation by VA
    within the TRICARE networks varies. Our reserve components capitalize
    on education and training opportunities with over 300 agreements in
    place. DOD, VA and the Indian Health Service collaborate in the Federal
    Health Care Information Exchange (formerly known as the Government
    Computerized Patient Record) which will enable DOD to send laboratory
    results, radiology results, outpatient pharmacy, and patient
    demographic information on separated Service members to the VA. Before
    fiscal year 2005, we expect not only to have the ability to transmit
    computerized patient medical record data to VA but also to receive this
    information from VA. While we have achieved many successes, it is time
    to reinvigorate these collaborative efforts to maximize sharing of
    health resources, to increase efficiency, and to improve access for the
    beneficiaries of both departments. The focus of our efforts is to move
    the relationship with the VA from one of sharing to a proactive
    partnership that meets the missions of both agencies while benefiting
    the service member, veteran and taxpayer.
        Our vision of DOD/VA coordination is a mutually beneficial
    partnership that optimizes the use of resources and infrastructure to
    improve access to quality health care and increase the cost
    effectiveness of each department's operations while respecting the
    unique missions of the VA and DOD medical departments. Our guiding
    principles include collaboration; providing the best value for the
    taxpayer; establishment of clear policies and guidelines for DOD/VA
    partnering; and fostering innovative, creative arrangements between DOD
    and VA. As DOD and VA move toward a more proactive partnership, we have
    established short-term goals to be accomplished during this fiscal
    year. These include establishing solid business procedures for
    reimbursement of services, improving access to health care through VA
    participation in TRICARE, examining joint opportunities in
    pharmaceuticals, facilitating healthcare information exchange, and
    establishing a long-range joint strategic planning activity between DOD
    and VA. We will accomplish this through the VA-DOD Executive Council,
    where senior healthcare leaders proactively address potential areas for
    further collaboration and resolve obstacles to sharing.
        Concurrent with these ongoing efforts, DOD actively supports the
    President's Task Force to Improve Health Care Delivery to Veterans
    announced by President Bush on Memorial Day 2001. DOD has provided
    office space, administrative support and functional experts to ensure
    the Task Force accomplishes its mission of developing recommendations
    to improve quality and coordination of healthcare for our nation's
    veterans. I will continue to work closely with my colleague, Dr. Gail
    Wilensky, to ensure the success of the Task Force in meeting their
    objectives; and we look forward to the Task Force's recommendations.
                           military medical personnel
        The Quadrennial Defense Review directs development of a strategic
    human resource plan to identify the tools necessary to size and shape
    the military force with adequate numbers of high-quality, skilled
    professionals. The MHS depends on clinically competent, highly
    qualified, professionally satisfied military medical personnel. In
    developing the MHS human resource plan, we have begun several
    initiatives to determine retention rates, reasons for staying or
    leaving the service, and what factors would convince one to remain in
    the military.
        At the request of Congress, we commissioned a study by the Center
    for Naval Analyses (CNA) to examine pay gaps, retention projections,
    and the relationship between pay and retention. We acknowledge the
    significance of the findings. The CNA study shows a relationship
    between pay and retention--although it points out that there are
    factors other than pay that affect retention. A typical military
    physician--for example, a general surgeon with 7 years of service--
    receives one-half of his or her income in ``incentive pays.'' CNA
    estimates the ``pay gap'' for the surgeon is currently $137,000, or 47
    percent. The challenges of military service can be unique and
    tremendously rewarding personally and professionally. We know that
    financial compensation is not the sole determinant of a medical
    professional's decision to remain in the service or to leave. We can
    never expect to close the pay gap completely. However, we are concerned
    by the CNA findings and are analyzing them now. The ability to shape
    military medical staff size and mix with appropriate pay and other
    human resource management tools are critical to meeting our mission
    requirements.
        We will simplify the health professions' compensation system to
    place more management authority within the Department. The rapid pace
    of change in the civilian healthcare personnel market, which competes
    directly with our military accession and retention programs, requires
    flexibility in the management of pay for optimum effectiveness.
        Additionally, we are expanding our use of the Health Professions
    Loan Repayment Program (HPLRP). The President's Budget provides funding
    for an increase of 282 scholarships. In addition we are exploring ways
    the Department can maximize use of incentives in the efforts to
    optimize the accession and retention of appropriate personnel to meet
    mission requirements.
                      military health information systems
        We leverage advances in information technology to contribute to the
    delivery of quality care, patient safety, improved system management
    and ease of patient access to healthcare. An essential element of
    quality remains the assurance of the credentials of the health
    professionals practicing in our health system. We have now in
    operational testing at ten military medical facilities a single
    database that supports the management of the professional credentials
    for active and reserve component health personnel across all services.
    We anticipate that this system, the Centralized Credentials Quality
    Assurance System, will begin full deployment to all sites in the very
    near future. We plan to explore the potential for integrating this
    system with the Veterans Administration's credentials system, VetPro.
        The Theater Medical Information Program, nearing implementation,
    supports the medical readiness of deployed combat forces. This system
    will aggregate medical information from all levels of care within the
    theater thereby supporting situational awareness and preventive
    medicine needs for operational forces. Medical data generated at
    battlefield locations will be transmitted to a central theater
    database, where the command surgeon will have a comprehensive view of
    the theater medical battlefield and be in a better position to manage
    the medical support to all forces. This system serves as the medical
    component of the Global Combat Support System and has an integrated
    suite of capabilities that includes the Composite Health Care System
    II. User testing will be conducted this summer during Exercise
    Millennium Challenge and initial operational test and evaluation is
    scheduled for later this year.
        The Military Health System has successfully created an electronic
    computer-based patient record. The Composite Health Care System II
    (CHCS II) generates, maintains and provides secure electronic access to
    a comprehensive and legible health record. CHCS II merges the best
    commercial off-the-shelf applications on the market into a single
    integrated system capable of worldwide deployment both in fixed
    facilities and in the field environment, as part of the Theater Medical
    Information Program. The Composite Health Care System II will undergo
    formal operational test and evaluation this summer. Once completed, a
    worldwide implementation decision will be made.
        The Executive Information/Decision Support Program assists health
    managers at all levels throughout the MHS. This program provides an
    exceptionally robust database and suite of decision support tools for
    health managers. It supports managed care forecasting and analysis,
    population health tracking, MHS management analysis and reporting,
    Defense medical surveillance and TRICARE management activity reporting.
    The data repository began operating in fiscal year 2001.
        The Defense Medical Logistics Standard Support Program reflects how
    information technology and business process re-engineering can lead to
    significant return on investment and tremendous user satisfaction. This
    program provides responsive medical logistics support to all military
    services. Electronic catalog sales have grown from $204,000 in April
    1999 to over $23.2 million in fiscal year 2001. The prime vendor
    section of this program has grown to electronic sales of $1.3 billion
    in fiscal year 2001. More importantly, it has reduced procurement lead
    times from up to 45 days to 2 days or less, reduced medical logistics
    inventory by 85 percent and allowed a 95 percent fill rate with
    delivery in less than 24-hours. This program is the first in DOD to
    receive Clinger-Cohen Act certification.
        TRICARE Online uses the Internet to assist our beneficiaries gain
    access to the Military Health System. It is an enterprise-wide secure
    Internet portal for use by all DOD beneficiaries worldwide. It provides
    information on health, medical facilities and providers, and increases
    patient access to healthcare. Beneficiaries may create their own secure
    health journals securely on this site, TRICARE Prime patients may make
    appointments with their primary care providers, and all beneficiaries
    may access 18 million pages of health and wellness information. This
    system is scheduled for worldwide deployment later this year following
    operational testing now underway.
        We believe that our medical technologies can be helpful to the
    Department of Veterans Affairs and together we are exploring joint
    technologies as a means for closer collaboration.
        As the MHS pursues the many initiatives outlined above, it will
    become even stronger. The Military Health System's continued mission-
    oriented focus on its primary responsibilities has further cemented its
    world-renowned stature as a leader in integrated healthcare.
        Again, I thank you for this chance to speak with you about the
    Military Health System and the exceptional people who make it the
    vibrant, innovative, comprehensive system that it is.

        Senator Inouye. Thank you very much, Mr. Secretary. We will
    be asking questions after we are done with the speakers. I will
    now recognize Lieutenant General Peake.
        General Peake. Mr. Chairman, thank you very much for the
    opportunity to represent Army medicine before the committee
    today. Last week two soldiers were posthumously awarded the
    Medal of Honor, one an Army dentist recognized for his actions
    in the South Pacific, which makes 52 Army medical personnel
    inducted into that hall of heroes.
        One of the many Medal of Honor recipients that I was
    chatting with there came up to me and said, you know, the medic
    in my unit deserved that more than I did. The tradition of
    heroism continues today in Afghanistan and around the world,
    and the medic will be recognized by medals and decorations that
    will be determined in the near future, but hopefully the not
    too distant future.
        I can tell you today that it is appreciation by those young
    soldiers who have come back through the hands of medics to
    places like Walter Reed, who have had extremities saved, whose
    lives have been spared because we have quality people to do
    that. Those soldiers I visited at Walter Reed were wounded on a
    Monday, and telling the story of their journey to a forward
    surgical team in Afghanistan, to the combat support hospital in
    Uzbekistan, air evac to be reoperated on in Landstuhl, Germany,
    and at Walter Reed by Saturday night. They and their families
    appreciate that kind of care. It is a pretty direct
    contribution to our country and for this effort, taking care of
    those in harm's way.
        I visited the National Library of Medicine last week, a
    magnificent institution that is part of the National Institutes
    of Health. It serves the Nation and really serves the world. It
    started as the Library of the Army Surgeon General, as a cross-
    referencing system that has been the information enabler of
    medical research, the Index Medicus. It came about because an
    Army doctor had $82,000 appropriated for the Surgeon General's
    Library, and began that cataloging effort, a value to the
    nation.
        Today the Armed Forces Institute of Pathology is another
    such world class national, international asset, with
    collections of pathologic specimens that go back to our Civil
    War and with recognized scientific and educational leaders that
    will leverage that scientific repository. They have leading
    edge forensic identification and that is called upon in
    virtually every major disaster, the September 11 terrorist
    attack now not even the most recent.
        But September 11 sure did highlight the value of our men
    and women. Response right here with environmental teams from
    our Center for Health Promotion and Preventive Medicine, now
    commanded by Brigadier General Bill Bester, the expertise of
    our experts in infectious disease in dealing with things like
    the anthrax letters, our folks were proud to contribute in such
    an important and visible effort.
        But that enthusiasm for our contribution is part of our
    culture. I would like to read just a short extract from an e-
    mail from one of our surgeons to the colonel who trained him in
    surgery. It says, ``I did an awesome case yesterday on a
    Special Forces soldier who had blown off a drop zone during a
    jump and did his PLF, a parachute landing fall, into the tail
    end of a truck. He came in shock with a rigid abdomen. He had a
    huge liver laceration, the biggest and deepest I have seen.
        I took your advice and packed him immediately, and did a
    modification of your temporary abdominal closure, and it worked
    like a charm. I had to take him to the Hospital Militaire for
    Intensive Care Unit (ICU) care, and then brought him to meet
    the Air Force critical care team that took him to Brooke Army
    Medical Center. All of the adjuvant stuff recently had made me
    forget how cool it is to be an Army surgeon.''
        Well, that one came from Honduras, it's not just in
    Afghanistan. We are engaged all over the world in taking care
    of soldiers and looking after our forces. The Hospital
    Militaire is a Honduran hospital where he had built a
    relationship with the physicians there. That ability of
    military medicine to bring people together in a positive way is
    important.
        Admiral Cowan and I recently spent some time together in
    Malaysia, where the medical leaders of 26 Asian Pacific
    countries gathered. That meeting was run by Major General Nancy
    Adams, who has done a superb job of medical leadership in that
    region, in sharing American values and opening constructive
    dialogue in places like China and Vietnam. Kosovo, Bosnia,
    Afghanistan, our combined laboratory in Thailand, are all
    places today where that medical coalition plays out to benefit
    soldiers directly, and the ongoing missions on a broader scale.
        The foundation for our ability to contribute in these many
    ways comes from our direct care system. That is not only our
    force protection platform and our training base, but also the
    basis for the delivery of arguably the finest health benefit
    around, the TRICARE benefit that Dr. Winkenwerder spoke about.
    The tremendous steps forward to fulfill the promise of TRICARE
    for Life resounds in every single retiree group with whom I
    meet, and it is well recognized also by those on active duty
    today.
        TRICARE Prime Remote for family members, now implemented
    with interim rules, a pharmacy benefit that was put in place on
    time on target last April by the TRICARE Management Association
    (TMA) team, all have been important success stories in this
    story.
        All of that said, we can't sit still. My Chief, General
    Shinseki speaks eloquently and more importantly, is aggressive
    in his leadership to transform the Army and insure relevance to
    meet the missions of the 21st century, of leveraging the
    technological promise of doing things better. We in medicine
    must keep up with that vision, linking our battlefield medics
    more easily, pushing our research base for things like fiber
    bandages, blood substitutes on the battlefield, and the next
    generation of vaccines for diseases that we will not face at
    home but present threats to our soldiers deployed. We keep
    proactively detecting the emergence of new diseases.
    Understanding things like mad cow disease. Engineering the best
    business practices for the delivery of population health. All
    of these things have a positive spin-off in the care of
    soldiers and their families and for being models for the
    Nation.

                               PREPARED STATEMENT

        Again, I thank you for the opportunity to appear here
    today. We really appreciate this committee's support for the
    care of soldiers so consistently and over so many years, sir.
    And more importantly, our soldiers and their families
    appreciate it. I look forward to your questions.
        [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 again in
    front of your committee. It is my privilege to serve as the 40th Army
    Surgeon General.
        This morning I would like to discuss the opportunities and
    challenges that face the Army Medical Department (AMEDD) as we provide
    medical support to the force. As we all know, the terrorist attacks of
    September 11, 2001, have dramatically changed America and the world. On
    that day Army medics were front and center providing quality and
    compassionate health care to their fallen comrades at the Pentagon.
    Today as I speak, Army medics are providing that same quality and
    compassionate care in support of Enduring Freedom and many other
    operations around the world to include our homeland. The AMEDD is
    uniquely capable of supporting these operations. The depth, breadth,
    and flexibility of our capabilities based medical force enable us to
    place an integrated health care delivery system any place in the world.
    Stories of how our combat medics are providing life saving care to
    injured soldiers in Afghanistan--followed by rapid evacuation to an
    Army forward surgical team, to a deployed combat support hospital and
    back to Landstuhl Regional Medical Center or Walter Reed Army Medical
    Center--demonstrates how well we take our combat casualty care from
    point of injury back to the United States for tertiary care. Today we
    have similar medical systems established in Bosnia, Kosovo,
    Philippines, and Kuwait.
        While all of these have been considerable challenges, we have met
    our October 1, 2001, NDAA commitment to military retirees age 65 and
    over by implementing TRICARE Plus and continue today to ensure our
    military families receive quality, seamless healthcare as their family
    members deploy to fight this war.
        The September 11, 2001, attack on America resulted in the Army
    expanding its focus by programming resource requirements to the
    protection of the homeland, while sustaining the transformation process
    to ensure continued dominance across the full spectrum of operations
    anywhere in the world. The AMEDD's resource priorities for both the
    fiscal year 2004-09 Army and Defense Health Program (DHP) will focus on
    the key capabilities necessary to fulfill the obligations to the Army
    and its family. They will also be consistent with the Quadrennial
    Defense Review (QDR) guidance and the Chief of Staff, Army Vision:
    Readiness, People, and Transformation. All of these resources support
    the three fundamental components of our mission: Deploying a Trained
    and Equipped Medical Force; Projecting a Healthy and Medically
    Protected Force; and Managing the Health of the Soldier and the
    Military Family.
    Deploy a Trained and Equipped Medical Force
        Medics in support enable the Soldier to be on point for our Nation.
    In October 2001, we began a new era of Army Medicine. Army Healthcare
    Specialists, active and reserve, now attend a 16-week training program
    at the Army Medical Department Center and School. This new Medical
    Occupational Specialist (MOS) is the 91W. Training is focused on
    emergency care, primary care, medical force protection, and evacuation
    and retrieval. All medics now graduate with National Registry Emergency
    Medical Technician certification and will require routine revalidation
    of their critical medical skills. Over the next few years we will be
    transitioning all of our health care specialists to this enhanced
    standard.
        Army graduate medical education (GME) programs are the keystones to
    the quality of Army medicine. Our GME programs include military-unique
    aspects of a given specialty, which prepares physicians for the
    rigorous demands of practice in a wartime or contingency environment.
    Residents receive orientations and lectures concerning war zone
    injuries, trauma and military deployments. Additionally, they attend
    formal training that includes a centralized combat casualty care
    course, advanced trauma life support, and medical management of
    chemical and biological casualties. After completing an Army graduate
    medical education, a physician is uniquely qualified to deploy at all
    levels within the theater of operations to support the military medical
    mission. We now place board certified physicians in our brigade and
    division surgeon positions to ensure our divisional soldiers receive
    the highest levels of care regardless of where they are in the world.
        We must ensure that the infrastructure and the capabilities of the
    institutional AMEDD are robust and are leveraged to meet our
    obligations to operational forces. We do this through comprehensive,
    planned support to Power Projection Platforms, by deployment of a
    trained and expert medical force through professional officer filler
    system (PROFIS) and assignment rotations, and by targeted new
    initiatives that can fill operational medical gaps anywhere in the
    world as well as in support of homeland defense requirements.
        To have a capable and ready Army medical force, we must have the
    ability to recruit and retain quality, highly skilled health care
    professionals. We are 8 months into what is projected to be a long war
    on terrorism, a war that will take us around the globe and will require
    the sustained efforts of our entire military--active and reserve.
    Without the ability to recruit and retain these vital health care
    professionals we face personnel shortages that could prove harmful to
    our deployment platform. For example, we continue to explore all
    sources to accomplish the recruitment of sufficient nurses to support
    all of our current missions. Unfortunately the nurse shortage that is
    being experienced generally is also being experience within the Army
    Nurse Corps. We are particularly concerned about our Nurse Anesthetists
    and our Operating Room Nurses who are critical for our deployment
    mission.
        Our Reserve Medical Forces are valued members of the Army. This is
    particularly true of the AMEDD where in 2002, 63 percent of the total
    medical force is in the Reserve Components. Ensuring that all reserve
    forces are medically prepared, and that Soldiers are healthy, is a
    critical issue for the Army. The Federal Strategic Health Alliance
    (FEDS-HEAL) is an important program to assist in providing medical and
    dental care to reserve forces. We must ensure that our reserve members
    are medically and dentally ready, so when called upon they can
    immediately deploy and fulfill their vital role as part of the AMEDD.
        Medical evacuation of casualties from the battlefield has been one
    of the AMEDD's modernization priorities for several years and it
    remains so. 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 AMEDD has been working with the aviation community to improve
    the UH-60 Blackhawk and create a state-of-the-art evacuation platform--
    the HH-60L.
        We have a balanced AMEDD Investment Strategy (AIS) that accelerates
    the provision of AMEDD capabilities to transition to the Interim Force
    and provides a bridge to the Objective Force. Concurrently, we must
    also ensure that the AMEDD's obligations to maintain the capability of
    legacy medical units through the recapitalization are met.
        Wherever possible, we are incorporating acquisition and fielding
    strategies that extend our purchasing power, with priority given to
    earliest deploying units and those that are likely to be called upon
    for Small Scale Contingencies (SSC) and Homeland Defense. I want to
    provide the U.S. Army Reserve with medical equipment sets that are
    operationally capable of responding to homeland or SSC requirements. We
    are also improving our worldwide posture by ensuring that medical
    materiel in Army prepositioned stocks is modern, complete, and properly
    maintained.
        Another AMEDD modernization effort is exploratory work on the next
    generation of medical shelter systems. These systems will have multi-
    functional design that will allow for quick reconfiguration for
    multiple medical applications. At home or abroad, across the spectrum
    of conflicts and full ranges of environments including chemical and
    biological scenarios, these shelter systems will improve the quality of
    care for our patients.
        To promote tactical mobility, the AMEDD is working with the
    Transportation Corps to define medical requirements for trucks in the
    Family of Medium Tactical Vehicles (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. Tactical
    mobility will be a critical factor on the battlefields of the future
    and the medical force must be able to keep pace with the maneuver
    elements.
        The United States Army Medical Research and Material Command has
    awarded a four year, $13.95 million contract to the American Red Cross
    for a hemostatic dressing using the blood clotting agents fibrinogen
    and thrombin, shown to be much more effective at stopping massive
    bleeding than traditional gauze bandages. There are estimates that a
    bandage like this could have saved 3,000 to 7,000 lives in Vietnam. We
    expect to obtain FDA approval and have the product in the field by
    2006. Blood substitutes and freeze-dried blood should allow the medics
    to carry the replacement blood needed to stabilize patients.
        Currently, in our field hospital in Uzbekistan, a system for
    concentrating air for hospital oxygen is being used in support of
    Enduring Freedom. This system avoids transporting heavy canisters of
    bottled oxygen, eliminating the requirement to transport some 17 tons
    of hazardous material from a Combat Support Hospital's basic load.
    Further development of digital radiography is a medical readiness
    enabler. Digital x-rays allow facilities near the front to have images
    without heavy film developing systems. The Digital Imaging Network-
    Picture Archiving and Communications Systems (DIN-PACS) provides us
    with reliable and consistent management of digital images within and
    between medical treatment facilities, avoiding film-based
    environmentally hazardous chemical processing and improving access and
    relative standard of care rendered to our patients. Teleradiology
    enables the secure transfer of images between fixed facilities and with
    deployed units for reach-back support, and helps the Army compensate
    for the continued attrition of radiologists by leveling digital
    workloads across wide geographic areas.
        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.
    Project and Sustain a Healthy and Medically Protected Force
        We must provide the capability to train, project and sustain a fit
    and healthy force that is protected against disease and non-battle
    injury. We must continue to develop and sustain effective disease- and
    injury-prevention programs that increase productivity and improve the
    health and fighting strength of the force. We must improve and
    streamline rehabilitative services for injured and ill soldiers to
    expedite return to full duty status. A good example of this is our
    Center of Excellence for Land Mine Injuries at Walter Reed Army Medical
    Center. We are able to take soldiers who have been wounded in
    Afghanistan to WRAMC and provide comprehensive reconstructive surgery
    and rehabilitative services in one stop.
        Finally, we must continue to develop and maintain surveillance
    programs and databases to monitor the health and medical readiness of
    the force. We must be able to reliably detect and assess threats to
    health from the environment this includes the timely identification of
    infectious diseases, chemicals, climatic extremes, and other hazards.
    We have done this in Operation Enduring Freedom by sending in our
    Special Medical Augmentation Team-Preventive Medicine (SMART-PM) to
    collect, analyze, and summarize occupational and environmental health
    exposure surveillance data.
        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.
    We continue to work towards a longitudinal and queriable digital
    patient record that will facilitate this proactive approach.
        Environmental monitoring entails knowledge of potential health
    threats in the air, water, and soil to which our service members are
    exposed. Army Preventive Medicine Units are currently assessing the
    occupational and environmental health risks to our force in
    Afghanistan, Bosnia, Kosovo, Kuwait and numerous other locations
    throughout the world. For example, our medics are monitoring our troops
    for altitude sickness; a health threat when fighting at high altitudes
    in Afghanistan. There are also some age-old diseases that we continue
    to combat such as tuberculosis and malaria that have the potential to
    affect the combat readiness of our troops and newer ones like HIV that
    we continue to research and study as we plan for future operations.
    While some of these medical threats might not be of interest to the
    U.S. population, they are important to the military. We place U.S.
    Forces in areas where these diseases pose serious threat to our
    Soldiers.
        Our abilities are not limited to surveillance of our military
    personnel. When an anthrax laced letter was opened in Senator Daschle's
    office the U.S. Army Medical Research Institute of Infectious Disease
    (USAMRIID), one of only two Level D Laboratories in the Nation,
    immediately provided the expertise to confirm that it was indeed
    anthrax. The Center for Health Promotion and Preventive Medicine
    provided a SMART-PM to developed strategies along with the CDC and EPA
    to confirm and document the presence of anthrax contamination in the
    U.S. Capitol building. The SMART-PM assisted in the sample planning and
    interpretation of analysis for over 20,000 samples for Bacillus
    anthracis collected in over 30 buildings. The Armed Force Institute of
    Pathology processed over 4,000 environmental and clinical specimens for
    study and or confirmation of anthrax from the National Capital Region.
    Manage the Health of the Soldier and the Military Family
        The healthcare of the soldier and the military family is a
    component of the Chief of Staff of the Army's Well-Being Initiative,
    and is our Priority One ``must fund'' DHP requirement. We are expected
    to have, and our beneficiaries deserve, a world-class system that
    supports peacetime and wartime contingency requirements, and we will
    achieve that in several ways. The President's fiscal year 2003 Budget
    ensures adequate funding for our health care system as it accounts for
    the cost of inflation and health care growth experienced throughout the
    health care industry. Our military medical readiness is inextricably
    linked to the direct care system. Our Army hospitals are the training
    bases and staging areas for deployment of world-class health care
    capability to support our soldiers anywhere in the world. Full funding
    to sustain this capability is essential. Historically, the DHP has
    survived through supplementals and large year-end reprogrammings. This
    cannot continue. We need to establish and sustain the DHP at the
    appropriate funding level, as requested in the President's Budget, to
    ensure we can provide the excellent health care benefits that you have
    legislated for our soldiers. Through optimized clinical and business
    practices supported by a fully funded Defense Health Program, we can
    deliver the best possible medical care to our soldiers, family members
    and retirees, while ensuring an ability to support our military force
    in operations around the world.
        I am programming targets for local investment in capital expense
    equipment to allow these expenditures to be programmatic rather than
    opportunistic. We must continue to comprehensively monitor resource
    requirements for the enhanced benefits authorized by the Fiscal Year
    2001 National Defense Authorization Act (NDAA) and those authorized in
    the Fiscal Year 2002 NDAA, and include these requirements in our DHP
    submission. Additionally, we adequately program resources to support
    Occupational Health mission requirements.
        I expect maximum utilization of our direct care system and I have
    charged my regional medical commanders with optimizing the productivity
    and utilization of our hospitals and clinics consistent with sound
    business practices. Investment capital will be targeted for business
    plans that meet strict return on investment criteria. Regional and
    local medical commanders will allocate sufficient resources for
    planning and execution of AMEDD obligations for deploying and deployed
    forces. This includes health and logistics support to Power Projection,
    installation protection, and facility expansion requirements. Any
    proposed new or expanded missions, to include advances in medical
    practices and technology, will be validated and approved prior to
    consideration for funding.
        Physical facilities also have a key role in optimization. We need
    to systematically invest in the sustainment and recapitalization of our
    medical, dental and research facilities in order to meet the
    expectations of our customers and provide only the most modern health
    and research environments for our beneficiaries and staff. We also can
    use those investments to re-look our mission and our partnership
    opportunities with the VA, HHS and other health resource partners. One
    excellent partnering example currently exists at our new Bassett
    hospital replacement in Fairbanks, Alaska, where we are sharing our new
    building and other resources with the VA as part of the Alaska Federal
    Health Care Consortium. Other recent examples of target investment
    include the new James K. Okubo Health and Dental Clinic at Fort Lewis,
    Washington, serving both soldiers and their families in a new, modern
    outpatient setting close to home and workplace. These predictable
    developments contrast with unpredictable new mission requirements like
    Europe's Efficient Basing initiative or the Land Partnership Program in
    Korea. We need to be able to place the needed healthcare facilities in
    the right place at the right time to support the CINCs. It is
    imperative that we are able to provide these facilities in a timely
    manner.
        The increased capacity in the military treatment facilities should
    reduce the cost of our TRICARE contracts. The competitive salaries
    packages available for civilian healthcare employees improve our
    ability to recruit and retain the best personnel in a competitive labor
    market. A final benefit of these investments is improved staff and
    patient satisfaction.
        There are systems issues that enable us to optimize health care
    delivery. The AMEDD 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 AMEDD has embraced acquisition reform and electronic
    commerce initiatives to reduce paperwork, improve responsiveness, and
    enhance delivery of the healthcare benefit.
        Army Medicine is more than an HMO. We follow in the proud tradition
    of such soldiers as Captain Ben Salomon, an Army dentist killed on
    Saipan in July 1944, the first dentist to receive the Medal of Honor.
    Our system of integrated care, teaching medical centers to outlying
    health clinics, schoolhouse 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 Table
    of Organization and Equipment (TOE) force, engage with both active and
    reserve forces, and respond to the Chief of Staff's vision of our
    Army's role in alleviating human suffering and transforming the Army,
    and ensuring our Soldiers have world class health care available no
    matter where they are deployed.
        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.

        Senator Inouye. Thank you very much, General. May I now
    call upon Admiral Cowan.
        Admiral Cowan. Mr. Chairman, it is a privilege to be here
    on behalf of the men and women of Navy medicine. I just
    returned from a Pacific trip, visiting the clinics and the
    hospitals in the Navy throughout the Pacific. I left Honolulu 2
    days ago and woke up with laryngitis.
        Since my comments mirror and echo Dr. Winkenwerder's and
    General Peake's, I would like to abbreviate my opening remarks
    and I have also submitted a written statement.
        Since becoming the Navy Surgeon General last summer I have
    carried the message of Force Health Protection, that is, it is
    our job to produce healthy and fit sailors and marines, to
    protect them from all hazards as they go in harm's way, to
    restore the sick and injured while at the same time caring for
    their families at home, and finally, to help a grateful Nation
    thank its retired warriors by providing healthcare for life for
    them and their families.
        The events of September 11th and beyond have only
    strengthened my conviction that this is the correct course for
    Navy medicine and the military health system. Two weeks ago I
    returned from a visit to Guantanamo Bay, Cuba, where I saw our
    Navy fleet hospital caring for the detainees. It was inspiring
    to see these Sailors performing high quality healthcare
    services to these 300 detainees, bearing their insults and
    hatred while not compromising their morality or their mission
    as members of the United States Navy. It was not luck nor
    coincidence that these and other responses to the contingencies
    since the terrorist attacks have been so successful; it's
    because we have devoted many years to force level protection.
    We have continuously trained, we have prepared and cared for
    our patients, and these units like the fleet hospital in
    Guantanamo are no different from any of the other thousands of
    men and women in Navy medicine.
        I think we have been very successful, and that success
    could not have been achieved without the support of Congress.
    Congress has made great strides in funding this year and the
    future promises further stability. For this you have our
    gratitude. You have also been extremely helpful in defining the
    military health benefit through legislation and in the first
    full year of the National Defense Authorization Act (NDAA),
    both quality and access are increasing, as the health benefit
    continues to be the number one quality of life issue for
    retention in the United States Navy. Your continued support and
    stable and adequate funding insure that continuation so that we
    can deliver high quality care in the right places at the right
    time.

                               PREPARED STATEMENT

        In closing, I simply thank you again for your you support,
    and I am available for any questions.
        [The statement follows:]
              Prepared Statement of Vice Admiral Michael L. Cowan
        Chairman Inouye, Senator Stevens and other distinguished Senators,
    thank you for the opportunity to share Navy Medicine's accomplishments
    in 2001 and plans for the future.
        We have successfully responded to many challenges placed before us
    as we continue to face a period of unprecedented change for medicine.
    The world, as we know it, changed dramatically on September 11th. Not
    since Pearl Harbor has America been attacked with such viciousness, and
    never have we had to deal with terrorism on such a scale coming to our
    homeland. We have had to make a ``sea change'' in our thoughts and
    actions. Until now, we always prepared to deploy to war somewhere else.
    During the Cold War, we prepared, trained and deployed to face our
    enemy. September 11th forced us to change our thinking, but not to
    abandon our mission.
        My vision of Navy Medicine is Force Health Protection. To produce
    hyper-fit, hyper-healthy Sailors and Marines; protect them from all
    possible hazards when they go in harm's way; restore the sick and
    injured, while at the same time caring for their families at home; and
    finally, help a grateful Nation thank its retired warriors by providing
    health care for life.
        High quality care and health protection are a vital part of the
    Navy's ability to execute worldwide missions. Just as the American
    people need to know that the Navy is guarding their safety, our
    Sailors, Marines, their families and retirees need to know they are
    protected by the best health care we can provide. Since becoming the
    Navy Surgeon General, I have preached the message of Force Health
    Protection through the business processes of Readiness, Optimization
    and Integration. The events of September 11th have only served to
    strengthen my conviction that this is the correct course for Navy
    Medicine. We're building on great success. We have the right men and
    women, and we have the right focus. I would like to share with you my
    current efforts to frame Navy Medicine's mission.
    Readiness
        I believe readiness consists of two parts: preparing a ready sailor
    or marine and our own organizational readiness within Navy Medicine.
        The response of our medical professionals to the events of
    September 11th provides a heartening illustration of our readiness to
    respond . . . our preparedness to fulfill our mission. It was shown
    clearly by the men and women who assisted at the scene of the Pentagon,
    who, without hesitation, bravely went to their battle stations. It was
    also clearly shown by the people of the Hospital Ship USNS Comfort, and
    supporting facilities, who had done their homework, made preparations,
    conducted drills, had their sea bags packed, had their affairs in
    order, and were ready to go. It was shown by our preventive medicine
    teams and research commands in their response to the anthrax attack on
    the Capital. Their effort and responsiveness helped ensure the
    continuity of our government operations.
        After the terrorists struck the Pentagon, our Navy medicine people
    were among the first to respond. Numerous naval medical personnel at
    the Pentagon ran to the crash site and even as officials screamed
    warnings of another incoming plane, none left their burned or injured
    victims. As the hours passed, they also began treating firefighters and
    other rescue personnel. Most stayed all night and into the next day.
    Members of the National Naval Medical Center's Special Psychiatric
    Rapid Intervention Team (SPRINT) were mobilized at a location near the
    Pentagon and provided stress management assistance and one-on-one
    counseling, aiding an estimated 1,500 individuals during a 2-week
    period following the attack.
        I would also like to elaborate on the response of the USNS Comfort
    who provided care and respite to New York City's rescue and recovery
    workers, firefighters and policemen. Within 12 hours of being notified,
    on 12 September 2001, the USNS Comfort left its berth in Baltimore with
    staff members from the National Naval Medical Center and other commands
    and headed to New York City. As the ship arrived at Earle, New Jersey
    to on-load provisions and pharmaceuticals, it received orders to change
    its mission. It would now provide logistical and support services to
    emergency personnel working in the disaster recovery area. In little
    more than an hour, 450 medical and support personnel packed,
    disembarked and boarded buses for a return trip home. The smooth
    transition from a treatment facility to a support oasis for exhausted
    firefighters and rescue workers trying to save lives in Manhattan,
    exemplified the flexibility of our staff.
        Preparedness was also underlined by the Navy staff of the Capitol
    Hill Clinic, Naval Medical Research Center and the National Naval
    Medical Center who responded to the anthrax attack on the Capital. The
    ability to rapidly detect and identify a bioterrorism (BT) incident is
    the foundation for the response to such an event. The Biological
    Defense Research Directorate (BDRD) of the Naval Medical Research
    Center (NMRC) originally pioneered rapid detection of potential
    Bioterrorism/Biowarfare (BT/BW) agents during the Gulf War. BDRD
    pioneered the development of rapid hand-held assays for the detection
    of BT/BW agents. These rapid and robust assays are similar in principle
    to home pregnancy tests and provide an initial screening tool for
    identifying BT/BW agents within 15 minutes. BDRD was called upon to
    test Capitol Hill buildings and provide invaluable information on the
    levels of contamination. Responding to Capitol Hill staff exposure to
    the anthrax bacterium, Navy Medicine provided over 7,000 anthrax swabs
    to Congressmen, their staff and other Capitol Hill employees. Numerous
    individuals were put on prophylactic prescriptions of antibiotics and
    were closely monitored for any complications. These efforts were key to
    keeping the Government ``open for business''.
        Navy Medicine has also recently deployed Fleet Hospital 20 to Naval
    Base Guantanamo Bay, Cuba. With the help of Seabees, staff from Naval
    Hospital Camp Lejeune, North Carolina and other hospitals, cleared the
    land and set up the fleet hospital, providing ethical and humane
    treatment to detainees. I have to share my pride in how Navy healthcare
    professionals ``knew where their battle stations were'' and responded
    in setting up 27 required beds in less than 10 hours.
        Whether responding with triage and emergency medical treatment at
    the Pentagon, or swiftly manning up a 250-bed hospital aboard the USNS
    Comfort, setting up a field hospital or responding to biological
    threats in these Congressional Halls, our response has been mission
    done exactly right--as the American people expect.
        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 2 one
    thousand bed hospital ships, 6 Active duty and 4 Reserve 500 Bed Fleet
    Hospitals, 84 Casualty Receiving and Treatment ships (CRTS) and medical
    units assigned to augment the Marine Corps and our overseas hospitals.
    One measure of readiness is whether we have personnel with the
    appropriate specialty assigned to the proper billets; that is, do we
    have for example surgeons with the right skills assigned to surgeon
    billets. The readiness of a platform also involves issues relating to
    equipment, supplies and unit training. Navy Medicine has developed a
    metric to measure the readiness of platforms using the Status of
    Resources and Training (SORTS) concept tailored specifically to measure
    specific medical capabilities such as surgical care or humanitarian
    services. Using the SORTS concept, Navy Medicine has increased the
    readiness of 34 ``Tier 1'' deployment assets by 23 percent.
        Feeding the SORTS system is a program known as the Expeditionary
    Medical Program for Augmentation and Readiness Tracking (EMPART) which
    Navy Medicine uses to monitor 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. Individual personal compliance is tracked through
    EMPART.
        Augmentation requirements in support of the operational forces have
    significantly increased. Our Total Force Integration Plan utilizing
    both active and reserve inventories has greatly improved our ability to
    respond to these requirements. Navy Medicine's demonstrated commitment
    to supporting the full spectrum of operations is mirrored in our motto
    ``steaming to assist'' and is in full partnership with the Navy's
    ``Forward Deployed, Fully Engaged'' strategy.
        I also believe that in order to achieve Force Health Protection we
    need a metric for measuring health readiness of our fighting forces.
    This measure must be beyond the traditional ``C-Status metric'', which
    lacks a true measure of one's health. My staff is in the process of
    developing this measure of individual health, which will also
    facilitate our measure of population health.
    Retention
        Finally, as we work to meet the challenges of providing quality
    health care, we must not forget the crucial role of our health care
    providers. We appreciate and value our providers' irreplaceable role in
    achieving our vision of ``superior readiness through excellence in
    health services.'' We need to do a better job however demonstrating
    this value, much earlier in an officer's career. I am particularly
    concerned about our retention rates for both enlisted and officer
    medical specialties. The critical skills retention bonus will enable us
    to increase retention rates for both officers and enlisted. In
    addition, we appreciate the accession bonus provided in the fiscal year
    2002 NDAA as it adds another very powerful tool to our toolbox to
    improve retention.
    Medical Corps
        The annual loss rates for the Medical Corps, as a whole has held
    steady at 8-9 percent and the primary care communities are healthy.
    However, loss rates within certain specialties are very high.
    Specialties such as General Surgery have a loss rate over 22 percent,
    Orthopedic Surgery at 27 percent, and Anesthesia at 22 percent. Several
    wartime critical specialties are undermanned, including anesthesia (74
    percent), cardio-thoracic surgery (46 percent), and orthopedic surgery
    (81 percent). In addition, we predict a large exodus of radiologists in
    the next two years as many reach the end of their service obligations.
        Our focus must be on more flexible pay, raising the specialty caps,
    and removing the restrictive aspects of contracts. The surgical
    specialists, in particular, have significant pay gaps with their
    civilian colleagues (often in excess of $100,000 per year).
        Distribution problems result where we are not able to keep pace
    with attrition in some specialties. We have several military treatment
    facilities where we are unable to assign a military radiologist. The
    enormous gap in pay between the services and the civilian market for
    radiologists makes it difficult to recruit or retain. In addition, we
    have not been able to adequately contract for these specialties. For
    example, at Naval Hospital Great Lakes we established a $400,000
    personal services contract for a radiologist, and for over a year no
    one applied. Our best option is to ``grow and retain'' our specialists.
    Dental Corps
        Despite efforts to improve dental corps retention, the annual loss
    rate between fiscal year 1997 and fiscal year 2001 increased from 8.3
    percent to 10.5 percent. Current projections for fiscal year 2002
    suggest an 11.5 percent loss rate. The significant pay gap compared to
    the civilian market and the high debt load of our junior officers seem
    to be the primary reasons given by dental officers leaving the Navy.
    Nurse Corps
        Navy Medicine continues to monitor the nationwide nursing shortage
    and its impact on the Nurse Corps. To date, we have been relatively
    healthy in our recruiting efforts through diversified accession
    sources; however, we are in direct competition with the private sector
    for a diminishing pool of appropriately prepared registered nurses,
    particularly in the specialty areas. Meeting operational and peacetime
    healthcare delivery missions with appropriate numbers of maternal-
    child, psychiatric, and perioperative nurses will be particularly
    challenging. Currently, board certification pay is authorized only for
    Nurse Practitioners (NP), Certified Registered Nurse Anesthetists
    (CRNA) and Certified Nurse Midwives (CNMW). So far, the CRNA incentive
    special pay program has been successful.
    Medical Service Corps
        In the Medical Service Corps, we are experiencing a relatively
    stable annual loss rate of 9 percent; however, loss rates vary
    significantly between specialties. A key issue for this community is
    that many of our health professionals incur high educational debts
    prior to commissioning. Recent increases in loan repayment requirements
    causes issues for many junior level officers trying to repay their
    education loans.
        The critical specialties to recruit and retain at this time are
    optometry, pharmacy, psychologists and environmental health officers.
    Navy-sponsored training is currently provided to some optometry
    students, which has helped with high loan problems. In addition, we
    have several other scholarships and pay initiatives which are being
    pursued to assist in recruiting and retaining optometrists. While we
    expect success with optometry recruiting, we expect retention
    challenges.
        Pharmacy is another difficult community with our current end
    strength only at 91 percent. We access pharmacists through direct
    accessions and the Health Services Collegiate Program (HSCP).
    Enlisted Members
        Within the Hospital Corps I am most concerned about under-manning
    in five Navy Enlisted Classifications (NECs). In the operational force,
    search & rescue corpsmen are manned at 69 percent and corpsmen for USMC
    reconnaissance battalions at 59 percent. In our MTFs, psychiatric
    technicians are staffed 57 percent, orthopedic technicians 66 percent,
    and advanced laboratory technicians 75 percent. Dental technician
    shortfalls are beginning to appear both in recruitment and retention.
    Optimization--Embrace Best Business and Clinical Practices
        There is no more important effort in military medicine today than
    implementing the MHS Optimization Plan to ensure the most efficient and
    effective delivery of health services to our Sailors, Marines and their
    families.
        Analysis of our direct care system indicates that in many cases,
    Military Treatment Facilities are not optimally staffed or resourced to
    deliver efficient health care. For example, a Family Physician working
    with two clinical support staff may be able to effectively care for a
    panel of 750 adults. When given the industry standard of 3.5 support
    personnel, that same provider may assume responsibility for 1,500-2,000
    adults. The Optimization Plan requires the cost of additional support
    staff to be recouped via higher throughput. When the volume of care is
    increased through more efficient processes, a return on investment is
    generated in which the actual cost of health care is lower.
        We must find new ways to allow our people to fulfill their duties
    in the most efficient manner possible. Our men and women continue to
    improve their skills in the medical field and incorporate best business
    practices. This result has been achieved while maintaining our high
    quality of health care delivery. In the future, we must continue to
    equip our people with the latest knowledge and technology needed to
    maintain this high level of service.
        The added resources from the Optimization Fund are most welcome,
    and are being wisely invested in areas that will bring the greatest
    return. With this investment our commanding officers are developing
    some very innovative measures at the Military Treatment Facility (MTF)
    level.
        Navy Medicine initiated an aggressive strategy to capture the best
    evidence-based clinical and population health practices of a number of
    key health care systems. Sharing these benchmark practices promotes
    improvement and optimization. Vigorous performance measurements provide
    additional focus and direction, ensure strategic alignment, and serve
    as a progress reports. Strong work to date has already resulted in many
    well-articulated goals and objectives at our MTFs for needed changes.
    The most immediate challenge that I see is using performance
    measurement to drive these organizational changes.
        In the Navy, we are making available comparative performance data
    on all facilities--so MTF commanders can see where they stand compared
    to others. Hopefully, the low scoring ones look at the higher scoring
    ones, see what they are doing, and make the appropriate changes to
    raise their performance. A spirit of friendly competition is
    engendered. Ultimately, it allows us to raise the bar for the whole
    organization. As we continue our journey of applying performance
    measurement, we will begin to identify targets for our system and for
    each MTF (in conjunction with the MTF CO). 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
    (CNA) to help us. With Navy Medicine's consensus 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're reviewing data from 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
    measures for our ``Leading Indicators'' that our leadership sees on a
    monthly basis. In developing and revising these measures, we are
    finding the BALANCE between measures of satisfaction (patient and
    staff), financial health, clinical quality, operational or process
    measures, and readiness. Once we look at the historical data for these
    indicators, we will be setting not only targets for where we want to
    be, but also action triggers in case we are going in the wrong
    direction. We will agree on a level below which we will no longer just
    watch and see if it improves, but will instead take action to change
    the processes. 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.
        I am aware that initial investments carry the inherent risk that
    return may not be earned quickly enough to pay for investment. 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.
    Integration
        Navy Medicine is a vital part of the overall composition of our
    total force. To ensure smooth operations between these parts, we
    continuously work to integrate ourselves throughout the Departments of
    the Navy, Air Force and Army. Our field is highly complex and requires
    a strong effort to ensure a fluid motion between specialties.
    Integration must also be maintained with our sister services, our
    TRICARE civilian partners, the Department of Veterans Affairs, and the
    Public Health Service to ensure all federal beneficiaries have
    appropriate access to high quality health care. I have made
    collaboration with the Department of Veterans Administration one of my
    top three goals and have underlined this commitment for my commanding
    officers. Progress has been made, but more needs to be done. Many of
    the barriers and regulations which were thought to be insurmountable
    are not that formidable. However, the process of collaboration is
    crucial to success. It is also important for resource sharing
    initiatives to truly improve access to quality care and be advantageous
    for both DOD and the Department of Veterans Administration. Navy and VA
    clinics coexist within several of our facilities such as at Naval
    Hospital Beaufort, Naval Hospital Guam and at the Naval Medical Clinic
    Key West. We are actively pursuing VA sharing arrangements at many
    other facilities, and have formed numerous local Navy/VA working groups
    to continue to identify additional opportunities.
        Integration should also include our patients with whom we must more
    effectively communicate. The next step of integration is--
    ``Webification.'' Today's beneficiaries demand access to healthcare
    information, involvement in the healthcare decision process, and high
    quality, hassle-free customer service. They are also very
    technologically sophisticated and expect us to make the best use of the
    Internet to provide these services. A significant number of our
    beneficiaries have access to, and know how to use, the Internet. In
    response, we are beginning to ``webify'' Navy Medicine to help create
    new business areas, enhance current ways of doing business, and
    optimize other business processes.
        E-Health is the newest way of conducting the business of
    healthcare, and represents the application of Internet principles,
    techniques, and technologies to improve health services delivery.
    Facilitating electronic exchange of information within the healthcare
    community enables stronger and more effective collaboration among
    patients, doctors, hospitals, employers, payers, laboratories,
    pharmacies, and suppliers. Linking these stakeholders to more
    information, reducing redundancies and increasing compliance in
    population health and disease management programs holds great promise
    for reducing the cost of healthcare delivery, improving patient safety,
    and health care quality.
        As E-health begins to take on a larger role within Navy Medicine,
    physicians will adopt the Internet as an important component of their
    patient encounters to provide health services and enhance
    communication. For Navy Medicine, E-health is all about improved
    access, health services, provider-beneficiary relationships, best
    business practices to support force health protection through
    optimization.
        I am particularly excited about the new TRICARE Online website
    portals, which will allow patients to make appointments on line,
    communicate with their healthcare providers and access healthcare
    advice data bases. I have called upon my physicians to embrace this new
    technology and ensure its spread throughout Navy Medicine.
    Navy 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 Navy researchers have started to develop
    the next generation of vaccines against naturally occurring or bio-
    engineered weapons. The DNA Malaria vaccine has provided the foundation
    for the development of other DNA-based vaccines used to battle a host
    of infectious diseases such as anthrax, smallpox or plague.
        Traditional vaccines have saved countless millions, but have their
    limitations. They take years to develop and can be difficult and costly
    to manufacture. Many need constant refrigeration and generally can't be
    mixed to inoculate against more than one disease at a time. And there's
    always the danger of side effects. This new generation of vaccines is
    expected to be safer, cheaper, more stable, have fewer side effects and
    is more effective against a wider variety of diseases, than traditional
    vaccines. The DNA vaccines are expected to have what researchers call
    ``agility''--they can be retailored quickly to become ``just-in time''
    inoculations against bacteria, viruses and other pathogens that have
    emerged or have been re-engineered in enemy labs to make existing
    vaccines ineffective. Another major advantage of the agile vaccines is
    that production from start to finish might take a matter of months, not
    years. While traditional vaccines use live virus or killed organisms
    that stimulate humans to develop an immune response against a specific
    disease, these agile vaccines use fragments of an organism's DNA. Navy
    researchers are recognized world leaders in development of these DNA
    vaccines and believe the vaccines may be able to protect today's
    children from some of the world's most deadly scourges.
        As previously mentioned, it was Navy teams from NMRC that invented
    the rapid hand-held assays that were used nation-wide to screen for
    anthrax. They were the first to identify anthrax contamination at the
    U.S. Supreme Court, CIA mail room, within the State Department
    diplomatic mail pouch system and in one of the Congressional Office
    Buildings. Through continuing efforts in the pursuit of scientific and
    technological excellence, BDRD is acknowledged as the premier BT/BW
    detection and identification program within the Navy and one of the
    premier programs within the United States. BDRD is specifically sought
    out by agencies of the U.S. Government for guidance on BT/BW issues and
    laboratory expertise in the detection and identification of threat
    agents. These agencies include the U.S. Secret Service, the U.S.
    Capitol Police, the Centers for Disease Control (CDC), the Federal
    Bureau of Investigation (FBI) and others. The current colloidal gold-
    based detection technology may soon be replaced by state of the art
    paramagnetic detection technology. Preliminary studies have
    demonstrated an increase in sensitivity of 10 to 1000 times over
    current capabilities. Very near future developments also include a Bio
    Detector with rapid high-throughput DNA sequencing capability which
    provides a state of the art ability to finger print BT/BW agents. DNA
    sequencing chip technology would make it possible to rapidly track the
    origin of pathogens such as the Ames strain of B. anthracis. This
    capability would be invaluable in determining the source of BT/BW
    agents and differentiating a bioterrorism attack from natural
    outbreaks. Furthermore, this capability will be utilized to develop a
    genetic library of biothreat agents thus constituting a national
    biodefense asset.
        Researchers at Naval Dental Research Institute (NDRI) Great Lakes,
    Ill. are using saliva to help protect Sailors and Marines against two
    potentially deadly diseases. Two different saliva tests are being
    developed: One to see if individuals have been exposed to tuberculosis
    (TB), and one to check anthrax antibody levels after receiving the
    anthrax vaccine series of inoculations.
        Tuberculosis is an ancient serious respiratory disease that has
    been on the upswing in the last several years. The current tuberculosis
    test requires a tiny amount of reactant be injected into the skin of
    the forearm. A health care provider must check the injection site 72
    hours later to see if a telltale red circle, indicating the presence of
    TB antibodies and exposure to TB. NDRI's screening test requires only a
    small amount of saliva and the results are available in 10 minutes.
    Non-health care professionals can easily be trained to administer the
    test. The development of a rapid salivary field test for diagnosing
    exposure to infectious tuberculosis (TB) bacteria, is especially
    important to the Fleet and Marine Corps, where sailors and marines are
    billeted in close quarters.
        The anthrax test works similarly, but monitors the presence of
    antibodies after receiving the anthrax vaccine. A high level of
    antibodies indicates that the vaccine has been successful in developing
    protection against anthrax. Results are also available within 10
    minutes and can be performed anywhere.
        Two technologies are used in the test. The first, the lateral flow,
    is similar to an over-the-counter pregnancy test. The prototype being
    tested at NDRI is about the size of a stick of gum and rugged enough to
    be carried in a uniform pocket. It's used for screening to see if
    antibodies are even present. The second technology, fluorescence
    polarization, is much more sensitive and not only shows whether
    antibodies are present, but at what levels. For example, it can test
    the difference between latent and active TB. This technology is housed
    in a hand-held monitor rugged enough to use in any forward-deployed
    environment. It, too, can provide test results in minutes. NDRI has a
    patent pending on the spit tests, and is working with volunteers now to
    ensure the reliability of the tests. If all goes well, it may be ready
    for use in the Fleet by next year.
        The anthrax and TB tests are just the first step in what could be a
    method to check for exposure to a number of diseases--quickly, easily,
    economically, and without the needle stick of a blood test. Epitope
    mapping is currently being done to assure the international accuracy of
    this TB test. Protein antigens only found among TB patients are being
    prepared commercially in order to manufacture prototype units. Final
    approval for clinical trials has been obtained and trials should
    commence soon. Sailors and Marines go to the dentist annually for check
    ups, so ideally while they are waiting for their appointments, they
    could spit in a cup and a whole battery of tests could be run.
        U.S. military personnel are at high risk for lethal radiation or
    chemical injury from nuclear weapons/chemical weapons attack or nuclear
    accident. High dose radiation and some chemical agents obliterate the
    bone marrow (blood forming organ), and are almost invariably fatal
    unless a matched donor can be found. Even casualties given a matched
    bone marrow transplant are susceptible to graft failure, graft vs. host
    disease, and other complications. Therefore, autologous (self produced)
    bone marrow would be most preferable and Navy researchers have
    developed techniques for growing bone marrow stem cells in the
    laboratory. The therapies under development have obvious dual use
    potential for patients with cancer and genetic disease. The methods to
    expand human bone marrow stem cells have been patented by the Navy.
        Major achievements have been made by Navy Researchers in transplant
    research and tissue rejection studies. Severe burns account for a
    significant proportion of combat casualties at sea and ashore following
    a thermal ordinance, nuclear, and some chemical munitions explosions.
    Current standard treatment for severe burns is limited. The major
    hurdle limiting curative skin transplantation capabilities is tissue
    rejection. Recent insights into tissue rejection immunology have led
    investigators to conclude that the immune system can be ``educated'' to
    accept foreign tissues while maintaining the ability to provide
    protection against disease causing germs. This field of research is
    termed ``tolerance'' research. Navy Researchers have demonstrated that
    new immune therapies can be successfully applied in higher mammals,
    including monkeys, to allow for the transplantation of virtually any
    tissue without the requirement for continuous immunosuppression. Navy
    investigators have recently made a major breakthrough by showing that
    full-thickness skin grafts without immune system suppression can be
    accomplished in animals.
        As a member of the Uniformed Services University of the Health
    Sciences (USUHS) Board of Regents and the USUHS Executive Committee,
    and as the designated Executive Agent for the University, I am pleased
    to say that the University's focus on relevance, readiness, and
    optimization continues to be aligned with both its establishing
    legislation and the special needs of the Military Health System (MHS).
    The University, which holds full accreditation from its fourteen
    accrediting organizations, continues to meet and exceed its mission to
    provide continuity and leadership for the MHS. To date, USUHS has
    recruited and graduated over 3,250 uniquely qualified career-oriented
    uniformed alumni (3,101 uniformed physician officers, 157 advanced
    practice nurses and additional uniformed health professionals in
    administration and allied health sciences). These USUHS alumni serve in
    critical roles that are vital to the readiness mission of the MHS. The
    extraordinary retention of these military officers ensures continuity
    for the MHS and the safeguarding of lessons learned during combat and
    casualty care. Currently, USUHS School of Medicine (SOM) alumni
    represent over twenty-one percent of the total physicians on active
    duty in the military services. Furthermore, a significant number of
    USUHS graduates who have completed their residency training hold
    leadership or operational positions throughout the MHS. The
    University's mission statement, Learning to Care for Those in Harm's
    Way, succinctly captures its essential commitment to Force Health
    Protection.
        The USUHS schools, institutes, centers and programs help ensure a
    thorough preparation to effectively respond to the aftermath of weapons
    of mass destruction (WMD), disasters and other contingencies. Today,
    USUHS is reaching out to other federal agencies and the civilian
    medical communities to share its curricula and expertise. I echo the
    assessment of USUHS provided by the Secretary of Defense on March 22,
    2001, ``the training USUHS students receive in combat and peacetime
    health care is essential to providing superior force health protection.
    We place great emphasis on the retention of quality physicians in the
    military. USHUS is a unique national asset and a vital integrated part
    of the Military Health System.
    Conclusion
        In closing I would like to thank Congress for the additional
    funding that was already provided for the Defense Health System and
    enabling it to respond to our ongoing challenges. The resources now
    available allow us to operate on a more comfortable level. Indications
    are that we have adequate financial resources. It is important to note
    however, that we still have not addressed our facility replacement
    cycles. We also face continued rising Health care costs, salary
    inequities and unexpected increased costs from 9/11, which the
    President's Supplement requests and fiscal year 2003 Budget Request are
    addressing. I would like to ask for your support to ensure that we have
    timely, consistent and sustained funding levels over future years in
    meeting our needs.
        Navy Medicine has proven that it is ready to meet the new demands
    of a changing world. September 11th opened our eyes and shook our
    foundation, but I believe we are prepared and we will prevail in this
    new and complex war. It will be an asymmetric war, and we will strike
    back asymmetrically--politically, economically, socially, and
    militarily. And in the end, the military piece will be paramount to
    success. Whatever challenges lie ahead, Navy Medicine will continue to
    be reasonable, relevant, and responsive.

        Senator Inouye. Thank you very much, sir. And now may I
    call upon General Carlton.

                                HOMELAND DEFENSE

        General Carlton. Yes, sir. Mr. Chairman, it is an honor to
    appear before you again this year. Clearly the world is very
    different than when we appeared before you last year. I shared
    with you some of the major initiatives that we have undertaken
    to respond to weapons of mass destruction. The events of
    September 11 have acknowledged the fact that we have a homeland
    contribution to make to the defense of our great homeland.
        We had practiced a Pentagon attack in May as a tri-service
    activity so that when the events occurred on September 11, we
    were well schooled, we had learned our lessons, we performed
    well, and saved lives as an Army-Navy-Air Force team. Our
    modular teams were in place alongside our Army and Navy
    colleagues within minutes after the attack, and saved lives.

                            MC GUIRE AIR FORCE BASE

        Within 24 hours of the September 11 attack, we had 500
    medics and 400 hospital beds, deployed to from McGuire Air
    Force Base, just outside New York City. We had several hundred
    deployed to support Washington, D.C. We had critical incident
    stress management teams in place immediately in the Pentagon,
    and they labored to prevent future mental health complications
    for several months thereafter. September 11 was truly a wake-up
    call for our Nation.

                                 ANTHRAX THREAT

        In October in response to another threat, the anthrax
    threat, we deployed personnel in our biomedical augmentation
    teams with our sister services to support the Centers for
    Disease Control and the New York City Public Health Department
    in their testing suspected anthrax samples. We had 100 percent
    correlation between our high tech pathogen identification
    system that gives an answer in 1 hour instead of subsequent
    days, and were extremely pleased with that technology and
    ability to help our colleagues in other areas of Federal
    Government.

                           OPERATION ENDURING FREEDOM

        Today the majority of our medics deployed in Operation
    ENDURING FREEDOM are Air Force medics. They are doing an
    incredible job alongside of sister services and allies to care
    for our young men and women who are in harm's way. They are
    proving the validity of our light modular expeditionary system
    know as Expeditionary Medical Support (EMEDS).
        The Special Operations Command Surgeon has said that if it
    were not for the light, lean and life saving modular medical
    packages such as Small Portable Expeditionary/Aeromedical Rapid
    Response (SPEARR) and EMEDS, we would not have been able to
    save the lives of the Special Forces people, many of whom
    incurred the casualties early in the conflict.

                            CENTRAL COMMAND SURGEON

        The Central Command Surgeon stated, and I quote, ``Light,
    lean and modular is the way to go. We will see more of the
    small modular medical teams far forward where they can save
    lives, and critical care air medical transport is the air
    evacuation system that works.''
        These are strong testaments from the people on the ground
    who are our customers. Our investment in such technologies as
    EMEDS and rapid pathogen identification are paying huge
    dividends for the country. We will continue to test and improve
    on those capabilities.

                       JOINT MILITARY-CIVILIAN EXERCISES

        Another readiness focus we currently have is to make sure
    that our civilian colleagues do not have to reinvent the wheel
    when it comes to caring for mass casualties and biological and
    chemical casualties. We are partnering in education, training,
    in joint military-civilian exercises across the country at this
    time, and are being warmly received.

                                   RECRUITING

        We must also invest in our people. We continue to face a
    personnel manning crisis. We are experiencing shortages in all
    corps; our losses have been greater than our gains for the past
    3 years. We are pursuing many initiatives to alleviate these
    problems but it is a very serious situation and we appreciate
    your support as we seek solutions.
        The Air Force Medical Service recognizes that meeting these
    challenges and realizing our vision of global engagement means
    executing a strategy that would provide us a vital and
    interdependent link between our readiness and our peacetime
    missions. At last year's hearing, we talked a lot about an
    effective budget programming and planning. We responded with,
    we must establish a reliable modeling system, and this we have
    done. As we briefed your staff, our long-view strategy provides
    a bottom up, microscopic analysis of the way we do business
    across our entire Air Force Medical System. With a focus first
    on readiness requirements, then on clinical currency, followed
    by best business practices, we are seeking the proper balance
    that will move us into the future.

                               PREPARED STATEMENT

        We know we have a great deal of work to do but we believe
    we have a sound strategy to insure that we have the right
    people in the right numbers at the right places with the right
    training to care for our people around the world. This is our
    job and our commitment to you and to this nation. I want to
    personally thank you for the support and the leadership that
    you have given us in support of the medical programs in my 3
    years as the Air Force Surgeon and in the 37 years that
    preceded that, and I look forward to your questions.
        [The statement follows:]
            Prepared Statement of Lieutenant General Paul K. Carlton
        Mr. Chairman and members of the committee, thank you for this
    opportunity to address the successes and challenges of the Air Force
    Medical Service (AFMS). The year 2001 was a year that changed our world
    forever. The threat we feared--an attack on the homeland--became
    reality on September 11, 2001.
        The AFMS swiftly rose to the challenge of September 11, and proved,
    once again, its commitment to rapidly and effectively meet any
    contingency that faces our country. Within hours, 71 personnel arrived
    at the Pentagon site from Andrews Air Force Base to provide emergency
    medical support. Four receiving hospitals were quickly identified
    within the National Capital Area to provide support as necessary.
        Within 24 hours of the attacks, the AFMS deployed 500 medics to
    McGuire Air Force Base, New Jersey to respond immediately to any
    Federal Emergency Management Agency (FEMA) tasking for equipment and/or
    personnel needed at the New York City disaster. State-of-the-art
    medical emergency facilities were assembled, which included four
    Expeditionary Medical Support packages (light-weight modular systems
    that allow added bed sets as needed). Critical Care Air Transportable
    Teams (CCATTs), which provide emergency medical attention while in-
    flight, were quickly established at both the Pentagon and McGuire Air
    Force Base. Critical Incident Stress Management Teams conducted
    counseling to personnel assigned to recovery efforts at both locations
    as well.
        Upon activation of the National Disaster Medical System, the AFMS
    also set up its aeromedical evacuation assets at both McGuire Air Force
    Base and Andrews Air Force Base. Overall, while little help was
    actually needed from the AFMS, it responded quickly and proactively
    with the help of several Air Force military treatment facilities. Such
    a response is exactly what America needs to stand prepared for future
    terrorist threats, whether they occur on our shores or the shores of
    our allies around the world.
        Our vision of global engagement supports an Air Force that is
    charged with responding to the full spectrum of contingencies
    throughout the world, and at a moment's notice. It also supports Joint
    Vision 2020, which states that today's joint force must be prepared to
    operate with multinational forces, government agencies, and
    international organizations. To achieve these ambitious visions, we
    know that we must consider our readiness and peacetime missions to be
    inextricably linked, and we must have a strategy that is durable,
    comprehensive and far-reaching. We do. This strategy is called the
    ``Long View.''
        The Long View is an enterprise-based approach that emphasizes the
    realignment of readiness requirements, clinical currency and best
    practices, enabling the AFMS to provide high quality, cost effective
    health care and preventive services in all environments during
    peacetime and contingency operations. Crucial to success is the
    acceptance by each member of the enterprise that the needs of the AFMS
    outweigh those of the individual unit. By thinking and acting globally,
    we will ultimately strengthen our capabilities at the grassroots level
    and be able to respond effectively to the needs of our nation anywhere
    in the world.
    Global Vigilance
        The AFMS is committed to the Air Force Vision 2020 of ``Global
    Vigilance, Reach, and Power.'' Our Long View is founded on this
    readiness triangle. One of the ways we are supporting global vigilance
    (to anticipate and deter threats) is through the Institute of Global
    Health (IGH), located at Brooks AFB, Texas. The IGH is a worldwide
    educational program for medical providers to develop and improve their
    medical response skills. It develops and executes our international
    medical training programs, under the International Military Education
    and Training (IMET) and Expanded IMET (E-IMET) requirements implemented
    by the Defense Security Cooperative Agency. These medical training
    programs support the three components of the AFMS readiness mission,
    including humanitarian and civic assistance (HCA), medical response to
    disasters, and support of traditional wartime operations.
        The objective of these ``train the trainer'' programs is to provide
    regional leaders a foundation for building disaster/trauma systems and
    improving their health systems and emergency response systems
    infrastructure by acquiring the necessary concepts and educational
    tools. Team training across specialties within healthcare, emergency
    response organizations, and regional partners (including hands on
    interactive educational techniques) have been tremendously popular with
    our international partners. At the same time, these mobile programs
    help shape the international environment by supporting the theater
    commander-in-chiefs (CINCs) engagement plans to promote democracy,
    stability, and collective approaches to disasters or medical threats to
    the region. Ultimately, we are partnering with our allies to protect
    our deployed forces in remote sites, that our troops might have the
    best possible care wherever they are.
        Key components of these programs are that they are tailored to the
    host nation's infrastructure and resources and are taught on-site.
    Certainly, a primary outcome is the excellent training and experience
    the courses provide our own personnel.
        Our prototype, ``The Leadership Program for Regional Disaster and
    Trauma System Management,'' was established largely through initiatives
    begun at the Air Force's Level-One trauma center, Wilford Hall Medical
    Center in San Antonio, Texas. These initiatives included a trauma
    refresher course for surgeons, a field surgery training course, Ecuador
    trauma symposiums, and clinical and field training for the new Air
    Force modular medical teams. The huge success of our prototype (taught
    to 25 countries since 1999; 16 scheduled for 2002) and the identified
    need for similar courses on other medical topics, such as the new
    ``Hospital-Focused Approach to Biological Weapons and Toxins Course,''
    has led to the requirement for a sustainable infrastructure to support
    our global medical initiatives--thus the Institute for Global Health.
        The Air National Guard and Air Force Reserve have partnered with us
    to support these courses. In addition, we have partnered with the Joint
    Commission for Accreditation of Healthcare Organizations (JCAHO),
    universities and international organizations in developing the IGH. We
    are excited about the future of the IGH and the opportunities it offers
    to enhance global health.
        In 1998, former Air Force Chief of Staff Michael Ryan stated that,
    ``to meet the needs of a complex global environment, Air Force officers
    would need specialized skills to operate in coalition with partners in
    the contingency arena.'' In response to this call, we developed the
    International Health Specialist (IHS) program. The program's focus is
    to build partnerships with other countries in peacetime, before
    disasters occur or assistance is needed. Then when disaster strikes,
    the medical networking is already in place and a more rapid and
    efficient response can occur.
        AFMS members should be culturally aware and language proficient
    when deploying to increase mission effectiveness and force protection
    as we serve as instruments of national policy. This is important in the
    areas of Humanitarian Assistance (HA) and Disaster Response (DR) as
    well as in war winning operational support. Clearly in the current
    Operation Enduring Freedom, coalition support and interoperability will
    grow best with cross cultural understanding and clear communications.
    In fact, we learned just how effective our IHS program really was when
    two French-speaking members of our Critical Care Air Transportable team
    worked successfully with French colleagues in response to the bombing
    of U.S.S. Cole in October 2000, providing the best possible care for
    the casualties.
        Currently, there are four fully capable IHS teams, and they are
    aligned under Unified Commands: European Command, Pacific Command,
    Central Command, and Southern Command. There are also IHS team members
    located at the Uniformed Services University of Health Sciences and the
    U.S. Air Force School of Aerospace Medicine, and some serve as Special
    Operations medical planners. To ensure the AFMS Total Force synergy is
    optimized, the IHS program partners with the Air National Guard and Air
    Force Reserve. The IHS also has partnered with the Air Force Foreign
    Area Officer Branch to explore numerous language-training options with
    the goal of having our medics meet and sustain the Air Force goal of 10
    percent of all officers proficient in a second language by 2005. Our
    language training opportunities do not stop at the officer level,
    however. The IHS Program has extended its language training
    opportunities to enlisted personnel as well through the Base Education
    Office Tuition Assistance Program and an IHS-funded enlisted
    opportunity for Language Area Studies Immersion experience.
        Each team is composed of medics of all ranks and Air Force
    Specialty Codes. Its members are cultural and language experts in their
    Area of Responsibility (AOR) and have humanitarian assistance/disaster
    relief and interagency and joint operations experience. In addition to
    the Unified Command-aligned teams, the IHS program office maintains a
    database of 300 AFMS members with varying degrees of cultural and
    regional medical experience who can serve as valuable assets for future
    missions. The language expertise represented by AFMS members includes
    more than 36 different languages. We are very excited about this
    program! The potential for IHS involvement and the return on its
    investment in the international arena is immeasurable: Today's
    commanders must be able to appraise health-related information and
    resources in a multi-national, multi-cultural context.
    Strategic Reach and Overwhelming Power
        While we are striving to support global vigilance, we are also
    thoroughly preparing our nation's ability for both strategic reach (to
    curb crises) and overwhelming power (to prevail in conflict and win
    America's wars). Part of this thorough preparation involves our
    continual development of state-of-the-art equipping and training
    initiatives. We continue to fine-tune our crisis response by ensuring
    we have the smallest, lightest, most flexible, and mobile system
    possible. We have nearly completed the transition from the Cold War
    legacy air transportable hospital to the Expeditionary Medical Support
    (EMEDS). The EMEDS system is a light-weight modular system that allows
    the AFMS to tailor our response to each situation, adding bed sets as
    needed and offering services that range from prevention and basic
    primary care to aerospace medicine support and sustained surgical
    operations. Collective protection has also been designed and is being
    fielded.
        In June, we were asked to take our EMEDS to Houston to assist the
    flood-ravaged hospital system there. Our EMEDS treated over 1,000
    patients, and our contribution was recognized by the mayor of Houston,
    the governor of Texas and the director of the Federal Emergency
    Management Agency (FEMA). As I noted previously, on September 11 we
    also activated four EMEDS upon the request from our Chief and Secretary
    to deploy EMEDS teams to McGuire Air Force Base, NJ, to provide
    additional medical capability to the medical group there in support of
    local authorities in New York City. Our strategy envisions placing
    EMEDS throughout the country to offer a regional quick response
    capability.
        In partnership with our Army counterparts, the U.S. Air Force
    Medical Evaluation Support Activity (AFMESA) at Fort Detrick, MD,
    recently activated EMEDS-XTI (Experimental, Exercises, and Technology
    Insertion) as a ``test bed'' for expedited fielding of medical
    technologies and processes. EMEDS-XTI will help to better equip our
    medical providers for dealing with the medical challenges resulting
    from attacks on our homeland as well as the medical requirements to
    support our expeditionary forces. Using EMEDS-XTI, AFMESA will
    immediately focus on assessing, acquiring and fielding several key
    technologies, which include deployable medical oxygen equipment,
    chemical and biological decontamination, and biohazard surveillance
    systems. EMEDS-XTI also serves as an available response unit in the
    region in case of disaster.
        Since the September 11 attacks, the concern regarding the threat of
    Weapons of Mass Destruction (WMD), particularly chemical and biological
    warfare attacks, has come to the forefront of our nation's most
    critical issues. For the AFMS, however, WMD has been a critical issue
    of concern and planning for the past few years--proof-positive of our
    carefully prepared detection and response technologies and programs. A
    primary example of our latest technology is a state-of-the-art disaster
    response system called Lightweight Epidemiological Advanced Detection
    and Emergency Response System (LEADERS), which was designed to enhance
    the current medical surveillance process and provide the earliest
    possible detection of covert biological warfare incidents or
    significant outbreaks of disease.
        LEADERS, also in use by some civilian organizations, such as the
    Centers for Disease Control and Prevention (CDC), is a modular web-
    based application that supports the collection, storage and analysis
    and distribution of critical sets of medical data to aid with rapid,
    effective response to natural disease outbreaks or overt/covert
    biological attacks within civilian populations or military forces.
    LEADERS is very deployable--it is based on an application model that
    requires little or no additional infrastructure for deployment.
        The LEADERS system is organized into three primary customer
    modules, which include (1) Critical Care Tracking to facilitate the
    communication of bed availability between hospital departments and
    emergency response teams; (2) Medical Surveillance to detect and
    identify disease outbreaks using medical information stored in a
    database; and (3) Incident Management to enable a coordinated response
    of medical and non-medical personnel to potential or confirmed
    emergencies through a collection of command and control tools for
    situational awareness and response management. Together, these three
    modules allow multiple civilian and military applications, including
    identifying disease outbreaks, medical forensics, public health
    analysis, monitoring and improving clinical practice, monitoring
    medical fraud, improving infection control, and comprehensive outbreak
    management and response. We will continue working with our civilian
    counterparts on development and fine-tuning of this technology over the
    coming year.
        Other efforts underway to improve the AFMS's ability to respond to
    weapons of mass (WMD) destruction include the First Responder Pilot
    Program, which consists of 10 pilot bases that maintain a medical
    equipment list to support nuclear bio-chemical detection and provide
    decontamination capability at the MTF if appropriate. MTFs are required
    to scale requirements based on their local threat, vulnerabilities,
    mission capabilities and manpower, deliberate plans, and agreements
    with local first responders and providers to develop credible,
    supportable first response capability.
        Another recent WMD initiative is the National Laboratory Response
    Network (NLRN), which provides an early warning network to detect
    covert release of pathogenic agents. Collaborators include local and
    state departments of health, Department of Defense medical
    laboratories, and the Federal Bureau of Investigation. The Air Force
    currently has 54 laboratories participating in this response network.
        In addition to this network of laboratories, the AFMS has also
    assembled and trained 35 Biological Assessment Teams (BATS) that
    identify pathogen agents through the use of a commercial product called
    a Ruggedized Advanced Pathogen Identification Device (RAPID). RAPID
    quickly and accurately identifies a variety of pathogens, including
    conventional biological agents; it can accomplish tests in less than
    two hours from the time of the sample being received, a marked
    improvement over current pathogen identification technologies, which
    require the culturing of biological agents--taking as much as 48 hours
    for results.
        In October, we responded to a request to send Air Force medics as
    part of joint Microbiology Augmentation Teams to New York City and the
    U.S. Capitol to assist staff from the Centers for Disease Control and
    Prevention and local authorities in the testing of samples for anthrax.
    We were delighted when our preliminary results completely correlated
    with the definitive cultures. Along with our sister Services, we are
    offering our services in whatever capacity is needed by local, state,
    and federal authorities during these tumultuous times.
        The War on Terrorism in the United States will test the
    effectiveness of our technologies and training in many areas. To ensure
    we have the best the health care industry has to offer, we are
    partnering with our civilian counterparts whenever and wherever it
    makes sense. At the same time, we are sharing with them what we have to
    offer as well. One of our biggest milestones over the past year is the
    development of two Centers for Coalition Sustainment of Trauma and
    Readiness Skills--or CSTARS. The CSTARS concept creates unique learning
    opportunities in which civilian academic medical centers serve as
    training platforms to provide clinical experience to help sustain
    necessary readiness skills for our providers. The evolving strength of
    the CSTARS program is that it allows for the development of synergistic
    relationships and familiarity between academic medical centers and
    military medical assets (active, Guard, and Reserve), while
    simultaneously improving wartime readiness and homeland defense
    capability.
        Our centers in Baltimore and Cincinnati have begun classes this
    year and will consist of full-time military medical personnel
    integrated into the facility of an academic medical center. Our
    partners are the University of Maryland School of Medicine and the
    University of Cincinnati. The faculty will coordinate the rotation of
    military medical teams into the academic health center using patient
    care and didactic teaching sessions as the means of sustaining
    readiness skills. Additional CSTARS programs are being considered to
    ensure geographical distribution across the United States, with the
    goal of shortening the response time in homeland defense efforts.
        Another way we are seeking to partner with the civilian community
    to reach our mutual goals is through a new partnership with the
    University of Pittsburgh Medical Center Health System to collaborate on
    the development of sophisticated telemedicine technology that will
    ultimately link specialists in pathology, radiology and dermatology
    with outposts at distant locations around the globe. Our goal is to
    strengthen the AFMS's expeditionary capability and provide state-of-
    the-art health care to our personnel everywhere.
        As my examples have shown, the face of medical readiness has
    changed drastically in the past decade. Therefore, so too have our
    training requirements. Today Air Force medics are asked to provide a
    full spectrum of medical support, from caring for refugees requiring
    treatment for measles, dehydration or starvation to providing state-of-
    the-art trauma care in a disaster or wartime environment. Admittedly,
    until recently, few Air Force personnel have had the necessary
    experience in these or many other readiness-based care requirements. In
    support of our readiness case analysis and skills currency case
    analysis goals, we designed the Readiness Skills Verification Program
    (RSVP).
        The RSVP will define the clinical tasks required of our deployable
    medics and build training programs targeted to keep our medics current.
    Individuals assigned to mobility positions are required to maintain
    currency in RSVP tasks through attendance in formal training programs,
    ongoing clinical practice, and individual study. The RSVP consists of
    training task lists for every Air Force specialty. Today, all
    deployable medics--and soon, all Air Force medics--will focus their
    clinical training upon specific, measurable goals.
    Where do we go from here? The Long View
        Under the Long View, when we have built a solid foundation for
    readiness case analysis (RCA) and currency case analysis (CCA), we must
    then ensure a strong business case analysis (BCA) occurs in our
    decision-making. We are doing this through an effective corporate
    structure that reviews every major AFMS resourcing decision through a
    standardized process using the RCA-CCA-BCA model that allows input from
    every applicable party and measures each decision against objective
    criteria. This maintains the enterprise strategic view of a
    comprehensive plan, preventing local or urgent decisions from adversely
    affecting the AFMS. We are now planning far beyond the standard Program
    Objective Memorandum (POM) cycle to 10 years out and beyond. Our
    Primary Care Optimization (PCO) development and rollout was the first
    use of this model.
    Primary Care Optimization
        Central to the AFMS Population Health Plan is the reengineering of
    our primary care services under PCO. Sixty-five of our 75 Air Force
    medical treatment facilities (MTFs) focus almost exclusively on
    offering primary care services. The goal of PCO is to vastly improve
    the efficiency, effectiveness and quality of care delivered through our
    primary care platform. An important strategy within PCO is to recapture
    care from the private sector so that all enrollees can benefit and also
    to better manage the total financial risk of our health care system.
    Efficiencies are gained by improving clinical business processes, by
    enhanced partnerships with civilian and other federal healthcare
    partners, by effectively utilizing support staff skills, and through
    robust information management that supports evidence-based health care
    decision-making. Critical to PCO success is Primary Care Manager by
    Name, which provides patients with continuity of care and allows
    providers and their teams to better manage their practice by knowing
    who their patients are.
        Since we began our ``Quick Start'' training for PCO two years ago,
    we have seen some important returns on investment. Where teams are
    fully staffed, they are performing exceptionally well, and with great
    patient and staff satisfaction. Primary Care Manager by Name enrollment
    has been accomplished in 100 percent of our facilities. MTFs are
    proactively contacting patients regarding needed clinical preventive
    services.
        Many other objective measurements continue to improve. Population
    health preventive measures are on a positive slope along with provider
    productivity. AFMS clinical quality measures, such as cervical cancer
    screening, breast cancer screening, and HbA1C annual testing for
    diabetics, are all above the 90 percent level for the Health Plan
    Employer Data and Information Set (HEDIS) national measures in all our
    Major Commands. There are very few health care organizations in the
    United States that can claim that type of preventive care success!
        As we continue to improve PCO, our next step will be to pursue
    specialty care optimization. We are reviewing a limited number of AFMS
    product lines associated with surgical specialties in larger, bedded
    facilities: general surgery, obstetrics/gynecology, orthopedics,
    ophthalmology, otolaryngology, and anesthesia. As we implement our
    primary and specialty care optimization programs, the resourcing
    decisions arising from the work of various functional panels will have
    full visibility at all levels of our corporate structure to ensure the
    Long View is the ultimate focus.
    Manning the Mission
        Of course a crucial factor in optimization is the ability to man
    our mission effectively, with the right number and mix of appropriately
    trained personnel at the right place and at the right time. We are
    working hard to do this, but it's been a very challenging time for
    medical force management in the Air Force. Many issues have been
    brought to the forefront, most importantly recruiting and retention and
    a high operations tempo with substantial deployment needs. Shortages in
    the Medical Corps, Dental Corps, Nurse Corps, Biomedical Sciences
    Corps, and Medical Service Corps have reached all-time highs and are
    expected to dramatically increase private sector health care costs as
    we are forced to shift health care downtown.
        These staffing shortfalls led to our largest recruiting
    requirements in AFMS history for fiscal years 2000 and 2001. Centering
    our efforts around our RCA-CCA-BCA model, we've sought solutions, such
    as addressing promotion concerns, exploring special pays and investing
    additional resources in health professions scholarships for better and
    more stable long-term staffing growth. The success of these force
    management initiatives will enhance the future of our clinical
    capabilities and ultimately improve our readiness posture.
    Population Health Initiatives
        Optimizing our health care involves many factors, from training and
    equipping our providers, to modernizing our facilities, to effectively
    manning our mission. It also means educating our patients to take
    responsibility for their health and giving them the tools to make it
    easier. This is a key tenet of population-based health care.
        As the current chairman of the DOD Prevention, Safety and Health
    Promotion Council (PSHPC), I want to praise the personnel serving on
    the council for their outstanding efforts in many areas, but
    particularly in reducing tobacco use and alcohol abuse. In fact, our
    Tobacco Use Reduction Plan is nearly 80 percent complete. We still have
    a problem in the armed services, but proactive initiatives such as
    sensible pricing of tobacco and alcohol products in the commissaries
    and exchanges, better education of our troops, and research studies
    that will help us focus our efforts better are all means to reducing
    the problem.
        I'm pleased to say that the PSHPC has now chartered the Suicide
    Prevention and Risk Reduction Committee to develop an action plan that
    will address suicide prevention across the DOD enterprise. The creation
    of both a DOD strategy and the national strategy developed under the
    United States Surgeon General are important steps in addressing this
    significant public health issue.
        The Air Force Suicide Prevention Program has made a difference in
    the number of suicides in the Air Force, but, unfortunately, we
    continue to lose valuable personnel who needlessly take their own
    lives. As we move forward with our program, and in support of the DOD
    program, our primary goal within the Air Force is to better understand
    the causative factors involved with suicide and thus be able to
    implement the critical ingredients for effective suicide prevention.
    Serving our Beneficiaries
        The recent implementation of ``TRICARE for Life'' provided one of
    the missing links to our population-based health care strategy. Now we
    truly have the foundation to provide ``whole life'' care to our
    beneficiaries. Fiscal year 2001 was a year of preparation and
    implementation of this and other significant health care provisions in
    the Fiscal Year 2001 National Defense Authorization Act.
        The TRICARE Senior Pharmacy Benefit, which started April 1, 2001,
    brought a robust pharmacy benefit to our senior patriots. The expanded
    pharmacy benefit was deployed with minimal problems and has been a
    tremendous success story for DOD and our beneficiaries. The Air Force
    continues to work with the other Services to minimize the impact of
    this enhanced benefit to ensure all of our beneficiaries are served.
        TRICARE for Life, the program that makes TRICARE second payer to
    Medicare, and TRICARE Plus, the program that allows seniors to enroll
    in a primary care program at selected MTFs, both began concurrently on
    Oct. 1, 2001. We are delighted that these programs will enhance the
    quality of life for our retirees. We are also optimistic that TRICARE
    Plus will strengthen our medical readiness posture by expanding the
    patient case mix for our providers while reducing the government's cost
    to provide healthcare for these great Americans.
        We are grateful to the committee and all of Congress for your
    support in adequately funding these programs. Your efforts have been
    crucial to their success, and they will provide the AFMS the ability to
    restore its in-house funding expenses (particularly for equipment,
    facility repair, and maintenance) to planned levels, and it will help
    ensure that our patients are provided quality care with state-of-the-
    art equipment. Funding will also allow us to address numerous
    infrastructure requirements in medical facilities, particularly in the
    area of recapitalization. Additionally, we are excited about the
    opportunities provided by congressionally directed optimization
    funding, which will help us strike the balance in maintaining a high
    state of readiness, while providing efficient peacetime healthcare and
    investing in imperative modernization for the future.
    VA/DOD Healthcare Resource Sharing
        VA/DOD relationships continue to move forward as the VA/DOD
    Executive Council, which was reinvigorated in fiscal year 2001 with
    increased accountability and leadership oversight, has established work
    groups to focus on a number of policy initiatives. The Air Force is
    pleased to participate in these work groups, which have achieved
    significant success in improving interagency cooperation in areas such
    as information management, pharmacy, medical surgical supplies, patient
    safety, and clinical practice guidelines. The AFMS continues to support
    the progress of our four successful joint ventures in Albuquerque, New
    Mexico; Las Vegas, Nevada; Anchorage, Alaska; and Fairfield,
    California.
        At the Albuquerque site, which has operated effectively for more
    than 14 years, we recently established an agreement with the VA to
    provide professional VA psychologist oversight to our Air Force mental
    health services. We also recently established an agreement to reduce
    the veterans' colonoscopy procedures backlog while assisting Air Force
    personnel in the retention of critical skills.
        In Las Vegas, our joint venture operates under common medical by-
    laws, allowing the VA and Air Force providers to address the needs of
    both Departments' beneficiaries. We collaborate with the VA to manage
    inpatient pharmacy services, and we plan to manage the Intensive Care
    Unit in the same manner. This management ``evolution'' capitalizes on
    the experience of VA staff in inpatient operation of medical centers.
    In addition, the VA and the Air Force at the Las Vegas site are
    proposing to expand their existing emergency room to add a Step Down
    Unit and a secure recreation area for psychiatric inpatients.
        In Anchorage, approximately 50 VA full-time employees work in the
    joint venture hospital. A recently established ``Joint Venture Business
    Operations Committee (JVBOC)'' was designed to provide structured
    communications and organizational continuity to the planning and
    implementation of issues relevant to the joint venture.
        In Fairfield, California, a VA outpatient clinic is located
    adjacent to David Grant Medical Center (DGMC) on land leased from the
    Air Force. The VA actually purchases inpatient care from DGMC as well
    as other services that include specialty outpatient, emergency
    services, ambulatory surgery, and ancillary services. An Executive
    Management Team (EMT) manages this VA/DGMC joint venture, which
    consists of commanders, directors, and senior level staff of both
    agencies. The EMT provides oversight to a Joint Initiatives Working
    Group (JIWG), which identifies operational issues that need to be
    resolved and develops recommendations for the EMT.
        We are extremely proud of the collaborative team efforts that all
    four joint ventures are engaged in, and we expect continued innovations
    in the areas of resource sharing in the future.
    Customer Satisfaction
        The Long View is built on metrics that show us how well we're doing
    in supporting DOD's missions. Customer satisfaction is one of the vital
    indicators of our success or failure. I'm pleased to report that
    customer satisfaction in the Air Force continues to rise. According to
    DOD's latest Customer Satisfaction Survey Results, 90 percent of our
    enrolled beneficiaries indicate they would enroll or reenroll in
    TRICARE Prime if given the option. The overall satisfaction with
    clinics and medical care exceeds national civilian HMO averages. With
    the expanded senior benefit, improving access through primary care
    optimization, and our many population health initiatives, it should be
    no surprise that we are receiving high marks from our customers.
        But the task is only begun. We will be working very hard in the
    months and years ahead to ensure we are ready if and when another
    ``September 11th'' arrives. The AFMS must keep the Air Force fit and
    healthy and be able to answer our nation's call whenever and wherever
    we are needed.

        Senator Inouye. Thank you very much, General. May I assure
    you that all of your prepared statements have been made part of
    the record.

                     DEFENSE HEALTH PROGRAM FUNDING REQUEST

        I would like to begin by asking the secretary a question, a
    very general one. In 1999, fiscal year 1999, the supplemental
    was $2,004 million; for fiscal year 2000, $1.4 billion; and
    fiscal year 2001, $1.6 billion. Given the past history of
    shortfalls, are you confident that this fiscal year 2003 will
    fully fund the defense health program?
        Dr. Winkenwerder. Mr. Chairman, I believe that our request
    is a realistic one and that we have made realistic estimates,
    and I have a high level of confidence that we can and will
    execute within that budget request. In part that depends on how
    we are doing this year, and the signs thus far are that we are
    executing within the budget this year and are confidently
    within that budget for this year. So, I'm confident that we
    provided you a realistic budget for 2003.
        Senator Inouye. If I may, I would like to ask the services.
    General Peake, would you say we will fully fund your program?
        General Peake. Sir, I believe we will be able to continue
    to provide the level of care that we are programmed to do. It
    will--there are always things that we can use for investing and
    we are appreciative of the opportunity to have the venture
    capital that we got this year to invest in certain things, and
    those opportunities we continue to explore. But this year we
    have been able to get to a really stable business picture for
    our commanders out there in the field, unlike the previous
    years where we had to supplement at the very end and as a
    result some made some poor decisions.
        Senator Inouye. Admiral?
        Admiral Cowan. Sir, I would echo that. We are adequately
    funded this year and we find that it is not only the adequacy
    of the funding but the timing of the funding that is important
    in delivering healthcare. Having a supplemental halfway through
    the year or towards the end of the year is much less effective
    than being able to plan and budget, so we are very grateful for
    this year's funding level.
        Although we are adequately funded for maintenance and
    delivery of healthcare, we are still not catching up to our
    deferred maintenance and repair, but we feel over time with
    increased stability of the budget, we will be able to attack
    and improve that situation too.
        Senator Inouye. General Carlton.
        General Carlton. Sir, we feel fiscal years 2002 and 2003
    are adequate funding, and we have actually been able to begin
    our recapitalization to restore our Air Force Medical Service
    to where we were before a period of lean years.

                          MEDICAL PERSONNEL RETENTION

        Senator Inouye. We have done some research and we find that
    one of the major reasons given by medical personnel for getting
    out of the military has been educational debt. Why is that? For
    example, we find the average debt load for a military dentist,
    $84,000; $64,000 for pharmacists; $118,000 for optometrists;
    $70,000 for psychologists; $148,000 for podiatrists. Are you
    all concerned about this, General?
        General Peake. Sir, I am. It is a fact that when people
    have debt like that, they are going to look for sources of
    income that are higher than what we can pay, and I think it has
    a direct impact on our retention. We are excited about the
    prospect of using the critical skills retention bonus at least
    until we can get a legislative proposal forward that would
    restructure the funding of the bonus structure, if you will,
    but we are concerned about the ability to retain those folks
    who are just finishing their active duty obligation or health
    scholarship program.
        That is one of the reasons it is such an important tool for
    our recruiting, the health professionals scholarship program.
    It is one of the things that has made a real difference as we
    started to inch ahead with getting dentists back into the Army.
    That needs to be funded to just off set that kind of debt that
    you're talking about.
        Senator Inouye. Is there anything we should do beyond that
    for retention?
        General Peake. I don't think we will ever, sir, get to the
    point where we can compete dollar for dollar with the civilian
    sector, but I do think that quality of our practice would be
    the kind of things that keeps us in. The ability to do things
    like the young surgeon that I quoted, ``It's cool to be an Army
    surgeon,'' we want to keep that cool to be an Army surgeon, not
    only in the excitement of what you're doing but the fact that
    you have quality places to do it in and the up-to-date
    equipment to be able to have the tools of your trade. That and
    the ability to make the right decision for your patient, not
    the economic decision, but the right decision for your patient,
    that we still retain in the military is terribly important,
    sir.
        Senator Inouye. Admiral Cowan, do you find that in your
    service?
        Admiral Cowan. We are seeing over time an erosion in our
    ability to compete in many specialty areas. Part of that has
    been a widening of the pay gap between the service and the
    civil sector. In fact, this year for the first time, the
    average MCAT, Medical College Admission Test, grade point
    average of young medical students that we accepted into the
    scholarship program was lower than the national average. We
    were very much used to taking the cream of the crop. But the
    military in many regards is becoming less competitive.
        We have legislative proposals that we are working within
    the Pentagon to correct this and we feel that we will have to
    turn this around over the next several years or we will begin
    to suffer in readiness and other areas.
        Senator Inouye. General Carlton.
        General Carlton. Yes, sir. We have addressed this, and it
    is a national problem, it is not unique to the military. As you
    look at the debt load of the graduating seniors from medical
    school, dental school, nursing school, podiatry school, all the
    professional schools, it is a mounting debt that on the medical
    and dental out of a public university approaches $100,000 by
    the time they graduate. Out of a private medical school, it
    approaches $200,000.
        We have applied $12 million to that this year on a loan
    repayment that covers many corps. We wish to expand that, and
    the question of what are we going to beyond for retention,
    fully funding our programs and allowing people a wonderful
    place to work, we already take care of great people. And so
    reestablishing that, we will have some proposals to your
    committee for what we can do with the bonus structure. That is
    a tri-service initiative, but yes, it is a major problem and it
    is a problem facing the Nation at this time.
        Senator Inouye. Thank you very much. Mr. Secretary.
        Dr. Winkenwerder. Yes. To your first question about the
    expense, it's real, I think it's there for everyone, the cost
    of medical education and other allied health professional
    education is expensive today. But given that fact that we're
    not going to change, we have to compete, and upon coming on
    board last fall one of the early issues I identified was this
    issue of attraction and retention of personnel, and so
    identifying it as one of our four principal goals in our
    overall strategic plan.
        I had directed that a group, a tri-service group
    representing the Army, Navy and Air Force be established to
    study this issue and come up with recommendations that would
    also build upon the Center for Naval Analysis report that we
    have just submitted to Congress, which did in fact show that
    there were significant pay gaps. Those gaps have grown since
    1990.
        I think a couple of additional facts in their conclusions
    were that we had inadequate pay incentives and that we needed
    to simplify our whole pay scheme. It's too complex. We have 19
    different pay categories. I spent my time in the private sector
    before I came here and one of the things I managed was a human
    resources department, and so I was very involved in pay, and
    this is a busy system we have. We have to simplify it, have
    more flexibility, and I think we can manage it with your
    appropriate oversight, and we intend to come forward with a
    comprehensive set of recommendations that we would really
    appreciate your careful look at and support of if you are so
    inclined.
        This is an issue that we want to address in the short term
    with lifting the caps on the critical skills retention bonus
    and also some restrictions on how we use the loan repayment
    funds, and then over the long term, of course deal with the
    broader issue. I'm confident that we can do all these things.
    We've been dealing with the problem that we've got.
        Senator Inouye. I wish you the very best, sir. Before I
    proceed with more of my questions, I would like to recognize
    the real scholar when it comes to health, Senator Specter.
        Senator Specter. Thank you very much, Mr. Chairman, and
    thank you for convening this important hearing. It is
    unfortunate that the schedules are so tight that there are not
    more Senators here for this important matter, but I know that
    the staff will be following up, and we appreciate what the
    Department of Defense is doing on the healthcare issue. I
    wanted to compliment you especially on the work that is being
    done in the advanced research programs.
        I work on the appropriations subcommittee on health and
    human services and have chaired it some 6\1/2\ years. We have
    put tremendous funding into the National Institutes of Health,
    but that work has been largely research and they have not done
    the mechanistic work.
        I was talking to a doctor here recently who has a unique
    body scan and other ideas which are being developed in Newport
    Beach, California, and he told me that the Defense Advanced
    Research Projects Agency is the agency which is looking beyond
    where NIH is willing to go, and I wanted to stop by to commend
    you for that and to keep that going. It is very hard to have
    the National Institutes of Health handle all the agencies.
        So there has been corollary activity and there has been
    extensive work done by your department on many very important
    items on the health line for osteoporosis, breast cancer,
    ovarian cancer, and many of the ailments which affect men as
    well as women. I wanted to thank you for what you are doing
    there and encourage you to continue items like this advanced
    technology, that is very important. I personally was the
    beneficiary of a Magnetic Resonance Imaging (MRI) a few years
    ago, and two decades ago there was not even such a thing as an
    MRI. There is a very important program which is underway at
    Walter Reed Army Medical Center trying to get retrogression on
    plaque and heart ailments, so those kind of advance techniques
    are really worthwhile, and I wanted to stop by to thank you and
    encourage you to do more. Thank you.
        Dr. Winkenwerder. Senator, if I might, if you wouldn't
    mind, just to say we really appreciate that support, and I want
    to commend all of the services for the terrific work they do.
    Again, having come in within the last year, we have some
    outstanding healthcare research, and it is under appreciated,
    under recognized. Cholera vaccine, malaria vaccine work, even
    Hunan Immunodeficiency Virus (HIV) vaccine work, now looking at
    a new vaccine for anthrax, and smallpox.
        And so, we're involved in all of these things and one of my
    goals is to better coordinate the health research at DOD with
    health research at NIH and the Department of Health and Human
    Services (HHS) because there are good things going on in both
    places. But I think we've got some tremendous people, very,
    very animated, very creative, that are doing things that are
    not always recognized. So I thank you for that.
        Senator Specter. Thank you for that testimony. I just wish
    I had formulated a question to which there could have been an
    answer.
        Thank you, Mr. Chairman.

                                 MEDAL OF HONOR

        Senator Inouye. If I may add to that, very few Americans
    are aware that the top research program on breast cancer is
    carried out by the military, not by NIH. The top research in
    the world on Acquired Immune Deficiency Syndrome (AIDS) happens
    to be administered by the military. And the list just goes on
    and on. And I think if the people of the United States were
    made aware of all of this, they might look a bit more kindly
    upon military spending.
        So with that, if I may continue my questions, General
    Peake, you brought up something that has been bothering me for
    decades. As you may be aware, since the Civil War, 3,500 Medals
    of Honor have been issued and of that number, about 2 percent
    have been presented to medics, doctors, nurses, corpsmen,
    dentists and such. And yet, of those who have been serving on
    the decks of carriers or on the battlefields, they tell us time
    and again that when they are injured, they very seldom call out
    for their wives, they call out for the medic. And when a call
    for a medic is issued, that medic will go through anything to
    get to the injured.
        But in the citation, unlike other citations, he has not
    killed anyone or captured anyone, and there have been
    commanders who say well, these medals are only for those who
    are killed or captured. I hope that your department, sir, is
    doing something about this, all of you. I want to be aggressive
    about this. General, what do you think?
        General Peake. Sir, I think there is Ben Solomon, who just
    got this award. He deserved getting this award, but there was
    some of that same notion back in World War II, and it was only
    through some persistent efforts that General Scully led, or
    actually General Schirrar started it, that allowed this medal
    to come to fruition. So I agree with you, sir, and I think when
    we have a Chief like General Shinseki who appreciates the value
    of the medic as he does from his personal experience, we are
    being recognized by our leadership and we will continue to make
    that push.
        Senator Inouye. If I were married to a nurse, I would be
    proud to know that she had a medal. It works two ways, not just
    for the morale of your personnel, but the morale of those at
    home. Admiral?
        Admiral Cowan. Sir, I have never thought of this issue in
    those terms before, but what you're saying strikes a chord. I
    think the expectation of military medicine is of excellence and
    when that corpsman or nurse does a heroic job, that's a job,
    and you have given me food for thought as to how we
    appropriately recognize it, and that is about all I can say at
    this point, sir.
        General Carlton. Sir, I concur with your comments. I
    believe on September 11 we did a better job. We recognized all
    of our medical team that performed heroically at the Pentagon,
    and so I think we are doing a better job now than we have done
    before. I think a lot has to do with taking the time to outline
    what are significant accomplishments and what is above and
    beyond the call of duty. So I concur with your comments, and
    we're working on that.
        Senator Inouye. Mr. Secretary, are you going to make it a
    policy?
        Dr. Winkenwerder. It looks like we have tri-service
    agreement, sir.

                                    TRICARE

        Senator Inouye. Well, Mr. Secretary, Medicare payment rates
    for physician services, which TRICARE reimbursement rates are
    based on, have been recently reduced by 5 percent. Is DOD
    correspondingly reducing its rates?
        Dr. Winkenwerder. Mr. Chairman, our rates do mirror the
    Medicare rates. We call them CMAC, CHAMPUS maximum allowable
    charge, I think is the acronym. And that would be our plan to
    do so.
        That said, a couple of points. First is, our participation
    rate in the TRICARE program this year is the highest it has
    ever been, and we believe our current payment rates are
    adequate. We don't have signs across the system that the
    payment rates for providers are inadequate. But that said, I
    want to keep a careful eye on this issue, particularly as it
    might affect providers in rural areas, and so we are vigilant
    to any signs that it could become a problem.
        I know that many private sector physicians are unhappy
    obviously about what is in store in terms of the trends for the
    next 1 or 2 years for Medicare payment rates.
        Senator Inouye. You have hit the problem right on the head,
    because the committee would not want to see beneficiaries be
    injured as a result of this cut. So, will you favor this
    committee by keeping us apprised?
        Dr. Winkenwerder. Yes, sir, we will continue to report back
    on the status of that issue.

                                TRICARE FOR LIFE

        Senator Inouye. Has there been a change in the number of
    military retirees and their families in the treatment facility
    since the TRICARE for Life benefit began?
        Dr. Winkenwerder. That's a good question. I'm not sure that
    we have an analysis that would provide an answer to that
    question, and I would ask if we could take that question back
    and come back with an answer for you.
        Senator Inouye. We have been told that it has had an impact
    on military hospitals and we would like to know how and to what
    extent this impact has been.
        Dr. Winkenwerder. Okay.
        Senator Inouye. Are the others aware of any impact?
        General Carlton. Sir, we did not get funding when TRICARE
    for Life came about, that a military retiree would get 80
    percent from Medicare and 20 percent from the military. So when
    we provide that healthcare, we do not get the 80 percent. The
    subvention issue did not carry, and so we have not been able to
    expand our services as we would like to our over 65 patients.
        Admiral Cowan. Despite that, we note two things. One is
    that by and large our over 65 patients want to come to Military
    Treatment Facility (MTFs) and that our healthcare providers
    want to take care of them. So each of the services in their own
    way has been taking back as many over 65 patients as possible
    without crowding out other levels of beneficiaries. In the Navy
    this has been a hospital by hospital analysis of patient
    populations and our ability to absorb and take care of our over
    65 patients.
        The TRICARE Plus program that was set up by the Office of
    Health Affairs was an attempt to assist us in doing that by
    allowing us to coordinate the primary care of our over 65
    population without requiring us to assume every facet of their
    care. That has been very helpful.
        General Peake. Sir, we've used the TRICARE Plus as an
    enrollment tool, but it really was sized to the capacity that
    we were able to meet with the base that we were given. As
    General Carlton said, there was no new money that came with
    that for us. And then next year with full funding, we are still
    working the details out to insure that we have that level of
    funding to continue the level of effort.

                                 TRANSFORMATION

        Senator Inouye. I have a whole lot of questions here but I
    notice that the nurses are waiting. If I may, I would like to
    submit these to you for your consideration and response.
        However, I have one question I would like to ask General
    Peake. As you know, the Army is going through this
    transformation. Does that include the medical services?
        General Peake. Sir, it does. And our notion of the
    transformation is to leverage the kind of technologies that are
    in the pipeline so that we can build them into the objective
    force. The Striker will have a medical variant. The objective
    force future combat system will have a medical variant that as
    part of that will have our requirements built into it.
        But it is also the notion of training the medic better so
    that we can be relevant on that 21st century battlefield. We
    already started some of those kinds of initiatives with the
    enlisted program where we train our medics for 16 weeks instead
    of the initial 10. They are Emergency Medical Technician (EMT-
    B) qualified when they come out of school now, and we are
    building a sustainment program to keep those skills up.
        It is all of those things that are part of the
    transformation. We sit in the same meetings with General
    Shinseki to make sure that we are in sync with where our Army
    is going in terms of being more quickly deployable with the
    right footprint to be able to take care of soldiers in that
    environment. When we built the Intern Brigade Combat Team
    (IBCT), we built a special medical footprint to fit right into
    it and make sure that we could operate as they needed us to
    operate in their support.
        Senator Inouye. And you can keep up with that?
        General Peake. Sir, we can, and in the future force, the
    armored evacuation vehicle for us is the M-113, and is part of
    the legacy force, and it has its issues with being able to keep
    up with Bradleys at this point.
        Senator Inouye. In World War II, we all carried a little
    kit about the size of two packs of cigarettes. What do the men
    carry now for infantry?
        General Peake. Sir, they're carrying an M-5A bag that is
    now being expanded to carry the ability to do airway
    management, splinting, IV solutions. In fact, some are
    carrying, as reported in the press, or will be carrying blood
    substitutes, and we are moving on with trying to force the
    technology, because we can now get a blood study, but there is
    research underway so that they will have the technology to make
    that diagnosis out on the front edge of the battlefield more
    quickly and identify an agent that is perhaps causing an
    illness and then be able to treat it and then still maybe move
    the patient back through the system for a better medical
    result.
        Senator Inouye. I presume it's safe to say the marines have
    improved their medical kit since World War II.
        Admiral Cowan. Yes, sir. In fact, each of the three
    services works very closely together in leveraging one
    another's strengths to make a safety net for our forces
    wherever they go. We are using more and more technology as our
    warriors go in smaller and smaller numbers, ever more
    technologically enhanced to control greater areas of ground.
    That has been the history of warfare, and it continues.
        And I think as General Peake said, this is why we are all
    so intent on pushing new technologies into production: fiber
    bandages, blood substitutes, better vaccines to protect our
    warriors from the hazards of what is their office space, the
    battlefield. And now the Navy is concentrating on sea based
    medical support of operations like Afghanistan, a sea based
    invasion of a landlocked country where its nearest port is 750
    miles away. The Air Force's ability to mobilize rapid
    transportation and the movement to forward position modules of
    fleet hospitals is enormous. We are meeting these challenges,
    and we will continue to work to meet tomorrow's together.
        Senator Inouye. General Carlton.
        General Carlton. Yes, sir. We have been transforming for
    about 3 years now. An example of that would be a 10th Mountain
    Division soldier who was severely injured 6 hours after
    arrival. He was in shock in 15 minutes. And out of a back pack,
    a joint service team took superb care of this gentleman after
    an impalement injury, and he is home with his family today.
        This happened in the Apache helicopter crash of April 10,
    where two Army helicopter pilots were severely injured. They
    received very sophisticated care within 50 minutes, they were
    back in Germany in a subspecialty trained spine center in 16
    hours, having been ventilated the entire way since injury.
        And so, we are investing heavily in this transformation, we
    believe it is exactly what we need to do. We have recently
    fielded an ICU based on a personal computer, that our next
    generation will be a personal digital assistant size. And so,
    we are pressing very hard to tell our soldiers, sailors and
    airmen that wherever they go, there will be United States
    quality healthcare as quickly as the battle allows. It's really
    been a transformation effort.
        Senator Inouye. Well, I'm certain the men and women of the
    armed services will be happy to hear all of this. As I said, I
    will be submitting questions and I hope you will look them
    over, sir. I thank the first panel very much.
                                  Nurse Corps

    STATEMENT OF BRIGADIER GENERAL WILLIAM T. BESTER,
                CHIEF, ARMY NURSE CORPS, U.S. ARMY
    ACCOMPANIED BY:
            REAR ADMIRAL NANCY J. LESCAVAGE, DIRECTOR, NAVY NURSE CORPS
            BRIGADIER GENERAL BARBARA C. BRANNON, ASSISTANT SURGEON
                GENERAL, NURSING SERVICES, U.S. AIR FORCE

        Senator Inouye. Now we will hear from the chiefs of the
    service nursing corps.
        It is useful to remember that modern medicine and modern
    nursing began in conjunction with the military. The war that
    took the British forces through the Crimea also took Florence
    Nightingale, and she provided not only care and comfort, but
    also a system for organizing medical research. She brought that
    leadership and compassion back to England and the civilian
    world as what we now know as modern nursing.
        In light with that great tradition and principle that
    nursing care is found wherever our military is found, it is my
    pleasure to welcome our distinguished panel of leaders. I know
    that they will bring us up to date on the accomplishments an
    challenges facing military nursing.
        I would like to welcome back Brigadier General William
    Bester, the Chief of the Army Nurse Corps and the Commanding
    General of the U.S. Army Center for Health Promotion and
    Preventive Medicine. And we will hear for the first time from
    Admiral Nancy Lescavage, Director of the Navy Nurse Corps and
    Assistant Chief of Healthcare Operations at the Bureau of
    Medicine and Surgery. And more importantly, she served on my
    staff.
        We also welcome Brigadier General Barbara Brannon, Director
    of the Air Force Nursing Service and Commander of the Malcolm
    Grove Medical Center. I thank all of you for joining us this
    morning and I look forward to hearing you on the issues. And
    may I begin with General Bester.
        General Bester. Good morning, Mr. Chairman, and thank you
    very much for the opportunity once again to testify before you
    today and talk to you about the Army Nurse Corps. This morning
    my focus will highlight four important concerns that relate to
    the ability of the Army Nurse Corps to serve this great Nation
    of ours: Manning, support for the baccalaureate degree as entry
    level into the Army Nurse Corps, our deployments, and nursing
    research.
        Since our last testimony before this subcommittee, there
    has been much analysis of the current and pending nursing
    shortage. Nationally, only 81.7 percent of total licensed
    Registered Nurses (RNs) were employed in nursing in 2000.
    Although this rate of participation is higher than the 77 to 80
    percent rates that were reported in 1980, many RNs are seeking
    positions in nonclinical settings, further exacerbating a
    shrinking pool of clinical nurses.
        We can expect further declines in working RNs as the older
    population of RNs retire and the younger population entering
    the profession continues to decline. By 2020 the full number of
    full-time employment RNs is projected to fall 20 percent below
    national requirements. This shortage of nurses in the civilian
    sector continues to have a direct impact on the Federal nursing
    force for both our civilian and military.
        In fiscal year 2001 the Army Medical Command (MedCom)
    reported an 81 percent fill of documented civilian RN
    positions, and a 76 percent fill of documented civilian
    Licensed Practical Nurse (LPN) positions. Currently the MedCom
    has 668 outstanding recruitment actions for RNs and 358
    outstanding recruitment actions for LPNs, and all of these have
    been open for greater than 90 days.
        Although MedCom decreased the average processing time for
    applicants from 126 days in fiscal year 2000 to 111 days in
    fiscal year 2001, these unreasonable processing time frames
    remain excessive, resulting in a continued loss of interested
    qualified applicants to the civilian sector. Over the last year
    under General Peake's leadership, the Army Medical Command
    instituted measures to reverse this trend.
        Our healthcare facilities expended over $270,000 in fiscal
    year 2001 for local job fairs, attracting large numbers of Army
    nurses. Madigan Army Medical Center developed an innovative
    nursing internship program designed to hire nursing students
    immediately upon graduation. In conjunction with the Office of
    Personnel Management, an accelerated promotion plan was
    developed, reducing promotion time from entry level GS-5 to GS-
    9 from 2 years to 1 year, resulting in 70 RN hires.
        In fiscal year 2001 under General Peake's leadership and
    General Peake's guidance, MedCom nearly doubles its use of
    superior appointment qualifications from 144 to 284. MTF
    commanders increased the use of relocation bonuses and
    retention bonuses by 25 percent and 113 percent respectively.
        Despite these initiatives, we realize that we need
    additional tools to insure a workable and competitive system
    for our future. Title 5 was simply not responsive enough to
    meet our needs. We actively pursued Title 38 and direct hire
    authority to obtain more flexibility in the hiring and the
    compensation and promotion of nursing personnel, which has
    historically been severely constrained by Title 5. As a result
    of the recent approval of this much needed change in our
    civilian hiring and personnel system, we can now create a
    flexible and robust civilian nursing work force.
        Similarly, our military nursing work force is equally
    challenged. In fiscal year 2001 for the third year in a row,
    our Reserve Officer Training Program failed its nurse
    recruitment mission. The U.S. Army Recruiting Command has been
    working hard but unable to compensate for this shortfall,
    resulting in a shortage of 134 budget end strength for the Army
    Nurse Corps in fiscal year 2001.
        Fiscal year 2002 projects a 39 percent shortfall, further
    exacerbating our critical shortages.
        Although our attrition rates have remained stable at 20
    percent, we continue to experience shortfalls in certain
    nursing specialties. In a recent survey of company grade
    officers from various specialty backgrounds, compensation and
    educational benefits continued to be major factors impacting on
    a young officer's decision whether to remain on active duty or
    to seek civilian employment.
        We are hopeful that approval of the critical skills
    retention bonus that General Peake referred to earlier, if
    focused on our critical specialty shortages, will enhance our
    ability to retain quality officers in these specialized areas
    of nursing practice.
        In addition, continued funding of the Defense Health
    Education and Training Program will insure that we continue to
    send a clear message to our great professional nursing
    community that they are valued and that we are supportive of
    their professional growth and development.
        The Army Nurse Corps once again reaffirms its commitment to
    recognizing the bachelor of science degree in nursing as the
    basic entry level for professional nursing practice. The
    American Association of the Colleges of Nursing and the
    American Nurses Association believe this requirement is
    necessary to manage the increasingly complex and demanding
    roles required of nurses today. Nurse executives are indicating
    their desire for the majority of nurses to be prepared at the
    Bachelor of Science in Nursing (BSN) level nationally. Many
    hospitals not already requiring the BSN have established BSN
    preferred policies for new hires.
        The Department of Veterans Affairs, our Nation's largest
    employer of RNs, has established the baccalaureate degree as
    the minimum preparation its nurses must have for promotion
    beyond entry level beginning in 2005, and they have committed
    $50 million over the next several years to help VA nurses
    obtain baccalaureate or higher nursing degrees.
        As the Army line units rely on officers with 4 years of
    college experience to read and manage our great soldiers, the
    Army Medical Department also demands its leaders be 4-year
    college graduates.
        Senator, the Army Nurse Corps continues to validate its
    wartime mission. In fiscal year 2001, 722 Army Nurse Corps
    officers deployed to 18 countries around the world, consuming
    14,581 man-days in support of our Army Medical Department
    mission. The current op tempo base is higher than ever, with
    over 350 Army Nurse Corps officers deployed since October 2001
    already totaling over 9,783 man-days. Army nurses continue to
    provide excellent patient care, superb leadership, and much
    needed clinical services worldwide, including support of our
    most current mission in the global war on terrorism.
        The 249th General Hospital which deployed to the Balkans
    for 6 months with Task Force Med Eagle provided the only
    Echelon III medical care to over 16 multinational forces in
    Bosnia and Herzegovina. The 160th Forward Surgical Team
    deployed to Bundase, Ghana, for Operation Focus Relief II,
    providing Level III surgical capabilities as well as primary
    care support for a Special Forces group there. Currently there
    are nurses deployed in three forward surgical teams in support
    of Operation ENDURING FREEDOM.
        Finally, in support of homeland defense, Army nurses
    provided immediate care following the September 11 attacks on
    the Pentagon, making order out of chaos, setting up treatment
    areas, providing lifesaving care, and evacuating patients by
    all means possible. At Walter Reed Army Medical Center,
    critical care nurses not only cared for burn victims at Walter
    Reed, but additionally mobilized the local Washington Hospital
    Center to provide lifesaving care to the burn victims of our
    Pentagon family.
        These deployment examples demonstrate that Army Nurse Corps
    officers will continue to deploy whenever and wherever needed,
    providing outstanding clinical expertise, superb military
    leadership, the highest quality of care to our most precious
    resource, the American servicemen and American servicewomen,
    and their commitment and dedication towards mission
    accomplishment in what is frequently austere environments.
        Finally, Senator, I would like to just touch on Army
    nursing research. Army nurses have long been at the forefront
    of nursing research. This tradition derives from a longstanding
    belief among the Army Medical Department leadership that the
    nursing profession is built on advanced educational preparation
    and a body of knowledge based on scientific research.
        Over the past year investigators have been actively
    involved in studies that address six priority areas. These
    priorities include sustainment training; pre, intra and post-
    deployment health care challenges; nursing care of our
    beneficiaries in garrison related to satisfaction, cost
    effective care and to patient outcome; ethical issues; research
    in women's health of deployed soldiers; and monitoring nurse
    staffing effectiveness and its relationship to patient
    outcomes. Findings from these studies will assist us in
    designing educational programs for the training of our military
    and civilian work force, as well as improving our system to
    better manage the health care of our beneficiary population.
        I would like to take this opportunity to express my
    gratitude and thanks to the Uniformed Services University of
    the Health Sciences (USUHS) for their continued support in the
    training of our certified registered nurse anesthetists and our
    family nurse practitioners. Additionally, USUHS has been most
    responsive to the services' need to create a clinical nurse
    specialist program in perioperative nursing, which will start
    next year. Our continued partnership with USUHS is key to
    maintaining a sufficient number of high quality clinicians to
    meet the nursing issues.

                               PREPARED STATEMENT

        Mr. Chairman, our Army Nurse Corps, as you can see, remains
    ready, caring, and very proud. We continue to be positioned,
    ready and fully prepared to meet the challenges of tomorrow
    with a sustaining focus on a strong clinical foundation,
    professionalism, motivation, and the unfailing commitment that
    has been the professional thread of our organization now for
    101 years. Thank you once again for this opportunity to talk
    about Army nursing this morning.
        [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, Commanding General, United Sates
    Army Center for Health Promotion and Preventive Medicine and Chief,
    Army Nurse Corps. I am both pleased and honored to testify before you
    today. This morning my focus will highlight three important concerns
    that relate to the ability of the Army Nurse Corps to serve the nation:
    manning, deployments, and nursing research. I would first like to begin
    by discussing manning.
        Manning.--Since our last testimony before this subcommittee, there
    has been much analysis of the current and pending nursing shortage by
    national nursing organizations and multiple congressional
    subcommittees. All concur that the national statistics vary in their
    description of the nature and extent of nurse workforce shortages, and
    that data is not sufficiently sensitive or current enough to compare
    nurse workforce availability across states, or clinical nursing
    specialties. Current evidence does, however, strongly suggest emerging
    shortages of nurses available or willing to fill vacant positions in
    various healthcare venues. A recent report to the Committee on Health,
    Education, Labor and Pensions stated that supply depends on the
    available number of qualified nurses willing to work in direct patient
    care. Nationally, 81.7 percent of licensed RNs were employed in nursing
    in 2000. This total varied across states from a high of 92 percent in
    North Dakota and Louisiana to a low of 75 percent in Pennsylvania.
    Although this rate of participation is higher than the 76.6 percent to
    80 percent rates reported in the 1980s, many RNs are seeking positions
    in non-clinical settings such as managed care corporations,
    pharmaceutical companies and insurance companies, further exacerbating
    a shrinking pool of clinical nurses. We can expect further declines in
    working RNs as the older population of RNs retire and the younger
    population entering the profession continues to decline. While the
    average age of nurses is currently 44.4 years, Buerhaus et al, in an
    article, Implications of the Aging Registered Nurse Workforce, Journal
    of the American Medical Association, states that approximately 40
    percent of the nursing workforce will be older than 50 years of age by
    2010. He adds that by 2020, the total number of full-time equivalent
    RNs is projected to fall 20 percent below requirements. Likewise, RN
    vacancy rates vary widely as noted in a June 2001 American Hospital
    Association survey reporting overall vacancy rates as high as 20
    percent in California, 16 percent in Florida and Delaware, and 13
    percent in Alabama and Nevada. These statistics, coupled with the
    higher proportion of patients having more complex nursing needs,
    becomes daunting.
        These factors affecting the nursing supply in the civilian sector
    continue to have a direct impact on the federal nursing force, both
    civil service and military. In fiscal year 2001, the Army Medical
    Command (MEDCOM) reported an 81 percent fill of documented civilian RN
    positions and a 76 percent fill of documented civilian LPN positions,
    which is a decrease of 8 percent and 6 percent respectively from fiscal
    year 2000. Currently, the MEDCOM has 668 outstanding recruitment
    actions for RNs and 358 for LPNs, which have been open for greater than
    90 days. Although MEDCOM decreased the average processing time for
    applicants from 126 days in fiscal year 2000 to 111 in fiscal year
    2001, these unreasonable timeframes to process qualified applicants
    remain excessive and, as a result, we continue to lose interested
    qualified applicants to the civilian sector.
        Over the last year, MEDCOM instituted long and short-term measures
    to reverse this trend, making nursing in Medical Healthcare Facilities
    a viable employment option for civil service nursing personnel. In lieu
    of posting vacancy announcements, over $270,000 was expended at the
    Medical Treatment Facility (MTF) level in fiscal year 2001 for local
    job fairs, which attracted large numbers of nurses. Madigan Army
    Medical Center, in partnership with nursing programs in the local area,
    developed an innovative nurse internship program. Student nurses, hired
    as interns during their collegiate days, have the option to convert to
    permanent hire upon graduation. Furthermore, in conjunction with the
    Office of Personnel Management, an accelerated promotion plan was
    developed reducing promotion times for entry level GS 5 to GS 9 from
    two years to one year, resulting in 70 RN hires. MTF commanders also
    made judicious use of Title 5 financial incentives designed to make
    salaries more competitive. In fiscal year 2001, MEDCOM nearly doubled
    its use of superior appointment qualifications from 144 to 284. MTF
    Commanders increased the use of relocation bonuses and retention
    bonuses by 25 percent and 113 percent, respectively.
        Despite these initiatives, we realized that we needed additional
    tools to ensure a workable and competitive system for the future. Title
    5 was simply not responsive enough to react to the tempo of change in
    the workforce. Through the diligent efforts of the Administration,
    Congress, and our military leadership, such relief has been provided
    through the Fiscal Year 2002 National Defense Authorization Act and the
    Department of Defense Appropriations Act. These Title 38 and Direct
    Hire Authority initiatives will allow flexibility in the hiring,
    compensation, and promotion of nursing personnel previously constrained
    by Title 5. Our charge is to now implement these plans creating a
    flexible, yet robust civilian nurse workforce.
        Similar to our civilian employees, our military nursing workforce
    has been equally challenged. In fiscal year 2001, our ability to
    attract young nurses diminished. For the third year in a row, our
    Reserve Officer Training Cadet (ROTC) program failed to meet its nurse
    recruitment mission. The four-year timeframe to realize the benefit of
    any corrective action compounds the problem. The U.S. Army Recruiting
    Command (USAREC) has been unable to achieve the additional mission
    created by ROTC shortfalls, resulting in a shortage of 134 in our
    budgeted end strength for the Army Nurse Corps in fiscal year 2001.
    Projections for fiscal year 2002 nurse recruitment are more ``grim'' as
    USAREC is projecting a 39 percent percent shortfall in nurse corps
    accessions further exacerbating our shortage with an inventory of 3,164
    versus a budgeted end strength of 3,381.
        Over the last year, members of Congress made concerted efforts to
    create programs designed to increase the nursing market and we thank
    you. All of these efforts have the ability to increase the civilian
    sector's ability to hire; however, they also directly compete against
    our military programs to attract nursing students and new graduates. To
    level the playing field, the Army Medical Department continues to
    explore additional initiatives to recruit and retain quality Army Nurse
    Corps officers.
        Although our attrition rates have remained stable at 20 percent, we
    continue to experience shortfalls in some of our most critical nursing
    specialties. A recently conducted exit survey of company grade officers
    in various specialties indicated that compensation, education, and
    quality of life are the pivotal points that affect young officers'
    decisions to remain on active duty. Although as a corps we have taken
    steps to increase flexibilities in assignments, the continued high
    optempo failed to reduce our attrition rates. We anticipate that
    through the recent directive by the Secretary of Defense authorizing
    the implementation of the Critical Skills Retention Bonus program,
    critical nursing specialties will hopefully be adequately compensated,
    thereby maintaining our mission requirements and assuring mission
    accomplishment. Additionally, within the funding of the Defense Health
    Education and Training Program, we hope to retain training accounts
    designed to develop our young officers both clinically and as leaders.
    Investing these resources is critical to maintaining our force
    structure, sending a message to our officers that they are valued.
        To adequately recruit and retain our force, we must demonstrate
    through our actions that we recognize the unparalleled contributions of
    military nursing and that we show our commitment to these dedicated
    military officers and professional nurses via benefit packages such as
    educational dollars and accession and retention bonuses.
        Deployment.--The Army Nurse Corps continues to validate its wartime
    mission through multiple deployments. In fiscal year 2001, 722 Army
    Nurses deployed to 18 countries consuming 14,581 man-days dedicated to
    our primary mission of supporting our active duty service members. The
    current optempo pace is higher than ever with 349 Army Nurses deployed
    since October 2001 for 9,783 man-days. Army nurses continue to provide
    excellent patient care and clinical leadership and services worldwide
    to include our most current mission in support of the Global War on
    Terrorism in the Afghanistan Theater of Operations.
        The 249th General Hospital was deployed to the Balkans for 6
    months, and with Task Force Med Eagle, provided the only Echelon Level
    III medical care to over 16 Multi-National Forces in Bosnia-
    Herzegovina. They provided expert clinical nursing care and support to
    7,435 outpatient visits, 110 inpatient admissions, 122 medical
    evacuations and 95 surgeries. In addition to providing patient care,
    nurses were involved with many educational, training and humanitarian
    related missions during the deployment. The 249th successfully trained
    and certified 104 soldiers in Combat Life Saver Courses and graduated
    51 soldiers in Emergency Medical Technician-Basic (EMT-B) Courses, with
    every single soldier successfully passing the National Registry Exam.
    They participated in ``Fit Eagle'', which provided health promotion and
    assessment activities to troops deployed in the region. The nurses
    provided, instructed and trained over 12 continuing education offerings
    monthly that covered all aspects of professional deployment and ongoing
    professional development.
        The professional nursing staff from the 86th Combat Support
    Hospital from Fort Campbell, Kentucky deployed to support Operation
    Joint Guardian in Kosovo for Task Force Medical Falcon V (TFMF V). They
    provided a wide range of care that included acute illnesses, injuries,
    minor surgeries, rule out myocardial infarctions and acute trauma.
        Forward Surgical Teams (FSTs) provide rapidly deployable immediate
    surgery capability that enables patients to withstand further
    evacuation within the forward division, separate brigade and Armored
    Calvary Regiment operational areas. During September 2001 in Korea, the
    127th and 135th FSTs conducted a four-day live surgical exercise
    performing eight successful surgical procedures. This was the first
    time two FSTs conducted a joint exercise. The 160th FST deployed to
    Bundase, Ghana for Operation Focus Relief II providing Level II
    surgical capabilities as well as primary care support to the Special
    Forces Group. This mission allowed for implementation of new doctrine
    for providing primary care with lab, x-ray and family practice
    capabilities within the FST. Currently, there are nurses deployed in
    three FSTs in support of Operation Enduring Freedom.
        The Joint Task Force-Bravo in Honduras hosted 25 medical readiness-
    training exercises (MEDRETEs) in Central America. These exercises can
    treat up to 600 outpatients per day. The nine-day General MEDRETE
    provided patient care for over 5,600 patients, and convoyed to eight
    different locations. Additionally, the nurses provided two quarterly
    continuing education seminars for 38 Honduran nurses from six
    hospitals. These seminars addressed topics ranging from the nursing
    process to the care of medical and surgical patients to physical
    assessments with a cardiac focus to BCLS and ACLS certifications. The
    nurses at JTF-Bravo were challenged daily to step out of the hospital
    environment and function in an austere environment, providing quality
    nursing care to an extremely needy population. These experiences afford
    our military nurses the opportunity to learn about the health care
    system of their host nation, as well as fostering a relationship with
    Honduran health care professionals who could potentially be caring for
    U.S. soldiers.
        The Reserve Component Army Nurse Corps Officers continue to support
    our deployed forces as well. The 399th Combat Support Hospital (CSH),
    U.S. Army Reserves from Taunton, Massachusetts mobilized for Task Force
    Med Falcon IV at Camp Bondsteel, Kosovo. The health care mission was
    vigorous, treating 79 inpatients and over 800 outpatient trauma victims
    of hostile fire, sniper fire and land mines in one 30-day period. The
    399th CSH initiated an EMT Course and a Combat Life Saver Course for
    the 101st Airborne Division in June 2001, with nurses as the primary
    instructors. The nurses also were actively involved with humanitarian
    care, delivering quality nursing care to a community that was torn from
    the aftermath of a brutal war. Later in their deployment, the 399th CSH
    was provided the opportunity to work jointly with a British Contingent,
    whose added mission provided medical support to Kosovo Force troops and
    additional emergency care to the local national Government
    Organizations, United Nations and civilian populations. This joint
    endeavor included treating the tragic bombing incident patients
    involving the Nis Express Bus.
        Deployments are now not only overseas, but include homeland
    defense. Since the horrific attacks on September 11, many Army Nurses
    rose to the occasion displaying their ability to respond to any
    adversity. These nurses made order out of chaos, setting up treatment
    areas, providing life-saving care and evacuating patients by any means
    available. At Walter Reed Army Medical Center, critical care nurses
    were integral in the immediate care of burn victims from the attack on
    the Pentagon bombing, both at WRAMC and the regional civilian burn
    center.
        Nurses are also critical team members in the Medical Command
    Aeromedical Isolation Teams and the specialty augmentation response
    teams, known as SMART. In August 2001, members of the 167th Aeromedical
    Evacuation Squadron, an Air National Guard Unit from Martinsburg, West
    Virginia, trained our nurses on the aeromedical isolation team at the
    U.S. Army Medical Research Institute of Infectious Disease (USAMRIID).
    This unit trained on initial containment patient care to ensure
    patients with infectious diseases will not spread the contamination
    while being evacuated back to USAMRIID.
        These few deployment examples highlight success stories of deployed
    Army Nurse Corps Officers in a myriad of settings. Army Nurse Corps
    Officers will continue to deploy whenever and wherever needed,
    providing clinical expertise, high quality care, commitment,
    dedication, training, and humanitarian care to accomplish the mission
    in, what is very frequently, very austere environments.
        Nursing Research.--Army nurses have long been at the forefront of
    nursing research. This tradition derives from a longstanding belief
    among the Army Medical leadership that the nursing profession is built
    on advanced educational preparation and a body of knowledge based on
    scientific research. Last year I directed Army nurse researchers to re-
    prioritize nursing research programs within the Army Medical
    Department. The resulting agenda focuses on compelling military
    healthcare problems over which we have an ability to influence
    outcomes. Today I will share with you the progress and accomplishments
    demonstrated by Army nurse researchers. Over the past year these
    investigators have been actively involved in studies that address each
    of five priority areas I identified. The first priority area was the
    identification of specialized clinical skill competency training and
    sustainment requirements. Trauma resuscitative care is a key competency
    required of military nurses. Trauma care of the injured soldier or
    civilian casualty in the field differs from that provided in a fixed
    facility. Little is known about the extent and frequency of trauma
    skills retraining required by Army nurses and medics assigned to field
    units. Researchers and advanced practice nurses assigned to the 67th
    Combat Support Hospital, the 30th Medical Brigade and Landstuhl
    Regional Medical Center in Europe are conducting a three-year study to
    evaluate the ability of our nursing staff to perform resuscitative
    skills to manage traumatic injuries. They will then determine the rate
    and timing of trauma skill degradation. The findings of this study will
    assist us in the design of effective military and civilian trauma
    skills sustainment programs.
        As military roles expand beyond traditional expectations to include
    disaster relief, humanitarian assistance, peacemaking, peacekeeping,
    and treatment of detainees from the war on terrorism, emerging ethical
    issues borne of increasingly complex and ambiguous clinical situations
    in healthcare must be addressed. One Army nurse research team is
    studying the ethical issues experienced by Army Nurse Corps (ANC)
    officers and Department of the Army civilian (DAC) registered nurses
    (RNs) in their practices in field and garrison military hospitals. This
    team is characterizing the most frequent and challenging ethical issues
    in order to provide the foundation for pre-emptive educational programs
    that will prepare nurses in a variety of military settings to best
    manage the ethical challenges presented to them.
        My second priority area was designed to identify the nursing care
    requirements necessary to meet the many pre-, intra-, and post-
    deployment healthcare challenges facing soldiers, veterans and their
    families. Nurse researchers at Tripler Army Medical Center are
    conducting two important studies, the Building Strong and Ready
    Families (BSRF) Study and the New Parent Telehealth Study. Both are
    aimed at strengthening family structures and helping young couples
    develop effective coping skills. In the first study, nurses and
    chaplains are teaching evidence-based health risk behavior modification
    and marital skill development. Participants who received these
    interventions exhibited significant reductions in personal and family
    stress and reported improvements in perceived quality of life and
    readiness to change risk behavior. In the New Parent Telehealth Study,
    video teleconferencing technology allowed community health nurses to
    maintain close relationships with young mothers at distant locations in
    soldier families at risk for abuse.
        Great progress continues in the deployed women's health research
    program conducted by LTC Nancy Ryan-Wenger, an Army Nurse reservist at
    Ohio State University. Her work in the area of self-diagnosis and
    treatment of gynecological infections for military women in austere
    environments has been recognized by the National Institutes of Nursing
    Research with the award of a large research grant to further develop
    this work in additional civilian populations.
        To date, the area that has received the most attention is that of
    the third priority area, issues related to the nursing care of our
    beneficiaries in garrison. Army nurse researchers at Brooke Army
    Medical Center have identified the safety and health benefits of
    engaging patients with cancer in programs of exercise during and after
    treatment; they have identified cost-effective techniques of pressure
    ulcer prevention; and developed a longitudinal tracking mechanism for
    monitoring patient outcomes in burn recovery. Each of these studies was
    conducted with financial support from the TriService Nursing Research
    Program.
        The value of having a consistent funding stream for the TriService
    Nursing Research Program is found in a series of three nursing research
    studies that each build on one another, and move us closer to better
    understanding the health care needs of our active duty soldiers. In the
    first study, which occurred in the early days of TRICARE, a team of
    nurse researchers at Madigan Army Medical Center examined access to
    care for various categories of military healthcare beneficiaries. Among
    many findings, it was evident that active duty personnel were the least
    satisfied of all beneficiary groups with TRICARE. This finding has been
    supported by other studies as well.
        The issue of active duty dissatisfaction was the stimulus for a
    second study that is currently in progress. In this study, focus groups
    are being conducted to better understand the expectations of and
    experiences with military health care. The beneficiary groups targeted
    in this study are active duty and family members of active duty.
    Clearly the possibility for this TriService funded study to inform and
    influence policy is significant.
        Preliminary findings from the second study lead to a surprising
    discovery that is creating the foundation of a third grant being
    submitted for funding. Active duty personnel, both enlisted soldiers
    and officers, as well as family members, expressed different
    experiences with ``soldier care'' compared to traditional TRICARE, the
    military's managed healthcare program. Soldier care encompasses first
    line treatment obtained at battalion aid stations, troop medical
    clinics or from medics or flight surgeons. Soldier care occurs close to
    the units in which active duty personnel are assigned.
        The third study in the series, therefore, proposes to smooth and
    simplify the interface between the military unit and the MTF. Improving
    this process has substantial readiness ramifications that may affect
    the individual, the military unit, and the Army as a whole from the
    standpoint of morale and deployability, as well as recruitment and
    retention.
        This series of studies demonstrates the contributions possible from
    work that builds on prior investigations. This collection of studies
    identified several military unique healthcare issues that would not
    have been evident from any single investigation. It is important to
    note that some of the most influential studies will occur over time as
    insights build on one another--we appreciate your support of these
    efforts.
        Just as identification of acute care nurse staffing requirements
    and their relationship to patient outcomes is a national concern, it is
    also an Army Nurse Corps research priority area. This past year, nurse
    researchers at Walter Reed and Madigan Army Medical Centers began
    implementing mechanisms for monitoring inpatient nurse staffing
    effectiveness and patient outcomes. This monitoring and reporting
    system is potentially capable of processing data from a large number of
    Army MTFs and may offer cost-effective real-time staffing decision
    support tools to nurse leaders of inpatient hospitals.
        As mentioned earlier in this statement, issues related to civilian
    and military nurse retention in this era of critical shortages are top
    priorities in the Army Medical Department. The quality of the work
    environment for hospital-based nursing staff has come under increased
    scrutiny by the nursing profession and the public, especially given the
    national nursing shortage and efforts aimed at marketing nursing as an
    attractive career option for young men and women. Nurse researchers at
    Walter Reed Army Medical Center are conducting a 2-year study of
    military and civilian nurses on inpatient units in Army hospitals to
    identify the relationship between the work environment and nurses'
    intent to leave military employment.
        In conclusion, Army nurse researchers are seeking the answers to
    important questions in military healthcare. The Army Nurse Corps is in
    the process of identifying areas for collaboration with researchers in
    the Navy and the Air Force. The TriService Nursing Research Program is
    supporting regional workshops to promote joint research across service
    lines. Your continued support of the TriService Nursing Research
    Program has resulted in many advances in caring for our nations most
    precious commodity--our soldiers, their family members, and the
    deserving retiree population.
        I would like to sincerely share my gratitude and thank the
    Uniformed Services University of the Health Sciences (USUHS) for their
    continued support in the training of our Certified Registered Nurse
    Anesthetists and Family Nurse Practitioners. USUHS continues to provide
    us with professional nursing graduates who have a much higher
    percentage pass rate for national certification than our civilian
    counterparts. Additionally, USUHS has been most responsive to the need
    to create a Clinical Nurse Specialist Program in Perioperative Nursing.
    Our continued partnership with USUHS is key to maintaining sufficient
    numbers of professional practitioners necessary to support our primary
    care mission.
        Finally Senator, the Army Nurse Corps once again reaffirms its
    commitment to recognizing the Bachelor of Science degree in Nursing
    (BSN) as the minimum educational requirement and basic entry level for
    professional nursing practice. We appreciate your continued support of
    this endeavor and your commitment to the educational advancement of all
    military nurses. The Army Nurse Corps remains Ready, Caring and Proud.
    We continue to be positioned and ready to meet the challenges of
    tomorrow, with a sustained focus on a strong clinical foundation,
    professionalism, motivation and the unfailing commitment that has been
    the professional thread of our organization for over 100 years. Thank
    you for this opportunity to present to you the many contributions made
    by Army Nurses.

        Senator Inouye. Thank you very much, General. I now call
    upon Admiral Lescavage.
        Admiral Lescavage. Good morning, Mr. Chairman. I am Rear
    Admiral Nancy Lescavage, Director of the Navy Nurse Corps and
    Assistant Chief for Healthcare Operations at the Navy's Bureau
    of Medicine and Surgery. It indeed is an honor and privilege to
    represent 5,000 Navy Nurse Corps officers, Active and Reserve.
        I would like to highlight the role of the Navy Nurse Corps,
    where we have established ourselves as a powerful presence in
    Navy Medicine, focusing on the goals of readiness, optimization
    and integration. I will speak to each of these goals and
    additionally provide an update on professional nursing in Navy
    medicine.
        The first goal is readiness. Our readiness mission focuses
    on ensuring a healthy and fit force. Seventy Navy Nurses are
    serving in key operational billets aboard aircraft carriers,
    amphibious ships, Marine Medical Battalions, and as flight
    nurses. For Operation ENDURING FREEDOM an additional 51 Navy
    nurses augment our Fleet Surgical Teams, Marine Medical
    Battalions, and our Fleet Hospitals.
        There have been several humanitarian missions and joint
    exercises involving a total of 130 Active and 28 Reserve
    nurses. At Naval Base, Guantanamo Bay, Cuba, our Navy nurses
    staff Fleet Hospital 20 at Camp X-Ray, and provide care to
    detainees.
        As you know, following the events of September 11th,
    homeland security became a priority. Within 18 hours, our
    Hospital Ship COMFORT was steaming to New York City with
    nursing presence heavily represented to provide emergency care.
    That same day at the Pentagon readiness became reality when the
    triservice nursing staff extensively collaborated with civilian
    rescue units.
        Given recent events, I want you to know that we continue to
    explore emergency training. A new Navy Trauma Training Program
    will begin this summer in conjunction with the University of
    Southern California and the Los Angeles County Trauma Center.
    At Naval Hospital Bremerton, through an agreement with
    HarborView Medical Center, we are also able to gain experience
    in the management of multiple trauma victims. Also, we have
    cooperative programs existing with our Naval Hospitals in
    Jacksonville, Florida and Pensacola, Florida.
        The second goal is optimization. We continuously review our
    programs to meet our mission. Through the concept of the Five
    Rights, the Navy Nurse Corps is focused on the right number of
    nursing staff, with the right skills and training, in the right
    mix of specialties, in the right assignments, at the right
    time. This, now, is our biggest effort.
        Many nurses occupy a variety of executive positions such as
    Commanding Officers, Executive Officers, and Officers in
    Charge. We excel in multiple Department of Defense positions as
    well, such as those at the TRICARE Management Activity, the
    Pentagon, Navy Medicine Headquarters, and in the Office of
    Homeland Security.
        Through nurse managed clinics, we promote positive
    outcomes. I am thrilled to tell you that the Diabetes
    Management Program at the National Naval Medical Center,
    Bethesda, and the Asthma Case Management Program at our Naval
    Hospital in Jacksonville, have resulted in resource savings,
    better disease control, and enhanced patient compliance. Other
    nurse managed clinics focus on cardiac rehab, wound ostomy
    care, women's health, and ambulatory infusion centers. Our
    patients clearly love seeing the nurses in these clinics.
        In the area of nursing research, we appreciate your
    continued support for the TRICARE Nursing Research Program.
    Thus far, we have completed 36 studies with 12 in progress.
    After a recent study on shipboard nursing on aircraft carriers,
    we are exploring the recommendations made because of their
    operational relevance, and that is just one example.
    Additionally, the Diabetes Disease Management Program at
    Bethesda served as a pilot study for one of our grants.
        The third goal is integration. Integration involves
    teamwork to support smooth operations with our Navy
    counterparts, the other uniformed services, Department of
    Veterans Affairs staff, and civilian partners. With the Naval
    Force U.S. Atlantic Fleet, for example, family nurse
    practitioners implement programs and render healthcare services
    to personnel onboard at least 40 of our ships. They provide
    such services as physical exams, PAP smears, and nutritional
    counseling in the ship's clinic as well as at pierside by the
    Mobile Medical Education and Clinical van. In essence, Senator,
    we provide care to the deckplate, thus saving lost work hours
    for our sailors.
        In addition, Navy nurses in Rota, Spain function as
    critical members of the National Aeronautics and Space
    Administration (NASA) Space Shuttle Medical Support Team. These
    are just two of the numerous initiatives we have regarding
    integration.
        Finally, our status on professional nursing in Navy
    medicine. Meeting our mission of Force Health Protection
    requires that we closely monitor the impact of the national
    nursing shortage. I'm happy to report that thus far, active
    duty Navy Nurse Corps numbers have been healthy due to our
    recruiting and retention efforts. Direct procurement of
    qualified civilian nurses accounts for 35 percent of our annual
    accessions. The remaining 65 percent originate from our four
    scholarship or pipeline programs.
        In addition, we have enjoyed an increasing retention rate
    over the past 3 years. I believe factors contributing to our
    retention include graduate study opportunities; which are the
    number one reason why our Navy nurses stay on, diversity in
    assignments, job security, collegiality, operational
    experiences, benefits, and leadership positions.
        Within the Nurse Corps Reserve, 95 percent of our billets
    are filled. Incentives such as the accession bonus, stipends
    for graduate education, and loan repayment programs are
    beneficial in procuring our reservists. Last year, our Navy
    nurse reserve officers contributed over 8,300 days in military
    treatment facilities and 190 days aboard our ships.
        We must continue to keep recruitment and retention, as you
    well know, on our radar scope to be responsive to the needs of
    the work force. I believe that nurses seek three things:
    education, compensation and appreciation. We use every effort
    to make these provisions.
        Graduate education programs in identified specialties are
    essential to retaining outstanding Navy nurses and to sustain a
    flexible work force. For the first time in our history, I'm
    happy to report that all of our fiscal year 2002 selections for
    our Duty Under Instruction Program have been dedicated solely
    to masters and doctoral degrees. We are pleased with the
    upcoming Clinical Nurse Specialist Program for Perioperative
    Nursing at the Uniformed Services University of Health
    Sciences, and also with the recent discussions regarding a
    possible nursing doctoral program.
        In the area of compensation, active duty accessions are
    holding at this point with the use of the $5,000 Nurse
    Accession Bonus. Family, pediatric and women's health nurse
    practitioners and certified registered nurse anesthetists, as
    well as our certified nurse midwives, receive Board
    Certification Pay. In addition, our nurse anesthetists receive
    Incentive Special Pay.
        We will continue to evaluate the need, though, for
    specialty pay in other fields such as mental health,
    perioperative, and emergency trauma nursing, as a retention
    tool, especially as competition increases for the dwindling
    supply of these nurses. Your continued assistance with these
    initiatives is greatly appreciated.
        Civil service nurses are the foundation of our stable work
    force. The passing of Direct Hire Legislation and delegation of
    Title 38 U.S. Code pay and promotion authorities enable us to
    fill nursing positions and retain qualified staff members. We
    are in the process, as are my counterparts, of planning and
    implementing these new initiatives. However, we would
    appreciate your support in assisting to recind language in the
    fiscal year 2002 National Defense Authorization Bill which
    requires completion of a clinical education program affiliated
    with DOD or the Department of Veterans Affairs.
        In closing, as always, I am grateful for your tremendous
    support. In my other role as the Assistant Chief for Healthcare
    Operations, I see our Nurse Corps officers as critical to the
    healthcare team. They possess a wealth of knowledge, admirable
    clinical expertise, strategic foresight, and dynamic
    leadership. Since our world is rapidly changing, we must remain
    adaptable at all times, be accountable, maintain constant
    readiness, and pull together as critical healthcare team
    members in all settings to successfully meet any challenges. I
    can assure you, Senator, that we do that and more.
        I look forward to working with you during my tenure as the
    Director of the Navy Nurse Corps. Thank you for this great
    honor and privilege, and once we complete our questions, I will
    let you know which side of the dais I prefer to be on.
        [The statement follows:]
             Prepared Statement of Rear Admiral Nancy J. Lescavage
        Good morning, Chairman Inouye, Senator Stevens and distinguished
    members of the Committee. I am Rear Admiral Nancy Lescavage, Director
    of the Navy Nurse Corps and Assistant Chief for Healthcare Operations
    at the Navy's Bureau of Medicine and Surgery. It is an honor and a
    privilege to represent a total of 5,000 Navy Nurse Corps Officers,
    Active and Reserve. I welcome this opportunity to testify regarding our
    achievements and issues.
        I would like to highlight the role of the Navy Nurse Corps in Navy
    Medicine where quality of care and Force Health Protection are vital in
    executing worldwide missions and in preparing for the challenges of
    tomorrow. In order to meet our goals, we have established ourselves as
    a powerful presence and primarily focus on Readiness, Optimization and
    Integration. I will speak to each of these goals, followed by a status
    update on professional nursing in Navy Medicine.
    Readiness
        Our readiness mission focuses on ensuring a healthy and fit force
    deployed and at home. Our Navy Nurses immediately respond to local
    communities and operational deployments on a daily basis. Seventy Navy
    Nurses are serving in operational billets on aircraft carriers,
    amphibious ships, Marine Medical Battalions, as Flight Nurses, and in
    key staff leadership and training positions.
        In support of Operation Enduring Freedom alone, an additional
    fifty-one Navy Nurses have been mobilized to augment our Fleet Surgical
    Teams, Marine Medical Battalions, and Fleet Hospitals providing health
    service support to the Marines and Sailors afloat and ashore. There
    have been several humanitarian missions and joint exercises involving a
    total of 130 Navy Nurses over the past year. Twenty-eight Navy Nurse
    reservists have been mobilized to provide backfill for deployed
    members. In addition, at Naval Base, Guantanamo Bay, Cuba, Navy Nurses
    with dual specialty skills have made huge contributions in staffing
    deployed Fleet Hospital 20 at Camp X-Ray and providing daily medical
    care to detainees.
        Following the events of September 11, homeland security became a
    priority for the Nation, the Navy and Navy Medicine. Navy Nurses
    perform a vital role in leading Navy Medicine's effort to ensure that
    our people, facilities, and assets are optimally prepared to respond to
    any threat or actual attack.
        Immediately after the attack, Navy Nurses not only responded to
    patient care needs, but also augmented the Federal Emergency Management
    Agency to assist with coordination of medical services for New York
    City and the Pentagon. Within 18 hours, the USNS Comfort was steaming
    to New York, with nursing staff heavily represented, to provide care to
    numerous emergency relief personnel. At the Pentagon, readiness became
    reality with the extensive TRISERVICE nursing collaboration with
    civilian community rescue units.
        Given recent events, we continue to explore training opportunities
    for our Navy Nurses to maintain operational readiness to respond to
    critically injured patients in time of war, national emergencies,
    natural disasters, or humanitarian need. A new Navy Trauma Training
    Program has been established in conjunction with the University of
    Southern California and Los Angeles County Trauma Center for our Navy
    Nurses to obtain hands-on clinical experience in trauma. The first
    session for one of our Fleet Surgical Teams will begin this summer.
        Partnership between military and civilian colleagues is another
    avenue we continue to explore to train our military nurses. One example
    is an agreement between Naval Hospital Bremerton and Harborview Medical
    Center, a Level I Trauma Center. Through this program, we successfully
    enhance our nurses' speed, flexibility and skill mastery in the
    management of the multiple trauma victim, similar to those injuries
    seen with casualty incidents.
    Optimization
        Optimization focuses on providing the right care by the right
    person at the right time as an integral part of our comprehensive
    health services delivery system. Recognized in their fields as experts
    and leaders, many nurses have been at the forefront of Navy Medicine as
    critical health care team members in meeting fiscal, regulatory and
    healthcare challenges into the future. They occupy a variety of
    executive positions such as Commanding Officers, Executive Officers or
    Officers in Charge of Clinics. Navy Nurses excel in strategic and
    leadership positions at Department of Defense Health Affairs, the
    TRICARE Management Activity, the Pentagon and headquarters assignments
    in establishing and implementing policy. In addition, visionary leaders
    are assigned to new positions, such as the Deputy Director of Navy
    Medicine's Office of Homeland Security.
        Across Navy Medicine, our professional nursing community is
    comprised of active duty and reserve Nurse Corps officers, civil
    service nurses, and contract nurses. We continuously review our
    processes to meet our mission by emphasizing the concept of the ``Five
    Rights.'' These rights focus on the right number of nursing staff, with
    the right skills and training in the right mix of specialties, in the
    right assignments, and with the right formal education. Nurse-managed
    clinics and nursing research studies are a few examples where we have
    maximized the benefits of these five rights to bolster the level of
    increased population health and positive patient outcomes.
        At the National Naval Medical Center (NNMC) in Bethesda, the
    Diabetes Disease Management Program utilizes Department of Veterans
    Affairs and Department of Defense protocols with success. Nurses
    function in key roles as nurse practitioners, case managers and
    certified diabetes educators resulting in a potential cost avoidance of
    approximately $200,000, better disease control and enhanced patient
    compliance. At the Naval Hospital in Jacksonville, the Asthma Case
    Management Program utilizes National Institute of Health guidelines,
    with significant resource savings of 56.5 percent and better patient
    outcomes through patient education, a coordinated self-monitoring plan
    and physician/nurse follow-up. In addition, in other military treatment
    facilities like Naval Medical Center San Diego and Naval Medical Center
    Portsmouth, nurse-managed clinics focus on cardiac rehabilitation,
    diabetic education, wound ostomy care, women's health, and ambulatory
    infusion centers.
        In the area of nursing research, we appreciate your continued
    support for the TriService Nursing Research Program. Since the
    program's inception in fiscal year 1992, we have completed 36 studies
    with 12 in progress. We continuously review the results to enhance our
    practice and provide opportunities for further research. For example,
    we are exploring the recommendations of a recent study on shipboard
    nursing on aircraft carriers because of its relevance to our
    operational readiness. In addition, the Diabetes Disease Management
    Program at NNMC served as a pilot study for one of our grants.
    Integration
        Integration involves teamwork to support smooth operations with
    Navy counterparts, other uniformed services, Department of Veterans
    Affairs staff, and TRICARE civilian partners in all clinical settings.
    The following examples focus on Force Health Protection as well as
    other unique missions.
        With the Regional Support Group for Naval Surface Force, U.S.
    Atlantic Fleet, Family Nurse Practitioners provide leadership in
    implementing programs and rendering healthcare services to Navy and
    Marine personnel on 40 ships in support of population health
    management, medical readiness, patient education and primary care. They
    provide these services in the ship's clinic as well as at pierside
    through the Mobile Medical Education and Clinical Unit. Physical exams,
    PAP smears and nutritional counseling are just a few of the specific
    services provided at the deckplate.
        Our Navy Nurses in Rota, Spain function in an exciting role as
    members of the NASA Space Shuttle Medical Support Team. Nurses receive
    extensive training in trauma, hazardous materials injuries, and space
    physiology. They become critical members of the health care team that
    must be ``in place'' prior to launch time.
    Professional Nursing in Navy Medicine
        Our success in meeting our mission of Force Health Protection
    requires that we closely monitor the impact of the national nursing
    shortage, like our colleagues in the other services. Given the aging of
    the current registered nurse workforce, the decreasing number of
    students who choose nursing as a career and the ever increasing demand
    for professional nursing services, the current and future number of
    registered nurses is insufficient to meet our national health care
    needs. Many studies, such as the one conducted by the Bureau of Labor
    Statistics, have predicted that jobs for registered nurses will grow by
    23 percent, meaning that the need for nurses will grow by about 500,000
    positions by the year 2008.
        Thus far, the Navy Nurse Corps numbers have been healthy due to
    recruiting via diversified accession sources over the past ten years.
    Direct recruitment of qualified civilian registered nurses and
    reservists account for 35 percent of annual accessions. The remaining
    65 percent originate from our current scholarship or ``pipeline''
    programs, such as the Nurse Candidate Program, Medical Enlisted
    Commissioning Program, Seaman to Admiral Program and Navy Reserve
    Officer Training Corps. To help ensure a healthy and stable Navy Nurse
    Corps, these programs have served us well in recruiting and retaining
    the high caliber of Navy Nurses currently on active duty.
        We have also been able to sustain our end strength requirements
    through our increasing retention rate over the past three years.
    Factors contributing to our retention include: graduate study
    opportunities, diversity in assignments, job security, collegiality,
    operational experiences, benefits, and leadership positions.
        Over the past year, our Reserve Nurse Corps officers have enhanced
    our ability to meet our regular mission requirements and have provided
    a total of 8,384 days in military treatment facilities within the
    United States and abroad as well as 190 days on ships. We presently
    have 95 percent of our Navy Nurse Reservist billets filled. Our
    recruiting goal for fiscal year 2002 is 272 reservists. Incentives such
    as the accession bonus, stipends for graduate education and loan
    repayment programs are beneficial in procuring our reservists. In
    addition, we are encouraging the nursing leadership at military
    treatment facilities to market potential affiliation with the Reserves
    for those Navy Nurses who are choosing to be released from active duty.
        It is critical that we continue to keep recruitment and retention
    on our ``radar'' scope in order to be responsive to the needs of the
    work force market. I have noticed that nurses seek three things:
    education, compensation and appreciation. We make every effort to make
    these provisions.
        As previously cited, education and training is the number one
    reason for retention of Navy Nurses. Graduate education programs in
    identified specialties are essential to meet patient care needs, retain
    outstanding Navy Nurses and sustain a flexible workforce. For the first
    time in our history, all fiscal year 2002 selections for the Duty Under
    Instruction Program have been dedicated to Masters and Doctoral
    Degrees. We will continue this focus since all accessions into the Navy
    Nurse Corps are based on a qualifying Bachelor of Science in Nursing
    degree. We are also pleased with the upcoming start-up of a Clinical
    Nurse Specialist Program for Perioperative Nursing at the Uniformed
    Services University for Health Sciences and recent discussions
    regarding a Nursing Doctoral Program at the University.
        Compensation, other than pay and benefits, includes bonuses. Active
    duty accessions are holding at this point with the use of the $5,000
    Nurse Accession Bonus. Board certification pay is provided to our
    Family, Pediatric and Women's Health Nurse Practitioners, Certified
    Registered Nurse Anesthetists (CRNA) and Certified Nurse Midwives. In
    addition to their board certification pay, there is a two-tiered
    incentive special pay system that exists only for CRNAs at $6,000 or
    $15,000, depending upon completion of their training obligation. We
    will continue to evaluate the need for specialty pays in other
    specialized fields such as Mental Health, Perioperative and Emergency/
    Trauma Nursing as a retention tool, especially as competition increases
    for the dwindling supply of nurses.
        Our civil service nurses enable us to provide quality nursing care
    through a stable work force in our military treatment facilities. In
    the past, we have expressed our concerns over the differences in
    compensation and hiring practices between and among the government and
    private sectors, in order to maintain an adequate level of civilian
    nurses. Your support in passing Direct Hire Legislation for civil
    service nurses and delegation of Title 38 U.S. Code pay and promotion
    authorities enables us to fill nursing positions and retain qualified
    staff members.
        In closing, I appreciate your tremendous support with legislative
    initiatives and the opportunity to share the accomplishments and issues
    that face the Navy Nurse Corps. In my other role as Assistant Chief for
    Healthcare Operations, I see our nurses as critical members of the
    healthcare team in all settings, from development of clinical and
    business plans and policies to program implementation. Our nurses
    possess tremendous knowledge, admirable clinical expertise, strategic
    foresight and dynamic leadership. Since our world is rapidly changing,
    we must remain adaptable at all times, be accountable, maintain
    constant readiness, and pull together as critical Health Care Team
    members in all settings to successfully meet any challenges. I can
    assure you we do that and more.
        I look forward to working with you during my tenure as the Director
    of the Navy Nurse Corps. Thank you for this honor and privilege.

        Senator Inouye. General Brannon.
        General Brannon. Good morning, Mr. Chairman. It is a great
    honor to represent the 19,000 Active, Reserve and Guard Air
    Force nursing personnel as their Assistant Surgeon General, Air
    Force Nursing Services. This is my third testimony before this
    committee and that reminds me how quickly time passes, and how
    rapidly our world can change from one year to the next.
        Today we are a Nation at war and fully engaged in defeating
    the vast network of terrorists who would rob us of our security
    and deprive us of our freedom. I am proud to be an American and
    I am particularly proud to be an Air Force nurse.

                         PENTAGON ON SEPTEMBER 11, 2001

        Our nurses and medical technicians were in the trenches
    when American Airlines flight 77 hit the Pentagon on September
    11th. They quickly found themselves triaging and caring for the
    injured on the Pentagon lawn. Their outstanding clinical skills
    and leadership undoubtedly saved lives that day. Since that
    horrific event, Air Force nurses and medical technicians have
    provided vital support during Operation ENDURING FREEDOM.

                           SPECIAL OPERATIONS SUPPORT

        The unusual characteristics of our enemy and the dynamics
    of this battlefield have put our medics in far forward
    positions to directly support Special Operations units. Be
    assured, our Air Force medical technicians, surgical nurses,
    and critical care air transport nurses are very near the front
    lines. Active duty, Reserve and Guard medical evacuation crews
    have transported 721 patients to date from forward operating
    locations to medical facilities in both Europe and the United
    States.

                                  AFGHANISTAN

        Our nursing air evac teams also provided care in the air
    during the transport of detainees from Afghanistan to
    Guantanamo Bay.

                                    TRAINING

        Training is the critical success factor to insure nursing
    is ready to meet a wide range of readiness requirements. The
    Air Force has established training platforms in civilian trauma
    centers where our teams can hone those critical wartime skills.
    We call these programs Center for Sustainment of Trauma and
    Readiness Skills (C-STARS), which stands for centers for
    sustainment of trauma and readiness skills. Forty nurses and
    100 medical technicians will be among those trained this year
    at our active duty C-STARS at the Shock Trauma Center in
    Baltimore.
        On the home front, the nursing profession is fighting its
    own campaign to provide enough nursing care to meet the growing
    demand in our country. It is a campaign to improve working
    conditions, to polish the image of nursing, and to attract more
    people into our wonderful profession. The Department of Health
    and Human Services forecasts the requirement for 1.7 million
    more nurses by 2020, but estimates that only 635,000 will be
    available.

                              AIR FORCE RECRUITING

        Air Force recruiting continues to be challenged by the
    nationwide nursing shortage. Last year we did not meet our
    nurse recruiting goal for the third consecutive year, and we
    were 215 nurses below our authorization of 4,005. This year's
    recruiting requirement is 383 nurses and as of last month, 252
    had been selected for a commission. We expect to end the year
    with 275 accessions. While this is still short of our
    requirements, it actually represents an almost 21 percent
    increase over last year's accessions. This is a strong
    indicator that our new recruiting strategies and policies are
    having a positive impact.
        This past year nursing has partnered even more closely with
    recruiting service to provide additional support and tools at
    the local level to maximize recruiting. Nurses from our Air
    Force facilities are holding open houses and visiting local
    schools of nursing to assist recruiters in spreading the good
    news about Air Force opportunities. We have also developed
    compact disks (CDs), brochures and business cards to be used to
    advertise Air Force nursing benefits. Last summer I assigned a
    nurse to each of our four recruiting groups to work directly
    with potential nurse recruits and also to liaison with Reserve
    Officer Training Corps (ROTC) units to increase the number of
    nurse candidates.
        One tool our recruiters are not finding as successful as in
    years past is the $5,000 accession bonus for a 4-year
    commitment. Two years ago, 61 percent of our accessions
    accepted the bonus and signed on for 4 years. Last year that
    dropped to 29 percent, and this year, so far it's a meager 19
    percent that are accepting the bonus and signing for 4 years.
    We must continue to look for recruiting incentives that will be
    more competitive with the generous benefits offered by civilian
    employers.

                                RETENTION RATES

        Based on historical retention rates and models, I
    anticipate the Air Force Nurse Corps will be about 400 nurses
    under our authorization at the close of this year. Although we
    will dip down to just under 90 percent of our requirement,
    there is a bright spot on the horizon. Last month we received
    the authority to grant $2.5 million this year in loan
    repayments for baccalaureate nursing education and we have
    already had an overwhelming response to the program. More than
    100 active duty nurses have signed up and applied for the loan
    repayment. This has great potential to increase retention in
    our most critical areas.
        On another positive note, I am delighted to report that
    retention rates among our first-term enlisted medics has
    increased this year to 58 percent following the implementation
    of the selective reenlistment bonus. While this is a real
    success story, retention among career enlisted members, those
    with 10 to 14 years of service, still remains five points below
    our Air Force goal.

                           PRIMARY CARE OPTIMIZATION

        Nursing personnel continue to be a backbone of the
    successful implementation of primary care optimization (PCO).
    This proactive healthcare systems focus on preventive services
    and on population health programs. A pivotal member of that PCO
    is the healthcare integrator, which is a role not really seen
    in the civilian healthcare system. Health Care Investigators
    (HCIs) are nurses who coordinate healthcare services for a
    large patient population and make sure that patients receive
    the right care at the right time from the right level of
    provider. Each Air Force medical facility now has at least one
    HCI who has been trained in our formal course, and we are
    seeing a positive impact reflected in increased patient
    satisfaction and in better clinical outcomes.

                                PRACTICAL NURSES

        I am also happy to report that we have made progress in
    strengthening our healthcare team by increasing the number of
    licensed practical nurses. This educational program is provided
    by St. Phillip's College in San Antonio, and the clinical
    training is at Wilford Hall Medical Center. Last year 40
    enlisted members earned their certification and they are now
    practicing in this expanded role.

                             NURSE RESEARCH PROGRAM

        This year we have continued to capitalize on funding
    available through the tri-service nursing research program. Air
    Force nurses are engaged in studies on readiness training and
    nursing practice models. Your advocacy and financial support of
    nursing research enables us to build our military nursing
    science and to improve patient care.

                               PREPARED STATEMENT

        Mr. Chairman, I appreciate the opportunity to share our
    tremendous Air Force nursing accomplishments. The tumultuous
    events of this past year will live forever in our memories and
    in our history. I am proud beyond words at the dedication of
    the patriotism and of the heroism displayed by Air Force nurses
    every single day, and I can assure you that they are fully
    prepared to support our fighting forces and the men, women and
    children of our United States. Thank you for your tremendous
    support and leadership as we protect and defend the greatest
    Nation in the world.
        [The statement follows:]
           Prepared Statement of Brigadier General Barbara C. Brannon
        Mister Chairman and distinguished members of the committee, I am
    Brigadier General Barbara Brannon, Assistant Surgeon General, Air Force
    (AF) Nursing Services and Commander of Malcolm Grow Medical Center at
    Andrews Air Force Base. It is my honor and privilege to represent the
    19,000 dedicated members of the active and reserve components of AF
    Nursing Services. This is my third testimony before this esteemed
    committee and that reminds me how quickly time passes and how rapidly
    the world can change from one year to the next. Today we are a nation
    at war and fully engaged in defeating our enemy, the vast network of
    terrorists who would deprive us of our freedom and rob us of our
    security. I am so proud to be an American and equally proud to be
    serving in our Armed Forces. As a people, we have shown great resolve,
    tenacity and a remarkable degree of solidarity. We have demonstrated
    again the strength of character and the morale fiber that is the
    foundation of our great nation. Those who do not understand our core
    values seriously underestimate our might. More than ever, I am proud to
    be an Air Force Nurse. We have provided the critical support and care
    upon which our war fighters depend when they are in harm's way--
    lifesaving care--and a lifetime of caring.
    Readiness
        Air Force Nursing Services is committed to responding anytime,
    anywhere to our nation's call and we are prepared to support the full
    spectrum of readiness missions from war-winning operations to
    humanitarian, civic assistance, and disaster response. Our nurses and
    medical technicians ``were in the trenches'' when American Airlines
    Flight 77 hit the Pentagon on September 11. Major Bridget Larew is an
    Air Force nurse practitioner at the Pentagon's DiLorenzo TriService
    Clinic. When she reported for duty that day, she never imagined she
    would be caring for patients on the lawn of the Pentagon but she was
    trained and ready to respond. Major Larew took charge as the initial
    on-scene clinic commander and quickly organized a triage team with over
    100 volunteers. She also provided direct care for burn patients and
    other casualties. Major Larew's outstanding clinical skills and
    leadership saved lives that day.
        Since that horrific event, Air Force nurses and medical technicians
    have provided vital support during our war on terrorism, Operation
    ENDURING FREEDOM. The unusual characteristics of this enemy and the
    dynamics of this campaign have resulted in unprecedented requirements
    for our independent duty medical technicians to provide medical support
    to special operations units. Additional training is required to prepare
    our medics for the special operations environment and they are proving
    to be vital members of these units. Lieutenant Colonel Paul Beisser, a
    certified registered nurse anesthetist (CRNA) leading a Mobile Forward
    Surgical Team (MFST), recently commended the seamless interoperability
    he witnessed during treatment of trauma victims in a Special Forces
    mass casualty incident.
        Due to the shortage of anesthesiologists, our CRNAs have had
    increased opportunity to demonstrate their tremendous clinical skills
    and leadership. Lieutenant Colonel Sheryl Claybough, a senior CRNA
    assigned to Wright-Patterson Air Force Base, deployed to Prince Sultan
    Air Base, Saudi Arabia, as Medical Operations Squadron Commander and
    Surgical Team Chief from August through December 2001. She excelled in
    interaction with all Joint Forces in the area, significantly impacting
    the continued success of Operation SOUTHERN WATCH.
        In addition to CRNAs and independent duty medical technicians, we
    have deployed critical care and emergency nurses, perioperative and
    medical-surgical nurses, and medical technicians. These personnel are
    members of smaller, more capable medical teams than we have assembled
    in the past, and these modules are ``additive'' to provide the right
    level of support and services to meet the needs of the population
    served. Some examples of these modules include the Mobile Forward
    Surgical Team (MFST), Critical Care Air Transportable Team (CCATT), and
    the Small Portable Expeditionary Aeromedical Rapid Response (SPEARR).
    Our more capable, but still relatively modest in size, Expeditionary
    Medical Support System (EMEDS) is deployed incrementally and has 25-85
    personnel assigned depending on services available. EMEDS can support a
    population of up to 5,000 personnel with emergency and operating room
    services and an inpatient capability between 10 and 25 beds. Forty-five
    percent of the EMEDS are deployed far forward in the battlespace of
    Operation ENDURING FREEDOM.
        In 2001, Air Force nurses and technicians provided care in the air
    to over 20,000 patients in our aeromedical evacuation (AE) system. In
    support of Operation ENDURING FREEDOM, Active Duty, Reserve and Guard
    AE teams have transported 366 patients from the Central Command
    (CENTCOM) Theater of Operations to medical treatment facilities in
    Europe and the United States. These missions carried 154 urgent/
    priority and 212 routine patients. In addition, our nursing AE teams
    provided medical care during the transport of detainees from
    Afghanistan to Guantanamo Bay.
        When the Houston, Texas community called for help during their
    disastrous flood in June 2001, Air Force nurses and technicians
    responded as part of a 25-bed EMEDS that deployed from Wilford Hall
    Medical Center. Air Force medics provided care to 1,000 people during
    the 13-day deployment and they also got valuable field training during
    the experience.
        The Air Force Surgeon General's Readiness Skills Verification
    Program has paved the way in identifying clinical skills needed for
    deployment thereby ensuring personnel are current in their practice and
    ready to deploy. We developed readiness skills checklists for each of
    our 14 nursing specialties and identified training gaps. Air Force
    Nursing is now closing those gaps by assisting with the development of
    training platforms at civilian trauma centers. Known as Centers for
    Sustainment of Trauma and Readiness Skills (C-STARS), these sites are
    offering outstanding sustainment training for our critical care,
    perioperative, and emergency nurses and technicians.
        Captain Kristine Pinckney from Elmendorf AFB, Alaska, was one of
    the first Air Force nurses to train at our premiere C-STARS, R. Adams
    Cowley Shock Trauma Center in Baltimore, Maryland. She sharpened her
    trauma skills with the assistance of four Air Force nurse instructors
    who are appointed to the University of Maryland School of Medicine
    clinical faculty, and work and teach in the trauma resuscitation units
    and surgical suites. Captain Pinckney's impression: ``Excellent course!
    I provided hands-on care to critically ill trauma patients using a team
    approach. Now I feel more prepared and confident to care for patients
    during deployment.'' The state-of-the-art shock trauma center will be
    accommodating 40 Air Force nurses and 100 medical technicians
    throughout 2002. In addition, we are beginning to explore ways to
    partner with the Department of Veterans Affairs to coordinate joint
    clinical skills enhancement training.
    Recruiting
        The nationwide shortage of nurses continues and has the potential
    to impede the ability of healthcare institutions to provide the best
    quality patient care. Last year, the Air Force Nurse Corps experienced
    our third consecutive year of failing to meet our nurse recruiting
    goals. We have recruited approximately 30 percent less than the
    recruiting goal each year and we ended fiscal year 2001 at just over
    200 nurses under our authorization of 4,005. Our fiscal year 2002
    accession requirement is 383 nurses and as of April 2002, 252 nurses
    have been selected for a direct commission and we expect to end the
    recruiting year with 275 new accessions. In light of these continued
    recruiting shortfalls, we have worked hard to balance our vacancies
    across our facilities and minimize the impact on the mission. Where
    possible, facilities have contracted with civilian nurses to fill
    critical needs.
        We have identified new strategies to boost recruiting and have made
    several policy changes to enable more nurses to qualify for a Nurse
    Corps commission. In the summer of fiscal year 2001, Recruiting
    Services asked for a review of the nurse accession educational
    requirement because of their difficulty in recruiting nurses with a
    Bachelor's of Science in Nursing (BSN) degree. We have had a ``BSN
    only'' accession standard since 1997; however, we acknowledged that an
    adjustment was prudent and necessary in light of the nursing shortage.
    We returned to our earlier policy of allowing accession of nurses with
    an Associate Degree in Nursing (ADN) and a baccalaureate degree in a
    health-related specialty, and one year of nursing experience. To date,
    only three nurses have taken advantage of this new policy since its
    implementation in September 2001.
        Another policy change in fiscal year 2001 expanded the pool of
    potential nurse recruits with clinical skills critical to support our
    wartime response; this pool includes nurse anesthetists, medical-
    surgical nurses, mental health and critical care nurses. In August
    2001, we began commissioning nurses in these critical wartime
    specialties up to age 47, as opposed to the previous age limit of 40,
    and we also granted them one-year constructive service credit. The
    maximum age to serve on active duty remains 62 years for nurses, so
    those over age 42 continue to be ineligible for retirement unless they
    have had prior military service. We have had 21 nurses above the age of
    40 enter under this policy. In addition, our nursing specialties that
    are manned below 90 percent receive the one-year constructive credit as
    well. These specialties include Obstetrics, Neonatal Intensive Care,
    Midwifery, Women's Health and Pediatric Nurse Practitioners.
        Recruiting Services has also indicated that their biggest hurdle in
    nurse recruiting has been the requirement for one year of clinical
    experience. In the past, we capped our new graduates or novice nurses
    at 25 percent of our accession goal due to limited clinical training
    opportunities in our hospitals. In fiscal year 2002, we increased the
    recruiting goal for new graduates to 33 percent of our total recruiting
    requirement by expanding our training capacity at larger facilities.
    Furthermore, I authorized that the 12-month experience requirement for
    ``fully qualified'' nurses be waiverable to 6 months, depending on the
    quality of the individuals' clinical experience. There have been 10
    waivers, 100 percent-approved in fiscal year 2002.
        Incentives used to persuade registered nurses to choose the Air
    Force as a career include Reserve Officer Training Corps (ROTC)
    scholarships, constructive service credit for experience in undermanned
    specialties and accession bonus programs. In fiscal year 2001, 44
    nurses entered the Air Force after graduating from Air Force ROTC
    programs. We recently increased our goal to 70 graduates in light of
    our increase in training capacity for new graduates at our larger
    facilities. ROTC is an excellent ``grow our own'' program and these
    graduates bring great talent to our corps. We are closely monitoring
    recruiting data to determine if these incentives are successful in
    attracting these talented clinicians.
        In previous years the $5,000 accession bonus for four years of
    service was successful in attracting nurses to military service. This
    past year we saw a decrease in the number of nurses opting to commit to
    a fourth year in order to receive the $5,000 bonus. In fiscal year
    2000, 61 percent of our nurse accessions took the bonus, but in fiscal
    year 2001 we saw a dramatic reversal; only 29 percent signed on for
    four years with the remaining 71 percent opting for no bonus and only a
    three year obligation. We will continue to explore means to be more
    competitive with civilian employment incentives.
        Approaching the recruiting challenge from many directions, Air
    Force Nursing Services is currently evaluating educational scholarship
    programs to boost recruiting. The Navy Nurse Corps' recruiting has
    remained remarkably stable and their success is attributed to their
    collegiate scholarship and stipend programs.
        As Assistant Surgeon General for Nursing Services, I am personally
    and energetically engaged in our officer recruiting efforts. I have
    written to nurses inviting them to consider nursing opportunities in
    the Air Force, manned recruiting booths at professional conferences and
    hosted a one-day recruiting event at Malcolm Grow Medical Center for
    deans and students in nursing programs at northeast universities. I
    travel frequently and take every opportunity to highlight the exciting
    and rewarding opportunities Air Force Nurses enjoy. I have also
    assigned several nurses to work directly with recruiting groups and
    focus exclusively on nurse recruiting. Recruiters are using innovative
    strategies to champion Air Force Nursing through marketing materials,
    websites, conference coverage and other publicity campaigns.
    Retention
        Our end strength reflects both accession shortfalls and losses
    through attrition. At the end of fiscal year 2001 there were 3,790
    nurses on active duty, 215 below our authorized endstrength. This
    deficit is projected to grow to over 400 by close of fiscal year 2002
    based on historical nurse retention data. We have had a decrease in
    retention beyond the initial active duty commitment. Given today's
    retention environment, 69 percent will remain in the Nurse Corps until
    their fourth year of service as opposed to 79 percent in 1995. Twenty-
    eight percent will stay until their eleventh year of service vice 46
    percent in 1995. The stop-loss program was implemented for all Air
    Force nursing specialties following the September 11, 2001 terrorist
    attacks and it continues to be in effect.
        Last year, I directed that every nurse who voluntarily separates be
    interviewed by the Chief Nurse, or a senior Nurse Corps officer in
    their organization. Exit interviews were standardized to facilitate
    identification of factors that most influenced nurses to separate prior
    to completing a full military career. Nurses indicated they might have
    elected to remain on active duty if staffing improved, if moves were
    less frequent, if they had an option to work part time, or if they
    could better balance work and family responsibilities. Junior nurses
    also cited non-competitive salaries as being instrumental in their
    leaving. We are actively working to improve staffing through recruiting
    efforts and have developed standardized staffing ratios for our
    facilities. Studies show that higher staffing levels of all types of
    nurses result in a decrease in adverse patient outcomes from 2 to 25
    percent and enhanced job satisfaction. The other desires cited by
    separating nurses cannot be accommodated within the structure of our
    active duty nurse corps. We continue to offer Reserve, National Guard,
    and Public Health Service opportunities for those who need more
    stability and flexibility in their service commitment.
        We appreciate the critical skills retention bonus Congress
    authorized in the fiscal year 2001 NDAA which amended U.S. Code Title
    37 to establish broad officer and enlisted retention bonus authority.
    It provides payments of up to $200,000 over a career for members
    qualified in a Secretary of Defense designated critical military skill.
    Currently, the Secretary of Defense is evaluating whether health
    professions will be designated as a critical skill. In anticipation,
    the TriService Health Professions Special Pay Working Group is
    evaluating future funding, and we have identified and rank-ordered our
    critical nursing specialties. These specialties include obstetrical
    nurses, mental health, medical-surgical, neonatal intensive care, CRNAs
    and Women's Health Nurse Practitioners.
        Anticipating a severe shortage of CRNAs, we instituted an
    unprecedented loan repayment program in fiscal year 2001 that grants
    reimbursement of education costs up to $25,000 per year of training,
    for a maximum of two years or $50,000. This was intended as a
    recruiting tool, available for civilian CRNA students willing to sign
    on for an additional three years. It is being marketed heavily by our
    Air Force nurse anesthesia consultant and there appears to be growing
    interest. Equally promising, we have just received funding for one-
    hundred $25,000 loan repayments for other nursing specialties. The $2.5
    million will be used this year to offer loan repayment to nurses on
    active duty between six months and eight years and who are willing to
    accept an additional 2 year active duty obligation. Thus far, we have
    had an overwhelming response and received over 100 applications which
    meet the established criteria. This program has great potential to
    boost retention in critical year groups.
        I am delighted to report that retention of our first term enlisted
    nursing personnel has improved after the implementation of a selective
    reenlistment bonus. Last year I reported a medical technician first
    term retention rate of 51 percent, the lowest in seven years and well
    below the goal of 55 percent. Rates rose above the goal in February
    2001 and, by September, reached 58.7 percent. While this is a great
    success story, retention among career enlisted members, those with 10
    to 14 years in service, remains at approximately 90 percent,
    significantly lower than their goal of 95 percent.
        We appreciate your continued support of legislation focusing on
    improving military quality of life and benefits. Quality of life
    issues, including child care, housing, salary and benefits, and
    workload are cited in Air Force Chief of Staff surveys as major factors
    considered when people make career decisions.
    Primary Care Optimization
        Air Force nursing personnel are the ``backbone'' of the successful
    implementation of Primary Care Optimization (PCO). This endeavor
    remains a high priority in the Air Force Medical Service because 50 of
    our 74 remaining medical treatment facilities are outpatient clinics
    only. Key nursing initiatives that support the delivery of best-quality
    primary care services include the addition of Health Care Integrators
    (HCI) on our clinical teams and an increase in the number of nurse
    condition-management clinics.
        The HCI is without civilian counterpart and they have proven to be
    invaluable since the implementation of the role three years ago. These
    highly experienced nurses manage the healthcare of an enrolled
    population by identifying their needs and ensuring they receive the
    right care at the right time, from the right provider. The HCI assists
    leadership in determining specialty care requirements availability
    based upon their populations' health, and in prioritizing resources.
        This past year, we evaluated the progress in the implementation of
    the HCI role and how well we were preparing and supporting our HCI's.
    Based on feedback from our facilities and working HCI's, a course was
    designed to better prepare these nurses to meet their responsibilities.
    Each MTF now has at least one nurse who has completed the course and
    this has enhanced job satisfaction and greater success in our
    population health initiatives.
        Several examples illustrate the importance of the HCI. At Ellsworth
    AFB, the HCI readdressed a TRICARE Lead Agent's decision to disapprove
    funding for an insulin pump machine for a diabetic patient. The patient
    was on the verge of kidney dialysis and was a frequent appointment
    user-clearly a ``high cost'' patient. The good news in this case is
    that the proactive HCI, Major Christine Liddle, conducted a thorough
    cost analysis and facilitated approval of the insulin pump. This case
    alone saved $50,000 per year in renal dialysis care and preserved the
    quality of life for the patient. In addition, the TRICARE regions'
    policy on insulin pump purchases changed and better health maintenance
    was possible for many other patients.
        At the local level, the HCI at FE Warren AFB in Wyoming noticed an
    alarming pattern of non-compliance with medical recommendations among
    the population of 200 diabetic patients. The HCI orchestrated a
    Diabetic Patient Profiling Program for those needing glucose testing
    and also provided comprehensive diabetic education. The patients began
    to demonstrate an enhanced desire to ``take control of their disease''
    as evidenced by a surge in their completion rate of critical laboratory
    testing ordered by their healthcare providers. A phenomenal 95 percent
    of the diabetic patients at FE Warren completed their lab work as
    compared to 53 percent the year before, a rate well above the national
    target of 87 percent. This is a big step in the direction of better
    health since it has been demonstrated that close monitoring of lab
    values, coupled with the adoption of a healthier lifestyle, reduces the
    risk of cardiac disease, blindness, kidney damage, and serious
    infections associated with diabetes.
        In women's health, the HCIs at MacDill AFB made a positive impact
    in promoting mammograms for those in high risk categories for breast
    cancer. They launched an innovative marketing campaign during October
    2001 that resulted in 151 women being screened in one month, five of
    whom were subsequently diagnosed with early breast cancer. This early
    identification and intervention increased their five-year survival rate
    from 85 to 95 percent. The Air Force has been focused on prevention for
    many years, and nurses in our primary care clinics ensure that
    preventive health assessments and interventions are part of every
    patient visit.
        Our enlisted personnel are also key members of our PCO teams and
    integral to the success of our population health programs. They have
    been at the forefront of our initiative to decentralize immunizations
    and provide this service in all Primary Care Clinics. By closely
    monitoring patients' immunization status and administering medications
    during their clinic visit, our medical technicians have increased the
    number of children protected by immunizations and have ensured that our
    active duty members are fully immunized in advance of deployments.
        Last year I spoke of the vast untapped potential of our enlisted
    force, and I am happy to report that we have made exceptional progress
    in our initiative to increase the scope of practice for our enlisted
    nursing personnel and to boost the number of Licensed Practical Nurses
    (LPN) on our nursing team. We have partnered with a civilian college to
    provide LPN education and clinical training and, in 2001, we had 40
    enlisted members successfully complete the program and earn their
    practical nurse certificate.
        The continued financial support of the TriService Nursing Research
    Program enabled us to fund valuable studies on new technologies in the
    patient care environment and on military nursing practice models.
    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 (STAN) and an innovative
    simulation laboratory to assess the readiness skills of over 200
    clinical nurses. This research spawned a wartime injury sustainment-
    training program that boosted the readiness of over 75 percent (170) of
    the medical-surgical nurses assigned to Wilford Hall Medical Center.
    The clinical skills targeted as a requirement for wartime nursing have
    been validated by a review of the injuries seen in the casualties from
    the campaign in Afghanistan, and in the survivors of the New York City
    and Pentagon bombings. Many of the victims suffered bomb blast
    injuries, hemorrhagic shock, orthopedic and spinal injuries, thermal/
    inhalation injuries and head trauma. The nurses who received additional
    training based on the findings of the study are now well prepared to
    provide combat casualty care.
        As I forecasted during last years' testimony, we initiated the AFMS
    Nurse Telephone Triage Demonstration working group this past summer.
    Our hypothesis is that nurse telephone triage facilitates patient
    access to the appropriate level of healthcare in the timeframe needed.
    The goals of the project include improving access to care, boosting
    patient and staff satisfaction, and decreasing the inappropriate use of
    costly civilian emergency department (ED) visits. This project was
    initiated with a $100,000 TriService Nursing Research Program grant.
    This two-year study kicked off in July 2001 at three sites in Florida--
    Patrick AFB, MacDill, and Tyndall AFB--and 14 triage nurses are
    assigned to the project.
        The triage nurses collaborate with the patient and the primary care
    teams to ensure referral to the right level of care to meet the
    patients' needs. In September 2001, the MacDill AFB triage nurses ``re-
    directed'' 220 callers planning to go to the ED to a more appropriate
    level of care--saving approximately $20,000. Evaluation indicated that
    50 percent of the callers did not need an acute appointment within 24
    hours and they were referred for routine visits or instructed in
    appropriate home care. We anticipate that this study will support nurse
    telephone triage as a valuable patient-focused practice that
    facilitates appropriate care for patients in a timely manner.
        After the alarming medical mishap statistics were reported by the
    Institute of Medicine last year, we immediately evaluated our patient
    safety programs. We applied for and received a grant from the
    TriService Nursing Research Program that helped us develop a prototype
    virtual schoolhouse on ``Medical Team Management'' for use in training
    medical personnel throughout the AFMS. This program combines
    facilitated and web-based modules to teach the principles of teamwork,
    communication, stress management and other human factor interventions
    to prevent medical mishaps. The actual rollout of the program began
    last month and evaluation of training will begin soon. We believe this
    program has the potential to prevent accidents in the medical system
    and preserve patients' faith in our healthcare professionals.
    Closing Remarks
        Mister Chairman and distinguished members of the Committee, the
    past year has been a tumultuous time in our Nation that will live in
    our memories and be recorded in our history. As the Air Force Nurse
    Corps' leader during this tragedy and its aftermath, I have been proud
    beyond words of the skill, patriotism, and heroism displayed by Air
    Force nurses and medical technicians. They serve our fighting men and
    women stalwartly and willingly, and possess a passion and spirit that
    has allowed them to persevere when faced with monumental tasks and
    challenges. They are prepared to go anywhere, anytime, to support our
    military forces and the men, women, and children of our great nation.
    Thank you for your tremendous support and leadership as we protect and
    defend the greatest nation in the world! GOD BLESS AMERICA!

                    CERTIFIED REGISTERED NURSE ANESTHETISTS

        Senator Inouye. Thank you very much, General Brannon. I
    think I will start with the Air Force. I have received reports
    that indicate that your fiscal year 2001 initiative on loan
    repayments for certified registered nurse anesthetists (CRNAs)
    has been a great success. Is that correct?
        General Brannon. I believe we are still awaiting funding
    for that, sir.
        Senator Inouye. You haven't received the funding for that?
        General Brannon. I'm sorry, we have received funding for
    CRNA loan repayment, but we have not had many takers. I think
    we had only one new accession this year who accepted a loan
    repayment, so it hasn't made a great deal of difference.
        Last year we were about 90 percent manned with CRNAs, which
    is very critical to our Wartime and Peacetime Mission. With our
    current stop-loss program, we sit at 100 percent manning, but
    when the stop-loss is lifted next year, we expect it to go down
    to about 82 percent, which will be a critical problem for us.

                                LOAN REPAYMENTS

        Senator Inouye. Obviously there is a shortage of nurses all
    over the land. Keeping that in mind, do you have any ideas,
    notwithstanding your chiefs sitting in back of you.
        General Brannon. With regards to improving recruiting of
    nurses, next year, I understand we will also be allowed to
    offer loan repayments for recruiting service, and I think that
    is going to have tremendous potential to draw new people into
    the Air Force. As I go around and visit at student nurses
    meetings and at other professional symposia, the recruiters
    tell me that one of the main questions that people come up and
    ask with regard to military service is, do you have a loan
    repayment program, and the next question is, what kind of
    bonuses and incentives are you willing to offer me. I think
    once we get folks into the military, the rewards are very
    obvious, but to attract them to take the chance, sometimes it
    takes a little bit more.
        Senator Inouye. Admiral, any ideas as to what we should be
    doing?
        Admiral Lescavage. Yes, Senator. In the late 1980s we
    experienced a nursing shortage. Fortunately my predecessors
    instituted several programs to help prevent that hitting the
    Navy Nurse Corps again, and fortunately for us, that's why we
    enjoy the numbers we do today.
        Nurses find Navy nursing very attractive. As I mentioned in
    my testimony, nurses want to be appreciated, compensated and
    educated. I also highlighted the number one thing on their list
    for staying in is education. We have the opposite problem in
    our middle ranks. We can't get enough of our nurses to depart.
    That is beginning to slow our promotion numbers and it will be
    interesting to see the effects when our numbers for promotion
    slow.
        As far as charming the nurses on the outside, I feel as
    General Brannon highlighted, our recruiting efforts are just
    going into the schools, adopting schools, sending nurses in
    there to the nursing programs and showing them what we're all
    about in the Army, Navy and the Air Force.
        Also, with accession bonuses, most of our nurses coming in
    for the first time accept that $5,000 accession bonus. I feel
    if that went away, that would stop a lot of people from coming
    in. So the compensation piece is there right now. It may have
    to go higher in the future if we see the numbers change; but I
    feel we are at the peak now in seeing that we, as the Navy
    Nurse Corps, will sustain our numbers. It will be interesting
    this time next year to see where we are. Right now, we're okay.
        Those programs we offer, in order to guarantee our nurses,
    with certain numbers coming in, are the ROTC Programs, Nurse
    Candidate Programs, our Direct Accession, our Reserve Recall
    Program, and our Medical Enlisted Commissioning program. And
    through that last program I mentioned, it is an absolute thrill
    to see some of our corpsmen or enlisted Sailors come into the
    Navy Nurse Corps after having enlisted experience.
        General Bester. Senator, a couple things regarding
    accessions. First of all, I think one of the accession
    mechanisms that we use is certainly the Army enlisted
    commissioning program. The Admiral just referred to it and we
    have the same equivalent program in the Army. General Peake
    this year has allowed us to jump from 55, where that program
    normally was, to 75, so we are bringing an additional 20 people
    in. It's a great system because what we get out of the
    graduates is, we've already got a soldier, all we need to do is
    get him settled into the profession of nursing. So that's one
    of the ways we're attacking this thing.
        I think the accession bonus is a great issue, and we have
    supported the Air Force's submission of a Unified Legislative
    Brief (ULB) in April to increase the accession bonus to a
    ceiling of $30,000, although the intent of our services is, at
    least the Air Force and Army at this time, is to use that up to
    a level of $10,000. I think $10,000 gets us in the equivalent
    ballpark that we see our civilian counterparts offering to new
    graduates as they try to recruit those folks into civilian
    institutions.
        The health professional loan repayment program is working
    extremely well for us in the Reserves for our CRNAs and our
    critical care nurses. Those monies are just becoming available
    and General Peake and I will be sitting down to look at those
    opportunities as far as using some of those dollars in that
    arena for next year.
        As far as retention goes, I think the issue on retention is
    two-fold. First of all, I think we need to focus on those
    critical shortages we have, certainly anesthesia and operating
    room nursing in the Army, and we have addressed that by
    forwarding a request for the critical skills retention bonus to
    be started this year.
        And I think the second point is, as the Admiral brought up
    earlier, the reason most of our nurses, midrange nurses stay in
    the Army Nurse Corps, are the educational opportunities, i.e.,
    graduate level education that we support them so well in. So I
    think it would be imperative that we continue to fund those
    kind of programs.

                            NURSING RESEARCH PROGRAM

        Senator Inouye. Speaking of education, in the fiscal year
    2002 Defense Appropriations Bill we directed the Secretary of
    Defense to fully fund the research program and once again, we
    find that it's not funded. Do you think it should be funded
    fully?
        General Bester. Senator, we find that the tri-service
    nursing research program is critical to what we do as far as
    establishing a scientific basis for our nursing practice, and
    it has been well received over the last decade that that has
    been in operation. I know that the Institute of Medicine in
    1996 developed a committee to look at and to basically evaluate
    the tri-service nursing research program, and they saw a real
    need to look at nursing specific issues as it relates to the
    military, and the recommendation was that we have military
    nurses do that research. So, we find that program very key to
    where we will be in the future and to progressing the
    profession of nursing in the military, so we would certainly
    like to see that program continue.
        Senator Inouye. Admiral.
        Admiral Lescavage. Senator, in my opinion, to not fully
    fund our research program is a great mistake. Research is how,
    indeed, we make ourselves better and it has tremendous value
    added for all of us and all of our beneficiaries.
        One of my personal goals as Director of the Navy Nurse
    Corps is to further expand our efforts in research that will
    impact our practice and everyday policy. We indeed have always
    appreciated your support for the Tri-Service Nursing Research
    Program (TSNRP) funding. Through that, we have been able to
    better support, as I mentioned, the study that we just finished
    on the aircraft carriers for carrier nurses. We have
    standardized our Health Promotions Program, including smoking
    cessation and weight and cholesterol reduction. Other pending
    projects are going to help us focus on quality of life and our
    families' needs during the stressful times of deployment.
        Our researchers have really done a great job in recent
    years in improving their methodologies and highlighting through
    publication what they have done and we have all learned from
    that. Without the TSNRP funding, we certainly risk valuable
    research that would ultimately, in my view, impact Force Health
    Protection.
        Senator Inouye. General.
        General Brannon. Our Federal Nursing Services Council has
    really advocated the tri-service nursing research program be a
    very high priority for funding and we are disappointed that it
    did not achieve funding again this year. I am concerned that if
    it is not funded, we will lose the ability to conduct some of
    that military specific research, some of the readiness research
    that civilian funding sources might find a little too narrow or
    too unique to fund. So, I think its continuation enables us, as
    I said earlier, to forward our military nurses science.
        Senator Inouye. I realize that you should not object to a
    command decision from above, but hearing from you three, we can
    assure you, it will be refunded fully. So if you get punished
    by the Secretary of Defense, please send me a note.

              UNIFORMED SERVICES UNIVERSITY OF THE HEALTH SERVICES

        Senator Inouye. One of the matters that gives me great
    pride is the success of USUHS. The retention rate of graduates
    of USUHS beyond the obligatory period is higher than West
    Point, Annapolis or the Air Force Academy. I think it says
    something about the medical profession. What about the graduate
    school of nursing? Are you having any problems in retention?
        General Bester. Sir, as I mentioned earlier, we think the
    world of USUHS. We think it is key to who we are. Currently we
    send all of our family nurse practitioners to graduate level
    education through the USUHS program. We think they not only get
    a fine education, which by the way, Senator, they score on the
    certification exam much higher than the national average, our
    graduates coming out of USUHS.
        Senator Inouye. Almost 100 percent.
        General Bester. Yes, sir, it is 100 percent pass rate. All
    of the graduates that come out of USUHS rave about the program
    out there and rave about the quality of education they get.
    Certainly we also use that program for our certified registered
    nurse anesthetists, and I am looking very much forward to the
    CNS program and perioperative nursing study starting next year.
    We think that USUHS provides us not only the educational base
    and foundation that we need, but certainly gives us the
    military orientation during that training that you just don't
    get in any civilian program, so we think it's key to who we
    are.
        Senator Inouye. Do you believe that this graduate school
    should be permanently funded?
        General Bester. Yes, Senator, I do.
        Admiral Lescavage. Senator, what's not to like about USUHS?
    They serve us well, not only in the graduate school of nursing,
    but in all the other schools they have. Certainly retention is
    great for the students graduating from there. I find
    particularly exciting that they are able to accommodate a
    special need of ours this year, and that is to start a program
    for our operating room nurses, a masters degree program. I see
    that the opportunities at USUHS, and what we can do in
    training, will enable our military members to be even better at
    what they do every day. And again, with doing research, looking
    at the needs of our patient population and then generating
    programs for how we best can train not only our nurses but all
    of those working in the military medicine, all the better. The
    anesthesia program for nurses up there is incredible, as well
    as the Nurse Practitioner Program, and I thank you for that.

                           GRADUATE SCHOOL OF NURSING

        Senator Inouye. Do you think the graduate school of nursing
    should be permanently funded.
        Admiral Lescavage. Yes, sir.
        Senator Inouye. How about you, General Brannon?
        General Brannon. Yes. We have 152 Air Force nurses that are
    graduates of the USUHS graduate school of nursing, both family
    nurse practitioners, certified registered nurse anesthetists,
    and we currently have 13 CRNAs in the program. As my
    counterparts have said, they do enjoy 100 percent pass rate on
    certification. I think one of the best things about the program
    is they really have the flexibility to build into the
    curriculum current readiness education needs and the people
    going through the program, particularly CRNAs, have an
    opportunity for field experience and using the equipment that
    they will use in the field. So they really come out ready to go
    to war and ready to function in that operational as well as a
    peacetime environment, and we certainly couldn't get that
    anywhere else. So, the graduates are enthusiastic, the
    supervisors that they come back to are very enthusiastic, and I
    think retention has been excellent.
        CRNAs, however, once they finish their term of service do
    tend to leave, and it's very difficult to keep them in the
    numbers that we require.
        Senator Inouye. They receive $180,000 a year on the
    outside.
        General Brannon. Correct, sir, and that does seem to be
    compelling.
        We can keep them to 20-year retirement often, which is a
    good thing, but very few feel the need to stay longer.
        Senator Inouye. Do you believe that the graduate school of
    nursing should be permanently funded?
        General Brannon. Without a doubt, sir. I think of it as an
    institution that has room to grow.

                            CIVILIAN JOINT PROGRAMS

        Senator Inouye. I have many questions I would like to
    submit to you but finally, we have been receiving reports from
    civilian facilities, emergency rooms in hospitals, in which
    your nurses have been engaged in programs with their staffs,
    and they are extremely pleased and they want us to continue
    this. Do you think it should be continued. General?
        General Bester. Senator, are you referring to our trauma
    programs?
        Senator Inouye. Yes.
        General Bester. Yes, we found those programs to be
    wonderful programs and a big benefit to our forward surgical
    teams. We had the program at Ben Taub in Houston and we
    recently moved it to Miami. It has been an excellent program,
    and I know General Peake is in frequent contact with the
    program down there to make sure that our physicians and nursing
    personnel that are going through that program are getting the
    kind of training that they need, and all we are getting is
    positive feedback, so we are very much in favor of that
    program.
        Admiral Lescavage. Yes, Senator, it's really critical
    because with what we do in many of our military treatment
    facilities, we do not see the type of trauma cases and
    emergency cases that we need to in order to better hone in on
    our skills. And as I explained in my testimony, we have four
    programs that are ongoing and I would like to see even more as
    we better connect with our civilian counterparts. What they can
    do for us and with us is incredible. I feel we have only just
    begun in that arena.
        General Brannon. Within our Air Force healthcare system, we
    are more a network of clinics and small hospitals than large
    facilities. We have five medical centers and it is difficult
    for our people to maintain the clinical skills critical to our
    readiness tasking, so I think these civilian joint programs are
    imperative and they are working very, very well. I mean, people
    have come back from them, we have done some evaluation, and
    found they have been able to bring their skills up to a level
    that is eminently deployable, sir.
        Admiral Lescavage. Senator, if I may also add, this is a
    good place to do recruiting. We have recruited some of those
    people, some of the nurses into our programs.
        Senator Inouye. Several months ago I visited an emergency
    room in Los Angeles County and I believe there were just as
    many military nurses there as civilian nurses, and it happened
    to be Saturday night so it was very very busy.

                         ADDITIONAL COMMITTEE QUESTIONS

        I would like to thank all of you for your participation and
    your testimony. If I may, I would like to submit a few more
    questions, a little bit of homework, and if you would return
    your responses to us, the record will be kept open for 2 weeks,
    and we would appreciate that.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                  Questions Submitted to William Winkenwerder
                Questions Submitted by Senator Daniel K. Inouye
                          defense health program (dhp)
        Question. How can the Department assure that in fiscal year 2003
    the direct care system doesn't suffer at the expense of the TRICARE
    contracts? Has the DHP fully accounted for contractor claims (change
    orders, bid price adjustments, and requests for equitable adjustment)?
    If not, how can the Department be sure that there is enough money
    budgeted for private sector care?
        Answer. The Department believes that the fiscal year 2003 DHP
    President's Budget is realistically funded, to include a 15 percent
    increase for pharmacy in the direct care system. The TRICARE contracts
    are funded at a growth rate of 12 percent. This accounts for all
    currently approved change orders, bid price adjustments and requests
    for equitable adjustment. The Department has implemented several
    initiatives to increase oversight, improve performance and contain
    costs of the health care programs. Examples are performance contracts
    and Military Health System (MHS) Executive Review.
        Question. Is the Department suppressing any areas of the DHP budget
    to stay within a given top-line amount? If so, please describe.
        Answer. The Department is not suppressing any areas of the DHP
    budget to stay within a given top-line amount. The fiscal year 2003 DHP
    President's Budget represents a realistic projection of the financial
    requirements necessary to meet the healthcare delivery responsibilities
    of the Department.
        Question. A significant cost driver to the Defense Health Program
    budget has been rising pharmacy costs. How does the Department plan to
    control costs for this benefit, including Senior Pharmacy?
        Answer. An integral factor in controlling pharmacy costs within DOD
    is to pursue every opportunity to take full advantage of the
    Department's access to best Federal prices for pharmaceuticals. The
    pharmacy benefit structure is evolving to encourage maximal use of
    Military Treatment Facilities' pharmacies and the National Mail Order
    Pharmacy (NMOP) program where the Federal prices are readily available.
        In the TRICARE Senior Pharmacy program, for example, over 43
    percent of a day's supply dispensed is through the NMOP program, a
    result of our marketing and education efforts to beneficiaries. Another
    example is an increase in the Basic Core Formulary at our military
    pharmacies, providing access to a wider range of drugs specifically
    targeted to the older population. Additionally, we continue to explore
    opportunities to partner with the Veterans' Administration for
    providing pharmacy services to DOD beneficiaries, thereby providing yet
    another venue at Federal prices.
        On a larger scale, the recently published proposed rule to
    establish a DOD Uniform Formulary includes three cost control
    mechanisms: (1) A three tier co-pay structure, based on the commercial
    best business model, provides a tool allowing DOD to negotiate the best
    possible pharmaceutical prices for both beneficiaries and the
    government; (2) the three tier co-pay also encourages beneficiaries to
    select equally effective, less expensive medications; and (3) movement
    of market share from the more costly retail network to the National
    Mail Order Pharmacy (NMOP) will further generate savings for both the
    government and beneficiaries when beneficiaries elect to continue on
    non-formulary medications.
        When implemented, the proposed rule will deliver a uniform,
    consistent, and equitable pharmacy benefit, allowing for patient
    choice, while optimizing resources. Cost savings are dependent on
    product negotiations, beneficiary selections regarding products and
    point of service, and formulary decisions made by the DOD Pharmacy and
    Therapeutics Committee.
                      military treatment facilities (mtf)
        Question. Is it costing taxpayers more or less to treat TRICARE For
    Life (TFL) beneficiaries in the Military Treatment Facilities (MTF)
    where the MTFs have to cover the full cost of care than if they receive
    private sector care since Medicare pays for 80 percent of the costs and
    TFL is the secondary bill payer?
        Answer. From the perspective of the Military Health System (MHS)
    budget, it would undoubtedly cost the MHS less to treat TFL patients in
    the private sector since the accrual fund pays 20 percent of the cost
    while Medicare pays 80 percent, the largest portion of the cost. If
    care were provided to Medicare eligible patients in MTFs, the DOD would
    be paying 100 percent of the care costs. Therefore, the DOD has no
    economic incentive to shift greater levels of Medicare eligible care to
    their MTFs.
        However, the current levels of Medicare eligible patients being
    treated in MTFs are necessary to present the types of cases required
    for military physicians and supporting staff to maintain clinical
    skills to meet our wartime mission. Losing this case-mix would
    seriously hamper readiness and imperil our military Graduate Medical
    Education (GME) programs.
        From the taxpayer's perspective care in the MTFs is often less
    expensive than care purchased from the private sector, when the true
    cost to the government is tabulated (OSD accrual fund plus Medicare).
                                     t-nex
        Question. How much progress has been made in the development of the
    next generation of TRICARE contracts (T-NEX)? Furthermore, what
    guarantees are there to ensure that the next generation of contracts
    will be an improvement over the previous round of contracts?
        Answer. The Department is on a very aggressive schedule and
    progress is being made. Prior to the initiation of the T-NEX
    activities, TMA senior management met with representatives of the
    Surgeon Generals and approved an outcome based, best practices approach
    to the development of the contracting structure to continue the TRICARE
    program in all regions. Management approved the establishment of an
    Integrated Product Team (IPT) (known as the Request for Proposal [RFP]
    Development Team [RDT]) to develop the concepts of the new performance-
    based contract. The RDT, composed of representatives from the Surgeons
    General, each TMA directorate and each Lead Agent, developed the
    government's objectives and requirements. Interspersed between these
    government-only meetings were two, week-long public forums attended by
    health care delivery industry representatives to include the current
    TRICARE Managed Care Support contractors (MCSCs), consultants, and
    TRICARE beneficiary fraternal organizations. The RDT, upon considering
    the public's input, developed a draft RFP and posted it on the TRICARE
    website for comments. A third public forum was held to provide the
    government an opportunity to present the concepts contained in the RFP
    and once again solicited the public's input, which again included input
    from the incumbent contractors.
        The T-NEX contracts' development process has greatly benefited from
    this public and industry input as many of the concepts developed for a
    best practices approach will be carried over into the new contracts.
    Our partnership with industry, to include all current TRICARE
    contractors, continues as evidenced by their active participation in
    the recent industry forums. They were held for the TRICARE Retiree
    Dental Program (January 10, 2002), the TRICARE National Mail Order
    Pharmacy program (September 26, 2001) and the proposed design for the
    contracts to replace the MCSCs (October 25-26, 2001). These forums are
    invaluable as we continue to explore industry best practices to improve
    on the current TRICARE contracts structure while not changing the basic
    structure of the program. As we continue to develop the T-NEX
    contracts, more public forums will be held to solicit valuable industry
    and incumbent contractors' input.
        It is the Department's intention to capitalize on the lessons
    learned from the earlier generation of contracts and continue to make
    gains in customer service, quality and access to care, and economize
    where industry best practices can improve the status quo. In addition,
    the requirements being developed for T-NEX are less prescriptive and
    outcome-based (versus procedural) and carry with them incentives for
    superior performance and service.
        Question. When will the Department be releasing the request for
    proposals for T-NEX, and what is the timeline for contract award and
    start dates?
        Answer. We do not have definite timelines for the healthcare/admin
    RFPs at this time as we are still in the process of developing
    requirements. In addition, significant contract related decisions have
    not been finalized. Once these key decisions have been made we will be
    able to develop timelines.
            medical expense and performance reporting system (meprs)
        Question. The Medical Expense and Performance Reporting System
    (MEPRS) is being used as a basis for calculating the amounts to be
    transferred to the accrual fund. What are you doing to improve the
    reliability of the cost and patient care information in MEPRS?
        Answer. The TRICARE Management Activity (TMA) has established the
    MEPRS Management Improvement Group (MMIG), a joint Service and TMA
    workgroup chartered to develop, implement and manage MEPRS policies and
    procedures. This includes integrating the collection, processing and
    reporting of standard workload, financial and labor data in the Expense
    Assignment System (EAS). The MMIG has developed a MEPRS Management
    Improvement Plan, through which it has implemented several recent
    initiatives designed to improve data quality:
        Workload and Financial Reconciliation Data.--Quality assessment
    tools for workload and financial reconciliation have been developed and
    deployed. These tools provide standard audit processes that identify
    and explain variations and provide crosswalks between data collected in
    source systems and data reported in MEPRS to ensure data quality. Each
    Service medical department has published a financial reconciliation
    procedure that must be used as part of the Military Health System (MHS)
    Data Quality Management Control Program.
        MEPRS Early Warning and Control System (MEWACS).--The fielding of
    Early Warning System IV (EAS-IV) in fiscal year 2002 has dramatically
    decreased the time required for Military Treatment Facilities (MTFs) to
    review and submit their monthly MEPRS data reports, so that virtually
    all MTFs are now able to submit their data within 45 days after the end
    of the month. To capitalize on the availability of more timely data,
    TMA has developed a new tool that automates many analytical functions
    for MTF review. MEWACS is a web-enabled interactive automated Microsoft
    Excel workbook that provides timely, reliable and relevant MEPRS data
    feedback (in both tabular and graphical formats) to each MTF,
    proactively identifying data anomalies in sufficient time to make
    appropriate corrections. To complement this process, the TMA staff
    analyzes regional, Service and MHS-wide data to detect trends and
    assists MTF personnel in detailed analyses and in correcting root
    causes of data errors. An updated MEWACS workbook is posted monthly on
    the TMA web site.
        MEPRS Application and Data Improvement Workshops.--TMA has
    developed and implemented an improved MEPRS education and training
    program targeting personnel responsible for data management and
    reporting. This hands-on course focuses on proper interpretation and
    application of MEPRS data, and provides a detailed understanding of the
    enhanced capabilities of the EAS-IV Data Repository. Feedback from
    participants in the first three iterations of these workshops has been
    extremely positive.
        Question. To better determine the costs associated with TRICARE For
    Life, how is the Department tracking the utilization rates for the
    Medicare-eligible beneficiaries for care obtained at the MTF as well as
    care obtained in the civilian health care system?
        Answer. The Department is able to directly measure utilization of
    purchased civilian health services for TRICARE For Life (TFL) because
    purchased care TFL claims records are explicitly coded as TFL claims.
    For utilization of TFL services in the Direct Care system, the
    Department is currently using utilization rates for all age 65 and over
    beneficiaries. This is an approximate approach. It gives a slightly
    high estimate because it includes the workload of a relatively small
    number of age 65 and over beneficiaries that are not eligible for TFL
    (a small number of age 65 and over beneficiaries never became eligible
    for Medicare). The Department is currently making changes in its
    automated systems so that it can reliably distinguish TFL-eligible from
    TRICARE-eligible age 65 and over beneficiaries in MTF workload data.
        Question. The improvement of information technology compatibility
    and the establishment of an interoperable electronic patient record
    system are priorities both internal to DOD and between DOD and VA. When
    will these systems be operational?
        Answer. DOD strongly supports the need for appropriate sharing of
    electronic health information across federal agencies and is committed
    to ensuring that VA has the information required to provide continuity
    of care and benefit eligibility determinations for eligible veterans.
    The Composite Health Care System II (CHCS II) is the DOD medical and
    dental clinical information system that will generate and maintain a
    comprehensive, life-long, Computer-based Patient Record (CPR) for each
    Military Health System beneficiary. The Military CPR will ensure
    complete and standardized medical records will be available 24 hours a
    day anywhere in the world throughout the Service member's DOD life
    cycle. CHCS II is currently undergoing user testing and formal DOD
    operational test and evaluation. Worldwide fielding of CHCS II is
    expected to begin in the first quarter of fiscal year 2003. This effort
    will meet the DOD and VA long-term information sharing objectives.
        For near-term information sharing, DOD and VA have collaborated
    extensively to deliver a technical solution using the Federal Health
    Information Exchange (FHIE), formerly known as Government Computer-
    based Patient Record (GCPR), an interface between DOD's CHCS I and
    Veterans Health Information Systems and Technical Architecture (VistA).
    DOD has transmitted protected health information from approximately
    3.75 million records on 1.8 million retired and separated service
    members to VA. DOD will continue to transmit protected health
    information to VA on a monthly basis. The Memorandum of Agreement and
    High Level Planning Document addressing the governance of the FHIE
    initiative and other interagency initiatives that may arise in the
    future was signed May 3, 2002. VA has successfully completed testing.
    Enterprise-wide use of the FHIE within VA is anticipated to begin late
    in the third quarter of fiscal year 2002.
        Question. To what extent does the fiscal year 2003 budget request
    reflect savings due to joint ventures with the Department of Veterans
    Affairs (VA)? What opportunities exist in the out years for additional
    savings due to joint ventures?
        Answer. Any operating costs the Department of Defense (DOD) is able
    to avoid through its joint ventures with the Department of Veterans
    Affairs (VA) certainly has a positive effect on the Defense Health
    Program budget. However, there is no system in place that reports a
    specific amount of the operating cost of each joint venture that would
    have been greater if the joint venture did not exist. Significantly,
    each joint venture model resulted from new construction and operates
    somewhat differently than all others. Additionally, in all but one, DOD
    is the host. That means that VA took advantage of DOD's new
    construction needs to plan for their requirements in the new facility.
    The economies of scale unquestionably benefit both Departments. Most
    importantly for DOD, VA staff augments DOD's medical capability
    resulting from skill shortages or deployments. However, other benefits
    to DOD would not show up in the budget. For example, military surgeons
    performing surgery on both DOD and VA beneficiaries are able to
    maintain combat-related skills that would otherwise be difficult to
    achieve. While these are not identified as budget line items, they are
    indirectly taken into consideration by the Services in their annual
    budget formulations.
        Opportunities exist wherever there are DOD and VA facilities near
    each other, or for that matter where there is a military mission and
    adequate numbers of veterans and military beneficiaries to justify a
    jointly operated medical facility. The joint ventures have typically
    resulted from both agencies coordinating their health care needs and
    integrating their requirements in well planned-out economically based
    joint operations.
            defense enrollment eligibility reporting system (deers)
        Question. Since accurate budgeting is dependent on knowing the user
    population, what is the Department doing to ensure that the Defense
    Enrollment Eligibility Reporting System (DEERS) accurately reflects the
    eligible population?
        Answer. The Defense Management Data Center (DMDC) has worked
    closely with the Services for many years to improve the quality of the
    data that is found in DEERS. The Services have made major strides and
    more are expected.
        DMDC meets with the Service representatives several times a year
    for a working level discussion of issues and requirements.
    Concentration is on accessions, separations, unit changes and
    promotions/demotions. The Air Force, previously the most timely, used
    to provide transactions every other day for these four actions.
    However, since June 1, 2001, the Air Force has had serious data
    processing difficulties. In April 2002, DMDC sent a team to San Antonio
    to review the problems and re-emphasize the need for timely and
    accurate data. The Air Force is doing everything it can to resolve the
    issue. Other Services are making internal changes to support more
    frequent submissions to DMDC.
        DMDC edits transactions from the Services and provides extensive
    reports back to the Services reflecting quality of specific data
    elements in addition to late or lacking accessions/separations etc.
    Moreover, DMDC has formed a quality assurance team to specifically
    identify and implement additional quality assurance techniques to
    further the improvement of the data quality within DEERS.
        RAPIDS (the ID card application) has been modified to more tightly
    control the adding of uniformed Service members, even when
    documentation reflects they are entitled. Policy now requires all but
    very junior grades be added to DEERS via the official personnel system.
    Analysis had revealed that most of the additions of more senior
    personnel were due to SSN/Name issues needing resolution within the
    personnel system. The need for ID cards for our junior members and the
    lack of true real-time Service feeds to DEERS makes it necessary to
    still allow the adding of new recruits. Updates to the RAPIDS
    application continue to add more stringent edits, related to the
    adding/changing of family members. A Joint Service User's Manual is
    reviewed on a regular basis with a special three day annual meeting
    totally devoted to this document.
        Each Service has a Personnel and a Medical Project Officer to
    represent them to discuss DEERS and RAPIDS issues. This group meets
    four times a year to discuss new requirements, data quality issues, and
    other issues. DMDC not only attends all of these sessions but provides
    extensive support to the group.
                                     ______

                 Questions Submitted by Senator Robert C. Byrd
                   armed forces institute of pathology (afip)
        Question. Over the past decade, there have been at least four
    separate studies undertaken to investigate potential solutions for
    AFIP's facilities problems, with no results. Is there still a need for
    new AFIP facilities?
        Answer. The need for appropriate facilities for the AFIP is clear.
    At present the AFIP is housed in nine buildings in five locations
    throughout the District of Columbia and neighboring Montgomery County,
    Maryland. Its facilities are scattered and largely obsolete. Many of
    them are leased commercial properties with insufficient security.
        The need for new and/or renovated facilities first surfaced in
    1990, when the Army Surgeon General recommended that a new AFIP
    facility be located on the campus of the National Naval Medical Center
    (Bethesda, MD). There it could complement the Uniformed Services
    University of the Health Sciences, Armed Forces Radiobiology Research
    Institute, Howard Hughes Institute, National Library of Medicine, and
    the National Institutes of Health. An architectural engineering study
    by the Engineering Field Activity-Chesapeake concluded that the AFIP's
    main facility (Building 54 of Walter Reed Army Medical Center) was
    obsolete and that a move to Bethesda was feasible.
        In 1996-97, three independent studies conducted by architectural
    and engineering consultants examined Building 54 and found serious
    life-safety issues. All three recommended extensive immediate
    renovation of the facilities for continued short-term clinical and
    laboratory use.
        Since 1998, the scope and missions of AFIP have been under
    continuous study and review. The Army Medical Command provided a total
    of $17 million of Operations and Maintenance funds in fiscal year 2000
    and 2001 to upgrade Institute systems to minimal standards. Most
    recently, the Army Medical Command was provided $25 million in fiscal
    year 2002 to continue repair of the facility.
        In an fiscal year 2000 report to Congress, the ASD(HA) confirmed
    the need for 620,000 square feet of modern space for AFIP (composed of
    administrative, clinical, laboratory and laboratory support space) and
    that the best economical solution to the AFIP facilities issue was new
    construction.
        Question. Please describe in detail the various roles that the AFIP
    plays in national security. In light of the events of September 11, do
    the current facilities adequately meet the intensified demands on the
    AFIP? How has the AFIP's workload increased since September 11?
        Answer. The Armed Forces Institute of Pathology (AFIP) supports the
    Department's readiness mission. AFIP is a designated reference
    laboratory for the Department of Defense and the Department of Veterans
    Affairs. Several other federal agencies also routinely use AFIP for
    consultation, education, and research. The AFIP is unique within DOD in
    that it is the only laboratory that combines both the research and
    clinical aspects of healthcare, allowing it to include clinical
    consultation and correlation in its assessment of healthcare problems.
        Specific categories of AFIP's national readiness roles include:
        1. CBRNE (Chem/Bio/Radiation/Nuclear/Explosives) Role:
      --Development of ``fingerprint'' identification of CBRNE threats
            which would facilitate rapid identification and
            characterization of threats as well as mass screening of
            personnel who might have been exposed to such a threat agent.
      --Interaction with the Global Emerging Infection Surveillance System
            (GEISS), which is a linked global public health surveillance
            system that facilitates early detection of illnesses that could
            be the result of bioterrorism.
        2. Environmental Pathology: AFIP's unique capabilities in the area
    of environmental pathology are critical in assessment of heavy metals
    toxicity, chemical threats, and radiation illness, all of which are
    potential terrorist weapons.
        3. Armed Forces Medical Examiner (AFME): The AFME provides support
    to armed forces throughout the world. The staff in the Office of the
    Armed Forces Medical Examiner (OAFME) is routinely called upon to
    investigate deaths of military personnel whether or not these incidents
    are combat related. The staff was also called upon to investigate the
    deaths that occurred at the Pentagon and in Pennsylvania as a result of
    the terrorist attacks of September 11, 2001.
        The facilities at AFIP are inadequate for some of the examinations
    that are required in support of national security. AFIP's Bio Safety
    Level 3 laboratory is currently undergoing upgrades to meet the strict
    standards of the CDC's Laboratory Response Network for the handling of
    potential biothreat agents.
        Question. Why does the fiscal year 2003 budget not include funding
    for new AFIP facilities if the need is so great and long overdue?
        Answer. The Department is currently evaluating options to address
    this long-term need. In the meantime, efforts are ongoing to upgrade
    the existing facility using Defense Health Program Operations and
    Maintenance funds. While a series of repair projects to the existing
    laboratory enables continuation of mission functions, it does not solve
    the long-term problem of providing AFIP with modern and sufficient
    laboratory space.
        Question. If the AFIP is not high enough on the Department of
    Defense's (DOD) priority list for funding, is there merit to
    considering transferring the responsibility of the AFIP, or certain
    functions of the agency, from the DOD to another federal office or
    agency? If so, what agencies might be best suited to assume AFIP
    functions? Which AFIP functions should remain at DOD?
        Answer. Throughout its long history, AFIP has provided outstanding
    support to DOD, other federal agencies, and to civilian medicine
    throughout the world. One of the main reasons that AFIP has been able
    to succeed at its mission is because of the institutional,
    intellectual, and scientific synergy that characterizes the
    organization. AFIP's success is attributed to its three integrated
    missions of research, clinical medicine, and education. AFIP also has a
    tremendously rich repository of rare and interesting cases that allows
    current pathologists to draw on the expertise of those before them.
        Regardless of AFIP's organizational placement, DOD will continue to
    require its services, such as support from the Office of the Armed
    Forces Medical Examiner. At this time the Department is evaluating
    options for the future of AFIP. A study that is scheduled for
    completion in Fall 2002 will assist us in clearly understanding both
    the future requirements for AFIP and alternatives for its financing and
    operation.
        Question. Is it imperative that all functions of the AFIP be in one
    location?
        Answer. It is not imperative that all functions of the AFIP be in
    one physical structure. The current requirement cites a need for a new
    research/clinical facility of 420,000 square feet, the renovation of
    the existing building (Building 54), and continued use of Building 53
    and the two AFIP tissue repositories at Forest Glen Annex. This plan
    consolidates AFIP functions on the Walter Reed Army Medical Center
    (WRAMC) campus and the Forest Glen annex.
        The bulk of the Institute's consultation (100,000 cases annually),
    education (500,000 hours), and research requires multiple components of
    the Institute for coordination and mission completion. Before a
    diagnosis is rendered, several departments review most AFIP cases. The
    Institute by nature is a synergistic organization. It is possible, but
    less than optimal, for certain functions, such as the DNA Repository
    and Tissue Repository, to be remotely located. This geographic
    separation would be at a cost in terms of timely mission response;
    additional site management, security, force protection and staffing;
    increased costs associated with specimen shipping and handling; and
    increased risk to specimen damage during transit.
        Geographic proximity to collaborative partners provides a valuable
    clinical and research nexus for AFIP. Partners include the National
    Institutes of Health, National Library of Medicine, Uniformed Services
    University of the Health Sciences, Walter Reed Army Institute of
    Research, National Naval Medical Center, Walter Reed Army Medical
    Center (WRAMC), George Washington, Georgetown, Howard, and American
    Universities. Their criteria for one location include:
      --Immediate need to consolidate operations into a single complex or
            closely located compounds
      --Proximity to other federal medical research organizations and
            collaborative partners
      --Availability of world-renowned professional staff
      --Relative costs incurred by relocating to other sites.
        Question. The report accompanying the fiscal year 2002 Military
    Construction Appropriations Bill includes language directing the DOD to
    undertake an assessment of alternate locations in lower cost regions
    within the Mid-Atlantic area. In conducting its assessment, DOD was
    instructed to take into account regional facilities that could provide
    research, medical, DNA analysis, forensic, and biometric support to the
    Institute. What is the status of the Army's efforts to satisfy this
    language? What sites have been examined thus far and what sites will be
    examined in the future? Please provide an assessment of each site
    reviewed, along with the associated estimated costs, that comport with
    the fiscal year 2002 language.
        Answer. Following direction in the committee report to undertake an
    assessment of alternate locations in the Mid-Atlantic area, the
    Department received additional communication from Senator Robert C.
    Byrd, Chairman of the Committee on Appropriations, requesting
    consideration of other locations in West Virginia to determine the
    feasibility of relocating AFIP. Four locations were visited by members
    of Senator Byrd's staff, the Army staff, the U.S. Army Health Facility
    Planning Agency (HFPA), and the Armed Forces Institute of Pathology
    (AFIP). These locations were determined to have potential as relocation
    sites for AFIP. Estimated construction cost for relocating to West
    Virginia was in excess of $505 million due to the requirement to
    provide not only the laboratory and its supporting facilities but all
    requisite support facilities on an installation.
        Sites with facilities capable of providing research, medical, DNA
    analysis, forensic, and biometric support to AFIP, located in the Mid-
    Atlantic region from New York to Georgia, are also being assessed. A
    report is being completed by the Office of the Assistant Secretary of
    Defense (Health Affairs) that complies with the direction to undertake
    an assessment of alternate locations. This report will be forwarded to
    the committee upon completion.
        Question. In fiscal year 2002, $25 million was provided for certain
    renovations at the current AFIP facilities. Please describe how these
    funds are to be expended. Will these renovations eliminate the need for
    new facilities for the AFIP, or is the funding intended as a Band-Aid
    solution? Do the renovations necessitate the relocation of AFIP
    employees to alternate site? If so, how many will be relocated, and to
    where? Will these relocations be temporary or permanent?
        Answer. These funds will be utilized to renovate a portion of the
    building for AFIP's Department of Microbiology, which focuses on the
    development of rapid molecular diagnostics for bio-warfare agents. The
    renovation will include the construction of an additional Bio-safety
    Level 3 laboratory suite. In addition, renovations will provide
    laboratories for the remainder of the Division of Geographic Infectious
    and Parasitic Diseases Pathology and the Departments of Environmental
    and Toxicologic Pathology and Cardiovascular Pathology.
        During the anticipated two years of renovation, AFIP plans to use
    temporary laboratory and administrative spaces within its facilities on
    the Walter Reed campus and at off-site locations. Current transition
    planning calls for approximately 150 personnel to occupy temporary and
    leased laboratory and support facilities in Maryland during this
    timeframe. While the investment in repair is significant, the
    Department acknowledges that repair does not obviate the future need
    for a new facility.
        Question. In a letter dated February 1, 2002, the Secretary of the
    Army informed me that ``Questions regarding facility solutions for the
    AFIP have led to a comprehensive analysis by the DOD of the best and
    future structure and functions of the Institute. Once this study is
    completed, the precise long-term facility needs of the AFIP can be
    addressed.'' When will this study be completed and do you believe that
    this study will yield results given that the previous four studies did
    not? I would like to be kept informed of developments related to the
    AFIP, and I would appreciate receiving a copy of the study, which I
    hope can be expedited, to assist in determining ways in which the
    Appropriations Committee might be able to help the AFIP achieve its
    goals.
        Answer. The Department is currently conducting an organizational
    and functional assessment of the AFIP. The study is scheduled for
    completion in fall 2002. This work will provide an assessment of AFIP's
    mission, essential functional requirements, financial operations, and
    mission staffing. It will allow the Department to better define what
    new or recapitalized facilities are required to support AFIP's mission.
    A copy of these findings will be provided to the committee upon
    completion of the study.
        Question. Does the AFIP need to be co-located with the Walter Reed
    Army Medical Center? If so, please explain why?
        Answer. Long-standing associations with all federal medicine
    resources in Washington, D.C. and with many civilian medicine
    activities make the Walter Reed campus and the current support provided
    by the Army a natural fit for AFIP. The Walter Reed Army Medical Center
    (WRAMC) and its campus are the flagship of Army Medicine. Its long
    history is linked to both the Walter Reed Army Institute of Research
    (WRAIR) and the AFIP. These three institutions comprise part of a
    synergistic federal medical reference center and campus. The AFIP has
    been on the grounds since 1955 and has enjoyed a consultative,
    educational, and research relationship with the hospital since 1909.
        There are five approved American College of Graduate Medical
    Education (ACGME) pathology subspecialty residencies at AFIP: forensic
    pathology, dermatopathology, hematopathology, neuropathology and
    pulmonary. These support their respective clinical services of
    dermatology, hematology, neurology and psychiatry, and pulmonary
    medicine. Many WRAMC clinical specialties, particularly surgical
    subspecialties, use AFIP resources extensively for clinical rotations,
    clinicopathology correlations, applied research, and education/training
    needs. The AFIP is also part of the pathology residency program at
    WRAMC and National Naval Medical Center (NNMC)-Bethesda, with important
    rotations in telemedicine and molecular diagnostics as well as system-
    based pathology services.
        The AFIP has unique ties to clinical specialties like urology and
    gynecology. In the Department of Urology, the AFIP provides pathology
    services for the Congressionally directed Prostate Disease Research
    Center and the Nephrology Service (kidney biopsies). The Institute also
    supports WRAMC's Comprehensive Breast Cancer Program as well as the
    U.S. Military Cancer Institute. Specialized AFIP tissue registries,
    such as the Persian Gulf Illness (PGI) registry, are linked to WRAMC
    clinical services specifically in gastroenterology (Hepatitis C),
    urology (sperm morphology), and the Persian Gulf Illness (PGI)
    evaluation center. Continuing investigations in PGI linked to
    infectious processes are pursued with the AFIP's Department of
    Geographic and Infectious Parasitic Diseases. The AFIP also maintains a
    Laboratory Animal Medicine facility and actively supports WRAMC
    approved research protocols, many of which requiring pathology support.
        Many AFIP staff, particularly military, holds appointments and
    clinical privileges at WRAMC and NNMC. AFIP staff provides on-going
    clinical, pathology and radiology services. Medical students,
    pathology, and clinical service residents and fellows rotate through
    specialized system-based departments of the AFIP.
                                     ______

                   Questions Submitted by Senator Ted Stevens
                                    tricare
        Question. Secretary Winkenwerder, I understand that the Department
    of Defense may be reducing the number of TRICARE regions from twelve to
    as few as three. Would you please explain the logic of this
    consolidation of regions?
        Answer. By realigning the regional structure, we look to reduce
    TRICARE administration burdens by reducing the number of contract
    change orders, eliminating redundant contractor overhead costs, and
    decreasing the number of contracts to monitor. We are also looking at
    minimizing disruption of the beneficiary and provider communities
    during transitions between regions; and lessening jurisdictional issues
    and regional differences.
        We expect to finish our analysis and decide on whether or not to
    change the current number of TRICARE regions prior to the end of the
    fiscal year.
        Question. What is the Department of Defense's time frame for
    solicitation of next generation TRICARE contracts? When do you
    anticipate beginning your consultations with Congress on this issue?
        Answer. We do not have definite timelines for the healthcare/admin
    RFPs at this time as we are still in the process of developing
    requirements. In addition, significant contract related decisions have
    not been finalized. Once these key decisions have been made we will be
    able to develop timelines.
        We have developed a communication plan that incorporates contact
    with all stakeholders in a logical pattern, and at an appropriate
    level, so no one is left out of the decisional, coordination, or
    information processes associated with such a high interest Department
    endeavor. We have opted to be as open as our procurement security plan
    allows. Attached is an illustration of how we intend to execute our
    plan.
        Question. I understand that you intend to remove the pharmacy
    benefit from managed care support contracts and begin purchasing
    pharmacy benefits through a national stand-alone contract. How much
    money do you anticipate that this action will save? How did you arrive
    at your calculations?
        Answer. The rationale behind consolidating the current multiple
    managed care support retail network contracts under one contract is
    based on management and control principles not possible under the
    current scenario. Advantages of consolidation include reduced
    administrative costs through centralized pharmacy claims processing and
    customer service. It will also resolve portability problems in the
    current retail network benefit. Consolidation will permit uniformity in
    policy implementation by reducing the risk of multiple interpretation
    and will allow centralized government controlled formulary management.
    Disadvantages to the government are few and relate primarily to the
    risk of relying on a single contractor.
        Question. What do you believe the greatest advantage restructuring
    of the pharmacy program will be?
        Answer. The greatest advantage will be the unprecedented capability
    of providing management oversight to what has previously been a
    fragmented, disparate benefit by using tools such as the Pharmacy Data
    Transaction Service and the Uniform Formulary provided by previous
    legislation. A streamlined, integrated operational structure will
    enable TMA to effectively manage the benefit that currently operates in
    a multi-layered, inefficient configuration proven to consume
    significant resources in both time and money. Most importantly it
    enables DOD to structure a pharmacy program to uniformly provide
    appropriate drug therapy to meet patients' clinical needs in an
    effective, efficient, and fiscally responsible manner.
        Question. The fiscal year 2002 Senate Appropriations report
    included language which urges the President to appoint a multi-agency,
    secretarial level task force as part of the National Prion Research
    Project. To your knowledge, has this task force been appointed, and if
    so, who are the members?
        Answer. To my knowledge, the President has not appointed this task
    force. However, the Secretary of Health and Human Services (HHS) has
    established an interdepartmental Steering Committee for Bovine
    Spongiform Encephalopathy/Transmissible Spongiform Encephalopathy (BSE/
    TSE) Affairs. The committee assures ongoing coordination between
    agencies and integrates contingency planning in case BSE or Variant
    Creatzfeldt-Jakob Disease (vCJD) is found in the United States.
    Moreover, the committee identifies and responds to potential BSE and
    vCJD vulnerabilities in the United States. Finally, it is responsible
    for coordinating the risk communication plans of the Federal Drug
    Administration (FDA), CDC, NIH, USDA, Customs Service, State and
    Defense departments, State Association of Feed Control Officials, the
    National Association of State Departments of Agriculture and the White
    House Office of Science and Technology Policy.
                                     ______

                Questions Submitted by Senator Pete V. Domenici
                            joint venture hospitals
        Question. Assistant Secretary Winkenwerder, as I noted in my
    opening remarks, the idea of joint civilian/military hospitals has
    thrived in the Air Force community of Alamogordo, New Mexico.
        Not only has this concept produced significant cost savings, it has
    led to increased efficiency in the administration of services, as well.
        Does the Department of Defense have a plan to seek broader
    application of this joint venture arrangement in military communities
    throughout the country?
        Answer. The Department of Defense has included in its DOD/VA
    sharing objectives a plan to create a joint planning capability to
    assist in assessing our mutual needs for the future. This would include
    determining if and where joint ventures would be effective in the
    future. Possible joint ventures are being reviewed by one of the DOD/VA
    Executive Council Work Groups on joint utilization of facilities.
        Question. Would it make sense to assemble a set of criteria against
    which hospitals in military communities could be assessed for
    determining whether such joint ventures might work for them?
        Answer. Yes. At the very least, DOD should include the VA in
    regional business plan development and long term facility planning. DOD
    capabilities should also be included in the VA Capital Asset
    Realignment for Enhanced Services (CARES) Program process.
        Question. Could you provide me with an update on the status of the
    DOD-VA hospital partnership at Kirtland Air Force Base? Do you foresee
    any significant changes in the working arrangement that exists between
    these agencies?
        Answer. We consider the federal facility at Kirtland AFB in
    Albuquerque, New Mexico, to be our most mature joint venture. This
    joint venture, which has been in full operation since 1987, has adapted
    itself to dramatically changing circumstances associated with the Air
    Force's personnel reductions. Originally, the Air Force operated a full
    wing in the federal facility, as well as a health care clinic and a
    dental clinic adjacent to the facility. Personnel reductions left it
    unable to staff its own medical unit in the hospital. Both sides of the
    joint venture overcame that situation and a healthy relationship exists
    with the Air Force buying its beds from VA. The ability of both sides
    to adapt to such changes is testimony to the quality of the leadership
    and the sound business relationship that is present at the federal
    facility at Kirtland AFB. A number of recent visitors there have
    commented on the positive climate that exists there.
                               retention/tricare
        Question. Assistant Secretary, I noted in your testimony that
    recruitment of Military Medical Personnel is one of the top priorities
    you have listed for transforming the Military Health System into a
    first-rate system.
        It has come to my attention that one of the military hospitals in
    my state has been trying to recruit a neurosurgeon for nearly one-and-
    a-half years, to no avail.
        Could you speak to this problem in general terms?
        Answer. The Air Force operates medical treatment facilities in New
    Mexico. The Air Force indicates they are not recruiting for a
    neurosurgeon for their New Mexico facilities. However, the Veterans
    Administration Hospital in Albuquerque indicates they have been
    actively recruiting for a neurosurgeon for over a year.
        The Military Health System (MHS) depends on clinically competent,
    highly qualified, professionally satisfied military medical personnel.
    In developing the MHS human resource plan, we have begun several
    initiatives to analyze retention rates and the reasons medical
    professionals choose to stay in or leave the Service.
        At the request of Congress, the Department of Defense commissioned
    a study by the Center for Naval Analyses (CNA) to examine pay gaps,
    retention projections, and the relationship between pay and retention.
    We acknowledge the significance of the findings. The CNA study shows a
    relationship between pay and retention--although it points out that
    there are factors other than pay that affect retention. A typical
    military physician--for example, a general surgeon with 7 years of
    service--receives one-half of his or her income in incentive pays.
    While base pay and other components which make up the remaining half of
    total compensation have been increasing recently, the incentive pays
    have not kept up with changes in the civilian community. Several
    physician specialties are at their maximum rates allowed under current
    authority. CNA estimates the pay gap for a surgeon is currently
    $137,000, or 47 percent. The challenges of military service can be
    unique and tremendously rewarding personally and professionally. We
    know that financial compensation is not the sole determinant of a
    medical professional's decision about whether to enter or remain in the
    Service. We can never expect to close the pay gap completely. However,
    we are concerned by the CNA findings and are analyzing them now.
    Incentives to optimize our ability to shape military medical staff size
    and mix with appropriate experience levels are critical to meeting our
    mission requirements.
        Question. Secondly, please give us a sense of how you will tackle
    this problem? What are the prospects for success?
        Answer. The Department is currently evaluating the leveling of
    specialties where imbalances exist between Services' manning levels. We
    are expanding our use of the Health Professions Loan Repayment Program
    (HPLRP) to include using it to retain highly qualified professionals
    who already serve on active duty. Use is currently limited to those who
    did not participate in the Armed Forces' Health Professions'
    Scholarship/Financial Assistance Program--removal of this prohibition
    would improve the program's effectiveness as a retention incentive.
        The Department is maximizing use of currently authorized incentives
    in our efforts to optimize the accession and retention of appropriate
    personnel to meet mission requirements. We agree with the Center for
    Naval Analyses' finding that it is important to simplify the health
    professions' incentives authority to place more management authority
    within the Department. The rapid pace of change in the civilian
    healthcare personnel market, which competes directly with our military
    accession and retention initiatives, requires flexibility in the
    management of incentives for optimum effectiveness.
                                     ______

              Questions Submitted by Senator Kay Bailey Hutchison
                         force health protection (fhp)
        Question. After our experience in the Persian Gulf, it is clear
    that we have a ways to go when it comes to force health protection.
    When I reviewed your statement, I was pleased to read of the new and
    innovative programs that have been initiated. However, I am not so sure
    that we are conducting enough research. It has been over ten years
    since Desert Storm, and yet we still have to convene special research
    advisory committees to try to get to the bottom of Gulf War Illness.
    Would you please highlight DOD's current efforts in this area?
        Answer. Gulf War veterans who suffer from fatigue, memory loss,
    muscle and joint pain, difficulty sleeping and a myriad of other
    symptoms need effective treatments. I agree that research has not yet
    provided complete and satisfactory answers for those of our Gulf War
    veterans with chronic multi-symptom illnesses. There are, however, many
    excellent federal and private sector medical research facilities
    throughout this country, working to understand the chemistry,
    physiology, causes and possible treatments of these frustrating chronic
    multi-symptom illnesses.
        The Department of Defense remains actively involved with the
    Departments of Veterans Affairs (VA) and Health and Human Services
    (HHS) in funding a comprehensive spectrum of research proposals. The
    proposals have been given high marks for scientific merit by
    independent scientific review panels and complement or complete
    research which has already been funded and initiated and/or finished.
    Currently that program is funding studies on low level chemical
    exposures relevant to Gulf War veterans and is initiating new projects
    in risk communication research, neurobiology of stress, immune
    function, deployment toxicology methods and force health protection
    epidemiology. Moreover, continued programs on health behaviors
    intervention research are promising. The DOD Deployment Health Research
    Center is continuing work with the VA on the Millennium Cohort Study,
    the Recruit Assessment Program and the deployment health assessments.
    Finally, with money added by the Congress, peer-reviewed projects on
    Gulf War illnesses diagnostic criteria at the University of Texas
    Southwestern Medical Center and on comparative studies of chronic
    fatigue syndrome and fibromyalgia at Georgetown University are being
    negotiated for continued efforts. DOD is committed to continue support
    for a research program designed to assess and understand the health
    effects which have been recognized after the Gulf War and other
    military actions.
                                    tricare
        Question. I am growing very concerned about the increasing number
    of letters I am receiving from health professionals in Texas that have
    decided not to participate in TRICARE. What can we do to stem this
    tide? Do we need to look at reimbursement rates? How can the
    reimbursement process be accelerated?
        Answer. Over time, providers choose to participate or not
    participate. Our most recent data shows that Texas has an average
    participation rate of 97 percent. This is equal to the national average
    participation rate. The participation rate in Texas has remained fairly
    constant. It is noted that as some providers go from participating
    providers to non-participating providers others decide to participate
    with TRICARE. Although individual provider's participation status can
    change, the average participation rate for Texas has remained constant.
    The TRICARE networks in Texas continue to meet the program's standards
    with no deficiencies. TRICARE is not aware of any specific areas of the
    state where there is a participation problem either caused by
    reimbursement rates or some other factor.
        The relationship of DOD payment levels to Medicare's for
    institutional and professional health care services is central to the
    ongoing success of TRICARE. However, TRICARE beneficiary access to care
    is severely impaired in some locations because providers in remote
    areas refuse to become CHAMPUS authorized or participating providers
    and demand payment in advance from patients. Providers cite low
    reimbursement as their main rationale for denying access to care for
    our beneficiaries.
        Congress has given the Department the authority to adjust
    reimbursement rates to assure access to health care services for our
    active duty members and eligible beneficiaries. Improvements include
    the enactment of Fiscal Year 2000 National Defense Authorization Act
    (Section 716 authorizes higher provider reimbursement rates than
    normally allowable) and Fiscal Year 2001 National Defense Authorization
    Act (Section 757 authorizes the establishment of special locality-based
    reimbursement rates). These provisions allow the Department to increase
    reimbursement rates to the market level for specific services for
    providers not in the network, and pay a provider up to 115 percent of
    TRICARE Maximum Allowable Charges (TMAC) to be in a network. The final
    rule implementing these provisions was published in the Federal
    Register on August 28, 2001. TMA is considering requests on a case-by-
    case basis.
                 department of health and human services (hhs)
        Question. I am aware that there is great concern in the Pentagon
    regarding the threat posed by biological weapons. Many in the Congress
    had anticipated that DOD's fiscal year 2003 budget submission would
    contain the down payment for the construction of a government-owned,
    contractor-operated (GOCO) vaccine production facility. Regrettably,
    the Department's initiative has stalled. Instead of measurable
    progress, I understand DOD has now convinced HHS to consider paying for
    the facility. Do you believe that HHS is going to build a vaccine
    production facility whose laboratory space would be dominated by the
    production of DOD-specific vaccines?
        Answer. DOD and HHS are continuing to work together identifying
    requirements for vaccines that address unique military requirements and
    the larger need for public heath vaccines. Each Department will need to
    identify resources necessary to meet their needs. If a dedicated
    facility is needed to meet national requirements, it is expected that
    multiple agencies will share the cost to construct and operate such a
    facility.
                               dod/va cooperation
        Question. What measurable progress has been made in terms of DOD/VA
    cooperation?
        Answer. The Deputy Secretary of Veterans Affairs, Dr. MacKay, and
    the Under Secretary of Defense for Personnel and Readiness, Dr. Chu,
    have developed an excellent cooperative and collaborative relationship.
    They have established two councils, one for health matters and another
    for benefits. The health council is co-chaired by Dr. Roswell and
    myself. The members of the council are the senior health care
    leadership within the respective Departments. We meet every other
    month. We meet with Dr. MacKay and Dr. Chu on a quarterly basis to
    advise them of our progress in accomplishing their initiatives. This
    unquestionably demonstrates our mutual commitment to improving inter-
    departmental cooperation at all levels. Moreover, I have listed some
    outcomes of our mutual commitment below:
      --Community-Based Clinics (CBOC) Program.--VA Medical Centers (VAMC)
            occupy clinic space provided by military facilities as a part
            of VA's CBOC program. For example, Louisville, Kentucky, VA
            Medical Center, manages three of Fort Knox's four primary care
            clinics. VA provides a broad range of services to support these
            clinics including: primary care, urology, orthopedics, women's
            clinic, podiatry, audiology, psychiatric, MRI and other
            radiology, medical library and orthotic laboratory services.
            VA's clinic at Fort Knox recorded over 10,000 unique visits for
            the year. The Army provides space for the clinic, provides
            equipment, and prescription services. The VAMC is approximately
            47 miles from Fort Knox.
      --Allergen Extracts.--The Walter Reed/U.S. Army Allergen Extract
            Laboratory, Washington, D.C., (USACAEL) provides delivery of
            diagnostic and therapeutic allergen extracts to 29 VA medical
            centers and outpatient allergy clinics. This agreement
            facilitates the treatment of 1,800 veterans per year with
            allergy injection therapy for allergic diseases such as insect
            venom anaphylaxis, asthma, and allergic rhinitis. In addition,
            it is estimated that, over 18,000 veterans are evaluated for
            allergic diseases annually using these high quality diagnostic
            allergen extracts. VA covers the costs of personnel, supplies,
            and equipment. VA benefits from the high quality services of
            USACAEL, which is one of the largest suppliers of therapeutic
            and diagnostic allergen extracts in the world, and from the
            economies of scale offered by participation in the program.
                                     ______

                 Questions Submitted to General James B. Peake
                Questions Submitted by Senator Daniel K. Inouye
                     third party collection program (tpcp)
        Question. The military treatment facilities (MTFs) bill third party
    insurance companies for those beneficiaries who carry other health
    insurance. What are the Services doing to ensure that all reimbursable
    care is being billed?
        Answer. The Army Medical Department (AMEDD) manages the most
    successful TPCP in the Department of Defense (DOD), collecting nearly
    45 percent of the total DOD TPCP collections. For fiscal year 2001, we
    collected a greater percentage of the amount billed (43 percent) than
    DOD as a whole (35 percent), than the Air Force (31 percent), and than
    the Navy (30 percent). Variability of this metric across our like MTFs
    for fiscal year 2001, expressed as a range, is as follows: Medical
    Centers, 33 to 41 percent; large Medical Department Activities
    (MEDDACs), 30 to 51 percent; MEDDACs, 24 to 52 percent; OCONUS
    inpatient MTFs, 21 to 52 percent; and Health Clinics, 24 to 45 percent.
    Continuous improvement of the program includes the following actions in
    the concerted effort to bill for all reimbursable care.
        All Services will be transitioning from an all-inclusive to an
    itemized billing methodology for outpatient services by the end of
    fiscal year 2002, and for inpatient services by the end of fiscal year
    2003. The shift to an itemized billing methodology will increase
    acceptance of our claims by insurers through meeting their edit
    requirements and will facilitate full implementation of electronic
    billing. The result will be an increase in collections as a percent of
    amount billed, and a reduction in payment turn-around time, improving
    cash flow.
        With the transition to itemized billing, all Services will be
    standardizing other health insurance (OHI) and insurance company names
    and addresses between the Composite Health Care System and the Third
    Party Outpatient Collection System. Standardization of this information
    between automation systems ensures accuracy, leading to more efficient
    and effective billing, increasing collections.
        Implementing lessons learned from the TPCP Business Process
    Reengineering (BPR) demonstration conducted in TRICARE Region 3,
    resulting in improved identification of OHI, facilitating increased
    billing and collections. The AMEDD Uniform Business Office (UBO) has
    disseminated to MTFs performance measurement standards for outpatient
    itemized billing, which are based on the TPCP BPR metrics.
        Requiring development and implementation of MTF UBO compliance
    plans, which include procedures to ensure compliance with DOD and
    industry coding and billing standards.
        Documenting and disseminating best business practices identified by
    MTFs for improving billing and collections. A few of our other MTFs
    that have identified these best business practices, that we have
    disseminated for consideration by other MTFs, are: William Beaumont
    Army Medical Center (placing an employee or volunteer in the outpatient
    pharmacy to obtain/update insurance information from beneficiaries
    while they wait for their prescriptions to be filled); Irwin Army
    Community Hospital (mass mailing of the TPCP Insurance Information form
    to all known non-active duty beneficiaries in the catchment area,
    requesting they fill it out and return); Walter Reed Army Medical
    Center (request from the local Civilian Personnel Office a list of
    civilian employees that are also retirees/family members enrolled in
    the Federal Employees Health Benefits Program).
                           facility capacity and cost
        Question. Is data available on the number of instances in which
    beneficiaries have not been able to obtain care at a Medical Treatment
    Facility (MTF) and were referred to the civilian network due to medical
    personnel shortages. If so, what additional costs were incurred.
        Answer. While our data systems do not allow us to query referrals
    caused specifically by manpower shortages, they do allow us to estimate
    the cost of insufficient capacity at our MTFs. In fiscal year 2001, 9
    percent of the outpatient visits and 15 percent of the inpatient
    dispositions required by patients enrolled to Army MTFs were sent to
    the network for a total cost paid of $251,696,358.
                                     ______

                 Questions Submitted by Senator Robert C. Byrd
                         outcomes management initiative
        Question. General Peake, in the Fiscal Year 2001 Defense
    Appropriations Act and the Fiscal Year 2001 Supplemental Appropriations
    Act, the Committee on Appropriations added, with my support and the
    concurrence of Senator Stevens, a total of $26 million for the Walter
    Reed Army Medical Center to conduct an outcomes management
    demonstration project. Please provide a status report of the Outcomes
    Management Program (OMP) at Walter Reed.
        Answer. The Outcomes Management Program within the Walter Reed
    Healthcare System (WRHCS) has been successfully stood up and is now
    making its presence fully felt across that system. Almost 20,000
    patient surveys have been completed and over 27,000 chronic disease
    management scorecards established since the inception of this program.
    As part of its objective to optimize clinician's productivity, in
    excess of 150 contract healthcare providers and support personnel have
    been deployed throughout the system as well. We have reengineered our
    primary care process within the WRHCS by redefining the role of each
    member of the primary healthcare team to ensure a coordinated effort to
    the care of each individual patient. The data shows the quality of the
    care provided has improved by almost any measure since Outcomes
    Management began. Some examples:
      --The average Hemoglobin A1c of Diabetes patients, an index of blood
            sugar control, has improved with a decrease of 9 percent, from
            8.3 percent to 7.5 percent.
      --Over 97 percent of our congestive heart failure patients now
            receive optimal therapeutic agent care--beta blockers,
            angiotensin converting enzyme inhibitors and furosemide in
            appropriate dosage--compared with a national average of 65
            percent.
      --Emergency room visits by Diabetes patients have declined 18 percent
            between fiscal year 2000 and fiscal year 2001.
      --Across the board improvements in compliance with recommended
            diagnostic and preventative health maintenance testing,
            consistently exceeding national standards or Department of
            Veterans Affairs performance levels.
        Further evidence of improvement on healthcare operations is the
    significant increases in the variety and volume of patients being
    treated within the WRHCS. For example, Walter Reed Army Medical Center
    alone has seen an increase in outpatient primary care visits of 16
    percent (same period fiscal year 2002 over fiscal year 2001) while
    ambulatory procedure visits have increased 4.5 percent and monthly
    outpatient specialty care clinic visits are up 4.2 percent over the
    base year.
        Question. I am advised that this project improves the care of
    military health beneficiaries and has grown in popularity with patients
    and staff. How does OM help to fulfill the promises made by the
    Military Healthcare System (MHS)?
        Answer. The first and most important obligation we have to our
    beneficiaries is that each individual will receive the best healthcare
    possible in whatever setting that care is received within our system.
    This includes our military treatment facilities as well as within our
    TRICARE network. OMI plays a significant role in our strategic planning
    to insure we meet that promise. In optimizing our IM/IT resources to
    increase the productivity of the healthcare provider and the quality of
    the care they provide. This is accomplished by presenting a constantly
    updated baseline or standard of care to which our system must practice
    and then arraying patient specific care data for providers allowing
    them to make better, more timely clinical decisions for their patients.
    In short, OMI will facilitate the Army Medical Department measuring the
    treatment provided to each patient with a chronic disease, against a
    nationally recognized standard of care in order to evaluate the quality
    and efficiency of the care provided within its treatment facilities.
        Question. Please provide information and significant milestone
    events for the record regarding this Congressional initiative.
        Answer. The Outcomes Management Program within the Walter Reed
    Healthcare System (WRHCS) has been successfully stood up and is now
    making its presence fully felt across that system. Almost 20,000
    patient surveys have been completed and over 27,000 chronic disease
    management scorecards established since the inception of this program.
    As part of its objective to optimize clinician's productivity, in
    excess of 150 contract healthcare providers and support personnel have
    been deployed throughout the system as well. We have reengineered our
    primary care process within the WRHCS by redefining the role of each
    member of the primary healthcare team to ensure a coordinated effort to
    the care of each individual patient. The data shows the quality of the
    care provided has improved by almost any measure since Outcomes
    Management began. Some examples:
      --The average Hemoglobin A1c of Diabetes patients, an index of blood
            sugar control, has improved with a decrease of 9 percent, from
            8.3 percent to 7.5 percent.
      --Over 97 percent of our congestive heart failure patients now
            receive optimal therapeutic agent care--beta blockers,
            angiotensin converting enzyme inhibitors and furosemide in
            appropriate dosage--compared with a national average of 65
            percent.
      --Emergency room visits by Diabetes patients have declined 18 percent
            between fiscal year 2000 and fiscal year 2001.
      --Across the board improvements in compliance with recommended
            diagnostic and preventative health maintenance testing,
            consistently exceeding national standards or Department of
            Veterans Affairs performance levels.
        Further evidence of improvement on healthcare operations is the
    significant increases in the variety and volume of patients being
    treated within the WRHCS. For example, Walter Reed Army Medical Center
    alone has seen an increase in outpatient primary care visits of 16
    percent (same period fiscal year 2002 over fiscal year 2001) while
    ambulatory procedure visits have increased 4.5 percent and monthly
    outpatient specialty care clinic visits are up 4.2 percent over the
    base year.
        Question. Is this program considered worthwhile and being expanded
    outside the Walter Reed Health Care System?
        Answer. Given the proper resourcing, the Outcomes Management
    program now being developed within the Walter Reed Healthcare System
    will serve as a template for the Army Medical Department and the
    Military Health System as a whole. We expect it to be a major component
    of our efforts at leveraging IM/IT assets to improve care, reducing
    long-term costs for chronic disease, and fully optimizing our
    healthcare resources. We are currently working to integrate the
    fielding of OMI with other AMEDD and MHS IM/IT initiatives and hope to
    complete that work soon. The current fielding plan now being worked
    during:
        Fiscal year 2002: The National Capital Region. Complete fielding
    and training to all designated medical units within the area.
        Fiscal year 2003: Fort Bragg, NC; Madigan Army Medical Center,
    Tacoma Washington; Fort Greely U.S. Army Health Clinic and Community
    Hospital, Fort Wainwright, AK; Elmendorf AFB Medical Facility, AK.
        Fiscal year 2004: Fort Knox, KY; Fort Eustis, VA; West Point, NY;
    Fort Lee, VA; Fort Monmouth, NJ.
        Question. What level of funding is necessary to sustain the program
    through fiscal year 2003?
        Answer. To sustain the program within the Walter Reed Health Care
    System, continue the expansion of the clinical optimization strategy,
    execute the current fielding plan to new facilities in fiscal year 2003
    and make identified improvements and modifications to the OMI software
    package expected to be required as the system expands rapidly through
    the fielding schedule and carry out technology transfer/mentoring
    initiative with a non-federal sector entity, $12 million to $16 million
    in funding will be required by the Outcomes Management Program in
    fiscal year 2003.
        Clinical and administrative personnel will account for
    approximately 70 percent of the cost of the program with equipment
    accounting for 25 percent and travel, supplies, and software license
    fees for the remainder.
        Question. In as much as this program appears to be highly
    successful, when do you anticipate that it will receive a Military
    Healthcare System funding stream?
        Answer. Line item funding for the Outcomes Management at Walter
    Reed is on track to be included within the fiscal year 2004 to 2009
    POM.
        Question. When will policy be implemented to ensure expansion of
    this program outside the Walter Reed Health Care System?
        Answer. Given the proper resourcing, the Outcomes Management
    program now being developed within the Walter Reed Healthcare System
    will serve as a template for the Army Medical Department and the
    Military Health System as a whole. We expect it to be a major component
    of our efforts at leveraging IM/IT assets to improve care, reducing
    long-term costs for chronic disease, and fully optimizing our
    healthcare resources. We are currently working to integrate the
    fielding of OMI with other AMEDD and MHS IM/IT initiatives and hope to
    complete that work soon. The current fielding plan now being worked
    during:
        Fiscal year 2002: The National Capital Region. Complete fielding
    and training to all designated medical units within the area.
        Fiscal year 2003: Fort Bragg, NC; Madigan Army Medical Center,
    Tacoma Washington; Fort Greely U.S. Army Health Clinic and Community
    Hospital, Fort Wainwright, AK; Elmendorf AFB Medical Facility, AK.
        Fiscal year 2004: Fort Knox, KY; Fort Eustis, Va; West Point, NY;
    Fort Lee, VA; Fort Monmouth, NJ
        Question. I am advised that the Outcomes Management technology is
    proving to be effective in the military environment. Would it be
    possible for the Department to extend this technology to support a
    field trial to medically underserved areas that have low income, but
    high disease rates?
        Answer. Yes Sir, I believe we could. It would have to be somewhat
    limited in scope and duration but I think this work would be of great
    assistance to healthcare systems that care for dispersed, isolated and
    medically underserved populations. Authority for this kind of effort
    would also have to be defined but given that authority exists, and that
    a willing and able team could be assembled, this definitely could and
    should be done.
        As I mentioned earlier, the OMI facilitates quality as well as
    efficiency gains. Providers that are isolated by topography and
    distance from medical resources and support would be well served by it.
    Once again I would say that to fully field and support a field trial of
    this type could cost between $3 million and $5 million annually
    depending on equipment, telecommunications, transportation, numbers of
    contracted medical and technical support personnel and of course the
    duration of the project. The Director of the OMI Program is prepared to
    meet with your staff to fully explore this if that is your intent.
        Question. How would you organize a successful field trial in a non-
    federal sector (such as a public health system) to ensure that the
    benefits of the investment Congress has made to date are widely
    disseminated?
        Answer. The success of the OM project is being shared with as large
    an audience as possible through the publishing of articles, individual
    and group presentations, and a demonstration site on the world wide
    web. We are also leveraging the investment by sharing the products and
    experience of this project with organizations within the Department of
    Health and Human Services tasked with supporting rural, underserved
    populations and with issues of medical quality and safety.
        Preliminary planning does indicate that a project of this type
    lasting three to five years and involving a sizable population could
    cost between $3 million and $5 million annually. It is difficult
    without a better understanding of such an endeavor to precisely lay an
    implementation plan. My staff is prepared to explore this further if
    that is your intent.
                                     ______

                   Questions Submitted by Senator Ted Stevens
                 life support for trauma and transport (lstat)
        Question. General Peake, as you are aware, the Committee has
    provided funding for the Life Support for Trauma and Transport (LSTAT)
    program in the Army procurement account. Could you comment briefly on
    the merits of this self-contained, life support system?
        Answer. The LSTAT program is of significant importance to the Army
    Medical Department as we support the Army Transformation Initiative.
    This spiral development program allows for its early use in qualified
    missions now and continues to refine the platform toward full spectrum
    battlefield requirements in the foreseeable future. Today, this FDA
    approved platform provides life-sustaining capability for National
    Guard search and rescue missions in Alaska as well as evacuation and
    inter-medical facility support in the Balkans. This support can be
    expanded with additional procurement of platforms. A post-September 11
    emerging mission includes the potential need for military response to
    terrorist attacks and the consequence management of generated patients,
    especially where civilian medical infrastructure is compromised or
    overwhelmed. Several Army Reserve hospital units are being equipped
    with Clinically Operational Equipment Sets (COES) over the next few
    years to assist in this mission, and LSTAT capabilities complement this
    action.
        Though important, these missions do not reflect the core AMEDD
    mission of providing support on the engaged battlefield. The LSTAT must
    reduce its weight, provide on-board oxygen generation and automated
    controls, and communicate within the Army information architecture to
    meet the challenges of the future Army Objective Force. So I must
    encourage the Congress to continue its support, not just in the
    procurement of LSTATs today, but equally important in its spiral
    development to the platform requirements necessary to meet the Chief of
    Staff's vision and our future battlefield needs.
                        national prion research project
        Question. General Peake, it is my understanding that peer review of
    the grant proposals for the National Prion Research Project will occur
    in December of 2002. When do you expect actual awards to be approved?
        Answer. The National Prion Research Project will be conducted using
    a two-tier (peer and programmatic) review process, as recommended by
    the National Academy of Sciences' Institute of Medicine. Peer
    (scientific) review will occur in November 2002. Programmatic Review
    will occur in February 2003. Programmatic Review funding
    recommendations will be aided by an Institute of Medicine report on the
    status of Prion research (to be delivered in mid-January 2003). Grants
    will begin to be awarded in March 2003, with all awards made by
    September 2003.
                                     ______

               Question Submitted by Senator Kay Bailey Hutchison
                 health professionals recruiting and retention
        Question. It's no secret that in order to provide quality medical
    care to our troops and their families, we must recruit and retain the
    very best and brightest health professionals. What can we in Congress
    do to make military service attractive to doctors and particularly
    nurses?
        Answer. The increasing demand for health care professionals and the
    robust nature of the civilian sector magnifies the differences in pay
    gap between the civilian and military sectors.
        The stark reality of today's recruitment market is that the Army
    Medical Department must buy the majority of its new accessions. Without
    robust student recruiting programs, supported by sufficient allocations
    properly funded, accessions will not be maintained at a level necessary
    to meet the current and future needs. Recent years have seen an ever-
    increasing requirement to utilize student scholarship programs to
    obtain the same number of accessions into the force annually.
        The retention of fully qualified, highly trained mature clinicians
    is of major concern to the Army Medical Department. As we continue to
    fact challenges and expensive solutions in the recruiting environment,
    it simply becomes cost effective to retain those we have trained and
    developed.
        A crucial factor in the retention of our clinical personnel is
    availability of various special pays which attempt to provide some
    degree of parity in compensation between our military health care
    providers and their civilian counterparts. While there have been many
    changes effecting the wages of civilian health care providers, the
    monetary ceiling for special pays has not been increased for the last
    ten years.
        Congress directed a study be conducted to evaluate the
    effectiveness of special pays on retention and evaluate the civilian
    pay gap for the health professions. The Center for Naval Analyses (CNA)
    report--Health Professions Retention-Accession Incentives Study
    (HPRAIS) was recently sent to Congress. The results indicate that the
    civilian pay gap is one of the major dissatisfiers of physicians, and
    it has similar effects on other health care professionals. The results
    support most of the content of initiatives being proposed by the
    Services and Health Affairs. Congress may assist by authorizing and
    appropriating increased special pay rates or cap authorizations, and
    legislating a redesigned incentives optimization program that will
    provide the Services with the flexible tools necessary to revive health
    professions retention and recruiting.
        Monetary incentives are not the sole factor evaluated when
    attempting to increase retention of the force. Issues of adequate
    facilities covered by adequate support staff to allow our clinicians to
    maximize their effectiveness are also crucial. Frustrations with
    inadequate or antiquated treatment environments coupled with the
    perception of spending excessive time to meet necessary administrative
    requirements will cause highly skilled and dedicated soldier clinicians
    to leave the service for the civilian sector.
        Lastly, we are concerned that the currently proposed Senate Bill
    1864 will further degrade the Services abilities to attract Registered
    Nurses. Consideration should be given to expanding the Bill to include
    DOD. In particular, DOD should be included with the proposal to
    establish the National Commission on the Recruitment and Retention of
    Nurses.
                                     ______

                    Questions Submitted to Michael L. Cowan
                Questions Submitted by Senator Daniel K. Inouye
        Question. The military treatment facilities (MTF's) bill third
    party insurance companies for those beneficiaries who carry other
    health insurance. What are the Services doing to ensure that all
    reimbursable care is being billed?
        Answer. In December of 2001, all Navy MTFs were tasked with
    implementing a Business Process Reengineering plan with guidance
    provided by TMA. A list of business process improvements (BPIs) was
    developed and Region 3 was selected to demonstrate the effectiveness of
    the BPIs. As a result of the success in Region 3, all MTFs were
    directed by BUMED on October 24, 2001 to evaluate the Third Party
    Collection (TPC) BPIs for implementation. Each MTF was tasked with
    customizing these BPIs to their MTF to improve their collection efforts
    for TPC. Based on TPC revenue reported in the first and second quarters
    of fiscal year 2002, it appears that the BPIs that were developed and
    implemented at specific MTFs have proven effective in improving TPC
    efforts. Some of the program elements implemented include:
      --Review of the administrative procedures for identification of other
            health insurance (OHI) utilizing the Third Party Collection
            Registration Form in beneficiary medical records and to improve
            the collection of OHI data to increase the number of claims
            generated.
      --Reviewing written policies and procedures that impact effectiveness
            of the Compliance Program.
      --Using audits and/systems reports and monthly reports to monitor
            compliance.
      --The recent requirement for the establishment of a UBO Manager/Point
            of Contact at each of the Health Support Offices will provide
            oversight for the Third Party Collection Program regionally who
            will be required to maintain a close working relationship with
            the Navy Service TPC Program Manager at BUMED.
      --Front Desk processes in Admission Offices and Outpatient Clinics
            are being standardized to assist the Business Offices in
            collecting OHI information from patients at each point the
            patient enters the MTF's.
      --Currently MTF's have various reports from the Composite Health Care
            System (CHCS) to insure that all visits are billed. Beginning
            August 1, 2002 itemized billing will be based on Evaluation &
            Management Codes, Procedure (CPT-4) Codes, and Diagnosis (ICD-
            9-CM) Codes which is similar to the process used in civilian
            physician offices. Automated systems have been developed and
            improved to identify OHI information and identify procedures
            and/or diagnoses and downloading all of the information related
            to clinical procedures and ancillary services (pharmacy/
            laboratory/radiology) into a Third Party Billing System.
            Electronic billing is also being review to enhance the billing
            process.
      --Data Quality issues are being addressed to improve Third Party
            reimbursement.
      --BUMED is providing funding for MTFs to hire and train coders to
            provide more accurate billing.
        Question. Is data available on the number on the number of
    instances in which beneficiaries have not been able to obtain care at a
    Military Treatment Facility (MTF) and were referred to the civilian
    network due to medical personnel shortages? If so, what additional
    costs were incurred?
        Answer. Currently, our data systems do not allow us to link network
    referrals and military staffing shortages. Our medical staffing is
    driven by our Total Health Care Support Readiness Requirement (THCSRR)
    model. The THCSRR model determines the number of medical personnel
    required to staff all contingency platforms, which include those needed
    in a wartime theater and those needed for day-to-day operational
    requirements. There is also a sustainment component to the THCSRR model
    which calculates the number of medical personnel needed in training to
    support all officer and enlisted communities based on known attrition
    rates. This model is used primarily for Navy medical personnel
    requirements and does not link directly to network referral patterns
    within any existing data system.
        Moreover, network referrals are not entirely due to military
    staffing, as they are also due in part to the complexity of care and
    mandatory access standards. We are currently working with our sister
    Services and the TriCare Management Activity (TMA) to develop specific
    metrics which would indicate the amount of care that is being referred
    into the network for MTF enrollees.
        Question. The Army and Air Force have provided special pay in
    fiscal year 2002 for pharmacists, optometrists, and psychologists to
    assist in retaining these critical medical personnel. Why hasn't the
    Navy provided these special pays? And, how has this impacted the Navy's
    ability to retain these skilled personnel?
        Answer. There is no difference in pay for psychologists between the
    Services. The Navy pays eligible psychologists the same diplomate pay
    as the Army and Air Force. This pay was initiated in October 1994.
    Likewise, the Navy, Army and Air Force pay pharmacists and optometrists
    the same Board Certification pay. However, during fiscal year 2001, DOD
    (HA) provided guidance allowing the Services to begin paying an
    Optometry Retention Bonus and a Pharmacy Special Pay based on each
    Service's ``own accession requirements and capabilities''. The Army and
    Air Force have funded the new pays. Due to funding constraints, the
    Navy has not yet begun paying the Optometry Retention Bonus or the
    Pharmacy Special Pay, however the Navy is considering future year
    funding options. These pay issues have adversely impacted the Navy's
    ability to attract and retain skilled personnel in these crucial
    specialties.
                                     ______

                 Questions Submitted to General Paul K. Carlton
                Questions Submitted by Senator Daniel K. Inouye
                      military treatment facilities (mtf)
        Question. The military treatment facilities (MTFs) bill third party
    insurance companies for those beneficiaries who carry other health
    insurance. What are the Services doing to ensure that all reimbursable
    care is being billed?
        Answer. We have taken great strides in improving the overall
    execution of our Third Party Collection Program throughout the Air
    Force Medical Service (AFMS). After a steady decline in revenue since
    fiscal year 1997, we have reversed the negative trend in third party
    reimbursement revenue. This began in fiscal year 2000, when six of our
    MTFs in Region 3 participated in a successful reengineering
    demonstration. Each of these MTFs increased their reimbursement
    revenue. Consequently, we've directed all of our MTFs to develop
    business plans using the reengineered model. Focus to-date throughout
    the AFMS has been providing extensive training for program managers,
    program marketing to MTF personnel; and gathering and documenting Other
    Health Insurance (OHI) information. Complete and accurate OHI
    information is the cornerstone of a successful program. Gathering and
    verifying OHI information takes an MTF-wide effort. To ensure this
    effort is sufficient, our focus has been on establishing data
    collection and verification processes at all points of encounter,
    educating staff on the importance and benefits of the program, and
    equipping staff with the skills and tools to get the job done. This
    includes the hiring of certified coders to conduct medical record
    coding training and auditing, which will result in more accurate coding
    and subsequently ``cleaner'' claims, a prerequisite for outpatient
    itemized billing that begins in the Fall of fiscal year 2002. Finally,
    last year Congress passed legislation (through the National Defense
    Authorization Act Fiscal Year 2002), which directs the Secretary of
    Defense (SECDEF) to conduct a pilot program in which Brooke Army
    Medical Center and Wilford Hall Medical Center in San Antonio, Texas
    charge civilians who are not covered TRICARE beneficiaries, fees
    representing the actual costs of trauma and other medical care
    provided. The SECDEF has one year to implement this program.
        Question. Is data available on the number of instances in which
    beneficiaries have not been able to obtain care at a Military Treatment
    Facility (MTF) and were referred to the civilian network due to medical
    personnel shortages? If so, what additional costs were incurred?
        Answer. There is no real-time data that depicts beneficiaries'
    inability to obtain care at MTFs. Though we have data that shows a
    gradual decline in access to care, this data does not show why an
    appointment or a provider was unavailable. Other data sources indicate
    the provider shortages and provider availability problem. For fiscal
    year 2002 we are experiencing a combined shortage of 420 physicians and
    dentists. This shortage is expected to grow to 880 by fiscal year 2004.
    We fully expect these provider shortfalls to impact network referrals
    and private sector care costs. The resulting costs incurred in the
    private sector could be significant. In planning, we assume that 80-100
    percent of a lost provider's productivity must go downtown,
    particularly in the area of specialty care. As a result of this shift
    to private sector care, the Air Force Medical Service (AFMS) projects
    annual losses between $250,000-$700,000 per lost provider and an
    additional annual loss of $300,000 per lost provider for private sector
    ancillary costs. We also experience significant opportunity costs (idle
    fixed resources) that can easily double this amount. We estimate that
    the total costs could easily exceed $2 billion in fiscal year 2004.

                              SUBCOMMITTEE RECESS

        Senator Inouye. The subcommittee will reconvene next
    Wednesday, May 15. At that time we will hear testimony from the
    Secretary and the Chief of Staff of the Air Force. Until then,
    we stand in recess.
        [Whereupon, at 12:05 p.m., Wednesday, May 8, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    May 15.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2003

                                  ----------

                            WEDNESDAY, MAY 15, 2002

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:17 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Daniel K. Inouye (chairman)
    presiding.
        Present: Senators Inouye, Stevens, Cochran, and Shelby.

                             DEPARTMENT OF DEFENSE

                          Department of the Air Force

    STATEMENT OF HON. JAMES G. ROCHE, SECRETARY OF THE AIR
                FORCE
    ACCOMPANIED BY GENERAL JOHN P. JUMPER, CHIEF OF STAFF

                 OPENING STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. Good morning. Appearing before the
    committee this morning is the Secretary of the Air Force, the
    Honorable James Roche, and the Chief of Staff of the United
    States Air Force, General John Jumper. Mr. Secretary, General
    Jumper, we welcome you here and look forward to your testimony.
        At this moment in history, the Air Force faces a complex
    and daunting challenge, one that perhaps is more demanding than
    any previously faced by our current generation of military
    leadership. For example, our troops are actively engaged in
    hostilities overseas, fighting terrorism in its breeding
    grounds, and our uniformed services also have been called to
    protect us here at home against terrorist threats, a
    vulnerability uncovered by the tragic attack on our Nation only
    months ago. While fighting the war on terrorism today, you must
    continue to plan and prepare our forces for future battles
    against sophisticated enemies.
        The Air Force has certainly played its part in facing the
    challenge. Last year alone, our Air Force pilots flew close to
    20,000 sorties in support of Operations Noble Eagle and
    Enduring Freedom. This comes in addition to more than 16,000
    sorties flown last year over the skies of Iraq and Yugoslavia.
        Mr. Secretary and General Jumper, let me say that the
    committee and I are extremely proud of the work done by our Air
    Force men and women in uniform in support of these operations
    and we congratulate you, sir.
        To continue our military efforts to address the terrorist
    challenge, the administration requested fiscal year 2002
    supplemental appropriations totaling $14 billion for the
    Department of Defense (DOD). The lion's share of these funds
    will be used to support the war on terrorism directly. And I
    can assure you this committee will do all it can to support
    your Department's efforts by providing these much needed funds
    as quickly as possible.
        Nonetheless, the Air Force, like the United States Army,
    Navy, and Marines, must continue to prepare for the future even
    as we fight today. Transforming our forces to engage future
    enemies is a challenge that will remain for years to come, but
    transformation is not simply developing new futuristic weapons
    systems. It requires new concepts for battle and fundamental
    changes to the very culture of the military service.
        In the case of the Air Force, let me ask in simple terms.
    Is the Air Force ready to train an increasing number of pilots
    to fly unmanned combat aircraft instead of putting them in
    cockpits? In other words, are we having enough men and women
    who are trained in the new age of high technology?
        Mr. Secretary and General Jumper, we will want to explore
    this and many other questions with you following your prepared
    statements. In particular, we hope to discuss with you the
    health of your tactical fighter programs, the C-17 aircraft
    financing plan, the troubled air space program, and of course,
    the small matter regarding leasing of tanker aircraft.
        But before I ask you to proceed, I would like to call upon
    my co-chairman, Senator Stevens, for any opening remarks.

                        STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Thank you very much, Mr. Chairman. I
    apologize to all for being late this morning. I got caught in a
    traffic jam in a tunnel.
        This year we have before us real rate of production for the
    F-22, the new multiyear contract for the C-17, authority to
    recapitalize the air refueling tanker fleet, the EELV, a
    dramatic leap forward in space launches, the JASSM advanced
    precision munition, and the Predator and Global Hawk. These
    systems and others are entering mature phases of research and
    development, and by the end of the decade, we expect to have a
    dramatically advanced air and space dominance.
        And this is not possible because of decisions we made this
    year, but it is because of the determination to support the Air
    Force in the past 10 years. The committee advocated the first
    multiyear contract for the C-17. We battled to sustain the F-22
    and accelerated the funds for JASSM, and we pushed to enhance
    the capabilities and quantities of UAV's. I do believe we are
    where we are because of the leadership that we have.
        I want to especially commend General Jumper for his
    leadership in the past three commands, Commander of the Air
    Force, Commander of the European Command, for the Air Combat
    Command, and I really think now as Chief, your efforts to bring
    advanced technology and far beyond a better air superiority
    that have directly contributed to the unprecedented range of
    opportunities we enjoy today.
        So, Mr. Chairman, I want to be brief. Again, I apologize
    for delaying. Thank you very much.
        Senator Inouye. Thank you.
        Senator Cochran.

                       STATEMENT OF SENATOR THAD COCHRAN

        Senator Cochran. Mr. Chairman, thank you. I am pleased to
    join you in welcoming our distinguished witnesses today. We
    appreciate their cooperation with the committee, and I look
    forward to hearing their testimony.
        Senator Inouye. Thank you.
        Senator Shelby.

                     STATEMENT OF SENATOR RICHARD C. SHELBY

        Senator Shelby. I just want to welcome the Secretary and
    General Jumper and look forward to their testimony. Thank you,
    Mr. Chairman.
        Senator Inouye. Thank you.
        Now may I call upon the Secretary. Secretary Roche.
        Secretary Roche. Thank you, Mr. Chairman and Senator
    Stevens and distinguished members of the committee. It is a
    distinct honor to appear before you today representing the Air
    Force team with General John Jumper. As you have noted, General
    Jumper is one of the finest officers in the American armed
    forces and certainly someone with whom I am deeply honored to
    serve.
        With your indulgence, Mr. Chairman, I would like to ask
    John at this point to introduce a very special guest whom we
    think you would like to get to know, Technical Sergeant William
    Calvin Markham, one of our air commandos who spent a number of
    months, 3 in fact, in Afghanistan doing some of the fine work.
    John.

                               CLOSE AIR SUPPORT

        General Jumper. Sir, if we could ask Tech Sergeant Markham
    to stand up. Sergeant Markham went into the interior of
    Afghanistan in the middle of October and stayed for 29 days
    straight in the field working close air support with his Army
    colleagues to bring close air support from Navy aircraft, Air
    Force aircraft, to include bombers and fighters of both of our
    services to bear on the enemy. It is heroes like Sergeant
    Markham that we read about in the newspapers, and he is here
    today to join us to lend some credence to our testimony this
    morning, sir.
        Senator Inouye. We congratulate you and welcome you, sir.
        Sergeant Markham. Thank you, sir.
        Secretary Roche. Mr. Chairman, we are committed to exercise
    our responsibility, together with our sister services, to
    provide for this Nation's defense now and in the foreseeable
    future. You have our full attention and we are ready to get
    down to the important business at hand.
        With your permission, Mr. Chairman, I will make some
    opening remarks, as will General Jumper, and we request that
    our written statement, the Air Force posture statement, be
    included in the record, sir.
        Sir, America's Air Force has had numerous opportunities
    over the past several months to implement and validate
    significant changes in the concept of military operations and,
    indeed, the conduct of war. With the full support of the
    Secretary of Defense, we have encouraged and exploited the
    rapid advancement and employment of innovative technologies to
    create a portfolio of powerful air and space capabilities. We
    have begun to reorganize and find efficiencies throughout the
    Air Force, and we have taken significant action to implement
    the findings of the Space Commission in our new role as the
    Department of Defense executive agent for space.
        We proceed, however, eager rather than complacent,
    recognizing that much work and many more opportunities to
    improve await us. Despite our dedication to demanding critical
    and global operations, we have not faltered in our steps to
    continue the task of transforming our force to match the
    demands of this new century.
        But first and foremost, Mr. Chairman, as you noted, we can
    all be justifiably proud of the American airmen who serve our
    country at home and abroad. Elaborating on your point, sir, in
    operations Northern Watch and Southern Watch, we have quietly
    amassed a total of almost 250,000 sorties in the last 10 years.
    Operation Enduring Freedom has demanded over 45,000 sorties to
    date, some of which have broken records of mission range, hours
    flown, and combat reconnaissance, and tanker support to joint
    operations, mobility demands, and humanitarian supplies
    delivered have all been unprecedented. As an example, sir, our
    tankers have flown close to 10,000 sorties to date. Fifty-five
    percent of all of our sorties have been in support of Navy and
    Marine Corps colleagues.
        For the first time in the history of warfare, the entire
    ground operation of landlocked Afghanistan, infiltration,
    exfiltration, sustainment of supplies and support equipment has
    been accomplished by air. In Noble Eagle, as you noted, sir,
    over the skies of America, 20,000 airmen, 265 aircraft, 350
    crews mainly from the Air National Guard and Air Force Reserve,
    but also from our Active Air Force and allies, flew over 21,000
    tanker, fighter, and airborne early warning sorties, as well as
    prepositioned C-130's for emergency purposes.
        Our North Atlantic Treaty Organization (NATO) partner
    nations have deployed the airborne warning and control system
    (AWACS) to our country to help defend American air space. This
    is the first time since the Monroe Doctrine of 1823 that a
    continental European force helped to defend the continental
    United States. This month we bid farewell from a grateful
    nation to these fine airmen who helped us in time of need and
    who are now heading home.

                                 TRANSFORMATION

        As we continue our transformation, support our airmen,
    reinvigorate the military industrial base, and become an even
    more efficient team, our vision remains a total air and space
    force providing global reconnaissance and strike, including
    troops and their support, across the full spectrum of
    operations.

                  INTELLIGENCE SURVEILLANCE AND RECONNAISSANCE

        But we have pressing needs. We need to modernize our
    intelligence surveillance, reconnaissance platforms, and
    tankers so that we can do the jobs we need to do. We need to
    develop capabilities to engage near instantaneous attack to
    exploit the advances in intelligence, surveillance, and
    reconnaissance, and here we do that by linking manned and
    unmanned systems, overhead systems, et cetera.

                               GUARD AND RESERVE

        And we have to understand exactly what the role of our
    Guard and Reserve will be in the steady state for homeland
    defense of the United States. We have a strategy developing for
    our air logistics centers. We need to continue to do that.

                                   READINESS

        Finally, sir, we cannot wait until we are on a par with
    potential enemies in the realm of air superiority, especially
    with respect to our fighter and attack capabilities. As General
    Jumper, the highly respected, revered colleague at my side
    today, is fond of saying, when we go to war, we never want to
    have a fair fight.

                                   AIR POWER

        It is fundamental to the defense of this Nation that we
    must own the skies and maintain the capability to operate
    freely in any air space we require, the definition of air
    dominance. We are the guardians of the high ground, and we
    cannot afford to allow any adversary to control the skies over
    any area where our soldiers, marines, sailors, or airmen must
    operate. We achieve this in concert with our naval air power
    colleagues.
        A recent RAND study observed that no American soldier has
    been killed in combat by an enemy air attack since 1953, a
    compelling statistic that speaks to both the superiority of air
    power and the extent to which we as a Nation must maintain that
    kind of dominance.

                                      F-22

        This, Mr. Chairman, is the crux of the reason we so
    fervently seek to acquire the F-22 aircraft and in sufficient
    numbers. We cannot accept the loss of air superiority and air
    dominance. The F-22 will enable our pilots to strike in all
    weather, night, day, and in anti-access, anti-aircraft, and
    emerging threat scenarios.
        Other focus areas include development of concepts and
    strategies to seamlessly integrate our manned and unmanned
    systems, as well as retaining our people, especially those in
    mid-career who will benefit from the provisions of this budget
    for improved family housing, pay, and facilities.
        And we wish to pause and give a special thank you to you
    and your colleagues for the support of our airmen over the last
    many years. It has made a huge difference, an absolute huge
    difference, including spare parts. The fact that spare parts
    have been flowing now for the last couple of years has made a
    major difference to our operating forces.
        Mr. Chairman, American airmen are able to perform the
    extraordinary feats asked of them because we are blessed with
    the full support of the American people, the Congress, and the
    President of the United States, all of whom have been
    graciously supportive of our efforts and missions. We sincerely
    appreciate the confidence in our commitment and our
    capabilities, as well as the wisdom, vigilance, and patriotic
    sense of duty that join us in our journey to provide our Nation
    with superiority in air and space throughout the century.
        You have gone to the current theater of operations, sir, as
    have General Jumper and I, and I know you were as impressed as
    we were with the airmen you met, the dedicated team of men and
    women, that you and your colleagues in the Congress have raised
    and have maintained. And on their behalf, may I please say
    thank you.
        Senator Inouye. General Jumper.

                      STATEMENT OF GENERAL JOHN P. JUMPER

        General Jumper. Mr. Chairman, thank you for the opportunity
    to appear before the committee today. I am proud to sit here
    beside my boss and offer the committee our comments. They will
    be brief this morning, as Secretary Roche covered the
    highlights of the current state of our Air Force.
        I would like to take a moment, though, Mr. Chairman, to
    thank you and the distinguished members of the committee on
    behalf of all our Nation's airmen, Active duty, National Guard
    and Reserve.
        As the Secretary said, we both have had the opportunity, as
    have many of you, to travel in the area of operation over
    recent months and to witness firsthand the superb performance
    of our young people in uniform, and I say this of all uniforms,
    not just the Air Force, doing superb work for our Nation. In
    every crisis--and I have been doing this now for more than 35
    years--I continue to be extremely impressed by the dedication
    and commitment of our young people, in this case, our young
    airmen out there in the field.

                               AIR FORCE RECRUITS

        This comes as a surprise to many in our society who would
    believe that these youngsters are raised in the era of Beavis
    and Butthead and the Simpsons and taught to disrespect anything
    of authority or anything that smacks of institution, but you
    know, Mr. Chairman, I get to go quite often down to Lackland
    Air Force Base where we graduate our basic trainees, and it is
    inspiring to see these youngsters on their graduation day all
    decked out in their bright new blue uniforms. When you go, you
    see the same scene at least once every time. Some young newly
    minted airmen standing in front of his mother, shaking his
    mother saying, yes, Mom, it is me. They do not even recognize
    the kid they sent off 6 weeks prior.
        And you go shake the hands of these youngsters, and they
    all tell you, sir, the Air Force saved my life. I was on a
    downhill spiral to nowhere. Somebody took me by the cuff of the
    neck and shoved me in the direction of the Air Force, and it
    saved my life.
        Or you hear comments like, sir, this is the first time I
    have ever had a chance to be proud of myself or anybody
    acknowledged that I was actually worth something.
        And this is the opportunity that our military gives these
    youngsters, and when you show them how to be proud and you
    provide the right leadership, they go out and perform the way
    that they do for our Nation. And this generation, Mr. Chairman,
    I can tell you, properly led and properly motivated, is no less
    dedicated or committed or patriotic than any generation that
    ever served this Nation. And we thank you for giving them the
    resources they need to do their job.

                                  SPARE PARTS

        I have had more than one knuckle-dragging maintainer out on
    the flight lines in hostile territory tell me that he would be
    glad to give up a pay raise in order to get spare parts he
    needed to fix the airplane. Thanks to you, Mr. Chairman, and
    members of the committee, they have both, the pay raise and the
    parts they need to do their job. We are starting to see that
    readiness turn up in a way that makes us all proud.

                             INFORMATION TECHNOLOGY

        Mr. Chairman, we have seen nothing less than a
    transformation in the way we have used our military over the
    last few months, with people like Tech Sergeant Markham out in
    the field using the miracle of modern information technology to
    put bombs on targets, using aircraft like the B-52 for close
    air support. General Curtis LeMay would roll over in his grave
    at the thought of a B-52 doing close air support. But it is
    these youngsters like Sergeant Markham who put these systems
    together and make the processes work in ways that we never
    dreamed of to take care of the problem that is in front of them
    and to confront an enemy as elusive as the al Qaeda hiding in
    caves. There has been no greater demand on our technology--
    unmanned aerial vehicles, global positioning system (GPS)-
    guided bombs, laser-spotting equipment that Sergeant Markham
    used to put weapons on target--than this very low tech
    environment that we were in in the country of Afghanistan.

                            SURFACE-TO-AIR MISSILES

        Now, as we contemplate this, Mr. Chairman, not every future
    war, as you said, is going to be low tech, and we have high
    tech systems that are being developed out there that we are
    going to have to be ready to face. A whole new series of
    surface-to-air missiles, the SA-10's, 12's, and 20's, will
    challenge us in the sky.

                                RUSSIAN AIRCRAFT

        The Russian, the former Soviet Union, aircraft
    manufacturing companies are pumping out very capable airplanes.
    From time to time, we get our hands on these airplanes, and the
    next generation of airplanes that they put out are going to be
    very capable. When our guys fly their airplanes, they beat our
    guys flying our airplanes almost every time.

                                      F-22

        And that is why we need this F-22, Mr. Chairman, not only
    for the air superiority in the air-to-air role that the
    Secretary talked of, but as he also said, to be able to take
    care of this threat on the ground. The F-22 is often marketed
    as an air-to-air dog fighting airplane, but it is going to do
    much more than that. Most of the reason we need it is to be
    able to penetrate those most difficult threats we will face in
    the future to take out these surface-to-air missiles.

                               prepared statement

        So, Mr. Chairman, we come to you today proud of our Air
    Force and representing proud airmen who are out there serving
    this Nation day in and day out, and it is a pleasure and a
    privilege for us to be here. I look forward to your questions,
    Mr. Chairman. Thank you.
        [The statement follows:]
     Joint Prepared Statement of James G. Roche and General John P. Jumper
        Mr. Chairman and members of the committee, the Air Force remains
    focused on transformation. It is a continuous journey, and fundamental
    to succeeding in the joint services' task to provide for this nation's
    security. This fiscal year 2003 budget takes significant strides along
    this path, and will enable us to remain the world's most capable air
    and space force.
        During the past year, the Air Force has had numerous opportunities
    to implement and validate significant changes in the conduct and
    strategies of war, exploit the rapid advancement of innovative
    technologies, and deliver global reconnaissance and strike for
    America's national security. Our successes are America's successes;
    they are the direct result of the tireless and unconditional service by
    men and women of the Total Air Force and their families.
        We recognize much work and many opportunities to improve await us.
    Despite our unassailable dedication to a demanding operational pace at
    home and abroad--including NORTHERN WATCH, SOUTHERN WATCH, NOBLE EAGLE,
    and ENDURING FREEDOM--we have not faltered in our steps to continue the
    tasks of our unprecedented transformation. We are pressing forward to
    develop and refine our operational and organizational processes and
    strategies to address the changing national security and economic
    environments. We are focusing on the horizontal integration of our
    manned, unmanned, and space assets in order to provide real-time
    actionable, exploitable intelligence to commanders. We are committed to
    leveraging technology to combine our air and space capabilities in
    order to increase asymmetric advantages for our nation. And, as our
    transformation continues, we will support our people, revitalize the
    military industrial base, and seek efficiency at every turn. We are the
    world's preeminent Air and Space Force, remaining true to our vision by
    providing Global Vigilance, Reach, and Power across the spectrum of
    military and humanitarian operations for America and our allies.
        We are able to perform the extraordinary feats asked of our Air
    Force because we are blessed with full endorsement from the American
    people, the Congress, and the President of the United States--all of
    whom provide unwavering support to our efforts and missions. We
    sincerely appreciate this confidence in our commitment and our
    capabilities to provide our great nation with superiority in air and
    space throughout this century.
                                    preface
        If Americans had not fully understood the idea of ``asymmetry''
    before September 11th, they received a horrific education on that day.
    In a lesson reminiscent of one 60 years earlier, air assets were
    employed in a malicious fashion on an unsuspecting people. This time,
    however, the attacks resonated a particular evil, for civil airlines
    were used to wreak destruction and death upon civilians.
        The World Trade Center, the Pentagon and a field in Pennsylvania
    were the battlefields of asymmetric warfare. A terrorist group
    exploited the United States' asymmetrical vulnerabilities, far in
    excess of their relative size and the physical results of the attacks.
    Within minutes of these attacks, the United States, through Operations
    NOBLE EAGLE and ENDURING FREEDOM, was providing education on an
    asymmetry of its own making--the object lesson of joint and combined
    warfare visited on the perpetrators of the September 11 strikes. The
    Air Force is fully prepared to execute the missions required--with our
    air, space and special forces assets--to carry this global war on
    terrorism to its conclusion, ending as President Bush declared, ``at a
    time and place of our choosing.''
    Operation NOBLE EAGLE (ONE)
        Operation NOBLE EAGLE unofficially began three minutes after North
    American Aerospace Defense Command (NORAD) received word from the
    Federal Aviation Administration of two hijackings. F-15 Air Defense
    fighters from Otis Air National Guard base in Massachusetts raced
    toward the skies over New York. Thirty minutes later, a similar attack
    unfolded in D.C. Within minutes, Guard F-16s from Langley AFB were on
    an intercept track while other Guard F-16s headed to the skies over the
    Capital. Though notified too late to thwart the attacks, the jets were
    in place to stop any further strikes, including the aircraft that
    crashed in Pennsylvania.
        Within hours of these attacks, the Air Force had established combat
    air patrols across America with air refueling support to keep them
    aloft, and command and control assets to direct them. By December,
    these sorties exceeded 8,000. Meanwhile, as the Air Force air defenses
    secured the skies, numerous other combat support enablers--strategic
    and tactical lift, civil engineers, medical teams, combat
    communications, command centers, chaplains, and security forces--rolled
    into action. The Air National Guard generated over 100 C-130's to
    support the movement of FEMA, FBI, human organs and blood, Combat
    Support Teams (CSTs), medical equipment, and combat communications. In
    addition, over 70 personnel arrived from Andrews AFB to help coordinate
    emergency medicine at the Pentagon alongside the Surgeon General of the
    Air Force.
        Within 24 hours, the Air Force swiftly deployed 500 medics to
    McGuire AFB, to respond to any Federal Emergency Management Agency
    (FEMA) tasking for equipment and/or personnel needed at the World Trade
    Center. State-of-the-art medical emergency facilities were assembled,
    which included four Expeditionary Medical Support packages (EMEDS)
    (lightweight modular systems). Critical Care Air Transportable Teams
    (CCATT), which provide emergency medical attention while in-flight,
    were quickly established at both the Pentagon and McGuire AFB. The port
    mortuary also was activated, with over 600 Air Force Active duty, Guard
    and Reserve personnel deploying to Dover AFB. They assisted in the
    identification and preparation of the remains of the Pentagon attack
    victims, working alongside the Armed Forces Medical Examiner, FBI, Army
    and Navy personnel. Critical Stress Management Teams conducted
    counseling to personnel assigned to recovery efforts at both locations.
    Finally, since the National Disaster Medical System was activated, the
    Air Force Medical Service (AFMS) also set up its aeromedical evacuation
    assets at both McGuire AFB and Andrews AFB.
        Meanwhile, demonstrating their invaluable integration in the Total
    Force, Air Force Reserve and Air National Guard airlift crews were
    among the first to bring in critical supplies, equipment and personnel,
    including emergency response teams from FEMA, fire trucks, search dogs,
    and earth moving equipment. At the time of this writing, more than
    10,000 Air Force Reservists and over 20,000 Air National Guard members
    have been mobilized, and many more continue to provide daily support as
    volunteers. Thousands of Air National Guardsmen, Reservists, civilians,
    contractors, and Active duty members are ensuring air and space
    security over America.
    Operation ENDURING FREEDOM (OEF)
        When the President decided on the appropriate course of action, air
    and space forces were called into action. At the outset, Air Force
    bombers proved instrumental to putting weapons on targets in
    Afghanistan. The vast mobility capabilities of the Air Force quickly
    moved assets into the theater, while simultaneously making possible
    Navy and Air Force fighter attacks.
        ENDURING FREEDOM also revealed an improvement from even the most
    recent operations. Air and space precision assets paired with multi-
    service special forces on the ground proved an effective, efficient and
    devastating mix of capabilities. Additionally, we have pushed
    developing technologies forward and have found operational successes in
    advanced employment of Unmanned Aerial Vehicles (UAVs).
        This operation is about creating effects--deterrence and defeat of
    terrorism--so it is more than simply munitions-on-targets. The Air
    Force is at the forefront of psychological campaigns, applying robust
    information warfare campaigns while also leading the humanitarian
    relief mission--essential to any long-term stability in the region.
    Airdropping millions of rations to a starving people, Air Force
    mobility forces directly affected the future of the new Afghan
    government.
        ``Let's Roll!''
        As it has throughout its history, America will champion the cause
    of freedom and defeat those who would attempt to deny us this most
    basic tenet. Guaranteeing our success is ``. . . the strength of our
    country--the skill of our people and the superiority of our
    technology.''
                                  introduction
        The world's premier Air Force begins 2002 under new leadership. The
    Secretary and Chief of Staff bring unique and complementary experiences
    to bear upon the dynamic promise of American air and space power in the
    21st Century. The Air Force is in the business of global reconnaissance
    and strike, including the full application of unparalleled mobility
    forces. Our efforts are fuelled by a vision of Global Vigilance, Reach,
    and Power to help the Nation assure our allies and friends, while
    dissuading, deterring or decisively defeating any adversary. The
    specific concept of ``core competencies'' \1\ well known among
    successful organizations has been adapted by Air Force leaders to
    characterize the capabilities that are central to our mission: air and
    space superiority, information superiority, global attack, precision
    engagement, rapid global mobility, and agile combat support.
    ---------------------------------------------------------------------------
        \1\ According to two leading scholars, successful enterprises
    ``consolidate corporate-wide technologies and production skills into
    competencies that empower individual organizations to adapt quickly to
    changing opportunities.'' The 3 identifying characteristics of core
    competencies are: (1) They transcend a single product or service and
    provide potential access to a wide variety of markets; (2) they are
    perceived by customers to deliver significant benefit; and (3) they
    should be hard to imitate. See C.K. Prahalad and Gary Hamel, ``The Core
    Competence of the Corporation,'' Harvard Business Review, May-June
    1990.
    ---------------------------------------------------------------------------
        The Air Force, and the Nation, entered 2001 aware of the challenges
    and opportunities of a new administration. The Department of Defense
    was to undergo significant evaluation, with the expectation of dramatic
    changes to follow. President Bush brought an eminently qualified team
    to Defense and National Security, and the Air Force welcomed the
    injection of energy and attention the Nation's defense was to receive.
    Long a force for innovation, airmen continued their leadership
    throughout the months of military reinvention. Capabilities-based
    planning was emerging as the Quadrennial Defense Review (QDR) focal
    point, and the Air Force strove to maximize the assessment of new
    technologies, revolutionary concepts of operation and visionary
    organizational changes. However, amidst this important task, terror
    struck the United States. The Air Force, and the Nation, exited 2001 at
    war.
        This new adversary, and those of the future, will pose a formidable
    challenge to American interests at home and abroad. They will attempt
    to intimidate, deter or defeat our nation through a variety of means,
    to exploit our asymmetrical vulnerabilities and avoid confronting U.S.
    military power directly. These strategies will include the use or
    threatened use of weapons of mass destruction, and the use of terrorism
    on U.S. soil. They will also attempt to counter the tremendous
    asymmetric advantages of U.S. air and space power.
        To meet these challenges, Air Force strategy calls for a
    capabilities-based approach to defense planning. This enables the
    Service to answer a broad range of challenges posed by potential
    adversaries, while also developing the capabilities it needs for the
    future. This capabilities-based planning must remain tied to ongoing
    Air Force transformation that continues to develop new technologies,
    concepts of employment and organizational adaptations.
    The Road Ahead
        The transformation of the military now runs parallel to the
    transformation of our Nation. Just as the military is exploring new
    capabilities and concepts of operation (CONOPs) to engage threats,
    America as a whole is experiencing new appreciation for the cost of
    freedom. The Air Force, the Department of Defense and the American
    people are up to the challenge.
        Though a shock, the events of September 11th did not fundamentally
    alter the course for a transformed military; rather, they served as an
    affirmation of our current direction. Turning away from decades of
    restrictive force-to-threat planning, the Air Force along with the
    Defense Department is on course to define desired effects, and then
    secure capabilities which allow us to reach that end. Additionally, the
    QDR and the Defense Planning Guidance (DPG) address organizational
    changes, which add to the effectiveness of new military methods.
        This describes the heart of Air Force transformation. Assessing
    existing and potential adversaries' capabilities against our own, we
    are developing Task Forces for a variety of mission requirements, from
    strategic response to homeland security. For example, Global Strike
    Task Force, which describes how we will operate in an anti-access
    scenario, is the next step in our journey to fully achieve our mission
    while also opening doors to adaptive and innovative operational plans,
    and relevant organizational structure.
        In order to draw the greatest effectiveness from these
    capabilities, the Air Force will exploit America's technical dominance
    to elevate our asymmetric advantage over any adversary. This involves
    harnessing the attributes of stealth, precision, standoff, space, and
    information technology. The success of our capabilities-based CONOPS
    depends upon reducing the find, fix, track, target, engage, and assess
    (F\2\T\2\EA) cycle and achieving persistent ISR capabilities. Key to
    this is the horizontal integration of manned, unmanned, and space
    assets. By facilitating digital conversations at the machine-level we
    will provide the Joint Force Commander with the decision-quality
    information required to ensure success--the ``sum of the wisdom''
    resulting in a cursor over the target. With determined exploration and
    exploitation of space capabilities--culture, principles, personnel and
    assets--we will widen our asymmetric advantages and set the bar beyond
    reach of any adversary. Such transformation will guarantee America's
    Global Vigilance, Reach, and Power--establishing powerful national
    mechanisms to assure, dissuade, defeat or deter.
        These are the building blocks to true transformation--
    technologically elevated capabilities, focused CONOPs and embedded
    structural changes. The Air Force remains at the forefront of each of
    these transformational elements. We ensure the freedom to operate
    around the globe and in the sky and space above, under any
    circumstances, and for whatever mission the Nation requires. This is
    asymmetry--exploitation of capabilities no other force in the world
    possesses--and it is fundamental to redefining jointly fought warfare
    on America's terms. Maintaining this advantage is critical, and a
    constant challenge. In the year ahead, we will meet this test by
    solidifying the roots of our success: Readiness, Transformation, and
    the resource that makes these possible--our People.
                               the year in review
        In 2001, the Air Force had an enormous impact on the peacekeeping
    and combat missions around the world. From the Korean Peninsula to
    Kabul, across every continent and over all bodies of water, Air Force
    civilian, Active, Guard and Reserve forces were executing global
    reconnaissance and strike missions. Through combined exercises,
    humanitarian interaction around the globe, and decisive combat action,
    we assured our friends and dissuaded, deterred or defeated our
    adversaries.
        In the Balkans, contributions to the region included fighter,
    tanker, command and control, ISR, and airlift aircraft. Combat search
    and rescue (CSAR) forces, special operations units and unmanned aerial
    vehicles (UAVs) also flew in support of the operation. In 2001, the Air
    Force flew approximately 1,000 sorties, enforcing no fly zones over the
    former Yugoslavia.
        In Southwest Asia (SWA), the Air Force maintained a continuous,
    steady-force presence of more than 8,000 airmen in support of
    Operations NORTHERN WATCH (ONW) and SOUTHERN WATCH (OSW). Air Force ISR
    assets provided crucial intelligence and situational awareness,
    particularly in the form of indications, warning and intelligence. We
    were the vital element in monitoring Iraq's compliance with United
    Nations' directives. Coalition forces flew over 22,000 combat sorties
    in SWA during 2001, 70 percent of which were flown by the Air Force.
        In response to the terrorist activity of September 11th, we began
    providing support to homeland defense via Operation NOBLE EAGLE and
    support to the war against terrorism via Operation ENDURING FREEDOM. By
    the end of 2001, we had flown 11,000 combat air patrol, surveillance,
    and refueling sorties protecting U.S. cities and other high-value
    assets. We also maintained an alert readiness status on the ground in
    order to scramble and intercept threat aircraft. Nearly 14,000 airmen
    have deployed to Southwest Asia in support of ENDURING FREEDOM. This
    number represents nearly every specialty in the Air Force, from
    engineers to explosive ordnance disposal, pilots to special operators.
    Of the over 18,500 total coalition sorties flown, almost 46 percent
    have been flown by the Air Force. These sorties included fighter,
    tanker, command and control, special operations, UAV, ISR, and airlift
    aircraft. Initially, the Air Force was the sole provider of airlift for
    humanitarian relief to the people of Afghanistan. By the end of
    December, Air Force mobility teams had delivered over 2.4 million
    humanitarian daily rations and over 4,300 tons of wheat, rice, and cold
    weather gear. Ultimately, in the land locked country of Afghanistan,
    everything brought in to build up and sustain our forces was brought in
    by air.
        The Caribbean and South America continued to be the focus of the
    ongoing war on drugs. Counter-narcotic missions were flown around the
    clock by all interagency organizations. The Air Force contributed
    aircraft and crews flying missions as fighter-interceptors, airlift,
    ISR and CSAR. Of the almost 3,000 sorties flown, the Air Force flew
    approximately 25 percent. These efforts directly contributed to
    seizures that totaled over 75,000 kilos of narcotics.
        Establishing operational imperatives for 2001 and beyond, the
    Secretary of Defense named the Air Force as executive agent for
    national security space. We now shoulder the responsibility for
    planning and programming of space systems for the Department. The
    Secretary and Undersecretary of the Air Force will direct efforts to
    nurture a space culture and ensure that the advancement of space
    capabilities receives focused and heightened emphasis. Throughout the
    year, we also maintained approximately 100 satellites in earth orbits
    that directly supported, and continue to support, not only the Air
    Force but also the other Services and the civilian population. Global
    Positioning Satellites assisted travelers worldwide. Data provided by
    Air Force weather satellites and communications and missile launch-
    detection satellites was used by all services. In order to maintain
    this robust capability, we launched, deployed, and initialized
    operations of eight additional assets in 2001.
        The Air Force provided an American presence in regions of the world
    where the United States is working to build goodwill and improve
    relations. It also enabled quick humanitarian relief during natural and
    man-made disasters. During the month of January, following a
    devastating earthquake in India measuring 7.7 on the Richter Scale, two
    C-5s and four C-17s transported 115 short tons of humanitarian cargo to
    Ahmedabad, India. In April, a C-17 airlifted 10 cheetahs from Africa to
    America as part of a gift to the United States from the people of
    Namibia. Additionally, Air Force engineers from Active and Air Reserve
    Component RED HORSE units accomplished several school construction and
    water well drilling humanitarian projects throughout Central and South
    America.
        When the floodwaters rose in Houston in June, a C-17 transported
    federal relief workers and 30,000 pounds of relief supplies to Texas.
    Additionally, the Air Force deployed a 92-person Expeditionary Medical
    Support System (EMEDS) to the area to relieve local hospital emergency
    rooms workload. The EMEDS cared for over 1,000 patients from this
    disaster, and the AMS envisions placing EMEDS throughout the country to
    offer added future regional quick-response capabilities. Later, in
    August and September, Air National Guard and Air Force Reserve C-130
    aircraft equipped with modular airborne fire-fighting systems flew 185
    missions and dropped over 800,000 gallons of fire suppressant on
    wildfires in Idaho and California. Additionally, they flew 45 support
    sorties lifting 414 firefighters and over 300,000 tons of cargo into
    the area.
        Whether at home or abroad, in combat, humanitarian operations or
    training, we strive to accomplish the mission effectively, efficiently
    and safely. Effective risk management directly contributes to readiness
    and warfighting capability. In 2001, a combination of targeted mishap
    prevention efforts and chain-of-command commitment resulted in
    sustained low mishap rates in all major areas. On the ground, a record
    low was achieved for off-duty sports and recreation fatalities with
    four total. In the on-duty ground fatality category, the Air Force tied
    the fiscal year 1998 all time record low of three. In the air, Class A
    Flight Mishap performance yielded the third lowest mishap rate in USAF
    history.
        The Air Force-wide fielding of safety tools and metrics such as the
    web-based Safety Automation System continues to improve operational and
    acquisition risk management decision-making. These efforts, coupled
    with aggressive seasonal safety campaigns, enable leaders at all levels
    to take proactive action aimed at specific trend areas. The Air Force's
    commitment to safety as a combat multiplier continues to enhance force
    preparedness and mission accomplishment.
    ``The Expeditionary Air and Space Force (EAF) After 2 Years''
        Our considerable mission accomplishments in 2001 have in large
    measure been made possible by the continued maturation of the EAF.
    Throughout the year, we called upon all facets of our Air Force--
    Active, Guard, Reserve, civilian, and contractors--to meet the demands
    of the war on terrorism and our steady-state commitments. In addition
    to the rotational deployments in support of OSW, ONW, Icelandic
    Operations, and counter-drug operations; we were called upon to support
    wartime efforts at home with ONE, and overseas with OEF. The large
    demand on the Air Force increased the OPSTEMPO drastically and placed a
    sizeable stress on our most valuable asset, our people. The Air Force
    is stretched thin, standing up several expeditionary bases overseas
    while at the same time defending the skies over the United States with
    numerous aircraft on ground and airborne alert. Our people have risen
    to the occasion in winning this war. We will maintain the Air and Space
    Expeditionary Force (AEF) structure throughout this effort to the
    maximum extent possible however, everyone in the Air Force realizes the
    mission has changed and the requirement to deploy for longer periods of
    time may increase.
    The Expeditionary Air and Space Force--Sum of the Parts
        Often misunderstood is the difference between the elements that
    collectively define the Expeditionary Air and Space Force. Whereas the
    EAF is a construct and is the Total Air Force, the AEFs are a subset
    and represent the core of our deployable combat power and forward
    presence capability. The EAF also enables the Air National Guard and
    the Air Force Reserve to participate more heavily in Air Force
    expeditionary operations. The increased predictability of the AEF
    rotation cycle allows us to schedule voluntary participation well in
    advance. This voluntary participation currently provides about 25
    percent of the aviation package and 10 percent of the Expeditionary
    Combat Support. This support brings both OPSTEMPO relief as well as
    highly trained and skilled talent to the operations. This interaction
    lays the basis for the development of our transformational initiative,
    Future Total Force (FTF) (explored later).
        AEF Prime consists of operational capabilities neither organically
    assigned to AEFs, nor incorporated in the rotational cycles. This
    includes regional command and control, intelligence, space, special
    operations, and the umbrella of deterrence provided by our nuclear
    forces. AEF Prime enables much of the global reachback we rely on for
    logistics and analysis.
        AEFs are not individual organizations, autonomous fighting forces,
    or units. Instead, our 10 AEFs represent buckets of capabilities the
    Air Force can draw upon to satisfy the requirements of theater
    commanders--flexible, responsive, adaptable. A nominal AEF has about
    12,600 people supporting 90 multi-role combat aircraft, 31 intra-
    theater airlift and air-refueling aircraft, and 13 critical enablers.
    The enablers provide command, control, communications, intelligence,
    surveillance, and reconnaissance, as well as combat search and rescue.
    AEFs are composed of squadron and sub-squadron elements, which are on-
    call for a period of three months in a 15-month cycle. If deployed,
    forces from AEFs make up Air and Space Expeditionary Task Forces
    (AETF). Finally, we have two Air and Space Expeditionary Wings (AEWs)
    that provide crisis response capability beyond what the two in-cycle
    AEFs can cover. They also contain unique capabilities, such as stealth
    aircraft, that are not distributed across the ten AEFs.
        Air Force Reserve Command made major AEF contributions in 2001
    having met virtually 100 percent of both aviation and combat support
    commitments, while also deploying 14,000 plus personnel in volunteer
    status in the current 15-month AEF cycle (Dec. 1, 2000-Feb. 28, 2002).
    The challenge for 2002 will be to meet ongoing AEF commitments with
    volunteers from a Reserve force which has had a large portion of its
    operations and combat support mobilized for homeland defense and the
    war on terrorism.
        The Air National Guard alone contributes nearly 25,000 men and
    women every 15 months to the AEF rotations. During AEF cycles one and
    two thus far, Guard units provided over 20 percent of the total force
    aviation packages and nearly 10 percent of all expeditionary combat
    support requirements.
        EAF Mobility provides the ability to deploy and sustain
    expeditionary forces. It includes airlift and air-refueling
    capabilities--the linchpin of power projection. Many mobility units
    accomplish the AEF role when specifically assigned to an AEF
    eligibility period and the EAF Mobility role all other times.
        EAF Foundation consists of support capabilities not organically
    assigned to AEFs. This includes acquisition, logistics, health care,
    education and training. Due to the expeditionary nature of the Air
    Force, individuals normally assigned to an EAF Foundation organization
    can still be assigned to an AEF and deploy to contingency operations
    during their three-month eligibility period.
        The EAF is a force structuring mechanism because it frames Air
    Force modernization, recapitalization, and transformation efforts. The
    AEFs and EAF Mobility provide the rotational basis for steady state
    expeditionary operations. Therefore, current and future programs must
    ensure adequate capability in the EAF to respond to global
    contingencies while providing predictability and stability for our
    people.
    EAF Today
        Our current level of commitment exceeds the capability we have
    available in our two on-call AEFs and one on-call AEW. In career fields
    such as Security Forces, Engineers, Communications and Information, and
    Medical, we have reached into future AEFs to source enough people to
    meet the current requirement. Low Density/High Demand (LD/HD) assets
    such as Airborne Warning and Control System aircraft (AWACS) and
    special operations aircraft have deployed almost their entire inventory
    to meet the war effort. We have been aided greatly in this LD/HD
    challenge with the deployment of NATO AWACS that have deployed to the
    United States in support of ONE. For the first time ever, the on-call
    AEW and portions of the remaining AEW were employed. Additionally, a
    large portion of the total tanker force deployed to support Air Force
    and Navy strikes, while our mobility forces rapidly moved thousands of
    airmen and support equipment overseas allowing us to quickly engage the
    enemy on our terms, not theirs.
    Fully Capable AEFs
        Providing the flexibility needed for full spectrum operations
    requires continued efforts to round out capabilities of our AEFs to
    make them inter-changeable. Currently, our 10 AEFs are not all the
    same. For example, only three of the AEFs have precision, standoff
    strike capability, and only nine have an F-16CJ squadron for
    suppression of enemy air defenses. Until the disparity is rectified,
    the EAF construct will have limits--many LD/HD and stealth systems
    remaining tasked at maximum levels.
        As the EAF continues to mature and technologies advance, we will
    expand the capabilities each AEF can provide. With enhanced
    intelligence, surveillance, and reconnaissance (ISR) we will enlarge
    the battlespace an AEF can control; improve our ability to do real-time
    targeting; and dramatically increase the number of targets an AEF can
    engage. Finally, we will continue to improve our expeditionary combat
    support capabilities--effective, responsive logistics are the key to
    sustaining expeditionary forces and operating from austere locations.
    Reflection and Resolution
        After a morning of terror on September 11th, there was reassurance.
    Aircraft over American cities lent calm rather than fear, for they were
    the Active, Guard and Reserve Air Force keeping watch. We reacted
    within minutes of the attacks to establish a defensive posture and to
    prepare our offensive forces, just as we spent 2001 reacting
    successfully to humanitarian and combat operations around the globe.
    While meeting the requirements of the new war on terrorism, we will
    continue our transformation journey. The capability to deliver massed,
    discriminate and precise effects anywhere in the world within minutes,
    and the persistent ISR to evaluate actions are within reach for
    America's air and space forces. This is the contribution of the Air
    Force to the Nation--asymmetric capabilities that assure, dissuade,
    deter or decisively defeat.
                                   readiness
        Though no organization in America was ready for the attacks of
    September 11th, none was more ready for the immediate aftermath than
    the Total Air Force team. From humanitarian to combat operations, the
    operational demands before the attacks were tremendous. Though
    significant milestones were reached in terms of reducing the effects of
    high tempo operations, the advent of war placed many of those gains on
    hold. The war on terrorism has disrupted the AEF schedules, which will
    create training, organization and resource impacts in the near future.
    Unaffected though, is our objective of 10 fully capable AEFs--each a
    flexible, identical cross-section of capabilities for the Joint Force
    Commander to employ. America's competitive edge is due in large part to
    its emphasis on realistic, comprehensive training, and we must continue
    to ensure our forces get that training. Equally important is ensuring
    our personnel have the resources needed to accomplish their jobs.
    Recapitalization
        Our fielded forces have aged to the point that they will not be
    able to compete with emerging and future threats. In order to deal with
    the global security environment, the Air Force must rebuild its aging
    infrastructure and modernize its outdated weapon systems. Higher
    priorities, however, require that we pursue a structured
    recapitalization process that will ensure tomorrow's warfighters have
    the advanced tools, technology, and equipment needed to preserve
    America's air and space dominance.
        The budgetary constraints and spending reductions mandated in the
    1990s caused the Air Force to seriously underfund modernization and
    infrastructure improvements. For example, in 1990 the Air Force
    purchased 257 aircraft; by 1996, that number had fallen to 30. This
    dramatic cutback in hardware acquisitions signaled an unavoidable shift
    in USAF priorities. Modernization stalled in order to maintain core
    operational capabilities and keep the fleet of older aircraft flying.
    Unfortunately, this financially driven reprioritization placed the
    nation's mid- and long-term air power readiness at significant risk.
        We now face a dangerous situation. Our aircraft fleet is getting
    older, less capable, and more expensive to maintain--all at the same
    time. Reversing this negative trend requires the Air Force to structure
    its recapitalization plans to avoid large-scale procurement spikes and
    critical modernization gaps.
        The recapitalization of our airframes and weapons systems is only a
    partial solution. The Air Force needs to upgrade its infrastructure and
    physical plant, which include sustainment, restoration, modernization,
    transportation, support equipment, and communications systems. At the
    same time, the Air Force must be prepared to conduct real-world
    operations on a global scale. While recapitalization is important we
    can never forget investing in our people. The Air Force needs to take
    particular care in preserving this resource and expanding its
    capabilities. With the help of Congress, we have made considerable
    progress in addressing pay, benefits, and quality of life issues but
    more remains to be done.
        Understanding the range and nature of Air Force capabilities is a
    prerequisite to comprehending the readiness and transformational
    requirements. Securing our task forces' potential capabilities demands
    insightful and bold initiatives. How comprehensively we elevate the
    systems, processes, and people will determine how effectively America
    will be able to operate on the global stage in the decades ahead.
                               core competencies
    Air and Space Superiority
        Air and space superiority is the ability to control the entire
    vertical dimension, from the surface of the earth to the highest
    orbiting satellite, so the joint force has freedom from attack and
    freedom to attack. This is the essential first step in achieving
    battlespace dominance. As was true with operations in the 20th Century,
    dominance of the vertical dimension will remain the most critical
    capability for 21st Century Joint Force.
                Air Superiority
        The Air Force is investing in a range of systems encompassed in the
    entire F\2\T\2\EA kill chain. Among the air superiority assets that
    contribute to this targeting and attack process are the legacy air-to-
    air platforms. While we await the fielding of new systems, we strive to
    maintain the viability of our current assets. The F-15 and F-16
    programs continue to pursue modernization of radars, engines, and
    enhanced combat capability to ensure near-term fleet maintenance and
    air superiority in air-to-air combat environment. Finally, key weapon
    advances rest with continued development and production of the Joint
    Helmet Mounted Sight as well as the AIM-9X and AIM-120 next-generation
    air-to-air missiles. While modernization of current systems is required
    to make them as capable as they can be, our greatest advantage with
    current systems is our robust training and the availability of ranges
    to conduct that training.
        Self-defense against enemy air defense systems is a key element to
    ensure air superiority. Several electronic warfare programs support
    this important capability. The Joint Services Electronic Combat Systems
    Tester meets our operational requirement for a mobile verification
    system to confirm installed electronic countermeasures systems on F-15,
    F-16, and A-10 are operable. It tests end-to-end electronic combat
    capabilities, identifies system problems before takeoff, and provides
    the highest level of confidence to the warfighter that the EW suite is
    operational.
        Comet Pod is a new infrared (IR) countermeasures system designed to
    provide covert, preemptive protection for the A-10 against IR surface-
    to-air missiles (SAMs). Fielding this system will greatly enhance
    survivability of the A-10 in its low-altitude close air support role.
    Additionally, the Advanced Strategic and Tactical Expendable program
    addresses multiple Combat Mission Needs Statements and provides
    accelerated ramp-up for production of the MJU-46 covert IR flare. This
    operational requirement acceleration responds to today's air war threat
    in Afghanistan and currently provides protection to special operations
    aircraft in the combat zone.
        The AF leads the way in Radio Frequency (RF) Towed Decoys on
    fighter and bomber platforms. These countermeasures provide protection
    against advanced SAM threats and increase the viability and lethality
    of current platforms to conduct operations in the modern RF threat
    arena. These defensive systems have proven invaluable in combat over
    the last decade, and will continue to add to our legacy force
    capabilities.
                Combat Search and Rescue (CSAR)
        The CSAR mission provides friendly forces protection and assurance
    by recovering downed aircrew members or other persons in isolated
    locales and returning them to friendly control. Primarily charged with
    supporting combat personnel, CSAR continues to play an important role
    in civil search and rescue activities. The aging nature of the CSAR
    fleet, however, increasingly jeopardizes the Air Force's ability to
    accomplish the CSAR mission. Moreover, CSAR assets lack appropriate
    compatibility with our advances in strike, command and control,
    intelligence, surveillance and reconnaissance systems, though some
    advances in information fusion have been completed.
        Other improvements are forthcoming. Air Force Reserve Command
    (AFRC) will modify nine HC-130's with the APN-241 ground map radar,
    which enhances position awareness and increases system reliability.
    Additionally, AFRC is beginning the upgrade of the forward-looking
    infrared for the HH-60G helicopter fleet.
                Space Superiority
        Space superiority ranks with air superiority as a top priority. The
    ability to exploit and assure U.S. access to space assets while denying
    the same to our adversaries is of great importance, and as the ultimate
    high ground, space provides America with military advantages that
    cannot be duplicated.
                Space Commission
        In 2001, the Secretary of Defense named the Air Force as Executive
    Agent for Space in his implementation of Space Commission
    recommendations. This made the Air Force responsible for department-
    wide planning, programming, and acquisition of space systems.
    Consistent with the National Reconnaissance Office's (NRO) long
    standing approach, the Air Force will manage space systems with a
    ``cradle to grave'' philosophy, integrating systems acquisition with
    operations. To accomplish this, the Space and Missile Systems Center
    has been transferred from Air Force Material Command to Air Force Space
    Command. The Under Secretary of the Air Force is now dual hatted as the
    Director of the NRO, and will have acquisition authority for all Air
    Force and NRO space systems, as well as Milestone Decision Authority
    for all DOD space programs. This will allow a comprehensive review of
    all space systems, to determine the optimal method of satisfying
    national/military requirements. The first National Security Space
    Program Assessment was accomplished this year, comparing DOD and NRO
    program budgets against existing plans. This assessment will be used in
    drafting the first National Security Space Plan, due in mid-CY02.
                Spacelift Range System (SLRS)
        Achieving and maintaining space and information superiority
    requires an operational space launch capability that can deploy
    satellites to orbit with speed and flexibility--the high ground of
    military operations. The Spacelift Range System modernization program
    is replacing aging and non-supportable equipment to improve reliability
    and efficiency; reducing the cost of operations and standardize
    equipment on the Eastern and Western launch ranges.
        SLRS modernization follows a phased approach. To date, the
    completion of new downrange satellite communications links, a new fiber
    optic network, and new range scheduling systems are providing
    government and commercial users more flexibility at the spacelift
    ranges. In 2001, these improvements enabled the rapid launch of 3
    systems in just 4 days using Cape Canaveral AFS equipment--an
    unprecedented feat for America's spacelift ranges. The next phase
    replaces old, base-unique systems with modern, standardized range
    safety, flight operations and analysis, communications, tracking,
    telemetry, planning and scheduling and meteorological systems. Once
    completed, the SLRS modernization program, coupled with the Evolved
    Expendable Launch Vehicle (EELV) program, will meet the future launch
    demands of national security, civil, and commercial payloads.
        In addition, Air Force spacelift ranges are central to supporting
    the Department of Defense's cooperation with the National Aeronautics
    and Space Administration (NASA) in the development of technology,
    operational concepts, and flight demonstration for the next generation
    of reusable launch vehicles. This cooperation also offers the basis for
    the evolution and future development of reliable, rapid, and assured
    access to space for air and space vehicles.
    Information Superiority
        Information systems are integral to every mission of the Air Force.
    Success in achieving superiority in this domain requires an effects-
    based approach, superior battlespace awareness, well integrated
    planning and execution, and properly trained and equipped information
    operations (IO) organizations. Information superiority means that our
    information systems are free from attack while we have freedom to
    attack an adversary's systems.
        Information is both a critical capability and vulnerability across
    the range of military operations from peace to war. In coordination
    with Joint Forces, the Air Force engages daily in conducting IO
    functions across this spectrum of military operations. We provide
    information superiority to our Air Force commanders and Joint Forces
    CINCs as well as to friendly multinational forces by conducting
    information operations in the air, space, and information domains.
                Command and Control, Intelligence, Surveillance, and
                        Reconnaissance (C\2\ISR)
        Currently, many military operations are limited in the area of
    C\2\ISR capabilities, which increases the amount of time, it takes to
    locate and destroy many targets. While we are aggressively pursuing and
    fielding solutions to streamline this process, some of our current
    C\2\ISR systems, which our forces rely on, are vulnerable to adversary
    manipulation. The challenge still exists to improve our own ability to
    disrupt the C\2\ISR systems of our adversaries. Of further concern to
    our C\2\ISR capabilities is limited radio frequency spectrum
    availability. Spectrum is the medium that supports the mobility,
    dispersion, and high tempo of operations. To meet this critical need
    for spectrum we must develop a strategy aimed at sustaining expanding
    spectrum access as we face evolving national security responsibilities.
        Our operational and tactical command and control airborne platforms
    and ground systems organize and direct efforts to create desired
    effects, whatever their form. Our C\2\ assets include the air and space
    operations center (AOC) with its decentralized component control
    reporting centers (CRC) and Theater Battle Management Core Systems
    (TBMCS); the Airborne Warning and Control System (AWACS); the Joint
    Surveillance Target Attack Radar System (JSTARS); and the Multi-
    Platform Radar Technology Insertion Program (MP-RTIP).
        The other half of C\2\ISR is central to achieving battlespace
    superiority--knowledge. ISR assets gather and processes the data into
    decision-quality information. Currently, our limited numbers of
    airborne ISR systems are in extremely high demand. The RC-135 Rivet
    Joint, U-2, Distributed Common Ground System (DCGS), Predator, and
    Global Hawk UAVs have proven indispensable during OEF and the expanding
    war on terrorism by providing real-time target data, threat warning,
    and battle damage assessment.
        The CRC is the JFACC's ground tactical execution node for C\2\ and
    battle management. It provides wide-area surveillance, theater air
    defense, identification, data link management, and air battle
    execution. The current system was developed in the 1970s and must be
    replaced. The CRC replacement, the Battle Control System, will exceed
    year 2010 requirements for time-critical targeting, open system
    architecture, small deployment footprint, remote operations, multi-
    sensor fusion, and AEF responsiveness.
                Air and Space Operations Center (AOC)--The Falconer
        As the primary element of the Theater Air Control System, the AOC
    is responsible for planning, executing, and assessing the full range of
    air and space operations. It is the premier operational system at the
    disposal of the Joint Forces Air Component Commander (JFACC). By fusing
    the data from a vast array of C\2\ and sensor systems, the AOC creates
    a comprehensive awareness of the battlespace so the JFACC can task and
    execute the most complex air and space operations across the entire
    spectrum of conflict.
        Especially significant among these operations is time-critical
    targeting. This is the development of swift reaction to the threat
    within theater battle management. Accomplishing this requires combining
    C\2\, rapid intelligence collection, analysis, and dissemination with
    positive control of airspace and the tasking of combat forces to
    coordinate the entire air battle with joint and coalition partners and
    component commanders. It is the ultimate goal of the targeting
    process--to reduce the F\2\T\2\EA cycle from hours to minutes.
        The Air Force has long understood the need to address
    standardization of command and control of air and space forces. The
    last decade witnessed the AOC as equivalent to a ``pick up game,''
    requiring on-the-job training and hundreds of individuals working long
    hours to produce an air tasking order. Throughout 2001, we aggressively
    addressed this problem and the Falconer AOC is now on path to becoming
    an efficient weapon system. Our focus will be refining the AOC into a
    standardized weapon system run by operators formally trained in C\2\
    Operations. We must also improve the weapon system's modularity,
    scalability and interoperability to meet requirements ranging from
    Major Theater War (MTW) to a Humanitarian Relief Operation (HUMRO) or
    Non-combatant Evacuation Operation (NEO).
        If there are adequate resources to develop Advanced Technology AOC,
    we will ``right-size'' the AOC to meet each mission's requirement. The
    system will be interoperable with internal and external U.S. National,
    Allied, Coalition and Joint Nodes. Utilizing emerging technologies to
    maximize reachback, we will dramatically reduce the footprint of the
    AOC while enhancing JFACC decision processes and timelines, and reduce
    costs. Supporting combat operations during Operations NOBLE EAGLE and
    ENDURING FREEDOM validated our strategic vision for C\2\ systems. We
    will continue to develop the AOC, which sets the standard for new Air
    Force capabilities-programming efforts, and keep it on course to
    revolutionizing the operational level of warfare.
        The ``engine'' of the AOC is the TBMCS. It is an integrated,
    automated C\2\ and decision support tool that offers the senior air and
    space commander and subordinate staffs a single point of access to
    real- or near-real-time information necessary for the execution of
    higher headquarters taskings. TBMCS supports a full range of functions
    including threat assessment, target selection, mission execution,
    battle damage assessment, resource management, time-critical target
    identification and prosecution, and defensive planning. During ONE and
    OEF, TBMCS was rapidly deployed supporting both CENTCOM and NORAD
    operation centers. TBMCS will evolve into an open-ended architecture
    capable of interface with a variety of joint and coalition data buses,
    displays and links.
        The Airborne Warning and Control System (AWACS) remains the premier
    air battle management and wide-area surveillance platform in the world.
    Still, aging aircraft issues, obsolete technologies, and the
    proliferation of advanced adversary systems necessitate several upgrade
    programs. This year, one-third of the AWACS fleet completed an improved
    radar system upgrade, which will reach full operational capability in
    fiscal year 2005. The next computer and display upgrade will replace
    the 1970 vintage processors with an open architecture system. Finally,
    a satellite communications access program will provide improved
    connectivity with regional and national C\2\ centers.
        Joint Surveillance Target Attack Radar System (JSTARS) provides
    battle management, C\2\, and ground moving-target detection. We will
    replace the on-board computers with commercial-off-the-shelf equipment
    by 2005 under the JSTARS Computer Replacement Program (CRP). The CRP is
    the foundation of all JSTARS communications and sensor upgrades, and
    should reduce life-cycle costs and minimize the number of obsolete
    parts.
        Another 707-airframe C\2\ISR asset is the RC-135 Rivet Joint--the
    premier aircraft in its class. We continue to modernize the Rivet
    Joint's sensors using an evolutionary, spiral development program.
    Recapitalization and modernization efforts promise to keep the RC-135
    and U-2 viable well into the 21st Century. As we look to the future, we
    are examining the growth of the Rivet Joint as part of the Multi-sensor
    Command and Control Constellation. Although the U-2 is not currently in
    production, we continue to modernize the aircraft with updated sensors
    and aircraft modifications to support our ongoing mission needs.
    Advanced imagery sensors will allow the U-2 to collect top-notch data
    for the battlefield commander. Aircraft modifications, such as cockpit,
    defensive and power system upgrades will ensure U-2 survivability and
    viability. Air Force DCGS continues to provide robust processing and
    reporting of the U-2, Global Hawk, and Predator collected data. System
    modifications/upgrades and increase in capacity will ensure continued
    delivery of timely intelligence to enable time critical target
    prosecution.
        Unmanned Aerial Vehicles (UAVs) provide unmatched access for
    information, surveillance and reconnaissance missions. Their
    capabilities expand ISR collection coverage while reducing the need to
    place our people in harm's way. We are committed to the production and
    fielding of Global Hawk as the next generation of high altitude
    airborne ISR platform. We have transitioned Global Hawk from an
    Advanced Concept Technology Demonstration (ACTD) program to a formal
    acquisition program. In the spring of 2001, Global Hawk successfully
    completed a deployment to Australia, where it supported maritime
    reconnaissance and achieved a number of UAV aerial firsts, including
    the first trans-Pacific crossing.
        Due to this success, and a high level of confidence in the
    platform, Global Hawk was deployed in support of OEF. The development
    of advanced sensors will enable Global Hawk to support the time
    critical targeting mission more completely. Finally, demand for the
    older Predator UAV remains high. The successful weaponization of
    Predator holds the promise of significantly shortening the time
    critical targeting timeline. Based on the tremendous successes of
    Predator A, testing is underway on an improved version, the larger
    Predator B.
        Air Force weather satellites enable information superiority every
    day during joint operations around the globe. The Defense
    Meteorological Satellite Program (DMSP) constellation provides global
    weather imagery and other environmental data to support mission
    planning. Augmented with civil satellites, joint forces are provided
    timely, accurate pictures of the weather affecting operations. The Air
    Force is modernizing environmental data collection with the new
    National Polar-orbital Operational Environmental Satellite System
    (NPOESS). In conjunction with the Department of Commerce, development
    of the NPOESS will provide the nation a consolidated system for all
    national weather monitoring needs. NPOESS will cost the DOD
    significantly less than building and fielding a DOD-unique follow-on
    system and will provide enhanced environmental monitoring capability to
    support emerging weapons systems and concepts of operations.
        The Multi-Platform Radar Technology Insertion Program (MP-RTIP) is
    developing a scalable X-band electronically-scanned array (ESA) for use
    on a variety of platforms for air-ground surveillance, including a
    future 767 manned, wide-area surveillance platform, the Global Hawk,
    and potentially a NATO manned platform variant. On the 767 platform
    this array would provide five to ten times the air to ground
    surveillance capability of current JSTARS, reduce target revisit times,
    improve moving-target track capability, and enhance radar resolution.
    Furthermore, MP-RTIP on a 767 is envisaged as the first development
    spiral toward achieving a Multi-sensor Command and Control Aircraft
    (MC\2\A) capability as part of an over-arching and transformational
    Multi-sensor Command and Control Constellation (MC\2\C) to support
    future employment of the task forces addressed later in the text.
                Communication
        Achieving information superiority depends considerably on the
    availability of a robust, worldwide communications capability.
    Communications are critical to the joint fighting forces deployed
    worldwide. We are modernizing Military Satellite Communications
    (MILSATCOM) systems to keep pace with this demand. Inseparable from
    such modernization is Tasking Processing Exploitation and Dissemination
    (TPED). TPED describes how information is transferred among our
    numerous systems and highlights bandwidth as a serious topic. Bandwidth
    is a critical parameter--more is better--defining how much and what
    kind of information we can disseminate. Over the next ten years, our
    need for reliable, redundant, and secure communications is expected to
    increase 15 to 20 times beyond the current capacity. The MILSATCOM
    systems in use today simply cannot meet that demand and supply CINCs
    with sufficient protected coverage to adequately support the
    warfighter. Further, in an environment of extremely high worldwide
    demand and competition, commercial providers cannot be leveraged for
    they lack the protected bandwidth, security, and coverage necessary to
    fully support military operations.
        Despite shortcomings, the MILSATCOM system is making significant
    contributions to current, daily operations. The scope and speed of
    joint operations, including OEF, simply would not be possible without
    MILSATCOM systems, notably the Defense Satellite Communications System
    (DSCS) and the Military Strategic and Tactical Relay System (Milstar).
    In fiscal year 2001 we successfully launched one DSCS and one Milstar
    satellite. Additionally, a complete modernization of satellite
    communications is underway. Wideband Gapfiller Satellites (WGS) are
    low-cost, high bandwidth communications satellites intended to greatly
    increase the on-orbit bandwidth available to the warfighter. WGS
    satellites will help bridge the requirements gap until the Advanced
    Wideband System (AWS) is brought on-line. Similarly, the Milstar
    constellation is planned for replacement beginning in 2006 by the new
    Advanced Extremely High Frequency (AEHF) satellites. The Air Force
    awarded a System Development and Demonstration contract in November
    2001 to design the AEHF satellite system.
        To leverage the full capability of our new technologies, we are
    combining our efforts with the other Services to form the joint Global
    Information Grid (GIG)--a globally interconnected, end-to-end set of
    information capabilities and associated processes that allow
    warfighters, policymakers, and support personnel to access information
    on demand. Currently as the AEF deploys to support combat operations,
    it connects to the global information grid via the Theater Deployable
    Communications (TDC) package. This package is replacing legacy
    deployable AF communications equipment with scalable, lightweight, and
    reliable transmission, networking, and network management equipment.
    TDC allows timely reachback to the United States for intelligence,
    logistics and people support that otherwise would have to deploy
    forward. During OEF operations, we successfully deployed TDC to support
    combat operations, demonstrating that TDC is the capability needed to
    support AEF communication requirements.
        Contributing to the GIG, the AF is building an enterprise
    architecture ensuring our diverse projects and initiatives are closely
    integrated to deliver maximum capability to the warfighter. In support
    of the enterprise architecture, the AF ``infostructure'' architecture
    facilitates system integration by providing timely and cost effective
    communications and information technology capabilities. The AF
    infostructure leverages commercial and government developed
    technologies and ensures these technologies are controlled and
    integrated.
        To provide our people better access to information and applications
    needed for their specific missions, we have fielded additional
    capabilities through the Air Force Portal. The Air Force Portal is
    envisioned as the single access point for practically all our
    information needs. Leveraging commercial successes in web-enabled
    information technology and communications, our members now have access
    to the Air Force Portal almost anywhere in the world.
                Information Warfare (IW)
        Multi-faceted information warfare planning and execution is another
    challenge of information superiority. In the effort to create specific
    effects to accomplish campaign objectives, the Air Force closely
    coordinates information operations (IO) plans between and among
    supported and supporting commands to prevent redundancy, mission
    degradation, or fratricide. The numerous organizations participating in
    these coordination efforts include representatives from the COMAFFOR
    for Computer Network Operations and the Air Intelligence Agency, to IO
    squadrons and IW flights. To enhance the effectiveness of these
    organizations, we specifically designed tools for the IW planning and
    testing efforts. In an effort to normalize IO as a warfighting asset,
    we integrated AIA into the Air Combat Command, the IW lead for the
    Combat Air Forces. They directly support the Joint Force Commander
    through the JFACC/COMAFFOR.
        We continue to make every effort to define requirements and layout
    a viable long-term strategy/roadmap to provide IW capability to the
    warfighter. The IW MAP has become a leading edge planning tool for the
    Air Force in this arena. Its expressed purpose is: (1) To define,
    document, and advocate Air Force IW requirements, (2) To integrate
    those requirements into the Air Force Capabilities Investment Strategy,
    (3) To identify solutions meeting validated IW needs, and (4) To
    provide IW Mission Area expertise to the warfighter and to the Air
    Force corporate process. Subsequently, the MAP helps to focus
    disjointed efforts, reduces duplication, promotes integration among
    architectures and enhances operations.
                Information Assurance (IA)
        The Air Force maintained a robust IA capability through a Defense
    in Depth strategy that integrated people, operations, and technology
    for multi-layered, multi-dimensional protection. People were trained to
    do the IA mission and protect the network. We changed policies and
    procedures to ensure IA operations are effective and efficient. We also
    implemented finally, technological advances to provide physical
    protection to our information weapon system. Consequently our IA
    posture has never been better.
        Training initiatives included a year long IA Campaign that focused
    our attention on such corporate issues as IA roles and
    responsibilities, network threats and countermeasures, computer network
    defense, and EAF web security which significantly improved our
    collective IA knowledge and capability. We also continued our emphasis
    on individual certification for network operators and maintainers
    through the development of a Job Qualification Standard toward mission-
    ready, deployable people.
        Addressing procedures, we implemented a Time Compliance Network
    Order (TCNO) process. TCNO allows senior leadership to track and ensure
    completion of critically important computer security configuration
    changes. This resulted in a ten-fold reduction of network infections
    attributed to malicious code attacks from 2000 to 2001. Another
    important operational initiative is the deployment of Scope Network
    teams to our installations to fine-tune base-level networks. Scope
    Network's mission is to optimize and tune networks and firewalls and
    ensure their proper configuration. They deploy throughout the year to
    measure, analyze, train, and mentor at the base level.
        Finally, our primary IA technology initiative is a layered
    equipment suite to discourage hackers and filter viruses as well as
    provide tools to identify vulnerabilities like the Combat Information
    Transport System (CITS), and the Network Management System/Base
    Information Protection (NMS/BIP). These systems provide a standard tool
    suite to each Air Force installation.
        The requirements for global-level detection and early warning of
    natural disasters, conventional military or chemical, biological,
    radiological, nuclear and high-yield explosive (CBRNE) aggression
    remain as critical as ever. At the same time, September 11th introduced
    a new category of threat that will challenge the ability of America's
    C\4\ISR networks to cope with strategic-level surprise, fait accompli
    or limited objectives strategies, among others. Information
    superiority, the mastery of prediction, assessment and employment of
    data, is arguably our Nation's most pressing challenge.
    Global Attack
        Global Attack is the ability to create desired effects within hours
    of tasking, anywhere on the globe, including locations deep within an
    adversary's territory. It also includes the ability to retarget quickly
    against objectives anywhere, anytime, for as long as required.
        Among Air Force programs supporting these capabilities is our
    bomber fleet. Our B-1, B-2, and B-52 bombers provide a global rapid
    response, precision and standoff strike capability, 24/7 battlespace
    persistence, and a level of time-critical targeting (TCT) capability.
    The new transformation era reinforces and re-emphasizes our ongoing
    basic bomber modernization plan--increase lethality, survivability,
    flexibility, supportability, and responsiveness.
        All three platforms now carry the highly accurate 2,000-pound Joint
    Direct Attack Munition (JDAM), and are all being fitted to carry new
    standoff precision guided weapons. In addition, future integration
    programs will see the inclusion of smaller precision weapons. To
    improve their survivability, bombers are receiving a range of upgrades
    to include defensive system, situational awareness and electronic
    countermeasure upgrades. To enable attack of time-critical targets, the
    Air Force is upgrading bomber avionics and communication systems and
    linking them directly with remote sensor and targeting systems.
        To enhance our ability to kick down the door in remote theaters and
    clear the way for follow-on forces, the Air Force is planning for a mix
    of new generation manned and unmanned, air superiority and ground
    attack aircraft. However, until the F-22, Joint Strike Fighter (JSF),
    and Unmanned Combat Aerial Vehicle (UCAV) become an operational part of
    our inventory, we will continue to rely heavily on our legacy
    fighters--the F-15, F-16, F-117 and A-10--to provide a potent mix of
    air-to-air and air-to-surface capability. These platforms are all
    programmed to receive upgraded voice and data communication systems
    linking them to a joint command and control net. Programmed
    improvements to avionics and situational awareness systems will allow
    for better all-weather/night operations, combat identification and
    response to time-critical and moving targets.
        F-15E modernization incorporates robust data-link capability and
    integration of smart weapons to ensure all-weather, deep strike
    lethality. The recent addition of Global Positioning System (GPS)-
    guided, precision guided munitions (PGMs) on the F-117 give it an
    adverse-weather capability. However, these aging platforms are growing
    more expensive to maintain and operate, and their combat effectiveness
    is expected to eventually decline as projected surface-to-air and air-
    to-air threats with greater capabilities emerge. The introduction of
    the stealthy F-22 and JSF will maintain America's technological
    advantage and ensure our ability to defeat next-generation threats
    while replacing our aging force structure with leap-ahead capabilities.
        One of our Guard and Reserve's top modernization priorities is
    incorporating precision targeting pods into their F-16 aircraft. From
    1998 through 2000, we outfitted all our Reserve units and selected
    Guard units with LITENING II pods. This acquisition gave Guard and
    Reserve F-16s a critical precision strike capability while configuring
    these units with the system capabilities of the Active F-16 force.
    Additionally, the Guard will join the Active force in procuring
    Advanced Targeting Pod (ATP) for an initial operating capability in
    2003.
        Two critical F-16 programs, the Combat Upgrade Integration Details
    (CUPID) and the Common Configuration Implementation Program (CCIP),
    will bring decisive combat capability (night vision, helmet-mounted
    cueing, and data links) to our F-16 fleet. Additionally, the Falcon
    Structural Augmentation Roadmap (STAR) will ensure the F-16 fleet is
    structurally sound to perform its mission through its designed service
    life. Collaborative programs between our Active and Reserve components
    increase our overall procurement flexibility and close the gap in
    combat capability.
                Intercontinental Ballistic Missiles (ICBM)
        The recent DOD Nuclear Posture Review (NPR) announced a transition
    from the Cold War nuclear triad to a new capabilities-based triad in
    response to the more complex, evolving security environment. Consistent
    with NPR direction, the Air Force is providing for long-term
    sustainment of ICBM capabilities. Minuteman III (MMIII) ICBMs will be
    deployed through 2020 and supported by on-going life extension
    programs. We will begin to look at alternatives for a follow-on ICBM to
    be fielded as MMIII reaches the end of its service life. Peacekeeper
    (PK) ICBMs will be retired beginning in CY02. As the PK system is
    deactivated the Air Force intends to transfer some warheads currently
    on PK to the MMIII, thereby avoiding a costly life extension program on
    certain MMIII warheads. This replacement effort will ensure that the
    newest warhead with all modern safety features remains a part of the
    ICBM force, an essential nuclear strike element in the nation's
    capabilities-based triad.
    Precision Engagement
        Our current operations emphasize the powerful advantage of being
    able to create precise effects rapidly. The Air Force offers tremendous
    capabilities to meet this national requirement from pinpoint
    humanitarian responses to precise weaponry. Precision is fundamental to
    all of our operations and, in particular, to transformational combat
    operating concepts. Along with information superiority and stealth,
    precision engagement enables our forces to identify an adversary's key
    centers of gravity and relay that information to strike assets, thus
    reducing risks by avoiding unnecessary engagements (a concept generally
    referred to as ``parallel warfare''). Enhancing precision engagement
    will allow us to accomplish this cycle in near real-time. This would
    allow us to maximize the leverage gained from the fluid interaction of
    joint forces in more effective prosecution of operations.
        We have made significant progress in our efforts to develop and
    field a new generation of weapons that can attack and destroy pin-
    point, hardened, and relocatable targets at night and in most weather
    conditions while greatly reducing the risk. By rapidly adapting new
    technology employed under actual combat conditions in Operations ALLIED
    FORCE and ENDURING FREEDOM, we now have an array of precision weapons
    that can be employed from nearly all of our combat aircraft. Our high
    priority precision engagement programs now include the Joint Air-to-
    Surface Standoff Missile (JASSM), Joint Standoff Weapon (JSOW), Joint
    Direct Attack Munition (JDAM), Wind Corrected Munitions Dispenser
    (WCMD), and eventually the Small Diameter Bomb (SDB).
        JASSM is a precise, stealthy, cruise missile that will enable us to
    destroy heavily defended, hardened, fixed and relocatable targets from
    outside of area defenses. JASSM program recently entered low rate
    initial production and will be delivered to the field in 2003.
        JSOW is an accurate, adverse-weather, unpowered, glide munition. We
    are currently procuring two variants, the AGM-154A and AGM-154B, which
    are capable of destroying soft and armored targets at ranges exceeding
    40 nautical miles.
        JDAM employs GPS-aided guidance, incorporated in a tail kit, to
    deliver general-purpose bombs or penetration warheads with near-
    precision accuracy. We will use JDAM in all weather conditions from
    multiple platforms to destroy high-priority, fixed, and relocatable
    targets. The first operational use of a 2,000-pound JDAM was from a B-2
    during Operation ALLIED FORCE and JDAM has been used extensively during
    OEF. The F-22 will employ the 1,000-pound JDAM against anti-access and
    air defense systems. Using the 500-pound JDAM currently in development,
    the B-2 that carries up to 16 2,000-pound JDAMs in OAF, would be able
    to carry up to 80 500-pound JDAMs in future conflicts. This will
    provide the first step in the Air Force's transition to miniature
    munitions. Succeeding steps include the Small Diameter Munition (SDM).
    SDM, under development for the F-22, will offer standoff capabilities
    against the most difficult surface-to-air threats. The F-22 will carry
    up to eight SDMs internally.
        WCMD has an inertial-guided tail kit that enables us to accurately
    deliver the Combined Effects Munition, Sensor Fuzed Weapon, and the
    Gator Mine Dispenser from medium to high altitude in adverse weather.
    WCMD became operational in late 2000 and has been successfully employed
    in OEF from the B-52.
        Key to precision engagement is the GPS navigation signal used by
    sensors and shooters to assist in targeting the enemy with pinpoint
    accuracy. Successful joint operations rely on the GPS signal: search
    and rescue, rendezvous, and mapping are only a few examples. Rigorous
    upgrades to both satellites and warfighter equipment are currently in
    work to protect the ability of American and allied forces to employ the
    GPS signal on the battlefield and deny it to our adversaries while
    preserving civil use.
        Precision capabilities allow the United States to engage in
    operations with dramatically reduced risk to friendly forces,
    significantly less costs in men and materiel, and with greater
    likelihood of success. The strike side of precision engagement enables
    us to employ one weapon per target to destroy it with minimal
    collateral damage and greatly increase the number of targets that can
    be struck per sortie.
        The benefits are exponential. By minimizing the number of sorties
    required to strike a target, we shrink the forward footprint necessary
    and minimize the number of airmen, soldiers and sailors in harm's way.
    Indeed over the last decade, the Nation has faced numerous engagements
    wherein precision has proven the method for success. From the Balkans
    to Kabul, combatant commanders have required precision capability, not
    large-scale conventional operations. However, this demand has
    dramatically reduced our large Cold War reserve munitions stockpiles.
    As current operations continue to tax existing PGM inventories, the Air
    Force is working to expand the capacity of our industrial base to fill
    preferred munitions requirements. This strategic effort, along with our
    continued acquisition of JDAM, JASSM, JSOW and WCMD, will increase PGM
    capabilities over the next several years. The changing nature of
    warfare with its emphasis on precision engagement, necessitates that
    munitions recapitalization and development of transformational small
    weapons will remain among our top priorities.
        Precision strike, however, is more than simply very accurate
    munitions. It is also the ability to generate precise effects other
    than destruction. For that reason we also invest in various non-lethal
    weapons, offensive information warfare capabilities, and directed
    energy weapons that enable the U.S. military to affect targets without
    having to destroy them. This enables effects-based operations that
    match precise capabilities to desired effects--the ultimate in
    deterrence.
    Rapid Global Mobility
        Rapid Global Mobility ensures the nation has the global reach to
    respond quickly and decisively anywhere in the world. As the number of
    forces stationed outside the United States has declined, the need for
    an immediate response to overseas events has risen. Given that access
    to forward bases will remain critical and become increasingly risky,
    the rapid deployment and agile sustainment of expeditionary air and
    space forces will be key to our ability to operate across the spectrum
    of conflict.
        Airlift and tanker aircraft give the United States the ability to
    swiftly reach out and influence events around the world. OEF and ONE
    have, again, shown the utility of rapid global mobility. We have also
    witnessed the potential need to provide critical tactical lift
    capability for immediate response at home. However, even with the
    success of these ongoing operations, the Air Force desperately needs to
    continue airlift and tanker modernization efforts to ensure the United
    States maintains its ability to operate globally. As part of our on-
    going effort to assess our airlift requirements in light of current and
    anticipated needs, Air Mobility Command is undergoing a comprehensive
    review of our air mobility force structure.
                Global Air Traffic Management (GATM)
        In addition to aging aircraft problems, the Air Force mobility
    fleet must also respond to the added requirements of a new air traffic
    architecture. GATM focuses on increasing system capacity and flight
    efficiency, while continuing to meet flight safety standards. The most
    critical technology elements are satellite-based navigation, increased
    use of data links rather than voice for pilot/controller communication,
    and improved surveillance that will enhance both ground and cockpit
    situational awareness. Incorporation of these technologies will ensure
    our mobility fleet maintains unrestricted access to global airspace.
        An essential means to ensure the AF's ability to support its 54.5
    million-ton miles per day airlift requirement is through the
    procurement of additional C-17s. The AF has identified a need for at
    least 180 C-17s, and will award a follow-on multi-year procurement
    contract to reach that number. A mobility tiger team with Active,
    Reserve and Guard representation will continue to study beddown plans
    for these additional aircraft.
        The average age of our KC-135 tankers is now over 41 years and
    operations and support costs are escalating as structural fatigue,
    corrosion, systems supportability, and technical obsolescence continue
    to take their toll. To keep these aging aircraft operational, we are
    modernizing the avionics and navigation systems on all Active, Guard,
    and Reserve KC-135s. Called Pacer CRAG (compass, radar and global
    positioning system), the project provides for a major overhaul of the
    cockpit to improve the reliability and maintainability of the
    aircraft's compass and radar systems. The project also meets the
    congressionally mandated requirement to install the global positioning
    system in all Defense Department aircraft. As an added safety measure
    for formation flying, a traffic collision avoidance system (TCAS) will
    be installed. TCAS gives pilots the ability to actively monitor other
    aircraft and provides advance warning of potential mid-air collisions.
        The ongoing war on terrorism is further stretching the tanker
    fleet, motivating the Air Force to consider accelerating replacement
    options. The Boeing 767 Global Tanker Transport Aircraft (GTTA) is a
    promising alternative to quickly replace the KC-135E, our least capable
    and most costly to maintain tanker aircraft. While considering this and
    other lease options, the Air Force is focused on acquiring the world's
    newest and most capable tanker; increasing fuel offload, increasing
    availability, and increasing reliability-all with far lower support
    cost.
        The Air Force is pursuing a two-phased modernization plan for the
    C-5 fleet. Phase I is the Avionics Modernization Program (AMP) and
    Phase II is the Reliability Enhancement and Re-engining Program (RERP).
    C-5 AMP replaces unreliable/unsupportable engine/flight instruments and
    flight system components, installing GATM equipment to assure complete
    access to global airspace and installing navigation/safety equipment to
    reduce risk of mid-air and ground collisions (i.e. TCAS). C-5 RERP
    improves aircraft reliability, maintainability and availability by
    replacing the power plant and other unreliable systems. Several C-5
    aircraft will undergo multi-year testing to evaluate the potential for
    modernizing this aging, but important mobility asset. The results of
    that evaluation will determine the need for additional C-17
    acquisitions or other alternative.
        Modernization of the C-130 fleet is proceeding with a two-pronged
    approach to maintain an intra-theater airlift capability well into the
    21st Century. Procuring 168 new C-130Js to replace our oldest C-130s
    and modifying the remaining fleet will reduce total ownership costs and
    simplify maintenance, training, and operational employment. New C-130Js
    will replace eight EC-130Es and 150 of our most worn-out C-130E combat
    delivery aircraft. In addition, 10 C-130Js will replace the Reserve's
    10 WC-130H aircraft at Keesler Air Force Base, MS. These aircraft and
    crews are specially trained and equipped to penetrate severe storms
    while collecting and transmitting extensive meteorological data
    necessary to track and forecast the movement of these severe storms to
    a special ground station. C-130Js will also replace the Air National
    Guard's aging Commando Solo platform, as well as complete other Guard
    units. The remainder of the AF's C/AC/EC/HC/LC/MC-130 fleet will
    undergo an Avionics Modernization Program (C-130 AMP). This will
    include state-of-the-art avionics and a new ``glass'' cockpit that will
    eliminate the need for a navigator in the combat delivery aircraft.
    Along with increased reliability, this modernization will make the
    fleet compliant with the GATM and the DOD's navigational safety
    requirements.
        Rapid Global Mobility is also dependent upon expeditious airfield
    support. Moving aircraft tails in-and-out of a field quickly can
    determine success or failure of an operation. The Air Force is
    procuring the Tunner (60K) and Halvorsen (formerly next generation
    small loader or NGSL) loaders to replace older equipment, providing a
    new capability to interface directly with all military and commercial
    cargo aircraft. The Tunner is optimized for high volume to support
    operations at major aerial ports while the Halvorsen is C-130
    deployable to support mobility operations at forward, austere bases.
                Large Aircraft Infrared Countermeasures (LAIRCM)
        The Air Force has begun a new self-protection initiative to counter
    man-portable air defense systems (MANPADS). LAIRCM will use state-of-
    the-art technology to provide an active IR defense for the AF's airlift
    and tanker aircraft. LAIRCM builds on existing systems designed to
    defend helicopters and small, fixed-wing aircraft. It will add a laser,
    which provides the increased power needed to protect aircraft with
    large IR signatures like the C-17 and the KC-135. Operational
    capability is expected on the first C-17s in late fiscal year 2004.
    Additional airlift and tanker aircraft will be LAIRCM-modified in the
    future.
                CV-22
        The CV-22 is the Air Force designation for the special operations
    variant of the V-22 Osprey--a vertical takeoff and landing airplane
    designed for long range, rapid, clandestine penetration of denied areas
    in low visibility, adverse weather, and/or at night. With twice the
    range and speed of a conventional helicopter and state-of-the-art
    avionics system, the CV-22 will be able to complete most of its
    missions under the cover of darkness without being detected. We will
    use the CV-22 to infiltrate, exfiltrate, and resupply Special
    Operations Forces (SOF) and to augment personnel recovery forces when
    needed. Currently, the entire V-22 program is undergoing a major
    restructuring that will address technical and safety concerns. Flight
    tests of the two CV-22 test vehicles, suspended through 2001, will
    resume in 2002 and continue through 2005.
                VIP Special Air Mission/Operational Support Airlift
                        (VIPSAM/OSA)
        The Air Force continues to modernize the VIPSAM/OSA fleets to
    provide senior leaders with improved capabilities to respond to
    national crises. Aging CINC support aircraft are being replaced with
    modern commercial aircraft with intercontinental range and robust
    communications (leased Gulfstream Vs, designated the C-37, and Boeing
    737-700 designated the C-40B). This innovative strategy to leverage the
    commercial aircraft industry should be completed by fall 2002. The
    President's VC-25s will receive major upgrades to the passenger cabin
    infrastructure. Additionally, major upgrades to the communications
    suite will provide airborne capabilities comparable to that of his
    White House office. The four C-32s (Boeing 757s) will also receive
    advanced ``office-in-the-sky'' upgrades to include broadband data and
    direct broadcast service. As funds become available, remaining VIPSAM
    aircraft will be evaluated for similar upgrades.
    Agile Combat Support (ACS)
        Responsiveness, deployability, and sustainability--the cornerstones
    of American expeditionary operations--are the mandate of agile combat
    support. The basic objectives established set to achieve these goals
    remain intact. The Air Force established set objectives to elevate the
    capabilities of the ACS elements by developing lighter, leaner, and
    more rapidly deployable forces; creating more responsive planning and
    execution capability; executing improved agile combat support command
    and control; and assuring an agile, responsive, and survivable
    sustainment capability.
        While progress has been made toward achieving these objectives,
    much of the deployment strain in support of OEF has fallen on our
    expeditionary combat support forces. Some high-demand support areas
    have exceeded their on-call capabilities in current AEF rotation
    cycles, as a result of our surge mode activities, which are likely to
    continue for some time. Consequently, we are continuing to make gains
    in right-sizing deployment teams so they are postured efficiently and
    effectively for expeditionary needs. We are placing high emphasis on
    the development of expeditionary site planning tools that provide the
    means to tailor our deployment capability based on assets pre-
    positioned in the theater.
        Reconstituting our current bare base systems and wartime stocks, as
    well as developing and acquiring bare base assets and other types of
    support equipment that are ``lighter and leaner'' and more rapidly
    deployable are also integral to achieve force responsiveness. Essential
    investments in infrastructure and pre-positioning are mandatory
    ingredients of improved reception and beddown capabilities at our
    fighter and bomber forward operating locations (FOLs).
        The fielding of the Integrated Deployment System at all of our AF
    Wings has improved the responsiveness of our Wing deployment process.
    Our information technologies must continue to mature with expansion of
    such capabilities as the virtual logistics suite hosted on the Air
    Force Portal. These essential components provide real-time situational
    awareness for ACS command and control that leverages logistics and
    combat support across simultaneous operations in multiple theaters that
    now include the CONUS. The CSAF's Logistics Review (CLR) and ongoing
    Logistics Transformation are reengineering our logistics processes to
    achieve an agile, effective, well integrated logistics chain that is
    responsive to AEF requirements.
        Whether forward deployed in AEF operations, or completing homeland
    security missions, we must be prepared to operate under any conditions.
    Protecting critical bases of operations and defeating CBRNE weapons and
    their means of delivery is one of the most complex challenges facing
    the DOD. Our balanced response to the proliferation of these weapons,
    integrates the four pillars of counterproliferation--proliferation
    prevention, counterforce capabilities, and active and passive defense
    measures.
        Our counter-NBC operational readiness initiative sets Air Force-
    wide standards for readiness, identifies shortfalls and develops
    capabilities to effectively cope with CBRNE attacks. This initiative
    includes a counter-NBC roadmap and an enhanced counter-chemical warfare
    CONOPS. The roadmap is an innovative investment strategy that cuts
    across Air Force plans and programs to increase counter-NBC visibility,
    while offering enhancements for effective air and space operations in
    NBC environments.
        Regardless of contamination, combat or humanitarian settings, the
    medical service plays an important role in agile combat support.
    Through training initiatives and innovation in field systems this year,
    AFMS has raised the bar on its capabilities. The results of these
    efforts are the addition of state-of-the-art equipment and training
    facilities which guarantee AFMS' ability to respond effectively when
    the nation calls.
        One example is EMEDS , which is a lightweight modular medical
    system that allows the AFMS to tailor its response to each situation.
    Another revolutionary disaster response system is the Lightweight
    Epidemiological Advanced Detection and Emergency Response System
    (LEADERS), designed to enhance the current medical surveillance process
    and provide the earliest possible detection of covert biological
    warfare incidents or significant outbreaks of disease. The Air Force
    will continue to work with its civilian counterparts to develop and
    fine-tune this technology over the coming year.
        Along with developing relevant facilities and equipment, the AFMS
    is expanding its training capabilities through the development of the
    Coalition Sustainment of Trauma and Readiness Skills (CSTARS) program.
    CSTARS creates learning opportunities in which civilian academic
    centers serve as training platforms to provide clinical experience to
    help sustain necessary readiness skills for AFMS providers. The CSTARS
    arrangement allows for synergistic relationships between academic
    medical centers and military medical assets, while simultaneously
    improving wartime readiness and homeland security capability. Finally,
    AFMS training also extends to allied and friendly nations. The
    Institute of Global Health (IGH), located at Brooks AFB, Texas, is a
    worldwide educational program for medical providers to develop and
    improve their medical response skills. Programs are tailored to the
    host nation's infrastructure and resources and are taught on-site.
        This cross-section of examples of initiatives that will help
    achieve the four ACS objectives are producing meaningful results. There
    is, however, more to be done to better prepare our ACS capability for
    supporting the EAF vision. For example, we need to fill readiness
    shortfalls in key logistics resources strained by expanded operations
    including people, skills, spares, munitions, bare base assets,
    vehicles, etc. We need to improve our capability to rapidly develop
    deployment and sustainment plans for fast-breaking contingencies.
    Enhancements need to be made to our ACS command and control capability
    to make it more responsive, better integrated, and sufficiently robust
    to support AEF needs worldwide. Finally, modernization of equipment and
    the tools essential to complement skilled personnel require investments
    in R&D in Science and Technology initiatives that will help reduce our
    ``footprint'' while improving our ACS capability.
    Additional Readiness Concerns
                Facilities and Infrastructure
        Air Force installations and facilities that are available when and
    where needed, and with the right capabilities, form the foundation
    supporting current and future operational requirements and readiness.
    Our installations and facilities are the platforms from which we launch
    and recover Air Force and Joint weapon systems while simultaneously
    providing work and living environments for personnel and their
    families. For example, bases like Whiteman AFB, Missouri and Ramstein
    AB, Germany, are important nodes in the global network that sustains
    OEF operations while also sustaining thousands of airmen, dependents,
    and their communities.
        Regular and planned upgrades are an essential part of keeping a
    healthy infrastructure upon which to build and sustain air and space
    capabilities. In fiscal year 2002, operations and maintenance (O&M)
    sustainment funding precluded fully maintaining Air Force facilities
    and infrastructure and will increase the backlog of necessary repairs.
    In the near term the Air Force facilities recapitalization rate falls
    short of DOD's 67-year facilities recapitalization goal. In fiscal year
    2002, our military construction (MILCON) and O&M restoration and
    modernization accounts allowed us to achieve a recapitalization rate of
    163 years. With Congressional assistance we were able to reduce our
    fiscal year 2002 rate to 118 years.
        In the fiscal year 2003-07 Adjusted Program Objective Memorandum we
    were able to fully fund O&M sustainment across the FYDP and achieve a
    restoration and modernization recapitalization rate trajectory that
    will meet the OSD's 67-year goal by 2010. This track must be
    maintained. Sustaining and modernizing our facilities and
    infrastructure will ensure we have the right facilities at the right
    time and place to support military readiness.
                Vehicle Replacement Program
        The Air Force vehicle fleet is in serious need of recapitalization.
    Underfunding of the program during the past decade has created a
    backlog of more than 41,000 general and special purpose vehicles that
    have exceeded their life expectancy. This backlog represents half of
    the entire Active, Guard and Reserve vehicle fleets. The backlog
    continues to grow each year, despite efforts to lease vehicles and
    extend vehicle life expectancies through enhanced technology. Current
    funding is below the annual requirement. On-going operations have
    created a need for 879 additional leased and procured vehicles valued
    at $42.4 million to support the mission. Failure to replace aging
    vehicles has a direct impact on of readiness and ultimately our combat
    capability.
                Realignments and Closures
        Reductions in Air Force manpower and force structure continue to
    outpace those in infrastructure. As a result, the Air Force continues
    to fund unneeded facilities while struggling to maintain its vital
    operational readiness. Our physical plant today is too costly, and we
    have too much of it. Excess infrastructure continues to waste precious
    dollars that could be better used for force modernization and quality
    of life. The Air Force needs to close unneeded installations and direct
    the savings into readiness areas: base operating support, real-property
    maintenance, family housing, and military construction at crucial
    operational bases. The Air Force will comply with the Secretary of
    Defense's guidance for conducting the Base Realignment and Closure
    (BRAC) process in 2005, as authorized in the 2002 National Defense
    Authorization Act.
                Environmental Leadership
        The Air Force continues to be a leader in the stewardship of our
    environment through compliance, pollution prevention, resource
    conservation, and environmental restoration. We have achieved the
    Defense Planning Guidance goal for 2002 for the environmental
    restoration program, to have cleanup remedies in place for 50 percent
    of our active installations high-risk sites. The next goal is to have
    remedies in place for 100 percent of the high-risk sites by the end of
    2007. We are on track to achieve that goal, as well as having remedies
    in place for all medium risk sites by the end of 2011 and all low-risk
    sites by the end of 2014.
        The Air Force has a tremendous range of flexible, rapidly
    responsive capabilities--the skill sets that allow us to meet any
    mission requirement. Constant improvement will require innovation,
    creativity and re-assessment, but also the funding support to
    recapitalize critical components.
    Towards Developing Systems
                Experimentation and Wargames
        We conduct experiments and wargames to evaluate near- and far-term
    air and space capabilities and operational concepts. Joint
    Expeditionary Forces Experiment (JEFX) is the Air Force's large-scale
    experiment, which is fully integrated with Joint Forces Command's
    Millennium Challenge series of experiments. It is a live and
    constructive event focused on improving time critical targeting;
    command and control of intelligence, surveillance, and reconnaissance;
    and alliance participation in an open-floor Combined Air and Space
    Operations Center. The Global Engagement (GE) wargame is held every
    other year to explore the potential capabilities of joint air and space
    power and future concepts 10 to 15 years into the future. GE V
    demonstrated air and space power's unique capability to ensure access
    to operational areas where the enemy employs robust anti-access
    strategies. In August 2001, we completed a year of post-game analysis
    from GE-V. This analysis showed the Air Force is on the right vector
    toward the future in the area of force capabilities and is making great
    strides in addressing time critical targeting requirements. GE V also
    provided substantive recommendations for improvements in space control,
    information operations, and forward logistic support.
        Planning is underway for the next Global Engagement (GE VI),
    scheduled for November 2002. This game will explore mid-term joint /
    combined operational concepts, such as rapidly dominating the
    battlespace and setting conditions for transitioning to sustained joint
    operations.
        During odd-numbered years, we conduct the Air Force Future
    Capabilities wargame that takes a longer view, striving to shape our
    strategic vision by testing alternative concepts, systems, and force
    structures that may appear 20 to 25 years into the future. These
    wargames have produced new air and space concepts, such as long-range
    standoff warfare, reach-forward C\2\ capability, space force
    application, and the link between C\2\, ISR and target engagement,
    which continue to mature through follow-up analysis and subsequent
    wargames. We have just concluded the 2001 Futures Game that focused on
    defining C\2\ and ISR for the 2020 air and space campaign; overcoming
    anti-access strategies; survivability of space capabilities; future
    transformational capabilities; computer network operations; and
    conducting future joint/coalition operations. Insights from this game
    will be developed, analyzed and investigated further throughout 2002.
                Advanced Concept Technology Demonstrations (ACTDs)
        ACTDs marry new operational concepts with mature technologies
    meeting warfighter needs in two to four years at a reduced cost. The
    Air Force currently has 21 ongoing ACTDs. An example is the
    Hyperspectral Collection and Analysis System ACTD that will demonstrate
    various hyperspectral sensors on operational platforms and integrate
    them into the existing tasking, processing, exploitation, and
    dissemination architecture. Another example is the Thermobaric Weapon
    ACTD, which provides an energetic thermobaric penetrator payload to
    defeat enemy tunnel facilities and weapons with two to three times the
    lethality of conventional high explosive payloads.
                Battlelabs
        Since their inception in 1997, Air Force battlelabs have developed
    over 120 initiatives, including the application of commercial
    scheduling software for the Air Force Satellite Control Network,
    telecommunications firewalls for base phone systems, and the use of
    speech recognition to reduce mission planning time. The recently
    commissioned Air Mobility Battlelab, with a charter to rapidly identify
    and assess innovative operational and logistics concepts, joined the
    ranks of the Air and Space Expeditionary Force, Command and Control,
    Force Protection, Information Warfare, Space, and Unmanned Aerial
    Vehicle Battlelabs.
    Enhancing Fundamental Practices
                Agile Acquisition
        The Air Force launched Agile Acquisition to streamline and
    synchronize the business of defining, funding, developing, acquiring,
    testing and sustaining the weapon systems our Air Force uses to defend
    America's freedom. The goal is simple: Field today's technology . . .
    TODAY. While we've had many individual successes in the past,
    individual successes do not translate into fundamental reform. We must
    get to the point where doing things smartly is not news. Agile
    Acquisition is the strategy to achieve systemic improvement.
        As a strategy, Agile Acquisition has three major thrusts: First, we
    will relentlessly attack our own processes and get rid of those steps
    that are not value added. Second, we are going to free our leaders to
    lead and demand that they take the initiative. We are going to train
    them to be innovative and think creatively, provide periodic refresher
    training, and then hold them accountable for being agents of change.
    Finally, we're going to offer a lot of help through our new Acquisition
    Center of Excellence, which opened for business on December 2001.
        The acquisition reform of Lightning Bolts 2002 gives us the tools
    to make those changes. They will focus our acquisition efforts and, at
    the same time, reinforce our other initiatives to transform and improve
    the services and products we provide. The Lightning Bolts will also
    reinforce and complement the headquarters reorganization announced in
    December 2001 by the Secretary and Chief of Staff. In addition, the AF
    is an active member of DOD's Rapid Improvement Team, chartered to
    streamline the Information Technology system acquisition process to
    less than 18 months. Towards that end, we are leading prototype
    programs aimed at eliminating serial and redundant oversight processes,
    expanding participation by interested parties, and sharing
    accountability from program inception. Achieving agile acquisition is
    not a luxury; it is a requisite for success. We must provide absolutely
    the best and newest capabilities to our fighters in the shortest time
    possible. Our acquisition processes, too often seen as a roadblock to
    real progress, must become as agile as our warfighters.
        Another key aspect of acquisition reform involves bringing the
    warfighter into the process early on. This is an essential element of
    our capabilities-based concept of operations which is discussed in a
    later section.
                Long Term Depot Maintenance Plan
        Depot maintenance is another critical element of our overall
    warfighting capability. The current depot posture has been influenced
    by the downsizing of our operational force; the reduction of our
    organic infrastructure; the introduction of new technologies; and
    recent depot legislative changes. In order to maintain a ready and
    controlled source of depot maintenance, the Air Force has prepared a
    Long Term Depot Maintenance Plan for submission to OSD and Congress by
    the summer recess of the Congress.
        The overarching objective of this plan is to ensure that Air Force
    equipment is safe and ready to operate across the whole range of
    contingencies, from training to supporting major theater wars.
    Partnering with private industry is a key element of our plan and
    provides the best value approach for maintaining our depots. And,
    benchmarking our depots is essential for us to understand where best to
    invest. Leveraging the best of public and private capabilities ensures
    the Air Force will take advantage of what each does best. Partnering is
    also the method by which we will be able to most efficiently utilize
    our current facilities as well as bring in technologies to support core
    capability requirements in the future. However, taxing programs to fund
    capital improvements is a contentious process. We continue to explore
    the concept of depot capital appropriations to smooth out the
    investment streams.
        The Air Force Long Term Depot Maintenance Plan will provide
    military strength by ensuring we possess an organic ``core'' capability
    sized to support all potential military operations. It will be a living
    document and postures our three organic depots to continue to support
    the warfighter.
    Organizational Experimentation--Future Total Force
        In the 21st Century, the U.S. Air Force anticipates deriving its
    strength from the flexibility and the diversity of its integrated
    Active duty, Air National Guard, Air Force Reserve and civilians more
    than ever before. Optimum use of Air Force component resources is
    critical in providing the complete potential of American air and space
    power. Future Total Force (FTF) efforts will include new ways to
    optimize the components to make the best use of our resources and
    people and to build on a foundation of high standards and strong
    cooperation among the components.
        In the 1990s, the restructuring of the Air Force placed a greater
    emphasis on the force structure in the Air Reserve Component. Today,
    the Guard and Reserve account for over 65 percent of the tactical
    airlift, 35 percent of the strategic airlift capability, 60 percent of
    air refueling, 38 percent of fighters, and significant contributions to
    rescue, bomber, and combat support missions. Additionally, the Guard
    and Reserve have an increasing presence in space, intelligence and
    information systems. Guard and Reserve units also provide support in
    pilot training; radar and regional control centers manning; at the
    Edward's Test Center, California; Test and Evaluation missions in
    Arizona; instructing in weapon system school houses; conducting flight
    check functions at Air Force depots; and helping to develop the
    Homeland Defense mission. Today, the Guard and Reserve components are
    providing day-to-day mission support. They are no longer simply a
    ``reserve'' force--their collective capabilities make operating as an
    expeditionary Air Force possible.
        Future success will depend upon our ability to develop an even
    closer partnership between the components and a ``seamless''
    integration of all assets. FTF will explore expanding the integration
    of our people and systems, seeking efficiencies and leveraging their
    individual strengths by combining operations into new organizational
    structures--blended units. Together, Active, Civilian, Guard and
    Reserve form a more capable, more efficient and more effective
    organization than any could provide individually.
        Blended units will integrate Active, Civilian, Guard, and Reserve
    capabilities in creative new ways, that may appear as radical
    departures from the past but which have already been part of the Air
    Force business practice for years. Flying and support functions, for
    example, will be so integrated with component personnel as to be
    invisible to outside observers. This will focus attention on conserving
    valuable manpower, resources, and skills while reducing overall costs.
    Finally, blended units will maintain the ability to deploy rapidly and
    will explore new avenues toward an overall goal of providing a ``best
    mix'' of personnel for the assigned mission.
        Developing blended units will not be without challenge. Out-dated
    laws and policies would have to change to reflect requirements in
    command and control, fiscal and personnel issues. Demands for more
    efficient use of resources (personnel and aircraft), greater
    flexibility and integration of personnel and administrative systems,
    higher reliance on the commercial marketplace skills of individuals,
    and rapid adjustment to changing cultural, social, and economic
    influences on the Air Force institution will serve to further promote
    blended organizations.
        The Guard and the Reserve are more than just our partners in
    providing air and space power, they are an integral part of today's Air
    Force and form a special link between the Active duty Air Force and
    America's citizens. To a great extent, they are citizens first. Blended
    units would take advantage of that connection to the citizenry and
    their broad base of knowledge and experience, in both civilian and
    military matters. The Air Force goal is to create a truly ``seamless''
    force of airmen--one organization of airmen who are interchangeable but
    who also operate in a different status at particular periods in their
    air and space careers. The Air Force is committed to evolving its FTF
    to meet the highly complex security demands in its future.
    Enhanced Homeland Security Missions
        As operators of two legs of the nuclear triad, the Air Force
    remains at the heart of homeland security. Since its establishment in
    1947, the Air Force has been actively and successfully deterring
    aggressors, intercepting intruders, and providing ballistic missile
    warning. The September 11th attacks brought homeland security to the
    forefront with the publication of Executive Order 13228, establishing
    the Office of Homeland Security. The Air Force is being called upon to
    counter a new class of foreign and domestic terrorist threats through
    both defensive and offensive actions. Air defense capabilities remain
    on high alert to intercede and prevent further misuse of our nation's
    civil aviation assets. Expeditionary capabilities have been called upon
    to help destroy terrorist operatives where they live. In all actions,
    the air and space expeditionary force construct provides the
    flexibility to place forces where and when we need them.
                Ground-Based Midcourse Defense (formerly: National Missile
                        Defense)
        The Rocket Systems Launch Program provided targets and interceptor
    vehicles for two National Missile Defense tests in 2001. Using
    decommissioned Minuteman II's, simulated incoming missiles were
    launched from Vandenberg AFB while a Minuteman II stage two and three
    combination, with test interceptor on board, was launched from
    Kwajelein Island. In the two tests supported this year, both
    successfully intercepted the target vehicle, meeting a huge technical
    milestone in the quest for homeland missile defense.
                                   conclusion
        Air Force capabilities provide America with a unique set of
    strengths--asymmetric advantages. However, today's technological
    advantage is no guarantee of future success. Maintaining our current
    leadership position requires addressing our aging infrastructure,
    modernizing outdated weapon systems and harnessing technology to
    achieve our vision. To be sure, this requires funding, but a
    significant part of the improvements rests with ingenuity. In fact, how
    we maximize the collective potential of our Active, Guard, Reserve, and
    civilian resources will affect our ability to exploit the advantages
    our core competencies create. Realizing this potential through better
    business practices, more sophisticated training methods, acquired
    technologies, and other innovative means will be even more challenging
    given our ongoing efforts in the war on terrorism. Yet the risks of
    failing to meet the requirements for readiness are unacceptable.
    Readiness is one prerequisite for American military success. Another is
    transformation.
                                 transformation
    New Impetus to Transform--The evolving geopolitical context
        The terrorist attacks of September 11th have forever changed the
    world we live in. Now, more than ever, our military must transform to
    preserve the asymmetric advantages it currently enjoys--specifically,
    its air and space capabilities. These advantages are in danger of
    eroding in the face of emerging security threats including the
    diminishing protection of geographic distance; the proliferation of
    weapons of mass destruction; rapidly advancing technologies (such as
    sensors, information processing, and precision guidance) available to
    adversaries; escalating competitions in space and information
    operations; greatly reduced access to forward bases; the prospect of
    operations in urban areas; and finally, the prominent threat of global
    terrorism, especially within our open borders. The demonstrated
    superiority of our air and space forces over Afghanistan, and the
    asymmetric advantage they continue to provide the nation must not be
    taken for granted. Success is not a birthright, we must continue to
    transform to stay ahead of our adversaries.
        America's future success requires us to fully exploit our current
    technological dominance to seek asymmetric advantage over our
    adversaries. Such transformation will encompass the horizontal
    integration of manned, unmanned, and space assets and require us to
    successfully address emerging and time-critical targets. It will
    require digital communications at the machine level which result in
    providing Joint Force Commanders with decision-quality information. The
    sum of this wisdom is a cursor over the target.
        Transformation can include multiple technologies that enable new
    missions, significantly improved old systems and processes, or using
    existing capabilities or organizations in new ways. Ultimately,
    transformation will drive how the military is organized, trained, and
    equipped. Transformation can also involve changes in military doctrine
    or tactics, techniques, and procedures that determine force deployment,
    employment, or the way forces are led or interact with each other to
    produce effects. It is also important to remember that transformation
    extends into every aspect of the Air Force--be it warfighting or
    support capabilities. For example, transformation of our business
    systems is currently being embraced to take advantage of new
    technologies and processes already proven in commercial industry. These
    ideas and products will enhance our efficiency and increase the
    crossflow of information across Air Force communities.
        A recapitalized force is fundamental to the realization of
    transformational forces. Though we are shortening acquisition cycles,
    new systems still take years to reach the field. Therefore
    transformation in the immediate future must begin by using legacy
    systems in new ways. We will continue to adapt and innovate in order to
    push the envelope of our capabilities.
    Transformation--Realizing Potential Capabilities
        In the 2001 QDR, the Secretary of Defense provided specific
    direction for military transformation. Future defense planning will
    shift from the previously ``threat-based'' approach to a
    ``capabilities-based approach,'' focusing on ``how an adversary might
    fight, rather than specifically on whom the adversary might be or where
    a war might occur.'' To support the SECDEF's goals, the Air Force
    remains in a continued state of evolution and transformation,
    aggressively pursuing advanced technologies, innovative methods of
    employment, and bold organizational changes. Transformation is nothing
    new to the Air Force. It has been an innate characteristic of airmen
    from the Wright Brothers to airmen operating in the 21st Century.
        Continued AF transformation will enable the United States to defeat
    an adversary by giving the Joint Forces Commander the exact warfighting
    effects he needs, at the right place, and at the right time. AF
    transformations will help DOD achieve its ``operational goals;'' give
    the United States more operational flexibility and capability to
    address the future security environment; defeat adversaries' asymmetric
    strategies; reduce friendly casualties and collateral damage; and
    sustain America's current asymmetric advantages into the future.
                Capabilities-Based Concepts of Operations (CONOPs)
        AF warfighters are working hard to lay the foundation for the next
    step in our transformation to a capabilities-focused Expeditionary Air
    and Space Force. Our goal is to make warfighting effects, and the
    capabilities we need to achieve them, the drivers for everything we do.
    The centerpiece of this effort is the development of new Task Force
    Concepts of Operations (CONOPS) that will guide our planning and
    programming, requirements reform, and acquisition. We have identified
    several Task Force CONOPS that we are fleshing out--Global Strike Task
    Force (GSTF) is a prominent example and is the farthest along in
    development.
        GSTF defines how the AF plans to operate when faced with an anti-
    access scenario. It will meet the immediate needs of our regional CINCs
    by leveraging our current and near-term capabilities to overcome anti-
    access threats like the next generation surface-to-air missiles and
    other defensive networks. By incorporating the stealth and supercruise
    capabilities of the F-22 with advanced munitions like SDB we will
    enable our stealth assets like the B-2s and F-117 to take apart the
    enemy defenses. This capability guarantees that follow-on air, space,
    land, and sea forces will enjoy freedom from attack and freedom to
    attack. Key to the success of the entire family of Air Force Task
    Forces will be the horizontal integration of manned, unmanned, and
    space ISR assets. A key component of horizontal integration is the
    Multi-sensor Command and Control network that will help provide the
    actionable, exploitable intelligence the JFC needs to make effective
    decisions.
        What warfighting effects will the AF provide? What capabilities do
    we need to deliver these effects? Our family of Task Force CONOPs will
    provide the answers to these questions. With this focus, we then
    understand what key requirements are needed to support these CONOPs.
    Advanced Capabilities
                Manned Assets
        Stealth provides the ability to fly largely undetected in hostile
    airspace and penetrate air defense systems. Stealth will be absolutely
    essential to establish air superiority in the decades ahead against
    rapidly improving air defense systems and fighters. The F-22, JSF,
    UCAVs, improved B-2 bombers, and highly stealthy stand-off weapons
    comprise the critical stealth capabilities under development now and
    into the future.
        The F-22, with its revolutionary combination of stealth,
    supercruise (i.e. supersonic-cruise without afterburner),
    maneuverability, and integrated avionics, will dominate the skies. The
    F-22 is clearly needed to counter the rapid deployment of third
    generation fighters to potential U.S. adversaries. In addition, when
    outfitted with the SDB, the F-22's ability to penetrate an adversary's
    anti-access airspace and destroy his most critical air defense
    capabilities, will enable 24 hour stealth operations and freedom of
    movement for all follow-on forces--fully leveraging our nation's
    asymmetric technological advantages.
        In 2001, flight-testing continued to demonstrate the revolutionary
    capabilities. Specifically, the F-22 successfully completed an AIM-120
    guided missile launch, and initial radar detection range measurements
    (met specification requirements the first time out--an unprecedented
    accomplishment).
        On 14 Aug the Defense Acquisition Board approved the F-22's entry
    into low-rate initial production (LRIP). Entering operational service
    in 2005, this transformational leap in technology is the linchpin to
    preserving the nation's most important military advantage for the
    warfighter: the capability to rapidly obtain and maintain air and space
    dominance.
        Acting in concert with the F-22 will be the JSF. The JSF program
    will develop and field an affordable, lethal, survivable, next-
    generation, multi-role, strike fighter aircraft for the Air Force,
    Navy, Marine Corps, and our allies. With its combination of stealth,
    large internal payloads, and multi-spectral avionics, the JSF will
    provide persistent battlefield stealth to attack mobile and heavily
    defended targets. Furthermore, JSF planned reliability and
    maintainability will enable an increase in sortie generation rate and
    mission reliability, and will reduce the logistics footprint as
    compared to legacy aircraft.
        On 25 October 2001, the Secretary of Defense certified to Congress
    that all JSF Concept Demonstration Phase (CDP) exit criteria had been
    accomplished; the technological maturity of key technologies was
    sufficient to warrant entry into the System Development and
    Demonstration (SDD) phase; and both CDP contractors achieved greater
    than 20 hours of short take-off, vertical landing (STOVL) aircraft
    operations. On October 26, 2001, the JSF program officially entered the
    SDD phase with the award of contracts to Lockheed Martin for the
    airframe and Pratt & Whitney Military Engines for the propulsion
    system. During the SDD phase, the program will focus on developing a
    family of strike aircraft that significantly reduces life-cycle cost,
    while meeting the Services' operational requirements. The program will
    use a block upgrade approach, based upon an open system architecture,
    which addresses aircraft and weapons integration and supports the
    Services' Initial Operational Capability (IOC) requirements in the
    2010-2012 timeframe.
        International partners will share the cost of JSF development. The
    United Kingdom signed an agreement in January 2001 to contribute $2
    billion to the SDD program, and negotiations are underway with other
    potential international partners. International participation in JSF
    will result in substantial benefits to the United States in such areas
    as future coalition operations and interoperability; financial savings;
    appropriate U.S.-foreign industry technology sharing; and strengthening
    political-military ties with our allies.
        For ballistic missile defense, one of the most important manned
    assets is the Airborne Laser (ABL). ABL is a transformational boost-
    phase intercept weapon system that will contribute significantly to our
    multi-layered missile defense architecture. Structural modification of
    a 747 aircraft, the first of two ABL prototypes, was completed in CY01.
    In CY02, ABL will begin an intensive period of subsystem integration
    and flight testing, progressing toward a lethal demonstration against a
    ballistic missile. The ABL program transferred to the Missile Defense
    Agency in October 2001 and will return to the Air Force for production
    and deployment. The ABL will also provide critical data for the
    development of a Space Based Laser (SBL).
                Unmanned Assets
        Unmanned Combat Aerial Vehicles have the potential to provide
    revolutionary suppression of enemy air defenses (SEAD) and strike
    capabilities to future joint force commanders. Our UCAV X-45 system
    demonstration program with DARPA will demonstrate the feasibility of
    UCAVs to affordably and effectively accomplish these missions in the
    high threat environments of the 21st Century. The first demonstration
    aircraft test flights will begin in 2002. UCAVs will eliminate the
    operator from harm's way for high-risk missions and, in conjunction
    with manned platforms, be a crucial enabler for GSTF and other Air
    Force Task Forces.
                Space Based Assets
        Maintaining and developing space superiority is critical to the
    transformation of the U.S. military to meet the challenges ahead. At
    the forefront of this development is leveraging the resident expertise
    of our space warriors, and integrating their cultural strength and
    wisdom with air forces in order to achieve maximum operational effects.
    The ability to exploit and deny access to space is of great importance
    in this new era where dominance in information systems may determine
    battlefield success or failure. The Air Force is investigating or
    pursuing revolutionary new capabilities to ensure adequate space
    situational awareness (in addition to traditional space surveillance)
    as well as defensive and offensive counterspace capabilities.
        We are transforming our space situational awareness with a much
    needed improvement to the nation's missile detection and warning
    capability. The highly accurate Defense Support Program (DSP) satellite
    system on orbit today was developed over 30 years ago to provide
    strategic missile warning. Modernization to meet 21st Century
    warfighter needs is critical. The new Space Based Infrared system
    (SBIRS) provides a single architecture for the nation's infrared
    detection needs--a ``system of systems''--meeting our security
    requirements for 24/7 strategic and tactical missile warning, missile
    defense, technical intelligence and battlespace characterization. This
    transformational space system consists of two primary components: SBIRS
    High and SBIRS Low. SBIRS High includes four satellites in
    Geosynchronous Orbit (GEO) and two in a Highly Elliptical Orbit (HEO)
    that will work hand-in-hand with the 20-30 Low Earth Orbit (LEO)
    satellites being developed through the Ballistic Missile Defense
    Organization's (BMDO), (since renamed the Missile Defense Agency
    (MDA)), SBIRS Low program. Both programs currently are under review.
    SBIRS High has experienced unacceptable cost growth and is being
    considered for restructuring. SBIRS Low may be delayed as the state of
    the program's maturity is being evaluated.
                Air Force Satellite Control Network (AFSCN)
        AFSCN is a global system of control centers, remote tracking
    stations, and communications links used to establish initial contact
    with all deploying military satellites, and to control early checkout
    operations. In addition, the AFSCN enables common satellite operations
    such as telemetry, tracking and commanding, mission data receipt and
    relay, and emergency satellite recovery. We also use the AFSCN to
    update the navigational database of GPS satellites, which ensures
    effective support to the warfighters. In fiscal year 2002 we initiated
    an AFSCN modernization program using commercial-off-the-shelf
    equipment. It is critical that we continue this effort since much of
    our current infrastructure is so old that spare parts no longer exist.
    Moreover, since nearly 50 percent of the total AFSCN workload supports
    National requirements, the system's viability is essential.
    Preservation of both the AFSCN infrastructure and the frequency
    spectrum it uses for military satellite operations is vital to
    successful national security space operations.
                Launch Systems
        Our heritage launch systems continue with a 100 percent success
    rate this year. The Evolved Expendable Launch Vehicle (EELV) will build
    on past successes while transforming today's fleet of Delta, Atlas, and
    Titan space launch vehicles into low-cost, efficient space
    transportation systems. The EELV will deliver navigation, weather,
    communications, intelligence, early warning, and experimental
    satellites to orbit on time and on budget to meet warfighter needs.
    Boeing Delta IV and Lockheed Martin Atlas V rocket families are
    currently in Engineering Manufacturing and Development to provide
    launch services beginning next year through the year 2020 and beyond.
    Our partnership with industry will meet military, government, and
    commercial spacelift requirements at 25 percent to 50 percent lower
    costs than current systems.
                Space-Based Radar (SBR)
        From the ultimate high ground, space-based ISR will provide near
    continuous overflight of enemy targets to complement airborne and
    ground-based sensor platforms. SBR will revolutionize battlespace
    awareness by providing deep-look, wide area surveillance of areas in a
    manner unaffected by political sensitivities and most denial efforts--
    absolute leap-ahead technology. Persistent ISR will be achieved with
    day/night, all weather detection and tracking of moving and fixed
    targets; improved mapping, charting, and geodesy; and responsive
    targeting data from sensors to shooters. Due to its basing mode, SBR
    can provide the nation a non-provocative, long-range capability to
    enable early situational awareness in advance of hostilities and
    throughout the spectrum of conflict. This will allow us to tighten the
    timelines for prompt attack of both anti-access systems and enemy
    centers of gravity. SBR is being designed to fit into the portfolio of
    other ISR assets.
                Information Warfare (IW) and Information Assurance (IA)
        Of primary importance to IW operations is the horizontal
    integration of manned, unmanned, and space systems to achieve the
    machine-to-machine interface of command and control, communications,
    computers, intelligence, surveillance and reconnaissance (C\4\ISR)
    systems. This integration provides executable decision-quality
    information to the commander in near-real-time. Second is our ability
    to protect these systems from adversary manipulation through defensive
    information warfare. Third, is the ability to deny adversaries these
    same capabilities through offensive information warfare.
        Information superiority enables our military to achieve ``decision
    cycle dominance'' and allow us to act and react much more rapidly and
    effectively than our adversary--creating transformational military
    advantages. While technology will never completely overcome
    Clausewitz's ``fog of war,'' achieving information superiority as
    described here could certainly minimize it for us and maximize it for
    our adversary.
        Information superiority also yields additional benefits. First, a
    reduced forward deployment requirement expedites the time to begin
    effects-based operations and reduces the number of personnel and
    equipment exposed to threats. Second, by avoiding massive attrition
    tactics, it would result in far fewer casualties and collateral damage.
    Third, under the right circumstances, effective offensive information
    warfare capabilities, which include computer network attack, military
    deception, public affairs, electronic warfare, and psychological
    operations (PSYOP), could prevent the need for destruction by
    influencing our adversaries to capitulate before hostilities begin.
    This latter possibility will be crucial in many of the environments the
    military will have to operate in the future, such as urban areas and
    various military operations other than war, in which employing highly
    destructive kinetic weapons would not be desirable.
        In the future, the Air Force will field C\4\ISR capabilities that
    enable dynamic assessment, planning, and the rapid execution of global
    missions. The system will be tailorable across the spectrum of
    operations and be horizontally and vertically integrated across
    components, functions, and levels of command. Joint Force Commanders
    will be able to exploit knowledge and awareness to use the right tools
    at the right time in the right way-and do it all faster and with higher
    fidelity than the adversary.
                Predictive Battlespace Awareness (PBA)
        PBA involves those actions required to understand our adversaries
    to the extent of being able to accurately anticipate his actions before
    they make them. This includes understanding how our adversaries
    organize and employ their forces. It means knowing their centers of
    gravity, capabilities, and weaknesses. PBA is an on-going intelligence
    effort which begins long before forces are deployed. Ultimately, PBA
    allows finite ISR assets to be focused on confirmation of anticipated
    actions instead of the more time-consuming discovery.
                Communication Enhancement
        We are now transforming the way information technology is used in
    the Air Force as we implement the One Air Force . . . One Network
    initiative. This enterprise-wide approach to IT will allow more
    responsive and more robust service to the whole Air Force. In addition,
    Global Combat Support System-Air Force (GCSS-AF) will integrate combat
    support information systems, thus removing the business inefficiencies
    resulting from numerous, independent stand-alone systems. With GCSS-AF,
    the Air Force will finally have the means to provide an enterprise view
    of combat support information. GCSS-AF, through the Air Force Portal,
    will provide the warfighter, supporting elements, and other Air Force
    members the means to seamlessly integrate agile combat support
    information necessary to efficiently field and sustain our Air and
    Space Expeditionary Forces.
        Another piece of integration is the Joint Tactical Radio System
    (JTRS). We aggressively accelerated development of this enabler of
    machine-level, digital conversations between our C\2\ISR and strike
    platforms so that the ``sum of our wisdom'' results in a cursor over
    the target. JTRS will also provide a flexible and adaptable information
    exchange infrastructure, which moves the joint force forward in getting
    operators and commanders the timely decision-quality information needed
    in today's warfighting environment.
                Precision Engagement
        The small diameter bomb, the first ``miniature'' munition in
    development, will provide an evolutionary capability in kills per
    sortie. The SDB weapon will use a common carriage system for fighters
    and most bombers, to carry at least four and potentially up to 12 SDB
    weapons per 1760 data bus aircraft station. This will allow a fighter-
    size platform to carry 16 or more SDBs and a bomber to carry up to 288.
    We will employ the SDB from low-to-high altitude, from standoff or
    direct attack ranges, and in adverse weather conditions. Each SDB
    weapon will employ GPS-aided guidance and be independently targeted.
    The Phase I SDB will have a capability against fixed or stationary
    targets, while the Phase II SDB will add a seeker with Automatic Target
    Recognition to provide a capability against mobile and relocatable
    targets.
        To increase our capability against time-critical and moving
    targets, we are experimenting with existing and miniaturized versions
    of precision weapons on UAVs. The range and loiter time of the
    ``hunter-killer UAV'' coupled with the direct feed of real-time
    targeting data, will increase our opportunities against moving
    targets--tightening our decision cycle and maximizing our warfighting
    effects. What these systems and our other advancing capabilities
    indicate is that we are within range of our goals of persistent ISR,
    the finding to targeting to assessing within minutes cycle, and
    fidelity in the integration of our systems. We seek near instantaneous
    attack capabilities once a target is approved for attack.
    Innovation and Adaptation
        All of the new systems and technologies in the world cannot
    supplant ingenuity. Whether modifying current systems, developing
    streamlined efficiencies in organizations, or simply thinking
    creatively, innovation and adaptation are at the heart of any
    transformation, and embedded in Air Force heritage. The same visionary
    essence behind the flight at Kitty Hawk works today to link emerging
    technologies with dynamic future concepts of operation. The driving
    spirit of innovation in past times of war exists today in the impetus
    to evolve our air and space capabilities and elevate the security of
    the nation. Innovation and adaptation will be tremendously important
    again in fiscal year 2003, and they will resonate in all the systems we
    develop, in our fundamental practices, how we organize and even in our
    evolving roles and missions in homeland security.
        The prerequisite to achieving the transformation force outlined in
    the QDR is our commitment to a strong Science and Technology (S&T)
    program. S&T is the critical link between vision and operational
    capabilities. We continue to invest in a broad and balanced set of
    technologies derived from basic and applied research, and advanced
    technology development on a continuum of maturity levels from short- to
    long-term. This time-scaled approach keeps emerging capabilities in the
    pipeline and fosters revolutionary developments.
        The Air Force S&T community is working closely with operators and
    strategic planners to explicitly link research activities with our core
    competencies, critical future capabilities, and future concepts of
    operation. This effort has produced eight short-term goals and six
    long-term challenges to focus our S&T investment. The short-term S&T
    objectives are focused on warfighter priorities in the following areas:
    Target Location, Identification, and Tracking; Command, Control,
    Communications, Computers, and Intelligence; Precision Attack; Space
    Control; Access to Space; Aircraft Survivability and Countermeasures;
    Sustaining Aging Aircraft; and Air and Space Expeditionary Force
    Support. Long-term S&T challenges also involve revolutionary
    capabilities in Finding and Tracking; Controlled Effects; Sanctuary;
    Rapid Air and Space Response; and Effective Air and Space Persistence.
    Successful pursuit of these challenges and objectives will meet the
    transformation goals of the Air Force and maintain our air and space
    dominance today and well into the 21st Century.
        Our new homeland security environment will necessitate both
    traditional and non-traditional responses, with significant coalition,
    joint, and interagency involvement. Whatever the threat, the AOC
    provides the critically important real-time predictive battlespace
    awareness for decision-makers. The Air Force will work closely with the
    other agencies to form a tightly knit web of resources that will be
    readily available to answer the call. In this way, Homeland Security
    efforts will be interwoven and fundamentally aligned with the Air
    Force's top priorities.
        Additionally, Air Force counterair and ISR capabilities are
    significant contributors to the multi-layered missile defense system,
    incorporating air and space-based elements that provide effective,
    affordable, global protection against a wide range of threats. Future
    space capabilities such as the SBIRS will greatly enhance our ability
    to track and engage ballistic missiles while space-based radar
    technologies will identify and track fixed and mobile ballistic missile
    launchers. Finally, the ABL will engage ballistic missiles in their
    boost phase, while the F-22, working with advanced ISR systems, will
    defend against cruise missiles.
                Consequence Management
        The Air Force has played an important role in consequence
    management. We have provided critical resources such as airlift,
    command and control, and disaster preparedness response forces to other
    lead agencies and the Joint Forces Civil Support Teams. The AFMS is
    acquiring a variety of modular packages that can be used to support
    civilian authorities requesting our assistance at home or abroad.
    Within two hours of notification, the Small Portable Expeditionary
    Aeromedical Rapid Response (SPEARR) teams deploy ten specialists with
    the capability to provide a broad scope of care, including initial
    disaster medical assessment, emergency surgery, critical care, and
    patient transport preparation. This will increase the state medical
    response capability for homeland security. Additionally, Air National
    Guard men and women both command and contribute to the nation's current
    Civil Support Teams--including critical mobility requirements that
    support the air transportation of these teams to sites of potential
    CBRNE or WMD attacks.
        In the QDR, the Secretary of Defense identified Homeland Security
    as a top priority for the Department of Defense. The Air Force has a
    role in each aspect of preventing, protecting from, and responding to
    attacks against our homeland. The Air Force has a robust array homeland
    defense capabilities today and will improve and transform as necessary
    for the future. As in the past, we stand ready today to contribute
    these unique capabilities and develop new technologies to aid our
    national command authorities in combating threats or attacks to our
    homeland.
    Conclusion
        The same relative advantages of speed, flexibility, range,
    lethality and the like that have defined air power since its inception
    also define the collective talents of airmen--military and civilian
    alike. The partnership among all of the components of the Air Force is
    elevating the nation's air and space capabilities to even greater
    heights than ever conceived. Yet we are not satisfied. We will continue
    to aggressively pursue our critical future capabilities through every
    avenue, drawing on all of our resources, and finding no satisfaction in
    compromise. While funding is critical to securing new and revitalized
    systems, the Air Force is focused on the source of the most
    exponentially beneficial results--our innate skill at integration,
    innovation, and visionary implementation of ideas and processes.
    Ultimately, it is from our airmen, our most essential resource of
    people that transformation will accelerate, accelerate and continue.
                                     people
        ``People are a priority'' is not just a slogan in the Air Force, it
    is an imperative. Historically, the Air Force has been a retention-
    based force and continues to be so today. We rely on recruiting and
    training technically and mechanically gifted individuals to develop and
    operate our advanced air and space systems. Though we exceeded our
    fiscal year 2001 recruiting and accession goals, there are some
    critical skills in need of special attention--scientists and engineers
    in particular. We must take action now to address these and other
    developing personnel gaps in the uniformed and civilian Air Force
    alike.
        Before September 11th, we were deploying our people at a rate three
    times higher than we were a decade earlier. Though we were narrowing
    the gap between force structure drawdowns and increased commitments,
    the marker has been shifted significantly and we anticipate a growth in
    requirements. The addition of Operations NOBLE EAGLE and ENDURING
    FREEDOM and the creation of new homeland security requirements to an
    already strained personnel tempo (PERSTEMPO) warranted an assessment of
    our total manpower requirements. We are working with our sister
    services and OSD on this issue.
        Recent events have accentuated the contributions our Total Force--
    Active duty, Air National Guard, Air Force Reserve, and civilians--
    brings to our National Defense team. We must now size this force
    appropriately to meet new demands by capitalizing on positive
    recruiting results, honing retention programs, and examining closely
    tasks that might better be performed by civilians, of members of the
    Guard or Reserve. To attract and retain the best people in a high-
    technology world, we will accelerate our efforts to develop, educate,
    train and compensate our people to continue to lead the world as a
    technologically superior military force.
        Retention is more than a quality of life issue. It involves letting
    our people know that what they are doing matters. It is about
    instilling our Airmen with pride in a mission well done. At the end of
    their careers they will remember being part of a team that made a
    difference. To this end, we have initiated a major ``re-recruiting''
    program.
    Recruiting
        The Air Force exceeded fiscal year 2001 enlisted recruiting goal of
    34,600 by almost 800. We still require 99 percent of our recruits to
    have high school diplomas and nearly 75 percent to score in the top
    half of test scores on the Armed Forces Qualification Test. In
    addition, we brought 1,155 prior-service members back on Active duty,
    nearly double the number from fiscal year 1999.
        We must enlist airmen whose aptitudes match the technical
    requirements we need. In fiscal year 2001 we implemented targeted
    recruiting programs for mechanically skilled recruits. These efforts
    paid off, allowing us to exceed our recruiting goal for these skills by
    763. We did, however, fall short of our recruiting goal by 203 in the
    general skill area. This includes the Security Forces career fields,
    which have become vital in light of current operations.
        The Air Force is postured well to increase recruiting goals to meet
    new requirements. Previously approved increases in advertising, a more
    robust recruiting force with broader access to secondary school
    students, and competitive compensation prepares the Air Force to meet
    future recruiting challenges. We budgeted $77 million for recruiting
    advertising in fiscal year 2002, which is nearly five times the amount
    from fiscal year 1998. For fiscal year 2002, we programmed an
    additional $9 million for the enhanced initial enlistment bonus
    program, and the prior service reenlistment program, up from $123.8
    million in fiscal year 2001. These bonus programs help to recruit hard-
    to-fill critical skills and to encourage recruiting during historically
    difficult recruiting months.
        Officer recruiting faces many of the same challenges as enlisted
    recruiting. However, we continue to draw America's best and brightest,
    even given the lure of a competitive job market. In the ROTC program,
    we implemented several initiatives to attract more candidates, offering
    contracts to freshmen cadets rather than waiting until their sophomore
    year, and a one-year commissioning program to attract both
    undergraduate and graduate students. Overall in fiscal year 2001, we
    achieved 105 percent of our line officer accession target, up from 97
    percent in fiscal year 2000. Recent legislation, which increased the
    maximum age for appointments as cadets into Senior ROTC scholarship
    programs, further increases our recruiting opportunities. We are also
    examining changes to the program to reduce attrition during the ROTC
    cadet years.
        Of particular concern, however, is the area of military and
    civilian scientists and engineers. We fell short of our accession goal
    for these groups by nearly 250, and have begun an all-out effort to
    plus up recruitment and target retention of these critical specialties.
    For example, in fiscal year 2003 we begin a college sponsorship program
    to attract scientists and engineers from universities where there is no
    ROTC program. Thanks to prompt Congressional action, we have the
    authority to implement bonuses, adjust funding to create retention
    allowances, and work toward implementing special salary rates for the
    most difficult to retain fields. At the December 2001 Scientist and
    Engineer Summit, the Secretary and the Chief of Staff embraced these
    and other initiatives to remedy the accession challenge. The Air Force
    recognizes the great need for these bonuses and has programmed funds
    accordingly. However, funding levels were cut during the appropriations
    process.
        We have also found recruiting health care professionals especially
    difficult. Many medical, dental, nurse and biomedical specialties are
    experiences critical shortages. For example, only 80 percent of our
    clinical pharmacy positions are currently filled. We are now reviewing
    accession initiatives for pharmacists.
        In fiscal year 2001, the Air Force Reserve exceeded its recruiting
    goal for the first time in five years--accessing 105 percent of their
    target. However, there are significant challenges ahead in recruiting
    citizen-airmen. Historically, 30 percent of Reserve accessions come
    from eligible members (i.e. no break in service) separating from Active
    duty. In fiscal year 2002, recruiting will have to make up that part of
    the goal, more than 3,000 people, from other applicant sources until
    Stop Loss is lifted. Once lifted, we expect there will be challenges in
    filling many vacated positions. One of the biggest challenges for
    Reserve recruiters this year is Basic Military Training (BMT) quotas.
    While recruiting services increased emphasis on enlisting non-prior
    service applicants, BMT allocations have not kept pace. This problem is
    forecasted to worsen this year as a result of Stop Loss. Reservists are
    working diligently to increase BMT allocations and explore solutions to
    address BMT shortfalls.
        The Air National Guard has placed recruiting and retention emphasis
    on Air Force Specialties where shortages exist by offering enlistment
    and reenlistment bonuses, Student Loan Repayment Program, and the
    Montgomery GI Bill Kicker Program. As a result, many of the Air
    National Guard critical maintenance AFSCs have seen real strength
    growth from 2-6 percent over the last two fiscal years. These
    incentives have contributed greatly toward enticing and retaining the
    right talent for the right job. Though recruiting and retention rates
    have increased, the Air National Guard realizes that potential problems
    exist that may affect future sustained capability.
    Retention
        Over 128,000 Active duty airmen, 46 percent of the enlisted force,
    are eligible for reenlistment in fiscal year 2002/03. Although positive
    about a career in the Air Force, our people are being lured away by the
    availability of higher-paying civilian jobs. To sustain our readiness
    posture for rapid deployment, we must retain our highly trained,
    experienced, and skilled people. By keeping our experience, we reduce
    recruiting and training requirements and continue to build and maintain
    our technical expertise.
        Retention will continue to be a priority and a challenge in the
    future. We are aware Stop Loss and the increased tempo of ONE and OEF
    may have a negative affect on retention and we are planning for offsets
    already. We must provide a robust compensation package that rewards
    service, provides for a suitable standard of living, ensures a high
    quality of life, and retains our high caliber professionals. We must
    continue to reduce out-of-pocket expenses incurred through frequent
    moves, deployments, and other temporary duty. Our airmen must view a
    military career as a viable and competitive option if we are to
    maintain an all-volunteer force. To that end, we have initiated an
    aggressive campaign to ``re-recruit'' our force, through individualized
    mentoring and career counseling. This effort began with scientists and
    engineers, as well as Battle Managers, and will include other critical
    skills in the coming months. Pilots were to be the initial focus, but
    the demands of ONE and OEF required that we delay the re-recruiting of
    this group. Congress has rallied to the Air Force's needs in all of
    these, and we will rely on continued help, particularly in the year
    ahead.
        Officer retention trends continue to raise concerns. We monitor
    these trends through the officer cumulative continuation rate (CCR), or
    the percentage of officers entering their 4th year of service (six
    years for pilots and navigators) who will complete their 11th year of
    service, given existing retention patterns. Although the fiscal year
    2001 CCR for pilots increased from 45 percent in fiscal year 2000 to 49
    percent, it's significantly lower than the high of 87 percent in fiscal
    year 1995. We have fully manned our cockpits, but our rated pilot staff
    manning has fallen to 51 percent. Airline hires in fiscal year 2002
    will be down from over 3,000 last year to approximately 1,500 this
    year; however, we anticipate the hiring will surge again shortly
    thereafter. Therefore, we can expect the USAF pilot shortage to
    continue for at least the next eight years until we fully realize the
    effects of the ten-year Active duty service commitment for
    undergraduate flying training. We are optimistic that our ``re-
    recruiting'' effort will further enhance pilot retention and help
    alleviate the shortage sooner.
        The mission support officer fiscal year 2001 CCR has held steady at
    44 percent. However, retention rates for several high-tech specialties
    have decreased--scientists (36 percent), developmental engineers (42
    percent), acquisition managers (40 percent), and air battle managers
    (47 percent). Conversely, navigator rates improved in fiscal year 2001,
    rising three percentage points to 72 percent. Navigators are a critical
    rated resource being used to fill many pilot vacancies at headquarters
    level. In the next few years, we expect a rapid decline in this large
    retirement-eligible population. We also need to retain every
    experienced air battle manager (ABM) we can to preserve our warfighting
    capability. This high-demand, low-density career field retention is
    negatively impacted by increased operations tempo.
        The Air Force Reserve exceeded Command retention goals for their
    enlisted airmen during fiscal year 2001. Again, it was the team effort
    of the members, first sergeants, supervisors and commanders that led
    the Reserve to this exceptional achievement. Bonuses also continue to
    be an effective tool in retaining our members. The flexible Aviation
    Continuation Pay (ACP) program is an important part of our multi-
    faceted plan to retain pilots. In fiscal year 2001 we offered ACP
    payments through 25 years of aviation service, resulting in a
    substantial increase in committed personnel. Because of this success,
    we plan a similar design for the fiscal year 2002 ACP program, and
    extension of this program to navigators and ABMs.
        Seventy-eight percent of our enlisted skills are now receiving re-
    enlistment bonuses, up two percentage points from fiscal year 2000. The
    authorization to pay officer and enlisted critical skills retention
    bonuses should help retain individuals in high demand by the civilian
    sector. We are initially targeting this new authority to Science,
    Engineering, and Communications and Information. Also, the authority to
    increase special duty assignment pay provides the flexibility to target
    our most pressing enlisted skills. The Fiscal Year 2002 National
    Defense Authorization Act (NDAA) authorizes installment payment
    authority for the 15-year career status bonus, and an educational
    savings plan to encourage re-enlistment in critical specialties.
    Additionally, the Air Force Reserve is studying special duty pay
    initiatives for senior enlisted positions, such as command chief master
    sergeants and unit first sergeants for future implementation.
        The Air National Guard's number one priority is to increase their
    traditional pilot force, which has maintained a steady state of 90
    percent. During the past year, the Guard continued to see an increase
    in ACP take rates to 93 percent. ACP has accomplished its goal by
    retaining qualified full-time instructor pilots to train and sustain
    our combat force. The Guard and Reserve continue to pursue substantial
    enhancements to the Aviation Career Incentive Pay (ACIP) and Career
    Enlisted Flyer Incentive Pay (CEFIP) to increase retention in the
    aviation community, as well as attract/retain individuals to aviation.
    These initiatives, which affect over 13,343 officers and enlisted crew
    members in the Guard and Reserve, are aimed at those traditional
    aviators who do not qualify for the ACP for AGRs and the Special Salary
    Rate for Technicians.
    Training
        Training the world's best Air Force is challenging in today's
    rigorous, expeditionary environment. Increased accessions stress our
    training facilities and personnel. During surge periods, we operate at
    maximum capacity by triple-bunking students in two-person dorm rooms.
    We are currently seeking funds to improve the training infrastructure.
        Lower than required enlisted retention rates are increasing our
    training burden. Also, fewer experienced trainers are available to
    train 3-level personnel. Despite these challenges, our technical
    training schools have been able to meet their mission. We increased our
    use of technology and streamlined the training processes to produce
    fully qualified apprentices ready to support the warfighter.
        Even with the EAF, our tempo can make educational pursuits
    difficult. Our learning resource centers and Advanced Distributed
    Learning initiatives address this situation by offering deployed
    personnel education and testing opportunities through CD-ROM and
    interactive television. Additionally, we have joined with the other
    Services, the Department of Labor, and civilian licensing and
    certification agencies to promote the recognition of military training
    as creditable towards civilian licensing requirements.
        Defining the Air Force's institutional training and educational
    requirements for leadership development allows the services to weigh
    resource decisions better and to emphasize to our people the
    institution's investment in their careers. The Air Force is pursuing
    leadership development and career mentoring strategies, to prepare the
    Total Force for the 21st Century. These competency-based strategies are
    focused on understanding the leadership needs of our transforming force
    and creating a development process that will better prepare Airmen to
    serve and lead. The Air Force is examining more deliberate career
    broadening, emphasizing two categories of competencies--occupational
    (what we do) and universal (who we are). We are also examining
    potential changes to the professional growth of officers including the
    rationalization of advanced degrees and professional military
    education. Force readiness, sustainability, and mission performance all
    depend on selecting, training, and retaining the best individuals with
    the necessary skills, as well as motivating every member of the service
    and taking care of Air Force families.
    Civilian Workforce Shaping
        Today, less than 10 percent of our civilians are in their first
    five years of service. In the next five years, more than 40 percent
    will be eligible for optional or early retirement. Historical trends
    indicate that approximately 33 percent of white-collar employees and 40
    percent of blue-collar employees will retire the year they become
    eligible. In addition, downsizing over the past decade skewed the mix
    of civilian workforce skills, compounding the loss of corporate memory
    and lack of breadth and depth of experience.
        While we are meeting mission needs today, without the proper
    civilian force shaping tools, we risk not being ready to meet
    tomorrow's challenges. To help shape the civilian workforce, it is
    imperative that we fund civilian force development initiatives to
    include skill proficiency and leadership training, and tuition
    assistance programs. The fiscal year 2002 NDAA did authorize the
    payment of expenses to obtain professional credentials.
        In addition, management tools are essential in shaping the force by
    opening the door to new talent so we can gather the right skill mix.
    These initiatives include pay comparability and compensation, a
    streamlined and flexible hiring process, recruiting incentives for
    technical skills and student employment programs. Also, the fiscal year
    2002 NDAA provided the authority for a pilot program allowing for
    payment of retraining expenses and extended the use of Voluntary
    Separation Incentive Pay (VSIP) and Voluntary Early Retirement
    Authority (VERA) for workforce restructuring. To incentivize key senior
    personnel to accept critical positions, we continue to support
    implementation of a last move home benefit.
    Quality of Life
        Quality of life ranks as one of the Air Force's top priorities, so
    our quality of life initiatives attempt to balance the intense demands
    we place on our mission-focused Total Force. With continued
    congressional support, the Air Force will pursue adequate manpower;
    improved workplace environments; fair and competitive compensation and
    benefits; balanced deployments and exercise schedules; safe,
    affordable, and adequate housing; enhanced community and family
    programs; improved educational opportunities; and quality health care,
    as these have a direct impact on our ability to recruit and retain our
    people and sustain a ready force.
        The fiscal year 2002 NDAA provided for the largest raises for mid-
    level and Senior NCOs (7-10 percent) to improve pay based on their
    education and experience levels. Junior enlisted members received a 6-
    6.7 percent pay raise and captains and majors received a 6-6.5 percent
    raise while all other personnel received a 5 percent raise. Basic
    Allowance for Housing rates effective 1 Jan 02 will be based on 11.3
    percent out-of-pocket for the National Median Housing Cost for each
    grade and dependency status. Additionally, the fiscal year 2002 NDAA
    authorizes several additional travel and transportation allowances that
    will reduce out-of-pocket expenses for our military personnel.
        Higher priorities have led to a deferral of much-needed
    infrastructure sustainment, restoration, and modernization of the
    workplace. Together with spare parts and equipment shortfalls, budget
    limitations impede successful execution of mission requirements, cause
    lost productivity, and negatively impact quality of life. It will take
    increased funding levels focused on infrastructure restoration and
    modernization to allow us to optimize the condition of the workplace
    environment and, furthermore, help eliminate the risk to our near- and
    long-term readiness.
        Providing safe and adequate housing enhances readiness and
    retention. The Air Force Dormitory Master Plan and Family Housing
    Master Plan identify and prioritize our requirements, while DOD is
    championing the reduction of out-of-pocket housing expenses by fiscal
    year 2005. We project significant improvements in our military family
    housing by reducing our inadequate units from 59,000 at the beginning
    of fiscal year 2002 to 46,000 at the beginning of fiscal year 2003, and
    with the help of privatization efforts underway, eliminating inadequate
    units by 2010. During fiscal year 2001-04 we plan to privatize over
    21,000 housing units at 26 installations. Similar improvements are
    being made in our unaccompanied housing, where more than 1,600
    dormitory rooms will be constructed as a result of the fiscal year 2002
    program.
        The Air Force continued to set the standard in providing quality
    childcare and youth programs. In addition to 100 percent accreditation
    of Air Force child care centers, the Air Force achieved 100 percent
    accreditation of all of its before- and after-school programs for youth
    6-12. In fiscal year 2001, the Air Force expanded the extended duty
    childcare program for members required to work extended duty hours and
    in fiscal year 2002 will test using this program for members working at
    missile sites and those who need care for their mildly ill children.
    Many youth initiatives implemented in fiscal year 2001 are part of the
    affiliation of the Air Force's youth program with the Boys & Girls
    Clubs of America.
        The Air National Guard also identifies childcare as a readiness
    issue. With increasing demands from Commanders and family members, the
    ANG formed a Childcare Integrated Process Team (IPT) to study
    innovative childcare options. The IPT yielded a website developed for
    internal use by ANG field units to pursue childcare alternatives in
    relationship to the unit's location, demographics, and legal issues.
    Additionally, the Guard has proposed a cost-sharing pilot program based
    on the Air Force childcare cost model.
        Tremendously important to child and family quality of life are the
    commissaries and exchanges. The Air Force continues to support these
    benefits as vital non-pay compensation upon which Active duty,
    retirees, and Reserve component personnel depend. Commissaries and
    exchanges provide significant savings on high quality goods and
    services, and a sense of community for airmen and their families
    wherever they serve. As a result, commissaries and exchanges are cited
    as a strong influence on retention and a highly valued component of
    quality of life.
        Additionally, lodging facility improvements and temporary lodging
    facilities have become a higher quality of life priority. Constructing
    facilities in sufficient quantity and maintaining existing facilities
    not only supports our members and families in TDY and permanent change
    of station status, but also yields significant savings in travel costs
    and ensures force protection. All new construction and renovations meet
    the recently adopted VQ standard--``one size fits all ranks''--
    mirroring the industry standard of 280 square feet per room with
    private baths for all grades.
        Physical fitness is unquestionably a force multiplier, and
    investment in fitness facilities, equipment, and programs directly
    impacts readiness. An independent assessment of our fitness centers
    documented a requirement of $645 million for construction and
    renovation at Active duty and Reserve bases. The Air Force committed
    $183 million in fiscal year 2000-05 Quality of Life funding and has
    steadily increased annual MILCON funding, including $52 million this
    year.
        Meanwhile, today's Air National Guard member families are in
    immediate need of dedicated full time family readiness and support
    services--specifically information referral support and improved
    communications and education capabilities. The Air National Guard has
    developed a program solution in fiscal year 2001 to fund a full-time
    contracted family readiness program at each Wing and Combat Readiness
    Training Center. While funding for fiscal year 2002 has been added in
    the fiscal year 2002 Supplemental Appropriations, there is no sustained
    funding in the FYDP. Properly funded and resourced, the ANG family
    readiness program will significantly enhance mission capabilities by
    reducing pressures on personnel and their families and improving their
    Quality of Life.
    Healthcare
        The recent implementation of DOD health care initiatives, such as
    TRICARE for Life, provided the missing link to the Air Force Medical
    Service's population-based health care strategy. Now, the AFMS has the
    foundation to provide whole care to its beneficiaries. The TRICARE
    Senior Pharmacy Benefit, started 1 April 2001, brought an expanded
    benefit to the Air Force's retired population. TRICARE for Life, the
    program that makes TRICARE second payer to Medicare, and TRICARE Plus,
    the program that allows seniors to enroll in a primary care program at
    selected MTFs, both began concurrently on 1 October 2001. These new
    programs will undoubtedly enhance the quality of life for the Air
    Force's older retiree population. TRICARE Plus will also strengthen the
    AFMS's medical readiness posture by expanding the patient case mix for
    our providers.
        The AFMS continues to make great strides in its population health
    initiatives and customer satisfaction. Central to the AFMS's population
    health plan is its Primary Care Optimization program, which improves
    clinical business processes through maximizing medical support staff
    skills and duties and through robust information management that
    supports effective decision-making. The Primary Care Manager by Name
    program provides much-needed continuity of care and, ultimately, better
    patient management by providers. Other population health initiatives
    include the Air Force Suicide Prevention program, which has served as a
    model for DOD and the nation in their efforts to address this
    significant public health issue. As a result of AFMS' initiatives,
    health care customer satisfaction continues to rise in the Air Force.
    According to the latest Customer Satisfaction Survey Results, 90
    percent of the Air Force's enrolled beneficiaries indicate they would
    enroll or re-enroll in TRICARE Prime if given the option. The overall
    satisfaction with clinics and medical care exceeds national civilian
    HMO averages.
    Conclusion
        The Air Force implemented structural and cultural changes via EAF
    concept to enhance responsive force packaging, as well as to provide
    more stability/predictability in deployment and home station
    scheduling. We must continue to address force-wide balanced tempo
    issues with manning, infrastructure and equipment, training, recruiting
    and retention, and mission requirement assessments. High OPSTEMPO has
    taken its toll: our people are still deployed three times more often
    than prior to Desert Storm-based on a force 60 percent its former size.
    Air National Guard and Air Force Reserve participation has steadily
    increased since Desert Storm, which has created unique challenges for
    Guardsmen and Reservists balancing civilian careers with increased
    military requirements. Trends show demand for air power will only
    increase; EAF holds promise by giving airmen predictability and
    stability. We must also take care of our families with adequate housing
    programs, medical facilities, and base support services. Our efforts
    continue to pay off, yet they must be actively renewed and
    revitalized--flexible enough to adapt to new circumstances and demands
    in a changing world.
                                closing thoughts
        The events of September 11th reaffirmed the importance of the Air
    Force's current focus on People, Readiness, and Transformation. Our
    future success hinges on our ability to recruit and retain highly
    qualified airmen, to provide these dedicated warriors with the
    resources required to accomplish their mission, and to continue to
    explore new and innovative approaches to the art of warfare.
        While the world's security environment changed dramatically, one
    thing that remains constant is America's need for Global Vigilance,
    Reach, and Power. That is your Air Force Vision, and what we strive to
    deliver every day. Fully exploiting our advantages in air and space
    capabilities is not an option--the risk of failing to do so is too
    great. We must remain the dominant air force in the business of global
    reconnaissance and strike (attack and mobility).
        Through recapitalization efforts, we hope to maintain the
    fundamental basis from which to perpetuate our transformation journey.
    This is a daunting task, and it cannot be achieved without substantial
    costs. Integration of systems, mastering real-time targeting, and the
    exploitation of new CONOPs, are more than mere objectives, they
    determine our ability to project power in tomorrow's battlespace.
        With America's continued support, the United States Air Force is
    poised for unprecedented success. The future holds sober challenges for
    America's military forces. Some may find easy remedy, while others will
    require tremendous sacrifice. In whatever scenarios lie ahead, the
    United States will be able to look to the Air Force for asymmetric
    capabilities that ensure our dominance of air and space. These
    capabilities, when employed in joint warfighting operations, will prove
    to be the resident military strengths that will enable America to
    assure, dissuade, deter or decisively defeat the adversaries of
    freedom.

                                 F-22 AIRCRAFT

        Senator Inouye. Thank you very much. You ended your
    presentation with the F-22. What is the status of the F-22?
        General Jumper. Sir, the F-22, as you know, is in testing.
    When we get the F-22 out at Edwards Air Force Base--I was out
    there 2 weeks ago. I spent a day looking into the F-22 and its
    test program and talking to the pilots who fly it. The pilots
    who fly it are blown away by its capabilities. It is orders of
    magnitude improvement over anything we have, and they are very
    confident in its capabilities.
        As you know, we are working through several issues with the
    F-22. One of them is a vibration problem on the tail surfaces.
    This problem is a problem that manifests itself on not the
    whole vertical surface but on the movable part of the rudder,
    and it is one that, although it has a very low probability of
    any sort of a catastrophic failure, it is something we have to
    pay attention to.
        We have a series of fixes that we know will deal with this
    problem. It is not dissimilar to the problem that they have had
    with the F/A-18 in its development and previously in the F-15
    during development. So, we have fixes to this problem and we
    are working those fixes. We will get this problem dealt with
    before we press on with any next stage of development.
        The other problem we are dealing with is software
    stability. At any stage of a program like this, in a software-
    intensive airplane, this is a problem we have to deal with. We
    have got ways to deal with that too.
        There is nothing in here in the F-22 program that I see
    right now as a show stopper. We are having trouble getting the
    test airplanes built and delivered and we are working that with
    Lockheed Martin. The strike, of course, had an effect on that
    and we are working our way through that. But when the airplane
    is delivered, when the guys get it up in the air, it is doing
    magnificently. So, I think overall I was very encouraged when I
    left Edwards Air Force Base and talked to the testers out
    there.
        Senator Inouye. As you are aware, the Secretary of Defense,
    in preparing for the fall budget review, called upon the
    services to look at four major weapons systems: Comanche,
    Crusader, V-22, and the F-22. Do you believe that what is
    happening now will satisfy the Secretary as to whether we
    should keep it or not?
        General Jumper. Well, sir, I do not think there is any
    thought of actually canceling the program. I think there is a
    discussion about the numbers, and we welcome the opportunity
    for us to justify the program again and the numbers. And he has
    left the book open to talk about the full range of capabilities
    for the F-22, the current version or other versions that might
    provide us a better air-to-ground capability. So, we think it
    is another opportunity for us to defend the program, and if we
    cannot defend it properly, shame on us.
        Secretary Roche. If I may, Mr. Chairman. He is giving us
    the opportunity that if we can make a case for more, we can
    make the case for more or for variants of them. One of the
    points that we welcome is the chance to talk about, this is not
    your grandfather's F-22. This is an airplane that, as we have
    looked at it, we have stressed certain parts of it much more
    than has been in the past so that each one of these is a
    tremendous ground attack airplane with a small diameter bomb,
    with the avionics that go into the fire control system for
    ground warfare being done effectively at no additional cost, or
    the other mods to the airplane that are very simple. This will
    be an extraordinarily good plane for air-to-ground purposes.
        In fact, the work that Tech Sergeant Markham has been doing
    was a forerunner to what we would like to be able to do with
    the F-22. It is the only system we know of that has a really
    good chance against deep moving targets like transporter-
    erector-launchers for Scud's or mobile air defense systems.
    Because of its stealth, because of its super cruise, its
    capabilities make it a very natural system to be able to attack
    those kinds of targets, which are becoming increasingly
    important.
        Senator Inouye. As you presently assess the future
    intelligent-wise and technology-wise, what do you consider to
    be the appropriate numbers we should consider for F-22's?
        Secretary Roche. Well, one of the things we are doing at
    this time, sir, is going back to basics, back to a clean sheet
    of paper, and starting over for this era, not for the prior
    era. This plane originally was thought to be ordered on the
    numbers of around 750. We have about 700 F-15C's and F-15E's.
    So, that was a placement number. With the advances in weaponry,
    et cetera, maybe the number would be smaller. Maybe it will be
    less than 339. We have thought 339 was a good place to start.
    But the variants. It may be that we would be better off to take
    beyond 339 and have some that are much more oriented to air-to-
    ground and a variant of the F-22. Or given its capabilities, we
    are looking now to see if maybe a few less would do. But we are
    starting with a clean sheet of paper so that we can make the
    best case to the Secretary, not just take out the old case and
    give it to him again.

                            UNMANNED AERIAL VEHICLE

        Senator Inouye. About 10 years ago, it was almost taboo to
    talk about unmanned aircraft. General, I noticed in your
    testimony there is much about that.
        General Jumper. Yes, sir.
        Senator Inouye. Are we going to be spending more on
    unmanned aircraft?
        General Jumper. Sir, I think that the role of unmanned
    aircraft is going to increase. I think that we have seen the
    worth of the unmanned intelligence, surveillance,
    reconnaissance aircraft, both in the form of Predator and
    Global Hawk in this war.
        I am amused at the articles I read that say that somehow
    the white scarf fighter pilot crowd--I guess I am one of
    those--is somehow opposed to the emergence of unmanned aerial
    vehicles (UAV's). But, Mr. Chairman, I am the guy back in the
    Kosovo war who insisted that we put a laser ball on the
    Predator UAV so it could spot targets on the ground to guide
    the bombs from the fighters. And then later on, I am the guy
    that insisted we put a Hellfire missile on the Predator UAV. I
    will tell you in the pilot community out there, anything that
    will improve our ability to get to the targets is welcome.
        We do have to proceed with some bit of caution in the UAV
    world as we get into the unmanned combat air vehicle (UCAV)
    business and we decide a concept of operations on how these are
    going to be employed. For example, if you take one of the
    current concepts, which is to put the conventional warfare UAV
    into a box of some type and then load them onto C-17's or C-5's
    and deploy them off to a theater, those are the same C-17's and
    C-5's that are needed to and are being counted on by other
    services and other pieces of the Air Force that need to get
    deployed into place. Once they get there, you still have to
    have people to take them out of the containers and to put them
    together and to test fly them and then to load them out and be
    ready to go. We want to make sure that, as we develop that
    concept of operations, it is not decreasing the rapidity of air
    power because one of our main features is that we get there
    quickly.
        The alternative to that is to make a UAV that you can
    deploy nonstop, which means that you have to make it air
    refuelable. As a matter of fact, any of these UAV's that are
    going to be dealing with any distances of the type we deal with
    today would have to be air refuelable, and when you start
    putting air refueling technology, which is not unlike the
    technology they use to mate the satellites up in space, onto
    the UAV, now pretty soon it is not considered expendable
    anymore. Somebody is asking, well, it costs so much money, we
    better put a person on it to make sure it gets there and back
    safely.

                                  GLOBAL HAWK

        So, these are the things we are having to balance as we
    evolve the technology, but at the right place and the right
    time, Mr. Chairman, I can tell you that we will blend UAV's
    into the appropriate mission areas. The one that I see on the
    near horizon is the role of the Global Hawk will eventually
    replace the U-2. That makes sense to me. Then I think in the
    long-range strike technology, a replacement bomber, whether
    that be a suborbital, an orbital, or an airborne machine, I
    think we need to look very closely at UAV's. And the
    replacement gun ship I think would be an excellent candidate
    for UAV's.
        These things are all being looked at, Mr. Chairman, by
    fighter pilots like me.
        Secretary Roche. Mr. Chairman, we have benefitted from
    General Franks allowing John and me to ask to put things into
    the theater that were really not ready for prime time. And we
    have learned a tremendous amount, both the advantages of these
    systems and also some of the difficulties. We have learned, for
    instance, the fact that when you think about an F-16 will have
    one pilot, a UAV has a pilot and a systems operator.

                      PILOTS FOR UNMANNED AERIAL VEHICLES

        And to answer your question about training pilots for
    UAV's, we are doing that extensively. Right now we are using
    pilots who come from manned aircraft to have temporary duties
    with the UAV's and then go back to manned aircraft because the
    pilot instincts, we have recognized, have become very, very
    important since they are working in two-dimensional space when
    they normally would be working in three-dimensional space. We
    have a few navigators who have their own private pilot's
    license who are also flying these, and over time that specialty
    may evolve into something other than a B-1 pilot and an F-15
    pilot. But as pioneers, we really need these folks flying them
    because they give us the kind of feedback that help us design
    the next generation.
        So, we know they take some attention, more than other
    things. We recognize if you try and fly multiples of these at
    the same time, that you are talking about swarms of unattended
    vehicles. Swarms demand an enormous amount of bandwidth, a lot
    of technology, et cetera. So, looking to where they really pay
    off and where it may not be so wise to use them is something we
    have had a chance to do in this campaign that otherwise would
    have taken years to learn.
        Senator Inouye. Before I call upon the co-chairman of this
    committee, I must say, Mr. Secretary, how stunned I was and yet
    I realize it is true that since 1953, no American in uniform
    has ever been killed by an enemy aircraft. I think that
    Americans should realize that. I think much of the credit can
    go to you and your predecessors.
        Secretary Roche. Well, and to you and your predecessors,
    sir, and your colleagues.
        Senator Inouye. Congratulations. We did not know our record
    was that good.
        General Jumper. It is pretty good, sir. You do not want to
    take it for granted, Mr. Chairman.
        Senator Inouye. Senator Stevens.

                          SPACE-BASED INFRARED SYSTEM

        Senator Stevens. Mr. Secretary, I understand that we have
    had a recertification of the space-based infrared system
    (SBIRS) High program. Could you tell us what is the status of
    that program now?
        Secretary Roche. Senator Stevens, this is a program of
    which I do not take great pleasure in talking about. It is a
    problem program that has come into a cost growth that I find to
    be quite shocking. We have gone back to square one. We have
    asked all the appropriate people if all the requirements were
    still necessary. We were told they were. John Jumper and I have
    tried to tell everybody do not add any more requirements to
    this, for heaven's sakes. Let us get this thing back in shape.
        We have stretched the program out. We have gone through it
    with Mr. Aldridge to try and get there. We have ended the total
    systems performance responsibility authority to the contractor
    that gave the contractor total control. We have introduced much
    more management attention from the part of the Government. All
    of the management of the program itself has been turned over.
        It is a program that is still in difficulty and I would not
    want to lead you to think that we have got a fix, but we are
    paying an enormous amount of attention to it. And we are told
    that it is still as necessary as ever, and we are on the path
    of trying to execute the new restructured program. But it is
    going to cost us money out of the Air Force budget.
        Senator Stevens. What were the basic causes for the
    increase in cost? And does it have a time line now?
        Secretary Roche. Oh, sir, it does have a time line. I am
    sorry. The launch date is not on the top of my head. I can get
    that for you.
        [The information follows:]

                          Space-Based Infrared System

        The launch of the first GEO satellite is planned for
    October 2006.

        Secretary Roche. But I can tell you in detail when we took
    a good, hard look as to why did this happen, why was it 1 year
    ago we had an indication of a small problem prior to my
    confirmation, and then within 3 or 4 months, it turned into a
    multi-billion dollar problem?
        When we brought outsiders into the program to take a look,
    I regret to tell you it was the basics, Senator. It was the
    program really was not ready to move as fast as it had. People
    thought software could be reused that simply could not be
    reused. The program management, by having the Government stand
    back and devolve all the authority to the companies, the
    companies kept trying their best, but not really having the
    Government aware of how deeply in trouble the program was. And
    then finally, it also appears that basic systems engineering
    was not done.

                     NATIONAL SYSTEM ENGINEERING INSTITUTE

        We are seeing this problem of basic systems engineering as
    a problem appearing in a number of programs to the point where
    we are very concerned about the capabilities of the United
    States and the industrial base in the systems engineering
    field. Secretary Aldridge and I are talking about the
    possibility of, at some point, coming back to you and asking
    authority to create a national systems engineering institute
    where we can start to train engineers how to do something. That
    was a magnificent competitive advantage of the United States
    but appears to not be as present as it used to be. We know it
    is not in the civilians in Air Force because most of them are
    retired. And in total systems performance responsibility, our
    officers and civilians were not asked to get deeply into the
    program. That has ended now.
        Senator Stevens. I worry sometimes we are losing some of
    these systems abilities to our friends overseas in terms of our
    increased procurement from overseas. I would like to have you
    follow up on that institute concept, and we should discuss that
    I think.
        [The information follows:]

                     National Systems Engineering Institute

        The Air Force is planning to establish an Institute of
    Systems Engineering to address problems with the systems
    engineering approach used by Air Force/contractor integrated
    teams identified during the acquisition and sustainment of some
    large complex systems. These problems include: Inconsistent
    systems engineering application across the Air Force; loss of
    technical discipline (e.g., configuration management,
    integrated risk management, modeling and simulation, etc.);
    Loss of expertise, aging workforce (over 50 percent eligible to
    retire over next five years); Recruiting and retention issues
    (``new employees'' not expected to be ``lifers'')
        A major premise for the Institute is that systems
    engineering is not something one can learn entirely in the
    classroom, but must also learn through hands-on experience
    working on real systems. The concept is to bring together
    government, industry, and academic stakeholders to eventually
    form a nationwide Institute of Systems Engineering.
    Implementation will be in phases using a spiral approach. First
    phase will focus on coordinating Air Force and other Services'
    capabilities, followed closely with the development of
    alliances with appropriate universities, professional
    societies, and industry. Plans are to have some early Institute
    capability/presence in place later this year. This coalition
    would be able to leverage each other's physical, financial, and
    intellectual resources to minimize additional investments and
    accelerate the stand-up of the Institute to provide services
    where needed nationwide.
        The objective of the Institute is to: (1) educate and train
    engineers and managers in the best practices, tools, industry
    standards, lessons learned, and the right questions to ask, as
    well as educate and train engineers in the basic systems
    engineering process and principles; (2) provide consultative
    services, through the establishment of a senior level
    consultation group comprised of industry, government, and
    academia experts to programs with systems engineering issues;
    and (3) advocate and maintain the systems engineering process
    and tools in order to sustain a robust disciplined process into
    the future.
        The Institute should provide: A spectrum of services and
    capabilities from just-in-time workshops and conferences led by
    government and industry practitioners using real-world cases,
    to Air Force Institute of Technology (AFIT) and university-led
    training, certification, and degree programs, which
    continuously incorporate best practices from government and
    industry into their education and training curricula. The
    capability to identify best practices, lessons learned, and
    deficiencies in the application of systems engineering
    principles; shape strategies and implement changes to address
    deficiencies; and set industry standards to promote the best
    practices for systems engineering throughout the government,
    industry, and academia.
        Air Force actions to establish the Institute of Systems
    Engineering include: The Air Force Materiel Command (AFMC)
    Commander has a team in place, which includes active
    participation by the Space and Missile Center (SMC), to
    identify and coordinate the activities needed to stand-up the
    Institute.
        The AFIT School of Engineering will be the Air Force
    academic anchor.
        AFIT and AFMC will work in collaboration and partnership
    with the other Services to establish a coalition of educators,
    trainers, and practitioners of systems engineering (e.g., Naval
    Postgraduate School, academic centers of excellence,
    professional societies, and leading aerospace companies).
        The Air Force is briefing industry partners as quickly as
    they can be scheduled. Working meetings have already been held
    with Lockheed Martin and Boeing personnel. As a complement to
    the Institute, the Assistant Secretary of the Air Force for
    Acquisition (SAF/AQ) will investigate ways to incentivize
    contractors to employ sound systems engineering practices.
        A Draft Institute of Systems Engineering Charter is in
    coordination.
        A Draft Integrated Management Plan and Schedule will be
    released for coordination on May 31.
        In summary, the Air Force is assiduously pursuing ``spiral
    development'' of the Institute of Systems Engineering to
    include initiation of an early capability by the end of
    calendar year 2002. In addition, revitalization of the systems
    engineering process is proceeding in parallel.

                                      F-22

        Senator Stevens. General Jumper, you mentioned in your
    statement about the tail buffet factor on the F-22. It is my
    understanding that has occurred on almost every twin-tailed
    airplane in the past. Is that right?
        General Jumper. That is correct, sir, in one form or
    another.
        Senator Stevens. So, this is not an unexpected phenomenon
    but one that has come out through basic testing of the
    aircraft.
        General Jumper. Exactly true. And it is important to point
    out, Senator Stevens, that there have not actually been any
    cracks that have been experienced in the test program. These
    are mathematical projections of what might happen. So, we have
    actually not experienced one. We are just projecting that this
    is going to be a problem.
        Secretary Roche. No manifestations at all, sir.
        Senator Stevens. It seems there have been a hyper-awareness
    of the problem on this aircraft, but there have not been that
    many of them delivered yet, have there?
        General Jumper. We have had eight of them delivered now,
    sir, that are the test airplanes. We have asked for some more
    testing to be done to make sure that we understand and we
    characterize this problem properly. But as of right now, we
    have got eight out there, sir.

                                      C-17

        Senator Stevens. The chairman and I are quite interested in
    the force of C-17's that are going to be deployed soon,
    particularly those going to the Pacific. Have you got a time
    line yet for that?
        Secretary Roche. We do, sir. We can get that to you. It is
    part of this new multiyear buy, and I believe it is eight
    planes going to one part of the Pacific and eight planes to
    another part, sir.
        [The information follows:]

                                      C-17

        We announced Monday, 15 April 2002, that Hickam AFB and
    Elmendorf AFB have been identified to beddown an eight Primary
    Aircraft Authorized (PAA) fleet at each location. These
    aircraft are tentatively scheduled to be in place at Hickam AFB
    in fiscal year 2006. Elmendorf is tentatively scheduled for
    fiscal year 2007 pending completion of their military
    construction requirements.

        General Jumper. Exactly.
        Secretary Roche. By the way, we should tell you the plane
    has just behaved unbelievably well in this conflict. For an
    aircraft that, like other aircraft, had very difficult birthing
    problems that you know better than I, Senator--both of you. You
    lived through them from the start in 1977 through the final
    planes. It has done both the retail long haul job and the short
    haul job beautifully. We have never had an aircraft that could
    do that before.
        Senator Stevens. Mr. Secretary, we know the history of
    that. Twice three committees in the Congress killed that
    airplane, and we kept it alive. And thank God we did.

                             HIGH DEMAND PERSONNEL

        General Jumper, I am told by the staff that there is a
    shortage now of some of the high demand personnel for the Air
    Force, security police, intelligence. What is causing that?
        General Jumper. Well, sir, the phenomenon of the 11th of
    September was that not only did we have to go to higher threat
    conditions overseas, which is the way we have been doing
    business during the decade of the 1990's, but we had to go to a
    higher threat condition both at home and overseas at the same
    time. Previously when you had an increased threat condition
    overseas, you would empty out your bases in the United States
    to go deal with that. In this case we had to do it both at home
    and overseas. It has put great demand on our security forces,
    and they are spread very, very thinly around the world right
    now trying to protect the Nation's assets around the world.
        It is not only security police, but it is other specialties
    that are in high demand out there in the commercial market:
    aircraft mechanics, communication specialists, computer
    experts, et cetera. Especially the kind that I described to you
    in my opening statement that are committed, loyal, and
    dedicated are the very ones that companies out there want to
    hire away from us.
        So, the qualification of our people and the different
    nature of this war on terrorism that we are engaged in have
    created this demand inside a healthy economy that has put us at
    a deficit.

                                RECRUITING GOALS

        Now, having said that, we have, as of this month, achieved
    our recruiting goals for this year well ahead of time. Our
    retention rates are continuing to improve in almost all
    categories so that some of this problem will be exacerbated.
        We have been asked by the Secretary of Defense that before
    we go ask for more manpower, that we find ways to explore
    things that people do in uniform and see if they can be done
    another way and sort of reengineer our manpower in the Air
    Force, and we are doing that. But we are stretched very thin,
    Senator Stevens.
        Mr. Secretary, you may want to----
        Secretary Roche. I had the pleasure yesterday, Senator, of
    swearing in the 37,283d recruit who was the recruit who put us
    over our goal for the year up in New York.

                                PILOT SHORTFALL

        We are still having trouble getting pilots. We are still
    short on pilots. Our officer accessions are not all that we
    would like them to be, and we are working very hard to look at
    the various programs. We are increasing Reserve Officer
    Training Corps (ROTC) programs. We are reaching deeper into the
    high schools to get young people to be more interested in the
    Air Force. We have about 600 junior Air Force ROTC programs
    now, and we want to move that up to 900. We need to get to
    these young people and tell them they can be pilots. They can
    be battle managers or they can be officers involved in the
    space world or noncommissioned officers (NCO's) involved in the
    space world.

                     UNMANNED AERIAL VEHICLE PILOT TRAINING

        Senator Stevens. I think I have taken more than my time
    already, but let me ask you, General, should we ask the academy
    to change its curriculum so we get people started on UAV
    training while they are still in the academy? It seems to me
    there are a lot of people--my brother, for instance, never
    liked to fly, but he liked to fly those model airplanes and put
    engines in them back in those days. I know you have got some
    different types of training out there such as gliders, but I do
    not think you have any training per se in UAV's. Do you?
        General Jumper. No, sir. We are actually training them in
    the units themselves. The consideration I would offer, Senator
    Stevens, is that these people we are having pilot these
    Predator UAV's we are also asking essentially to do close air
    support. In some cases, they are putting laser spots on the
    ground and having to control airplanes in the air much like
    Sergeant Markham did from the ground, and they are also having
    to take the responsibility in some cases for shooting missiles
    off of these airplanes. So, the skill set that we require is a
    skill set that is very closely associated with close air
    support, and the education that goes along with a close air
    support specialist that is trained usually at the lieutenant or
    captain level.

                               AIR FORCE ACADEMY

        But the technical part of your question, Senator, if you do
    not mind me adding, is exactly right. What we need out of the
    Air Force Academy are the people who are technically smart
    about the integration of systems, and the Secretary has visited
    the Air Force Academy. They were about to cut down the
    engineering and sciences curricula in the Air Force Academy in
    the basic core curriculum. The Secretary went out there and
    reversed that decision. As a matter of fact, we are going to
    increase the technical specialty. But we need the people who
    understand the principles of unmanned flight, the principles of
    orbital and suborbital flight, the integration of manned/
    unmanned in space platforms at the technical level. And what we
    really need to work on are these systems engineers that the
    Secretary talked about before at the academy level.
        Senator Stevens. Thank you very much, Mr. Chairman. Thank
    you, gentlemen.
        Senator Inouye. Thank you very much.
        Senator Shelby.
        Senator Shelby. Thank you, Mr. Chairman.

                             MAXWELL AIR FORCE BASE

        Mr. Secretary, I understand that you and the General have
    been down to Maxwell Air Force Base to the Air University. We
    talked about that earlier. One of my concerns that they tell me
    about at Maxwell is the ROTC training requirements facing the
    schoolhouse down there. It is my understanding requirements
    have increased 26 percent, and they need some money there. I do
    not know if you have looked at that, but a 26 percent increase
    puts more demand on them. Do you want to comment on it?
        Secretary Roche. Yes, sir. I think the modern Air Force is
    being surprised at the degree to which General Jumper and I
    will get into curriculum and to make sure the curriculum is
    right. We have a joke with each other. I do the Air Force
    Academy because I am the more academic. He does Maxwell's
    advanced schools because he knows the professional military
    education (PME) better than I do.
        We both were a little surprised to find that ROTC cadets
    drop out a lot between their first and second year, especially
    the 4-year scholarship students. My experience as a naval ROTC
    midshipman was I could not have dropped out because I was at
    sea. So, I asked, well, how can they drop out? Well, we do not
    put them anywhere between their first and second years. And we
    both went, gosh, here is a chance for them to work with our
    first sergeants, to get to know the Air Force at its most
    meaningful level. And so, we are going to make a change. We are
    going to have those cadets go out and work in the units. That
    is putting a greater burden on the ROTC management.
        Senator Shelby. But it is for a real reason, though, is it
    not?
        Secretary Roche. It is a wonderful reason.
        Secondly, precisely because of the point that Senator
    Stevens raised, we have gone back to see where do we get our
    technical Air Force officers from. The academy is fixed in
    numbers in total. The ROTC program is our best chance to get
    technically educated officers. We do better there than we do in
    the officer training school (OTS) program. Therefore, we are
    shifting. We have agreed to shift a number of the billets from
    OTS to ROTC, which will put a burden. With that shift, we have
    committed to making sure we fund the direction we have given,
    sir.
        Senator Shelby. Thank you.

                                     KC-135

        I have several questions here dealing with the aging fleet
    and primary depot maintenance. You are very familiar with it.
    What impact have the rigors of Operation Enduring Freedom and
    Operation Noble Eagle had on your periodic depot maintenance
    (PDM) schedules and your near-term operational capabilities of
    the KC-135 fleet? General?
        General Jumper. Well, sir, as you know, we have about 120
    KC-135's in the PDM line at Tinker Air Force Base today. In the
    last several years, we have doubled the amount of time from
    about 180 days to more than 300 days it takes to take one of
    these airplanes apart, fix all the corrosion and things that
    are wrong with them----
        Senator Shelby. That is too long.
        General Jumper [continuing]. And put them back together
    again. It is too long.

                             MISSION CAPABLE RATES

        Once they go through the process, we are getting good
    mission capable rates out of the tankers and we are getting
    good mission capable rates out of our airlift fleet. These are
    recovering now from a long time of decline. As you would
    expect, when we go into combat, we see an increase in the
    mission capable rates, because people are working very hard
    using cannibalization and other techniques to keep them in the
    air. As you would expect, our older bombers show the effects
    more than the newer airplanes, but increased operation puts a
    greater demand on spare parts and a greater demand on our
    maintenance people.
        While we see, in the overall fleet, the results of our
    investment, with the help of this committee of more than $1.5
    billion over the last 4 years to fully fund our spares
    accounts, we have seen that level off and start back up again.
    When you start and do an operation like Afghanistan, the charts
    start going all over the place, as you increase your tempo of
    operation.
        Senator Shelby. Sir, will your fiscal year 2003 PDM request
    meet your requirements?
        Secretary Roche. To the best of my knowledge, yes, sir. We
    face an issue that something is wrong if one-fifth of our 135
    fleet has to be in major depot at any one time. That is losing
    20 percent of your capability. While the planes work when they
    get out, they have to get back for corrosion control and other
    repairs very, very quickly.
        The money we have there now continues to work these and
    with the basis of replacing them sometime later in this decade
    or early next decade. But it is one of the reasons why we were
    trying to jump start and move more quickly so that we could
    retire some of the oldest ones, the E models which are facing
    about $3 billion worth of work in the next several years.
        Senator Shelby. Mr. Secretary, the specific goals of your
    plan would be to move forward, get the oldest out, and get the
    ones you can rehabilitate back to their units quickly. What
    about the specific goals?

                                    TANKERS

        Secretary Roche. The specific goals, Senator, are right now
    we have roughly 600 tankers, 59 KC-10's and 545 KC-135's. Thank
    God this committee and others helped the Air Force get the KC-
    10's in the mid-1980's, taking some new DC-10's and converting
    them into tankers, because they have been the principal plane
    that has served the Navy and Marine Corps aircraft.
        What we would like to do is to take a look at the fact that
    our newer aircraft, if we have the F-22's and Joint Strike
    Fighters, because of internal carriage, will not have to refuel
    as often. Therefore, we probably, when we are finished, will
    have a need for something less than 600 tankers, but it is
    certainly going to be in the 400 or 500 range, somewhere in
    there we think.

                            LEASING TANKER AIRCRAFT

        We would like to try to get a replacement for the oldest.
    We will retire approximately 130 if we can get 100 to replace
    them and then study what we need and what pace to go on. But
    the issue is can we do this lease so that it is a business case
    that you and all your colleagues could say, yes, that makes
    great sense. That is good for the taxpayer, good for the Air
    Force, good all the way around. If we can do that, then we have
    a model to say this takes care of the worst. Now, exactly when
    do we have to do the next ones? And we can shift to a buy.
        Senator Shelby. How long is that going to take, Mr.
    Secretary, to put this together?
        Secretary Roche. By the time you finish the whole fleet,
    sir, it will be 2020, 2025.
        Senator Shelby. A long time, is it not?
        Secretary Roche. But some of those planes are going to be
    awfully old. That is why we have this desire to get going with
    this.
        Senator Shelby. But you are going to fully fund this this
    year.
        Secretary Roche. Yes, sir. We have no choice.
        Senator Shelby. You have got the request and you have got
    the help.
        Secretary Roche. Yes, sir.

                                      C-5

        General Jumper. If I could just add, Senator. It is the
    unexpected that always causes the hiccups. I was recently down
    in Georgia looking at the C-5 PDM line, and there was a C-5
    there where they had found a 17-inch crack in the spar. It is
    when that happens is when you go into these delays that take
    you from 180 days to more than 300 days of repair time. It is
    the unexpected.

                                  KC-135 FLEET

        In the KC-135 fleet, we have had flaking on the fuel tanks.
    We have spent almost 40,000 man-hours dealing with this flaking
    problem. Again, these are the unexpected things that pop up
    that require us to come back to you and ask for help.
        Secretary Roche. The flaking is because we fixed leaks by
    coating the tanks and the coating is flaking. This is, as
    Secretary Rumsfeld says, keeping a 1934 Oldsmobile going. You
    can do it. It just costs so much money. At some point it is not
    wise to continue trying to keep these things going.
        The 707's have catalytic corrosion problems where
    dissimilar metals are no longer separated as they were
    originally. You get a little water, you get a battery. Some of
    the aluminum is delaminating. These are things that take a lot
    of time, and when you have one-fifth of your force in major
    maintenance, plus the routine maintenance--and as any of the
    135 people will tell you, when they fly, they take a lot of
    spare parts with them.
        Senator Shelby. Mr. Secretary, lastly after you go through
    a major maintenance plan on the KC-135, in other words, really
    do it right, what is the life of it then?
        Secretary Roche. We think these planes could make it.
    Certain of these planes. The ones that are very good are the
    ones that were reserved for the Strategic Air Command for
    years. They had very low hours on them, and they were taken
    very, very good care of. They should be able to be the last
    ones in the KC-135 fleet and they should last us until 2025 or
    2030, as long as we do this. It is the ones that have been used
    in TACAIR, have been used more often, that are just showing the
    wear and tear and the oldest ones.
        But by 2020, Senator, these are all going to be real old
    planes. They average 41 years of age now. The E models average
    43 years. Add 15 years, you are talking about 60-year-old
    planes. We have never flown 60-year-old planes.
        Senator Shelby. They are going to live longer than we are,
    are they not?
        Secretary Roche. Longer than I will.
        Senator Shelby. Thank you. Thank you, Mr. Chairman.
        Senator Inouye. Thank you.
        Senator Cochran.

                     SPACE-BASED INFRARED SYSTEM HIGH ORBIT

        Senator Cochran. Mr. Chairman, thank you very much.
        Senator Stevens brought up the issue of the space assets in
    the missile defense area, SBIRS High. You mentioned some of the
    problems and the challenges that are faced in that area.
        Under Secretary Aldridge recently certified, though, that
    the program is essential to national security and its cost can
    be controlled, so it is continuing. But my question is last
    week the Senate Armed Services Committee cut the funding
    request by $100 million. What I am curious to know from you,
    Secretary Roche, is what the impact of that $100 million cut
    would be on the program?
        Secretary Roche. It is a program that does not need that
    kind of a problem now, sir. Anything that disrupts its schedule
    or causes us to have to restructure to account for that will
    only engender more cost increase and more schedule delay. We
    are hoping that we can have that not happen so that we can take
    the restructured program and try to provide some stability to
    the program as we go forward. Any disruption in any of these
    programs really causes havoc, and this is enough that it may
    cause havoc.

                             AIRBORNE LASER PROGRAM

        Senator Cochran. One other program that you mentioned in
    your testimony was the airborne laser (ABL) program. Another
    example of cuts in the President's budget request are
    illustrated in that program. Last week the Senate Armed
    Services Committee cut $135 million from the President's $598
    million request for the airborne laser. That will eliminate the
    design work I am told and the procurement of the second ABL
    aircraft. Although the Missile Defense Agency is responsible
    for developing this program, the Air Force is executing it for
    the Missile Defense Agency and will operate it, as I understand
    it, after it is deployed.
        So, I guess, General Jumper, I will ask you. What would be
    the impact of the cut that has been recommended by the Armed
    Services Committee if we do not do something about that?
        General Jumper. Senator, we think the airborne laser is
    going to be a very significant part of the theater ballistic
    missile defense. It has shown success in each phase of its
    development and testing. Of course, a cut does nothing more
    than stretch it out and, in the end, increase the cost. So, we
    are very much in support of the airborne laser and we want to
    see it built to its completion.
        Now, within the missile defense arena, the program
    responsibility, they have certain prerogatives to trade off
    these resources, and I must admit that I do not know the reason
    why, the justification for this cut. But we very much support
    the airborne laser and its role in theater missile defense.
        Secretary Roche. And to the best of our knowledge, this is
    a program that is doing well. The ground tests held earlier in
    the year performed well. General Kadish has told me that
    everything he knows about it looks good, and we think it is one
    of those programs that is working and should not be cut.

                              GLOBAL HAWK PROGRAM

        Senator Cochran. You have already mentioned some of the
    unmanned vehicle programs. One that I think, General Jumper,
    you predicted was going to be a very important and successful
    program was the Global Hawk program. The pre-production
    aircraft have been deployed to Afghanistan. You were talking
    about that. I would be interested in your assessment of the
    Global Hawk's performance and how it has fit in with the assets
    that have been deployed to Afghanistan.
        General Jumper. Senator, the Global Hawk is doing very
    well. As you know, it is really still in developmental testing
    and we deployed it over there in its test phase. As you know,
    one of them crashed over there as a result of simply a
    malfunction that is part of the testing process. Having said
    that, though, the airplane is performing magnificently.
        The Secretary and I have been alarmed at the price
    increases in the Global Hawk, and the costs have gone up. We
    have taken steps to make sure that we separate the Global Hawk
    air vehicle from the sensors that are in the Global Hawk and we
    make sure that those sensors in the Global Hawk are the subject
    of a proper competition to incentivize the people who do that
    very important sensor work to keep their costs intact.
        I would say that the system is performing magnificently. I
    think the Global Hawk is going to serve this Nation not only as
    a surveillance asset, but in the future as a communications
    relay asset and other roles as well. I think in many ways it
    can substitute for a constellation of low orbiting satellites
    in a localized confrontation. So, I think the future of the
    Global Hawk is bright if we can control the costs, and that is
    the Secretary's challenge to the company.
        Secretary Roche. Senator, one of the things that John and I
    are doing, in the unmanned vehicles, we are not treating them
    as just airplanes that do not have pilots riding in them. We
    are saying that these are new forms of air-breathing vehicles
    and we ought to think about them more broadly and not just say,
    well, this is what we do with an airplane.
        So, among other things, we have issued a challenge to the
    contractor and have set a budget and a time limit and said we
    would like to give you freedom to think of how best to employ
    these to do the effects we want have done. So, for instance, it
    may be because they have such endurance without a pilot wearing
    out, that if you put two of them in an air space at the same
    time, you can do much more than just one plus one. We are
    trying to make people realize that we are asking for innovative
    ideas, asking for innovative combinations of sensors, and not
    trying to treat them like a classic airplane that as it goes
    through its development, where from day one you seem to know
    everything you need to know about everything you want.
        In this case, it is quite clear, by putting in programs
    that were not ready for prime time, we have learned. We have
    also learned things that we want.

                                    PREDATOR

        So, for instance, in Predator, sir, it is quite clear there
    is no reason to have two types of wings, one that can carry
    Hellfire and one that cannot. So, now all Predators built will
    be Predators that will have the ability to carry Hellfire
    should we choose to do so. We have learned about how to make
    use of these, and we are experimenting with various sensors on
    Predator.
        In the case of the middle ground, there is Predator A,
    which is in our words a razor blade. We want to keep it very
    cheap and we are willing to have a computer chip die for our
    country.

                                  GLOBAL HAWK

        Global Hawk. The sensors were getting so expensive that the
    benchmark was we could reopen the U-2 line, and that does not
    make sense. So, the sensor costs have to come down.
        In between, we have developed a concept of operations for
    hunter-killer, an unattended vehicle that can be programmed to
    hunt for specific types of targets, to alert people when it is
    there, go through a decision, and if the decision is to shoot,
    to shoot, trying to develop new concepts that exploit the
    technology as compared to just using the technology in the ways
    we used manned aircraft.

                               SPACE-BASED RADAR

        Senator Cochran. One of the other new developments I was
    reading about in your statements is the space-based radar,
    which is another development program. I wonder if you could
    acquaint us with that. When I first came across it, I thought
    maybe it was a version of the SBIRS High/Low or had some
    relationship to those programs, but it is separate and
    different. Could you explain that to the committee?
        Secretary Roche. It is and we are hoping to do this one
    right. The configuration and control board of the space-based
    radar is Pete Teets, John Jumper, and Jim Roche. We are the
    three and we are holding this thing amongst us very tight so as
    to not allow requirements to go crazy. To try and do something
    like put joint surveillance and target attack radar system
    (Joint STARS) in space, to have the ground moving target
    indicator so precise that you could target would be so
    expensive that we think that that is foolish.
        Secondly, we have oft times approached these systems,
    Senator, as if each system stood in the world by itself as
    compared to their being part of a portfolio and providing a
    mosaic-like picture. One of the things that we really have
    learned in this conflict is how to fuse intelligence, how to
    fuse data, and the value of having all of these devices
    sampling.
        So, for instance, in one case there was a target that was
    seen by special systems, seen by Global Hawk, Predator, et
    cetera, but only one mode of the Global Hawk caught it. And
    then when we recued the others, we found a very lucrative
    target. The fact that it was a mosaic was important.
        So, we are trying to approach space-based radar not to cure
    world hunger, but to be a proper member of a portfolio of
    systems and therefore keep its costs down, keep the
    requirements down, and to start it with its sensors before we
    turn it over to the big primes who may want to add lots of
    things to it.
        Senator Cochran. Interesting. Well, I think our committee
    ought to be cooperative in the effort to provide the funding
    that we need to keep this on track and let you carry forward
    with your ideas on this subject.

                         C-17'S IN JACKSON, MISSISSIPPI

        One parochial issue has come up and been brought to my
    attention. You know, the C-17's are being deployed around the
    country. We were happy that the Air National Guard in Jackson,
    Mississippi will be host to some of those planes.
        What we are concerned about now is whether or not there
    will be full utilization of the aircraft in terms of flying
    hours and operational tempo. They do not want to be treated
    like second class citizens because they are not active duty Air
    Force, but they have been very competent with C-141's and
    before that with other airlift planes and have provided
    important supplementary services in time of need and in time of
    war. So, they are very proud of their accomplishments and would
    like to continue to be thought of as fully capable to operate
    those.
        What I would like for you to do is let us know how you are
    going to transition into the new planes to be sure that we meet
    crew proficiency standards, that they are second to none, and
    that the flying hours are what are needed in order to take full
    advantage of those assets. Can you give us a reaction to that
    now?
        General Jumper. We are still working on the crew ratios and
    how we are going to do exactly what you say with the proper
    manning of the unit. The C-17 is so important we cannot have it
    not being fully utilized. So, we are going to have to take
    steps to make sure that that happens. But the crew ratios and
    the details are still being worked as far as I know, Senator,
    but we will keep you up to speed on where we are on that.
        Secretary Roche. We thought it was unprecedented to give
    you, as part of our program to be as transparent as possible,
    all of our thinking based on 180 C-17's and the number of C-
    130's we see, to give all of the members a map of where
    everything would go so that you understood where our thinking
    was.
        One of the things we are observing in these newer aircraft
    is they are far more reliable. If they are far more reliable,
    then the limiting factor is people, not the airplane. So,
    therefore, having multiple crews allows us to use the same
    plane more often.

                             OPERATION NOBLE EAGLE

        And the Guard has done a magnificent job in the current
    conflict. After all, 80 percent of what was done in Operation
    Noble Eagle was done by our Air National Guard and Reservists,
    about 20 percent by active duty folks. And an awful lot of the
    mobility and an awful lot of the tanking that has occurred,
    bridging across the world has been done by the Guard. They have
    performed magnificently.
        Senator Cochran. Thank you very much.
        Senator Inouye. Thank you very much.

                                      B-2

        Mr. Secretary, about 30 years ago, we began to very
    seriously discuss stealth bombers, and research programs began.
    About 5 years after that, we came up with the B-2. When the B-2
    was initially conceived, some were talking about 270 copies,
    and we finally settled on about 132. At that time, it was
    determined that the unit costs would be approximately $200
    million because we could spread the research and development
    (R&D) throughout all those aircraft. But with the passage of
    time, it came down to 70, to 40, and to 21. And a plane that
    was scheduled to cost $200 million a copy now became $2 billion
    a copy.

                              JOINT STRIKE FIGHTER

        A few years ago, we decided that the Joint Strike Fighter
    was important to replace your F-16's. If we maintain the
    numbers, we can get it for a reasonable price, but now I hear
    rumbles that we are cutting down the numbers. The Navy may have
    second thoughts about the numbers they will procure. Can you
    tell us what the situation is? Because I do not want you to get
    into this B-2 syndrome because that would be terrible.
        Secretary Roche. Yes, sir, and this committee, because of
    what you did in the C-17, is fully aware that that was
    originally 210 planes, 120 planes, 40 planes, 80 planes, 120
    planes, now 180 planes. That does not do scheduling or cost any
    good as things bounce around like that, and we worry about this
    in the case of the F-22 as well.
        In the case of the Joint Strike Fighter, we all went
    through the analysis last fall and decided that this was the
    right thing to do and these were the right numbers. In the case
    of the Air Force, we had less of an immediate demand for the
    Joint Strike Fighter than our sister service. Our sister
    service needed it more quickly. It was clear that as part of
    being part of a larger Department of Defense, that we should
    come on board early, and we did so.
        As we look at the total number of planes, the issue is not
    so much how many are bought 15 years from now, but how they are
    purchased in the short term because if the rate increase is
    done poorly, it throws costs off very, very quickly, say, onto
    us, if the Navy were to drop out. We are working closely with
    the Navy to try to avoid that. If we can get to rate at the
    right levels, then worrying about how many are sold in 2017 and
    2015, we have time to worry about that because by then one
    would expect international purchasers, et cetera. It is how you
    start the program that is most critically important when you
    have one that is large where you are talking maybe 2,500 planes
    that might come down to 2,000 planes.
        We worry about others, for instance, the F-15E where an
    insufficient number were built and they were very expensive and
    they were expensive to maintain because you have to have
    separate logistics lines for a small number of aircraft. It is
    one of the problems of maintaining the B-2 today because there
    are only 21 of them, but its uniqueness permits us to say it is
    a good thing to do.
        So, we are very worried about the rate of production,
    getting up to the right rate. That includes the F-22 and we
    will be just as adamant when we talk about the Joint Strike
    Fighter and not worry about what happens out at 2015 or 2017.
        Senator Inouye. Where are we now?
        Secretary Roche. In the case of the Joint Strike Fighter,
    there are, as you know, discussions within the Navy to make
    some adjustments. In the case of the Air Force, we are still
    looking at the total number. It seems right but it could be
    smaller. But what we are certainly interested in is hundreds of
    them which would be to get the program started correctly, and
    that is where the real costs come in.
        As you point out, Mr. Chairman, we buy the most expensive
    airplanes and we do not buy the cheap ones. The most expensive
    ones are the ones that have to carry the load of all of the
    fixed costs that go with it. In the case of the Joint Strike
    Fighter, if this stays on track--but it is only entering its
    system development and demonstration (SDD) phase now. For
    instance, in the engine, it will take until about 2007 for all
    the software associated with the engine to be incorporated in
    the plane. It is going through its really tough phases next,
    and we are hoping costs can be contained on the flyaway costs,
    let alone the average unit cost which is when you have to
    incorporate all the overhead. The average unit cost you do at
    the end of a program looking backwards. The flyaway costs you
    look at each time.
        Senator Inouye. Well, I wish you the very best, sir,
    because we are supporting you.
        Secretary Roche. Thank you, sir.
        Senator Inouye. Senator Stevens.
        Senator Stevens. I have no further questions.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Inouye. Mr. Secretary, General Jumper, we thank you
    very much for your appearance today. But we would like to
    submit, if we may, prepared questions for your response.
        [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. James G. Roche
                   Question Submitted by Senator Thad Cochran
                               space-based radar
        Question. Secretary Roche, in your statement, you called Space
    Based Radar the ``ultimate high ground.'' I would be interested in your
    view of a satellite architecture called MIRIAH-ROSAE discovered by a
    firm in Jackson, MS. Several professors at the University of
    Mississippi and University of Kansas have evaluated the technology
    mathematically and found it worthy of further development.
        I am told that radar is highly sensitive to errors in time
    division, and it also depends on Doppler History, however, MIRIAH uses
    Very Large Arrays comprised of triads of Very Large Baseline
    Interferometers whose dependencies are far less sensitive. Apparently,
    MIRIAH has an ideal raw data format that leads to faster, cheaper, and
    more accurate processing, and is coherent in three dimensions.
        Could you provide for the record a review of this technology for
    research and development potential for application to Space-Base Radar
    as well as Future Imagery Architecture, SBIRS-High, GPS Navigation
    Satellite Services, and Global Communications Satellite Services?
        Answer. The Air Force has not had the opportunity to evaluate the
    MIRIAH-ROSAE concept. While I cannot offer an opinion on the
    suitability of MIRIAH-ROSAE for the programs mentioned at this time, we
    have contacted the company and advised them of how they may submit
    their proprietary information through our unsolicited proposal process.
    We will review the concept when the materials are received.
                                     ______

              Questions Submitted by Senator Kay Bailey Hutchison
                                  f-22 raptor
        Question. I am aware the Department of Defense is concerned about
    the cost of procuring three fighter aircraft nearly simultaneously. I
    am also aware it has been recently reported that the Department of
    Defense directed you to reevaluate how many F-22's it really needs.
    With the newly discovered cracks in the tail sections of some F-22's,
    is this directive to reduce the number of planes a response to concerns
    about the performance of the F-22 or merely a budgetary concern? What
    savings will this reduction of procured F-22's actually produce? Will
    it create significant savings or will it merely increase the per-unit
    cost of each airplane?
        Answer. First, there have been no cracks on the F-22. Second, let
    me assure you that the overall performance of the F-22 remains
    outstanding. And third, the Air Force welcomes the opportunity to
    review requirements and force structure options. Structurally, our
    flight tests revealed some issues we didn't wholly expect, such as
    vertical fin buffet. This aerodynamic phenomenon results in vibration
    on the vertical tail, similar to the problem experienced in both F/A-18
    and F-15 development. However, it differs in that those programs could
    be solved without concern for preserving a stealth profile. Although
    this is not a safety of flight issue, we must address a solution. This
    is a good example of why we have a development flight test program--fin
    buffet is an extremely difficult phenomenon to model. I'm confident we
    have the fixes scoped, and we have already incorporated some structural
    changes to the production aircraft. This is certainly not a
    showstopper, but we are keeping an eye on it.
        With regard to overall testing results, the F-22 is meeting or
    exceeding all of its key performance parameters. At its inception, the
    F-22 design was primarily an effort to maximize the characteristics
    necessary for air superiority in the 21st century threat environment.
    Yet we continued to explore the possibilities of the F-22's design and
    overwhelming capabilities. That has led to a truly different F-22 than
    the platform of several years ago. Now, we are developing an F-22 that
    is a multi-role, air dominance aircraft, capable of defeating both
    advanced air and ground threats. The unprecedented combination of
    supercruise, generationally-advanced stealth, integrated avionics, and
    revolutionary maneuverability defines transformational capability--and
    the F-22 is successfully demonstrating them all.
        In terms of the up-coming program review, I welcome the opportunity
    that this study presents us. I wholeheartedly agree with the Secretary
    of Defense that it makes sense to occasionally go back to a clean sheet
    of paper and review our procurement plans to make sure we are still
    pursuing the right kinds of things in the right kinds of numbers. So we
    will evaluate a number of options, including F-22 variants that might
    play in the mix. I'm not sure what the final answer is, but that's what
    we are going to find out.
        Finally, we won't know the full costs until we've completed the
    review. Moreover there are critical ``costs'' to capabilities inherent
    to any force structure decision that we must also explore. However, as
    a minimum, previous F-22 quantity reductions have shown that if planned
    total procurement falls, unit costs increase, not only for the F-22,
    but also for the F-35.
                              joint strike fighter
        Question. Because of the Joint Strike Fighter relies on much of the
    technology and production capabilities employed on the F-22, what
    effect will slashing the production of F-22s have on the cost of the
    Joint Strike Fighter?
        Answer. The Joint Strike Fighter (JSF) program has already
    benefited significantly from technology transfer and lessons learned
    during the development and flight-testing of the F-22. For example,
    Pratt & Whitney is using information obtained during the development
    and testing of the F-22 F119 engine to develop the F135 engine for JSF.
    At his point, we do not know how a reduction in the number of F-22s
    produced would impact the JSF schedule. However, any reduction is
    surely to have an impact on JSF costs. Overhead rates would undoubtedly
    rise, in turn driving development and production cost increases. In
    addition, there would certainly be additional costs resulting from
    lessons or techniques lost in the elimination of large-scale F-22
    production.
        It is important to note, however, that reductions to either program
    have serious negative impacts on military capabilities, and little or
    no positive relief for defense budgets. The Air Force's capabilities
    requirements for the 21st Century, indeed our entire, balanced force
    modernization plan is based on a force structure composed of both F-22s
    and JSF (as well as many other systems). A reduction in any one program
    alters overall capability of the entire joint force and would require
    comprehensive restructuring of our modernization plan in order to try
    and effectively compensate for otherwised diminished capabilities.
                                depot provisions
        Question. As I am sure you are aware, both the House and Senate
    versions of the fiscal year 2003 Defense Authorization Bills contain
    language that would dramatically expand the statutory definition of
    what is considered ``core'' workload.
        What is the Air Force's position on these provisions?
        Answer. Both of these provisions will severely limit the Air
    Force's ability to manage logistics and acquisition capabilities and
    provide logistics support to the warfighter at ``best value.'' The
    provisions will eliminate many current public-private partnerships, and
    restrict the Air Force's ability to partner with industry in the
    future. Restricting partnerships will significantly increase costs to
    the government. Partnering with industry provides for sharing of
    facilities, equipment and workforce skills. These provisions would
    require the many of the logistical support function currently provided
    in the private sector to be duplicated or transferred to government
    activities. The transition costs to bring in those logistics functions
    already on contract will be significant in terms of both investment
    dollars and readiness support to the warfighter. The provisions will
    also drive additional hiring in areas like system engineering, which is
    predominately done on contract today. Hiring additional government
    engineers with the right skills just adds to the current problems that
    the Service has hiring and retaining existing scientists and engineers.
        Additionally, the Senate language will shorten the transition
    period to establish core logistics capabilities from four to two years.
    This will result in unstable logistics support due to immature
    technologies inherent in every program early in the process. The
    compressed timeframe will drive inappropriate decisions made too
    quickly which can prevent best value and can result in increase total
    life cycle costs to the warfighter. The short decision timeframe will
    result in the exact opposite of the stated intention to improve
    ``planning for future workloads in the public and private logistics
    sectors and allow for better workload and workforce planning within the
    public depots.'' Neither the House nor the Senate version of these
    provisions should be adopted without DOD first conducting a thorough
    study.
                                   b-1 bomber
        Question. Last year, when you unexpectedly announced the retirement
    of one-third of our nation's B-1 bombers, you committed to reinvesting
    the savings directly into the modernization of the remaining airframes.
        What is the status of the B-1 modernization program?
        Answer. The B-1 modernization program is on track to improve B-1
    lethality, survivability, and supportability. Specifically, Block E is
    currently in flight test and scheduled to start dedicated operational
    testing this Fall. Block E replaces the current avionics computers,
    upgrades the data transfer units, and converts the operational flight
    software from Jovial to Ada. In addition, the ability to employ the
    Wind Corrected Munitions Dispenser (WCMD) will be delivered
    concurrently with the new avionics computers in fiscal year 2003.
    Finally, the B-1 Joint Stand Off Weapon (JSOW) and Joint Air to Surface
    Standoff Missile (JASSM) capability will be delivered in fiscal year
    2004. These three new capabilities significantly increase B-1
    lethality.
        The Defensive System Upgrade Program (DSUP) is designed to improve
    B-1 survivability. The program began flight test in August 2001, but
    testing has been slowed by ALE-55 Fiber Optic Towed Decoy (FOTD)
    maturity issues. The B-1 DSUP test program has conducted ten ALE-55
    decoy deployments with very limited success. Recognizing the ALE-55
    decoy is a program risk, the Air Force is pursuing a concurrent DSUP
    risk reduction effort with a Fiber Optic ALE-50 (FO-50). Because of
    these issues, the Air Force is currently evaluating the way ahead.
        Other modernization efforts focused on improving B-1 lethality,
    survivability, and supportability include modernization of the B-1
    automatic test equipment, procurement of additional interim data link
    capability, situational awareness improvements, and procurement of
    depot tooling. Future efforts planned for the B-1 include a fully
    integrated datalink capability and upgrades to the inertial, radar, and
    on-board diagnostics systems.
                            nanotechnology research
        Question. Is the AF considering expanding investments in
    nanotechnology, which has recently been described by DOD as having the
    greatest potential for revolutionary changes in military warfare since
    the invention of gunpowder? The AFRL, which is pioneering collaborative
    efforts with world leaders in nanoscience such as those in my own home
    state of Texas, is acquiring a reputation for technical leadership in
    this field. How is the Air Force planning to leverage this capability?
        Answer. The Air Force Science and Technology (S&T) Planning Review,
    conducted in response to the Fiscal Year 2001 National Defense
    Authorization Act, identified nanotechnology as one of the most
    important future technologies for the Air Force. With an investment of
    approximately $18 million in fiscal year 2002, the Air Force has in
    place a robust nanotechnology research program. As this technology
    matures and proves successful, we anticipate it will provide an array
    of new warfighting capabilities with many different applications. The
    current Air Force investment in nanotechnology research represents a
    broad scope of scientific disciplines leveraging strong collaborations
    between world-class leaders in diverse technical areas.
        Current research focused on nanomaterials provides the enabling
    foundation for developing new capabilities that until now have not been
    achievable because of technology deficiencies. The physical properties
    of materials (i.e., corrosion, reactivity, fracture, adaptivity,
    radiation reflection/emission, etc.) stem from their molecular
    composition. While definitive applications have yet to be identified,
    it is anticipated that this technology will lead to revolutionary
    warfighting capabilities as the emerging technology provides the
    ability to design tailored material properties. Tailored structural
    materials could provide resistance to corrosion and thermal
    degradation, which would make a significant contribution towards
    aerospace sustainment. In addition, nanomaterials technology could be
    the key technology resulting in high-power devices that are compact
    enough to enable high-power directed energy weapons to be used on
    fighter aircraft. This would provide a revolutionary capability of
    instantaneous target defeat.
        In the area of nanoenergetics, research is focused on capabilities
    to tailor the composition of explosives and propellants. As the
    delivery platforms and weapons are miniaturized, so is the available
    volume of energetic materials. As a result, if the desired target
    effects are to be achieved, the energetic output of the munition must
    be increased to compensate for the reduced volume. By manipulating the
    chemical and physical structure of the individual molecules and/or
    small molecular clusters, the warfighter could be provided with the
    capability to deliver the desired explosive effect in a much smaller
    package. Other potential benefits may include the ability to control
    the rate of explosion and reduce collateral damage.
        Another key area of nanotechnology research is focused on
    developing the basic technology building blocks that will enable new
    computational capabilities. Application of this technology to quantum
    computers and computation methodologies could provide orders of
    magnitude (up to 1,000 times) of increased computing power and capacity
    over current high-speed computers. This new class of computer hardware
    and computational software could enable the warfighter to process data
    in volumes that would overpower today's capabilities. Of particular
    importance is the capability to process and fuse massive amounts of
    intelligence and communications data, making important battlefield
    information available to the warfighter in near-real-time. This
    capability could also support in-flight retargeting of weapon systems,
    which would provide substantial flexibility in changing targets as new
    information becomes available.
        In summary, nanotechnologies could result in lower cost, lighter
    weight, stronger, and faster products for air and space applications.
    Nanotechnology research has the potential to revolutionize the way the
    Air Force conducts warfighting operations. The Air Force plans to
    continue investing in this robust Science and Technology effort and
    will continue to leverage this investment into superior warfighting
    capabilities via strong collaborations with the world's technology
    leaders, including those in other Services and Defense Agencies,
    industry, and academia.
                                     ______

                  Question Submitted to General John P. Jumper
                   Question Submitted by Senator Thad Cochran
                                      c-17
        Question. General Jumper, I understand that there is a significant
    funding shortfall in Manpower, Flying Hours and Equipment for the
    Jackson C-17 conversion in fiscal year 2003 and in the ensuing Future
    Years Defense Plan. Could you provide us with a budget update,
    detailing how you plan to transition to this new airframe, meet crew
    proficiency standards, and optimize the flying hours per aircraft?
        Answer. The original Air Mobility Command (AMC) beddown plan for
    Jackson was based on the United States Air Force buying 137 C-17s. As
    part of this plan, Jackson would have become an Air National Guard wing
    with an Active Duty Associate squadron manned at a 5.0 crew ratio (2.0
    Air Guard Reservist, 1.0 Traditional Reservist, 2.0 Active Duty). The
    United States Air Force has since increased its C-17 buy request to 180
    aircraft to meet Mobility Requirements Study 2005 validated airlift
    requirements. To provide the optimal crew force, AMC/CC redistributed
    the active duty crew force from Jackson to active duty units gaining C-
    17 aircraft under the 180 beddown plan. On 15 April 2002, the Air Force
    presented a comprehensive Mobility Force Structure Plan to Congress. As
    part of this plan Jackson will transition from an 8 Primary Aircraft
    Authorized (PAA) C-141 unit with a 2.0 crew ratio to an 8 PAA C-17 unit
    with a 3.0 crew ratio in the fiscal year 2004 time frame. This crew
    ratio along with their current manpower, flying hours, and funding
    allows Jackson to meet crew proficiency standards and optimize the
    flying hours per aircraft. Within the current fiscally constrained
    environment, an increase in manpower or flying hours is not feasible
    for either AMC or the Air National Guard. As lead command, AMC will
    continue to work with the Air National Guard to meet future airlift
    Total Force requirements.

                              subcommittee recess

        Senator Inouye. The subcommittee will now stand in recess
    until Tuesday, May 21 at 10 a.m., at which time we will receive
    testimony from the Secretary of Defense, the Honorable Donald
    Rumsfeld.
        General Jumper. Thank you, Mr. Chairman.
        Secretary Roche. Thank you very much, sir, Senator Stevens,
    Senator Cochran.
        Senator Inouye. Thank you.
        [Whereupon, at 11:40 a.m., Wednesday, May 15, the
    subcommittee was recessed, to reconvene at 10 a.m., Tuesday,
    May 21.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2003

                                  ----------

                             TUESDAY, MAY 21, 2002

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:04 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Daniel K. Inouye (chairman)
    presiding.
        Present: Senators Inouye, Hollings, Dorgan, Reid,
    Feinstein, Kohl, Stevens, Cochran, Specter, Domenici, Bond, and
    Shelby.

                             DEPARTMENT OF DEFENSE

                            Office of the Secretary

    STATEMENT OF HON. DONALD H. RUMSFELD, SECRETARY OF
                DEFENSE
    ACCOMPANIED BY:
            GENERAL RICHARD B. MYERS, U.S. AIR FORCE, CHAIRMAN, JOINT
                CHIEFS OF STAFF
            LAWRENCE LANZILOTTA, PRINCIPAL DEPUTY COMPTROLLER, DEPARTMENT
                OF DEFENSE

                 OPENING STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. Good morning. Today will conclude our
    overview hearings on the fiscal year 2003 budget request of the
    Department of Defense (DOD) with Secretary of Defense Donald
    Rumsfeld and Chairman of the Joint Chiefs General Richard
    Myers.
        We want to thank you for making time in your very busy
    schedule to join us this morning. We understand how challenging
    your positions are at this point in our Nation's history. A
    little over 8 months ago, our world was shattered by the
    surprise attack. On September 5th, just 6 days earlier, you
    testified before this committee, Mr. Secretary, and in your
    opening remarks you said: ``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.''
        Mr. Secretary, reading those words today has a chilling
    effect on all of us. Little did we know when you spoke how
    close we were to learning about these emerging threats.
        Today we are interested to hear how you are responding and
    restructuring the military and your Department to meet these
    new challenges. For fiscal year 2003 you are requesting $370.8
    billion in new budget authority for your Department, not
    counting funding for military construction, which is not in the
    jurisdiction of this subcommittee. Your request is $48 billion
    more than you received in fiscal year 2002.
        During our hearings this year we have heard the testimony
    of all of the military departments, the Guard and Reserve, and
    the Surgeon Generals of your budget request. As we have
    examined the testimony of these officials, it is clear that
    they are basically pleased with your budget request. The Navy
    might not be buying enough ships, but that is mostly because
    ship programs are not ready to be accelerated.
        We learned even more about the shortfall of Air Force
    tanker and transport aircraft. At the same time, we were told
    that the Air Force plans to invest $4.6 billion this year on
    the F-22, even though there are concerns with software delays
    and a potential problem with the aircraft tail. General Jones
    gave us an optimistic assessment of the V-22 for the marines
    and the Army testified it desperately needed the Crusader
    program, but I gather you have now decided to recommend its
    termination.
        Mr. Secretary, many of us had the opportunity to hear
    General Shinseki address the Crusader program last week before
    the Armed Services Committee. In his testimony, the General
    noted the importance of the Crusader and, as you recall, he
    pointed out that today our Army artillery is outgunned by many
    potential adversaries and he believes that the Crusader was the
    solution to that problem.
        General Shinseki's best professional military judgment was
    that the Army needs this system. Today, Mr. Secretary, you have
    the opportunity to explain why you believe we should ignore the
    advice of our military professionals and cancel this program.
    Perhaps you can enlighten us on why you believe your members of
    your organization know a little better than those who have
    spent their career studying this art of warfare.
        There is one other issue, Mr. Secretary, that we still do
    not have an answer to. What are you going to do with the $10
    billion contingency fund you have requested in this fiscal
    year? We would also like to hear about your plans for the
    Osprey, the Comanche, and the F-22. We would like to know if
    these programs are likely to suffer the same fate as the
    Crusader.
        Mr. Secretary and General Myers, we welcome you here this
    morning to discuss these and other issues. We recognize yours
    is a very demanding and almost impossible job. But you should
    know that this committee stands ready to help you to meet these
    demands and we are ready to assist you, sir. So we look forward
    to hearing your testimony and the responses to our committee's
    questions.
        But before proceeding, I would like to call upon the co-
    chairman of this committee, Senator Stevens. Senator Stevens.

                        STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Thank you, Mr. Chairman.
        Mr. Secretary, General Myers, I join the chairman in
    welcoming you to come today and appearing before us again for
    the second time in 2 weeks. We have discussed the supplemental
    and the homeland security issues and your words were very
    important to us. I am hopeful we will be able to get that
    supplemental out of our committee this week.
        The fiscal year 2003 bill has a new direction and new
    details for and priorities for the administration. Your
    objectives, pay and quality of life for our military personnel,
    readiness for our forces, and recapitalization of the system,
    are reflected in your request. In the absence of a budget
    resolution, we are somewhat delayed. But I see no real threat
    or problem in securing satisfaction of the priorities that you
    have outlined, Mr. Secretary.
        We welcome your comments on budget cuts and the language
    presented in the Senate version of the defense authorization
    bill. We are hopeful that we will be able to consider all of
    these matters after the Memorial Day recess, which starts at
    the end of this week. We had hoped that the bill would be out
    before the Memorial Day recess. The absence of a budget
    resolution has delayed our work of necessity. We are waiting to
    see what the House will do with regard to deeming that we have
    a budget level to proceed.
        The chairman mentioned you did testify and we watched your
    appearance on the decision to terminate the research and
    development of the Crusader system. As I understand it, once
    the program is completely terminated we must have an
    authorization to proceed once again if we want to oppose your
    action, Mr. Secretary. I have said and told the chairman that I
    will not seek to replace that money for the Crusader unless
    there is an authorization bill that the President accepts that
    restores it. What will happen in that process we do not know.
        But I have got to tell you that I am deeply troubled by the
    process that brought this to us, and I am sure you recognize
    this. We have had a series of opportunities for the Department
    to make the decision that terminated that program. It was
    included in the President's budget. It was included in the
    comments that you made before our committee in September. It
    was included really in every appearance before us from members,
    the uniformed members of the Department, until the day that the
    decision was made to terminate the program.
        That happening at the time it did I think creates a
    situation where those of us who have been trying to support the
    Department and support the request are in the position where we
    are facing questions now from everyone else: Are there any
    other areas that we are going to face termination? How many are
    under review now by this group that is within the Secretary's
    office?
        I do not think it is fair to the President, the Army, or
    the Congress to have such a decision happen after we have had
    the hearings. We have gone all the way through the hearings.
    This is the windup hearing now. To have that decision made so
    late is what is really the problem as far as I am concerned.
        We have had other systems cancelled both by the Congress
    and by administrations before and I can understand why you
    would be brought to make the decision. But I too will await the
    comments you wish to make today, Mr. Secretary. Again, I just
    do not think it is fair to make those decisions so late in the
    process, after the authorization hearings have been held and
    after the appropriations hearings have been held, to have us
    face a cancellation of a significant new initiative.
        I look forward to your testimony, Mr. Secretary, and thank
    you very much.
        Senator Inouye. Thank you, sir.
        May I recognize Senator Cochran.

                       STATEMENT OF SENATOR THAD COCHRAN

        Senator Cochran. Mr. Chairman, thank you. I am pleased to
    join you and Senator Stevens in welcoming our witnesses for
    this hearing today. I do not know of any other part of the
    Government's responsibility that is more important than
    defense. Hearing the presentation of the budget request for the
    Department of Defense is something we should take very
    seriously and we do.
        We are pleased with the performance that you have turned in
    in this time of stress and threat to our country. We appreciate
    the devotion to duty that has been reflected in your
    performance and I congratulate you for it and wish you all the
    best and pledge to you our effort to cooperate with you and to
    work with you and to support you.
        Thank you.
        Senator Inouye. Thank you very much.
        Senator Stevens. I failed to mention one thing. Mr.
    Secretary, I hope you will tell us what is going to happen to
    the Crusader money. Is it going to stay in the Army or is it
    going to be allocated throughout the Department?
        Senator Inouye. Thank you. Now may I recognize the
    Secretary. Mr. Secretary, it is yours now.

                                  INTRODUCTION

        Secretary Rumsfeld. Thank you very much, Mr. Chairman,
    Senator Stevens, Senator Cochran. I thank you for this
    opportunity to meet on the President's budget request. In
    addition to General Myers, I have asked the Principal Deputy
    Comptroller, Mr. Lanzilotta, to join us. Unfortunately, Dr.
    Zackheim, the Comptroller, has had a death in the family and
    was not able to be here.
        As you, I am deeply grateful to the outstanding service of
    the men and women in uniform. As you, I visit the troops around
    the world from time to time, most recently in Manas Air Base in
    Kyrgyzstan and in Afghanistan, and they are certainly doing an
    outstanding job as they put their lives at risk for all of us.
    It certainly makes all of us determined to make sure that they
    have everything they need to do their jobs. I look forward to
    working with you and the committee to ensure that they are in
    fact the best trained, the best equipped fighting force on the
    face of the Earth, ready not only for the challenges we face
    today, but also for the challenges we face in the future,
    indeed increasingly deadly challenges in the 21st century.

                      BUDGET TOPLINE AND WAR ON TERRORISM

        To that end, President Bush has requested a $14 billion
    supplemental for fiscal year 2002 and a $379 billion budget for
    fiscal year 2003. The 2003 budget request is $48 billion
    increase over 2002. It includes $19.4 billion for the war on
    terrorism, $9.4 billion for a variety of programs related to
    the war plus $10 billion which is essential to conduct the war
    effort and provide the minimum necessary flexibility to respond
    quickly to the changes in operations as the war unfolds.
        Our estimate--and in direct answer to Senator Stevens'
    question about the $10 billion--our estimate is that the $10
    billion should cover the war on terrorism for about the first 5
    or 6 months of fiscal year 2003, the normal things--force
    protection, combat air patrols, strip alerts, fuel,
    transportation, maintenance, support services, mobility, costs
    for the Guard and Reserve--the normal activities of the global
    war on terrorism.
        We had a choice. We either put nothing in for the fiscal
    year 2003 war on terrorism, because you cannot know precisely
    what the amount will be, or you make a guess that it is going
    to increase or stay at the current level, or you just take a
    number like 10 that will bridge us between the end of this year
    when Congress goes out of session and into October, November,
    December, January, February, when Congress would have a chance
    to see what has in fact happened in fiscal year 2003 with
    respect to the war on terrorism and make an orderly judgment.
        So there is no mystery. It is not complicated. That is in
    effect what the $10 billion is for.
        The $379 billion is a significant investment of the
    taxpayers' hard-earned money, but certainly nothing is more
    important, as Senator Cochran said, than our Nation's security.
    I urge that we do take up the defense budget first, not last,
    and that we give our forces the tools they need to do the job.
        I also am hopeful that the President's fiscal year 2002
    supplemental request will pass, which is essential to
    preserving readiness for the rest of the fiscal year and to
    support for the defense emergency response fund which gives us
    the ability to prosecute the war.

                               CRITICAL MISSIONS

        Our country is being called on to accomplish three
    difficult missions at once: first, to win the global war on
    terrorism; second, we have to prepare for the wars we may have
    to fight later in this decade by making sure that a number of
    long-delayed investments during the so-called procurement
    holiday of the last decade--and making a number of those
    investments in procurement, people, and modernization; third,
    we have to be prepared for the wars in the future between 2010
    and beyond, and therefore we do have to transform the armed
    forces so that they can deter and defend against the emerging
    threats of the 21st century.
        Each of these missions is critical. None can be put off. We
    cannot delay transformation while we fight the war on
    terrorism.
        As we painfully learned on September 11th, our adversaries
    are transforming. They are watching us. They are studying how
    we were successfully attacked, how we responded, and they are
    looking for ways that we may be vulnerable in the future. We
    stand still at our peril.
        Last year the Department's senior leadership, civilian and
    military, began intensive discussions about where Americans'
    military should go in the years ahead. In 1 year the Department
    of Defense developed and adopted a new capabilities-based
    defense strategy, we replaced the decades-old two major theater
    war construct for sizing our forces with an approach that is
    more appropriate for the 21st century, we adopted a new
    approach for balancing risks, one that takes into account not
    only operational risks, but also the risks to people, to the
    failure to modernize and the failure to transform.
        We have announced a new unified command structure with a
    new Northern Command to help in defending the American
    homeland. And we have developed new contingency planning
    guidance to assure that the United States has up to date
    contingency and operational plans that are appropriate to our
    new national security environment. We did this all while
    fighting a global war on terrorism.

                              TRANSFORMATION GOALS

        In the course of last year's defense reviews, we identified
    six key transformational goals around which we are focusing our
    strategy: protecting the homeland and forces overseas;
    projecting and sustaining power in distant theaters; denying
    enemy sanctuary; protect U.S. information networks from attack;
    use information technology to link up U.S. forces so they can
    fight jointly; and last, to maintain unhindered access to space
    and protect U.S. space capabilities from enemy attack.
        The President's 2003 budget request advances each of those
    transformational goals by accelerating transformation programs
    and funding the objectives that I have just outlined.
        One of the programs the Department is pursuing is a
    revitalized effort to test and develop ballistic missile
    defenses capable of defending the United States, our friends
    and allies, and our forward-deployed forces from limited
    ballistic missile attack. On September 11th terrorists took
    commercial jetliners and turned them into missiles, killing
    thousands. Let there be no doubt, it is only a matter of time
    before terrorist states armed with weapons of mass destruction
    develop the capability to deliver those weapons to U.S. cities,
    giving them the ability to try to hold America hostage to
    nuclear blackmail.
        With the power and reach of weapons today, we have little
    margin for error and we need defenses that can deter and defend
    against such attacks. That is why I am concerned about the
    Senate Armed Services Committee's decision to cut more than
    $800 million from the President's request for missile defense.

                    PROGRAM TERMINATIONS AND TRANSFORMATION

        Terminations. As we all know, resources are finite and even
    with the significant increase in the budget proposal, these
    transformational investments cannot be made without terminating
    some programs and finding other savings. Although this year's
    requested budget increase is large, virtually all of it is
    spoken for by a number of must-pay bills covering the cost of
    inflation, $6.7 billion; health care, retirement, and accruals,
    pay raises, $14 billion; realistic costing for readiness and
    procurement is another $7.4 billion; and funding for the global
    war on terrorism at about $19.4 billion.
        After counting the costs of keeping the Department moving
    on a straight line, the costs of the war, there is really not a
    great deal that is left. In the 2003 budget request, we have
    made $9.3 billion available, in part by terminating a number of
    programs, such as the DD-21, the Navy Area Missile Defense, and
    18 Army legacy programs. Let us face it. It would be nice to
    have retained them all, but choices have to be made. There is
    just no question about it.
        As we put together the 2003 budget, a number of programs,
    including Crusader, required further review. After several
    months of examination, we decided to recommend termination of
    the Crusader program. The decision to recommend termination is
    not about killing a bad program. It is potentially a good
    system. It is not about a system that could not be used. It is
    a system that is wanted by a number of people, including the
    Army. But that is not the issue.
        The issue is how do we balance the risks. In short, it is
    about forgoing a system that was originally designed in an
    earlier period to make room for more promising technologies
    that can accelerate transformation.
        In February of this year, we began developing the defense
    planning guidance for fiscal year 2004 and the fiscal years
    2004 to 2009 program. The senior civilian and military
    leadership had to focus on the looming problem of a sizable
    procurement bow wave beyond fiscal year 2007. This is shorthand
    for describing the cost of the procurement of systems that
    would be ready for fielding later in this decade. If all were
    funded they would crowd out all other areas of investment and
    thereby cause a repetition of the same heartaches and headaches
    that we still suffer from today as the result of the
    procurement holiday in the 1990's. The time to address that bow
    wave is now, not earlier--not later, excuse me.

                        ARMY TRANSFORMATION AND CRUSADER

        If you look at this chart, you will see what the Army looks
    like for 2003 to 2007. If you add 2 years at the end for 2008
    and 2009, if every program we have today in the budget were
    funded the way it is currently programmed--Larry, why do you
    not give him a hand and let us get it up there. If every
    program that is in the budget were funded the way it is
    currently programmed, including Crusader, the bow wave soars.
        If you look at--Larry, please point to where the line is
    for 2007. This year we are working now on the 2004 to 2009
    budget. Show where 2009 is up at the top. That is what we are
    facing.
        Mr. Chairman, you said that--you suggested that we were
    ignoring the advice of the military and the Chief of Staff of
    the Army. We are not ignoring his advice at all. It is
    understandable that he would like all of those. So would the
    Navy, and the Navy's looks roughly the same. So would the
    Marines and so would the Air Force.
        There is no way that is going to happen. We all know that.
    That means that at some point, if you wait until 2009 to
    address it, it is too late. If you start earlier and address
    it, you can in fact have an impact on what happens to this so-
    called bow wave that exists out there.
        We have great respect for General Shinseki and for his
    views and for the other service chiefs. They are doing a
    wonderful job. But it is their job to make proposals for
    systems that fall within their service and then it is somebody
    else's job to take all of those proposals--and they all look
    like this--and bring them together and rationalize them and
    make them more coherent.
        Second, let it be said that combatant commanders--General
    Franks out in Central Command--they do not fight with Army
    systems or Navy systems or Air Force systems. What they want to
    do is fight with joint systems. They have to take all of the
    capabilities, not the ones that one service recommends but all
    of them, and make them rational and coherent and then be
    capable of putting power on a specific target in a specific
    way.
        So the task we are faced with in the Department is, it
    would be wonderful if we could just simply say yes to all the
    services, make any recommendations you want, and resources are
    infinite, we do not have to worry about that, and then we can
    go about our business. But somebody has to make tough decisions
    and in my view you have to make them earlier rather than later.
        The Crusader, if fielded in the next decade, would have
    represented an improvement over the existing Paladin howitzer
    in rate of fire and in mobility. The issue is whether the
    United States would be better off upgrading Paladin and
    eliminating Crusader and accelerating the Future Combat System,
    which you can see is shortly behind the Crusader, not very far,
    and it has an artillery piece as well, and improving the
    munitions of all of those capabilities simultaneously,
    including the rocket systems. The answer we believe is yes, we
    are better taking the Crusader out, bringing the Future Combat
    System forward, upgrading the precision of the munitions.
        We are convinced that that is a better way to invest the
    money and that was why the decision was made.

                           WHY TERMINATE CRUSADER NOW

        Senator Stevens raised the question, why now? How could we
    do it right in the middle of a markup? Would you put the time
    line up. This is an important question because we do not--first
    of all, we would like never to have to make these decisions. It
    would be much more pleasant to be able to come down here and
    say everything that every Senator wants is going to happen.

        The problem is, if you look at the black lines, those are
    DOD actions, and what we do is we start in the early part of
    the year with the defense planning guidance. We started in
    February. We start developing that so that we can begin
    building the budget starting in May and June for 2004 to 2009.
    We are doing that right now. The defense planning guidance has
    as its function making decisions.
        Now, the complication is that the Congress is the red line,
    and we are still talking about a 2002 budget authorization and
    2002 budget appropriation there. We are talking about the
    fiscal year 2001 supplemental in July 2001 there. Then the red
    to the right is the 2003 budget authorization and the 2003
    budget appropriation. The reality is there is only about 3 or 4
    weeks when we could make any decision that would not conflict
    in some way with some portion of the congressional
    authorization or appropriation process.
        I wish it were otherwise. But our task now is to be
    building the 2004 to 2009 budget, and that is what we are doing
    downtown. We then fashion the final portion of it and send it
    to the Office of Management and Budget (OMB) in November. The
    President makes his decisions and he sends it up to the
    Congress in February, and you will be working on the 2004 to
    2009 budget while we are building the 2005 to 2010. We are
    always out of sync.
        There just is no way I know of that we could make a
    decision and have it not land up here at an awkward moment when
    you are either working the appropriation or the authorization.
    I would dearly love to know some way, other way to do it, but I
    do not know.
        The hardest choices really are those about balancing risks
    between the challenges we face in the near-term and the mid-
    term and those less certain, but possibly more formidable,
    challenges that we face in the longer term. That was certainly
    the choice we had to make in terminating the Crusader and
    recommending that to the Congress.

                            ALTERNATIVES TO CRUSADER

        It is not, of course, an indication, in answer to your
    question, that the United States can do without ground forces.
    To the contrary, it is a decision that reflects confidence in
    the Army that they have set a course over the longer term that
    is sound and indeed needs to be accelerated.
        Nor is it a decision that the future Army can manage
    without direct fire and rely solely on air support. Rather, it
    is a decision that precision in artillery and rocket fires can
    be as revolutionary as it has already proven in air-delivered
    weapons and that mobility and rapid deployability will be
    crucial in the future, not only in getting to the battlefield
    but in maneuvering over potentially vast areas.
        In direct answer to your question, Senator Stevens, it is
    the Army's plan and the Office of the Secretary of Defense's
    (OSD) plan that those dollars would stay in the Army, they
    would effect direct fire in terms of rockets, precision guided
    munitions, and acceleration of the Future Combat System, which
    as I say has an artillery piece, as well as some upgrades to
    the Paladin. There are a number of the technologies attached to
    Crusader which clearly can be migrated both back to Paladin and
    forward into the Future Combat System.
        In short, it was a decision about balancing risks, a
    decision that was made after a great deal of consideration.
        As to what our needs in the coming period will be, in light
    of the new defense strategy and the initial insights from the
    war, we weighed the relative merits of the Crusader against
    other alternatives to meet the Army's need for organic indirect
    fires, both cannon and rocket. Following a great deal of
    discussion and evaluation, it became apparent to me that on
    balance alternatives to Crusader would be more consistent with
    both the new defense strategy and, we believe, with the Army's
    overall transformation effort.
        A couple of statements have been made about Crusader. Some
    have suggested it might be helpful, for example, in
    Afghanistan. The idea of trying to get the Crusader into
    Afghanistan, a landlocked country, is I think a reach. Had that
    been the case that indirect fire artillery would have been an
    advantage, certainly the combatant commander and his land
    component commanders would have brought artillery to the
    battle. They, the experts, made a decision not to. They were
    the ones who made that decision, let there be no doubt.
        Another assertion which has been made is that Excalibur
    munitions will be exorbitantly expensive, as much as $200,000
    per round. In truth, the Excalibur Program Office currently
    estimates that average procurement unit costs will be about
    $33,000 a round and believe that refinements to the production
    plans could yield costs of no more than $10,000 per round. That
    is still expensive, but if you think about it, if a precision
    round can do what 10 or 20 dumb rounds can do that is not a bad
    tradeoff.
        Second, you can use a precision round in much closer
    proximity to your troops. You can use a precision round in much
    closer proximity to civilians, where you are worried about
    collateral damage, and it seems to me that if one adds in the
    logistics costs of moving dumb bombs, which have a much poorer
    rate of hit, much less lethality, the logistics costs alone I
    think shift the equation.
        Another assertion is that the Crusader cancelling would
    lead to midterm operational risk because Paladin is outranged
    by enemy systems. U.S. forces clearly will retain an
    unparalleled capability to deliver fire support at long range
    in the mid-term. The Army's field artillery capability is
    provided by Paladin and MLRS, the Multiple-Launch Rocket
    System. Extended Range MLRS with a reach of 45 kilometers can
    outrange virtually all howitzers in the hands of potential
    enemies. Guided MLRS and Army tactical missile system (ATACMS)
    provide even greater range at 60 to 300 kilometers.
        When post-gulf war improvements to the Army's fire support
    capability are considered, such as Apache Longbow, the MLRS
    upgrades, Paladin improved ammunition, the firepower of its
    divisions is overwhelming. The test I think would be to ask any
    of those countries that supposedly have better artillery
    whether they would trade the United States for our capability
    to put power on a target, and the short answer is there is not
    a country on the face of the Earth that would even think about
    it.
        Mr. Chairman, there are always reasons to not do something.
    But if we do not make tough choices now, then in the long run
    we are not serving the interests of the Army, the armed forces,
    or the security of the country.

                       FISCAL YEAR 2003 BUDGET PRIORITIES

        As we transform for the threats we face, we have to prepare
    the force for conflicts they may have to fight later in the
    decade. To deal with the backlog that resulted from the
    procurement holiday of the last decade, we have requested $71.9
    billion for procurement, $68.7 billion in the procurement
    title, an increase of 10.6 percent over 2002, and $3.2 billion
    in the defense emergency response fund.
        We have requested $150 billion for operation and
    maintenance accounts for 2003, including a substantial funding
    for the so-called readiness accounts of tank miles, steaming
    days, flying hours.
        If we are to win the war on terror and prepare for the
    threats of tomorrow, we have to take proper care of the
    Department's greatest asset, which are the men and women in
    uniform. They join because they love their country and they
    believe that freedom is worth defending. But at the same time,
    we have to recognize that they have families to support and
    children to educate. We already ask them to voluntarily risk
    their lives. They should not be asked to live in substandard
    housing while they do so.
        That is why the President's 2003 budget requests $94
    billion for military pay and allowances, including a $1.9
    billion across the board 4.1 percent pay raise, plus $300
    million for targeted pay in the mid-non commission officer
    (NCO) grades and mid-officer grades; $4.2 billion to improve
    military housing, putting the Department on track to eliminate
    most substandard housing by 2007; funds to lower out of pocket
    housing costs for those living off base from 11.3 percent to
    7.5 percent, putting us on track to eliminate the out of pocket
    housing cost for men and women in uniform by 2005; $10 billion
    for education, training, and recruiting; and a breathtaking
    $22.8 billion to cover realistic estimates of the cost of
    military health care.
        The hard truth is that that line item promises to grow and
    put pressure on all other categories of the budget, research
    and development (R&D), modernization, transformation, pay, and
    the like, and we need to face up to that.
        Some have argued that the military departments need relief
    from end strength caps because of the many demands that have
    been placed on our forces. There is no question but a lot of
    demands are being made, but before entertaining such relaxation
    I have asked the services to scrutinize the missions and
    assignments from which we can extract our uniformed forces to
    relieve some of the pressures. While the numbers are not always
    large, one area that we must look to immediately are those
    missions to which our forces are assigned, but in which there
    may be some exposure, for example, to prosecution to the
    International Criminal Court. As you know, we are working
    closely with the Department of State to ensure that our forces
    would be protected from prosecution before committing U.S.
    forces overseas.

                                BUDGET TRADEOFFS

        After the cost of keeping the Department moving on a
    straight line, the cost of the war, and the savings generated,
    we are left with about $9.8 billion. That requires some
    tradeoffs. We are not able to meet our objective of lowering
    the average age of the tactical aircraft. However, we do invest
    in unmanned aircraft and in the F-22 and Joint Strike Fighter,
    which require significant up-front investments now, but will be
    coming on line in the years immediately ahead.
        While the budget funds faster growth in science and
    technology (S&T), we were not able to meet our goals of 3
    percent for the overall budget, though we are slightly higher
    than the 2002 President's request.
        Clearly, we were not able to fund the shipbuilding in
    fiscal year 2003 at a rate that we clearly will need in the
    future. As with every department, the Navy had to make some
    tough choices and they did. The 2003 shipbuilding budget is
    $8.6 billion. It procures a low of five ships for several
    reasons.
        First, there are a number of problems, including contractor
    problems and also past shipbuilding cost estimates that were
    way too low and they were not in the forward year budget and we
    needed to fully fund them.
        Second, the Navy made a calculation that in the short term
    it can maintain the desired force level at the proposed
    procurement rate because of the relatively young average age of
    the fleet. The Navy's forward year defense plan does budget for
    7 ships in 2005, 7 in 2006, and 10 in 2007.
        Mr. Chairman, $379 billion is a great deal of money, but if
    we consider the estimated cost of September 11th attacks to the
    national economy, they range from about $170 billion to almost
    $250 billion in lost productivity, sales, jobs, revenues, not
    to mention the terrible cost in human lives and human
    suffering. We, as you know well, cannot put a price on
    defending our country. We have to deter and defend from those
    who may wish to attack and kill our people.
        The President's budget amounts to about 3.3 percent of our
    gross national product. Compared to the cost in lives and
    treasure if we underinvest, it is a needed and proper
    investment in our national security.

                               prepared statement

        I believe I have touched on most of the questions that you
    asked, Mr. Chairman, and that were asked by Senator Stevens. If
    not, I would be happy to touch on them in response to other
    questions. Thank you.
        [The statement follows:]
                    Prepared Statement of Donald H. Rumsfeld
                                  introduction
        Mr. Chairman, Members of the Committee. Thank you for the
    opportunity to meet with you on the President's Budget request. As each
    of you, I am gratified by the outstanding service of the men and women
    in uniform. Recently I visited with United States and coalition forces
    stationed in Afghanistan and at Manas Airbase in Kyrgyzstan. They are
    heroes, each and every one.
        Many are active duty, others are guard or reserves--dedicated men
    and women who have put their regular lives on hold to answer their
    country's call.
        And visiting with them--as I know many of you have in recent
    months--makes us all resolve to make sure they have everything they
    need to defend freedom. I look forward to working with you to ensure
    that they are the best trained, best equipped fighting force on the
    face of the earth--ready not only for the challenges we face today in
    the war on terror, but for the different, and equally deadly challenges
    we will face as the 21st century unfolds.
        To that end, President Bush has requested a $14 billion
    supplemental for DOD in fiscal year 2002, and $379 billion for fiscal
    year 2003. The fiscal year 2003 request is a $48 billion increase from
    the 2002 budget. It includes $19.4 billion for the war on terrorism--
    $9.4 billion for a variety of programs related to the war, plus a $10
    billion fund, which is essential to conducting the war effort and
    provides the minimum necessary flexibility to respond quickly to
    changes in operations as the war unfolds.
        The 2003 request is a large increase. But in constant 2002 dollars,
    the proposed 2003 defense budget is lower than the defense budgets
    during the Korean War, the Vietnam War and the Reagan Administration's
    Cold War defense build up.
        Nonetheless, $379 billion is a significant investment of the
    taxpayer's hard earned money. And, Mr. Chairman, we need every nickel--
    and we need it as soon as possible. Nothing is more important than our
    nation's security--on that, we all agree. I urge that Congress take up
    the defense budget first, not last--to give our forces the tools they
    need to do the job.
        I also urge you to pass the President's fiscal year 2002
    supplemental appropriations request, which is essential to preserving
    readiness for the rest of this fiscal year--and to support the Defense
    Emergency Response Fund, which give the Department the flexibility we
    need to prosecute to this war.
        I realize that some of your colleagues have questions about the $10
    billion war reserve the President requested. Examples of where the
    money would likely be needed include:
      --Incremental costs for continued operations in Operation Enduring
            Freedom--fuel, transportation, supplies, maintenance, repair
            parts, communications, temporary duty travel, support services,
            and more:
      --Mobilization costs--pay of the National Guard and Reserve members
            who have been mobilized and are providing major essential
            support to the war on terrorism, or are backfilling active
            personnel deployed in support of the war. Areas of likely
            support include security and force protection, infantry,
            special operations, transportation, chemical and biological,
            intelligence, civil affairs, communications, strategic and
            tactical airlift, air refueling operations, and aero-medical
            staging capabilities.
        These two funding categories would consume most of the $10 billion,
    but we cannot yet project our exact requirements. We intend to come
    back to Congress when we have finalized our requirements for this $10
    billion reserve.
        The men and women of this Department are today being called on to
    accomplish three difficult missions at once:
      --First, we must win today's global war on terrorism;
      --Second, we must prepare for the wars we may have to fight later in
            this decade--by making a number of long-delayed investments in
            procurement, people and modernization;
      --And third, we must prepare for the wars we may have to fight in
            2010 and beyond--by transforming the Armed Forces so that they
            can deter and defend against the emerging threats of the 21st
            Century.
        Each of these missions is critical. None can be put off. We cannot
    delay transformation while we fight the war on terrorism. As we
    painfully learned on September 11th, our adversaries are transforming.
    They are watching us, studying how we were successfully attacked, how
    we are responding, looking for ways we may be vulnerable in the future.
    We stand still at our peril.
                              new defense strategy
        Last year, the Department's senior leaders--civilian and military--
    began intensive discussions about where America's military should go in
    the years ahead. And in just one year--2001--the Department of Defense:
      --Developed and adopted a new capabilities based defense strategy;
      --Replaced the decade-old two Major Theater War construct for sizing
            our forces, with a new approach more appropriate for the 21st
            Century;
      --Adopted a new approach for balancing risks--one that takes into
            account not only operational risks, but also the risks to
            people, modernization and transformation;
      --Reorganized and revitalized the missile defense research and
            testing program, free of the constraints of the ABM Treaty;
      --Reorganized the Department to better focus on space capabilities;
      --Through the Nuclear Posture Review, adopted a new approach to
            strategic deterrence that increases our security while reducing
            our strategic nuclear weapons;
      --Announced a new Unified Command Structure, with a new Northern
            Command to help in defending the American homeland; and
      --Developed new contingency planning guidance to assure that the
            United States has up to date contingency and operational plans
            that are appropriate to our new national security environment.
        And we did all this while fighting a worldwide war on terrorism--
    not bad for a Defense establishment that is supposedly so resistant to
    change.
        In the course of last year's defense reviews, we identified six key
    transformational goals around which we are focusing our new defense
    strategy: to protect the U.S. homeland and forces overseas; to project
    and sustain power in distant theaters; to deny enemies sanctuary--so
    they know no corner of the world is remote enough to protect them from
    our reach; to protect U.S. information networks from attack; to use
    information technology to link up U.S. forces so they can fight
    jointly; and last, to maintain unhindered access to space--and protect
    U.S. space capabilities from enemy attack.
        The President's 2003 budget request advances each of these
    transformational goals--accelerating transformational programs and
    funding the objectives outlined in our new defense strategy.
        Specifically, the President's fiscal year 2003 budget provides for:
        Protecting Bases of Operation/Homeland Defense.--$8 billion for
    programs to support defense of the U.S. homeland--$45.8 billion over
    the five year Future Years Defense Program (2003-07)--an increase of 47
    percent.
        Denying Enemies Sanctuary.--$3.2 billion for programs for this
    purpose--$16.9 billion over the next five years--an increase of 157
    percent.
        Projecting Power in Denied Areas.--$7.4 billion for programs to
    help ensure the ability to project power across long distances--$53
    billion over the next five years--an increase of 21 percent.
        Leveraging Information Technology.--$2.5 billion for programs to
    help leverage advances in information technology to connect U.S. forces
    in the air, at sea and on the ground--$18.6 billion over the five year
    FYDP (2003-07)--an increase of 125 percent.
        Conducting Effective Information Operations.--$174 million for
    programs to help us protect our information networks and to attack
    those of adversaries--$773 million over the five year FYDP (2003-07)--
    an increase of 28 percent.
        Strengthening Space Operations.--$200 million to strengthen space
    capabilities--$1.5 billion over the five year FYDP (2003-07)--an
    increase of 145 percent.
        While new technologies represent only a portion of the Department's
    overall transformation program, transformational investments account
    for 17 percent, about $21 billion, of all procurement and RDT&E in
    2003, rising to 22 percent by 2007. Over the next five years, we
    propose to invest more than $136 billion in transformational
    technologies and systems. Of this, $76 billion represents new
    investments to accelerate or start new transformation programs.
        We have applied a strict definition to programs included in these
    totals as transformational, counting only systems that offer the
    warfighter a distinctly new kind of capability. Many activities that
    enable transformation, or extend current capabilities, are not included
    in these figures. For example, the $1.7 billion in this budget for
    funding for the Joint Direct Attack Munitions (JDAMs) and other
    precision-guided munitions is not counted as transformational. The
    total investment in additional systems that support transformation
    approaches $25 billion in the fiscal year 2003 budget and $144 billion
    over the five year FYDP.
                                missile defense
        One of the programs the department is pursuing a revitalized effort
    to test and develop ballistic missile defenses capable of defending the
    United States, friends and allies, and our forward deployed forces from
    limited ballistic missile attack. Mr. Chairman, on September 11th,
    terrorists took commercial jetliners, and turned them into missiles,
    killing thousands. It is only a matter of time before terrorist states
    armed with weapons of mass destruction develop the capability to
    deliver those weapons to U.S. cities--giving them the ability to try to
    hold America hostage to nuclear blackmail. With the power and reach of
    weapons today, we have no margin of error--we need defenses that can
    deter and defend against such attacks.
        Missile defense is part of our new defense strategy, and a key
    element of the New Triad of capabilities we intend to pursue--an
    approach that combines reduced offensive nuclear forces, advanced
    conventional offensive capabilities, and a range of new defensive
    capabilities. Missile defense is critical to our strategy of reducing
    America's reliance on strategic nuclear weapons--and one of the reasons
    why President Bush was able to make the decision to make historic
    reductions in U.S. operationally deployed nuclear warheads.
        Mr. Chairman, that is why I am concerned about the step by the
    Senate Armed Services Committee to cut more than $800 million from the
    President's request for missile defense. These cuts put at risk our
    ability to develop and deploy effective missile defenses. Missile
    defense funding represents only 2.1 percent of the overall defense
    budget. We need all of the President's request. I urge you to restore
    these cuts and fully fund the President's missile defense budget
    request.
                                  terminations
        As we all know, resources are finite--and even with this
    significant increase, these transformational investments cannot be made
    without terminating some programs and finding other savings.
        Although this year's requested budget increase is the largest in a
    generation, virtually all of it is spoken for by a number of ``must
    pay'' bills--covering the cost of inflation ($6.7 billion), healthcare/
    retirement accruals and pay raises ($14.1 billion), realistic costing
    for readiness and procurement ($7.4 billion) and funding for the global
    war on terrorism ($19.4 billion). After counting the costs of keeping
    the Department moving on a straight-line, the costs of the war, there
    is not much left.
        In the 2003 budget request, we have made $9.3 billion available, in
    part by terminating a number of programs, such as the DD-21, Navy Area
    Missile Defense, 18 Army Legacy programs, and the Peacekeeper Missile.
    We also accelerated retirement of a number of aging, and expensive to
    maintain capabilities, such as the F-14 and 1,000 Vietnam-era
    helicopters. It would have been nice to keep them all. But choices have
    to be made.
        As we put together the 2003 budget before you, a number of
    programs--including Crusader--required further review. After several
    months of careful examination, we decided to recommend termination of
    the Crusader program. Last Thursday, I testified before the Senate
    Armed Services Committee on the Crusader decision. I ask that portions
    of my testimony from that hearing be made a part of the Record today,
    but allow me to briefly summarize a few key points.
        The decision to recommend termination of the Crusader program is
    not about killing a bad system. It is potentially a good system. It is
    not about a system that could not be used. It could. And it is a system
    that is wanted by many. But that is not the issue. The issue is how do
    we balance the risks. In short, it is about foregoing a system
    originally designed in an earlier period, to make room for more
    promising technologies that can accelerate transformation.
        In February of this year, we began developing the Defense Planning
    Guidance for the fiscal year 2004 budget and the fiscal years 2004-2009
    program. The senior civilian and military leadership team had to focus
    on the looming problem of a sizable procurement ``bow wave'' beyond
    fiscal year 2007--shorthand for describing the cost of the procurement
    of systems that would be ready for fielding late in this decade. If all
    were funded, they would crowd out other areas of investment and thereby
    cause a repetition of the same headaches we still suffer from today as
    a result of the procurement holiday in the 1990s. The time to address
    that ``bow wave'' is now--earlier, not later.
        If you'll look at the chart of the Army fiscal year 2003-07 budget,
    and then add two years at the end. If every program we have today
    continues to be funded the way it's currently programmed, including the
    Crusader, the bow wave soars. The time to deal with that bow wave is
    not in two, three or four years, because by then the investments will
    have been made and lost. The only way to deal with it is to make tough
    choices now on major defense acquisition programs, like Crusader.
        The issue is not, in my view, whether Crusader is a fine artillery
    piece. It is. If fielded early in the next decade, Crusader would have
    represented an improvement over the existing Paladin howitzer in rate
    of fire and speed of maneuver. The issue is whether the United States,
    during the period we see up on the chart, is better off upgrading the
    Paladin, eliminating Crusader, accelerating the future combat system
    and improving the munitions of all of those capabilities, including the
    rocket systems? And the answer is, I think we would be better off.
        We are convinced it is better to invest that money in capabilities
    such as increased accuracy, more-rapid deployability, and the ability
    to network fires--that will make Army indirect fire systems effective
    and relevant on the battlefields of the 21st century.
        The debate over Crusader is about whether to spend roughly $9
    billion more to procure some 480 Crusader howitzers or, instead, to use
    those funds to accelerate a variety of precision munitions--including
    GPS-guided rounds for all U.S. 155 mm cannons, as well as adding GPS
    guidance and accuracy to upgraded Multiple Launch Rocket System
    vehicles and the more mobile, wheeled versions of this system, the High
    Mobility Artillery Rocket System (HIMARS).
        Transforming to give our country the capabilities that
    revolutionary changes in technology offer and to enable us to fight and
    win the nation's wars in the 21st century as effectively as we did in
    the last century, requires hard choices and tough decisions. The
    hardest choices are those about balancing risks between the challenges
    we face in the near and mid-term and those less certain, but possibly
    more formidable, challenges that we will face in the longer term. That
    was the choice we have made in recommending terminating Crusader and
    shifting the funding into programs that are more appropriate to the
    future.
        It is not, of course, an indication that the United States can do
    without ground forces. That is nonsense. To the contrary, it is a
    decision that reflects confidence that the Army has set a course over
    the longer term that is sound and, indeed, needs to be accelerated. Nor
    is it a decision that the future Army can manage without indirect fires
    and rely solely on air support. Rather, it is a decision that precision
    in artillery and rocket fires can be as revolutionary as it has already
    proven in air-delivered weapons, and that mobility and rapid
    deployability will be crucial in the future, not only in getting to the
    battlefield, but in maneuvering over potentially vast battle areas.
        In short, it was a decision about balancing risks, a decision that
    was made after consideration of those risks and the capabilities this
    nation will require in the coming decades.
        The Quadrennial Defense Review emphasized the need for U.S. forces
    to demonstrate an ability to swiftly and surely defeat adversaries in
    distant theaters, and by doing so, deter them. In particular, the
    strategy confirmed the need for ground forces that are lighter, more
    lethal, and more readily deployable than today's force. Throughout the
    conflict in Afghanistan, we have seen the remarkable synergy between
    ground, air and naval forces. If nothing else, Operation Enduring
    Freedom has demonstrated some of the advantages that can be achieved
    with joint, integrated approaches to warfare. Not only is the safety
    and effectiveness of our troops improved, the result is the rapid and
    precise destruction of enemy forces. We know that ground operations
    will continue to be a critical dimension of warfare, and that accurate
    indirect fires will continue to play an important role in deterring and
    defeating a range of potential adversaries.
        In light of the new defense strategy and initial insights from the
    war, DOD senior leadership weighed the relative merits of Crusader
    against other alternatives to meet the Army's need for organic indirect
    fires--both cannon and rocket. Following extensive discussion and
    evaluation, it became apparent that, on balance, alternatives to
    Crusader would be more consistent with both the new defense strategy
    and, we believe, with the Army's overall transformation effort.
        Mr. Chairman, I would like to address many of the assertions that
    have been made in the Crusader debate.
        For example, the assertion has been made that Paladin had trouble
    keeping up with Abrams tanks during Desert Storm. During Desert Storm,
    the Army followed well-rehearsed tactics to ensure that heavy divisions
    operated as a team. Those tactics are what accounted for the fact that
    many of the divisions' key vehicles--including Paladin howitzers--did
    not have top speeds to match those of tanks or infantry fighting
    vehicles. While tanks are designed with fast top-speeds, they are not
    employed at those speeds over long periods. For example, the VII Corps
    moved about 400 miles in 96 hours, or about 4 miles per hour on
    average.
        Others have suggested that Crusader would have been of help to us
    in Afghanistan. The idea of trying to get a bunch of Crusaders in place
    to participate in the Anaconda battle, quite frankly, boggles the mind.
        Another assertion which has been made is that Excalibur will be
    exorbitantly expensive--as much as $200,000 per round. In truth, the
    Army's Excalibur program office currently estimates the average
    procurement unit cost will be $33,000. OSD (AT&L) believes that
    refinements to the Army's production plans could yield unit costs of no
    more than $10,000 per round.
        Another assertion is that precision rounds are not useful in the
    absence of precise target locations. In fact, precision munitions will
    provide the capability to direct suppressive fire much closer to
    friendly troops than is now possible with unguided rounds. Accelerating
    precision rounds does not preclude artillery units from using a mix of
    guided and unguided munitions.
        Another assertion is that canceling Crusader creates too much
    midterm operational risk because Paladin is outranged by many enemy
    systems. U.S. forces will retain an unparalleled capability to deliver
    fire support at long range in the midterm. The Army's field artillery
    capability is provided by Paladin and MLRS. Extended-Range MLRS--with a
    reach of 45 km--can outrange virtually all howitzers in the hands of
    potential enemies. Guided MLRS and ATACMS provide even greater range--
    60 km and 300 km, respectively. When post-Gulf War improvements to the
    Army's fire support capability are considered (Apache Longbow, MLRS
    upgrades, Paladin, improved ammunition), the firepower of its divisions
    has doubled.
        Mr. Chairman, the point is this: If we can't cancel this system,
    and we can't do it now, what systems can we cancel and when can we
    cancel them? There is always a reason not to do something. But if we do
    not make tough choices now, then in the long run we are not serving the
    interests of the Army, the U.S. armed forces, and the security
    interests of the country.
                    modernization, procurement and readiness
        As we transform for the threats we face, we must also prepare the
    force for conflicts they may have to fight later in this decade, by
    improving readiness, increasing procurement and selective
    modernization.
        To deal with the backlog that resulted from the ``procurement
    holiday'' of the last decade, we have requested $71.9 billion for
    procurement--$68.7 billion in the Procurement title (an increase of
    10.6 percent over fiscal year 2002) and $3.2 billion in the Defense
    Emergency Response Fund. Procurement is projected to grow steadily over
    the five year FYDP to more than $98 billion in fiscal year 2007, and
    will increasingly fund transformation programs over time.
        We have requested $150 billion for operation and maintenance (O&M)
    accounts in 2003, including substantial funding for the so-called
    ``readiness accounts''--tank miles, steaming days and flying hours for
    the Army, Navy, Air Force and Marines.
                                     people
        If we are to win today's war on terror, and prepare for the threats
    of tomorrow, we must take proper care of the Department's greatest
    asset: the men and women in uniform. They joined because they love
    their country--and believe that freedom is worth defending. But at the
    same time, we must recognize that, like all of us, they have families
    to support and children to educate.
        We already ask them to voluntarily risk their lives for us--they
    should not be asked to live in substandard housing while they do so.
        That is why the President's 2003 proposed budget requests:
      --$94.3 billion for military pay and allowances, including $1.9
            billion for an across-the-board 4.1 percent pay raise and $300
            million for targeted pay raises for mid-grade NCOs and
            officers;
      --$4.2 billion to improve military housing, putting the Department on
            track to eliminate most substandard housing by 2007;
      --Funds to lower out-of-pocket housing costs for those living off-
            base from 11.3 percent today to 7.5 percent in 2003--putting us
            on track to eliminate out of pocket housing costs for the men
            and women in uniform by 2005;
      --$10 billion for education, training, and recruiting; and
      --A breathtaking $22.8 billion to cover realistic estimates of the
            cost of military healthcare. The hard truth is that this line
            item promises to grow and put pressure on all other categories
            of the budget--R&D, modernization, transformation, pay and the
            like. We need to face up to it.
                          international criminal court
        We must also protect our men and women in uniform from the
    jurisdiction of the new International Criminal Court, which is expected
    to come into being this July 1st.
        The ICC's entry into force this summer means that Americans may
    soon be exposed to the risk of prosecution by a court that is
    unaccountable to the American people, and that has no obligation to
    respect the Constitutional rights of our citizens.
        The United States has a number of serious objections to the ICC--
    among them, the lack of adequate checks and balances on powers of the
    ICC prosecutor and judges; the dilution of the U.N. Security Council's
    authority over international criminal prosecutions; and the lack of any
    effective mechanism to prevent politicized prosecutions of American
    service members and officials.
        These flaws would be of concern at any time, but they are
    particularly troubling in the midst of a difficult, dangerous war on
    terrorism. There is the risk that the ICC could attempt to assert
    jurisdiction over U.S. service personnel, as well as civilians,
    involved in counter-terrorist and other military operations--something
    we cannot allow.
        Unfortunately, the ICC will not respect the U.S. decision to stay
    out of the treaty. To the contrary, the ICC will claim the authority to
    detain and try American citizens--U.S. soldiers, sailors, airmen and
    marines, as well as current and future officials--even though the
    United States has not given its consent to be bound by the treaty. The
    United States understandably finds that troubling and unacceptable.
        In fact, some have argued that the military departments need relief
    from end-strength caps because of the many demands we have placed on
    our forces. Before entertaining such a relaxation, I have asked the
    services to scrutinize those missions and assignments from which we can
    extract our forces and relieve some of the pressure. While the numbers
    are not large, one area that we must look to immediately are those
    missions for which our forces are assigned but in which there may be
    some exposure to prosecution by the International Criminal Court. As we
    consider U.N. peacekeeping mandates--for example, the mission in East
    Timor--I intend to work closely with the Secretary of State to ensure
    that our forces would be indemnified from prosecution before committing
    them.
        To deal with the threat posed by the ICC, some have proposed
    legislation, including the American Servicemembers Protection Act, as
    passed by the House of Representatives. Such legislation will provide
    needed protections for our men and women in uniform, as they conduct
    the global war on terrorism and voluntarily risk their lives to defend
    our freedom and way of life.
                                   tradeoffs
        After the costs of keeping the Department moving on a straight-
    line, the costs of the war, and the savings generated, we are left with
    about $9.8 billion. That's a lot of money. But it required us to make a
    number of difficult tradeoffs.
      --We were not able to meet our objective of lowering the average age
            of tactical aircraft. However, we are investing in unmanned
            aircraft, and in the F-22 and JSF, which require significant
            upfront investments, and should be coming on line in the years
            ahead.
      --While the budget funds faster growth in Science and Technology
            (S&T), we were not able to meet our goal of 3 percent of the
            overall budget, though we are slightly higher than the
            President's 2002 request.
      --And clearly we were not able to fund shipbuilding in fiscal year
            2003, at a rate we need to in the future. As with every
            department, the Navy had to make tough choices.
        The fiscal year 2003 shipbuilding budget is $8.6 billion, and
    procures a low 5 ships, for several reasons. First, there are a number
    of problems, including contractor problems and also past shipbuilding
    cost estimates that were off and not in the forward year budget and
    which we need to fully fund.
        Second, the Navy made a calculation that, in the short term, it can
    maintain the desired force level at the proposed procurement rate
    because of the relatively young average age of the fleet--and that it
    is more important now to deal with significant needs that had been
    under-funded in recent years, such as shortfalls in munitions, spare
    parts, and steaming hours for the men and women at sea, which are fully
    funded in this budget. Further, we are investing in SSGN conversion,
    which does not count in ship numbers because, while they give us new
    capabilities, they do not technically buy new ships.
        The Navy's Future Years Defense Program budgets for 7 ships in
    2005, 7 ships in 2006 and 10 ships in 2007.
                                   conclusion
        $379 billion is a lot of money. But consider: the estimated cost of
    the September 11th attacks to the national economy ranges from about
    $170 billion to almost $250 billion in lost productivity, sales, jobs,
    and airline revenue, media and advertising, and costlier insurance for
    homes and businesses, not to mention the terrible cost in human lives
    and human suffering.
        The point is this: we cannot put a price on our ability defend this
    country, and deter those who might wish to attack and kill our people.
    The President's proposed defense budget amounts to a modest 3.3 percent
    of our country's Gross Domestic Product. Compared to the cost in lives
    and treasure if we under invest, it is a needed and proper investment
    in our national security.
        Thank you.

        Senator Inouye. Thank you very much, Mr. Secretary.
        Now may I recognize General Myers.
        General Myers. Chairman Inouye and Senator Stevens and
    distinguished members of the committee: It is indeed an honor
    to report on the state of our Nation's armed forces. While the
    open wounds created by the events of September 11th have begun
    to heal, nothing will erase the horror of that day from our
    memories. We remain a Nation at war and our troops are still
    faced with grave danger.
        The al Qaeda network has been severely damaged and they
    know they are going to pay a price if they directly challenge
    our forces. But just as a wounded animal is the most dangerous
    of all, al Qaeda remains a real threat. Without a doubt, they
    still seek to harm our men and women in uniform, our citizens,
    and our way of live.

                           FUTURE OF OUR ARMED FORCES

        Around the world we face other dangers, challenges, and
    obligations. This demanding world forms the strategic context
    for the future of our armed forces. To serve our Nation
    effectively, we must win the war on terrorism, continue to
    improve our joint warfighting skills, and transform our forces.
    We are making steady progress in all three areas, but there is
    still much to do.
        As we all know, the war on terrorism is being conducted
    using many different means, from military operations to
    diplomacy to law enforcement. On the military front, our
    operations are intended to achieve three objectives: first, to
    disrupt and destroy global terrorist organizations; second, to
    eliminate safe havens for terrorists; and third, to ensure that
    weapons of mass destruction do not fall into the hands of
    terrorist groups.
        The successes we have achieved so far are founded on three
    factors. The first is the superb training of our armed forces.
    Our troops were ready from day one and they performed
    magnificently, whether flying the longest duration combat
    missions on record, or fighting from cave to cave in the bitter
    cold and high altitude of the Afghan mountains, or creating
    logistics bases from scratch, or launching strike missions from
    the pitching deck of an aircraft carrier in the black of night.
        The second has been the invaluable contributions of our
    coalition partners, including the anti-Taliban Afghan forces.
    At last count there were over 80 countries working together and
    that number alone should send a clear message to terrorist
    organizations that they can run, but they cannot hide forever.
        The third is the unprecedented coordination of effort by
    U.S. governmental agencies. We have individuals from several
    agencies deployed with our troops on the front lines. We have
    inter-agency coordination groups assigned at various military
    headquarters and we have military liaison officers attached to
    civilian organizations. Most importantly, we all understand the
    critical need to share intelligence information and integrate
    our planning processes so that our collective efforts form a
    whole far greater than the sum of its parts.
        I know you are aware that we have extended our operations
    beyond Afghanistan. Most notably, we have begun to train and
    assist the military forces in the Philippines, in Yemen, and in
    the Republic of Georgia in their counterterrorism efforts. I
    recently returned from a trip to the Pacific, where I visited
    our troops on Baselon Island. In addition to the training and
    assistance the Special Forces are providing, the Seabies and
    Marine engineers are building the first road on that island.
        Now, this is really tough work. It is every stereotype you
    have ever seen about the tropics. It is hot, it is humid, dense
    jungle, dust, mud, bugs, you name it. But we have got tough
    people there. The construction troops and Special Forces
    trainers are not only doing tough work, they are doing vitally
    important work.
        In the Philippines, the Abu Sayyaf group is ruthless. With
    ties to al Qaeda, they are a threat that extends beyond the
    Philippines. We will continue to work closely with the
    Philippine Government to help eradicate this particular threat.
        The cooperative effort in the Pacific goes beyond the
    Philippines. On the same trip, I also met officials from Japan
    and South Korea. It was gratifying to hear first-hand the
    steadfast commitment of our allies to achieving victory in this
    war on terrorism.
        As the months have progressed since September 11th, we have
    started to transition from interim actions to more permanent
    arrangements. For example, to ensure we have the best
    capabilities available for the homeland defense mission, the
    President recently signed a revised unified command plan to
    establish a U.S. Northern Command. This revision provides
    several improvements. First, it helps eliminate the gaps and
    seams among the different military organizations that have
    homeland defense responsibilities; and it allows for better
    military support of civilian agencies. It also improves our
    ability to anticipate and to plan, rather than to merely react
    to events.
        Second, I think it helps advance our transformation efforts
    by allowing the commander of the Joint Forces Command to
    concentrate on joint exercises and experimentation.
        But we cannot focus solely on today's counterterrorism
    operations. We must also support other worldwide commitments,
    such as Operations Northern and Southern Watch, the Balkans
    peacekeeping mission, and the defense of the Korean Peninsula.
    We must face other challenges of the 21st century. With the
    help of Congress, we have come a long way in recent years
    toward improving our joint warfighting capabilities. We are
    working hard to get even better and certainly the operations in
    Afghanistan are proof of our progress. But much more work needs
    to be done.

                                    C\4\ISR

        In my view, the area with the greatest potential payoff is
    command, control, communications, computers, intelligence,
    surveillance, and reconnaissance, or C\4\ISR for short.
    Currently our commanders have vastly different C\4\ISR suites.
    For example, the Combined Air Operations Center at Prince
    Sultan Air Base in Saudi Arabia is essentially state of the
    art. But if you had visited the commander for the Operation
    Anaconda in Afghanistan just before the operation, General
    Hagenbeck, you would see a different variety of equipment, from
    paper maps and grease pencils to a few laptop computers. If you
    go aboard a Navy warship, you would see another command and
    control suite that is very different from the previous two.
        What we need is a common suite that links everything
    together and allows commanders to pick and choose what elements
    they need to prosecute their mission, not only among U.S.
    forces but with our coalition partners as well. To that end, we
    are developing a standardized command and control architecture
    called a Standing Joint Force Headquarters that will lead to an
    improved ability to receive and deploy forces, what I call
    ``plug and play.''
        This summer Joint Forces Command will test this concept in
    the Millennium Challenge joint exercise, an experiment. These
    types of improvements will also help us continue to transform
    our armed forces. Transformation is not defined by a policy or
    choice. It is an inexorable process of change. To me, it is
    simply fostering changes that result in a dramatic improvement
    in the way a combatant commander wages war, and such dramatic
    improvement requires not only technological change, but also
    and perhaps most importantly changes in how we think.
        True transformation must include training and education,
    doctrine and organizations. As we transform our forces, we need
    to build capabilities that allow us to defend our interests in
    a wide array of situations. The key to that in my view are
    flexibility and adaptability. Our people must be expert at many
    tasks and our equipment must be applicable to many missions.
        Another key to transformation is recognizing that sudden
    technological breakthroughs are few and far between. More often
    than not, transformation results from an accumulation of
    incremental improvements and arises from the course of service
    modernization efforts. Let me give you an example.
        When I was flying in Vietnam we often targeted bridges and
    anti-aircraft sites and we had to wait for the right weather
    and fly a lot of sorties to destroy each single target. In the
    course of that we lost a lot of crews and a lot of planes, all
    because our weapons were not very accurate. Think about where
    we are today. We have got weapons relatively impervious to
    weather conditions, that steer themselves using the global
    positioning system satellite signals, and now we can use one
    sortie to destroy several targets.
        How did we get to today's capabilities from Vietnam?
    Incremental improvements along multiple paths. We improved the
    targeting and guidance capabilities of our bombs, even figuring
    out how to use a global positioning system which we originally
    thought was going to be just an aid to navigation to guide
    them. On another path, we developed unarmed aerial vehicles
    that could loiter for hours over the battlefield, improving our
    ability to identify and locate potential targets. On still
    another path, we worked on data transformation and computer
    processors so we could see the reconnaissance pictures in real
    time.
        All these separate improvements added up to the
    transformation of capabilities that we are seeing in the
    battlefield in Afghanistan. This transformation has been built
    on successive improvements over a period of 30 years, not
    necessarily on any single breakthrough. That is why service
    modernization programs are so important to the process of
    transformation.
        Members of the committee, I am pleased to say that the U.S.
    military remains the preeminent military force in the world.
    This excellence is due in no small part to your unwavering
    support for our troops. We have made tremendous strides in
    recent years in providing our people a comprehensive set of
    quality of life improvements, especially in the areas of pay,
    housing, and health care. Sustaining the quality of life of our
    people is crucial to recruiting, to retention, and to our
    readiness to fight. But more importantly, it is the right thing
    to do for the men and women who this very minute are fighting
    to defend our freedom.
        Your support of these initiatives and the global war on
    terrorism is greatly appreciated. But there are a couple of
    issues I would like to bring to your attention. First, some of
    our capabilities are being stretched. The war has increased the
    operations tempo for segments of the force, including Active,
    Reserve, and Guard units. Tempo is especially stressed for
    those specialized assets and capabilities commonly referred to
    as ``low density, high demand.'' Of course, we are managing
    this essentially every day, trying to reduce that stress.
        I am also concerned about the diminishing availability of
    training ranges and military operating areas. Environmental
    concerns are very, very important and we take those very
    seriously, but we must be able to strike a balance with
    readiness requirements. In mid-April the Secretary of Defense,
    Secretary Rumsfeld, forwarded to Congress the Readiness and
    Range Preservation Initiative. The service chiefs and I fully
    support this proposed legislation and I would ask for your
    support as well.

                               prepared statement

        Mr. Chairman, I welcome the opportunity to work with you
    and the committee on these issues and others that impact our
    Nation's security and our defense. I thank you again for your
    support in the war against terrorism and for the opportunity to
    be here today, and we look forward to your questions.
        [The statement follows:]
                 Prepared Statement of General Richard B. Myers
        It is an honor to report to Congress on the state of the U.S. Armed
    Forces. The United States is engaged in a multi-front war that includes
    operations in direct defense of our homeland and a sustained military
    campaign overseas. All elements of our force--Active, Reserve, and
    National Guard--are taking part in this struggle to maintain the safety
    and security of our Nation, and the results of the initial campaign
    have been promising. While there are relatively few American troops
    deployed ``on the ground'' in Afghanistan, it is important to note that
    a significant percentage of the force is directly engaged in some
    aspect of the global war on terrorism. At the same time, other threats
    to U.S. interests remain a part of our strategic calculus. Thus, we
    have forces committed to other missions, such as defense of the Korean
    peninsula, protection of U.S. interests in Southwest Asia, and
    peacekeeping operations in the Balkans.
        With our friends and allies, we continue to gather intelligence and
    take action against the Al Qaeda network and other terrorist
    organizations that threaten nations around the world. As President Bush
    has reminded us on several occasions, the global war on terrorism will
    require great effort over an extended period of time--and it will
    require all elements of our national power. The U.S. Armed Forces are
    ready to engage the enemy for as long as it takes to complete the
    mission.
        We face a difficult task--to defeat multiple enemies who are
    capable of striking asymmetrically from hundreds of locations around
    the world. Winning this new global war will require flexibility in
    adapting to changing operational conditions and new technologies and
    procedures to enhance our combat capabilities. An equally important
    imperative in the midst of this war is to continue to modernize and
    transform our forces to meet future challenges in this rapidly changing
    21st century.
        These imperatives dictate my priorities as Chairman--to win the
    global war on terrorism, to improve the joint warfighting capabilities
    of the U.S. Armed Forces, and to transform those forces so they are
    ready to face future challenges. I look forward to working with
    President Bush, Secretary Rumsfeld, and Congress in the months ahead to
    achieve these goals and to address other critical issues facing the
    U.S. military. To keep our forces superior to those of any other
    nation, we must invest in our quality force today and create the
    capabilities needed to meet the challenges of tomorrow. The brave
    soldiers, sailors, airmen, marines, and coastguardsmen who are
    defending our way of life are counting on us to make the right
    decisions.
                            global war on terrorism
        As you well know, we are engaged in only the first phase of the
    global war on terrorism. In this new kind of war, we face adversaries
    who refuse to adhere to the norms of international behavior, who
    possess or have sought access to weapons of mass destruction (WMD), and
    who have demonstrated both the capacity and the will to use those
    weapons. Our objectives in this war are clear: to disrupt and destroy
    global terrorist organizations, to eliminate safe havens for
    terrorists, and to prevent access to WMD by terrorist groups.
        In response to the terrorist attacks of September 11, 2001, we have
    conducted both offensive and defensive operations. The Reserve
    Components have been essential to these actions. As of late April 2002,
    we had alerted over 107,000 individuals for activation and completed
    the call-up of more than 74,000 people. Additionally, since September
    11, the number of personnel, both active and reserve, deployed to the
    U.S. Central Command area of responsibility increased from
    approximately 22,000 to a high of about 60,000, with about 55,000 in
    theater as of the end of April 2002.
        The direct defense of the American homeland is called Operation
    NOBLE EAGLE. This operation comprises combat air patrols and alert
    aircraft to enhance the security of U.S. airspace as well as actions to
    protect civil population centers, critical infrastructure, and special
    events. NOBLE EAGLE also includes Coast Guard inspections of cargo
    vessels and patrols in defense of major sea ports. Additionally, there
    is widespread augmentation of civil site security with both active duty
    and reserve component military personnel. Familiar examples of these
    actions are the 6,100 National Guard troops augmenting security at 421
    airports, a program that is scheduled to continue through May of this
    year. We have also enhanced security at military and other government
    installations and for space launch operations at Cape Canaveral. And
    for seven months, the North Atlantic Treaty Organization (NATO)
    provided airborne early warning aircraft and aircrews to augment our
    airspace protection operations under Article 5 of the NATO treaty. This
    action freed U.S. E-3 Airborne Warning and Control System aircraft for
    the war effort in forward areas.
        Our offensive operations are labeled Operation ENDURING FREEDOM.
    These actions include, but are not limited to, ground, air, and naval
    operations in the Afghan theater and North Arabian Sea; planning and
    training for follow-on operations; and a host of support activities.
    The combat operations are notable for their distance from the United
    States, the deployment most of the ground forces solely by air, and the
    integration achieved between the technologically unsophisticated Afghan
    opposition forces and U.S. forces. Also of note, air operations
    included not only reconnaissance, air refueling, and strike missions,
    but also simultaneous humanitarian airdrop missions by C-17s flying
    from Germany.
        Operations NOBLE EAGLE and ENDURING FREEDOM have both highlighted
    many lessons that will be of great use in the subsequent campaigns of
    this war, as well as in our planning, programming, and transformation
    efforts. Foremost among them is the importance of versatility and
    flexibility to achieving operational success. Forward air controllers
    on horseback and special operations troops transporting their high-tech
    gear on donkeys to isolated mountain tops from which they directed
    strikes of precision guided munitions are illustrations of the kind of
    versatility and flexible thinking we need to foster.
        A second lesson is the ever-increasing importance of operations in
    the information domain--the most significant aspect of which is a
    ``networked'' operations capability. We have continued the process of
    connecting sensors, shooters, and command and control elements with a
    single network of voice and data links, without regard to platforms or
    individual Services. We do not yet have this capability complete, but
    we are making steady progress. For example, in Afghanistan special
    operations forces (SOF) on the ground guided strikes from both U.S.
    Navy and Air Force aircraft. Additionally, Navy and Air Force
    intelligence, surveillance, and reconnaissance (ISR) platforms were
    able to feed sensor outputs to Marine and SOF ground units, as well as
    other airborne platforms. We were also able to link real-time inputs
    from unmanned aerial vehicles to orbiting AC-130 gunships, which then
    provided responsive and pinpoint fire support to ground operations.
    These Afghan operations provide a hint of the operational advantages we
    will gain when this element of the transformation process is more
    mature.
        The more we rely on information resources and systems, the greater
    must be our efforts to protect them. An important step will be the
    development of military doctrine for Information Assurance/Computer
    Network Defense. This doctrine will guide our actions in employing
    safeguards against attacks upon our critical information networks and
    in detecting, combating, and recovering from cyber attacks as soon as
    they are attempted.
        Finally, another lesson learned with every operation, but one that
    bears repeating, is that the friction and fog of war remain difficult
    to overcome. Our goal is to ensure our enemies face greater
    difficulties than we do. But our adversaries are always thinking and
    reacting in an attempt to defeat our forces. And although we do our
    best to prevent errors, human beings make mistakes and mechanical
    systems sometimes fail. We will never have perfect success--and
    sometimes will suffer tragic accidents. History tells us these
    difficulties will never be completely eliminated, but we continue to
    work hard to reduce their occurrence as much as possible.
        In addition to providing lessons learned, the campaign has
    reinforced some existing concerns and validated concepts that we have
    been working on for quite some time. It has had a significant impact on
    and exacerbated shortfalls in specialized assets and capabilities. It
    has also added emphasis to the requirement of maintaining an adequate
    inventory of precision guided munitions (PGM). These weapons are an
    increasingly important tool for operational commanders across the
    entire spectrum of conflict. We need to maintain sufficient capacity in
    the industrial base to manufacture adequate quantities of PGMs. We also
    need to protect our ability for production surges to meet increased
    demands associated with sustained high-tempo operations. We ask for
    your continued help in building PGM inventories so we may retain the
    full capability to deliver this lethal combat power in the future.
        Other weapon systems that have further validated their potential in
    Afghanistan are unmanned aerial vehicles (UAV). These systems are
    increasingly important in reconnaissance and surveillance and have
    recently demonstrated unmistakable potential for strike missions. We
    will continue to experiment with additional roles and missions for
    these vehicles, improve their communications, and develop and acquire
    them faster.
        The war has also validated our emphasis on the importance of
    interagency coordination and cooperation, especially the need for close
    partnerships with both domestic and international law enforcement
    agencies. On the domestic front, the military will usually act in
    support of civilian law enforcement and first responders, as has been
    the case in Operation NOBLE EAGLE. We are working to build strong ties
    with other government agencies in the areas of training, planning, and
    operations--and especially in intelligence sharing.
        As the war continues, the Armed Forces will remain focused on the
    fundamental mission of homeland defense. To better organize our forces
    at home and provide support to civil authorities, we have modified the
    Unified Command Plan to establish a combatant command responsible for
    homeland security. We are also analyzing the potential advantages to be
    gained by combining U.S. Space Command and U.S. Strategic Command into
    a single organization. We anticipate being able to make a
    recommendation to the President on this initiative within the next
    several months.
        The new Northern Command (NORTHCOM) will help eliminate the seams
    between the multiple military organizations that currently share
    responsibility for homeland defense. It will encompass the continental
    United States, Alaska, Canada, Mexico, and adjoining waters to
    approximately 500 nautical miles. The command will serve as a single
    point of contact for support to civil authorities and cooperation with
    our North American friends and allies. NORTHCOM will improve the
    effectiveness of our homeland defenses; however, our first line of
    defense will remain our overseas forces.
        On the overseas front, our main effort is the destruction of the Al
    Qaeda network. Continued success toward that goal will require
    sustained effort as we work with our friends and allies around the
    world to disrupt, preempt, and prevent terrorist attacks at their
    source. We have troops in the Philippines, Yemen, and the Republic of
    Georgia training and assisting their forces in antiterrorism efforts--
    another illustration of the global nature of this war. At the same time
    we stand ready to plan for and take action against other international
    terrorist organizations and the nations that harbor them when ordered
    to do so. And we are working diligently with our friends and allies to
    prevent the proliferation of WMD and their acquisition by terrorist
    organizations.
        Our challenge will be to prioritize resources and coordinate
    operations in support of that mission with our other security
    responsibilities. We must remain trained and ready to execute the full
    range of military operations to protect simultaneously the homeland as
    well as other U.S. interests in the near term, even as we transform our
    forces to meet future challenges.
                    improving joint warfighting capabilities
        The superb warfighting capabilities of the Services have given us
    the winning edge in Operation ENDURING FREEDOM and provide the
    foundation for success against future adversaries. While our forces
    operating in and near Afghanistan have achieved enormous success on the
    battlefield, the same operations have revealed that much more can be
    accomplished.
        Joint warfighting brings the combat capabilities of the Services
    together with a focus on desired effects, resulting in a whole that is
    greater than the sum of the parts. It is, therefore, imperative that we
    continue to improve joint warfighting capabilities. We have made great
    progress in improving those capabilities, especially since the landmark
    Goldwater-Nichols legislation of 1986, but there is much still to be
    accomplished. In pursuing further improvements, there are four areas of
    particular importance to me: joint command, control, communications,
    computers, intelligence, surveillance, and reconnaissance (C\4\ISR);
    interoperability; joint officer management; and joint experimentation.
    Joint C\4\ISR
        A cornerstone of joint warfighting is C\4\ISR. Although we have
    made significant recent improvements, current deficiencies in joint
    C\4\ISR result in gaps and seams between the combatant commands and
    between the forces the Services provide. These gaps and seams must be
    eliminated. An adequate joint C\4\ISR capability will provide the
    necessary flexibility to better integrate diverse capabilities and
    achieve desired effects.
        In terms of command and control, development of a standardized
    joint force headquarters is essential to improving our ability to
    rapidly deploy and employ joint forces. The 2001 Quadrennial Defense
    Review Report discussed the implementation of a standing joint force
    headquarters within each regional combatant command. The regional
    combatant commanders and U.S. Joint Forces Command are developing
    proposals that they will test in a series of exercises. Among the
    options we will examine are deployable joint task force headquarters
    and the deployable joint command and control systems required to
    support them. Building on these efforts, we will be able to recommend a
    standardized model. I ask for your support of this critical joint
    warfighting initiative.
    Interoperability
        The second key to improvements in joint warfighting is
    interoperability. The ability to fight jointly requires command and
    control and weapon systems that are interoperable with each other and
    with those of our coalition partners. The force must have systems
    conceived, designed, and produced with joint warfighting in mind. We
    must think in terms of interchangeable modules we can ``plug and play''
    in any situation and command. These modules can be as simple as
    individual components. They may be complex like a multi-Service ISR
    network providing data to multiple layers of command at multiple
    locations. Or they may be planning tools, staff processes, and
    organizations that are standardized across combatant commands.
        Here, too, joint C\4\ISR is a focus for our efforts. We have made
    important strides, but are acutely aware of the need to solve
    interoperability shortfalls in our legacy C\4\ systems. And it is
    critically important that future C\4\ISR systems have interoperable
    technologies, processes, and products. In terms of C\4\ISR, the
    necessary ``plug and play'' capabilities will be designed to facilitate
    immediate employment and readiness to accept additional forces, execute
    missions, and integrate multinational and interagency support.
    Joint Officer Management
        In the long term, a third key to improving joint warfighting
    capabilities is continued improvements in the management of our joint
    officers. The quota-based system mandated by the Goldwater-Nichols
    legislation has served us well; however, joint officer management must
    evolve to reflect the way we operate in today's environment. To meet
    future requirements, we need more flexibility than currently exists. I
    applaud the independent study on joint officer management and
    professional military education directed by Congress. We are in the
    process of obtaining funding and selecting an organization to conduct
    the study, and we are prepared to work closely with you to facilitate
    continued improvements.
    Joint Experimentation
        Meaningful improvements in all areas of joint warfighting will
    require a willingness to question current practices, organizational
    patterns, and command processes--in essence, continued progress toward
    significant cultural change. One of the most important means of
    engendering this change is the joint experimentation process. This
    process is designed to evaluate new missions, devise new force
    structure, and test new operational concepts. For example, this summer
    the Millennium Challenge 2002 joint experiment will test the U.S. Joint
    Forces Command (JFCOM) model of the standing joint force headquarters.
    Joint experimentation also allows us to integrate the experimental
    concepts and new weapon systems being developed by the Services into a
    joint framework early in the development process. Finally, joint
    experimentation is a key element of the transformation process, and the
    revised Unified Command Plan will enable JFCOM to focus more time and
    effort on experimentation and transformation efforts. Naturally, we
    need to use the lessons from Operation ENDURING FREEDOM in the joint
    experimentation process to ensure we are prepared for subsequent
    battles in the war against terrorism.
        The willingness to examine and change, if necessary, all aspects of
    joint capabilities is imperative if we are to win the global war on
    terrorism and surmount other national security challenges of the 21st
    century. The process of improving joint warfighting is a key component
    of and is closely intertwined with our transformation efforts. Just as
    it is necessary to improve our joint warfighting capabilities to
    succeed against future enemies, it is also necessary to transform the
    force.
                    transformation of the u.s. armed forces
        Transformation is a process of change devoted to maintaining U.S.
    military superiority in all areas of joint warfighting. It is on-going
    and must be continuous since our enemies will persist in attempts to
    neutralize or erode our superiority and exploit perceived weaknesses.
    As history has repeatedly shown, Service modernization efforts have
    often proven to be the key to transformational change. For example, in
    World War II an accumulation of incremental technical advances and
    tactical lessons, combined with a willingness to experiment, led to
    significant improvements in combat capabilities. And while sudden
    technological, organizational, or doctrinal breakthroughs are possible
    and should be pursued vigorously, I believe current modernization
    programs will provide an important impetus for transformation in the
    21st century as well.
        Technological change alone does not lead to transformation--
    intellectual change is also necessary. Transformation, therefore, must
    extend beyond weapon systems and materiel to doctrine, organization,
    training and education, leadership, personnel, and facilities. We need
    to foster a mind set that allows us to take advantage of both new ideas
    and new technologies.
    Capabilities-Based Approach
        Part of the required cultural change entails a transition to a
    capabilities-based model as the foundation of our transformation
    efforts. Such an approach does not preclude consideration of specific
    threats. Indeed, it would be unwise to ignore those nations and
    organizations that pose a clear danger to U.S. interests. It is,
    however, appropriate, given the rapidly changing international security
    environment and the diffused nature of the threats we face, to shift
    the weight of our considerations away from our historical emphasis on
    specific threats. The United States cannot know with confidence which
    nations, combinations of nations, or non-state actors will pose threats
    to our interests, or those of our allies and friends. It is possible to
    anticipate with greater accuracy the capabilities that an adversary
    might employ. Such a capabilities-based model focuses more on how an
    adversary might fight than on who the adversary might be. It broadens
    our strategic perspective and requires us to identify the capabilities
    U.S. military forces will need to deter and defeat a wide variety of
    adversaries.
        Accordingly, an appropriate blueprint for change will include the
    following important considerations. First, we must base the process of
    change on an overarching set of strategic capabilities we believe our
    forces must possess to support the National Security Strategy now and
    in the future. Second, we need to use those capabilities to guide the
    development of joint operational concepts and architectures that drive
    decisions concerning materiel and non-materiel improvements and to
    establish standards for interoperability. Third, because transformation
    involves more than fielding new systems, we must integrate requirements
    for new doctrine, organizations, training and education, leadership,
    personnel, and facilities into the process. Fourth, we need to find
    ways to modernize and integrate legacy systems when it makes sense,
    while developing technological bridges with interagency and
    international partners. Finally, we must ensure that the transformation
    process is characterized by unity of effort based on clearly defined
    roles and responsibilities throughout DOD.
        Joint Vision 2020 contains the conceptual outline we will use to
    help guide these transformation efforts. To ensure the validity of
    those concepts, we have completed a detailed evaluation of the document
    and will update it based on the results of the 2001 Quadrennial Defense
    Review, changes to our defense strategy, the global war on terrorism,
    and strategic guidance from the administration.
    Information Capabilities
        The area offering the greatest promise for the most significant
    transformation in the near term is information sharing. The U.S.
    military is an ``information intensive'' force. Much of the military
    superiority we currently enjoy rests on our ability to achieve and
    maintain a decisive advantage in accessing, gathering, exploiting, and
    acting on information. The ability to arrive at and implement better
    decisions, faster than an opponent can react, rests on the
    accumulation, processing, and understanding of vast quantities of
    operational and tactical information.
        We have taken the first steps toward fully integrating our
    capabilities to find and strike targets of all types, using networks of
    sensors and shooters to achieve an effects-based targeting capability.
    Our goal is to allow dispersed forces to collaborate on operations and
    give our warfighters the ability to achieve desired effects rapidly and
    decisively--with a speed and accuracy that will overwhelm an
    adversary's ability to respond. This goal is attainable if we
    creatively use existing and planned technologies.
        Success will depend on several factors. First, we must take
    advantage of U.S. leadership in information technologies to create
    networks that allow a coordinated exchange of information among
    different levels of command and a wide variety of units at ever-
    increasing rates. Second, we must shift from a reconnaissance to a
    surveillance approach in gathering information on adversary operations,
    emphasizing the ability to ``watch'' or ``stare'' at targets. Third, we
    must continue to place an appropriate emphasis on vital information
    transfers such as voice, video, and data exchanges, and on the ability
    to operate effectively in areas with primitive or nonexistent
    communications infrastructure. These requirements drive a growing need
    for more transmission capability or bandwidth. In Afghanistan we used
    the maximum available bandwidth, and as we continue the interlinking of
    networks, our bandwidth requirements will only increase. It is also
    imperative that we continue to hold the line on military radio
    frequency spectrum allocations. Finally, adequate investment in
    communications infrastructure is an absolute necessity. In particular,
    our reliance on satellite communications capabilities is expanding
    exponentially, and we need your support in ensuring the Military
    Satellite Communications program continues to enjoy full funding.
        We will also use improved networks of information systems to
    transform logistics capabilities. By taking advantage of new
    technologies, improving logistics processes, and fusing information
    from many different sources, decision support tools will integrate data
    to make logistics information available to the appropriate commander
    anywhere in the world. We have already fielded an initial joint
    decision support capability and have successfully experimented with a
    shared data environment that provides integrated information from
    various Service legacy systems. This type of logistics capability will
    provide the joint warfighter with real-time situational awareness and
    allow us to control and use our logistics assets with greater
    effectiveness and efficiency.
        Continued improvements in all facets of information capabilities
    are dependent on acquiring, operating, and protecting computer
    networks. U.S. Space Command has the responsibility for Computer
    Network Operations. The command's main areas of effort include
    reassessing the command and control relationships among Computer
    Network Attack (CNA) forces, re-evaluating CNA request and approval
    procedures, developing a Computer Network Defense mission needs
    statement, acquiring improved indications and warning capabilities for
    impending information attacks, and focusing all actions toward an
    effects-based capability.
    Force Requirements
        Developing better ways to identify, validate, and acquire new
    systems is essential to effective transformation. To improve the
    generation of joint warfighting requirements, we initiated actions two
    years ago to improve the Joint Requirements Oversight Council process.
    Since then, we have established processes to develop, test, and approve
    joint operational concepts and architectures that will be used to
    establish and enforce standards for system interoperability.
    Additionally, we now have a process to implement joint experimentation
    recommendations and have greatly improved our ability to assess and
    implement transformation beyond weapon systems and materiel.
        As discussed previously, among the most important non-materiel
    initiatives is the development of a standardized Standing Joint Force
    Headquarters model. This headquarters will serve as a tool for
    combatant commanders to improve joint warfighting and better integrate
    Service-provided forces. The development of this model will require us
    to identify baseline command and control systems and standardized
    organizations, tactics, techniques, and procedures.
        Another important initiative is focused on interagency cooperation.
    Threats to U.S. national security in the 21st century will, more often
    than not, require an interagency response, especially when they involve
    homeland defense. As a result, missions and responsibilities will
    transcend agency boundaries, making a decisive and timely interagency
    response to crises increasingly important. We recognize the need,
    therefore, to work closely with non-DOD agencies of the U.S. government
    on training, crisis planning, and coalition building.
        In terms of materiel changes, the improved accuracy and
    effectiveness of precision-guided munitions and our ability to match
    them to a variety of delivery systems have significantly reduced
    collateral damage and non-combatant casualties while greatly increasing
    the combat effectiveness and versatility of our forces. They have
    become integral to the plans prepared by the combatant commanders;
    therefore, we must ensure our requirements determination and
    acquisition processes meet this warfighter need. As we continue
    experiments to evaluate transformational technologies, we will look for
    weapon systems with similar high-payoff potential.
        One area with such a high-payoff potential is theater missile
    defense. Analysis over the last decade has consistently validated the
    combatant commanders' requirements for a family of missile defense
    systems. There is a specific requirement for land- and sea-based, lower
    tier, terminal phase missile defense systems because of their
    capability against the predominant and growing short-range ballistic
    missile threat. The fielding of the Patriot PAC-3 is an important first
    step, but it only partially covers potential threats. We are,
    therefore, in the process of assessing a wide range of options for
    protection of sea- and airports of entry. Additionally, we will
    continue to evaluate methods of broadening terminal-phase defense
    beyond a single tier to improve operational flexibility and the ability
    to achieve a sufficient probability of shootdown against the entire
    range of missile threats.
                     critical issues for the u.s. military
        As you consider the specifics of the fiscal year 2003 Defense
    Budget, I would like to bring to your attention a number of issues that
    are critical to maintaining today's quality force and meeting
    tomorrow's challenges. The most important of these is supporting our
    troops.
    People
        Success in all missions depends on our number one asset--our
    people. We must continue to keep faith with both our active and reserve
    component members, as well as our retirees. We must keep their trust
    and confidence by ensuring they are compensated commensurately with the
    responsibilities they shoulder, the risks they face, and the hardships
    they bear. We also need to ensure they have the tools and facilities
    they need to accomplish their missions. Collectively, the Joint Chiefs
    are committed to five quality of life initiatives: pay and
    compensation, health care, unaccompanied and family housing,
    infrastructure and workplace improvements, and those base support
    programs that comprise our community services. This past year's
    legislation was a large step in the right direction. We are grateful
    for the hard work of the Administration, Congress, and Department of
    Defense in raising the standard of living and improving the quality of
    life of our Service members and their families, including the continued
    Congressional support of the Secretary of Defense's initiative to
    reduce out-of-pocket housing expenses to zero by fiscal year 2005.
        I am also grateful for the strong support of Congress in providing
    a comprehensive, world-class health care program for our active duty
    and retired service members, and their families. We must now ensure the
    military health care system is fully funded. In view of today's
    security environment, we also must develop and fund adequate vaccine
    production capability and immunization programs, as well as medical
    surveillance systems that provide early warning of potential threats,
    enhanced medical data collection, and tracking processes to support the
    medical aspects of consequence management.
        Congressional support of our program to eliminate substandard
    family and unaccompanied housing has been outstanding. The Services
    have made great strides and, for the most part, remain on track with
    their plans to achieve this goal by 2007.
        We must also commit to reversing the decay of infrastructure and
    workplaces. Within civilian industry, the replacement, restoration, or
    modernization of buildings is accomplished in roughly a 50-year cycle.
    By comparison, the rate of investment in DOD infrastructure has fallen
    to a level that requires over 100 years for recapitalization. The
    fiscal year 2003 President's Budget significantly increases our out-
    year infrastructure investment and puts DOD on a path to approach a
    recapitalization rate of 67 years by 2007. We need to ensure resources
    are available in the future to adequately sustain, restore, and
    modernize our facilities.
        Finally, community services is a critical quality of life area that
    is, perhaps, the easiest to overlook, but dollar for dollar, is one of
    the most effective programs the Services provide. Based on the 2001
    Quadrennial Defense Review, we are reviewing existing community
    services programs and policies to ensure we meet the needs of the
    changing demographics of military families and keep pace with modern
    requirements.
        Providing better quality of life for our service members and their
    families directly affects recruitment, retention, and family welfare.
    Personnel and family readiness are inseparable from operational
    readiness. We have made significant investments over the past several
    years in the quality of life of our soldiers, sailors, airmen, and
    marines and their families; we must maintain the positive trends we
    have worked so hard to establish.
    Readiness, Modernization, and Recapitalization
        The war on terrorism has provided fresh validation of previous
    readiness assessments. Our forward deployed and first-to-fight forces
    remain capable of achieving the objectives of our defense strategy.
    However, we remain concerned about the effects of a sustained high
    operations tempo on the force, strategic lift and sustainment
    shortfalls, and shortages of ISR assets, as well as the challenges
    associated with the WMD threat, antiterrorism, and force protection.
    Additionally, in some locations, we face operational limitations that
    may affect mission success. Usage restrictions and a shortage of
    training ranges and operating areas contribute to lost or degraded
    training opportunities, resulting in reduced operational readiness. I
    am especially concerned about maintaining an appropriate balance
    between environmental and readiness concerns. To that end, the Service
    Chiefs and I join the Secretary of Defense in requesting your support
    for the Readiness and Range Preservation Initiative. Overall, recent
    funding increases have helped address critical readiness concerns, but
    we must maintain a proper regard for both near- and long-term readiness
    initiatives.
        One avenue for maintaining that balance is through modernization of
    our existing forces. The development and procurement of new weapon
    systems with improved warfighting capabilities leads to incremental
    improvements that cumulatively may result in transformative changes.
    Through a sustained and carefully managed process, we can reap the
    benefits of such an incremental approach while also pursuing more
    radical technological changes. Modernization thus serves as a hedge
    against both near-term readiness shortfalls and failures of unproven
    technologies.
        I also remain concerned about the recapitalization of older assets.
    Our older fleet is taking its toll in increased operational costs and
    reduced equipment availability rates. For example, between fiscal year
    1995 and fiscal year 2001, the Air Force's F-15C/D aircraft, at an
    average age of 17\1/2\ years, have experienced a 28 percent increase in
    cost per flying hour (constant fiscal year 2000 dollars) and a decrease
    from 81 percent to 77 percent in mission capable rate. Similarly, the
    Navy's EA-6B aircraft, at an average age of 20 years, have experienced
    an 80 percent increase in cost per flying hour (constant fiscal year
    2000 dollars) and a decrease from 67 percent to 60 percent mission
    capable rate. For the Army, the M2A2 Bradley Infantry Fighting Vehicle,
    at an average age of 10\1/2\ years, has experienced a 61 percent
    increase in cost per operating mile (constant fiscal year 2000 dollars)
    and a decrease from 95 percent to 93 percent in mission capable rate.
        We cannot continue to defer procurement as we did over the last
    decade. Rather, we must accelerate the replacement of aging systems if
    we are to sustain our ability to meet near-term challenges and all of
    our 21st century commitments. In conjunction with the Service staffs,
    we have conducted a steady-state procurement estimate that concluded
    the DOD should spend $100-$110 billion (fiscal year 2001 constant
    dollars) per year to recapitalize today's force structure. The fiscal
    year 2003 President's Budget significantly increases current and out-
    year procurement investment and puts DOD on a path to approach steady-
    state procurement. We need your support to continue this real growth in
    procurement accounts.
    Strategic Mobility
        Over the past several years, DOD has worked diligently to overcome
    the shortfalls in strategic lift capability identified in the Mobility
    Requirements Study-2005. The events of September 11 and the subsequent
    U.S. military response once again highlighted a requirement to deliver
    combat forces and their support elements quickly anywhere in the world.
        Our strategic lift forces proved themselves capable of supporting a
    fight in a landlocked country with limited infrastructure, 8,000 miles
    from the United States; however, we also identified deficiencies that
    call for resolution. For example, we do not have a sufficient number of
    C-17s to meet our strategic lift requirements, so procurement of
    additional aircraft remains our top strategic mobility priority. Our
    tanker force has significant shortfalls in numbers of available
    tankers, air crews, and maintenance personnel. Additionally,
    improvements in speed and capacity for inter-theater sealift are not
    expected to develop in the commercial marketplace so the government
    will be required to make research and development investments if we are
    going to derive benefit from emerging technologies in this area.
    Personnel Strength
        The domestic and overseas commitments of the war on terrorism, when
    coupled with other ongoing commitments, have stretched our active
    forces. These commitments also have the potential to stress our Reserve
    Component forces and their civilian employers who are sharing precious
    people resources who are vital to continued economic recovery. As we
    move forward in the war on terrorism, the Services will continue to
    review their end-strength requirements. At the same time, we must
    examine our tasked missions to ensure we are using our uniformed
    personnel only where military personnel are needed to do the job. We
    will assess missions, technology, and force structure as part of our
    transformation efforts, to determine the optimal size of the force
    required to meet all challenges, now and in the future.
                                   conclusion
        I look forward to working closely with Congress as we progress
    toward these goals. We face adversaries who seek to destroy our way of
    life. In response, your Armed Forces will not rest until we have
    achieved our part of the victory in the global war on terrorism. At the
    same time, improving the joint warfighting capabilities of our Armed
    Forces and transforming those forces are essential if we are to prevail
    over the ever-changing threats and challenges of the future.
        In pursuing these goals, we face tough, complex issues--with no
    easy answers. It is understandable that reasonable people can disagree
    on both the substance of and the solutions to those issues. The great
    strength of our form of government is the open dialogue engendered by
    such disagreements, and one of the privileges of my position is the
    responsibility of providing military advice to aid that dialogue. The
    men and women of our Armed Forces, at great personal risk, are doing a
    superb job. We owe them our best as we face these challenges. Thank you
    for the opportunity to present my views and your continued outstanding
    support of our soldiers, sailors, airmen, marines, and coastguardsmen.

        Senator Inouye. I thank you very much, General Myers.
        I am certain all of us are aware that members of this
    subcommittee are concerned about the status of systems such as
    Commanche, the Crusader, the Osprey, the F-22. But on the front
    pages of every morning paper and very likely in the headlines
    speak of this new massive threat, terrorist threat against
    America. From the information you have received, Mr. Secretary,
    is there anything you can tell us as to the nature or the
    magnitude of this threat?

                               TERRORIST THREATS

        Secretary Rumsfeld. Mr. Chairman, I can. First as to the
    nature. Last year when we were revising our strategy we moved
    from a threat-based strategy to a capabilities-based strategy
    because it was clear that threats are going to come at us in
    ways that go for vulnerabilities. That is to say, we are less
    likely to be attacked against our Army or our Navy or our Air
    Force directly because it would be expensive for people to try
    to develop those capabilities and they serve a great deterrent
    effect. We are more likely to be attacked through asymmetrical
    vulnerabilities--our space assets, cyber attacks, our
    dependency on electronics as an advanced, technologically
    advanced country, terrorist attacks, ballistic missiles, cruise
    missiles, things that go for seams in our circumstance as a
    free people, the very fact that we are a free people and we do
    not care to live in a repressive society where people are not
    allowed to get up in the morning and go where they want and say
    what they want and children go off to school and we can expect
    them to come home safely.
        So we have to expect that the asymmetrical advantage of a
    terrorist is that he can attack at any time, at any place,
    using any conceivable technique, and it is physically
    impossible to defend at every time, in every place, against
    every conceivable technique. There is no way to do it. The only
    way to deal with those threats is to go after them where they
    are, and that is why the President's global war on terrorism is
    based on that principle that we have to find the global
    terrorist anywhere in the world and we have to stop nations
    from providing safe haven for them.
        With respect to the nature of the weapons, there is no
    question but that we will continue to be surprised in the sense
    that who would have--if you think about taking one of our
    airliners filled with our people and using it as a missile, to
    fly it into the World Trade Center or the Pentagon, that is a
    new technique of terrorism. We can expect other new techniques
    of terrorism.
        The problem I see, and it is a very serious one, is that
    there has been a proliferation of weapons of mass destruction
    and the terrorist networks have close linkages with terrorist
    states, the states that are on the worldwide known terrorist
    list--Iraq, Iran, Libya, Syria, North Korea, one or two others.
    Now, those countries have been developing weapons of mass
    destruction for some time. They are testing and weaponized
    chemical and biological weapons. They are aggressively trying
    to get nuclear weapons. We know that.
        I guess the second part of the question you posed as to the
    magnitude is I think realistically we have to face up to the
    fact that we live in a world where our margin for error has
    become quite small. In just facing the facts, we have to
    recognize that terrorist networks have relationship with
    terrorist states that have weapons of mass destruction and that
    they inevitably are going to get their hands on them and they
    would not hesitate one minute in using them.
        That is the world we live in. Can we do that? Yes, we can
    live in that world. We have to rearrange ourselves here at
    home. We have to rearrange ourselves worldwide. We have to
    recognize that our warning--we are going to be living in a
    period of limited or no warning because of the asymmetrical
    advantages of the attacker as opposed to the defender. We have
    to recognize that the word ``surprise''--the only thing we
    ought to be surprised about is that we are surprised when we
    are surprised.
        If a terrorist can attack any time, any place, using any
    technique, that advantage is there. The al Qaeda training camps
    in Afghanistan trained hundreds of these people. They are
    spread across the globe. They are in our country and they are
    very well trained. We have seen their training manuals. They
    are well financed. They are still getting money.
        We are putting pressure on them all across the globe,
    trying to shut down their bank accounts, trying to make it more
    difficult to travel, more difficult to raise money, trying to
    make it more difficult for them to recruit and retain their
    people. But it is a difficult task. It is taking all elements
    of national power and it is the hand we have been dealt with
    and we are hard about it.
        Senator Inouye. There is nothing specific as far as your
    information is concerned?

                           SPECIFIC TERRORIST THREATS

        Secretary Rumsfeld. Mr. Chairman, I have got so many
    specifics in my head. I get a daily briefing every morning from
    the fused intelligence supposedly from our intelligence-
    gathering agencies. I read it. In every case there are a series
    of threats, specific in a few cases, general in other cases,
    not specific as to time, not always specific as to location,
    rarely as to location, but more categories. If you add them all
    up, they end up in the hundreds.
        What we have to do is see that they are distributed to the
    people who have responsibilities, and so they go out to our
    combatant commanders who have force protection responsibilities
    so that they can use their best judgment as to whether, for
    example, to take a ship and get it out of port if there is a
    risk to that ship. Department of State from time to time draws
    down their Embassy personnel.
        But the odds are that on any given day nine-tenths will be
    walk-in traffic, some people trying to find out how we will
    respond. We know for a fact that from time to time we get a
    threat warning, not because there is a threat, but because the
    people issuing the threat warning want to see what we are going
    to do. They want to learn how we respond to that kind of a
    warning and they jerk us around, try to jerk us around, and
    test us, stress our force in a way.
        I always have lots of specifics, but needless to say I
    cannot discuss specifics here in an open forum, and it is not
    really the nature of my business anyway. It is more the
    intelligence and the Federal Bureau of Investigation (FBI)
    side.

                           INVESTMENTS IN NEW WEAPONS

        Senator Inouye. Before my time expires, I just wanted to
    make certain the record is clear that as far as investments in
    weapons systems and other procurement items I believe the
    Army's share in fiscal year 2003 is about $19 billion, the Air
    Force is about $38 billion, and the Navy is about $38 billion.
    So that would make Army 5 percent and the Navy and Air Force 10
    percent.
        Looking at the chart there, one might get the impression
    that the bulk of the money went to the Army and I think I would
    just want to clarify that.
        Secretary Rumsfeld. You say the bulk of the money went to
    the Army?
        Senator Inouye. No, one might get the impression.
        Secretary Rumsfeld. Well, if you could put up the other
    chart, please, Larry.
        Senator Inouye. Am I wrong that the Army's investment is
    $19 billion for fiscal year 2003 and the Air Force and Navy $38
    billion?
        Secretary Rumsfeld. I think that that is not apples to
    apples, no, sir. I would have to check it.
        Here is the indirect fires chart that shows the investment
    in artillery, the Paladin artillery piece, the Crusader, and
    then the Future Combat System coming in the outer year. The top
    of that chart are all rocket systems, but all of those are
    investments designed to enable the Army to provide indirect
    fires for combatant commanders.
        Do you want to answer the question of the chairman?
        General Myers. Mr. Chairman, I do not have the procurement
    numbers for the Army, but the Army increase from 2002 to 2003
    was $10 billion, the Navy-Marine Corps overall increase was
    $9.5 billion, and the Air Force increase was $12.7 billion.
        Senator Inouye. What is the total amount for this 2003
    fiscal year.
        General Myers. For the Army, sir?
        Senator Inouye. Yes.
        General Myers. $90.9 billion.
        Senator Inouye. What is the Air Force?
        General Myers. $107 billion. That does not include any
    money that would come to them through the Defense Emergency
    Response Fund (DERF).
        Senator Inouye. I am talking about the investments, not the
    total budget.
        General Myers. Sir, I am sorry, we do not have that number
    with us.
        Senator Inouye. Senator Stevens.
        Senator Stevens. Thank you very much.
        Mr. Chairman, I appreciate your answer to the questions I
    raised. I still have a problem about the timing of the decision
    and I think we ought to have some informal meetings. If we had
    been on time with our bills this year--and because of 9/11 we
    started off behind time, as we all know. But hopefully we can
    get on time next year. But if we were on time, your bill should
    be on the floor by at the end of April and passed some time by
    May.
        I think we should not have decisions coming out of a
    planning group like you have that do not phase into the budget
    of the President. If there is going to be a cancellation, I
    think it should be discussed prior to the time when the
    President prepares and presents his budget in the spring.
    Otherwise we lose out.
        I just make this statement to you that we lived through a
    period of time when there was a group of people in the Congress
    who did not like this generation request but they are all for
    the next generation request. We had to fight C-17 three times,
    we had to fight the V-22 three or four times. We have faced
    problems with every major system in its infancy, and to have
    one that was almost mature like Crusader cancelled I think is
    going to lead to a whole series of problems if we are not
    careful.

                      COUNTERTERRORISM FELLOWSHIP PROGRAM

        Let me ask you this question, though, specifically. We
    provided $17.9 million for a regional defense counterterrorism
    fellowship program in the 2002 budget. It is my understanding
    the Department has not implemented that program. Senator Inouye
    and I when we went to Indonesia recently spent a lot of time
    with their military and their government. It is very clear that
    the new dialogue between our military people and the military
    people in Indonesia is very productive. But we created that
    fund primarily with Indonesia in mind, but it has not been
    implemented. Can you tell me why it has not?
        Secretary Rumsfeld. Senator, we very much favor that fund
    and, as you know, are anxious to be of help with the CT
    fellowship as one of the tools to help countries develop their
    indigenous capacity to deal with the threat of terrorist
    networks. It is in the process of being implemented, as I
    understand it, and we favor it, we are for it, and certainly
    the country you just visited is one of those countries that
    would be an appropriate beneficiary of that.

                    PERMANENT CHANGE OF STATION (PCS) MOVES

        Senator Stevens. Into a totally different area, over the
    years we have been concerned with the number of permanent
    change of station moves that military people are required to
    make. That causes service members and their families I think to
    decide to leave the military when they are moved too often. In
    last year's budget request the President requested a level of
    funding that would allow 52 percent of the force to move each
    year.
        Have there been any changes in the whole concept of the
    number of permanent change of station moves within the
    Department?
        Secretary Rumsfeld. Changes in the last 6 or 8 months, not
    to my knowledge, although I share your concern. I personally
    believe that it is unhelpful for a lot of reasons. It is hard
    on families, but it is also hard on a person's ability to learn
    their job if they are constantly being moved from one place to
    another. So I am hopeful that we will be able to lengthen tour
    lengths somewhat during this year and next year.
        Dr. Chu, the Under Secretary for Personnel and Readiness,
    has in fact been performing a study, which has not yet been
    supplied to us. The other piece of that is my personal view is
    that it would be also desirable for people to have the
    opportunity to serve somewhat longer in a total career, given
    the fact that people are living longer and that a number of
    people would like to not have to be up and out. I keep finding
    people who are outstanding noncommissioned officers who are in
    their 40's who are kind of shoved out at the top, as well as in
    the officer ranks.

                             CRUSADER DEPLOYABILITY

        If I could just go back quickly to Crusader, I believe you
    made the comment that Crusader was a mature system. The
    Crusader that is relatively mature, where there is a prototype,
    is 60 tons. The one that the Army is working on is a downsized
    one, down to 40 tons. They do not know if they can do that, but
    they believe they can get it down there. There is no prototype
    yet for that.
        Even going from 60 to 40 tons, it is not really 40 tons. It
    is really 97 tons. If you want to take a single tube with the
    fuel and the people and the armor and the supply vehicle that
    has the ammunition in it, what you need to fight with a
    Crusader, it is not 60, it is not 40, it is actually 97 tons.
    To take a battalion of Crusaders, if it were ever to happen, 18
    tubes, and put them into a battle in a landlocked country--you
    would have to fly it in, obviously--it would take something
    like 60 to 64 C-17's, according to TRANSCOM, Transportation
    Command. It is half of the entire C-17 fleet to get in one
    battalion of Crusaders, 18 tubes, into a battle.
        That assumes you have got airports that are safe and you
    can unload. Then you have got bridges and roads that you can
    take that heavy equipment and take it from the safe airport
    into the battle. That is a tough task.

                                  PCS FUNDING

        Senator Stevens. With regard to the change of station--
    thank you for that comment, Mr. Secretary--General Myers, we
    reduced the PCS funding for 2002 precisely because of the
    complaints we were having, we were receiving, about the number
    of moves that personnel, military personnel, are having to
    make. How have you adjusted the military to meet that
    reduction?
        General Myers. Senator Stevens, as you know, I think the
    services are each taking actions to respond to that, that
    budget decrease. The joint staff is part of the group that is
    led by Dr. Chu that is reviewing this whole process to come
    back and talk about what the appropriate amount is and we will
    continue to stay engaged in that. I know the services are
    actively engaged and I agree with the comments that the
    Secretary made.
        Senator Stevens. I think my time is up, but I will just
    make this. We are approached mainly by married couples, both in
    the service, with children. They are established in one base
    and then all of a sudden everybody has to move, the children
    change schools in the middle of the school year. There just
    does not seem to be the focus on the individual families'
    problems when that happens. But we hear about it. I assure you
    we hear about it, particularly with the families that have
    multiple children, and some of them up our way have four and
    five kids in their family and that is a massive thing, to move
    a family and children in the middle of a school year and put
    them in another place, particularly if you do it every 2 years.
        We just think that the policies have not changed as the
    military has changed, because we remember a fully single
    military. I remember going with Senator Hollings over in
    Germany when there was not one single enlisted person that had
    an accompanied tour authorized. Now they all have accompanied
    tours and to have that changed every 2 years is just, I think,
    is outmoded.
        I would hope you would address that because I hear more
    about that at home from military people than I think any other
    thing, is the move in the middle of the school year. I urge you
    to review that and see if there is not some way to modify the
    policy as a whole throughout the Department.
        Secretary Rumsfeld. Thank you very much.
        Senator Inouye. Senator Cochran.
        Senator Cochran. Mr. Chairman, thank you.
        As you observed in your testimony, the Senate Armed
    Services Committee has recommended an $800 million cut in the
    missile defense programs. Obviously this is going to slow down
    or in some areas maybe cancel programs that this administration
    has been supporting. Particularly I am concerned about theater
    programs that are now in the process of the last stages of
    development and in some cases being fielded to protect troops
    in the field and assets overseas that are located in areas
    where there is a very real threat of missile attack.
        To what extent do you think we should seriously consider
    trying to restore these funds on the floor of the Senate or in
    conference with the House?

                            MISSILE DEFENSE FUNDING

        Secretary Rumsfeld. Well, I am certainly hopeful that the
    funds will be restored. We now have the Anti-Ballistic Missile
    (ABM) Treaty will be behind us in June. We will for the first
    time be able to go out and test and experiment with a variety
    of things that had been inhibited by the treaty in prior
    periods. We do not have a set of conclusions, but we clearly
    need to invest the money in theater.
        Of course, ``theater'' depends on where you live. This is
    our theater and if our deployed troops are overseas that is a
    theater as well. We do need to be able to address all of that
    spectrum of issues with respect to ballistic missiles.
        You know, these things can be launched from ships at
    relatively medium distances off our shores. It could be
    launched from various locations at our friends and allies and
    deployed forces. The missile technologies are being
    proliferated around the globe. North Korea has been active
    helping all the states, the terrorist states I mentioned
    earlier, develop their ballistic missile programs.
        We also have to recognize the risk from cruise missiles. As
    I said earlier, we have to recognize that that is the kind of
    thing--terrorism, cyber attacks, the kinds of missiles with
    weapons of mass destruction we have talked about--that our
    country is at risk from.

                 SPENDING TO DIRECTLY DEFEND THE UNITED STATES

        Senator Cochran. One of the statements that was made this
    week that is very alarming to me is the suggestion by the FBI
    Director that it is inevitable that we are going to have
    further terrorist strikes against the United States and maybe
    even some of the kind that have been seen in Israel. To what
    extent does this budget provide funding for the Department of
    Defense to be engaged and actively involved in defending
    against these kinds of attacks against the United States and
    our people?
        Secretary Rumsfeld. It is very difficult to get an exact
    number, but the defense establishment of course is intimately
    working with the Coast Guard that deals with our coasts and our
    ports. We have been providing the combat air patrols over the
    United States. We have a great deal of funds in for force
    protection around the world. We have funds in the budget for
    intelligence-gathering, which contributes significantly to
    that. Across the Government it is a large number that is being
    spent.
        Do you want to--well, I will take a look here. Yes, this
    does not have a specific number, but it is a very difficult
    thing to pull all those threads and characterize them as in
    that particular category, but it is a great deal.

                                  SHIPBUILDING

        Senator Cochran. It is my hope, too, that we will observe
    the importance of the amphibious forces and other naval assets
    that were involved, particularly in the very early stages of
    the war in Afghanistan, bringing planes and other assets to an
    area where we could actually get engaged in an effort to
    prevail in that theater. Obviously we do not have enough money
    in the budget to solve all of the needs of all the defense
    systems and programs in all the services, but I could not help
    the other day being impressed by the Chief of Naval Operations,
    the Secretary of the Navy, the Commandant of the Marine Corps,
    talking about how old a lot of our amphibious assets are.
        The average life of four different classes of ships is 33
    years. To accelerate the LPD-17 program, for example, seems to
    be a matter of some urgency. Do you agree with that and would
    you support funding to try to address that problem?
        Secretary Rumsfeld. Senator, we have completed a portion of
    a shipbuilding study and there is no question we are going to
    need more ships than we currently are on a trajectory to have.
    The actual mix of those ships is a complex one and it is not
    clear to me that I would want to answer that question without
    getting the Department of the Navy to sit down and go through
    with a good deal of granularity precisely what they think the
    proper mix of ships ought to be.
        We know the total number has to go up and, while the
    average age of our Navy is not ancient, it is relatively young,
    which is the reason the Navy made the tradeoff decision it did
    for this year to have a lower shipbuilding budget than any of
    us would have wanted, they felt that there were more urgent
    needs they needed to address, but they then step it up in the
    period immediately following 2004--2003, I should say.
        I do not doubt for a minute that, because of your correct
    point that the categories of amphibious ships are in fact older
    than the total Navy, that they ought to be looked at as
    possibilities for the numbers of ships to be built in the years
    immediately ahead.
        Senator Cochran. Thank you, Mr. Chairman.
        Senator Inouye. Thank you.
        Senator Feinstein.
        Senator Feinstein. Thank you very much, Mr. Chairman.
        Good morning, Mr. Rumsfeld.
        Secretary Rumsfeld. Greetings.

                                 STRATEGIC LIFT

        Senator Feinstein. Two questions for you, then one for the
    General. I want to continue the discussion of strategic lift.
    It seems to me that that is a real shortfall that we have. You
    spoke of it in your written--or wrote of it in your written
    testimony on page 24. General Franks has testified as to the
    shortage. Admiral Blair says that one of his great shortcomings
    was the absence of both air and sea lift.
        In the budget are 12 C-17's for 2003 and 15 being built in
    2002. I am prepared to support you on the Crusader, but it
    seems to me that more ought to go into the lift area. It takes
    us so long to get adequate forces into any theater that we
    really ought to beef this up more than we have.
        Would you comment?
        Secretary Rumsfeld. You are certainly correct, Senator
    Feinstein. Lift is a subject that comes up every year as we are
    working with the Air Force and the Navy and the Army. There is
    a competition for those assets. We are going to have to improve
    and strengthen our capability in that area. What you have to do
    is make tradeoffs and judgments. The budget we have before us
    for the C-17 is what we concluded was an appropriate balance,
    given the balancing of all those risks.
        General Myers, do you want to comment on it?
        Senator Feinstein. Yes, it is a very small number of C-
    17's. I am looking at the Air Force aviation. Fifteen in 2002
    and 12 in 2003.
        General Myers. Right, Senator Feinstein, that is correct.
    But we do have a multi-year procurement program here that buys
    60 aircraft over the period, over the period that we are
    talking about. I think it takes our total of C-17's to 180.
        Senator Feinstein. Over what period, General?
        General Myers. I think that is through--it is for 6 years.
        Senator Feinstein. 180?
        General Myers. To 180 C-17's.
        Senator Feinstein. Total?
        General Myers. Total at that point. I think they are
    working on procurement increments beyond that as well. So when
    you combine what we are doing in the C-17, we are buying new,
    what we plan to do with the C-5 aircraft as well, what we have
    done with shipbuilding over time, where our strategic lift in
    sealift is more robust today than it was 10 years ago when we
    did Desert Storm, I would agree with the Secretary, I think we
    have struck the right balance here.
        But this is something that the service chiefs, the
    combatant commanders, have all said, based on the last mobility
    study, that we need 54.5 million ton-miles per day out of our
    strategic lift, and that is the goal we are working towards.
        Secretary Rumsfeld. I would add that our allies frequently
    are without lift as well. So when we try to work with
    coalitions we are continuously pinged for assistance with
    respect to airlift. They also need to address this issue.
        Senator Feinstein. Well, it is just as I look at this this
    is a very high priority item and I would rather see some funds
    transferred from other places into this, so at least when we
    move we could move in a much more timely way really than we
    seem to now.

                      NUCLEAR POSTURE REVIEW AND FIRST USE

        Now, having said that, Mr. Secretary, I cannot resist the
    opportunity, because I have written you two letters on the
    subject and have not had a response, and that is on the nuclear
    posture review. I viewed with substantial consternation the
    leak that was carried in the Los Angeles Times, which pointed
    out that certain rogue states were targeted for a first use of
    a nuclear weapon if we did not like what they were doing.
        Now, I can understand that with respect to biological and
    chemical weapons perhaps. But China was also added to that list
    with respect to any cross-straits military activity. I would
    view that as one of the worst things we can possibly ever do in
    terms of its repercussions across the world. I am not alone in
    this. Bruce Blair in his writings points out that here is
    America, the world's juggernaut in military, economic, and
    domestic terms, inducing the rest of the world to emulate U.S.
    policy and lift the 50-year-old taboo against the use of
    nuclear weapons.
        I am very puzzled by it. I have asked you in two letters if
    I might have a more in-depth response to why this was done at
    this particular point in time, because I think it is just
    counterproductive. It says to everybody else: You better start
    building your supply of nuclear weapons. And if the United
    States is going to do this, why should we not countenance doing
    the same thing?
        If you could respond, I would appreciate it.
        Secretary Rumsfeld. You bet. If we have got two letters
    from you that have not been answered, I will get that fixed
    promptly. I apologize.
        Senator Feinstein. Thank you very much. I appreciate it.
        Secretary Rumsfeld. With respect to this subject, the
    document you are talking about is highly classified. I do not
    tend to get into details with it. The way you have
    characterized it is not accurate. That is to say, the article
    that you were referencing your comment off, to the extent it is
    roughly what you have said, is not accurate.
        The Nuclear Posture Review I think it is correct to say--
    and General Myers, I would be happy to have you chime in here--
    I think it would be accurate to say that the recently concluded
    Nuclear Posture Review does not change the threshold for the
    use of nuclear weapons one bit. Clearly, the thrust of the
    quotations you were using suggested to the contrary.
        Senator Feinstein. Correct. So you are saying that among
    the states that were mentioned--I think there were seven or so
    in the Times article that I read--and the addition of China and
    the specific reference to a cross-straits military action would
    not bring about a nuclear response from us, is that correct?
        Secretary Rumsfeld. What I am saying is, number one, it is
    a highly classified document which I do not talk about in open
    hearings. Number two, it--nowhere in it does it make judgments
    about when nuclear weapons would be used. Those are decisions
    for the President. Third, the single most significant thing in
    the Nuclear Posture Review, Senator, was the fact that the
    President made a decision to reduce offensive strategic
    operationally deployed nuclear weapons from thousands down to
    the 1,700 to 2,200 level. That is not something that anyone
    could characterize who has an ounce of judgment as something
    that is, if the article suggested it, as something that is
    lowering the threshold for the use of nuclear weapons or
    sending a signal to other nations that we would not want
    emulated.
        Senator Feinstein. Do not mistake me. I did not say that it
    was. That is good.
        Secretary Rumsfeld. I understand that, but I think the
    article you quoted had some of that in it. If I misunderstood
    you I apologize.
        Senator Feinstein. Well, I am not concerned about that part
    because I know the facts on that part. What I am concerned is
    this new little twist in there that I had never heard before. I
    really, respectfully, am not the only one. Many others have
    commented, including the Center for Defense Information.
        Secretary Rumsfeld. Well, I think I have said about all I
    can on that classified subject. Thank you.
        Senator Feinstein. Well, I appreciate a response or a
    classified briefing then perhaps.
        Secretary Rumsfeld. Sure. Let General Myers.
        General Myers. Senator Feinstein, let me just--and we have
    to be careful how far we go into this whole issue in this
    forum. But I might just say that the Nuclear Posture Review in
    terms of the threshold for use and that issue, the way we put
    together a so-called new triad actually would diminish the need
    to use nuclear weapons. That is the part we need to go into, I
    think, in another session, or maybe the letter can handle that.
        But I think the kind of work that was done in the Nuclear
    Posture Review actually makes it a lot less likely that we
    would ever have to resort to nuclear weapons to solve any----
        Senator Feinstein. Well, I appreciate that, and because
    this came out in California I have had a lot of people very
    deeply concerned about it. As a matter of fact, they know much
    more about this than they do about our approval of judges,
    which happens to be another resounding call. And there is
    really deep concern, and I think if it is wrong the record has
    to be corrected.

                            SITUATION IN AFGHANISTAN

        But I would like to go on before my time expires to one
    other quick thing, General. I am very concerned about the
    deterioration in Afghanistan. I am concerned about the reports
    that there is deterioration in the stability of the
    establishment of a new government. I am concerned by the
    skirmishes that are now taking place, which indicate to me a
    resiliency on the part of the Taliban and al Qaeda and that
    they will in fact try to come back if in fact they can come
    back.
        I am concerned that this budget may not reflect our best
    interests in terms of maintaining a long-term peaceful
    stability to enable a new government to develop, to enable a
    new military to develop, and to enable a country decimated to
    get back on its feet economically. This goes into something
    Senator Biden made comments about this, additional funds that
    he thought. I think there is a very strong feeling among many
    of us that it is to our interest to see that the country
    remains stable and that we have a peacekeeping force there to
    ensure it.
        Secretary Rumsfeld. Senator, I find that we did apparently
    answer your letter, but very recently and it may not have
    gotten into your hands yet.
        Senator Feinstein. I have not received it.
        Secretary Rumsfeld. Here is a copy of it.
        Senator Feinstein. Thank you.
        Secretary Rumsfeld. The situation in Afghanistan is
    complex. It is a country that has been at war for many, many,
    many years. It is a country that throughout its history has had
    clan fighting, it has had enormous drug trafficking and crime.
    On the other hand, there is a persuasive indicator that things
    are more stable there than they were, because refugees are
    returning. It is becoming a problem how many refugees are
    coming in. They are coming in from neighboring countries. The
    internally displaced people are moving back to their homes and
    into the cities. People vote with their feet. They are
    obviously saying to themselves: It is better there than where I
    am.
        So I think that as a key indicator the flow of refugees
    back into that country ought to tell us that it is certainly
    not stable like Washington, DC, or San Francisco or wherever,
    but for Afghanistan it is not bad.
        The humanitarian workers are able to get around for the
    most part. Big areas are reasonably secure. People get killed
    every once in a while, just like they do in the United States
    and Europe. It is nowhere near as stable as here, but it is a
    vastly better place than it was.
        I do not know what the situation will be with the
    government except that the interim government is in place, the
    loya jirga process is underway. They are going to go from an
    interim government to a transitional government in the period
    ahead. The skirmishes you refer to are correct. There are
    periodically mild dustups between the so-called warlords or
    regional leaders, for a variety of reasons. Sometimes it is
    fights between people over personal grudges from before.
    Sometimes it is over turf. Sometimes it is over control of a
    border.
        I do not know. I am told if you wanted to have as many
    peacekeepers in Afghanistan, given the size of the country, as
    we have per population or per square mile in Kosovo or Bosnia,
    it would be just over 100,000. The question is how do you do
    that proportionately. Even in those countries you still have
    some untidiness, Bosnia and Kosovo.
        We are not against an international peacekeeping force
    expanding. If that is what people want to do, it might be a
    good thing. There is no one opposing it. The problem is there
    is no one stepping up and wanting to do it. Indeed, the United
    Kingdom that led the first ISAF asked to be relieved. The Turks
    have agreed to come in if we give them assistance, which we are
    doing, but they have asked not to be extended. Some other
    countries are in the process of moving out of the current ISAF.
    If there were countries that were eager to take over and eager
    to come in and put peacekeepers in there, I am sure the Karzai
    government would be happy to have them.
        What we are doing is we are trying to find the terrorists
    around the world that are trained to kill innocent men, women,
    and children. That is a big task. It is an enormous task. We
    are going to have to keep on in Afghanistan until we keep
    finding more al Qaeda and Taliban and the ones that are in the
    neighboring countries.
        But in addition we are helping to train the Afghan army.
    The Germans are helping to train the Afghan police force. I do
    not know, I do not know what else one can do. You cannot do
    everything. You have to make choices. And the government is
    anxious to have an Afghan army and so we are helping do that.
    If other countries want to step forward and do the
    international security assistance force, I think that is fine.

                            U.S. ROLE IN AFGHANISTAN

        Senator Feinstein. But we are not, is that correct?
        Secretary Rumsfeld. What we are doing with respect to the
    ISAF is we have agreed to provide logistics, intelligence
    support, communications assistance, and last we have agreed to
    be a quick reaction force to assist the ISAF if they get in
    difficulty.
        Second, with respect to the second phase of the ISAF, we
    are the ones out with the donors conference trying to help the
    Turks raise the money so that they can take over the leadership
    of ISAF. We have agreed to do all the things we did with the
    British leadership and in addition we are now negotiating a
    memorandum of understanding with the Turkish government which
    will undoubtedly leave us in a position of providing even more
    assistance for the Turkish ISAF leadership than we did for the
    British. So we are doing quite a bit.
        Senator Feinstein. Thank you. My time is up. Thank you very
    much.
        Secretary Rumsfeld. Thank you.
        Senator Inouye. Thank you very much.
        Senator Bond.
        Senator Bond. Thank you very much, Mr. Chairman.
        Mr. Secretary and Chairman Myers, welcome. As a former
    Governor and as co-chair of the National Guard, obviously I am
    very much interested in the high level of involvement of Guard
    and Reserve forces in homeland security and it concerns me very
    much that the establishment of the Northern Command does not
    appear to have involved sufficient input from senior National
    Guard leaders. The adjutants general, the Governors, have a
    role in this and I think they ought to be able to participate
    at the high level.
        Do you envision incorporating the National Guard input from
    the States at the most senior level? To give you a hint of what
    I am thinking about, I have proposed legislation to make the
    deputy commander a representative of the National Guard. So I
    would appreciate it, General, if you want to respond to that.
        General Myers. You bet, Senator Bond. I think you raise a
    very important issue. As you know, this command does not stand
    up until October 1, so we are in the implementation planning
    phase, if you will, where issues like that are being discussed
    and trying to find the right way forward.
        I think you are right in your assertion that any command
    such as this is going to have participation from National Guard
    units and Reserve component units as well as active duty units.
    In fact, there will probably be a fairly heavy reliance on some
    National Guard capabilities. I do not think there is a
    question.
        The issue of whether or not you should have a senior Guard
    person in the hierarchy there I think is still being
    considered. My personal view is I think somewhere in that
    hierarchy that would be appropriate. I think we need to have
    that.
        Senator Bond. I think you have a real problem and, based on
    past experience, it is a very difficult one to solve. So we
    will look forward to working with you. But I am afraid that,
    from what we have seen, that only giving the appropriate rank
    to a member, to a leader of the National Guard, will solve the
    problem. If he does not have enough stars, they are not going
    to be paying any attention to him or her.
        General Myers. We are going to work all that. I think those
    are valid concerns, but I think they are concerns that the
    Secretary and I and the folks that are working this
    implementation plan, which we are right in the middle of, are
    going to work.
        Senator Bond. Thank you.
        Let me move to another one, either Mr. Secretary or Mr.
    Chairman. Recently it was discovered that a tail stress problem
    exists in the F-22 Raptor. It is already the Nation's most
    expensive fighter and the testing will be delayed as changes to
    the airframe are considered. Air Force officials said last fall
    they found certain high force maneuvers put unacceptable stress
    on the tail of the F-22.
        Given the fact the aircraft will cost over $200 million
    when completed and the overall program cost is over $60 billion
    and rising, as you are looking at the budget constraints is
    there consideration being given to adjusting the current
    planned buy of 339 aircraft?
        General Myers. I can talk a little bit about the fin buffet
    problem. I relied for a while on some articles in the press
    that turned out to be incorrect. I talked to General Jumpers,
    Chief of Staff of the Air Force, last week on this issue to
    find out what the issue was.
        When you have twin tails we know we have a buffet problem.
    We have it in the F-15 and you have probably ridden in the F-
    15. You can look behind you at high speeds and you can see the
    tails back there move. It is one of the phenomena.
        Senator Bond. I am scared to look back. I was worried
    enough just looking forward.
        General Myers. Me too, Senator. But even on the world-
    renowned and the great F-15 that is built in St. Louis there--
    --
        Senator Bond. Thank you.
        General Myers [continuing]. That I have several hundred
    hours in, even in that airplane we have this issue.
        On the F-22, I understand it is not even an issue yet. It
    is one of those things that they predict that at the edge of
    its service life out at 8,000 hours they might have a problem
    that affects the rudder back there on the fins, and certainly
    they are taking steps in the test program to characterize this.
        In terms of the numbers, I will let the Secretary handle
    that.

                     ADJUSTING F-22 PROCUREMENT QUANTITIES

        Secretary Rumsfeld. Well, this goes back to the question
    that Senator Stevens raised early on about this time line. As
    we have indicated, the Department of Defense, while you are
    working on the 2002 supplemental and the 2003 budget, we are
    working on the 2004 to 2009 budgets. As we do that, the defense
    planning guidance gets completed, which it now is, and in that
    there are a series of studies that are called for.
        If there seems to be no question about something, it goes
    in basket one and we may just say continue this or do this. If
    there is a question but we feel that the service or the joint
    staff or the OSD has not looked at some options, we take basket
    two and say come back with some options, but make sure this
    particular option is included. Then in basket three we say just
    come back with options; we don't have an option we want you to
    look at for sure. Last is a plan to deal with something.
        Now, there are dozens of things that have been lumped in
    one of those four baskets in the defense planning guidance.
    What happens during this period that you are working on 2002
    and 2003, we are working on 2005--correction, 2004 to 2009. All
    of those things are under review. As I said to Senator Stevens,
    I do not know that there is any way on Earth that this can--
    that we could do it any differently.
        We simply need that time to build the budget. We are
    reviewing what ought to be in that budget for 2004 to 2009.
        Senator Bond. Thank you, sir. The Navy has made readiness--
    --
        Secretary Rumsfeld. Could I? I am sorry to interrupt. I
    apologize. The question--the dilemma we face is let us say that
    in a month or two or three those studies come out and you are
    still working on our bill. Should we tell you then or should we
    wait until you have gone out of session in December and the new
    budget comes out? It is hard to know.
        Senator Bond. Mr. Secretary, I apologize. We are working
    under time constraints----
        Secretary Rumsfeld. Oh, I am sorry.

                       AVERAGE AGE OF AIRCRAFT AND SHIPS

        Senator Bond [continuing]. And I had a couple of questions
    I wanted to add. The Navy's near-term readiness emphasis has
    benefited depot maintenance, spare parts and ammunitions, but
    shipbuilding and tac air have been negatively impacted. I was
    recently told for the first time in the history of the Navy the
    average age of naval aircraft is older than the average age of
    ships.
        I am concerned that we are spending good money on aging
    platforms that have reached the end of their useful life, such
    as the F-14, which costs about twice as much to maintain as the
    F-18. The plan for retiring F-14's calls for replacing them
    with F-18's. Yet this year the DOD reduced the F-18 buy with no
    guarantee the shortfall would be made up in the coming years. I
    am very much concerned about it.
        I am told the Navy has a plan for adjusting tac air, but
    the overall shortfall in the Navy's shipbuilding and tac air
    account may limit it. Do you have a plan for improving the
    procurement of shipbuilding and tac air?
        Secretary Rumsfeld. Well, we do. In my opening statement I
    did not go through that portion, but in the written version we
    indicate what the plan is with shipbuilding. You are quite
    right, we do have to increase it in the forward year defense
    plan that we are currently working on and we intend to do that.
        Second, with respect to the tactical aircraft, you are also
    correct. As the age of those aircraft goes up, the cost of
    maintaining them, the difficulty of spare parts, is a very
    serious problem. When you go on a procurement holiday during
    the 1990's and you arrive in the year 2001, 2002, you have to
    pay the piper. One of the reasons the shipbuilding budget is
    lower is because the Navy made some tradeoff decisions and
    therefore the budget is as proposed.
        With respect to the F-18, I am told that we have a multi-
    year procurement contract and that the proposal we have in for
    2003 for 44, the multi-year contract commits the Navy to
    purchasing 48 plus or minus 6 aircraft, so we are well within
    the contract.
        Senator Bond. Thank you, Mr. Secretary.
        Senator Stevens [presiding]. Senator Domenici.
        Senator Domenici. Thank you very much, Mr. Chairman.
        Senator Stevens. Wait, wait, wait. My mistake. Senator
    Shelby.

                          MISSILE DEFENSE FUNDING CUTS

        Senator Shelby. Thank you, Mr. Chairman.
        Secretary Rumsfeld, Senator Cochran brought up the cuts in
    the missile defense program that you are very aware of and we
    are all going to be working with you to restore. What my
    concerns were in this area are the cuts, yes, but where were
    these cuts? Some of them were specific to the program. In other
    words, if you stop the critical development initiatives in the
    program, like systems engineering, system integration
    initiatives, and so forth, you are really going in the back
    door to kill missile defense as I see it. I think that is what
    some people would like to do.
        I appreciate your comments on that. I know that you are
    going to fight to restore those cuts. We are going to fight
    with you and I believe we will prevail at the end of the day,
    at least I hope so.
        Secretary Rumsfeld. Senator, thank you. You are exactly
    right, not only were the funds reduced, but the funds were
    reduced in a micro way----
        Senator Shelby. That is right.
        Secretary Rumsfeld [continuing]. That go directly to our
    efforts to have a broad-based research and development program
    across a range of possibilities, and they are particularly
    harmful because not only of the total amount, which is
    significant in and of itself, but the way it has been done.

                         SCIENCE AND TECHNOLOGY FUNDING

        Senator Shelby. Targeted. Thank you. Well, I look forward
    to working with you and others on the committee for this.
        Into another area, science and technology funding. DOD
    remains, Mr. Secretary, below the 3 percent funding target for
    science and technology research that you set. I believe--and we
    have talked about this before at these hearings--robust
    investment in fundamental science and technology is absolutely
    essential to transformation and future success.
        You have demonstrated your interest in transformation and
    are looking to future weapons. Science and technology is where
    so much of this comes from. Mr. Secretary, with that in mind,
    when will the Department of Defense meet the 3 percent goal and
    show a stronger commitment to basic science and technology
    research? How do we do it? I know we are talking about money,
    but we are also talking about priorities, are we not?
        Secretary Rumsfeld. Exactly right. It is a matter of
    priorities and it is in my view a reasonable goal to get up to
    the 3 percent level. Where we are this year is we are coming in
    with a proposal that is higher than last year's----
        Senator Shelby. It is.
        Secretary Rumsfeld [continuing]. Presidential request
    proposal. Now, as you know, what happens when the budget gets
    up to the Congress, it gets changed around quite a bit and
    things get put into that number that we had not requested and
    that we do not believe are directly headed towards helping the
    problem you have posed as to how do we develop these
    capabilities out 5, 10, 15, 20 years.
        Senator Shelby. That is a priority for you, is it not?
        Secretary Rumsfeld. Absolutely.
        Senator Shelby. The science and technology funding for the
    weapons of the future.
        Secretary Rumsfeld. Absolutely.
        I would have to go back and look, but my recollection is we
    are on a trajectory to get up to that 3 percent during this
    forward year defense plan.
        Senator Shelby. Could you furnish that for the record, if
    you would?
        Secretary Rumsfeld. Yes, sir.
        [The information follows:]

        While the Department continues to embrace the goal of
    achieving a level of funding for science and technology (S&T)
    that represents 3 percent of total obligational authority
    (TOA), the events of September 11th and nearer term military
    requirements have slowed our programmed achievement of that
    goal. The fiscal year 2003 President's Budget Request reflects
    S&T funding at levels over 2 percent across the future years
    defense program. The following table reflects the S&T funding
    levels through fiscal year 2007:

    ------------------------------------------------------------------------
                                                                    Percent
                        Fiscal year                        S&T       of DOD
                                                                      TOA
    ------------------------------------------------------------------------
    2003..............................................   $9,890.1        2.7
    2004..............................................   10,228.8        2.7
    2005..............................................   10,499.7        2.6
    2006..............................................   10,312.4        2.4
    2007..............................................   10,420.5        2.3
    ------------------------------------------------------------------------

        Senator Shelby. I appreciate that.
        Mr. Chairman, that is all I have.
        Senator Stevens. Senator Domenici.

                          COMPENSATING MILITARY PEOPLE

        Senator Domenici. Thank you very much, Mr. Chairman.
        Mr. Secretary, just by way of an observation, I have on a
    number of occasions in the past couple of weeks run into
    Americans who have walked up and want to say something to me.
    In the four instances that I am going to refer to they have all
    been people that wanted to tell me that their spouse was in the
    military and just yesterday that spouse was a marine pilot and
    the spouse was telling me that they had been married for 2
    years and how scared she was because for the first time he
    could not tell her where he would be, at least for a while.
        But then she volunteered and said how grateful she and her
    husband were for the pay which had increased so dramatically
    for her husband, a very experienced marine pilot, and for their
    housing allowance, which is the first time I had heard somebody
    walk up and mention it, and indicated that she hopes everything
    will go well for her husband and he was ecstatic about going to
    war, going off to do what he signed up to do.
        But more important, she said: I want to tell you that we
    think you care about us. I think that is happening to our
    military personnel across the world wherever they are. I think
    what they are doing and our concern through you and our
    President and the Congress is actually, it is hitting a real,
    real important kind of vein in these Americans who are serving
    us. I hope you know that already, but I think it is important
    that we share it with you because we get plenty of complaints
    and we share them with you.
        Secretary Rumsfeld. Sure. Well, I am pleased to hear that.
    You are right, there is nothing more important than the human
    beings who make up this great armed forces for us, and they do
    a wonderful job and they deserve to be appropriately
    compensated.

                             U.S. RELIANCE ON SPACE

        Senator Domenici. I want to talk a little bit here now
    about a memo that was circulated to senior Pentagon officials
    suggesting that the United States may be too reliant on space
    systems. I understand, I know that you have been a strong
    proponent of leveraging our advantage in space for military
    purposes and I too have supported research being conducted at
    places like the Sandia Space Vehicle Directorate at Kirtland
    Air Force Base next to Sandia Laboratories in Albuquerque.
        Could you elaborate as to why you have raised this concern
    about our overreliance on space and has that concern been
    prompted by operations in Afghanistan?
        Secretary Rumsfeld. Well, I do not know what memo you are
    referring to. Is it a memo that has my name on it?
        Senator Domenici. Yes.
        Secretary Rumsfeld. The concern that has been discussed--
    and I would like to have General Myers comment as well; he used
    to head up the Space Command, as you know. The concern that
    exists is we have a wonderful advantage because of our space
    assets and they began back in the Eisenhower period and they
    have contributed a great deal to our ability to do what we do.
    A great many of those assets are not hardened and therefore one
    has to ask the question, if you have that potential
    vulnerability how do you manage that?
        One of the things you can do is to harden them. The other
    thing you can do is to have certain types of redundancies and
    see that you are getting what you need from multiple sources,
    rather than single sources.
        Senator Domenici. Well, let me shift over to you, General.
    First of all, I never get a chance to thank you for what you
    do. I see him a little more than I see you, but I want to
    extend my thanks to you for the way you have been conducting
    yourself----
        General Myers. Thank you, Senator.
        Senator Domenici [continuing]. In behalf of our country.
        I know that you and the Secretary have highlighted the
    importance of the war in Afghanistan and investment to further
    the objective force. In particular, we have seen the importance
    of the interoperability of our air and ground units in
    Afghanistan for coordinating close air support and support from
    heavy bomber strikes.
        If I am not mistaken, General, the Theater Aerospace
    Command and Control Simulation Facility that is at Kirtland Air
    Force Base provides virtual simulation training for the Air
    Force crews and also joint exercise with the Navy and the Army
    as well. I raise this issue because I believe that NACCSF could
    rapidly enhance the kind of networked operation capabilities
    that you have mentioned in your testimony.
        So first, if you are familiar with that facility would you
    care to offer your comments about how you see it accelerating
    the interoperability of forces?
        General Myers. Senator, I am familiar, but not familiar
    enough to answer that directly today. So I will furnish that
    for the record.
        But on inter-operability----
        Senator Domenici. Yes, sir.
        [The information follows:]
       Theater Aerospace Command and Control Simulation Facility (TACCSF)
                  accelerating the interoperability of forces
        The Theater Aerospace Command and Control Simulation Facility
    conducts exercises in a shared, virtual battlespace environment such as
    DESERT PIVOT. The recent DESERT PIVOT exercise (13-17 May) included
    participants from all four Services. This exercise included horizontal
    and vertical integration of command and control assets in a simulated
    air war. Participants were both local (operating in-house simulations)
    and distributed (operating simulators at other sites around the
    country). This exercise provides an opportunity for the Services to
    practice command and control of military operations in a virtual
    environment. In this way crews can learn the capabilities and
    limitations of other Service systems as they could otherwise do only in
    combat.

        General Myers. Clearly there is, as I said in my opening
    statement, too, there is clearly no more important requirement
    than to ensure that when our forces go on a mission that they
    be able to coordinate among each other in a seamless way. We do
    a pretty good job of that today, but we can do a much better
    job. So simulation facilities and other capabilities like that
    are essential to that capability and to that requirement. I
    will just say that and then I will furnish for the record on
    the facility specifically in Albuquerque.
        Senator Domenici. I will submit two questions on that same
    issue to each of you.
        General Myers. Okay. Can I go back to the space piece for
    just a second?
        Senator Domenici. Indeed.
        General Myers. Once I got to Space Command and had been
    there just a little bit of time, it really did become apparent
    that the wonderful advantage we acquire from having preeminent
    space systems can also be an Achilles' heel if we do not watch
    it. I think the Secretary is absolutely right, we often do not
    even know if our systems are under attack. If you go back to
    this commercial satellite 5 or 6 years ago that failed and
    people's pagers did not work, doctors could not get to work,
    bank transactions could not be made, you could not swipe your
    card in a service station and expect to pay for the gasoline
    because it would not transmit through this one satellite.
        The frustrating thing to me was that until you investigate
    you do not know what the situation is. Are you under attack?
    Did you have a malfunction? What is it that is causing this
    problem?
        I think the 2003 budget and previous budgets have dealt
    with this in a fairly responsible way. But it is one of the
    things we have got to keep our eye on. If you look at our
    communications satellites, without going into a lot of detail
    in open hearing, they are fairly vulnerable. Global positioning
    system satellites, that signal is a very, very weak signal and
    vulnerable as well. On and on you go on our space systems.
        I do not think anybody is proposing that we do not need
    these space systems. We just need to take the step that makes
    sure that we know what is happening to them when they are on
    orbit and that we know the difference between malfunctions and
    attacks, that we, if you will, the term ``harden'' as the
    Secretary uses, if we harden them, make sure they have the
    ability to tell us what is happening so we can analyze them
    properly and take corrective action.
        Senator Domenici. There is a lot of research going on on
    hardening, is there not?
        General Myers. Absolutely, and that is all required. We
    have just got to pay particular attention because we get great
    leverage from these assets. We need to make sure that we
    protect them.
        Senator Domenici. Thank you.
        Thank you, Mr. Chairman.
        Senator Inouye [presiding]. Thank you very much.
        Senator Hollings.

                         GETTING MORE C-17'S AND PILOTS

        Senator Hollings. Thank you very much, Mr. Chairman.
        Mr. Secretary, I am somewhat hesitant on the question, not
    important to a Defense Secretary, but very important to
    Charleston, where we have the C-17's based. In fact, we had all
    the 141's and around the clock in Desert Storm they did an
    outstanding job. Right to the point, they are doing an
    amazingly outstanding job right at this minute in Afghanistan.
    Eighty percent going in there, you do not take a boat; you fly
    in, and it is the C-17's that are bringing them in.
        Now, we had 120 C-17's were planned and we were assigned in
    Charleston 54. General Myers or somebody can get these figures
    down. We had a beddown of the additional 60. In addition to the
    120, we were going to get 60 more, which we all support. But
    instead of getting more, we are cutting Charleston back from 54
    to 46 in order to look like assign where they have no C-17's
    whatever, but they do have some good political leaders in these
    areas, at Travis, Dover, March, Elmendorf, and Hickham.
        I know better than any because I have been out there over a
    month or so ago and shook hands again with all the pilots to
    thank them for what they were doing. We have an outstanding
    Reserve unit. In addition to the 437th, we have the 315th
    Reserve. Actually, the Reserve are flying a little bit more
    than 50 percent of the flights.
        Point: You do not have Reserve C-17 pilots at these other
    things, and it looks good on a sheet of paper, well, we just
    put a few around here to get the vote to get the extra 60. But
    you do not need that. Everybody is going to support you and the
    Defense and President in making sure we get the additional 60
    C-17's and it is not necessary, whereas you are going to
    unfairly penalize those who have been doing the outstanding job
    and been gearing up to get the additional ones and everything
    else on the one hand, but on the other hand not have the
    Reserve units.
        We do need more C-17 pilots at this minute. I have been
    trying to see if we can get more trained and into the regular
    Air Force. But look at those figures or have the staff look at
    those figures and say, heavens, just do not penalize the people
    who have been doing the good job. Just at least get us the
    original number of the 54, rather than--we got a briefing just
    the other day they are going to cut me back to 46 to make these
    reassignments, which I do not think are in the interest of the
    Defense Department because you do not have the Reserve pilots
    and you do not have the Reserve units for C-17's at all of
    these various fields and everything otherwise.
        So I would appreciate it if you could get someone on the
    staff to look at that.
        Secretary Rumsfeld. We will certainly do it, Senator. There
    is no question but the C-17 fleet is important to us and we
    will get back to you with some answers.
        Senator Hollings. I appreciate it.
        Thank you very much, Mr. Chairman.
        [The information follows:]

                                      C-17

        We recognize the vital role C-17 Reserve crews are playing
    in our war on terrorism. Currently, these C-17 crews are
    Reserve Associate crews based at McChord Air Force Base,
    Washington, and Charleston Air Force Base, South Carolina, and
    help us fulfill our airlift role by flying a large portion of
    the C-17 missions in Afghanistan. In light of this fact, the
    Air Force plans to utilize other Reserve units at Travis Air
    Force Base, California, Dover Air Force Base, Delaware, March
    Air Reserve Base, California, Elmendorf Air Force Base, Alaska,
    and Hickam Air Force Base, Hawaii. As part of our Mobility
    Force Structure brief presented to Congress on April 15, 2002,
    the Air Force plans to redistribute assets from current beddown
    locations. In doing so we plan to convert one C-5 Reserve
    Associate unit at Travis Air Force Base, California, and one C-
    5 Reserve Associate unit at Dover Air Force Base, Delaware, to
    C-17 Reserve Associate units. We plan to create a C-17 Reserve
    Associate unit at Elmendorf Air Force Base, Alaska, and plan to
    convert the Reserve C-141 unit at March Air Reserve Base to a
    C-17 unit equipped unit. The C-17s at Hickam Air Force Base,
    Hawaii, are planned to have an Air National Guard Associate
    unit. Creating C-17 Air National Guard and Air Force Reserve
    Command active duty/associate units in Hawaii, and Alaska is
    consistent with the new military strategy emphasizing increased
    chances of future military action in Pacific.

        General Myers. Can I take this opportunity, Senator
    Hollings, just to tag onto what you said about those great air
    crews? I have traveled in the theater, in General Frank's
    theater, and I took the liberty on one occasion to fly up with
    the crew in the front end of the C-17 up on the flight deck
    with a fairly young crew. I think we had maybe a captain and a
    lieutenant in the seats and a captain backing up behind.
        This was a flight from inside Uzbekistan down to a forward
    operating location and then into Afghanistan the next day, into
    Bagram, down to Kandahar, and then back to Uzbekistan. It
    required tactical approaches to some of the airfields because
    of the threat. It required the use of night vision goggles.
        I will tell you--and they were out of Charleston, it just
    so happens, as you would probably expect--what a tremendous job
    those young men and women, because one of the crew members of
    course was a woman, what these young men and women do. I just
    could not pass up the opportunity to on the record say how
    impressed I was with their professionalism, their dedication,
    and the C-17 for that matter.
        Senator Hollings. I thank you very much, General. Their
    morale is high and I want to keep it high. It would somewhat be
    injured, I feel--I know I am injured if you are going to start
    cutting me back just after we have been doing an outstanding
    job.
        Thank you.
        Senator Inouye. Thank you.
        Senator Kohl.
        Senator Kohl. Thank you, Mr. Chairman.
        Secretary Rumsfeld.
        Secretary Rumsfeld. Sir.
        Senator Kohl. Good morning.
        Secretary Rumsfeld. Good morning.

                               AVIATION SECURITY

        Senator Kohl. This weekend Vice President Cheney told the
    American people that another terrorist attack was in all
    likelihood imminent. However, at the same time these warnings
    are being sounded, combat air patrols around our cities have
    ended. In the case of commercial aircraft, those patrols were
    our second line of defense, the first line of course being the
    screening of passengers and baggage.
        In the case of chartered aircraft, however, those fighter
    patrols were our only defense against another hijacking. No
    security whatsoever takes place on chartered aircraft, which
    would allow a terrorist to charter a large aircraft, board with
    his friends, carry on luggage with explosives, and use that
    aircraft as a weapon against innocent civilians exactly as what
    happened on 9/11.
        In light of these recent warnings, I am more determined
    than ever to see this enormous gap in our aviation security
    system addressed. So I would like to ask you, Secretary
    Rumsfeld: Do you believe that currently unsecured chartered
    aircraft pose a security threat? How serious is that threat?
    How important is it that we address that threat as quickly as
    we can? Is the Department of Defense working with the
    Department of Transportation to deal with this threat?
        Secretary Rumsfeld. Senator, let me take that in pieces. It
    is an important question. Vice President Cheney was exactly
    correct in his statement on Sunday. We do face additional
    terrorist threats and the issue is not if but when and where
    and how. We need to face that.
        Certainly the issue of aircraft is an important one. I can
    say without question or debate or any concern at all that our
    security today is vastly greater than it was on September 11th,
    for some of the reasons you have mentioned, but for some other
    reasons as well. There is no question but that the commercial
    airliners are doing a much better job in terms of security. We
    have security in airports. There have been men and women in
    uniform up until this month and they are going to be
    transitioned out later this month.
        In addition, the radars--our whole defense establishment
    was oriented out to look for foreign threats and that has now
    been changed. The radars that we are using in the United States
    do a vastly better job of managing and tracking air traffic in
    the continental limits of the United States and indeed in
    Hawaii and Alaska as well because of the changes in radars, and
    the linkages between the North American Aerospace Defense
    Command (NORAD) and the Federal Aviation Administration (FAA)
    is now excellent.
        Now, the combat air patrols have not been eliminated. We
    still have random combat air patrols. We still have random
    Airborne Warning and Control System (AWACS) flights. We believe
    we have a system which is uneven in how it is done for the very
    purpose of confusing people as to how it is done. It is not a
    regular pattern as to what we are doing, but we feel quite
    confident that it is doing a good job.
        So I think that any aircraft has the ability to fly into
    any target, whether it is a nuclear powerplant or a school or a
    hospital or a building. That is a fact and it is not possible
    to ground all aircraft. There what we have to do is to balance
    out, as we have done, the whole host of things, but the
    principal place the work gets done is on the ground, as you
    suggested.

                           GENERAL AVIATION AIRPORTS

        Senator Kohl. I am not sure if I made myself clear. General
    aviation, private airplanes, chartered aircraft, there is no
    security. Nothing prevents anybody from boarding those
    aircraft. When you go into any of those terminals, there is
    nothing that happens to take a look at who is boarding, with
    what they are boarding, and what their intentions might be,
    which sets up a situation potentially exactly, Secretary
    Rumsfeld, like 9/11.
        Secretary Rumsfeld. Well, I would have to talk to the
    Department of Transportation. They are the ones, of course, who
    are managing the airports.
        Senator Kohl. Well, I guess I would ask you this question.
    If I am citing the facts correctly that there is literally no
    security at our general aviation airports, that anybody can
    board an aircraft without being looked at in even the most
    cursory way, would that disturb you?
        Secretary Rumsfeld. There is no question but that, given
    the warnings we have had and the use to which aircraft can be
    put, that that is a problem if it is true. I just am not
    knowledgeable about whether or not general aviation airports
    are as you characterized them. I am sure you are right, but it
    is really something that the Department of Defense is not
    involved in. It is a Department of Transportation
    responsibility and I would have to check with Secretary Mineta,
    which I will be happy to do.
        Senator Kohl. I would like to suggest you might give him a
    call at your earliest convenience.
        We are working with them and I wanted to raise that issue
    with you because I know it is something that would concern you
    also.
        Secretary Rumsfeld. Yes, sir.

                      STRATEGIC NUCLEAR WEAPONS REDUCTIONS

        Senator Kohl. Last question, sir. President Bush will sign
    an arms control agreement very soon with Russia that will
    reduce our deployed strategic nuclear arsenal from roughly
    6,000 weapons to between 1,700 and 2,000. The agreement does
    not call for destruction of the 4,000 or so weapons. Instead,
    the President intends to keep these weapons in storage.
    Clearly, 1,700 to 2,000 strategic nuclear weapons are more than
    enough to deter any would-be adversary.
        The question I am asking you is whether you envision any
    scenario that would require 6,000 strategic nuclear weapons?
    After that the question is, so why do we not destroy those
    4,000 or so instead of putting them in storage?
        Secretary Rumsfeld. Yes, sir, Senator Kohl. Technically,
    the treaty that is going to be signed is 1,700 to 2,200, as
    opposed to 2,000.
        Senator Kohl. Yes, I am sorry.
        Secretary Rumsfeld. I think that the important thing that
    came out of the Nuclear Posture Review was the dramatic
    downsizing of our offensive operationally deployed strategic
    nuclear weapons that the President has proposed and that we are
    in the process of getting on that trajectory now with the
    decisions made with respect to Peacekeeper, for example, as
    well as some submarines.
        What will actually happen to the warheads is an open
    question. Some will undoubtedly be destroyed. Some will replace
    warheads on other strategic nuclear weapons that we intend to
    maintain in the fleet. Still others will be stockpiled for
    safety and reliability problems.
        One of the nightmares in this business is that the phone
    will ring and we will be told that a whole class of our weapons
    are no longer safe or reliable, for whatever reason. As you
    know, they are looked at and checked from time to time and the
    Department of Energy has that responsibility. To the extent
    that we get that call--and it happens from time to time--that
    some class of weapon is under question, then we would need to
    replace that class of weapon with some other weapons. So it is
    perfectly appropriate to have additional weapons.
        If you think about it, time and money can change the number
    of weapons you have. Russia today has open production lines for
    nuclear weapons. We do not. It would take us years to start up
    our ability to make nuclear weapons, warheads. Therefore,
    having additional weapons to be able to use them in the event
    of a problem with safety and reliability, it would be mindless
    not to. It would be inexcusable for us to destroy all those
    weapons and not have them as a backup in the event they are
    needed.
        The other issue that you did not mention, which is
    something that is important to me and I know to the President,
    is the theater nuclear weapon issue, which keeps getting set
    aside. The Russians have many thousands, multiples of the
    numbers we do. They also have a long queue of nuclear weapons
    that have not yet been destroyed and they also have a lot of
    piece parts that could be reassembled conceivably.
        So the problem of what we do with those is an important
    one, as you have suggested. But I think what is even more
    important is the drawdown from five, six, whatever the numbers
    may be on their side or our side, down to 1,700 to 2,200.

                   SECURITY AND MANAGEMENT OF NUCLEAR WEAPONS

        Senator Kohl. Are we not very concerned about the other
    side not destroying, even more so than ourselves?
        Secretary Rumsfeld. I would not put it that way. I would
    put it that we are worried about their management of their
    nuclear weapons and the security of them and the risk that they
    could get loose and be available to people who we would prefer
    not to have them. Quite honestly, it does not make a lot of
    difference whether they destroy them or not. If one is worried
    about what they might do with them, it is more an issue that,
    as you have suggested, of the security of them.
        I would expect they would have the same interest in keeping
    some for safety and reliability as we would, for example.
        Senator Kohl. Well, some minimum amount on both sides. But
    are we not and have we not been for some time concerned about
    the security?
        Secretary Rumsfeld. You bet.
        Senator Kohl. And to the extent that weapons, nuclear
    weapons, are stored and not destroyed, then that concern about
    security is there, is it not?
        Secretary Rumsfeld. Absolutely. I am not worried about the
    security of our weapons, sir.
        Senator Kohl. I agree with you. But in order for them to
    destroy their weapons, they would need that agreement on our
    side?
        Secretary Rumsfeld. Oh, I do not think so. We did not need
    this treaty in a sense. The President announced he was going to
    go down to 1,700 to 2,200 regardless of what the Russians did.
    Then Mr. Putin announced that he was going to do that. The
    agreement is useful, I suppose, but we were going to do what we
    are going to do regardless.
        The problem with the issue of destroying those weapons, one
    problem I have mentioned. A second problem is this: There is
    not any way on Earth to verify what people are doing with those
    weapons. To get that kind of transparency or predictability
    into what they are doing, you would have to know what their
    production rates are, how fast they could increase to
    production rates and make new weapons, if you are worried about
    how many weapons they have, the extent to which they could take
    tactical nuclear weapons, theater weapons, and reform them into
    strategic offensive nuclear weapons, the extent to which they
    could take piece parts and reassemble them into offensive
    nuclear weapons.
        So there are so many things one would have to look at that
    the idea that you could verify it--we could not verify it. Now,
    in our country everyone knows what we do. Goodness gracious,
    there is not anything that the General or I even think that
    does not end up in the newspaper 5 minutes later. But
    everything we do is transparent and when we destroy weapons
    everyone in the world knows it. When we do not destroy weapons,
    everyone in the world knows it.
        That is not true in Russia. It is not true even today. We
    do not have a good grip on how many theater nuclear weapons
    they have. We do not have a good grip on what their production
    rates are for nuclear weapons in a given year.
        So I think this understanding, which has been turned into a
    treaty, is a good thing. I think that the country is doing the
    right thing in attempting to turn Russia toward the West and
    take steps which will reassure them that we in fact intend to
    do this, so that they can reassure those in their country who
    are doubting. There are some people in their military who doubt
    these things and wonder if this turning West by Russia is
    really going to be the right thing for Russia or the permanent
    thing for Russia. If a treaty helps in that regard, I am all
    for it.
        Senator Kohl. I quite agree with you and I also believe
    that it is an excellent agreement. I would like to hope that as
    time moves on we can move from stored nuclear weapons on both
    sides to destroyed nuclear weapons on both sides. I think you
    might agree with that.
        Secretary Rumsfeld. Thank you, sir.
        Senator Kohl. Thank you, Mr. Chairman.
        Senator Inouye. Thank you very much.

                         ADDITIONAL COMMITTEE QUESTIONS

        Mr. Secretary, General Myers, on behalf of the committee I
    thank you very much for your appearance today and for your
    testimony. In the coming weeks we will review the testimony we
    have received to formulate our recommendations to the full
    committee. We will do our very best to expedite this process.
    having said that, there are many questions that we would like
    to submit to you. Members have asked me to submit them in their
    behalf and we look forward to your responses to them.
        [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 Daniel K. Inouye
                          legislative affairs staffing
        Question. Secretary Rumsfeld, last year the Committee made a great
    effort to support you in some of your initiatives such as
    transformation of combat units, reducing outdated legislative reporting
    requirements, and in reducing the headquarters staff committed to
    legislative liaison. The fiscal year 2002 Defense Appropriations Act
    contained a provision which capped the number of personnel committed to
    legislative affairs positions. Unfortunately, the Department has
    reported to the Committee that rather than reducing these staff
    positions, 661 people are now committed to these jobs. Last year the
    Department reported that 464 people were committed to these staff
    assignments. How are you implementing the direction of Congress, and do
    you need further assistance?
        Answer. Last year I testified the department required 464
    legislative personnel to handle the requirements from the Congress.
    Based upon your legislation of last year we again determined the number
    of personnel in legislative functions and redefined what is actually
    legislative liaison verses legislative support. We have now determined
    that there are 218 personnel throughout the Department of Defense
    directly committed to full-time legislative affairs positions. A
    legislative liaison position is defined as, ``Those individuals having
    responsibility for direct and personal contact and communications to
    provide advice, information, and assistance to the Congress on all
    Department of Defense issues.'' In addition, we have another 443
    personnel in support of legislative requirements. Personnel filing
    those positions are defined as, ``Individuals that have responsibility
    for assisting those who perform direct legislative liaison functions.''
    These functions are normally administrative in nature. For example, the
    Army has 35 personnel responding to Congressional correspondence alone,
    which are normally responses to Congressional constituent letters.
        At the same time, we determined the Department had a total of 31
    personnel providing appropriations legislative liaison and an
    additional 11 personnel providing appropriations legislative support.
        Question. Secretary Rumsfeld, do you intend to reduce legislative
    affairs staff during fiscal year 2003?
        Answer. I have learned that because of the congressional
    requirements placed on the Department our legislative liaison staff is
    staffed properly to meet those requirements. It is my belief that we
    are under the cap of 250 personnel you directed in your bill last year
    so I do not intend to reduce the total number of legislative affairs
    personnel any further during fiscal year 2003.
                               navy shipbuilding
        Question. Secretary Rumsfeld, many of the reviews emerging the
    Department of Defense last year differed in the number of ships
    necessary to fulfill Navy requirements. Recommended numbers ranged from
    310 to 360 vessels. Have you made any progress in determining the
    actual number of ships required? How has the emerging requirement for a
    fleet of Littoral Combat ships changed this requirement?
        Answer. The Department's Quadrennial Defense Review dated September
    30, 2001, identified the current fleet of approximately 310 ships as
    the baseline from which the Department will develop a transformed force
    for the future. The Department recognizes that the number of ships in
    the fleet, in and of itself, is not the best indicator of fleet
    capability. Ships of today are more capable and advanced. Therefore,
    when compared to fleets of the past, fewer ships may be adequate to
    meet current requirements. However, in light of our new defense
    strategy, requirements may change. The Department annually assesses the
    current fleet and its capability against the projected operational
    requirements for warfighting and peacetime missions of the Navy. The
    results of these assessments are reflected in the budget submittal each
    year. The number of ships required for the Navy will change over time
    as requirements, technology, and capabilities evolve.
        The restructuring of the DD 21 program into the family of surface
    combatants will result in DD(X) destroyer, CG(X) cruiser, and littoral
    combatant ship (LCS) platforms. The quantities required for each class
    of ship has not been determined at this time.
        Question. Secretary Rumsfeld, I remain extremely concerned about
    the prior year shipbuilding bill. The fiscal year 2003 budget requests
    $645 million for this purpose and there is word that next year's bill
    will be even larger. What actions have been taken to correct this
    problem?
        Answer. The table below is a summary of the Department of the Navy
    completion of prior year shipbuilding requirement across all major
    shipbuilding programs as reflected in the fiscal year 2003 budget
    request

                                             [Then-Year Dollars in Millions]
    ----------------------------------------------------------------------------------------------------------------
                                                                  Fiscal year--
                                     ----------------------------------------------------------------------   Total
                                        2001      2002      2003      2004      2005      2006      2007
    ----------------------------------------------------------------------------------------------------------------
    LPD-17..........................     140.0     173.0     242.7     373.4     419.1      71.4         0   1,419.6
    SSN-774.........................     119.0     227.2     276.7     213.1     254.4      75.8         0   1,166.2
    DDG-51..........................     125.0     143.6     125.5      59.4      70.2      38.1         0     561.8
    CVN-76..........................     106.0     169.4         0         0         0         0         0     275.4
    CVN-68 RCOH.....................      97.0         0         0         0         0         0         0      97.0
    T-AGOS..........................      10.0         0         0         0         0         0         0      10.0
    SSN ERO.........................         0      16.0         0         0         0         0         0      16.0
                                     -------------------------------------------------------------------------------
          Total.....................     597.0     729.2     644.9     645.9     743.7     185.3         0   3,546.0
    ----------------------------------------------------------------------------------------------------------------

        I am equally concerned regarding the prior year shipbuilding bill
    for it hampers the Department's ability to initiate new,
    transformational programs by tying up funds in future budgets to pay
    for old programs. It is my intention and that of the Navy to eliminate
    this funding line as soon as possible. I have implemented a policy of
    budgeting to more realistic cost estimates for acquisition programs to
    avoid this situation in the future. In the meantime, the Department is
    taking steps to mitigate cost overruns on current programs.
        The Navy is intensely managing the Completion of Prior Year
    Shipbuilding requirements as it prepares the fiscal year 2004 budget
    submission. The Navy has implemented rigorous controls to minimize
    changes in programs and has challenged its industry partners to improve
    cost performance by reengineering processes, employing lean
    manufacturing, and reducing overhead. If any cost increases beyond what
    is currently recognized in the fiscal year 2003 budget request despite
    these measures, the Navy plans to de-scope existing shipbuilding
    contracts to stay within budget constraints.
        The Department's cost estimating process is under constant review
    to ensure that risk factors such as low rate production, labor
    availability, and inflation are appropriately reflected. Aggressive
    sharelines and contractual incentives are being implemented to better
    facilitate on-target performance. From a budgetary standpoint, the
    Department is striving to more effectively reconcile budget and program
    scope prior to contract award.
        The cumulative effect of these actions should provide greater
    control of prior year cost growth and ensure that accurate cost
    estimates are used for future budgeting.
                            military transformation
        Question. Mr. Secretary, everyone agrees that our military must
    transform over time to meet possible future threats. Yet the way ahead
    is not clear to many and sometimes there appears to be little
    coordination between the military services. I have a series of
    questions for your comment that I hope will help clarify to the
    Committee what your vision is for transformation.
        Technological change, plus today's political environment and public
    expectation demand minimal casualties in war. All appear to lead to
    using fewer manned aircraft and ground systems in future wars. Will our
    military rely more on unmanned systems in future conflicts?
        Answer. Unmanned systems are increasingly being integrated into
    ongoing operations and new generations of these systems will
    incorporate even more sophisticated capabilities and sensors. Use of
    Predator, including versions armed with the Hellfire missile, and
    Global Hawk UAVs in Afghanistan are harbingers of even more advanced
    systems to come. Already Predator's have transmitted live targeting
    data to AC-130 gunships within minutes of identifying potential
    targets. The Air Force's Unmanned Combat Air, Vehicle prototype
    undertook its maiden flight recently and the service is interested in
    developing an even more capable version of Predator. The Navy is
    seeking to experiment with Global Hawk in support of carrier battle
    group operations while putting into place plans to procure these
    capabilities in future budget years. That said, the UAV capabilities in
    the force today can be considered quite primitive compared to where
    they are likely to be in another 10-15 years. That is because
    continuing information technology advances will lead to even more uses
    of unmanned systems in coming decades.
        UAVs will likely play a critical enabling role in linking together
    hundreds and perhaps thousands of small sensors that can be deployed
    and integrated together across a future battlefield. Tremendous power
    will be derived from this future type of sensing phenomena--something
    referred to as the power of the collective. We don't want to sense in
    just one or two ways, but in a multitude of ways. If sensing is
    important to future military operations then U.S. forces must be able
    to sense in depth--vertically from space to beneath the sea--and
    horizontally deep into an enemies territory. Tactical and operational
    sensing are equally important so that sensing is brought to bear in a
    number of ways. Certain elements of this changed strategic concept can
    be glimpsed during operations in Afghanistan.
        Question. If we move to more unmanned systems, do you expect
    military force manning requirements to decrease over time?
        Answer. Increased use of unmanned systems is part of the
    demassification of combat taking place with the widespread embrace of
    Network Centric Warfare. Dramatically increased levels of integrated
    information, necessary for the extensive use of unmanned aerial
    vehicles, unmanned combat air vehicles and even unmanned undersea
    vehicles, allows the military services to relocate where personnel are
    located on future battlefields. There will always be a role for the
    infantryman or rifleman up close with the enemy, but many other aspects
    of how personnel can be re-distributed and used in future conflicts
    will be more fully revealed over the course of experimentation and the
    development of new operational concepts in coming years.
    Transformation, by its very nature, will generate broad implications
    for personnel policies.
        Question. Transformation is not simply buying futuristic weapons;
    it requires changes in doctrine, battle plans, and military culture.
    Yet, we are building ships and aircraft carriers now that could last
    until the middle of this century. Do you envision our naval forces
    fighting in carrier battle group formations 50 years from now like they
    do today?
        Answer. Given the pace of transformation, it is unlikely that naval
    forces will be organized around carrier battle group formations by the
    middle of the century. The widespread adoption of Network Centric
    Warfare will enable vastly dispersed naval forces to exert operational
    control over vast swaths of the world's ocean and littoral regions.
    These forces will be characterized by starkly different platforms,
    including new high-speed hull designs and littoral combat ships linked
    to an Expeditionary Sensor Grid composed of thousands of discrete
    sensors and even unattended munitions. This change is all part of the
    demassification of warfare taking place with the transition from
    Industrial Age forces to those embracing Information Age capabilities.
    Speed is also a critical element in this transition, which includes
    speed of deployment, speed of employment and speed of sustainment. The
    Navy is already taking steps in this direction through its
    experimentation with the High Speed Vessel. This joint venture, in
    cooperation with the Army and Special Operations Command, is yielding
    valuable insights into what speed can bring to operations and is
    opening the door to new operational concepts as well.
        Question. Military transformation calls for a heavy reliance on
    improved information management and communications systems. How can the
    United States remain dominant in this fast moving, ever changing field?
        Answer. Our ability to successfully transform will depend in large
    measure on exploiting the power inherent in information and networks,
    while realizing use of the technology creates opportunities for both
    friends and foes alike. Transforming the military services from the
    Industrial Age to the Information Age thus hinges on leveraging Network
    Centric Warfare, which is the cornerstone of future force capabilities.
    With potential enemies likely becoming increasingly adept in leveraging
    information technology, it is imperative that the U.S. military
    dramatically reduce the cycle time required to field new generations of
    networks and information systems. Continuous adaptive acquisition and
    operational prototyping are two ways to quickly get new capabilities
    into the warfighter's hands, while simultaneously working on the next
    iteration and the next. The net effect is a continual flow of
    innovative capabilities to the combat forces with those capabilities
    growing and changing over time. This approach offers a more efficient
    means to stay on the technology curve rather than freezing a design and
    then developing and building it over a 15-20 year time horizon.
                                   abm treaty
        Question. This June, the United States will formally withdraw from
    the ABM Treaty. Mr. Secretary, will you describe for the Committee what
    withdrawing from the ABM Treaty means for our missile defense program?
    That is, what key testing programs can now move forward? What
    construction and development programs can now be undertaken?
        Answer. When ABM Treaty withdrawal becomes effective in June, the
    United States will be able to effectively and efficiently test and
    develop the most promising missile defense technologies, as well as,
    eventually, deploy layered missile defenses to protect all 50 states,
    our Allies, and friends. In particular, the United States will be able
    to proceed with testing those promising technologies that were
    previously cancelled because they may have conflicted with ABM Treaty
    prohibitions. These include the AEGIS SPY-1 radar tracking strategic
    ballistic missiles, and concurrently operating ABM and non-ABM radars
    (GPR-P and THADD). Indeed, without ABM Treaty withdrawal this June,
    additional test activities of this sort, as well as those involving new
    mobile, sea-based, and land-based ABM sensors would all likely have
    been cancelled due to potential conflict with the ABM Treaty.
        In addition, following ABM Treaty withdrawal the United States will
    be able to proceed this year with construction of missile defense test
    facilities in Alaska; in particular, construction of the ABM
    interceptor silos at the Missile Defense Test Bed at Fort Greely,
    Alaska. Other elements of the Missile Defense test bed will be built
    starting early in 2003. Moreover, following ABM Treaty withdrawal, the
    United States will be able to pursue cooperative development of missile
    defenses with our friends and allies against the full range of missile
    threats.
                                 space programs
        Question. Mr. Secretary, modernizing our military space assets is a
    key to transformation, yet there are several major space programs that
    have experienced numerous setbacks. In particular, the Space-based
    infrared system and the Advanced EHF communications satellite programs
    have had numerous delays and cost overruns. How do you plan to get
    these programs under control?
        Answer. The Space Based Infrared System--High Component (SBIRS-
    High) has had significant problems, but the Department has identified
    and implemented corrective actions that I feel will solve the problems.
    Following the discovery of a $2 billion over-run on SBIRS-High, the Air
    Force chartered an independent review of the program. This found that
    the prime contractor and government did not perform sufficient system
    engineering before aggressively moving into acquisition; that
    configuration control and design requirements ``flow-down'' were
    inadequate; and that internal government and contractor management was
    poor. Common to all these problems was the experimental use of
    contractor ``Total System Performance Responsibility'' (TSPR), which
    has proved a failure for complex developmental programs. To correct
    these problems, the SBIRS-High government and contractor management
    teams have been either replaced or significantly restructured. The
    contract has been changed to remove the TSPR clause and functions, and
    return those to the government. A government chaired and controlled
    system engineering board and configuration management board will
    reassert control of these functions. Finally, a series of senior
    management reviews and expanded cost reporting tools have been
    implemented to track the SBIRS-High recovery plan and execution of the
    new baseline.
        The Advanced EHF program has encountered numerous challenges, many
    of which arose from an attempt to accelerate the launch schedule
    following the April 1999 loss of a Milstar EHF satellite. The
    acceleration was to mitigate delays in getting protected EHF capability
    to the warfighter. A sole source contracting team was created in an
    attempt to gain efficiencies through a single contracting team that had
    experience developing EHF technologies and were already working on the
    Milstar program. As the design effort progressed, detailed cost
    estimates revealed that the design complexities required to address
    United States and International Partner operational requirements
    required changes to the satellite design and drove the need for
    increased funding. More recently, funding perturbations from a
    Congressional cut in fiscal year 2002 and some yet-unrealized funds
    from international partners have forced schedule delays. We believe the
    performance issues have been satisfactorily resolved and that the
    current baseline design will meet all operational requirements and
    enable satellite communications interoperability between the United
    States and our key allies in future joint operations. OSD remains fully
    engaged and will maintain oversight on this program to assure cost and
    schedule stability. Finally, DOD is evaluating alternatives for the
    protected satellite communications requirements after the third
    Advanced EHF satellite. This is part of our effort to achieve a
    transformed national security wireless communications system that will
    better enable network centric warfare.
                                     ______

                   Questions Submitted by Senator Tom Harkin
                       iowa army ammunition plant (iaap)
        Question. Secretary Rumsfeld, last year Congress passed an
    amendment I introduced regarding secrecy and worker health. I was
    pleased to get the support of your Department for this amendment. The
    amendment required you to notify workers at the Iowa Army Ammunition
    Plant of possible exposures and tell them how they can discuss those
    exposures without violating any security requirements. It modified a
    requirement to review secrecy and security policies as they impact
    former nuclear plants. And it asked you to report back within 90 days.
        This issue is really important to the workers and former workers at
    the Iowa Army Ammunition Plant (IAAP), which has a unique status as
    both a former Atomic Energy Commission nuclear weapons plant and an
    operating Army ammunition plant. Recently the Department of Energy, as
    at other nuclear weapons facilities, has worked hard to foster openness
    at the plant and to address the health concerns of former workers.
    Unfortunately, the Army has not been in the same position.
        Secretary Rumsfeld, when will we receive the overdue report, and
    when will the former workers at the Iowa Army Ammunition Plant be
    contacted? Can you expedite this?
        Answer. The report is in final coordination at this time and should
    be forwarded to your office soon. Efforts are continuing to finalize a
    contract between the Army and the researchers who will, among other
    health related activities, contact current and former employees who
    worked at IAAP. Notification efforts should begin later this summer.
        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 security
    requirements inherent in this U.S. policy 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.
        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. The Army is no longer pursuing such an exception.
                          oversight of missile defense
        Question. When the Missile Defense Agency was created at the
    beginning of this year, national missile defense programs were exempted
    from normal testing requirements, including operational testing by the
    Director of Operational Test and Evaluation.
        How will we know if the program is ready for deployment, if it will
    work against realistic threats, without independent operational testing
    and evaluation?
        Answer. The Missile Defense Agency and the Ballistic Missile
    Defense System (BMDS) are not exempt from testing requirements. Each of
    the elements of the BMDS will undergo rigorous development testing to
    reduce risk in the program and to demonstrate technical maturity.
    Testing will become increasingly operationally realistic as development
    of the element progresses. As the element's capability evolves and
    military utility is demonstrated, an operational test agent will be
    designated to perform operational assessments to characterize the
    operational effectiveness and suitability of the element as an input to
    decisions to produce, operate, and deploy. The Director, Operational
    Test and Evaluation (Director, OT&E) will review test results and
    provide an input to the Department's decision process as well as, when
    applicable, to the Congress.
        Question. What are the provisions for independent oversight of this
    new agency and its programs?
        Answer. The Director, Operational Test and Evaluation (Director,
    OT&E) is represented on the Missile Defense Support Group and is in a
    position to review for and advise the Under Secretary for Acquisition,
    Technology and Logistics, and the Director, MDA on potential OT&E
    testing issues throughout the development of the Ballistic Missile
    Defense System (BMDS). His staff will attend test meetings, review
    documentation, and have access to MDA's plans and programs to
    accomplish the oversight mission. In support of decisions to procure
    and operate elements of the BMDS, the Director, OT&E will exercise his
    Title 10 oversight responsibilities with respect to OT&E and Live Test
    Fire and Evaluation. A report will be submitted to Congress
    characterizing the demonstrated operational effectiveness and
    suitability, where applicable. The Director, OT&E Annual Report to
    Congress will address OT&E activities.
        Question. Recently, it was announced that in future missile defense
    tests, information on the targets and on countermeasures would no
    longer be made public.
        How can Congress and the public evaluate the testing and the
    significance for creating an effective missile defense system if we
    don't know what the target was or how countermeasures were deployed?
        Answer. We recently revalidated the classification of this
    information and it meets the criteria of Executive Order 12958. Last
    year the General Accounting Office reviewed the classification
    decisions made by the Missile Defense Agency over the past decade and
    determined that its classification process was accurate and reasonable,
    and agreed that this sensitive information was properly classified
    consistent with DOD standards and provided protection for national
    security reasons. Congress will continue to have access to this
    classified information in closed sessions for their deliberative
    processes. However, the nature of ballistic missile defense
    countermeasures is extremely sensitive. Detailed knowledge of these
    techniques, technologies and systems could lead an adversary to develop
    capabilities that can defeat our systems.
        Question. There have been repeated problems with incomplete and
    misleading information on missile defense tests, with problems and
    limitations coming to light long after initial reports have described a
    success. Won't these restrictions make it harder ever to find out the
    truth?
        Answer. Without more specific information as to what, if any,
    misleading information, problems and limitations you are referring to
    it will be impossible to specifically address these concerns. We are
    certainly willing to provide Congress with information addressing their
    concerns. As to the effect of our determination that target and
    countermeasures information will now be classified, Congress will
    continue to have access to this classified information in closed
    sessions for their deliberative processes consistent with the way other
    classified national security information is handled.
                                 pentagon waste
        Question. When you first took your position I was glad to see you
    placed an emphasis on reducing waste and improving contracting,
    inventory, and financial and accounting procedures. One of my big
    concerns has been lack of control over inventory that is shipped from
    one point to another--the Pentagon loses track of vast quantities of
    items, some of which are restricted or classified.
        Can you describe your program, and give a timeline, for
    implementation of modern inventory control systems? What can we do to
    help?
        Answer. Under the Future Logistics Enterprise initiative, the
    Department is focusing on integrating ongoing modernization programs
    within the Services and the Defense Logistics Agency to introduce a
    modern system architecture that supports best commercial practices for
    supply chain and inventory management. Under that initiative, between
    now and fiscal year 2005, commercial-off-the-shelf or COTS enterprise
    resource planning and supply chain management tools are being
    introduced and connected with Department ``legacy'' systems to enable
    the Department to improve logistics business processes. This embracing
    of commercial practices and COTS technology will allow the Department,
    by the end of fiscal year 2007, to tap into the power of online
    marketplaces to create supply chain exchanges that support true
    eBusiness with the commercial marketplace, thus reducing the
    Department's need to hold inventory by focusing on managing
    relationships with industry. In the meantime, we are already supporting
    true eBusiness with some of our key transportation service providers to
    improve in-transit visibility. DOD's in-transit visibility system, the
    Global Transportation Network or GTN currently receives movement
    information from over 50 commercial transportation service providers
    and 30 DOD automated information systems. GTN collects, integrates and
    displays transportation movement information to permit visibility as
    assets transit the Defense Transportation System pipeline. In fact,
    during Operation Enduring Freedom, GTN has reached record in-transit
    visibility levels. Considering the fact that the environment in which
    we are currently operating had a non-existent infrastructure, we are
    now routinely capturing and reporting over 93 percent of all cargo and
    passengers moving in support of the global war on terrorism. Congress
    can help by continuing to support, through legislation and funding, the
    Department's logistics modernization efforts as we move forward in
    adopting commercial practices.
        Question. Recent reports have shown widespread abuse of credit
    cards issued to make small purchases easier. How will you prevent these
    credit cards from being used for personal goods?
        Answer. On March 19, 2002, the Under Secretary of Defense
    (Comptroller), in conjunction with the Director of Defense Procurement,
    established a Government Credit Card Task Force. Their findings have
    been rolled into the newly established Concept of Operations for the
    Purchase Card that was created at the direction of the Director,
    Defense Procurement. In addition to serving as a deskbook for the
    purchase card program, the Concept of Operations will be a tool for
    reengineering the program. It emphasizes strong internal controls. The
    Joint Program Office for the Purchase Card is also developing new
    training tools, including web-based offerings, that will help ensure
    that cardholders have the most up-to-date information on how to
    correctly use the card. Finally, the DOD Inspector General has
    developed data mining techniques that improve our ability to spot card
    misuse/abuse. They are currently field testing those techniques.
                                     ______

                  Questions Submitted by Senator Arlen Specter
                                    crusader
        Question. Mr. Secretary, could you explain why Army leaders say the
    Crusader artillery program is vital to maintaining the Army's
    warfighting edge over the coming decade, but you have decided to cancel
    it?
        Answer. One of the highest priorities that the current
    administration has placed on the Department of Defense is the need to
    transform all of our military departments. Our country needs an Army
    that is mobile, lethal, and deployable across a wide range of future
    contingencies. The Crusader decision was not about any one weapon
    system, but really about a strategy of warfare. This strategy drives
    the choices that we must make about how best to prepare and equip our
    total forces for the future. Accordingly, I decided to recommend to
    Congress that the Crusader funds be redirected so as to provide
    resources for more promising technologies that offer greater payoffs
    and are more consistent with the Army's overall transformation effort.
                           risk in military strategy
        Question. Secretary Rumsfeld, prior to September 11th, persistent
    funding shortfalls, compounded with expanding requirements and record
    high operational tempo, had resulted in significant risk in executing
    the national military strategy of fighting two nearly simultaneous
    major theater wars. Now our country faces just that scenario should we
    choose to escalate our activities in Iraq? Does the increase in the
    proposed fiscal year 2003 budget eliminate this risk?
        Answer. First, the new defense strategy that this Administration
    has adopted is different from the previous one of fighting two nearly
    simultaneous major theater wars, and so the premise of your question no
    longer applies. However, let me say that the proposed fiscal year 2003
    budget increase was not formulated to eliminate strategic risks. This
    increase does not buy as much as one might think. Almost $20 billion is
    for the war on terrorism and related requirements. About $28 billion of
    the increase went to cover inflation ($6.7 billion), must-pay bills
    such as pay raises ($2.7 billion) and new accrual funding for
    retirement and health care benefits ($11.4 billion), and realistic
    costing of weapons acquisition and readiness ($7.4 billion). That would
    be the entire $48 billion, except we made program reductions and
    management changes that netted us over $9 billion, which were used to
    fund our most pressing requirements. No funding was included for an
    escalation of activities against Iraq. For a major escalation such as
    this, added funding would be needed--otherwise there would be increased
    risks to other defense priorities and commitments.
                                ec-130 aircraft
        Question. Secretary Rumsfeld, the recent Air Force plan to
    redistribute C-130 aircraft did not address the urgent need of the
    Pennsylvania Air National Guard's 193rd Special Operations Wing in
    Harrisburg. They were one of the first units to deploy to Afghanistan
    and only just returned on March 19, 2002. This unit is being asked to
    fly some of the oldest C-130's in the U.S. inventory around the world
    on a moment's notice to perform their Psychological Operations mission.
    Their recent performance in Afghanistan was so successful that the unit
    was often mentioned by General Myers and yourself in their daily
    briefings on the war. Mr. Secretary, what can you do to speed the
    delivery of new EC-130 aircraft to this unit?
        Answer. I am very proud of the job that has been done by our
    special operations Commando Solo crews in Afghanistan. Commando Solos
    are unique, high demand/low density platforms and continue to be an
    asset for the department. Commando Solo is also wholly comprised of
    volunteer air national guardsmen.
        In fiscal years 1997 through 2001, the transition from the EC-130E
    to the EC-130J model provided five of the planned eight C-130J aircraft
    and special operations-unique modifications. The Air Force Master Plan
    provides funding for the remaining three C-130J for conversion to EC-
    130J in fiscal years 2006 through 2008. The 193rd Special Operations
    Wing is the only unit that flies the EC-130 and will receive all eight
    EC-130J aircraft. In addition, the fiscal year 2003 budget request
    contains $79.4 million to mitigate special mission equipment
    obsolescence and degraded capability equipment issues on EC-130
    aircraft.
                              counterdrug training
        Question. Secretary Rumsfeld, the Pennsylvania National Guard
    operates the Northeast Counterdrug Training Center at Fort Indiantown
    Gap and has been highly successful in providing a variety of
    counterdrug training for law enforcement from an eighteen state region.
    However, it has been widely reported in the media that you do not
    support counterdrug efforts by the U.S. Military. Can you tell me what
    your recommendations and plans are for future counterdrug support by
    the Department of Defense?
        Answer. The Department issued its new counternarcotics policy on
    July 31, 2002. The Department will continue to execute drug supply
    reduction and drug demand reduction programs consistent with statutory
    responsibilities, Presidential direction and Department of Defense
    priorities.
        Specifically, the Department will implement Drug Demand Reduction
    programs that promote the readiness of the Armed Forces and the
    Department's civilian personnel and that reduce illegal drug use within
    the Department's communities.
        It will also implement supply reduction programs that collect,
    analyze and disseminate intelligence, support interdiction operations,
    and train host nation counternarcotics forces.
        Finally, it will implement other programs that support foreign
    military and law enforcement counternarcotics activities, so long as
    they benefit the Department, enhance readiness of the Department,
    contribute to the war on terrorism, advance the Department's security
    cooperation goals, or otherwise enhance national security.
        The Department is still evaluating how this new policy will impact
    specific programs, including National Guard training for domestic law
    enforcement. Currently we are exploring the possibility that the
    Department of Justice will assume responsibility for the National Guard
    Counterdrug Schools. We will keep Congress fully informed as this
    develops.
                              morale and retention
        Question. Secretary Rumsfeld, can you describe the effects that the
    increased operational tempo has had on your personnel in terms of
    morale and retention?
        Answer. Thus far, after controlling for the effect of Stop Loss
    which generates involuntary retention of certain critical skills, the
    overall retention picture has been favorable. This is consistent with
    research which suggests that a low number of deployments--including
    deployments to hostile areas--does not harm retention, whereas a number
    of such deployments could. My first hand experience in visiting with
    the troops suggests that the vast majority believe they are involved in
    necessary and important work, and morale is good.
                                     ______

                Questions Submitted to General Richard B. Myers
                Questions Submitted by Senator Daniel K. Inouye
                              joint strike fighter
        Question. General Myers, keeping the cost down on the Joint Strike
    Fighter seems to be particularly important, since price increases could
    lead to force cuts. Given recent indications that the Navy may reduce
    the number of JSFs it will purchase; do you expect the unit price of
    the airplane to increase?
        Answer. The Department of Defense is resolutely committed to the
    Joint Strike Fighter (JSF) program, and shares your concern about
    costs. While it would be premature for me to speculate about the
    Department of the Navy's Joint Strike Fighter force structure plan,
    clearly order numbers affect unit price. From JSF's inception,
    affordability has been a cornerstone for the program, and in this
    regard we have reason for optimism.
        Current cost projections are based solely on planned United States
    and United Kingdom procurement quantities. With the recent Memorandum
    of Understanding signings by Canada, Denmark, and the Netherlands, and
    projected signings by Italy, Norway, and Turkey, conservative
    predictions estimate that total procurement quantities may climb by
    anywhere from 1,000 to 4,000 aircraft. The economies of scale
    associated with such an increase would reduce total costs for all
    program participants.
        Question. General, some have argued that if the price of the JSF
    grows too high, the Air Force would pull out of the program. What is
    the current thinking?
        Answer. The Air Force fully supports developing and fielding the
    Joint Strike Fighter (JSF) and has not given me any indication they are
    wavering in their commitment to the program. JSF, along with F-22 and
    Unmanned Combat Air Vehicle (UCAV), represents a crucial part of the
    Service's future force structure.
        The JSF is an affordable precision engagement and global attack
    fighter with superb stealth capabilities. It will constitute the
    persistent portion of the Air Force's future force structure. Given its
    importance to the joint warfighter, we are making every effort to keep
    aircraft cost down, especially since affordability has always been one
    of its chief strengths.
                                     ______

               Questions Submitted by Senator Christopher S. Bond
        Question. Currently we have 22 long range B-2 bombers. Is this
    sufficient? What is the plan for the next generation of short range and
    long range bombers?
        Answer. [Deleted].
                           tactical fighter aircraft
        Question. Are we spending too much money on Tactical Fighter
    Aircraft? When is the last time the United States lost a series of
    ``dogfights?'' How can we justify an estimated $67 billion on the F-22
    Raptor, an estimated $300 billion on the Joint Strike Fighter, and the
    continued improvements and recapitalization efforts to the F-15 and F-
    16 fleet in the out years?
        Answer. The United States can ill afford not to procure the F-22
    and Joint Strike Fighter (JSF). These aircraft are essential to our
    capability to project force deep into the enemy's battle area while
    defending friendly airspace and ensuring maximum warrior survivability.
    Until the F-22 and JSF are combat ready, the USAF must continue to
    maintain the F-15 and F-16 fleets in order to respond to all threats to
    U.S. security.
        Even though the last U.S. fighter to be shot down by an enemy
    fighter occurred during the Vietnam War, the F-22 and JSF remain
    critical to U.S. defense. These aircraft are not designed solely to win
    ``dogfights.'' They are multi-mission capable and will use their
    unique, transformational capabilities, such as supercruise, stealth and
    integrated avionics, to attack fixed and mobile targets as well as
    perform electronic attack.
        The F-15 has consistently enjoyed a competitive edge over all other
    air superiority fighters since its introduction into the USAF inventory
    in 1975. But today, as other countries and potential adversaries
    continue to improve and develop new anti-air systems and fighters, the
    F-15 is beginning to lose its advantage. Currently, the F-15 is at
    rough parity with the Su-27 and Mig-29. By 2005 the F-15 will be at a
    disadvantage with the anticipated fielding of the Su-35 and export
    versions of the Rafale and Eurofighter. Worse yet, the development and
    proliferation of advanced and, for many third world countries,
    affordable SAMs such as the SA-10/12 will result in a sanctuary for the
    enemy because the F-15 is unable to survive in this environment. This
    is where the F-22's stealth, supercruise, maneuverability, and
    integrated avionics make a transformational difference. As part of the
    Global Strike Task Force, the F-22's capabilities enable it to
    penetrate airspace denied to older systems, destroying enemy SAMs,
    command and control assets, and air threats. After the F-22 ``kicks
    down the door,'' the JSF is the persistent force that follows up with
    precision engagement of multiple enemy targets using its all weather,
    stealth, and precision air-to-ground capabilities.

                              subcommittee recess

        Senator Inouye. The subcommittee will stand in recess until
    June 5. At that time we will receive testimony from public
    witnesses. I thank you very much, Mr. Secretary.
        [Whereupon, at 12:18 p.m., Tuesday, May 21, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    June 5.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2003

                                  ----------

                            WEDNESDAY, JUNE 5, 2002

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

                             DEPARTMENT OF DEFENSE

                   United States Military Academy, U.S. Army

    STATEMENT OF LIEUTENANT GENERAL WILLIAM J. LENNOX, JR.,
                SUPERINTENDENT
    ACCOMPANIED BY LIEUTENANT SECOND CLASS ANDREW BLICKHAHN

                 OPENING STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. Today we'd like to welcome the
    superintendent of the service academies. Each person is
    accompanied by an outstanding cadet or midshipman from their
    respective institutions.
        The service academies have a long tradition of educating
    and training young men and women for future leadership as
    officers in the United States military. The academies couple
    economic rigor with military training and development to
    graduate top notch young officers.
        Every year, the academies receive thousands of applications
    from outstanding young men and women across the country. The
    high school grade-point average for those accepted into the
    academies is, on an average, 3.9 on a 4.0 scale, and scholastic
    assessment test scores average over 1,300. Admissions are also
    based on participation in athletic and non-athletic
    extracurricular activities, leadership positions, community
    involvement, and work experience.
        It's a rigorous application process, and only the highest
    caliber candidates are accepted. So why do these young men and
    women, who could have their pick of top universities, choose to
    apply in increasingly large numbers to the academies? The
    committee is looking forward to hearing from the cadets and
    midshipmen here today on that very subject.
        This is the first hearing that this committee has held to
    review the service academies. We look forward to a frank and
    open discussion today with our panel on the state of service
    academies and their continuing traditions of excellence to
    prepare our future military leaders.
        Joining us today, we have the superintendent of the United
    States Military Academy at West Point, Lieutenant General
    William Lennox, Jr. Joining General Lennox is Second Lieutenant
    Andrew Blickhahn, who reached a rank of E-5 prior to becoming a
    cadet at West Point. We're also happy to have here today the
    first Marine commandant of midshipmen, Colonel John Allen, from
    the United States Naval Academy. And joining Colonel Allen is
    Ensign Benjamin A. Drew, who has just graduated from the Naval
    Academy. And finally, I would like to welcome Lieutenant
    General John Dallager, superintendent of the United States Air
    Force Academy. And joining General Dallager is Cadet First
    Class Todd Garner, who will serve as cadet wing commander next
    year. And congratulations to you for your achievements and to
    all of you who are here today.
        Senator Stevens wanted to be here, but, as you know, the
    supplemental appropriations is now under consideration on the
    floor, and he is the senior Republican on the committee, and he
    has his job there. He has to be at his post, so he has asked me
    to submit his statement in the record. And without objection,
    it will be done.
        [The statement follows:]

                   Prepared Statement of Senator Ted Stevens

        Mr. Chairman, I commend you for inviting the
    Superintendents of the Military Academies to appear before the
    committee this morning.
        With our nation's military engaged in the Balkans, central
    Asia, the Philippines and Colombia, we must pay close attention
    to the means by which we train and prepare our combat leaders.
        Mr. Chairman, you and I have each served more than 30 years
    in Congress, and have had the privilege of nominating many
    scores of men and women to the academies.
        They have emerged as fine military leaders, but of equal
    importance, tremendous community and civic leaders.
        That is the significant dividend from our investment in the
    academies--men and women with a commitment to public service,
    in every form.
        I also want to note my interest in the role of the
    academies in training international students.
        As we find our nation increasingly engaged around the
    globe, it is vital that we have strong personal ties with the
    military leaders of these nations.
        Engaging those potential leaders at a young age, and
    providing them insight to our values, is critical.
        Mr. Chairman, I welcome the witnesses, and look forward to
    the hearing. I may be called to the floor to assist in managing
    the pending supplemental, but will return if possible.

        Senator Inouye. May I first call upon the superintendent of
    the Military Academy at West Point, General Lennox?

                               prepared statement

        General Lennox. Mr. Chairman, I appreciate the opportunity
    to appear before your subcommittee to discuss the mission,
    goals and the challenges of the United States Military Academy.
    I have a written statement that I'd like to submit for the
    record.
        Senator Inouye. Without objection, so ordered.
        [The statement follows:]
        Prepared Statement of Lieutenant General William J. Lennox, Jr.
        Mr. Chairman and members of the committee, I appreciate the
    opportunity to appear before your subcommittee to discuss with you the
    mission, goals, and challenges of the United States Military Academy. I
    would also like to thank you for allowing us to address this
    distinguished assembly during this momentous year for the Academy, our
    bicentennial.
        The United States Military Academy was founded in 1802 under the
    presidency of Thomas Jefferson. In his vision, West Point was a means
    to democratize American military leadership and to ensure that it would
    be representative of American society. Since that time, the leaders who
    have graduated from the Academy have been representatives of the nation
    that they served. They come from all walks of life--varying economic,
    social, religious, and ethnic backgrounds.
        West Point graduates have seen America through good times and bad,
    peace and war. Early leaders like William MacNeil or George Washington
    Whistler helped build the nation in the early 19th century. Gallant men
    like Ulysses S. Grant and Robert E. Lee, weathered the great Civil War.
    In the early 1900's, LTC Thomas Goethals directed the construction of
    one of the greatest engineering achievements--the Panama Canal. During
    the global conflicts of the 20th Century, individuals like John J.
    Pershing, Douglas MacArthur, and Dwight D. Eisenhower secured the
    nation. The past generation of the Long Gray Line contributed
    astronauts like Frank Borman, Ed White, Jr., and Buzz Aldrin; leaders
    like Norman Schwarzkopf in the sands of Desert Storm and Wesley Clark
    in the mountains of Kosovo; individuals as diverse as Roscoe Robinson--
    the Army's first African-American 4-star General and Allison Jones,
    Class of 2000, who was awarded the Soldier's Medal for her courage
    following the terrorist bombing in 1998 of the U.S. Embassy in Nairobi;
    and warfighters like Franklin Hagenbeck and Jason Amerine assisting
    anti-Taliban forces in the austere Afghanistan countryside. We are
    proud that the people we taught made much of the history we teach.
        Many of our former cadets, now commissioned officers, are called
    upon to overcome obstacles they could not imagine when they graduated;
    but that is the purpose of the United States Military Academy. As the
    nation's premier institution for leader development, the mission of the
    United States Military Academy is: ``to educate, train and inspire the
    Corps of Cadets so that each graduate is a commissioned leader of
    character committed to the values of Duty, Honor, Country; professional
    growth throughout a career as an officer in the United States Army; and
    a lifetime of selfless service to the nation.''
        As a result of their four-year experience, the Academy envisions
    that graduates will possess the intellectual, military, physical and
    moral-ethical foundation for professional growth and service as
    commissioned officers in the Army. They will be prepared for the
    uncertainty and ambiguity associated with military service during this
    period of strategic transition, and they will be able to anticipate and
    manage change in their organizations. They will be able to do so
    because they will have reflected upon and developed a personal
    understanding of the unique characteristics of their chosen profession
    and the principles that govern the fulfillment of their office.
    Additionally, they will be inspired to serve the nation as a lifetime
    endeavor.
        Expressed as a specific outcome goal for its graduates, the Academy
    envisions that graduates will be: ``commissioned leaders of character
    who, in preparation for the intellectual and ethical responsibilities
    of officership, are broadly educated, professionally skilled, moral-
    ethically and physically fit, and are committed to continued growth and
    development both as Army officers and as American citizens.''
        In support of this overarching goal, graduates must understand: the
    profession of arms and the application of a broad liberal education in
    the arts and sciences to that profession; the ideals of the American
    Constitution and the responsibilities of commissioned officers to its
    defense; and the values and ethical standards of the United States
    Army. Graduates must also demonstrate: personal devotion to the duties
    of a commissioned officer; intellectual curiosity, imagination, and
    creativity; ability to act rationally and decisively under pressure;
    mastery of the basic military and physical skills required for entry
    into commissioned service; inspiration and motivation to lead American
    soldiers in war and peace--leadership characterized by a winning
    spirit; ability and motivation to achieve and sustain unit climates
    that are conducive to military effectiveness and professional
    excellence; and personal commitment to the selfless standards of
    officership within the United States Army.
        The developmental systems and programs--academic, military,
    physical, and moral-ethical--are structured to contribute to instilling
    these characteristics in each of our graduates.
        Through our academic program, cadets receive a balanced, world-
    class, liberal arts education focused on the creation of independent
    and self-directed learners. The curriculum balances engineering, math
    and science, and humanities. Understanding that the challenge for
    today's Army officer is to bring people and technology together to
    accomplish diverse missions in areas around the world, we have recently
    adjusted our curriculum. Cadets now receive more classes focused on
    foreign cultures, foreign languages and information technology. These
    changes allow us to continue to develop officers who can anticipate and
    respond effectively when confronted with new problems in this dynamic
    world. All cadets receive a Bachelor of Science degree, which is
    designed specifically to meet the intellectual requirements of a
    commissioned officer in today's Army.
        Military development begins on a cadet's first day. First-year
    cadets spend their first summer learning military skills at Cadet Basic
    Training. They road march, conduct individual tactical training, and
    learn teamwork under tough, demanding conditions. At Camp Buckner,
    second-year cadets sharpen advanced military and leadership skills
    during Cadet Field Training. They carry out weapons training,
    combatives, and small unit maneuvers. They also spend a week at Fort
    Knox, KY conducting a mounted maneuver exercise. The third-year and
    fourth-year cadets plan and lead most of the training for the plebes
    and yearlings. In addition, upper-class cadets are sent to Army units
    and schools during the summer to train. Military training is combined
    with military science instruction throughout the academic year to
    provide a solid military foundation.
        Each cadet also participates in a demanding physical education
    program. Cadets achieve the highest levels of personal fitness in a
    program that emphasizes a lifelong pursuit of physical development and
    instills the winning spirit through four years of classes. Every cadet
    also participates in an intercollegiate, club or intramural level sport
    each semester. West Point fields 25 intercollegiate sports, 25 sports
    clubs, and a number of intramurals. This rigorous physical program
    instills the ``winning spirit'' and contributes to the mental and
    physical fitness that is required for service as an officer in the
    Army.
        These programs--military, academic, and physical--are encompassed
    by ethical development centered on our Honor Code that simply says, ``a
    cadet will not lie, cheat, steal, or tolerate those who do.'' The code
    is strictly enforced and imbedded in all that we do. Cadets receive
    formal, values education in areas such as respect, honor, and
    consideration of others. This is critical to developing our
    professional ethos.
        These developmental programs combined create the West Point
    Experience. The West Point Experience is about producing leaders of
    character for our nation and our Army. Leaders that seek to discover
    the truth, decide what is right, and demonstrate the courage to act
    accordingly, and leaders that always choose the harder right over the
    easier wrong. But maintaining the West Point Experience and
    accomplishing our mission is not without challenges. There are two
    major challenges that we continuously face.
        The first is maintaining the Academy's relevance in a perpetually
    changing world. Today, our Army and the officers who lead it are being
    placed on the path of peace as well as in harm's way. They are being
    asked to provide humanitarian relief and to fight and win our wars.
    They operate, in short, across the full spectrum of conflict. As a
    result, 21st century officers must have the mental agility and a
    comfort with ambiguity to operate and win in this complex, global
    environment. In response to this, two years ago the Academy conducted
    an academic curriculum review. We realized that rapid adaptation to
    ambiguous situations requires leaders broadly educated in the
    languages, customs, and cultures of the world beyond our shores. It
    also requires leaders who are familiar with technology, especially
    information technology. Accordingly, we slightly decreased the
    engineering course requirement allowing us to increase foreign culture,
    foreign language, and information technology opportunities. Currently,
    we are looking at the Cadet Honor System and our military program to
    confirm that they are balanced properly within the West Point
    Experience to enable us to fulfill our mission of developing leaders of
    character. This is West Point's challenge, to ensure that our
    developmental programs balance continuity with change to produce
    leaders relevant to the needs of America's Army.
        The United States Military Academy must also actively compete with
    other similar colleges and academies to obtain an extremely scarce
    resource, namely, young Americans willing to commit to a lifetime of
    service to the nation. However, schools that have cutting-edge
    recruiting programs, excellent facilities, top-tier professors,
    integrated student services and institutionally supported athletics
    have a distinct advantage in luring this limited human resource to
    their campuses instead of into the ranks of our Army. Therein lies the
    challenge: to maintain a physical plant and program plan that remains
    competitive with other tier one institutions; and to maintain the
    historic integrity of a 200-year-old institution and national historic
    landmark.
        In the recent past, the Academy had been operating at a Minimum
    Sustainment Level (MSL) of funding for several years, and that was
    simply inadequate to compete with our sister service academies and our
    civilian undergraduate peers. The USMA staff worked closely with the
    Department of the Army to develop a Competitive Sustainment Level (CSL)
    of funding, which would represent a significant increase over the MSL.
    Beginning in fiscal year 2000, the Department of the Army supported a
    ``Competitive Sustainment Level'' in funds for West Point. In addition
    to this, the Association of Graduates has raised a considerable sum of
    funds used for ``Margin of Excellence'' gifts to the Academy. These
    gifts enhance our academic, military, physical, and moral-ethical
    programs as well as our facilities, recruiting and cadet activities.
    The synergy of public and private dollars--CSL and Margin of
    Excellence--will restore a competitive balance with other tier one
    institutions as we fight to attract America's finest young men and
    women to serve our nation.
        As we look toward the future, every graduating class will play a
    critical role in leading and shaping the Army of the 21st century. We
    must continue to develop leaders who are capable of performing many
    roles. The Army needs officers who are both warriors and leaders who
    can serve as ambassadors. These future officers will have the character
    of a true leader who is ready, willing, and able to meet the challenges
    of the Army and the Nation. They will defend our way of life both on
    the home front and abroad, wherever they are called. Just as we have
    been by America's side for the last 200 years, we will continue to be
    by her side for the next 200 years.
        Again, thank you for the opportunity to appear before you today.
                                     ______

      Biographical Sketch of Lieutenant General William James Lennox, Jr.
        Lieutenant General William James Lennox, Jr. of Houston, Texas,
    assumed duties as the 56th Superintendent of the United States Military
    Academy at West Point, New York on June 8, 2001. He entered the Army
    following graduation from the United States Military Academy in 1971,
    where he earned his commission as a lieutenant of Field Artillery.
        General Lennox has served in a wide variety of field assignments.
    He served as a Forward Observer, Executive Officer, and Fire Support
    Officer in the 1st Battalion, 29th Field Artillery, and as Commander,
    Battery B, 2d Battalion, 20th Field Artillery, 4th Infantry Division.
    He was the Operations Officer and Executive Officer for the 2d
    Battalion, 41st Field Artillery, 3d Infantry Division. He commanded the
    5th Battalion, 29th Field Artillery in the 4th Infantry Division and
    the Division Artillery in the 24th Infantry Division. General Lennox
    has also served in a number of staff positions including White House
    Fellow, Special Assistant to the Secretary of the Army, and Executive
    Officer for the Deputy Chief of Staff for Operations and Plans. He
    served as Deputy Commanding General and Assistant Commandant of the
    U.S. Army Field Artillery Center; Chief of Staff for III Corps and Fort
    Hood; Assistant Chief of Staff, CJ-3, Combined Forces Command/United
    States Forces Korea and Deputy Commanding General, Eighth United States
    Army; and, most recently, Chief of Legislative Liaison.
        In addition to his Bachelor of Science degree from the United
    States Military Academy, General Lennox holds a Masters Degree and a
    Doctorate in Literature from Princeton University. His military
    education includes the Field Artillery Officer Basic Course, the
    Infantry Officer Advance Course, the distinguished graduate from the
    United States Army Command and General Staff College, and the Senior
    Service College Fellowship at Harvard University.
        General Lennox's awards include the Defense Distinguished Service
    Medal; the Legion of Merit with 4 Oak Leaf Clusters; the Meritorious
    Service Medal with 1 Oak Leaf Cluster; the Army Commendation Medal with
    2 Oak Leaf Clusters; the Army Achievement Medal; the Korean Order of
    Military Merit, Inheon Medal; the Ranger Tab; the Parachutist Badge;
    and the Army Staff Identification Badge.

        General Lennox. Sir, first, I'd like to thank you and your
    colleagues for the support to the academies, both in terms of
    finances, but, more particularly, in terms of the great
    applicants that you give us every single year. I just want to
    highlight for you one class, the class that just graduated, and
    talk to you briefly about them.
        Last Saturday, we commissioned 947 leaders of character.
    This year's graduating class was another great class. It
    included three Rhodes scholars, three Marshall scholars, three
    Truman scholars, along with two all-American athletes and more
    than 40 all-conference athletes.
        For 200 years, West Point has provided timeless leadership
    for our Army and for our Nation. We began by producing
    engineers and artillerists. And throughout the past two
    centuries, we've produced presidents, military leaders,
    corporate innovators, heads of state, astronauts, and patriots.
    General Shinseki, the first Japanese-American Chief of Staff of
    the Army, is a 1965 graduate. The long, grey line includes over
    100 all-Americans, 79 Rhodes scholars, 75 Congressional Medal
    of Honor winners. As the Nation's premier institution for
    leadership development, West Point continues to educate, train,
    and inspire leaders of character committed to the values of
    duty, honor, and country.
        As seen in combat in Afghanistan, officers of the 21st
    century must be flexible, principled, and self-learning. Army
    officers must be ready and willing to lead American soldiers
    and make complex decisions in complicated environments with
    little or no time. To succeed, they must be part Ivy League
    professor, part professional athlete, part international
    ambassador, and all warfighter.
        We've seen these traits in some of our graduates, like
    Captain Jason Amerine, class of 1993, the Special Forces
    officer who assisted Hamid Karzai in his march toward Kandahar;
    and in Captain Nate Self, class of 1998, the Army Ranger who
    led the attempted rescue of the Navy SEAL in the Shahiko
    Mountains.
        How do we develop these traits? We develop them
    academically, physically, and militarily all in a moral,
    ethical environment.
        First we develop them intellectually, challenging them to
    achieve in a curriculum that balances engineering, math,
    sciences, and humanities. For example, this past year, West
    Point cadets won academic competitions in all disciplines--from
    the National Security Agency (NSA) cyber-defense exercise in an
    international mathematical contest in modeling, to five
    National Honor Society awards for excellence in history and the
    best program at the National Model United Nations (U.N.). In
    creating independent, self-directed learners who can think
    critically, we produce officers who will anticipate and respond
    effectively when confronted with new problems in our dynamic
    world.
        Second, we develop them physically. We imbue them with the
    winning spirit by putting them through the best college fitness
    program in the Nation and by training them to meet and exceed
    Army standards for fitness and by encouraging their
    participation in individual and team sports at the intramural,
    the club, and the intercollegiate levels. This past year, we
    produced conference champions in softball, men's indoor and
    outdoor track, men's cross-country, lacrosse, and golf. Our
    rugby club finished third in the Nation, behind Berkeley and
    Utah.
        And, finally, we produce disciplined leaders by training
    them to be, know, and do. That is, we give cadets the
    knowledge, the loyalty, and the courage to follow orders, make
    decisions, and set the example for the soldiers whom they will
    lead in combat.
        As we speak, West Point cadets are preparing to attend some
    of the Army's most demanding training. This summer, cadets will
    become paratroopers at Fort Benning, and combat divers in Key
    West. They will learn mountain warfare in Vermont, and cold-
    weather warfare in Alaska. Finally, we'll send several hundred
    cadets to serve as platoon leaders in Army units worldwide.
        Together the intellectual, the physical, and the military
    challenges create the leadership qualities needed to win our
    Nation's wars on the 21st century battlefields. But all of
    these qualities are wasted if we do not instill in them the
    moral and ethical values that are critical to maintaining the
    Nation's trust in our armed forces. West Point remains, in the
    words of President Bush, ``the guardian of values that have
    shaped the soldiers who have shaped the history of the world.''
        As we look forward, every graduating class will play a
    critical role in leading and shaping the Army of the 21st
    century. On June 1, the class of 2002 added 947 leaders of
    character to our Nation's armed forces. The new class of 2006
    will begin its exciting 4-year journey in just a few weeks.
        At West Point, we will continue to develop leaders who are
    capable of performing many roles. These future officers will be
    ready, willing, and able to meet the challenges of the Army and
    the Nation. They will defend our way of life, both on the home
    front and abroad, wherever and whenever they are called. Just
    as we have defended America's freedom for the last 200 years,
    we'll be ready for the next 200 years.
        Again, sir, thank you for the opportunity that you gave us
    today, and thanks for the support you've given us over the
    years.
        I'd like to introduce Andy Blickhahn--Second Lieutenant
    Andy Blickhahn, our First Captain, who just graduated June 1,
    last Saturday.
        Senator Inouye. Before I call upon the Lieutenant, may I
    call upon my colleague?

                       STATEMENT OF SENATOR THAD COCHRAN

        Senator Cochran. Mr. Chairman, thank you very much. I'm
    glad to join you this morning in welcoming our panel of
    witnesses from the service academies. I know of no finer
    institutions of higher learning in the country than our service
    academies that are represented here today.
        And I'm very, I guess, unique among Members of the Senate.
    I've had the privilege of serving on each of the Board of
    Visitors of each academy, was chairman of the Military Academy
    at West Point at one time, and now on the Navy Academy. My
    first opportunity was on the Air Force Academy. I haven't been
    at King's Point, I'm afraid, but I--maybe I will get to visit
    there and learn more about what they do.
        But these experiences have convinced me that these are true
    national assets of great importance, and we need to do
    everything possible to support them and protect their interests
    and ensure that they continue to provide the kind of leadership
    for our country--and not just military officers, but even
    beyond. When you look back over the course of our Nation's
    history, some of our greatest political leaders have been
    graduates of the service academies.
        So I take our responsibilities in this regard, making sure
    we appropriate the funds that are sufficient to carry on these
    important activities, very seriously. And we appreciate your
    being here and sharing with us your views and your suggestions
    about how we can do that.
        Thank you.
        Senator Inouye. I thank you very much, Senator.
        Before I call upon the Second Lieutenant, I want to advise
    all of you that the absence of our membership here is not any
    indication of disinterest. We happen to have, at this moment,
    eight committees having hearings. A very important supplemental
    appropriations bill is now pending on the floor, which, among
    other things, would include an $18 billion account for the
    military. And so it is understandable that members will have to
    be absent.

                       STATEMENT OF LIEUTENANT BLICKHAHN

        And so, with that, I'd like to call upon the next general--
    Second Lieutenant Blickhahn.
        Lieutenant Blickhahn. Mr. Chairman, I appreciate the
    opportunity to appear before your subcommittee to discuss with
    you my experiences as a recent graduate of the United States
    Military Academy at West Point. My name is Lieutenant Andrew
    Blickhahn. I graduated from West Point as the First Captain and
    Brigade Commander 4 days ago. I was commissioned the Second
    Lieutenant of Infantry.
        Why did I go to West Point? It seemed like the only choice
    for me. I've always wanted to be a soldier. I enlisted in the
    Army right after high school. And after spending about 3 years
    on active duty and having reached the rank of sergeant, I knew
    I wanted to make a career out of the Army, and I knew I wanted
    my contribution to affect the Army as a whole. I decided I
    wanted to be an officer. From the examples set by my commanding
    officers, I knew I wanted to be commissioned as a graduate of
    West Point.
        Leadership lessons start on day one at West Point. To be a
    good leader, each cadet must be a great follower. Daily
    inspections of rooms, personal appearance, academic
    requirements, and homework all contribute to an ingrained habit
    of excellence. Cadets learn to lead by example in every aspect
    of their lives. As I developed into a leader of the corps of
    cadets, I found West Point offers leadership development
    opportunities not found at any other place.
        West Point is superb in developing character. Cadets police
    their own ranks with a strong and active honor code. I have
    learned that living honorably enables and is a requirement for
    outstanding leadership. The mentorship and knowledge of our
    professional staff and faculty help cadets make sense of their
    experiences and grow as people and leaders.
        The time I spent, the knowledge I gained, and the
    experiences I had have better prepared me to lead soldiers and
    were things I could have gained only at West Point. Most of
    all, West Point taught me what it means to be a selfless
    servant of the Nation and a leader of character.
        Again, thank you for the opportunity to appear before you
    today.
        Senator Inouye. I thank you very much, Lieutenant.
        Now may I call upon Colonel Allen?

                          United States Naval Academy

    STATEMENT OF COLONEL JOHN R. ALLEN, COMMANDANT OF
                MIDSHIPMEN
    ACCOMPANIED BY ENSIGN BENJAMIN A. DREW

                               prepared statement

        Colonel Allen. Mr. Chairman, good morning, sir, Senator
    Cochran.
        We are very grateful for this opportunity to speak with the
    committee this morning, sir. And as did General Lennox, I also
    have a written statement, which, with your permission, I'd like
    to submit into the record.
        Senator Inouye. Without objection, so ordered.
        [The statement follows:]
                  Prepared Statement of Colonel John R. Allen
        Mister Chairman and committee members, it is an honor to speak to
    you today on behalf of the Naval Academy Superintendent, VADM Ryan.
    Last month we graduated almost 1,000 Navy Ensigns and Marine Corps
    Second Lieutenants, and I could not have been prouder to send them into
    the Fleet and to our operating forces to serve this great nation at
    home and abroad. Your Midshipmen, and the officers they become, never
    cease to amaze me for their maturity, insight, dedication, and
    commitment to service. They become men and women of profound character;
    and they have never failed the American people.
        Your Naval Academy today is persevering in the midst of the war
    against terrorism and the threat of future strikes against the United
    States. And from the front lines, to the streets of America, Annapolis
    graduates are playing a central role in this struggle. The United
    States Naval Academy continues to produce officers of the Naval Service
    who are prepared for the rigors and challenges of leading our Sailors
    and Marines in combat. As I speak with you today, there are Naval
    Academy graduates in the forward echelons of Operation Enduring
    Freedom--leading Marines and SEALs, flying in the skies above
    Afghanistan, positioning our ships and preparing for the next phase of
    this conflict. In the coming struggle I, and all of us at the Naval
    Academy, gather encouragement and strength from your untiring support.
    It is times such as these when America needs certainty--certainty that
    you so steadfastly provide as you support our services and as you lead
    this nation into the future.
        Our mission at Annapolis is enduring:

              To develop midshipmen morally, mentally and physically and to
            imbue them with the highest ideals of duty, honor and loyalty
            in order to provide graduates who are dedicated to a career of
            naval service and have potential for future development in mind
            and character to assume the highest responsibilities of
            command, citizenship and government.

        We view the mission's component elements as developing midshipmen
    morally, mentally and physically. In my testimony, let me address each
    of these. In terms of moral and professional development, we know that
    in war, in peace, and in crisis, character is the single most important
    quality in a leader--moral courage, the conscious choice--the habit--of
    doing the right thing everyday. What Douglas Southall Freeman once
    described as, ``That quality of mind which makes truth telling
    instinctive rather than strange.''
        We recognize the imperative that men and women who lead in combat
    must possess the moral authority to issue orders which may sorely tax
    their Sailors and Marines in the crucible of battle. This plays in
    virtually every dimension of the Academy experience today, from the
    carefully crafted and orchestrated immersion of the midshipman in
    leadership, our honor concept, in ethics instruction, and in our
    character development; to instruction in seamanship, tactics and naval
    warfare; to the vital spiritual preparation of our young leaders in
    their faith and in their beliefs.
        This year, with the Class of 2005, we placed significant emphasis
    on military and social etiquette--the ``gentleman'' portion of the
    classic term ``officer and a gentleman.'' This focus on officership is
    not new, but this year we concentrated it in a series of lectures on
    customs, courtesies, traditions, and etiquette. We remain resolute in
    our commitment to continue this program, and we are expanding it into
    the upper three classes next year and beyond.
        In all our emphasis on moral development we continue to return to
    the message that an officer of the naval service is a public figure and
    servant of the nation. Indeed, our message is clear: Our oath of
    office, sworn so solemnly on Induction Day, means midshipman have an
    absolute, a sacred, obligation to embody the highest moral principles
    of our precious naval service in every dimension of their lives--and in
    every one of their pursuits.
        For the current Brigade, men and women who arrived here during a
    period of relative peace, the discovery of their true purpose and of
    the Nation's reliance on them during these moments of trial, in
    Afghanistan and beyond, is interesting and enlightening to watch. As I
    observe the midshipmen react to reports from the front lines and
    prepare themselves for their role in this conflict, I see purpose in
    their eyes and sense grim resolve as these young men and women,
    especially the recently graduated Class of 2002, prepare to join the
    fight against terrorism. These midshipmen know this conflict is for the
    long haul; this fight is to the finish, and they know there will be a
    place for them in the struggle ahead.
        To transition to the next element of our mission, the mental
    development of the Brigade, this was an important year for the Naval
    Academy--a year of continued accomplishment. As the Members of the
    Committee are aware, there is a survey conducted annually amongst the
    students of the 331 top universities and colleges in the Nation. This
    survey, the Princeton Review, provides important insights into the
    student perceptions of the quality of their educational and college
    experience. The Naval Academy has always fared well in this survey, but
    this year, the Naval Academy, in the category of ``student
    accessibility to the professors of the faculty,'' placed first in the
    nation. This high praise by the midshipmen speaks volumes about the
    commitment of the faculty to the academic and intellectual development
    of these future officers.
        The Naval Academy's admissions process, aided and supported by
    nominations from Senators, Congressmen, and other of our country's
    leaders, continues to deliver some of the finest of America's youth.
    Our nationwide efforts to attract the highest qualified young men and
    women have yielded more than 1,200 great Americans who will join the
    Brigade of Midshipmen on June 28. As I administer the oath of office to
    these future members of the Class of 2006, it will reaffirm once again
    the quality of the bright young men and women of America who seek
    service to their country. I am also proud that more than ten percent of
    our incoming class are enlisted Sailors and Marines who have already
    proven themselves as leaders in the operating forces. Once these
    students arrive at the service academies, they are afforded one of the
    finest academic experiences an institution of higher learning can
    offer. This is our return on the sacred trust by the Congress of the
    United States and the American people.
        Another means of gauging the academic experience and
    accomplishments of the Brigade is through the graduate education
    opportunities afforded our young officers after commissioning. For the
    size of our student body, this is an important signal of the quality of
    the academic rigor of our institution. This year, from the Class of
    2002, twenty-seven graduates continue on to immediate postgraduate
    education. Of these, three will attend Oxford University, including our
    Rhodes Scholar, ENS Emmy Spencer. Three ensigns will attend Cambridge,
    including one Marshall scholar and two Gates Scholars. The remaining 21
    graduates will attend other splendid postgraduate institutions in the
    country including Georgetown, MIT, and University of California at
    Berkley. These accomplishments are something about which we are truly
    proud.
        Yet another example of the academic achievements of the midshipmen
    is in space operations. This year, Naval Academy midshipmen, sponsored
    by the Aerospace Department, built and launched a satellite and
    controlled it from a Naval Academy ground station--truly a great
    accomplishment and an example of institutional commitment to space and
    the aerospace program. Also this year, we added a new academic major,
    Information Technology. Its appearance as the 19th major at the Naval
    Academy is in direct response to the expressed needs of operational
    commanders in the Fleet. This demonstrates the Academy's ongoing
    efforts to leverage advances in computer systems and command and
    control technologies to ensure the relevance of the institution to the
    operational needs and requirements of the naval service. In addition,
    we have added significant Information Technology components to the core
    engineering curriculum to ensure all midshipmen have opportunity to
    keep pace with today's technology.
        To transition to the physical development of our midshipmen, and in
    celebration of the 200th Anniversary of our magnificent sister Academy,
    the United States Military Academy--let me recite the words of one of
    the distinguished sons of West Point who said: ``Upon the fields of
    friendly strife are sown the seeds that on other fields . . . on other
    days will bear the fruits of victory.'' I believe with all my heart
    Douglas MacArthur was right in this statement, and this institution is
    committed to the physical development of its young officers. The end
    state of our physical mission is to create young officers who are
    accustomed and conditioned to winning, but who possess humility in
    victory and resilience in setback.
        The physical preparation of midshipmen spans a wide range of
    activities from individual conditioning in any one of several world-
    class fitness centers, to intramurals and club sports, to Division 1A
    intercollegiate competition in 30 sports administered within the Naval
    Academy Athletic Association. We have made great strides this year to
    truly insinuate a sense of individual physical fitness and physical
    discipline for the midshipmen. The fierceness of our intramural
    competition has already paid big dividends in building small unit
    esprit de corps and cohesion, as well as generating additional
    leadership opportunities.
        Every day, Navy athletes continue to achieve the same kind of
    excellence on ``the friendly fields of strife'' as they do in the
    classrooms or within their professional development. Last year Navy
    athletes won two-thirds of all their competitions, and the Naval
    Academy produced 5 All-Americans, 2 Academic All-Americans, 4
    Conference Athletes of the Year, and 1 Coach of the Year Award. We have
    welcomed a new Director of Athletics who has already made an impact on
    the Academy, as his focus is not just on athletics, but on the
    institution--on its traditions, history, mission, and service. The
    athletic department, and the teams that will benefit from his
    leadership, understand their role in preparing midshipmen to lead
    Sailors and Marines.
        This is another area where we will seek your continued support in
    the future. One of our challenges to properly support our very
    necessary athletic program is to provide proper indoor physical
    education space. However, the Naval Academy is currently operating with
    a deficit of adequate indoor athletic space of 180,000 square feet.
    Therefore, our Board of Visitors has indicated to the President that
    our highest military construction priority is the construction of a new
    field house at Turner Field. The new field house will provide a 120,000
    square foot facility, which will substantially address our critical
    deficit. We need to advance this facility as much as possible.
        There could be, perhaps, no greater measure of the marriage of the
    principal components of our mission--the moral, mental, and physical
    preparation of the midshipmen--than in the areas of our club and
    extracurricular activities, opportunities for our midshipmen to ply the
    skills, prowess, and leadership qualities they learn every day. For
    example, this year our International Pistol Team finished #1 in the
    country with 7 All-Americans, our Triathlon team finished #1 in the
    country and our Powerlifting, Men's Rugby, Boxing, and Women's softball
    club teams ranked #2 in the country. In addition, we won the
    International Law Competition, the Ethics Bowl Competition, and our
    community service outreach program, the Midshipman Action Group, was
    awarded the Council for Advancement and Support of Education Circle of
    Excellence Award.
        As I speak to you today, your midshipmen have transitioned into
    their summer training period. After a long year of academic and
    physical rigor, you could feel their excitement and their anticipation
    as they departed Annapolis for service around the world with the Fleet
    and Marine Corps units. The diversity of the summer training experience
    for the midshipmen is simply remarkable and spans the spectrum from
    service with forward deployed operational Fleet units, to internships
    in the Federal Government. Midshipmen will be going to sea in
    submarines and on surface combatants, and they will be serving with
    operational naval aviation squadrons and aboard forward deployed
    aircraft carriers. Midshipmen will train with special operations and
    special warfare elements, and will be serving with Marine Corps units
    around the world. As well, over 150 midshipmen will be involved in
    summer internships with organizations such as NASA Goddard and Johnson
    Space Flight Centers, Lawrence Livermore and Brookhaven National
    Laboratories, and with the Defense Intelligence Agency, the Office of
    Naval Intelligence, and in various Offices of the Secretary of Defense
    and the State Department.
        As we graduate the Class of 2002, we are reminded the academic year
    began with a national tragedy that caused death and devastation upon
    this nation in a way we have never before experienced in all the annals
    of American history. The enemy, an evil malignant force, is bent upon
    one thing, the destruction of our country, its way of life, and its
    people. Already, 15 Naval Academy graduates have fallen in the opening
    attack and the continuing battle. With the Class of 2002, nearly 1,000
    graduates entered the naval service to join this fight. Of that number,
    272 are joining the surface units of the Fleet, 345 will become naval
    aviators and naval flight officers, 129 will go to sea in our
    submarines, 27 will become SEALs or special operators, and 165 have
    become Marines. From our youngest graduates, to the Vice Chairman of
    the Joint Chiefs of Staff, General Peter Pace, your Naval Academy
    graduates are engaged in every facet of the defeat of this implacable
    and determined enemy, the elimination of terrorism, and the restoration
    of peace. In the months and years to come, the leadership and fighting
    prowess of the graduates of your Naval Academy will be profoundly and
    unambiguously demonstrated to the enemies of America and to the
    opponents of freedom.
        In this, and in the coming struggle, we always remain mindful of
    the silent messages so dramatically displayed on the monuments and the
    buildings of the Naval Academy. From these granite words we draw
    strength and inspiration. Words such as ``Don't give up the ship.'' or
    ``I have not yet begun to fight.'' define who we are and color our
    enduring role in the defense of America and its people. But perhaps no
    message left for us by our alumni better embodies that for which your
    Naval Academy and its graduates stand than that cast in the magnificent
    bronze doors of our Naval Academy Chapel. They are ancient Latin words,
    Non Sibi Sed Patriae, and are rendered not just in bronze, but are
    emblazoned on the heart and in the soul of every graduate of Annapolis
    and translate as ``Not for self . . . but for country.'' Distinguished
    Members, your Naval Academy continues today, as it has for one hundred
    fifty-seven years, to produce men and women of character and
    unimpeachable integrity to lead the Sailors and Marines of our naval
    service. We are tremendously grateful for your continuing support in so
    many areas and for your leadership in this time of national emergency.
    As we discharge our duties at the Naval Academy, we will remain always
    faithful to our mission and to those silent, but all encompassing
    words: ``Not for self . . . but for country.''

        Colonel Allen. Thank you, sir. I'd also like to make some
    preliminary comments, if I may.
        I speak to you this morning to tell you how great an honor
    it is for us to come to the Hill and to speak to you about the
    Naval Academy and this great institution--the great
    institutions of the service academies.
        Admiral Ryan asked me to extend his greetings to you, sir,
    and his sincere thanks for the tremendous support of this
    committee, to the Naval Academy, in so many ways--not just
    resources, but in advice and other services that the committee
    has provided to us for so long.
        He asked me also to relay that last month we graduated
    nearly 1,000 Navy ensigns and Marine second lieutenants. We
    could not be more proud of these young men and women and more
    confident of their capabilities and role as they join the fleet
    and our operating forces, particularly to serve this Nation now
    in this time of emergency.
        And one of these fine graduates is with me today, Ensign
    Benjamin Drew, who will have an opportunity to speak in just a
    few moments, sir.
        Ensign Drew hails from Michigan and is a third-generation
    Jewish-American. He entered the Naval Academy with the Class of
    2002 directly from high school. He has excelled in all facets
    of midshipman life, achieving a 3.83 in mechanical engineering
    over his 4 years, graduating 11th in his class.
        Beyond that, Ben had an opportunity to serve as an exchange
    midshipman with the Air Force Academy in the Service Academy
    Exchange Program and will be attending, shortly, Georgetown
    University in the National Security Studies Program, eventually
    becoming a submarine officer in the United States Navy.
        Ben is a prime example of the success the Naval Academy
    program continues to produce in the officers of our naval
    service, officers who are prepared for the rigors and for the
    challenges of leading sailors and marines in combat.
        Now, the preparation of our officers is done through three
    main mission areas: moral, mental, and physical development.
        In terms of mental--or moral development, we recognize the
    imperative that men and women who lead in combat must possess
    the moral authority to issue orders, which will sorely test the
    sailors and marines that they will lead in the crucible of
    combat. This plays in virtually every dimension of the academy
    experience today, from the immersion of the midshipmen in
    leadership instruction, in the honor concept, in ethics, to
    character development, seamanship, tactics instruction, to the
    vital spiritual preparation of our young midshipmen for their
    beliefs and their values.
        In mental development, in the brigade this year, it was a
    year of continued accomplishment. Our admissions process
    continues to deliver some of the finest young men and women of
    America to Annapolis. And once these students arrive at the
    Naval Academy, they are afforded one of the finest academic
    experiences an institution of higher learning can provide in
    America today. This year, for example, the class of 2002
    produced 27 midshipmen who will go to postgraduate education,
    including a Rhodes scholar, Ensign Emmie Spencer. And, as
    previously mentioned, Ensign Drew will continue on to
    Georgetown University.
        Also this year, we added a new academic major, a 19th
    major, in information technology, and have done so in response
    to the needs of our operating forces. We have incorporated
    significant information-technology components in our core
    engineering program, and we ensure that all midshipmen will be
    able to continue to lead in the expanding technology that will
    confront our forces in the future, sir.
        The physical preparation of the midshipmen is the third
    mission area and spans a wide range of activities, from
    individual physical readiness, to leadership opportunities and
    intramural and club sports, to Division 1A intercollegiate
    competition in 30 varsity sports. And this year, Navy athletes
    won two-thirds of all of their competition. The Navy produced
    five all-Americans, two academic all-Americans, and four
    conference athletes-of-the-year and one coach-of-the-year
    award.
        While this was a year of accomplishment for the Naval
    Academy, it was a different year for us, because it began with
    a national tragedy unparalleled in its proportions in American
    history. Fifteen Naval Academy graduates have already fallen in
    the opening attack and in the continuing operations in the
    continuing battle. Midshipmen understand that this enemy is
    bent upon nothing less than the destruction of this country,
    its way of life, and its people. In the class of 2002, nearly
    1,000 graduates, entered the naval service at the end of May to
    join this fight. And whether they're serving with the surface
    or the subsurface--the submarine forces of our fleet, flying in
    naval aviation or leading SEALs or marines, they are ready, and
    they're determined, and they will not fail this country or its
    people.
        The remaining midshipmen in the brigade are preparing
    themselves morally, mentally, and physically for the challenges
    ahead, challenges to their homeland and challenges to American
    interests and our friends overseas. In the months and years
    ahead, you, Mr. Chairman, Senator Cochran, the other members of
    the committee, and the American people can continue to rely on
    the graduates of the Naval Academy, like Ben Drew, to do their
    duty and to deal swiftly and decisively with the enemies of
    this Nation.
        In all this, again, sir, we are so grateful for the support
    of this committee and of Congress and of the American people.
    We could not be more proud of these midshipmen, of the officers
    that they have become. And, again, sir, thank you for the
    opportunity for us to come today to speak to you about the
    academy.
        Senator Inouye. Thank you very much, Colonel.
        And now may I recognize Ensign Drew?
        Ensign Drew. Thank you, Colonel Allen. Mr. Chairman,
    Senator Cochran, I would like to sincerely thank you for this
    opportunity to come before this committee and speak on behalf
    of the recently graduated class of 2002 and relate my own
    experiences about the U.S. Naval Academy.
        Exactly 12 days ago, nearly 1,000 newly commissioned
    officers became ensigns and second lieutenants in the United
    States Navy and the United States Marine Corps, respectively. I
    can honestly tell you that these are some of the most
    motivated, dedicated, hardworking, and altruistic young people
    that you will ever come across. After 4 years by the bay, as we
    know it, they have challenged themselves mentally, morally, and
    physically, beyond their limits to reach a new potential and to
    do what they came to do, and that job is to lead.
        As I sit here right before this committee today, I have
    classmates who have already opted and eagerly accepted the
    opportunity to go directly to their ship. I have other
    classmates who have eagerly accepted and relinquished all of
    their leave so they can go directly to flight school, submarine
    school, and dive school so that they can take part in defending
    this country.
        As a third-generation Jewish-American, I have been indebted
    to this country for my entire life, because it gave my
    grandparents refuge after World War II. And I am honored today
    to wear this uniform before you. That is just one story. That's
    my personal story. There's 4,000 other midshipmen in the
    brigade that had their own stories and their own reasons why
    they came to the Naval Academy, which are just as good and
    better, just as influential and just as convincing.
        Annapolis--the men of Annapolis and the women of
    Annapolis--revere the 68,000 graduates who have preceded us. On
    May 24, 2002, when the newly commissioned officers accepted
    their diplomas, received their commissions, donned their new
    uniforms and rank insignia, they accepted a commitment to this
    institution, to the Naval Academy, to themselves, and to this
    country. And I assure you, Mr. Chairman and Senator Cochran, as
    a representative of my class, we will fulfill that promise.
        Thank you very much, gentlemen.
        Senator Inouye. Ensign, I thank you very much, sir.
        And now may I call upon the General?

                        United States Air Force Academy

    STATEMENT OF LIEUTENANT GENERAL JOHN R. DALLAGER,
                SUPERINTENDENT
    ACCOMPANIED BY CADET FIRST CLASS TODD GARNER

                               prepared statement

        General Dallager. Thank you very much, Mr. Chairman,
    Senator Cochran. We appreciate the opportunity to tell you and
    America that you can be very proud of the cadets, the faculty
    and the staff at your United States Air Force Academy.
        And, Mr. Chairman, with your permission, I would request my
    statement be inserted into the record, and I would just like to
    summarize a few of the major points.
        Senator Inouye. Without objection, so ordered.
        [The statement follows:]
           Prepared Statement of Lieutenant General John R. Dallager
                                  introduction
        Good morning Mister Chairman and committee members. It's an honor
    to be here today to discuss the United States Air Force Academy and the
    people, programs, and facilities we're most proud of. As you know, many
    of our Air Force professionals are presently deployed to remote
    locations around the globe defending our nation's security interests.
    Many of these individuals are graduates of the Air Force Academy. For
    almost 50 years the academy has been commissioning second lieutenants
    into the Air Force. Officers who have gone on to win the Congressional
    Medal of Honor, become Chief of Staff of the Air Force, hold public
    office, and die in defense of this country. There's a recipe for
    success at USAFA, and it includes the focus on academic education,
    character development, athletic competition, and military training. Or
    as I like to refer to them: ``brains, heart and soul, and guts.''
                                    overview
        This past year has been one of tremendous tragedy and perseverance.
    Ask any graduate of West Point, the Naval Academy, or the Air Force
    Academy and they'll all admit their service academy experience was very
    challenging. Compound this already difficult challenge with the events
    of 9-11 and the security requirements following, and we have, I
    believe, entered a new era. Yet, much like our nation, the officer,
    enlisted, civilian, and cadet populations never waivered, and became
    keenly focused on the potential threats to our country and the ways and
    means to protect it.
        We just graduated over 900 second lieutenants dedicated to
    defending the Constitution of the United States of America. As
    Superintendent I can assure you they are up to the task. The continued
    strength of America's Air Force will depend on our ability to recruit
    and retain quality people. Thanks to your and other Members of
    Congress' support, the Air Force Academy continues its tradition as a
    top tier leadership institution and commissioning source. Thank you for
    your continued support.
                                      body
        Developing the brains, heart and soul, and guts of America's youth
    is an institutional challenge to say the least. Yet, if I had to select
    only one thing I could highlight as being most proud of, it would be
    the caliber of graduates we commission each year. I'd like to take a
    moment and touch on a few reasons why I feel this way.
        First, we start with the best and brightest. Our admissions
    experience has been a college president's dream, especially for the
    past couple of years. Competition for nominations is keener than it has
    ever been both in terms of qualifications and numbers of applicants.
    Acceptances of appointment offers remain at all-time highs, and cadet
    attrition has been far lower than historic averages. That says good
    things not just about the academy, but also the caliber, determination
    and patriotism of America's high school youth.
        All of our academy programs are dedicated to building leaders of
    character for the nation. We maintain a very challenging core
    curriculum, but it doesn't stop there. We exist to make our Air Force
    and nation better, and relevance is critical. For example, the academy
    was the first undergraduate institution to design, build, launch, and
    command its very own satellite. The program, now known around the
    academy as Falconsat was just an idea in one astronautics instructor's
    head back in 1991; but by 1995, 15 cadet astronautics majors ``balloon
    launched'' the first USAFA spacecraft known as USAFASAT-B. Several
    successful balloon launches followed and the lessons learned from these
    ``near-space'' flights led to the first ``true'' launch of Falconsat I
    aboard a ``minotaur'' missile. Falconsat II goes up in January 2003
    aboard the Space Shuttle with a USAFA graduate as pilot and a former
    USAFA math instructor as mission commander.
        On a similar note, USAFA cadet programs are impacting our fight
    against terrorism. As you know, the AC-130 gunship is a formidable
    weapon and has flown over Afghanistan in that war. Despite its
    effectiveness, the modifications required to make it as deadly as it is
    had a price in efficiency. The Air Force Academy took on the challenge
    to reduce the gunship's drag without moving anything, affecting its
    functionality, or becoming ``expensive.'' Over a 4-year period, 36
    cadets and an aeronautical engineering instructor came up with a
    solution fitting these criteria. Pending funding approval, when fully
    implemented, the modifications recommended will result in a 30-minute
    increase in flying time and a 2,000-foot increase in ceiling--
    improvements positively affecting future operations. This program
    received rave reviews from the cadets involved: their studies were more
    than mere theory and hypothetical problems. They are solutions being
    used right now, in today's Air Force.
        Speaking of today's Air Force, it's an expeditionary force with
    global reach and global power. But how do you relate this experience
    and knowledge to 4,000+ cadets? For several years now we've included a
    program entitled ``Global Engagement'' that gives cadets a taste of
    what life is like in a deployment situation. Global Engagement is an
    intense 9-day course, taught 6 times throughout the summer. In these 9
    days, under the supervision of officers and enlisted personnel (many
    from the Reserve components), cadets construct, defend, and re-deploy
    an entire base. They're responsible for their own security, facilities,
    defense against attack, morale, and welfare. If they don't have a good
    plan, and fail to construct appropriate housing, then they have nowhere
    to sleep. If they fail to properly secure their perimeter, a small
    aggressor force will succeed in a surprise attack, and if they're
    unable to properly configure their mess hall, then they go hungry until
    they get it right. This program challenges the cadets' abilities to
    absorb training and put it to use immediately. Nothing beats hands-on
    training and, in my opinion, this hands-on approach to preparing our
    graduates for deployments is as close as you can get to operational
    missions.
        For you see, it's all about leadership. The academy is often
    referred to as a ``leadership laboratory'' because the cadets run the
    squadrons, the groups and the wing with supervision from active duty
    personnel. At each level they have cadet commanders and staff. All of
    these positions run for a single semester allowing as many cadets as
    possible to experience the challenges of leading. The purpose behind
    our leadership laboratory is to provide experience in a somewhat
    forgiving arena. I use the word somewhat because there are definitely
    consequences for cadet actions. They may not be commanding a fighter
    squadron or sending their troops into combat, but trust me, many of
    their decisions seem like life and death--especially those affecting
    their peers.
        As we all know too well, peer pressure can be a powerful thing,
    both positively and negatively. At USAFA, character development
    programs educate the cadet wing on how to handle peer pressure, and
    many other challenges to ethical decision making. For example, programs
    like our National Character and Leadership Symposium (NCLS) invite
    speakers from around the country and the world to address character
    issues to an international audience. This last year we hosted guest
    speakers from senior military ranks, CEOs/presidents of private
    corporations, and professors from other universities. Students traveled
    from as far away as Japan to attend the NCLS. This program continues to
    grow, and with it its audience, benefitting many more people than just
    the cadet wing.
        Most of our other character development programs specifically
    target the cadet wing. The Falcon Heritage Forum is a good example. In
    this program, distinguished veterans are united with cadets to share
    experiences, mentor, and appreciate one another. This link with
    previous generations provides tremendous understanding of the honor,
    dedication, and selflessness required to serve in our armed forces. As
    it turns out, the Falcon Heritage Forum is equally as popular amongst
    cadets and veterans alike.
        Turning now to athletics, members of the Falcon football team and I
    were at the White House less than a month ago to receive our 15th
    Commanders in Chief trophy. Air Force has provided a home for the CINC
    trophy for all but one year since 1989. Athletic competition is crucial
    to developing our future leaders. Our men's and women's intercollegiate
    sports, our many and varied club teams, and the cadet wing level
    intramural competitions all demand the pursuit of victory with honor--a
    lesson that serves our future leaders well.
        The goal of athletics at the service academies isn't so much to win
    games--it's a means to the much more important end of transforming
    cadets into officers who will subordinate ``self'' to pull together as
    a team to accomplish the mission under difficult circumstances. General
    MacArthur probably said it most eloquently: ``On the fields of friendly
    strife are sown the seeds that, upon other fields, on other days, will
    bear the fruits of victory.'' It's a truism, but one well worth
    reminding ourselves about; the pressures of competitive athletics are
    often regarded as the closest peacetime comparison to those experienced
    in actual military combat. In this pressurized crucible, competitive
    athletics forges the high levels of individual character we expect--and
    demand--of our service academy graduates.
        Now, let me take a moment and thank you and other Members of
    Congress who supported our breaking ground on an important addition to
    our athletic facilities. This new facility provides upgrades for both
    our men and women further fostering development of traits such as:
    courage, aggressiveness, self-confidence, intensity, and teamwork.
                                   challenges
        While the nation can be proud of all its military academies and
    their graduates, there remain challenges we must address.
        The nationwide shortage of science and engineering talent affects
    the Air Force and the Air Force Academy in the sense that we have to
    compete for ``blue-suit'' instructors in these areas. Given the
    operational Air Force's requirements for people in the S&E area, we'll
    almost certainly have to hire additional civilian professors to teach.
    While they are outstanding teachers, what they cannot offer to the
    degree uniformed instructors can is the mentorship that comes from
    being in front of a class in uniform, bringing past military
    experiences to bear on classroom instruction. You teach subject matter
    by what you say, but inspire professionalism by what you are.
                                   conclusion
        Mr. Chairman and members, in its short history the Air Force
    Academy has established a tradition of producing quality leaders for
    the nation. One hundred and sixty-two academy graduates have made the
    ultimate sacrifice in America's battles. Graduate valor and bravery
    have garnered this nation's highest awards including a medal of honor,
    16 Air Force crosses, and 266 silver stars. Thirty-six graduates have
    been POWs. Exceptional graduate leadership has saved lives and produced
    victories in conflicts around the globe. Our graduates have led and are
    leading the Air Force--there have been 315 generals including 18 four-
    stars. Graduates have made an impact in every walk of life. Many of our
    alumni are captains of industry--727 are presidents/CEOs of companies,
    33 are astronauts, and over 500 are doctors. Others are lawyers,
    airline pilots, entrepreneurs, inventors, teachers, ministers,
    government officials, coaches, authors--and one, Heather Wilson, is the
    first female veteran Member of Congress. The long blue line is making
    an impact across society and the Air Force Academy is proud of its
    living legacy.
        The events of 9-11 were a watershed in our history. For the first
    time, our homeland faces a real and constant threat of attack. These
    are extraordinary times which demand extraordinary leadership, not only
    to win the war against terrorism but to guide our economy and inspire
    confidence in all sectors of society. The cornerstones of the Air Force
    Academy experience--integrity, service before self, and excellence are
    expected from all academy graduates. Now, more than ever, the country
    needs leaders of character to lead the nation.
        On behalf of the men and women who serve in America's Air Force and
    sister services, thank you for your leadership and superb support--and
    for the privilege to appear before you today. We would be honored to
    host you at USAFA and share with you the privilege of serving alongside
    America's most precious treasure--its sons and daughters--as we develop
    leaders of character for our Air Force and nation.
                                     ______

           Biographical Sketch of Lieutenant General John R. Dallager
        Lt. Gen. John R. Dallager is Superintendent, U.S. Air Force
    Academy, Colorado Springs, Colo. He directs a four-year academic,
    military training, athletic and character development program leading
    to a bachelor's degree and commission as an Air Force officer.
        The general, a distinguished graduate of the U.S. Air Force
    Academy, earned a bachelor of science degree in mechanical engineering
    in June 1969. He has served in several United States, joint staff and
    instructor positions, as well as squadron, wing numbered air force and
    combined/joint task force command positions.
        A command pilot with more than 2,900 hours in F-4, A-10 and F-15
    aircraft, he has accumulated 600-plus combat hours over Southeast and
    Southwest Asia, and Bosnia.

                          QUALIFICATIONS OF APPLICANTS

        General Dallager. First, applications are up substantially.
    The qualifications of applicants are at an all-time high
    resulting in an extraordinarily competitive and extremely
    challenging selection process. Appointment offers are being
    accepted at record-high rates. For the past 2 years, attrition
    has been at record lows.
        We just completed the selection process for the class of
    2006, which will arrive and start basic cadet training in just
    a couple of weeks. We had 16,500 applications, up from around
    9,000 last year. The average combined scholastic assessment
    test (SAT) score for selectees was 1,310, and the average high-
    school grade point average (GPA) was better than 3.9. Women
    will comprise 19 percent of the class, and minorities will make
    up 18 percent. Both the women and the minority admissions are
    up, continuing a trend that we're very, very proud of. Clearly,
    there's an abundance of patriotic, high-achieving, goal-
    oriented young people who are eager to learn and earn their
    commissions and serve their country.

                              CURRICULUM REVISION

        Secondly, we've just completed a thorough revision of our
    core and our majors programs. They say it's easier to move a
    cemetery than to undergo a curriculum revision, but we felt it
    was essential to do so to permit our time-challenged cadets to
    meaningfully integrate our exceptionally rigorous academic,
    military training, athletic, and character-development
    programs. I'm proud to say that our Secretary of the Air Force,
    Dr. Jim Roche, personally took part in the process because of
    his fierce belief in the importance of education. The result,
    we believe, will be a better-balanced, more interdisciplinary
    curriculum that will, among other things, ensure enhanced
    technical literacy of all our graduates and increase our output
    of badly needed science and engineering graduates.
        From our nationally recognized character-development
    programs, to building and launching our own satellites, we have
    much to be proud of. Our cadets are preparing for our wars of
    the future with sister-academy competition in NSA's highly
    technical cyber-war program. And on the fields of friendly
    strife, we compete for the coveted Commander-in-Chief's trophy.
    Despite the traditional competition, we all realize that
    ultimately, we're on the same team, America's team, fighting
    the same fight for national security.
        The sky is the limit for our cadets, literally and
    figuratively. Our graduates emerge as leaders of character and
    have achieved stellar records in the military, in government,
    and in civilian life serving our Nation.
        When you think about what kind of young person typifies our
    future Air Force officer, you should think of outstanding young
    women and men, like the cadet right here with me, Cadet First
    Class Todd Garner, of Bettendorf, Iowa, our Cadet Wing
    Commander for the fall semester. There's no doubt in my mind
    that with the young men and women like Todd, preparing to serve
    their country, our Nation will be in great hands.
        Thank you, Mr. Chairman, Senator Cochran. I'm happy to
    answer any questions you may have and, with your permission,
    would like to turn the microphone over Cadet Garner.
        Senator Inouye. I thank you very much, General Dallager.
        And now may I call upon Cadet First Class Garner?
        Cadet Garner. Mr. Chairman, Senator, thank you and good
    morning. I'd like to say thank you for the opportunity to speak
    before this subcommittee today. It is always a pleasure to have
    the opportunity to express the awesome opportunities and
    experience provided by the Air Force Academy.
        With the graduation of the class of 2002, I can say
    firsthand that the academy finished another year of producing
    nearly 1,000 extremely motivated and committed officers into
    the United States Air Force. This year, with the class of 2003
    at the reins, we hope to go above and beyond 2002's success in
    developing leaders for our future Air Force.

                   UNITED STATES AIR FORCE ACADEMY CADET WING

        As the vision created by the United States Cadet Wing says,
    we are the United States Air Force Academy Cadet Wing, a wing
    united and committed to carry on the honor, tradition, and
    sacrifice of those who, inspired in spirit, came admirably
    before us. We take pride in our academy and revere the
    privilege it presents us to serve our Nation. We willingly
    accept the challenges ahead, and demand the passion and desire
    essential to overcome all obstacles and break all barriers. We
    are the United States Air Force Cadet Wing, and we will leave
    no doubt that we create the world's finest officer.
        Again, I am excited to be here to express the awesome
    attributes of the academy, and I'd be happy to answer any
    questions. Thank you.
        Senator Inouye. I thank you very much, Cadet First Class.
        I decided to suggest to the committee that we have a
    hearing of this nature, because these are the young men, the
    young men and women they represent, who have said to us that
    they are willing to stand in harm's way to uphold and defend
    the honor of our country. I wanted the people of the United
    States to see why we are spending their hard-earned tax monies.
        Hardly a day goes by when I don't receive a letter or a
    call telling us that we're spending too much for defense. My
    response is a very simple one. If any person is willing to
    stand in harm's way and give his life for this country, the
    least I can do is to provide the best. And that's what this
    committee is committed to doing.
        And so, with that, I know I speak for all of the members of
    the committee. We thank you very much, and we are extremely
    proud of all of you.

                         RESPONSE TO BRANCHING QUESTION

        Lieutenant Blickhahn, you're in the infantry, aren't you?
        Lieutenant Blickhahn. Yes, sir.
        Senator Inouye. I was told that the--of all the special
    services, the infantry is not on the top of the list. Why did
    the number one man pick the infantry?
        Lieutenant Blickhahn. Sir, if you're looking to lead
    soldiers and to execute the Army, the infantry is the place to
    be. West Point ingrains everyone into an understanding of the
    total Army picture. I felt that the contribution that I could
    best give to the United States Army, to America, is to be at
    the top of the spear being an infantryman, making sure we take
    care of the business for America.
        Senator Inouye. As you know, I have something very personal
    here. I was scheduled to become a member of the class of 1949
    at West Point, but the war came along and denied me that
    privilege. But seeing all of you, it makes me feel good that I
    could have been there, once upon a time.
        Ensign Drew, you have been selected for the submarines?
        Ensign Drew. Yes, Mr. Chairman.
        Senator Inouye. You know that that's top of the heap.
        Ensign Drew. I am aware, Mr. Chairman.
        Senator Inouye. I want to congratulate you, because I've
    been told that to be selected as a member of a submarine, you
    must be exceptionally good--not just disciplined and
    knowledgeable, but one who is willing to live with other people
    under extraordinary circumstances. That means psychologically,
    you're top of the heap here, so congratulations. What made you
    select the submarines?
        Ensign Drew. I'm sorry, could you repeat your question, Mr.
    Chairman?
        Senator Inouye. What made you select the submarines?
        Ensign Drew. Well, Mr. Chairman, during the second-class
    summer at the Naval Academy, I had the opportunity to go to
    Italy and embark upon the U.S.S. Hartford, which was conducting
    dynamic mixes with the North Atlantic Treaty Organization
    (NATO), a 30-ship Italian operation, and I had an opportunity
    to see the versatility of the submarine. I was very impressed
    with the mission. I was very impressed with it being covert,
    uncertain, and stealth. And essentially everything on the
    surface is a floating target.
        Beyond that, sir, the people, the enlisted sailors, are
    some of the top-quality--actually are the cream of the crop of
    what you see in the Navy. They are some of the most intelligent
    and hardworking individuals--a lot of them have college
    experience, and generally something went awry that led them to
    the Navy and to the nuclear power program--and they're
    incredibly capable and incredibly motivational.
        And, finally, sir, the actual equipment, the submarine
    itself, is a very exciting platform, being on it, being inside
    a closed, confined space. It's quite a leadership challenge,
    and I was--it was an overwhelming experience to be onboard it,
    and I would like to pursue it.
        Senator Inouye. Cadet First Class Garner, what made you
    become what you are today?
        Cadet Garner. Mr. Chairman, I have a passion for flying. I
    have a passion for this country. And I felt that there was one
    place where I could do both to the best of my ability, and that
    was at the academy. I came here, have been working my best,
    hope to get out there, get a fighter jet, and then serve our
    Nation proudly.
        Senator Inouye. What do you hope to be flying?
        Cadet Garner. Sir, I hope to fly the F-16.
        Senator Inouye. He's got it all selected.
        Cadet Garner. Now I just need some people to agree with me
    on this one, sir.
        Senator Inouye. You want to try the F-22?
        Cadet Garner. That would be awesome, sir.
        Senator Inouye. Well, it'll be ready for you.
        Senator Cochran.

                    APPROPRIATED FUNDS FOR SERVICE ACADEMIES

        Senator Cochran. Mr. Chairman, thank you very much. I know
    that there is not enough money appropriated every year to meet
    all the needs of the service academies. And because of that,
    you've all engaged in some fundraising activities among your
    alumni and other friends of the service academies. Tell us
    about, each of you--I hope you will give us an overview of what
    your program is in this regard, and what it's designed to do,
    and the nature of the success that you've had so far in these
    efforts?
        General Lennox. Sir, that's a great question. It's not so
    much that we have not gotten enough money. What we do is, we
    ask from the Federal Government, from the departments, the
    money it takes to make second lieutenants, and we get that
    money. The Army, in my case, has been very supportive of
    providing us the money that it takes to run the academy. What
    we look for is margin of excellence, the things that provide
    the cadets a broader experience, one step above.
        Over the last few years, we've been able to raise about
    $200 million. Where does it go? It goes into facilities first--
    for example, the football stadium, our marksmanship center, a
    gymnastics center, a tennis center--giving us some of the best
    facilities in the college experience across the Nation. We also
    provide money for cadet clubs, for the academic experiencing,
    sending cadets to 25 different countries around the world
    during the summertime for language immersion, for example. And,
    let's see, a few of the other things that we do with the money
    is providing cadets the broader experiences they would not get
    in just the basic program.
        Senator Cochran. One of my best friends back in Mississippi
    is a graduate of the academy, Billy Munger, and he's----
        General Lennox. Yes, sir.
        Senator Cochran [continuing]. And he's told me about his
    personal commitment to the academy and his efforts to encourage
    others to support the fundraising drive that you have going on.
    He's been a very generous supporter of the academy.
        General Lennox. Sir, he has been one of the best. And it's
    people like him who have given us that boost that we need to
    give these cadets the broader experience that they need for
    confronting some of the things that they're going to see over
    the next few years.
        Senator Cochran. Colonel Allen, tell us about the Naval
    Academy?
        Colonel Allen. I'd like to echo General Lennox's comments
    with regard to the resourcing that we receive from the
    Government, that we are well resourced, and, as a result, the
    fundraising in which we are engaged--and I'll use for an
    example the program we now call the Campaign for Leadership for
    the Nation, which is a campaign--a 5-year campaign being run
    through the Naval Academy Foundation. It permits us to provide
    excellence above the core to the Brigade of Midshipmen. In
    particular, at this juncture, the campaign's objective is $175
    million. We're about $100 million into the campaign at this
    point.
        Some of the kinds of benefits for which we find that this
    money can be of value to the academy is, for example, the Glenn
    Warner Soccer Stadium, renovation for the football stadium,
    enhancements to some of the academic experiences that the
    midshipmen have, the funding of distinguished chairs amongst
    the faculty, conferences--there's a conference on leadership
    that has been very generously funded by one of our benefactors.
        So we recognize that there are so many magnificent young
    men and women in America today who are making difficult choices
    with the 4 years that they will spend in a college environment.
    And as prestigious as the academy is, the added benefit of this
    public or private giving, above the core, is excellent in
    helping us to attract the very finest young men and women of
    the country to come to the Naval Academy because they see the
    magnificent facilities that can be achieved--or the potential
    that can be achieved through this private giving.
        As well, it also connects the citizens of the Nation to the
    service academies, and we think that's very important. And just
    as the General said, someone who truly supports the academy is
    able to demonstrate that support by generous support in many
    ways.
        So we think that the private giving, in addition to the
    resourcing that we receive from Congress, truly permits us to
    add the margin of excellence to attract the very finest young
    men and women in this country for future service as officers of
    the naval services and the armed forces, sir.
        Senator Cochran. Thank you.
        General Dallager.

                       FUNDING FOR THE AIR FORCE ACADEMY

        General Dallager. Senator Cochran, thank you very, very
    much. I would echo my colleagues' comments. One slight
    difference with the Air Force Academy is that, of the three
    that are represented here, we are the junior academy. We're
    following in their footsteps, in that we're embarking on what
    we would call the ``silent phase'' now of the first-ever
    capital campaign that will occur in conjunction with our 50th
    anniversary.
        The themes, I think, are essentially the same at the Air
    Force Academy. We receive tremendous support from our Nation
    through appropriated funding.

                                PRIVATE FUNDING

        As we look at the competition for men and women of the
    quality who are represented here, I would offer to you that the
    competition amongst the top-tier institutions in the Nation
    continues to get tougher and tougher and more competitive. To
    maintain that margin of excellence that they've both suggested,
    we believe will take Government funding. We also think there's
    an opportunity there for graduates and friends of the academy
    to help.
        So this will span literally all four mission pillars at the
    Air Force Academy--academics, athletics, character development,
    as well as military training--to ensure that we are able to
    continue producing the types of leaders that you can see we're
    producing right now.

                              INCREASED ENROLLMENT

        Senator Cochran. The Armed Services Committee, in its
    authorization bill, has a provision in there suggesting an
    increase in enrollment from 4,000 to 4,400 students per academy
    by the year 2007. What impact is this going to have in the
    current fiscal year's budget request? Are there going to be any
    additional needs for funds because of this authorization, or is
    this something that will be phased into your regular
    appropriations request over time?
        General Lennox. Sir, the military academy supported that
    provision, as long as it didn't require us to do it by the
    deadline. Right now, I do not have the space to expand to
    4,400. I'm short barracks space. I could probably go to about
    4,200, but that's all. Over time, we will work on the barracks,
    and then we would be able to go to that number later.
        Senator Cochran. Okay.
        Colonel Allen.
        Colonel Allen. Sir, we have the existing infrastructure now
    to go to 4,400. Back in 1986, in fact, the size of the Brigade
    of Midshipmen was 4,685, so we have the infrastructure for an
    expanded brigade at this point. As well, with the numbers of
    magnificent men and women who are applying to the academy, our
    admissions can support it, as well, sir. So we can field a
    brigade of 4,400, sir.
        Senator Cochran. General Dallager?
        General Dallager. Sir, we are undergoing, in our
    dormitories right now and for the next several years,
    renovation after--in the case of the one dormitory, it's about
    40 years old now. It's the first time it's had a renovation,
    and we are triple-bunking about one-quarter to one-third of the
    cadet wing. That will be resolved probably in 2 to 3 years.
        The Air Force is currently looking at the mix--we are just
    one of three commissioning sources for our Air Force--we have
    Reserve Officer Training Corps (ROTC), as well as the academy--
    and looking at the proper balance there. And then once they
    have determined whether they would like to retain the same mix
    or increase some of those commissioning sources, then we would
    be able to support that. But it would take a phased-in
    approach, and we would then need the budget for that.

                       HONOR CODE-STUDENT RESPONSIBILITY

        Senator Cochran. My last question is for the current
    graduates or students at the academy, and it relates to the
    military leadership training in character education that has
    made the service academies quite distinctive, in my opinion.
    Could you tell us how important you think, it is to involve the
    students in this process, to give them responsibilities for
    helping enforce the provisions of the honor code and the
    integrity of the individual students at the academy?
        Lieutenant Blickhahn. Senator Cochran, sir, the involvement
    of the Corps of Cadets within the enforcement of the honor code
    is critical to the success and the implementation of the honor
    code itself. When the cadets have internalized it and when they
    own the code, when they're policing their own ranks, that's
    where you see the manifestation of all the ideas and theories
    about honor and character--is when they're actually executing
    it. And it's that daily habit of accountability, standards, and
    discipline that makes the West Point graduate so inundated in
    the concept of the honor code and become that leader of
    character when we graduate.
        On a daily basis, our decisions, our time schedules,
    everything is centered around the decision-making process and
    doing the right thing at West Point. And I think for the cadets
    to own it and for the cadets to be the enforcers of that code
    brings it down, internalizes it, and makes it personal for
    every cadet.
        Senator Cochran. Thank you.
        Mr. Drew.
        Ensign Drew. Senator Cochran, the Brigade of Midshipmen is
    a leadership laboratory. And that laboratory is run entirely by
    the Brigade of Midshipmen. We have a chain of command that
    operates everything from the honor concept to the adjudicatory
    authority on conduct and minor offenses, and major offenses at
    times.
        The point is--is that the midshipmen are in charge, and
    they take an active role in the military professional
    development at formations, at training evolutions. They plan
    the training evolutions. They plan the objectives for the
    year--the leadership objectives. And the midshipmen are an
    entirely--it's in their hands to make a difference and to do
    what they want. And they do a great deal at this time.
        In addition, we also police our own, and we also enforce
    our own standards, and not only by learning about it in the
    classroom, but by actually demonstrating in Bancroft Hall, on
    the athletic fields, doing different obstacle courses and
    different training evolutions. We actually have an opportunity
    to internalize what we learn in the classroom. And it is up to
    the midshipmen to cultivate themselves and develop themselves
    into the officer, as well.
        Senator Cochran. Thank you.
        Mr. Garner.

                             AIR FORCE HONOR SYSTEM

        Cadet Garner. Senator Cochran, just like the other two
    academies, our honor system is completely cadet-run. We do
    everything from the actual initial allegations to the
    clarifications to the actual board, and we take it very
    seriously. This is something that we have a lot of respect for,
    and which we really feel is extremely important to the success
    of the academy. It teaches us not only to make tough decisions,
    but to hold each other accountable for tougher situations, for
    instances where it might not be so clear. It tells us that we
    are here, we are making decisions, we are responsible for those
    decisions, and, when it comes down to it, we can trust one
    another, we can count on one another, and we will be officers
    who take accountability for their own actions.
        Senator Cochran. Thank you. Thank you, Mr. Chairman.

                      TECHNOLOGY AND THE SERVICE ACADEMIES

        Senator Inouye. Thank you. And if I may, now I'll ask a few
    technical questions.
        Recent events in Afghanistan have demonstrated to us that
    our military is becoming highly dependent upon technology. At
    the same time, we have seen statements and articles suggesting
    that the service academies may not have been up to par in
    preparing our young students to meet the needs of this day. Is
    there any justification to that?
        General Lennox.
        General Lennox. Sir, none at all. Right now, we have a core
    curriculum that includes the engineering aspects, math,
    science, as well as the humanities. Every graduate has a
    background in technology. We've just reviewed the curriculum.
    We've opened up more humanities courses because of the kinds of
    things that you saw in Afghanistan, but each graduate will have
    that engineering, math, and science background. And, in fact,
    we added another information-technology course.
        If you take a look at some of the competitions over this
    past year, whether it was math modeling or the NSA's
    competition, all three academies have been in the running
    there. I see no problem in the technology area for our
    graduates.
        Senator Inouye. Colonel Allen.
        Colonel Allen. Mr. Chairman, the Naval Academy produces
    about two-thirds of the technical degrees, the annual accession
    of young officers into the Navy and the Marine Corps, so we
    believe that we are, in fact, on the leading edge of the
    technical preparation of the young officers for their
    challenges, their leadership challenges, in the operating
    forces and in the fleet.
        And, as I have mentioned in my statement, sir, this year we
    have added a 19th major, a major in information technology
    (IT), which will have 10 additional core courses added in that
    major. Plus, we'll have five, what we call, secondary-
    discipline courses, which all other midshipmen will have the
    opportunity to take. Plus, we'll be expanding information-
    technology opportunities in other aspects of our curriculum. So
    the midshipmen are, in fact, exposed significantly--and
    certainly with the advent now of the 19th major in IT--to the
    challenges of information technology.
        As well, we're in the process of the renovation of Luce
    Hall, which is the center for our professional development. And
    when Luce Hall comes out of renovation, we will have a new
    network-centric operations center, which will, in many ways,
    give us added capability to--for the midshipmen to be trained
    and educated in the principles and processes of network-centric
    warfare, which, of course, is the way by which the fleet and
    the Navy prosecute warfare in conjunction with the Marine Corps
    today and in joint operations.
        So we believe that we do, in fact, prepare the midshipmen
    technically for the challenges of the Navy and the Marine
    Corps. Very importantly, though, we also believe that the moral
    preparation that they receive and their personal dedication to
    physical development, prepares them very well, sir, at the
    accession level, and, of course, prepares them with habits of
    leadership and dedication for a lifetime in their career. So we
    believe that the academy is, in fact, answering the needs of
    the Nation technically, morally, and physically, sir.
        Senator Inouye. General Dallager.

                    AIR FORCE ACADEMY TECHNOLOGY CURRICULUM

        General Dallager. Mr. Chairman, I would echo my colleagues'
    comments. We, too, have a broad-based core every academy cadet
    goes through that is 55 to 56 percent technically oriented--
    math, science, physics, chemistry--and ultimately every
    graduate from the Air Force Academy graduates with a Bachelor
    of Science. That is significant.
        One of the areas of particular concern to us is the
    relevance of the instruction we're providing. And I've already
    mentioned the fact that we have had cadets who have designed,
    built, launched, and controlled their own satellite. They will
    be doing something similar this coming January on a shuttle
    launch, where the pilot is a graduate of the United States Air
    Force Academy, and the commander of that shuttle, which will
    launch this satellite, was a math teacher several years ago at
    the Air Force Academy. They work things such as drag reduction
    on unmanned aerial vehicles. Cadets and faculty worked together
    to do some drag reduction on the AC-130 gunship, which most of
    you are familiar with and which has been used extensively in
    Afghanistan that will increase the ceiling as well as the time
    over target, which is critical in areas like Afghanistan, for
    example.
        So we believe that we are very focused on the technical
    aspects--information technology, information operations,
    information warfare--and it's important, as the other academies
    do, to look ahead 10 to 15 years and to focus our educational
    efforts on what we think will be the technology and the
    facility with that technology that officers will need to have
    in the future.

                        ADMISSION STANDARDS FOR ATHLETES

        Senator Inouye. Recent press articles have been very
    critical of admissions standards for athletes by service
    academies. If you care to, I'd like to get your comments.
        General?
        General Lennox. Sir, our admissions process looks at the
    whole-candidate score. That score examines a high school or a
    candidate's academic background, athletic, and leadership
    qualities--about 60 percent academic, about 30 percent
    leadership, and about 10 percent athletic. Our athletic
    department is one of 15 departments that sit on the admissions
    committee.
        All people coming into West Point are qualified at the
    beginning. All candidates have been qualified. We don't use the
    concept of waivers. So--and, in fact, over the last 3 years,
    we've reduced the number of recruited athletes coming in,
    focusing--to be honest, focusing more on the athlete who can
    play the sport and perform academically at the academy.
        So I'll tell you that our athletes are not a problem area.
    Some of them are at risk, but they are no more at risk than
    some of the other areas that we recruit, possibly some of the
    minority areas. So I would say it is not a problem at the
    Military Academy.
        Senator Inouye. Colonel?
        Colonel Allen. I would echo the comments of General Lennox,
    sir. The athletes who come to the Naval Academy are--fall
    within admissions standards upon entry, sir. They adhere to the
    standards of the institution while they are members of the
    Brigade of Midshipmen, and they meet the standard for
    graduation when the time comes. Just as any other potential
    candidates who come to the Naval Academy, should we elect--or
    should we detect that someone needs additional grooming or
    additional opportunities to learn something in the line of
    chemistry or calculus, we have other options--foundation
    private schools where we might suggest that an entering
    candidate could receive an additional year after graduation
    from high school for preparation for the very demanding
    technical education of the Naval Academy. But upon their entry
    to the Naval Academy, they fall within admissions standards,
    sir.
        Senator Inouye. When the academy requested that your star
    quarterback be kept for another season, was that because of
    academic standing?
        Colonel Allen. Mr. Chairman, the academy did not request
    that he remain another season.
        Senator Inouye. Well, maybe the football team.
        Colonel Allen. I think he might have wanted to stay another
    season, sir, but we did not countenance a request for that
    midshipman to remain another season or another year, sir.
        Senator Inouye. General Dallager.

                            RECRUITMENT OF ATHLETES

        General Dallager. Mr. Chairman, we, like the other
    academies, recruit scholar athletes. The classes that have
    entered in the last several years rank in the top 14 percent
    across the Nation, using the whole-person concept. So we're
    very, very interested in their academic capabilities, their
    leadership and extracurricular activities, their character, as
    well as their athletic abilities. Approximately 85 to 86
    percent of the young women and young men over the years that
    come to the Air Force Academy have lettered in at least one
    sport during their high-school career. So, again, it does
    emphasize the whole-person concept.

                          SCHOLAR-ATHLETE SCHOLARSHIPS

        As an indicator of the success of that program, the
    National Collegiate Athlete Association (NCAA) awards
    postgraduate scholar-athlete scholarships, and the Air Force
    Academy ranks number two, behind only Stanford, in the total
    number of recipients during the years those have been
    presented.
        Again, I would echo the sentiments of our colleagues. We
    believe that athletics is absolutely essential for a well-
    rounded officer, particularly individuals who will be entrusted
    with people's lives and have to make decisions, sometimes under
    the stress of combat. And one of the great venues for
    cultivating and honing those skills is on the fields of
    friendly strife.

                               ACADEMY STANDARDS

        Senator Inouye. Then I would say that you would agree that
    the athletic programs do not in any way dilute the standards
    set by the service academies?
        General Lennox. Sir, our athletes are all qualified to come
    to the military academy.
        Colonel Allen. Sir, they enhance the experience at the
    Naval Academy.
        General Dallager. I would agree with both those comments.
        Senator Inouye. Then, once again, in behalf of the
    committee, I'd like to thank all of you and tell you how proud
    we are to have you serving us and leading us.
        It should be noted that less than one-half of 1 percent of
    the people of the United States step forward to take the oath
    and say, ``We are willing to stand in harm's way.'' When you
    consider that less than one-half of 1 percent defend the honor
    of this country, it's awesome. And you are the heart of that 1
    percent--the one-half of 1 percent--and we depend much upon
    you, and we just hope that the training we have provided you
    has not only been adequate, but the best available.
        But before we call a recess, Senator Cochran, do you have
    any further questions?
        Senator Cochran. I thank you, Mr. Chairman.
        I think we've been reassured this morning, and impressed
    with the quality of the statements and testimony we've heard.
    And I just want to add my thanks to all of you for the hard
    work you do and the great job you do in helping to ensure that
    we are capable of defending our country.
        Senator Inouye. Gentlemen, yours is an awesome
    responsibility, training our Nation's future leaders. And
    listening to all of you, I can say that I can go to sleep
    tonight much more soundly.
        To our students and recent graduates, naturally we say
    congratulations. We wish you the very best in the years ahead.
    We expect one day that you'll be called upon to testify before
    us, because many of the academy graduates become the highest
    offices. Right now, the Army Chief of Staff is an academy grad.
    And I believe the same thing is with the Navy. And so it is not
    farfetched when someday the Chief of Staff may be a man named
    Blickhahn, or the CNO maybe someone called Drew, or the Chief
    of the Air Force may be someone called Garner. And, in fact,
    I'd be willing to put my money on that.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
        Question Submitted to Lieutenant General William J. Lennox, Jr.
               Question Submitted by Senator Christopher S. Bond
                  cadet exposure with the usng and usar forces
        Question. What exposure do the Cadets have with the National Guard
    and Reserve Forces? Is there an appreciation for the many capabilities
    that these forces bring to the table and is there an adequate amount of
    time given to developing a working relationship between the Cadets and
    Midshipmen and the National Guard and Reserve Forces?
        Answer. USMA Cadets are exposed directly to the Army Reserve, who
    provide instruction to the cadets during their Military Science
    education and Cadet Field Training. Cadets gain an appreciation of the
    Army Reserve and Army National Guard during Military Science education
    when introduced to the Total Army and the contributions of the Reserve
    Component towards the Army mission and National Defense. An appropriate
    amount of time is allocated on this subject. During Cadet Summer
    Training, all cadets are introduced to the fundamentals of rifle
    marksmanship by a reserve training battalion. The Military Academy has
    also had cadets participate in its Troop Leader Training Program with
    reserve units. Additionally, West Point has a Army National Guard
    officer assigned to the Academy, who is fully engaged in cadet
    activities--to include coaching the Army Rifle Team.
                                     ______

                  Question Submitted to Colonel John R. Allen
               Question Submitted by Senator Christopher S. Bond
            midshipmen exposure to national guard and reserve forces
        Question. What exposure do the Cadets and Midshipmen have with the
    National Guard and Reserve Forces? Is there an appreciation for the
    many capabilities that these forces bring to the table and is there an
    adequate amount of time given to developing a working relationship
    between the Cadets and Midshipmen and the National Guard and Reserve
    Forces?
        Answer. Midshipmen receive exposure to the reserve forces primarily
    through the Merchant Marine Individual Ready Reserve Group during
    ``youngster'' (sophomore) training cruise on the yard patrol (YP)
    craft. During the summer, approximately 15 of these individuals
    volunteer to perform as safety officers aboard the YPs. The skills that
    they bring to the training program are invaluable since many have been
    employed as pilots in the areas that the YPs visit. Additionally, a few
    reservists are actively involved with the sailing program during the
    summer. Academically, there are several instructors who are reservists
    that have been called to active duty to teach. Although they do not
    specifically teach topics about the National Guard and Reserve Forces,
    they interact with the midshipmen on a daily basis. In the Strategy and
    Tactics course, the reserves are addressed in a case study of Operation
    Desert Storm. The case study discusses the large numbers of reserves
    that were mobilized and some of the roles that they filled.
    Additionally, a proposal is being reviewed that would establish a
    reserve unit at the Naval Academy to support the YP training during the
    summer.
                                     ______

           Questions Submitted to Lieutenant General John R. Dallager
               Questions Submitted by Senator Christopher S. Bond
                             cadets and midshipmen
        Question. What exposure do the Cadets and Midshipmen have with the
    National Guard and Reserve Forces? Is there an appreciation for the
    many capabilities that these forces bring to the table and is there an
    adequate amount of time given to developing a working relationship
    between the Cadets and Midshipmen and the National Guard and Reserve
    Forces?
        Answer. The short answer is that there is good--and growing--
    exposure to the Air Reserve Component (ARC), appreciation for their
    capabilities, and working relationship with these forces. Moreover, we
    plan to continue to expand this relationship in light of the current
    indispensability of the ARC to the national defense.
        In the fall of 2001, the United States Air Force Academy (USAFA)
    began to examine how to improve our interaction with the Air Reserve
    Component (ARC). Our goal is simple; better prepare cadets for the
    ``real'' Air Force where the ARC is an equal partner in the daily
    execution of the Air Force mission. We began a multi-pronged approach
    and have already made measurable, reportable progress.
        In order to improve the exposure cadets have to the Guard and
    Reserve we have established an ARC Support Office in Harmon Hall (USAFA
    headquarters building) manned by two experienced ARC Colonels, one each
    from the Air Force Reserve Command (AFRC)--an Academy grad, and the Air
    National Guard (ANG). Concurrently, we began adding ARC members
    (primarily pilots) to the faculty, 34th Training Wing and Prep School
    staffs. We employed a process where we recalled ARC personnel to
    Extended Active Duty (EAD) in tours ranging from two to four years.
    These people will primarily be full-time instructors working for the
    Dean. Deploying ARC members serving on EAD tours fulfills two key
    objectives: first, we are increasing the rated presence in the
    classroom as role models to our future Air Force leaders; second, we
    are exposing the cadets to outstanding examples of the ARC. This second
    objective can be summarized by a comment in a recent staffing package
    entitled ``Developing the Air Reserve Component Vision at the USAF
    Academy.'' In addressing the needs of the cadets for increased
    knowledge of the ARC, it stated, ``The one effective way to improve
    their knowledge is through direct, routine contact with the ARC,
    similar to what they will experience in the Air Force after
    graduation.'' Aggressively using tools available, including the EAD
    approach, we will achieve increased Total Force integration and thereby
    awareness and appreciation of the ARC role in the Air Force and the
    nation's defense by our cadets.
        A final note on the status of the EAD program: Although we are in
    the early stages of the EAD program, we have already added seven AFRC
    and two ANG officers to our team. An article was recently published in
    the June 2002 edition of Citizen Airman magazine that recounts the
    journey of two AFRC members who have recently joined the USAFA faculty.
    The web address is: http://www.afrc.af.mil/hq/citamn/jun02/
    academy.html. As we continue to evaluate the requirements in the
    classroom and couple that need with our desire to grow the ARC presence
    at the Academy we will continue to seek nominations from the Guard and
    Reserve for qualified instructors. We currently have an additional five
    positions advertised. The advertisements are located on the ANG web
    site and other locations. The ANG web address is: http://
    www.ang.af.mil/OM/career/Recall%20Vacancies/
    ead__advertisements%20default.htm
        The first exposure to the ARC is the interaction of United States
    Air Force Admissions Liaison Officers (ALO) with prospective
    candidates. Out of the 1,900+ ALOs, over 800 are primary duty, Category
    E (CAT E, [non-pay, retirement points only]) reservists assigned to the
    9001 Air Reserve Squadron, HQ ARPC. Many others are CAT A and B
    Reservists or National Guardsmen, who perform ALO duties as additional
    duty volunteers. These officers provide information about Air Force
    educational opportunities to high school counselors and administrators
    in all 50 states and several overseas locations. They explain U.S. Air
    Force Academy and Air Force Reserve Officer Training Corps programs and
    admissions procedures to young men and women potentially qualified and
    interested in an Air Force career.
        USAFA's rated officer presence has declined due to Air Force wide
    rated management issues. This situation has required the 34th
    Operations Group (OG) to increase the use of both officer and enlisted
    reservists to relieve the manning shortfalls in their airmanship
    programs and associated staff duties to accomplish the mission.
    Currently, the 34 OG's robust reserve program stretches over four
    squadrons and currently has 37 reservists actively participating. The
    trend would indicate continued growth. The 34 OG's airmanship programs
    motivate and inspire USAFA cadets to make the crucial decision to
    attend undergraduate pilot training (UPT). Currently 42 percent of Air
    Force UPT students come from the Air Force Academy. Reservists provide
    the much-needed manpower in all of the 34 OG programs, including
    scheduling in airmanship programs, managing flying hours program,
    tours, orientation rides, and tandem jumps.
        Air Force Reserve members provide critical management to numerous
    programs within the 34 Operations Support Squadron (OSS). Many of these
    programs were previously non-existent due to the 34 OSS's limited rated
    presence and other manpower shortages. For example, a Reservist serves
    as the Pegasus program manager. Pegasus is an ``operationally geared''
    orientation flight program for Air Force Academy cadets serving to
    motivate future officers toward rated careers. Another critical area
    for a safe flying training operation is the Cockpit Resource Management
    (CRM) program. Here again a Reservist created and maintains CRM
    periodic training courseware and collects trend data thereby ensuring
    compliance with all Air Force CRM regulatory guidance. As with all Air
    Force flying operations, there is an active Bird Aircraft Strike Hazard
    (BASH) program. Again, a Reservist established and manages the 34 OG
    BASH program. A Reservist also functions as our primary ground safety
    officer implementing all 34 OG ground safety programs.
        94 Flying Training Squadron (FTS) Reserve augmentation accounts for
    over 50 percent of Supervisor of Flying (SOF) staffing levels, ensuring
    airfield safety and program effectiveness for Airmanship 251, 461, and
    advanced programs. Reservists serve as instructor pilots for the ``Soar
    For All'' program, teaching cadets the basics of flight and culminating
    with a solo in a glider. Reservists support staff training deployments,
    competitions, and Higher Headquarters taskings and serve as the core of
    experience in many of the 94 FTS flying programs.
        Reservists assigned to the 98 FTS serve as AM-490 (Basic Parachute
    Course) instructors, UV-18B Twin Otter pilots and parachute riggers.
    They serve to elevate the 98 FTS experience level and contribute
    continuity and quality to the flight and jump operations. Reservists
    actively augment several high-visibility training deployments.
        In the 557 FTS Reservists provide augmentation for squadron's
    safety and standardization and evaluation programs for their Initial
    Flight Training (IFT) program. Reservists provide recent Undergraduate
    Pilot Training (UPT) experience to enhance the cadet's understanding of
    the future UPT environment.
        The Department of Civil Engineering is particularly successful in
    blending academic instruction on the ARC with the establishment of
    working relationships. For example, our Civil Engineering Senior
    Seminar (CE 405) last spring, both the ANG/CE (Col Jan Stritzinger) and
    the AFRC/CE (Col Jon Verlinde) presented a lesson on the mission of the
    ANG and AFRC civil engineers and how they fit in the total force
    mission. All 66 of our civil and environmental engineering majors from
    the Class of 2002 attended the class.
        Additionally, we get great support from the AFRC and ANG each year
    providing CE and Services NCOs to serve as mentors during the Field
    Engineering and Readiness Laboratory (FERL) portion of our 5-week
    summer course. This year we have 91 students (77 USAFA, 12 ROTC, and 2
    West Point cadets) enrolled in the course. Twenty active duty, two
    AFRC, eighteen ANG NCOs and four civilians serve as mentors to the
    cadets, leading them through numerous construction activities (house
    construction, concrete placement, asphalt roadway, surveying, operating
    heavy equipment, etc.). The Buckley ANG (140 FW/SV) unit cooks the
    meals in Jack's Valley for our cadets and mentors for the three weeks
    at FERL. Through this program, our cadets get an appreciation of the
    skills and abilities the AFRC and ANG folks bring to the fight. CE 351
    is our cornerstone CE course to give the cadets a hands-on feel for
    what CE and construction is about before they begin the last two years
    of course work as a Civil or Environmental Engineering major.
        The Global Engagement (GE) training exercise is the annual bare-
    base exercise experienced by third-degree cadets each summer. In the
    exercise, cadets learn the basics of deployed operations during five
    ten-day rotations. Each group of 200 cadets learns how, (many for the
    first time), to survive in a deployed environment. In all, over 1,000
    cadets will receive the training. There are 33 associate instructors
    supporting GE and of that number, four are members of the 951 Reserve
    Support Squadron, AFRC, Dobbins AFB GA. Last year members of the 140FW/
    SF (Security Forces) CO ANG were members of the cadre. The continued
    support of the ARC has been crucial to the successful outcome of Global
    Engagement exercise through the years.
        The Department of Philosophy's instructors occasionally use the
    Guard and Reserve to make points about military ethics. Every USAFA
    cadet must take Philosophy 310, ``Ethics'' a course that focuses on
    moral issues in war-fighting and professional military service. Each
    year about 30 cadets choose to take a follow-on elective course
    entitled ``War, Morality, and the Military Profession.'' Instructors
    sometimes explore the roles and founding philosophies of the National
    Guard and the Reserve to illustrate concepts taught in these courses.
    For instance, an important principle in what's called the ``Just-War
    Tradition''--a centuries-old but living system of principles intended
    to ensure that war is ethically commenced and prosecuted--is usually
    called ``right authority.'' Among the questions this principle helps
    answer is, ``Who may, with moral authority, order forces into combat?''
    Activation and deployment of Guard and Reserve assets offer valuable
    cases in point for discussions of this principle. Cadets who at first
    do not see a substantive moral issue in the War Powers Act may suddenly
    ``get it'' whey they're asked to explain why a state governor can't
    order his Guard forces to deploy to Afghanistan. Class discussions
    might then turn to broader questions--e.g., if troops have been
    illegally deployed, are any actions they undertake necessarily immoral?
    Sometimes an instructor will choose to discuss questions surrounding
    the concept of the citizen-soldier--e.g., whether a professional (full-
    time) military is necessarily less connected than a conscript, Guard or
    Reserve force to the ethics of its parent society and thus more likely
    to act in ways the society would consider immoral. (The alleged
    disconnect between the ethos of the U.S. society-at-large and the U.S.
    military is something of a hot topic; cf. Ricks' ``The Widening Gap
    between the Military and Society'' in The Atlantic Monthly, July 1997,
    or Halberstam on Mogadishu in War in a Time of Peace: Bush, Clinton,
    and the Generals, Scribner 2001.) All sections of the core course spend
    significant time considering the extent of the military member's
    obligation to service and, if necessary, sacrifice. (Is an enlistment a
    ``contract'' with built-in limitations, or is the call to service
    absolute? In discussions of this and similar questions, the actions of
    Guard and Reserve members provide useful case studies--e.g. in
    instances of ``failure to go'' during Desert Shield).
        The Department of History's core course, History 202,
    ``Introduction to Military History'', addresses the historical
    development and expanding role of United States Guard and Reserve
    forces, air, land, and sea. Starting with lessons on 18th century
    colonial America and the Revolutionary War, the course describes the
    origins of the Minutemen and the development of America's citizen army.
    Further lessons trace changes in the American military throughout the
    early part of the 19th century and focus subsequently on the American
    Civil War. The use of state militias, irregulars, and volunteers
    between 1861 and 1865 is introduced to cadets. Our students learn about
    what one historian has identified as ``the American Way of War.'' This
    refers to the uniquely American approach to conflict characterized by
    citizen-soldiers, rapid mobilization, industrial strength, overwhelming
    power, decisive victory, and a return to civilian life. With several
    lessons devoted to the wars of the 20th century, our cadets are exposed
    to the increasing role of American National Guard forces as they were
    called up and integrated into a globally deployed military. The last
    lessons of the course cover post WWII developments, the Cold War,
    Vietnam, the Gulf, and more recent conflicts. Cadets are fully apprised
    of the contributions of Guard and Reserve personnel and, in particular,
    understand that the reserve component carries out a huge percentage of
    our war fighting and contingency missions. We feel that it is important
    to devote in-class time to discussion of the ARC as well. Fortunately,
    their ubiquitous use in the history of American warfare and their
    unique nature as ``citizen-soldiers'' provide rich examples for
    instruction.
        The Academy's three reserve legal functions provide direct mission
    support as well as instruction to cadets. The 10th Air Base Wing Legal
    Office has five reserve attorneys who provide services ranging from
    environmental law to legal assistance, including military justice. The
    law department has two reserve attorneys who teach courses to cadets.
    The Headquarters legal office has two attorneys who provide services
    ranging from constitutional law to senior management legal counseling
    on A-76 procurement issues, utility privatization and legislative
    initiatives. The seamless integration of the reservists into Academy
    operations not only directly benefit the Academy, but provide career
    incentives to the reservists who develop the skills necessary to assume
    active duty mission elements when required by AEF rotations.
        The Chaplains at the Academy depend on reservists (both ANG and
    AFRC) to augment our staff during periods of surge activity. During the
    summer over 20 reservists support not only the arrival of the new class
    of cadets, ministering to their spiritual needs at this sometimes
    stressful period of their young lives, but continue in place, many for
    a month or more to support the Basic Cadet Training (BCT) activities in
    the field. A typical ARC contingent would involve six chaplains
    representing a diversity of faiths and one or more enlisted Chaplain's
    Assistants.
        The events of September 11 had a dramatic impact on the Academy's
    deliberate and systematic ARC integration plan intended to improve our
    working relationship with ARC forces. The Academy needed to add
    capability, primarily to our security and medical forces, and we needed
    to do it immediately. The ARC responded with 39 officers and 33
    enlisted members serving in both long and short tour capacities. The
    integration process was smooth as our new colleagues joined the rest of
    the team in the performance of critical tasks thereby allowing the Air
    Force Academy to remain focused on our number one mission, taking our
    Nation's best and brightest and producing second lieutenants. The rapid
    surge capability demonstrated by the ARC provided additional assurance
    that we were on the correct vector in embracing this new relationship.
    Based in part on our early successes, but also because we know that it
    is the correct approach, we are seeking additional nominations for Air
    Officers Commanding (AOCs), Faculty and Training Wing staff members
    from the ANG and AFRC.
        The important bottom line to this answer is that we are being
    aggressive and rapidly pressing ahead with our ARC Vision to enhance
    the Total Force experience of our Cadets. Again, the goal is simple and
    to the point: ensure that our Cadets have a seamless transition from
    the Air Force Academy to the operational Total (Air) Force.

                              subcommittee recess

        Senator Inouye. So, with that, we thank you all very much
    for your testimony, and we wish you godspeed.
        [Whereupon, at 11:10 a.m., Wednesday, June 5, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    June 12.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2003

                                  ----------

                            WEDNESDAY, JUNE 12, 2002

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 9:50 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Daniel K. Inouye (chairman)
    presiding.
        Present: Senators Inouye and Domenici.

                           NONDEPARTMENTAL WITNESSES

    STATEMENT OF BENJAMIN H. BUTLER, DEPUTY LEGISLATIVE
                DIRECTOR, NATIONAL ASSOCIATION FOR
                UNIFORMED SERVICES

                 OPENING STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. First, my apologies. I just had an
    emergency requiring medevacing a patient I hope you will
    understand.
        Good morning. Today the subcommittee will receive testimony
    of members of the public who have petitioned the committee to
    be heard. The right of the public to petition the Congress is
    one of the most sacred of our country's promises. It is a right
    that helps ensure our democracy remains strong, and we have
    traditionally ended our annual hearing process with public
    witnesses, and today we continue that tradition.
        We have received and granted the request of 37 witnesses to
    testify. Because of the large number, we would ask that you try
    to limit yourselves to about 4 minutes, if that is possible.
    However, your complete statement will appear in the record, and
    I can assure you that I will read every one of them.
        Let me assure you that the committee will review your
    statements, and before we begin I should tell you that, at this
    moment, there are eight committee hearings going on. This is
    just one of them. As a result, the members on this committee
    are the chairmen of other committees, and they have their
    responsibilities. So with that, may I proceed by calling our
    first witness, the deputy legislative director of the National
    Association for Uniformed Services, Mr. Benjamin H. Butler.
        Mr. Butler, welcome, sir.
        Mr. Butler. Thank you, Mr. Chairman. Mr. Chairman, I am
    also a retired U.S. Marine and master gunnery sergeant, and I
    am representing the National Association for Uniformed Services
    today, and we are very grateful for the opportunity to testify
    before you.
        We know that Congress has not passed the authorization bill
    yet, but we understand it calls for a fully funded defense
    health budget. We greatly appreciate how this committee has
    always funded our health care, and especially appreciate this
    committee's support for the TRICARE for Life and Senior
    Pharmacy program. In light of this, I would like to bring your
    attention to some of our medical care issues of interest for
    this year.
        During recent hearings, a major topic of discussion has
    been the Department of Defense and Department of Veterans
    Affairs (DOD-VA) sharing. We believe that improved cooperation
    will save funds, but we have the following recommendations.
    First, we do not want to see unification of the budgets. The
    budgets should be kept separate, with memos of understanding at
    sharing sites. We think the joint procurement of medical
    equipment and drugs is a good idea, because such purchases
    would benefit from economy of scale to save money in both
    systems.
        Development of a uniform claims and billing system would
    greatly benefit DOD-VA sharing initiative. It has been our
    long-time hope that part of the growing costs of medical
    treatment in both DOD and the VA could be paid by improved
    billing of private insurance companies and authorizing payment
    by the medicare system, commonly called medicare reimbursement
    or subvention.
        Numerous attempts to allow retirees to use their medicare
    benefits and the Military Treatment Facility (MTF's) have
    failed. In part this failure has been called because various
    systems do not share the same system for claims and billing.
    Since one of the primary systems for all medical claims in the
    country is medicare, if DOD and the VA adopted the standard
    industry claim system, all parties such as private insurance
    companies, the DOD, VA, and medicare would know what medical
    services, pharmaceuticals, laboratory services and so forth
    have been provided, thus making better use of scarce
    appropriated funds.
        On another topic, the law enacting the TRICARE for Life
    program requires medicare part B enrollment for participation.
    In addition, part B is required for all retirees reaching age
    65 on or after April 1, 2001 for them to participate in the new
    pharmacy program. Although we believe in the principle that the
    military benefits should stand alone and not require part B
    participation, the part B will save the TRICARE for Life
    program funds. However, we believe that requiring part B for
    participation in the pharmacy program does not result in
    significant savings, and creates a hardship for some
    beneficiaries and 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 their medicare benefits overseas, we
    recommend that this requirement be eliminated for all retirees
    residing overseas.
        Some retirees who live near military installations did not
    enroll in part because they believed that they would receive
    care at the hospitals and clinics located on the military
    bases, which later closed. Many are in their seventies and
    eighties now, and to enroll would require them to pay huge
    penalties. While we certainly understand that this is going to
    cost money, we recommend that those who relied on these
    hospitals and were 65 on or before the date TRICARE for Life
    was enacted be allowed to participate in TRICARE for Life
    without enrolling in part B medicare. We think it is the right
    thing to do.
        Mr. Chairman and distinguished members of the subcommittee,
    the funding and implementation of TRICARE for Life and the
    Senior Pharmacy program has had a significant positive impact
    on our military retirees at a time when they need it the most.
    As we travel throughout the country and visit with retiree at
    Retiree Days, we find that they are very appreciative of these
    new programs. We greatly appreciate your part in this. We want
    to thank you for your continued support on these additional key
    issues.
        [The statement follows:]

                    Prepared Statement of Benjamin H. Butler

                                  introduction
        Mister Chairman and distinguished members of the Committee The
    National Association for Uniformed Services (NAUS) is very grateful for
    the invitation to testify before you about our views and suggestions
    concerning current and future issues of defense funding.
        current and future issues facing uniformed services health care
        The National Association for Uniformed Services would like to thank
    the Sub-Committee and the Full Appropriations Committee for its
    leadership in passing 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.
        Mr. Chairman, the overall goal of the National Association for
    Uniformed Services is a strong National Defense. We believe that
    comprehensive, lifelong medical and dental care for all Uniformed
    Service beneficiaries regardless of age, status or location supports
    this goal. In light of these overall objectives we would request that
    the committee examine the following proposals.
                           uniform claims and billing
        It has been the long term hope that part of the growing costs of
    medical treatment in both the Department of Defense and the Department
    of Veteran Affairs could be paid by billing private insurance companies
    and Medicare/Medicaid systems (DOD and VA Subvention). Numerous
    attempts to improve these financial streams have failed. In part this
    failure has been caused we believe because the various systems do not
    share the same system for claims and billing. Since the dominant system
    of all medical claims in the country is clearly Medicare if DOD and the
    DVA adopted the Medicare claims system ALL parties--Private Insurance
    Companies, DOD, the DVA and Medicare/Medicaid would know what medical
    services, pharmaceuticals, laboratory services and the like have been
    provided. Such a uniform billing plan could also lead to improvements
    in allowing the VA to be a fully participating TRICARE network
    provider. This does not solve the other billing problems but at least
    it would put all the parties on the same sheet of music.
                             dod and va subvention
        The attempt of Medicare subvention (having Medicare pay for
    treatment of its beneficiaries at MTFs) with the DOD has been a huge
    disappointment. The Department of Defense has received no stream of
    payments. Medicare's required'' level of effort'' has never been
    reached by an MTF. But this goal should not be abandoned. The active
    duty member, his or her working spouse, the Veteran and the Military
    Retiree have all spent their working careers paying money into the
    Medicare system. The taxes have been paid but if they receive treatment
    in a MTF or a DVA hospital or clinic the facility receives nothing from
    Medicare to help pay for that beneficiary. Of course, the people sworn
    to protect the Medicare trust fund like the situation as it is. And who
    can blame them? However the financially strained medical systems of the
    VA and DOD should receive some of the support their patients have paid.
    Again, if DOD and the VA adopted Medicare's billing system it could
    support an effective attempt at subvention.
            the department of veterans affairs as a tricare provider
        At this time 80 percent of Veteran Affairs installations are
    nominally TRICARE providers in the TRICARE Networks. However, last year
    TRICARE paid only $3.7 million to VA facilities for care provided to
    TRICARE beneficiaries. Part of the problem is clearly the previously
    discussed failure to have one system of Medical Record keeping and one
    method of claims and billing. Therefore, the change suggested above to
    follow Medicare's claims and billing system could alleviate some of the
    problems. It is also crucial to solve this problem so that the VA can
    qualify to be a TRICARE for Life provider. It could be a way to help
    improve coordination and predictability as well as a cost saving for
    both the DVA and DOD if the VA became a qualified Medicare provider. If
    this was accomplished then Medicare Part A or Part B would be first
    payer and TFL would pay the rest. This could be a serious stream of
    money (primarily from Medicare) to the VA for non-service connected
    treatment that the VA provides to military retirees. But unless and
    until the VA qualifies as a MEDICARE provider this is not possible.
    Since the door has been opened to coordinate Medicare payments and
    TRICARE by the coordination of their benefits in TRICARE for Life this
    would be a coordination that should make sense for all three
    Departments and would most importantly, improve the treatment of many
    beneficiaries.
                   joint mtf/visn/tricare contractor projects
        When looking far into the future we can see coordinated networks
    for a region's Military Treatment Facility (MTF), its Veterans
    Integrated Service Network (VISN) and the civilian TRICARE contractor.
    This would actively use the VA as a provider of specialty health care,
    save money for DOD and plan a core of coordinated services. A test
    program in the Central TRICARE region called the Central Regional
    Federal Health Care Alliance has just been rolled out to look at, and
    coordinate areas of practice including possibly: ``catastrophic case
    management, telemedicine, radiology, mental health, data and
    information systems, prime vendor contracting, joint provider
    contracting, joint administration processes and services and education
    and training.'' The governing board's members of this experiment
    include DOD's Lead Agent for the Region, VA's VISN Director and the
    president and CEO of the Region's TRICARE Contractor. If this plan
    succeeds in improving the health care of the beneficiaries and,
    hopefully, saving money for the taxpayers perhaps its form can be
    transported or modified for other regions.
                           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 TFL was enacted by NDAA for
    fiscal year 2001, be allowed to participate in TFL without enrolling in
    Part B Medicare.
             military health care in puerto rico and virgin islands
        The TRICARE benefit in Puerto Rico and the Virgin Islands is
    different than that provided in the United States. NAUS believes that
    the TRICARE triple option benefit should be implemented in Puerto Rico
    and the Virgin Islands in the same manner that it is being offered in
    the United States. Further, the FEHBP Demonstration program has been
    highly successful in Puerto Rico and is due to end on 1 January 2003.
    NAUS strongly recommends that the FEHBP demonstration in Puerto Rico be
    extended and made a permanent program.
          include physician and nurse specialty pay in retirement pay
                                  computations
        The military services continue to lose top quality medical
    professionals (doctors and nurses) at mid-career. A major reason is the
    difference between compensation levels for military physicians and
    nurses and those in the private sector.
        Results of a recent survey of military urologists show that pay and
    benefits are the most important factors impacting retention. Improving
    specialty pay/bonuses and including specialty pay/bonuses in retired
    pay calculations would aid retention. More than half of mid-level
    military urologists (5-15 years of service) have not made their future
    career decisions. The survey also showed that 83 percent of senior
    military urologists, those with over 15 years of service, plan to
    retire at the earliest opportunity. Therefore, prompt action to retain
    these and other highly skilled medical professionals is needed.
        NAUS recommends that prompt action be taken to improve these
    special pays and to include them in the retired pay calculations.
       end preauthorization requirements/non-availability statements for
                                tricare standard
        When the TRICARE program was begun beneficiaries understood that
    options would include a fee-for-service plan (TRICARE Standard), a
    preferred-provider plan (TRICARE Extra) and an HMO (TRICARE Prime).
    However, TRICARE standard is not a fee-for-service plan. Beneficiaries
    who use the TRICARE Standard plan must obtain pre-authorizations to
    obtain care out of the Military Treatment Facilities or the networks.
    TRICARE Standard should be a true fee-for-service plan and no
    preauthorization or non-availability statement should be required.
                                     fehbp
        The NAUS has been a long time supporter of legislation that would
    provide military personnel the option of participating in the Federal
    Employees Health Benefit Program. Currently, a bill introduced in the
    107th Congress, H.R. 179, would provide that option. NAUS believes 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. 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.
                                    summary
        Mr. Chairman and distinguished members of the Sub-Committee, we
    want to thank you for your leadership and for holding these hearings
    this year. You have made it clear that the military continues to be a
    high priority and you have our continuing support.

        Senator Inouye. Well, I thank you very much, sir. I can
    assure you that this committee will do its utmost to meet your
    requests. That is the least we can do. Most people do not
    realize this, but our military is made up of volunteers, and
    all of them have taken the oath to stand in harm's way in our
    behalf if such be necessary, and anyone who is willing to stay
    in harm's way in my behalf, as far as I am concerned, you
    deserve the best.
        Secondly, we have the problem of recruiting and retention,
    and if we do not provide the wherewithal, then I do not expect
    the young men and women to volunteer, so we are quite
    sympathetic with the problem. We will do our very best, sir.
    Thank you very much.
        Mr. Butler. Thank you, Mr. Chairman.
        Senator Inouye. Our next witness is the associate professor
    of psychology at George Mason University, representing the
    American Psychological Association, Dr. Stephen Zaccaro.
    STATEMENT OF DR. STEPHEN ZACCARO, ASSOCIATE PROFESSOR
                OF PSYCHOLOGY AT GEORGE MASON UNIVERSITY,
                ON BEHALF OF THE AMERICAN PSYCHOLOGICAL
                ASSOCIATION
        Dr. Zaccaro. Good morning, Mr. Chairman. I am Dr. Stephen
    Zaccaro, professor of psychology at George Mason University,
    and a researcher who studies leadership, leader development,
    and team effectiveness in military contexts. I am testifying
    today on behalf of the American Psychological Association (APA)
    a scientific and professional organization with more than
    155,000 psychologists and affiliates.
        While I am sure you are aware there are a 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 the national defense,
    particularly with support from the Army Research Institute, the
    Office of Naval Research, and the Air Force Office of
    Scientific Research.
        As a member of the larger scientific community, APA joins
    the Coalition for National Security Research and over 40
    scientific associations and universities in urging the
    subcommittee to provide DOD with $11 billion for 6.1, 6.2, and
    6.3 level research in fiscal year 2003, or 3 percent of the
    overall Department budget. This figure also is in line with the
    recommendation of the Independent Defense Science Board, the
    Quadrennial Defense Review, and the House and Senate Armed
    Services Committee. We strongly urge the committee to direct a
    small portion of the proposed increases for national security
    activities to these Science and Technology (S&T) research
    accounts to achieve the $11 billion funding target.
        Beyond the overall S&T budget, the behavioral research
    programs within the military labs need your continued
    attention. In 1999, the Senate requested from the Department of
    Defense a report on the behavioral, cognitive, and social
    science research in the military due to your committee's
    ongoing concerns about the erosion of DOD's support for
    research on individual and group performance, leadership,
    communication, human-machine interfaces, and decision making.
        In the final report, the Department found that, quote, the
    requirements for maintaining strong DOD support for the
    behavioral, cognitive, and social science research capability
    are compelling, and that this area of military research has
    historically been extremely productive, with a particularly
    high return on investment and high operational impact, end
    quote.
        My own research on leadership has been funded by the Army
    Research Institute (ARI). The focal point and principal source
    of this expertise for all the military services. Identifying,
    nurturing, and training leaders is especially critical to the
    success of the military, as 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
    semiautonomous systems.
        The ARI budget for fiscal year 2003 will sustain the Army's
    current investment in leadership and cognitive readiness
    research, but APA is very concerned again this year that both
    the Office of Naval Research and the Air Force Office of
    Scientific Research appear to be eliminating entire lines of
    applied human-centered research in fiscal year 2003. Given the
    current global climate, this is not the time to zero out
    research in human factors and training that is mission-specific
    to the military, and we urge the subcommittee to request
    further clarification from the Navy and the Air Force and
    reinstate their budgets for 6.2 and 6.3 behavioral research.
        Clearly, psychological scientists address a broad range of
    important issues and problems vital to our national security,
    and we ask you to support the men and women on the front lines
    by supporting human-oriented research.
        Senator Inouye. We shall most certainly discuss this matter
    with the authorities, as you suggested, and we will do our very
    best.
        Dr. Zaccaro. Thank you, Mr. Chairman.
        [The statement follows:]

                  Prepared Statement of Stephen Zaccaro, Ph.D.

        Conflict is, and will remain, essentially a human activity in which
    man's virtues of judgment, discipline and courage--the moral component
    of fighting power--will endure--It is difficult to imagine military
    operations that will not ultimately be determined through physical
    control of people, resources and terrain--by people--Implicit, is the
    enduring need for well-trained, well-equipped and adequately rewarded
    soldiers. New technologies will, however, pose significant challenges
    to the art of soldiering: they will increase the soldier's influence in
    the battlespace over far greater ranges, and herald radical changes in
    the conduct, structures, capability and ways of command. Information
    and communication technologies will increase his tempo and velocity of
    operation by enhancing support to his decision-making cycle. Systems
    should be designed to enable the soldier to cope with the considerable
    stress of continuous, 24-hour, high-tempo operations, facilitated by
    multi-spectral, all-weather sensors. However, technology will not
    substitute human intent or the decision of the commander. There will be
    a need to harness information-age technologies, such that data does not
    overcome wisdom in the battlespace, and that real leadership--that
    which makes men fight--will be amplified by new technology. Essential
    will be the need to adapt the selection, development and training of
    leaders and soldiers to ensure that they possess new skills and
    aptitudes to face these challenges.----NATO RTO-TR-8, Land Operations
    in the Year 2020
        Mr. Chairman and Members of the Subcommittee, I'm Dr. Stephen
    Zaccaro, Associate Professor of Psychology at George Mason University,
    and a researcher who studies leadership development and team problem
    solving in military contexts. 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
    (ARI), the Office of Naval Research (ONR), and the Air Force Office of
    Scientific Research (AFOSR). I would like to address the proposed
    fiscal year 2003 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 (CNSR), a
    group of over 40 scientific associations and universities, in urging
    the Subcommittee to provide DOD with $11 billion for 6.1, 6.2 and 6.3
    level research in fiscal year 2003 (or 3 percent of the overall
    department budget). This figure also is in line with the recommendation
    of the independent Defense Science Board, the Quadrennial Defense
    Review, and the House and Senate Armed Services Committees.
        As our nation rises to meet the challenges of a new century,
    including multiple, asymmetric threats and increased demand for
    homeland defense and infrastructure protection, enhanced battlespace
    awareness and warfighter protection are absolutely critical. Our
    ability to both foresee and immediately adapt to changing security
    environments will become only more vital over the next several decades.
    Accordingly, DOD must support basic Science and Technology (S&T)
    research on both the near-term readiness and modernization needs of the
    department and on the long-term future needs of the warfighter.
        Despite substantial appreciation for the importance of DOD S&T
    programs on Capitol Hill, and within independent defense science
    organizations such as the Defense Science Board (DSB), total research
    within DOD has declined in constant dollars during the last decade.
    This decline poses a real threat to America's ability to maintain its
    competitive edge at a time when we can least afford it. APA, CNSR and
    our colleagues within the science and defense communities recommend
    funding the DOD Science and Technology Program at a level of at least
    $11 billion in fiscal year 2003 in order to maintain global superiority
    in an ever-changing national security environment. We strongly urge the
    Committee to direct a small portion of proposed increases for national
    security activities to the core S&T research accounts to achieve the
    $11 billion funding target.
              behavioral research within the military service labs
        In August, 2000 the Department of Defense met a congressional
    mandate to develop a Report to the Senate Appropriations Committee on
    Behavioral, Cognitive and Social Science Research in the Military. The
    Senate requested this evaluation due to concern over the continuing
    erosion of DOD's support for research on individual and group
    performance, leadership, communication, human-machine interfaces, and
    decision-making. In responding to the Committee's request, the
    Department found that ``the requirements for maintaining strong DOD
    support for behavioral, cognitive and social science research
    capability are compelling'' and that ``this area of military research
    has historically been extremely productive'' with ``particularly high''
    return on investment and ``high operational impact.'' Given such strong
    DOD support, APA encourages the Committee to provide, at minimum,
    increases at the level of inflation for behavioral science programs
    within the three Service research laboratories.
        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. As DOD noted in its own
    Report to the Senate Appropriations Committee:
        ``ilitary knowledge needs are not sufficiently like the needs of
    the private sector that retooling behavioral, cognitive and social
    science research carried out for other purposes can be expected to
    substitute for service-supported research, development, testing, and
    evaluation . . . our choice, therefore, is between paying for it
    ourselves and not having it.''
      the army research institute for the behavioral and social sciences
                                     (ari)
        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)
        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)
        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.
        Below is suggested appropriations report language which would
    encourage the Department of Defense to fully fund its behavioral
    research programs within the military laboratories:
                             department of defense
    Behavioral Research in the Military Service Laboratories
        The Committee recognizes that psychological scientists address a
    broad range of important issues and problems vital to our national
    security through the three military research laboratories: the Air
    Force Office of Scientific Research, the Army Research Institute, and
    the Office of Naval Research. Given the increasingly complex demands on
    our military personnel, psychological research on leadership, decision-
    making under stress, cognitive readiness, training, and human-
    technology interactions have become even more mission-critical, and the
    Committee strongly encourages the service laboratories to fully fund
    their behavioral research programs.

        Senator Inouye. Our next witness represents the Juvenile
    Diabetes Research Foundation International. Major General Paul
    Weaver, (Ret.).
    STATEMENT OF MAJOR GENERAL PAUL WEAVER, (RET.), ON
                BEHALF OF THE JUVENILE DIABETES RESEARCH
                FOUNDATION INTERNATIONAL
        General Weaver. Good morning, Mr. Chairman. I want to thank
    you, Mr. Chairman, for allowing me to testify before you this
    morning. As you know, I have had the privilege of appearing
    before this committee numerous times over the last 8 years in
    my capacity as the Deputy Director, and then as the Director of
    the Air National Guard. You have been more than gracious with
    your support in our efforts to have the Air National Guard as
    the most effective and sought-after reserve component force in
    our Nation, and I cannot thank you enough. You all made it
    happen, Mr. Chairman.
        I come to you today, obviously, as a civilian who retired
    after 35 years of military service with a plea to ask for your
    support and assistance in a cause that became very personal to
    me on January 1 of this year. On that day, my wife, Kathy Lee,
    behind me, and I took our 2\1/2\-year-old daughter Julia, with
    us here today, the youngest of our eight children, to the
    emergency room at Mary Washington Hospital, Virginia. That date
    really changed our lives.
        A few days before, when we sought and received medical
    assistance for her, we were told she had all the signs of the
    flu, which was prevalent at that time. We were told to treat
    her with all the normal precautions for a young child, drinking
    plenty of fluids and so on. For 3 days, her conditioned
    worsened to the point that a weight loss became very
    noticeable, and she was losing mental awareness of her
    surroundings.
        On New Year's Day morning we noticed a severe degradation
    of her overall health. We proceeded to the emergency room at
    Mary Washington Hospital, where we were told after her blood
    was tested that she had diabetic ketoacidosis. Simply put, she
    had juvenile diabetes. The attending physician stated her
    condition was grave, and that he was not sure that she was
    going to make it. Julia, who we called the Precious, needed to
    get into a pediatric intensive care facility immediately. The
    closest available was Walter Reed, here in the District. the
    attending physician said the only chance she would have would
    be to be transported by helicopter ambulance, and then he said
    that would be a long shot.
        The chopper arrived a short time afterwards, and Julia was
    put on the chopper with the staff, not allowing us to proceed
    with her because of the lack of space in the chopper. We prayed
    to our Lord Jesus Christ to bless her and keep her safe. As the
    chopper lifted off, I could never explain the feeling in our
    hearts that we may never see our little girl alive again.
        We were told that upon her arrival at the pad at Walter
    Reed Medical Center, a flurry of activity by the crack and
    professional staff kicked in. We arrived approximately 2 hours
    later by car to find her alive, barely, with multiple tubes and
    IV's coming from her little body. She was in the intensive care
    ward for approximately 2 days and then moved to a regular ward
    after her condition became stable. The great medical staff at
    Walter Reed saved her life, and for that my wife and I will be
    eternally grateful.
        I made a commitment to God that if I could ever do anything
    to help in finding a cure for diabetes, I would do that, and
    so, Mr. Chairman and members of this committee, that is why you
    see me before you today. I am pleading for your help and
    assistance in honoring the Juvenile Diabetes Research
    Foundation's request for funding for $3 million for the
    technologies in metabolic monitoring that are known as TMM at
    the Department of Defense.
        My daughter's daily regimen with juvenile diabetes begins
    in the morning with a finger prick to test her blood and her
    first shot of insulin of the day. At lunch she will have her
    blood tested again, usually followed by another insulin
    injection. Prior to dinner, the same protocol takes place, and
    then again at bedtime. At 3:00 every morning we test her blood
    again to make sure her blood is within range, never quite
    knowing what to expect, whether we will need to give her an
    insulin shot if she is too high, or a glass of orange juice to
    bring up her glucose level from going too low. In a nutshell,
    Julia has her fingers pricked about five to eight times a day,
    and receives two to four shots a day, Mr. Chairman.
        Just briefly, let me explain how technologies in metabolic
    monitoring, better known as TMM, could help greatly and be of
    benefit to all members of the Armed Forces, something I know a
    little bit about, as well as you. The Juvenile Diabetes
    Research Foundation's interest in technologies in metabolic
    monitoring arises from the needs of men, women, and children
    with diabetes who must endure four to six finger pricks a day
    to regulate their blood glucose levels. TMM would noninvasively
    monitor diabetes metabolism, and would allow individuals with
    the disease to ultimately improve the control of fluctuations
    in their blood glucose levels, potentially reducing the
    severity of complications such as kidney failure, blindness,
    nerve damage, amputation, heart attack, and stroke.
        I cannot overemphasize enough the need to control the
    fluctuations of a person's blood levels. The greater the
    fluctuations, the more severe consequences will occur for the
    individual in later life. You simply cannot control these
    fluctuations unless you can continually monitor them.
        The development of TMM would also have a significant
    application in protection the men and women of the Armed
    Forces. It will monitor more than just glucose levels for
    diabetics. TMM could potentially monitor metabolic products of
    personnel in the field to determine health status and
    accurately communicate this information. Furthermore, Mr.
    Chairman, it would provide an ability to respond quickly in the
    field by also providing technology that would enable us to
    deliver drug treatments and nutritional supplements that may be
    required by our personnel.
        Mr. Chairman, I ask for your support from the bottom of my
    heart to not only assist our daughter, Julia, but thousands
    like her who are afflicted with this disease. I ask your
    generous support in assisting our Armed Forces in advancing the
    technology that will have the potential of saving lives on the
    battlefield. Let my daughter, Julia, and so many like her help
    in aiding our brave young men and women who are on the front
    lines today in our war on terrorism. No funds are too great for
    their sacrifices being made today.
        God bless you, Mr. Chairman.
        Senator Inouye. General, I am going to do whatever I can,
    and when we do, it will be called the Julia Weaver Foundation
    Fund.
        General Weaver. Thank you, Mr. Chairman. God bless you.
        Senator Inouye. You will get it.
        General Weaver. Thank you, sir.
        [The statement follows:]

        Prepared Statement of the Juvenile Diabetes Research Foundation
                                 International

        The Juvenile Diabetes Research Foundation International (JDRF)
    thanks Chairman Inouye, Senator Stevens and the Members of the
    Subcommittee for the opportunity to submit this testimony in support of
    $3 million in research funding to allow the Department of Defense (DOD)
    to continue and expand the Technologies in Metabolic Monitoring (TMM)
    Initiative, the goal of which is to identify and expand research areas
    that have direct impact on the ability to monitor, understand and
    predict metabolism with special emphasis on issues associated with
    diabetes.
                                  applications
        JDRF's interest in this technology arises from the needs of men,
    women and children with juvenile, or insulin dependent, diabetes, who
    must endure four to six finger pricks a day to test their glucose
    levels.
        Anyone who has a loved one with this disease, or has the disease
    him or herself, knows the difficulties of controlling ever-fluctuating
    glucose levels with insulin and diet. With our current technology, it
    is extremely difficult to maintain tight control of glucose levels over
    long periods of time and devastating complications, such as blindness,
    kidney failure, amputation, heart disease, and nerve damage, are often
    the inevitable result of a lifetime with this disease. Largely as a
    result of these complications, diabetes costs our economy in excess of
    $105 billion per year, and its financial impact is so severe that one
    out of four Medicare dollars and one out of ten health care dollars
    overall are spent on individuals with the disease.
        Technologies that would non-invasively monitor diabetes metabolism,
    coupled with an ability to provide information remotely (or
    wirelessly), would allow individuals with the disease to monitor their
    blood sugar levels accurately, constantly, and non-invasively, which
    could ultimately improve the control of fluctuations in their blood
    glucose levels and potentially reduce the severity of debilitating
    complications. In this way, this technology could offer a significant
    and immediate improvement in the quality of life of 16 million
    Americans who suffer from this disease and relieve much of the economic
    burden of this disease on our nation.
        More broadly, however, the development of wireless, remote, non-
    invasive technologies that could measure the state of metabolism in an
    individual would have a significant application in protecting the men
    and women of the armed forces. The Subcommittee is undoubtedly aware of
    the risks that our men and women of the armed forces face while in the
    field, but may not be aware of their risk due to medical problems. In
    fact, it is an alarming statistic that most wartime deaths occur due to
    medical problems, caused by environmental stress and illness, rather
    than to enemy attack.
        Technologies for metabolic monitoring could potentially determine
    health status and accurately communicate this information. This
    technology could be used to track key personnel in remote areas and
    monitor their metabolic changes to determine and prevent distress due
    to stress or illness. Furthermore, it would provide an ability to
    respond quickly in the field by also providing technology able to
    deliver antidotes and drug treatments that may be required by sick or
    injured personnel, as well as nutritional supplements.
        One example of the potential value of this technology would be in
    the monitoring of astronauts when they are in space for several months.
    During this time, astronauts are at risk for illness due to disease or
    environmental stresses, such as temperature extremes, vacuum or sleep
    deprivation. This technology would provide continuous and real-time
    measures of health, and a means to intervene if stress or illness is
    detected. NASA also foresees applications to utilize this technology to
    conduct research on the development and sustenance of life in extreme
    environments.
        Thus, this technology has a potential application as a more
    efficient and effective means to protect the health and safety of both
    civilians and the military by detecting abnormalities early and
    providing real time information that could be acted upon
    therapeutically. Such a device would ultimately improve the lives and
    health of both civilians and the military.
                                 program status
        The Technologies in Metabolic Monitoring (TMM) Initiative was
    established in 2001 by direction and with the support of Congress and
    close involvement of several agencies including JDRF, the Department of
    Defense (DOD), the National Institutes of Health (NIH) and NASA. We
    want to extend our appreciation to the Subcommittee for their support
    of this initiative.
        The fiscal year 2001 appropriation of $2.5 million was used to
    establish the Department of Defense Research Program in Technologies
    for Metabolic Monitoring, which is managed at DOD by the United States
    Army Medical Research and Materiel Command (USAMRMC). Ultimately 5
    applications addressing aspects of metabolic monitoring were funded in
    fiscal year 2001.
        With the additional $2.5 million in congressional appropriations
    secured for fiscal year 2002, the TMM Initiative will solicit research
    programs that aim to identify potential new metabolic measures of
    diabetes that can be adjunct measures to glucose, ultimately
    potentially increasing the sensitivity of glucose measure.
        The TMM Initiative held a workshop meeting May 21st-22nd, 2002,
    which was attended by approximately 70 researchers from the sensors
    community encompassing academia, industry, the military and space
    researchers. Through a series of short research presentations the
    meeting provided an overview of the `state of the art' of current
    research in metabolic monitoring as well as a focus on problems that
    had been encountered. Metabolic sensing of glucose, the gold standard
    measure of diabetes metabolism, was a key area of focus. Others
    addressed metabolic monitoring in aeronautical and military scenarios.
    The meeting increased awareness in the research community of the TMM
    Initiative and the key needs for sensors in diabetes, the military and
    NASA. An important accomplishment of this meeting was that it brought
    together researchers from a very broad range of backgrounds to discuss
    common problems and develop new ideas because of these interactions.
        The fiscal year 2002 Technologies for Metabolic Monitoring Request
    for Proposals (RFP) was finalized and made public at the end of May of
    2002. The 2002 RFP is intended to provide seed funding for proof of
    concept studies. Collaboration between military, NASA, academics, and/
    or industry is encouraged and all persons are eligible to apply.
                                    request
        JDRF requests funding for this program in fiscal year 2003 at $3
    million to enable USAMRMC to expand this research and develop a broad
    program that includes military, academia and industry researchers. A $3
    million appropriation will allow USAMRMC to fund this crucial outside
    research and capitalize on the opportunities provided by the fiscal
    year 2002 funding.
        Considering that this funding could ultimately save the United
    States billions of dollars in health care, improve the quality of life
    for 16 million Americans with diabetes, and better protect the lives of
    our men and women of the armed forces in the field, we believe that
    this is a worthwhile investment for the Department of Defense.
        Thank you for considering this request.

        Senator Inouye. Our next witness is the director of
    marketing and communications of the Air Force Sergeants
    Association, Command Sergeant (Ret.) Richard M. Dean. Command
    Sergeant.
    STATEMENT OF CMSGT RICHARD M. DEAN, (RET.), DIRECTOR,
                MARKETING AND COMMUNICATIONS, AIR FORCE
                SERGEANTS ASSOCIATION
        Sergeant Dean. Good morning, Mr. Chairman. First off I want
    to thank you for this opportunity before this committee, and I
    want to thank you for the tremendous support this committee
    continues to provide for increased pay and allowances,
    enhancements of military health care, increased educational
    benefits, and enhanced reserve component benefit for active
    duty and retired military personnel.
        Everything is in the written testimony, but there are a
    couple of items that I would like to highlight. The first is,
    as you said earlier, our military personnel are engaged all
    over the world in police actions, they are rooting out
    terrorists, and providing humanitarian relief missions wherever
    they are needed. These deployments are really stretching the
    forces thin, as we all know, and as they are deployed more
    often away from their families the support system that is left
    at home becomes even more critical, and the systems I am
    talking about are the commissaries, the BX systems, the
    educational and job opportunities for dependents. We would ask
    you fully fund these programs and not make any reductions in
    these programs.
        For military pay for enlisted personnel, last year the
    targeted pay increases did a lot to decrease the gap between
    the enlisted and the officer pay charts, and we ask that you
    continue the targeted pay raises to decrease that gap, because
    the enlisted personnel in our military forces today have
    stepped up. With the decreased manning they are assuming
    positions of greater responsibility, many that were held by
    commissioned officers in the past, and they are also increasing
    their education tremendously so that they can better perform
    their jobs out there, so we ask that you continue the targeted
    pay raises for the enlisted personnel.
        Military health care, you have done a great job in funding
    the health care programs for the military, especially the
    TRICARE for Life and TRICARE Senior Pharmacy program. What we
    would ask is that you continue to do these and prevent any
    increases in copay or reductions to the TRICARE Senior Pharmacy
    program or the TRICARE for Life program.
        As far as retired pay, we ask that funding be provided to
    restore full military pay compensation, along with concurrent
    VA disability compensation to retirees, and for the Air Force
    Reserve component members we ask that funding be provided to
    provide adequate health care, full benefits, comparable
    retirement benefits similar to the active duty, all of which
    are critical to providing a strong and ready militia.
        For this opportunity, Mr. Chairman, I thank you.
        [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, thank you for
    the tremendous support this committee continues to provide in increased
    military pay and allowances, overall benefit increases, enhancement of
    military health care, increased educational benefits, an increased
    focus on the needs of military reserve component members, and support
    for military retirees who are also disabled as a result of their
    military service. We also thank you for this opportunity to offer our
    views on the 2003 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. Of course, your task
    is especially critical this year as we wage a war on terrorism while,
    at the same time, working to enhance quality-of-life programs.
        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. Especially with
    Operations Enduring Freedom and Noble Eagle, military forces today face
    significantly greater missions with considerably fewer people,
    increasing family separations, a decline in some health care programs,
    deteriorating military housing, diminishing opportunities for
    educational benefits, and still sizable 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. Another factor in
    today's environment is the increasing reliance on reserve component
    military members, and the extraordinary sacrifices they make in
    balancing their civilian jobs and long-term call-ups to military duty.
    While all of these issues are important, the paragraphs below will
    highlight several areas you will consider as you develop the
    appropriations for fiscal year 2003.
                      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.'' Of course, as those memories and challenges fade into the
    past, we now have entered a new era of military challenges. Clearly,
    our National Strategy is no longer one of projecting America's military
    force only in support of our ``vital national interests.'' We are now,
    instead, globally engaged in police actions, rooting out terrorists
    where we can find them, and in humanitarian efforts (military
    operations other than warfare) around the world. As you are well aware,
    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 expanded operations. 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. Added to this is the increased
    burden of providing for the quality of the lives of military family
    members who require additional support as military members deploy for
    longer periods of time. In that environment, programs such as family
    support and morale welfare and recreation programs, military
    commissaries and exchanges, educational and job opportunities for
    family members all become even more important.
        These programs will only remain viable if manning levels are
    increased to parallel tasking. The Fiscal Year 2002 National Defense
    Authorization Act called for more 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.
        At a minimum, we urge this subcommittee to fully support the
    manpower required both to maintain our military missions at home, to
    carry out the war of terrorism and other obligations abroad, and to
    provide for the unique manpower requirements of the reserve component
    as a result of the call-up of over 80,000 Guard and Reserve members to
    successfully executive Operations Noble Eagle and Enduring Freedom.
                         military pay and compensation
        Continuing to build on the gains made in the fiscal year 2002
    Authorization, it is important to realize that the work is not
    finished. We applaud the pay adjustments made, especially for enlisted
    members who receive relatively lower pay, but they are only the first
    step in accurately adjusting the pay charts. Also, annual minimum
    military pay raises through the year 2006 a half percentage above the
    Employment Cost Index continues to send 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 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 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 NCOs assumed many tasks
    formerly handled by commissioned officers, they often 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. In fact the most recent quadrennial
    review report has highlighted the need to increase enlisted pay
    commensurate with increased responsibility and education levels. This
    subcommittee can help make those necessary adjustments.
        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. No longer should we have to discuss
    ``military poverty.'' We would urge this subcommittee to establish
    minimum military pay levels above the poverty level. Recent targeted
    enlisted pay raises supported by this subcommittee have greatly helped.
    We ask that you support or exceed full funding for the targeted raises
    indicated in S. 2514, the fiscal year 2003 NDAA, as it has developed
    through the Senate Armed Services Committee. These continuing pay
    adjustments will aid tremendously to help sustain an enlisted force.
        We sincerely appreciate the good work of this subcommittee in
    protecting those who serve by providing increases in military pay. We
    ask that we continue to build on past achievements by:
      --Fully fund a 4.1 to 6.5 percent military pay raise for fiscal year
            2003, with weighting toward middle- and senior-enlisted grades.
      --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.
      --Fund increased BAS rates to enlisted members assigned to single
            quarters without adequate availability of a government messing
            facility (S. 2514, Sec. 602).
                         housing and housing allowances
        A military member's residency location 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 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. Unfortunately, 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 enlisted 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.
        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 costs.
      --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.
                              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, this subcommittee has made significant
    contribution to restoring funding of military health care programs,
    providing TRICARE Prime Remote to active duty family members,
    eliminating TRICARE Prime co-payments for active duty family members,
    and providing the TRICARE Senior Pharmacy and TRICARE for Life
    programs. We ask that full funding is provided to support
    comprehensive, low-cost pharmaceuticals for military health care
    beneficiaries. Further, that full funding is provided to support
    military health full usage of military medical facilities and to
    support the manpower needed to service all beneficiaries. The health
    care benefit is absolutely critical to readiness for those currently
    serving. It is also an earned career benefit for those who have
    served--a strong, clear message that this committee has continued to
    send through its support of these programs.
        We ask the support of this committee for the following health care
    concerns.
      --Provide full funding to support comprehensive health and
            pharmaceutical care to all beneficiaries.
      --Support TRICARE eligibility of dependents residing at remote
            locations after the departure of the sponsor for unaccompanied
            assignments (S. 2514, Section 703).
      --Establish continuing eligibility of surviving dependents for the
            TRICARE Dental Program benefits (S. 2514, Section 701).
      --Establish funding for full Reserve health care and for research
            related to war-field environments in light of the high rates of
            deployment as part of Operations Noble Eagle and Enduring
            Freedom.
                              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.
        It is AFSA's 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 support, at a minimum:
      --Appropriate to support the funding parameters indicated in the
            Senate Budget Committee report for fiscal year 2003, and S.
            2514, the fiscal year 2003 NDAA, to phase-in restoration of
            retired pay for those with VA service-connected disability
            ratings of 60 percent or higher. While this association
            supports full retired pay restoration regardless of VA
            disability level, the phase-in of full retired pay for those
            with the highest disability ratings is a good first step.
                               survivor programs
        Our members greatly appreciate the provision in the fiscal year
    2002 NDAA extending Survivor Benefit Plan (SBP) eligibility to members
    killed on active duty, regardless of years of service. This action
    corrected a long-standing inequity. But more still needs to be done.
    Before age 62, SBP survivors receive an annuity equal to 55 percent of
    the retiree's SBP-covered retirement pay. At age 62, however, the
    annuity is reduced to a lower percentage, down to a floor of 35
    percent. For many older retirees, the amount of the reduction is
    related to the amount of the survivor's Social Security benefit that is
    potentially attributable to the retiree's military service. For member
    who attained retirement eligibility after 1985, the post-62 benefit is
    a flat 35 percent of covered retired pay. Although this age-62
    reduction was part of the initial SBP statute, large number of members
    who retired in the 1970s (or who retired earlier but enrolled in the
    initial SBP open season) were not informed of the reduction at the time
    they enrolled. As such, many still are very bitter about what they view
    as the government changing the rules on them in the middle of the game.
    Thus, thousands of retirees signed up for the program in the belief
    that they were ensuring their spouses would receive 55 percent of their
    retired pay for life. They are further dismayed to find out that widows
    who earned Social Security through their own earnings still face a
    reduction in the SBP annuity at age 62. To add further to the need for
    changes in this program, the DOD actuary has confirmed that the 40-
    percent government subsidy for the SBP program, which has been cited
    for more than two decades as an enticement for retirees to elect SBP
    coverage, has declined to less than 27 percent. This means that the
    government has enjoyed a 13 percent reduction in its burden to fund the
    program--shifting the benefit cost to the beneficiary. Clearly, this
    benefit has become more beneficial and less costly for the government,
    and more costly and less beneficial for the retirees and survivors the
    program was created to protect.
        We urge this subcommittee to provide appropriations to correct some
    of these inequities. The paid-up SBP initiative enacted in 1998 will
    ease this disparity somewhat for members retiring after 1978, but the
    subsidy will still fall far short of the promised 40 percent and now
    comes too late for many older retirees. In other words, members who
    enrolled in SBP when it first became available in 1972 (and who have
    already been charged higher premiums than subsequent retirees) will
    have to continue paying premiums for up to 36 years to secure paid-up
    coverage. Unfortunately, the 1998 paid-up provision does not become
    effective until 2008. That is simply too late for many enrolled in the
    program; we urge that you accelerate the paid up provision to October
    2003 at the latest.
        To show this country's dedication and compassion for its military
    retirees, we ask you to:
      --Eliminate the Age-62 SBP annuity reduction by supporting S.145.
      --Provide funding to accelerate the ``paid-up'' SBP program (for
            those 70 years of age and who have paid into the program for 30
            years) from the current implementation in 2008 to the year
            2003.
                                   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,'' merely provide a deferred-
    compensation windfall to DOD. 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.
        Although we realize that many of these benefits below fall under
    the purview of the Department of Veterans Affairs, cross-funding/income
    will require VA and DOD support. Therefore we ask that this
    subcommittee support:
      --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 4-year college be implemented.
      --An open window for enrollment for in the MGIB be established.
      --Eliminate the member's $1,200 enrollment fee.
      --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.
                      air reserve component (arc) members
        Our nation's military is now truly a ``Total Force.'' The citizen
    soldier works side-by-side with their active duty counterparts on a
    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 full funding for an accelerated study to reduce the reserve
            retirement age from 60 to 55.
                             general funding issues
        In addition to the issues explained above, we asked the
    subcommittee to consider the following:
      --Fund a daily stipend for those who support funeral honors details.
      --Fund POV storage in lieu of shipment when members are ordered to
            non-foreign ports outside of CONUS when POV shipment is
            prohibited.
                                    summary
        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. Mr. Chairman, this
    subcommittee repeatedly demonstrates an understanding of these
    hardships and challenges. As such, we are pleased to have had an
    opportunity to share the views of our members with you relative to your
    deliberations about the fiscal year 2003 Defense Bill. As always, this
    association and its members are ready to provide you with full support
    on matters of mutual concern.

        Senator Inouye. Sergeant, I want to commend you, because
    the latest reenlistment statistics indicate that in the Air
    Force for the first-timers it is over 70 percent, and in spite
    of the fact that we are at war, the reenlistment rate is high,
    and I think it has something to do with your work.
    Congratulations.
        Sergeant Dean. Thank you, sir.
        Senator Inouye. Our next witness represents the American
    Association of Nurse Anesthetists, Ronald L. Van Nest.
    STATEMENT OF RONALD L. VAN NEST, CRNA, M.A., VAN NEST
                AND ASSOCIATES, ON BEHALF OF THE AMERICAN
                ASSOCIATION OF NURSE ANESTHETISTS
        Captain Van Nest. Good morning, Mr. Chairman. My name is
    Ronald Van Nest, Captain, Nurse Corps, United States Navy
    (Ret.). I am a certified registered nurse anesthetists (CRNA) a
    member of the American Association of Nurse Anesthetists
    (AANA). I served in the Navy for 30 years. I am testifying
    today on behalf of the AANA, which represents more than 28,000
    nurse anesthetists, including 540 that serve in the Armed
    Forces. I hope to inform you today about the critical need to
    maintain adequate numbers of CRNA's on active duty.
        For several years, the number of CRNA's serving on active
    duty has been falling short of the number authorized by DOD. In
    a letter to the president of the American Association of Nurse
    Anesthetists dated March 14, 2002, the Assistant Secretary of
    Defense for Health Affairs stated that, quote, the nurse-
    anesthetist specialty has been identified by the Department as
    a critical wartime shortage for several years, close quote.
        Right now in Afghanistan the only anesthesia professionals
    deployed are nurse anesthetists. Recruitment of nurse
    anesthetists for the miliary becomes increasingly difficult
    when the civilian sector faces shortages also. The number of
    nurse anesthetist vacancies increased 250 percent from 1998 to
    2001. Staffing firms for health professionals report that from
    1997 to 2000, nurse anesthetist recruitment has risen by up to
    tenfold, making nurse anesthesia the second most recruited
    health profession.
        Incentives for recruitment and retention of nurse
    anesthetists in the military must remain of the highest
    priority so the services can meet their medical mission. There
    has been no change in the incentive specialty pay (ISP) since
    the increase from $6,000 to $15,000 was authorized in fiscal
    year 1995, even though civilian pay has continued to rise since
    then. We ask this committee to look at raising the ISP ceiling
    from $15,000 to $30,000 so the services can retain nurse
    anesthetists.
        The AANA also supports funding for the critical skills
    retention bonus for fiscal year 2003 for CRNA's in the
    military. On May 8, 2002, the Assistant Surgeon General for the
    Air Force Nursing Services testified before this subcommittee
    requesting the expansion of the critical skills retention bonus
    to health professionals with critical skills like CRNA's. The
    Air Force has only 82 percent of its authorized CRNA's on
    active duty. They will not be able to maintain readiness
    without bonuses to retain nurse anesthetists.
        At that same May 8 hearing, the Chief of the Army Nurse
    Corps told this subcommittee that the critical retention bonus
    is a priority issue to retain both CRNA's and operating room
    nurses in the Army Nurse Corp.
        CRNA's are proud to serve this country. On September 11,
    2001, military nurses were called to action to provide medical
    response to those who were injured from that terrorism. The
    Navy sent the hospital ship, COMFORT, within 18 hours of the
    attack.
        In conclusion, the American Association of Nurse
    Anesthetists thanks you again for your support of military
    CRNA's, and I thank you for your support over the years to me,
    when I was on active duty.
        I would be happy to answer any questions you may have.
        Senator Inouye. We will do our best to continue our support
    of the CRNA's, because without you our medical services would
    be incomplete. We do not have enough anesthesiologists, that is
    obvious, and you provide the necessary services that we need,
    so we will do our very best, sir.
        Mr. Van Nest. Thank you, sir.
        [The statement follows:]

              Prepared Statement of Ronald L. Van Nest, CRNA, M.A.

        The American Association of Nurse Anesthetists (AANA) is the
    professional association representing over 28,000 certified registered
    nurse anesthetists (CRNAs) in the United States, including 540 active
    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 U.S. 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, CRNAs are
    the only anesthesia providers deployed in Afghanistan. No
    anesthesiologists are assigned to these missions.
        On September 11, 2001, military nurses were called to action to
    provide medical response to men and women injured from the horrible
    acts of terrorism imposed on this country. The Navy sent the USNS
    Comfort ship to NYC, within 18 hours after the attack. Each Nurse Corps
    of the Navy, Army and Air Force responded quickly to the attacks on the
    Pentagon with TRIAGE units and worked with the civilian community
    rescue units.
        When President George W. Bush reacted to the ``terrible acts of
    terrorism'' against the U.S. with Operation Enduring Freedom, CRNAs
    were immediately deployed. With the new special operations environment
    new training was needed to prepare our CRNAs to ensure military medical
    mobilization and readiness. On May 8, 2002, Brigadier General Barbara
    C. Brannon, Assistant Surgeon General, Air Force Nursing Services,
    testified before this Senate Committee providing an account of CRNAs on
    the job overseas. She stated, ``Lt. Col Beisser, a certified registered
    nurse anesthetist (CRNA) leading a Mobile Forward Surgical Team (MFST),
    recently commended the seamless interoperability he witnessed during
    treatment of trauma victims in Special Forces mass casualty incident.''
    This committee must ensure that we retain and recruit CRNAs for now and
    in the future for the ever-changing military operation deployments
    overseas.
              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 shortage of CRNAs in the nation. A letter dated March 14, 2002 from
    the Asst. Secretary of Defense for Health Affairs, William
    Winkenwerder, Jr., MD, to the AANA President, Debbie A. Chambers, CRNA,
    MHSA, states that, `` The Nurse Anesthetist specialty has been
    identified by the Department as a critical wartime shortage for the
    last several years.''
        Recruitment of nurse anesthetists for the military becomes
    increasingly difficult when the civilian sector faces such critical
    shortages, too. Currently, the number of nurse anesthetist vacancies
    increased 250 percent from 1998-2001, according to CRNA managers'
    surveys. Health professions staffing firms report CRNA recruitment
    rising by up to ten-fold from 1997-2000, making nurse anesthesia the
    second most recruited health professional specialty. In addition, this
    is compounded by the baby boom retirement impact. As the number of
    Medicare-eligible Americans climbs, it compounds the number of surgical
    procedures requiring anesthetics. Indeed, among those retiring
    Americans are CRNAs themselves. One in seven CRNAs intend to retire
    within 5 years and one-third within 10 years.
        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.
        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 1,100 nurse anesthesia students graduate
    annually.
        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 increasing special pays.
    Critical Skills Retention Bonus
        As recently as May 8, 2002, Brigadier General Barbara C. Brannon,
    Assistant Surgeon General, Air Force Nursing Services, testified before
    this Senate Committee requesting the expansion of the critical skills
    retention bonus, authorized in the fiscal year 2001 Defense
    Authorization Act, to health professionals with critical skills.
    Brigadier General Brannon stated:

              ``Currently, the Secretary of Defense is evaluating whether
            health professions will be designated as a critical skill. In
            anticipation, the TriService Health Professions Special Pay
            Working Group is evaluating future funding, and we have
            identified our critical nursing specialties. These specialties
            include obstetrical nurses, mental health, medical-surgical,
            neonatal intensive care, CRNAs and Women's Health Nurse
            Practitioners.''

        The critical skills retention bonus would assist each of the
    service branches to both retain and recruit CRNAs. Currently, the Air
    Force will be losing between 15-17 CRNAs in 2002. With the Air Force
    only having an 82 percent capacity of CRNAs filling critical needs for
    war time, they will not be able to maintain military medical readiness
    without needed bonuses to retain CRNAs.
        Currently, the Army is facing similar shortages in CRNA billets
    too. During the May 8, 2002, Senate Defense Appropriations Committee
    hearing on Medical Programs, Brigadier General William T. Bester, told
    Chairman Daniel K. Inouye that the Critical Retention Bonus is a
    priority issue to retain both CRNAs and Operating nurses in the Army
    Nurse Corps.
        The AANA requests funding for the Critical Skills Retention Bonus
    for fiscal year 2003 to ensure the retention of CRNAs in the military
    services.
    The Incentive Special Pay for Nurses
        On May 8, 2002, Brigadier General William T. Bester, Chief Army
    Nurse Corps, testified before this Senate Committee:

              ``To adequately recruit and retain our force, we must
            demonstrate through our actions that we recognize the
            unparalleled contributions of military nursing and that we show
            our commitment to these dedicated military officers and
            professional nurses via benefit packages such as educational
            dollars and accession and retention bonuses.''

        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 2001 AANA
    Membership survey measured income in the civilian sector by practice
    setting. The median income in a hospital setting is $104,000, MDA group
    $96,000, and self-employed CRNA $110, 800 (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 2001 membership survey reported, CRNA's median annual
    vacation is 21 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. In 2002, the
    Army reported MTFs paying $130,000-$180,000 for CRNA contractors.
    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 an
    increase in the annual ISP for CRNAs from $15,000 to $30,000, 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, 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 continue 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 the recruitment and retention
    of CRNAs in the Services is of critical concern. The efforts detailed
    above will assist the Services in maintaining the military's ability to
    meet its wartime and medical mobilization through the funding of the
    Critical Skills Retention Bonus and an increase in ISP. In addition we
    commend and thank this committee for their continued support for CRNAs
    in the military.

        Senator Inouye. Our next witness is the legislative
    director of the Retired Enlisted Association, Deirdre Parke
    Holleman, Esq. Ms. Holleman.
    STATEMENT OF DEIRDRE PARK HOLLEMAN, ESQUIRE,
                LEGISLATIVE DIRECTOR, THE RETIRED ENLISTED
                ASSOCIATION
        Ms. Holleman. Good morning, Mr. Chairman. I am here
    representing the members of the Retired Enlisted Association, a
    Veteran Service Organization (VSO) made up of retired enlisted
    and present career enlisted personnel from all the uniformed
    services. Before speaking briefly on our concerns about fiscal
    year 2003, I want to thank the subcommittee on behalf of The
    Retired Enlisted Association (TREAs) members for the great
    improvements that have been implemented in the last 2 years in
    the area of military retiree benefits.
        The TRICARE Senior Pharmacy and TRICARE for Life program
    have greatly improved the quality of life for our over-65 and
    medicare-eligible retiree members, and of course we know where
    the money that made these programs realities came from, so
    joining speakers who have already spoken, and those who will
    speak after me, TREA wishes to thank this committee and its
    staff once again.
        Now onto this year. TREA is very hopeful that the
    improvements that have occurred in military health care will
    continue. Primarily, we hope that this subcommittee will see
    that there is full funding for the direct care system, the
    managed care support contract, and TRICARE standard. Many
    military retirees under 65 years of age are totally dependant
    upon one of these programs for their health care. After all,
    there are still military retirees who do live close to MTF's
    and are enrolled in TRICARE Prime.
        Additionally, in the tradition of military families, many
    retirees' children are active duty personnel today, and are
    dependant on the direct care system and the managed care
    contracts for their own and their family's care. If these
    programs are not fully funded, readiness and the health of the
    entire military family suffers. TREA respectfully asks this
    subcommittee to make sure that the direct military health care
    system is fully funded.
        Additionally, TRICARE Standard must be properly funded and
    its system simplified so we can see an increase in medical
    provider participation. With the providers' displeasure in both
    the level of payment that is controlled by medicare rates and
    the complications and administrative problems in filing a
    claim, providers have simply chosen to opt out. It is poison in
    such small portions. Unless these problems are solved, TRICARE
    Standard is simply a phantom benefit in many of the areas of
    the country. Happily, concurrent receipt is moving in this
    session of the Congress in both the House and the Senate. While
    retired pay and survivor issues are not under the direct
    purview of this subcommittee, we know that you are well aware
    the veteran groups have made this cause one of their chief
    focuses for this session. TREA strongly believes that it is a
    great injustice to require an offset of military retired pay
    and veterans disability compensation. Both Senator Reid's S.
    170 and Representative Bilirakis' H.R. 303 have overwhelming
    support in the chambers. In the Senate, there are 81 cosponsors
    to authorize concurrent receipt, including 15 members of this
    subcommittee. That is why, hopefully when it is authorized, we
    ask that you support it in this fiscal year 2003.
        Additionally, there are numerous bills in both Houses aimed
    at improving the survivor benefits programs (SBP). These bills
    would move up the paid-up date for SBP, would end the reduction
    at age 62 of survivor's annuity, and would end the Survivor
    Benefits Program/Dependency Indemnification Compensation (SBP/
    DIC) offset. All these are sound and fair proposals, and should
    be supported.
        Finally, numerous military families, whether retirees or
    active duty, are dependant on the commissaries for an important
    non-paid benefit. The present proposals to seriously cut back
    on the staffing and hours of commissaries will be damaging to
    the active duty, the retirees, and our members. The present
    plan to eliminate 2,650 commissary positions, which is over 12
    percent of the workforce, by October 1 of this year, will
    seriously erode this benefit. TREA respectfully requests that
    you fully fund the commissaries for fiscal year 2003.
        Thank you again for all the work and care you provide to
    all parts of the military, and thank you for listening to us.
        Senator Inouye. Thank you very much for your kind
    compliments. May we assure you that all of us are well aware of
    your needs and quality of life has always been our top
    priority.
        Ms. Holleman. Thank you.
        [The statement follows:]

               Prepared Statement of Deirdre Parke Holleman, Esq.

                   disclosure of federal grants or contracts
        The Retired Enlisted Association does not currently receive, has
    not received during the current fiscal year or in either of the
    previous 2 years any Federal money for grants or contracts. All of the
    Association's activities are accomplished completely free of any
    Federal funding.
                                  introduction
        The Retired Enlisted Association (TREA) wishes to thank the
    Chairman and the Distinguished Members of the Senate Defense
    Appropriations Subcommittee for the opportunity to come before you to
    testify about the funding issues that will have serious effects on our
    members in fiscal year 2003 and in the Future. But before we begin we
    wish to take the opportunity to thank this Subcommittee for the great
    improvements in military health benefits we have seen in the past year
    with the implementation of the Senior Pharmacy Benefit and TRICARE or
    Life (TFL).
                                  health care
    Full funding for health care
        In the last 2 years we have seen great steps forward in the
    implementation of a host of improvements in the military health care
    programs for all Uniformed Services Beneficiaries. These included not
    only TRICARE for Life and the Senior Pharmacy Program but the lowering
    of the Catastrophic Cap on retired beneficiaries' out-of-pocket costs
    from $7,500 to $3,000 per family and numerous improvements for active
    duty families' benefits. A historic accomplishment of this Subcommittee
    was full funding in fiscal year 2002 for the military health care
    budget for the first time in memory. This was a wonderful
    accomplishment that allowed those in positions of power to plan
    realistically for the following year rather than to wait for a
    necessary supplemental fund. A fully funded Defense Health Budget will
    both meet readiness needs of the Active Duty and the health needs of
    their families and the retirees and their families and survivors who
    are dependent on the system. It is crucial to all military retirees but
    especially those under 65 who are enrolled in TRICARE Prime Programs
    for there to be sufficient funding to maintain the MFTS' quality of
    care, staffs, equipments and plants. Additionally, it is essential to
    fully and realistically fund the managed care portion of the military
    health care plan so retirees throughout the country can have a plan
    that will protect their health while not destroying their finances.
    TREA is very pleased that the President's budgetary request for
    Military Health Care truly covers the costs of Military Health Care as
    planned by the Department of Defense (DOD) for the next fiscal year.
    This a great step forward. TREA respectfully requests that this
    Committee assure that full funding continue for fiscal year 2003 and
    into the future. However, those are not our only concerns.
    TRICARE Standard improvements
        TRICARE Standard (CHAMPUS) the fee for service option portion of
    Military Health Care for Active Duty Family Members and Retirees under
    the Age of 65 is falling farther and farther behind both the rest of
    Military Health Care and civilian health care plans. The reimbursement
    levels are much too low to attract quality health care providers.
    Additionally, the claims processing is so cumbersome and complicated
    that numerous health care providers are refusing to take any TRICARE
    Standard patients or refusing to take any more than they presently
    have. This is particularly true in both rural areas and in urban areas
    where there are few military patients and thus TRICARE is not crucial
    to a doctor's practice. It is TREA'S suggestion that either Medicare
    payments must be increased or TRICARE's CMAC (TRICARE Standard's
    CHAMPUS's maximum allowable charge) must de-linked. Either way the CMAC
    must authorize higher payments to providers. We are well aware that
    Congress has given the Secretary of Defense the authority to increase
    reimbursements and improving TRICARE's Business Practices. However very
    little has happened on that front. TRICARE Standard still is full of
    paper claims, baroque rules and slow as well as low payments. Until
    both payments are increased and bureaucratic hassles are lessened we
    see no reason to believe that more quality providers will join the
    program. This seems to be the only way that we will be able increase
    the number of health care providers to make TRICARE Standard a benefit
    for military retirees and active duty families in more than name only.
                                  commissaries
        Commissaries are an important benefit to numerous military retirees
    who still live near military bases. They can save close to 30 percent
    for high quality food as compared to commercial outlets. They also care
    about the commissaries around the world since so many of their children
    serve in the military in far-flung places. That is why TREA is
    concerned by DOD's proposal to cut the Commissaries funding in fiscal
    year 2003 and concerned about their long-term goal to privatize the
    entire program. We think the presently instituted employee cuts are
    already hurting the efficiency and quality of the commissaries and we
    ask this Subcommittee to stop the walk down this long road. We believe
    that the savings envisioned by DOD could only occur if the contract
    allowed the private company to close unprofitable stores. These are the
    Commissaries that are placed in out of the way places throughout the
    world and are the ones that are most crucial to the readiness mission.
    If the contract was drawn with care to require that these carried
    commissaries must remain open with proper hours we believe that DOD
    will find the expected savings illusory. TREA requests that this
    Subcommittee assures that the Commissary benefit is properly funded in
    fiscal year 2003 and beyond.
                               survivors benefits
        TREA members, as we are sure all military retirees, strongly hope
    that the offset presently in place in the Department of Defense's
    Survivor Benefit Program is eliminated in this session of Congress. At
    the present time when a survivor of a military retiree who paid for
    full SBP reaches 62 years old the payment drops from 55 percent to 35
    percent. This is a precipitous drop that is particularly painful for
    the enlisted retiree's family. Since an enlisted retiree's average
    income being only $16,000 a year this leaves his or her survivor with
    only $6,600 a year from their spouses' military service. This leaves
    numerous widows in real want. We are presently working with members of
    Congress and the Veterans groups to change this inequity. Both Senators
    Thurmond of South Carolina and Senator Smith of New Hampshire have
    bills in the Senate to change this. Until such an authorization bill is
    passed we are well aware that you can do nothing to fund it. However,
    we are hopeful that you can support your colleagues in implementing
    this change and if we are successful in passing it we hope you will
    fund it.
        Another improvement that we hope to get authorized in this session
    is paid up SBP. Set to begin on October 1, 2008 the program would allow
    retirees who have paid into SBP for at least 30 years and have reached
    70 years of age can stop making payments and still have their spouses
    covered. We are working to have the paid up program start as soon as
    possible. Retirees who enrolled in the SBP program when it began have
    already paid in more than 30 years and have certainly covered their
    spouse's possible future benefit. The extra retired pay would be a real
    boon in their older years. Again, this is a proposal that has yet to be
    authorized. If, as we hope it is, TREA would request that this
    Subcommittee appropriate the necessary funds to make it a reality.
                               concurrent receipt
        TREA is very hopeful that there will be further substantial steps
    towards the goal of full concurrent receipt of retiree pay and VA
    disability pay. Yet again, we note that military retirees are the only
    class of Federal retirees who have their retirement pay reduced when
    they receive VA disability pay. The Veterans organizations have worked
    for years to correct this injustice. This year it seems very likely
    that we will move substantially closer to our goal. Both the House and
    the Senate have moved to authorize concurrent receipt for those with 60
    percent and over disability and to provide the money to pay for this
    step in the next 5 years. Senator Reid's S. 170 which would provide
    concurrent receipt for all military retirees who have a VA disability
    presently has 81 co-sponsors including 23 members of the Senate
    Appropriations Committee and 15 members in this Subcommittee. It is
    clear that the time is right to start to right this wrong. TREA
    respectfully requests that this Subcommittee makes sure that the
    funding is provided if the authorization of this change is passed later
    this year.
                                   conclusion
        The Retired Enlisted Association wishes to note publicly that the
    last 2 years have shown great gains for our members and all retired
    military personnel and their families and survivors. There have been
    great improvements in the health care benefit for those over 65
    including TRICARE for Life and the Senior Pharmacy Benefit. These and
    many other benefits were funded through this Subcommittee. We are very
    grateful. Additionally, it finally looks hopeful that we will make a
    substantial step towards reaching our goal of full concurrent receipt.
    That, too, will have to go through this Subcommittee. We ask that that
    you continue your extremely important and impressive work. Thank you
    very much for the opportunity to present TREA'S views on a few
    important issues. We hope to discuss these matters in the future with
    you and your staffs. Thank you very much.

        Senator Inouye. We are pleased to have Senator Domenici
    with us. Would you like to make a statement?
        Senator Domenici. No, thank you. We are short of time, and
    I would rather hear from the witnesses. Thank you, Mr.
    Chairman.
        Senator Inouye. Our next witness is the chair of the DOD
    Task Force of the American Society of Mechanical Engineers, Dr.
    John Leland. Dr. Leland, welcome, sir.
    STATEMENT OF DR. JOHN LELAND, CHAIR, DOD TASK FORCE OF
                THE INTER-COUNCIL COMMITTEE ON FEDERAL
                RESEARCH AND DEVELOPMENT, THE AMERICAN
                SOCIETY OF MECHANICAL ENGINEERS
        Dr. Leland. Thank you. Good morning again. My name is Dr.
    John Leland. I appear before you today as a representative of
    the Task Force of the American Society of Mechanical Engineers
    concerned with Federal funding of research and development.
        The American Society of Mechanical Engineers (ASME)
    International, has 125,000 members, including over 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. 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.
        We would like to express our deep appreciation to the
    members of this subcommittee for their past support, and for
    their fiscal year 2002 funding approved for the DOD S&T
    programs. In fiscal year 2002, DOD set an S&T funding bill of 3
    percent of the Department's total obligational authority. That
    goal was achieved only after Congress added an additional $1.1
    billion to the President's request.
        The DOD S&T programs make essential contributions to
    national defense by fueling innovation and training the
    scientists and engineers of tomorrow. Revolutions in defense
    S&T such as the global positioning system, self-propelled
    unmanned vehicles, and communications, date back to work
    initiated in the seventies and eighties. These revolutionary
    technologies are the valuable contributions of our Nation's
    engineers and scientists. Furthermore, they would not have been
    possible without the vision and support of Members of Congress
    like yourselves to promote the continued strengthening of this
    Nation's investment in DOD science and technology programs.
        Federal funding for defense basic and applied research has
    provided the majority of financial support for graduate level
    education in defense-related fields. The defense industry has a
    workforce whose average age has been increasing at an alarming
    rate, and as a result of declining support for defense-related
    S&T over much of the past decade, defense laboratories and the
    defense industry have had great difficulty in attracting and
    retaining the best engineering and scientific talents of this
    Nation.
        My own institution, the University of Dayton, has
    experienced this first-hand. The university conducts research
    in the areas of advanced materials, nondestructive evaluation,
    and aging aircraft systems for the U.S. Air Force. The
    university, which often acts as an employment source or agent
    for neighboring Wright-Patterson Air Force Base, has found that
    increasingly difficult to find qualified scientific and
    technical talent to fill jobs at both the university and the
    Air Force Base.
        Hon. Ronald M. Sega, Director of Defense Research and
    Engineering at DOD, expressed concern about the downsizing of
    the S&T workforce during the last 12 years, stating, we are at
    a critical point that requires a focused effort to bring
    stability to the workforce that will attract and retain talent.
    For fiscal year 2003, the administration has proposed
    significant increases for the Department, yet funding for the
    DOD's science and technology programs will actually decline 3.7
    percent. We urge this subcommittee to approve robust and stable
    funding for science and technology programs in fiscal year
    2003.
        Specifically, our task force urges this subcommittee to
    provide 3 percent of the total Defense Department budget, or
    $11 billion, for the science and technology programs for 2003,
    a funding target consistent with numerous program and
    Department reviews. In 1998, the Defense Science Board
    recommended that the Department's S&T budget be about 3.4
    percent of the total budget.
        The Department's own Quadrennial Defense Review, released
    in September 1999, stated, a robust research and development
    effort is imperative to achieving the Department's
    transformation objectives. DOD must maintain a strong S&T
    program that supports evolving military needs and ensures
    technological superiority over potential adversaries. The
    review further called for a significant increase in funding for
    S&T programs to a level of 3 percent of DOD funding per year.
        The President's Commission on the Future of the United
    States Aerospace Industry released an interim report this year,
    stating, the United States is just now beginning to see the
    effects of the research and development (R&D) budget declines
    of the 1990's. The commission also stated their support for the
    DOD goal to increase S&T investment to 3 percent of the total
    budget.
        With consideration of the fiscal year 2003 budget, it is
    important to recognize the critical role DOD science and
    technology plays in ensuring the future national security of
    the United States. These defense science programs
    simultaneously contribute to the research enterprise of this
    country and the education of tomorrow's scientists and
    engineers. Investment in DOD science and technology programs
    produces 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 an increasing
    national security imperative.
        In conclusion, I want to again thank the subcommittee for
    its continued support of DOD science and technology, and for
    the opportunity to appear today on behalf of ASME International
    and its members. We look forward to assisting you in any way
    possible.
        Thank you.
        [The statement follows:]

                     Prepared Statement of Dr. John Leland

                                  introduction
        The Department of Defense (DOD) Task Force of the Inter-Council
    Committee on Federal Research and Development (ICCFRD) of the American
    Society of Mechanical Engineers (ASME International) is pleased to
    provide the following comments on the fiscal year 2003 budget request
    for the Department of Defense.
                                    findings
        The Department of Defense (DOD) Basic Research (category 6.1),
    Applied Research (category 6.2) and Advanced Technical Development
    (category 6.3) accounts provide the fundamental building blocks for
    Defense Science and Technology (S&T) programs.
        The President's proposed fiscal year 2003 budget request for the
    DOD S&T Program is $9.670 billion, 2 percent lower than the fiscal year
    2002 appropriated levels. Basic Research and Applied Research are down
    $10 million (0.7 percent) and $307 million (7.5 percent), respectively.
    Advanced Technology Development appears to have increased $124 million
    (2.8 percent), but after accounting for new Air Force programs widely
    believed to be inappropriately categorized, Advanced Technology
    Development is actually down $168 million or 3.8 percent. Science and
    Technology, as a whole, is $168 million (3.8 percent). Individually,
    the Army and Navy are experiencing cuts of 20 percent to 30 percent in
    the Applied Research and Advanced Technology Development categories.
    Air Force Applied Research is down 9 percent and Advanced Technology
    Development is up 30 percent (or down 21 percent if suspected non-S&T
    programs are accounted for.)
        In fiscal year 2002, DOD set an S&T funding goal of 3 percent of
    the department's Total Obligational Authority (TOA). That goal was
    barely achieved after Congress added an additional $1.1 billion to the
    President's request. After subtracting the newly created $10 billion
    War Contingency Fund from DOD's fiscal year 2003 TOA, S&T funding is
    2.6 percent. If suspected non-S&T 6.3 programs are accounted for, S&T
    funding drops to 2.5 percent.
        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, both public and private. Federal funding
    for defense basic and applied research has also provided the majority
    of financial support for graduate level education in defense related
    fields. As a result of declining support for defense-related S&T
    research and development for much of the past decade, Federal defense
    laboratories and the defense industry have had great difficulty in
    attracting and retaining the best-of-the-best engineering and
    scientific talents of this nation.
        The Department of Defense and defense industry now have a workforce
    whose average age is increasing at an alarming rate and will continue
    to do so until our intellectual resources are replenished. Just as our
    country's recent and prolonged economic expansion was largely the
    outcome of technological advances that were created by the world's
    premier group of talent--U.S. technologists--so has our recent and
    prolonged success in military engagements been the outcome of
    technological advances made by this national treasure. Strengthening
    defense-related engineering sciences is essential for meeting the
    future needs of the DOD.
        Nearly a decade of funding declines accompanied by dramatic budget
    instability and a pattern in which advanced technology demonstration
    programs, designed to accelerate the insertion of research efforts,
    were stretched out, delayed and cancelled, resulted in a waste of
    valuable resources, and has been a deterrent to attracting a generation
    of highly skilled, highly motivated engineers and scientists, the
    people who transform ideas into reality. The decline in support has led
    to the loss of irreplaceable research facilities and infrastructure to
    reduce Federal and corporate overhead costs. In the academic
    institutions, many aerospace and other defense related programs of
    study were discontinued, thereby weakening the important contributions
    that these universities make to the U.S. defense technology base. As
    research and development budgets were reduced, the job market for
    engineers in the defense sector shrank, leaving little incentive for
    young engineers to seek defense-related career opportunities.
        The President's Commission on the Future of the United States
    Aerospace Industry noted in its March 20, 2002 Interim Report that,
    ``The United States is just now beginning to see the effects of the R&D
    budget declines of the 1990s.'' Revolutions in Defense Science and
    Technology such as the Global Positioning System (GPS), stealth,
    propulsion, unmanned vehicles and communications date back to work
    initiated in the 1970's and 1980s. These revolutionary technologies are
    the valuable contributions of our engineers and scientists and have
    promoted the continued strengthening of this nation's investment in DOD
    Science and Technology programs. While these revolutionary technologies
    have not yet been fully exploited by our military, we cannot postpone
    the creation of new revolutionary technologies because existing ones
    have not been fully exploited. Breakthroughs cannot be planned and
    revolutions in technology often take 20 years to be implemented.
        In 1998, the Defense Science Board recommended that the
    department's science and technology budget be about 3.5 percent of the
    total budget. Last year's Quadrennial Defense Review stated that, ``A
    robust research and development effort is imperative to achieving the
    Department's transformation objectives. DOD must maintain a strong
    science and technology (S&T) program that supports evolving military
    needs and ensures technological superiority over potential
    adversaries.'' The review further called ``for a significant increase
    in funding for S&T programs to a level of three percent of DOD spending
    per year.'' The President's Commission on the Future of the United
    States Aerospace Industry also, ``supports the DOD goal to increase
    science and technology investment to three percent of the overall
    budget, and encourages continued progress toward this goal in the
    fiscal year 2003 budget.''
        Unfortunately, the current year budget takes a step back from the
    progress made last year and the out-year budget projections of the
    department do not even keep pace with inflation after fiscal year 2004,
    much less make progress toward this noble goal.
                                recommendations
        DOD S&T programs provide critical investments in scientific
    disciplines vital to ensuring future security--including engineering,
    mathematics, and physical, computer, and behavioral sciences. We
    recommend a balanced portfolio of physical and life sciences
    accompanied by a healthy increase in these accounts for fiscal year
    2003, and beyond. Supporting DOD S&T will ensure that the best
    engineering and scientific minds are once again available and willing
    to apply their talents to meet the future defense needs of this nation.
        Therefore, the Task Force supports the findings and recommendations
    of the Quadrennial Defense Review and the Defense Science Board Task
    Force, and endorses the allocation of 3 percent of the total DOD budget
    to S&T funding. This would amount to approximately $11 billion for
    fiscal year 2003 in the 6.1, 6.2 and 6.3 categories.

        Senator Inouye. I thank you very much for your very timely
    testimony. As you know, we are in the process of working on our
    markup, and we will take your matters in very serious
    consideration.
        Senator Domenici.
        Senator Domenici. Mr. Chairman, I wonder if I could just
    give a brief statement. We have a witness here named Dr. Rogene
    Henderson from the Lovelace Respiratory Center. He is going to
    testify with reference to what this respiratory center might do
    in a partnership arrangement with the United States Government.
    They happen to have one of the most eloquent facilities for
    testing the air and they are proposing that an institute be
    created so that somebody can do a better job with dirty bomb
    assessments, which they are particularly expert at, and they
    are making a proposal. I am hopeful we will listen carefully.
    It may be a very good investment. I do not know. We will have
    to look at it.
        I just wanted to welcome the doctor, and thank you for
    putting him on the list so we can hear from him.
        Senator Inouye. This is on dirty bombs?
        Senator Domenici. He is a very clean fellow.
        Senator Inouye. Well, I thank you, and I will look forward
    to his testimony.
        Senator Domenici. Thank you, Mr. Chairman.
        [The statement follows:]

                 Prepared Statement of Senator Pete V. Domenici

        I would just like to briefly remind the Committee of the
    important work that the Lovelace Respiratory Research Institute
    is doing in the area of acute lung injury and respiratory
    disease. This institute is nationally renowned for its efforts
    in aerosol science, inhalation toxicology, and other lung
    diseases such as asthma and bronchitis. In collaborative
    efforts with universities and other laboratories, Lovelace has
    made significant headway in reducing the risks that our
    military personnel face from possible biological or chemical
    exposure on the battlefield.
        The terrorist attacks on our country have ushered in new
    concerns about biological and chemical agents and how our
    civilian population might be subject to their harmful effects.
    Anthrax and radioactive aerosol from ``dirty bombs'' are two
    examples of airborne contaminants that have posed, and will
    continue to pose, serious danger to the homeland. Much has yet
    to be learned about how such agents can be detected, how they
    spread, and how their potential health risks should be treated.
        I believe that the experience and technical capability that
    Lovelace Institute has developed in the past gives it a great
    opportunity to address the problems we face today in the form
    of terrorist attacks. Investing in activities that can give us
    a better understanding of how to detect, assess, and provide
    effective treatment for such threats makes eminent sense.

        Senator Inouye. Now may I call on the former Director of
    Defense Research and Engineering and professor of engineering
    at the University of Virginia, Professor Anita Jones.
    STATEMENT OF DR. ANITA JONES, FORMER DIRECTOR OF
                DEFENSE RESEARCH AND ENGINEERING AND
                QUARLES PROFESSOR OF ENGINEERING AT THE
                UNIVERSITY OF VIRGINIA
        Dr. Jones. Thank you, Mr. Chairman. I appreciate the
    opportunity to speak to you today. My subject is also defense
    science and technology. I have one message to deliver, and that
    is that DOD science and technology programs should be focused
    today on creating breakthroughs that will enable entirely new
    military capabilities.
        In this time of U.S. dominance, this is the critical time
    to deemphasize the incremental, whether it is research or
    advanced development, in order to seek breakthroughs that can
    lead to tomorrow's capabilities. I would submit to you that
    today's investment focus is on comfortably short-term. Even the
    Defense Advanced Research Projects Agency (DARPA), the agency
    whose raison d'etre is to create technology breakthroughs, is
    investing most of its budget in activities that are planned
    around short-term returns.
        I would like to give you an example of the kind of program
    that made sense 15 years ago, but does not today, and that is
    the specialized prototype science and technology information
    systems that the services and DARPA have built for many
    specific military missions. Command and control, transportation
    scheduling, air sortie planning, et cetera. They made sense a
    decade ago, but industry now knows how to build these systems.
    It is not necessary to do this kind of prototype building of
    system after system. We have reached the point of diminishing
    returns. This is just one candidate area where I think the
    committee can direct what is now near-term to be invested in
    more further-term activity.
        I cochair the 2001 Defense Science Board (DSB) summer study
    on the subject of defense science and technology. The DSB would
    be glad to submit that report to this committee and to brief
    Members and staff on our recommendations. We make a number of
    recommendations that are consistent with my theme today of
    seeking more technology breakthroughs. Let me just offer three
    areas where there is clear potential, a potential for a
    technology breakthrough that could generate a new military
    capability.
        The first one is cyber security. Essentially, all our
    information security technology is based on a perimeter defense
    model. Moats were a perimeter defense. They did not work in the
    Middle Ages. The Maginot Line was a perimeter defense. It did
    not work. We need a sustained, multidecade investment in
    research to find a new basis other than perimeter defense so
    that we can replace things like firewalls, intrusion detection
    systems. The DOD needs to step up to that.
        A second area that I would suggest is some systems in which
    to explore military command. I mentioned before that the DOD
    has built a number of prototype S&T information systems, some
    to support command and control, but they focus on control,
    control of information collection, display, dissemination. We
    need to take a hard look at command. The way a commander might
    express commander's intent to a large force, all of whom have
    suitable and maybe better than the commander's situational
    awareness.
        There is a new technology that DOD has not really embraced
    and should, and that is the virtual presence entertainment-
    oriented computer game kind of technology. We need to explore
    its ladder command structures, and that is a technology that
    could help the military do it.
        A third area that I would like to highlight is reducing the
    terror of bio warfare agents. Bio agents are a terror weapon in
    part because we lack an effective and immediate therapeutic
    response. It takes years, 10 to 15 years, typically, to develop
    a vaccine or a drug to make a specific intervention. The
    Defense Science Board believes there is a possibility that
    could be reduced not just to a shorter number of years but in
    fact to weeks or days. This is a DOD challenge. The
    pharmaindustry will not step up to it. Health and Human
    Services (HHS), which promulgates the Food and Drug
    Administration (FDA) processes, which takes so many years, will
    not step up to it. DOD does.
        These are just three examples of research challenges that
    require new knowledge and the development of new technology,
    military technology. This is a time when we have no military
    peers that the DOD should reduce S&T investment in the
    incremental programs and invest in long term, high risk
    potential breakthroughs.
        Thank you, Mr. Chairman.
        Senator Inouye. I thank you very much, professor. As we are
    well aware, research gives us the edge, and we will try to be
    there. Thank you very much.
        Dr. Jones. Thank you, Mr. Chairman.
        [The statement follows:]

                       Prepared Statement of Anita Jones

        Mr. Chairman, members of the Committee, and members of the Staff, I
    am pleased to be here today. I appreciate the opportunity to speak to
    you.
        I have one message to deliver and that is: Redirect the DOD science
    and technology program to create breakthroughs that will enable
    entirely new military capabilities.
        In the next several decades when the US has no military peers is
    the critical time to de-emphasize incremental research and incremental
    advanced development in order to seek breakthroughs that can lead to
    substantive new military capability.
        Between the 1980s and today, the amount of the DOD S&T investment
    in programs that have any chance of generating a breakthrough has
    dwindled. The DOD S&T investment focus is uncomfortably short term
    focused.
        The greatest responsibility for creating breakthroughs falls to the
    Defense Advanced Research Projects Agency (DARPA). Breakthroughs are
    the raison d'etre for DARPA's existence. Yet, the bulk of DARPA's
    budget is invested in incremental goals and in activities that are
    planned to show short-term return.
        I want to offer one example of a class of programs that are most
    definitely short term focused. Information technology provides that
    example. For the past two decades and more, DARPA and the services have
    built S&T prototype information systems in order to experiment with
    information technology to support every conceivable military mission.
    To a great extent these prototypes use commodity workstations, networks
    and software. They do not stress the state of the art in information
    technology. Military mission software, however, may be unique.
        S&T prototype information systems have been built for mission
    planning, command and control, training, materiel management,
    transportation scheduling, among many others. This has reached the
    point of diminishing returns. Some of these systems may have potential
    for transferring technology into service acquisition. But, they
    typically have no potential for breakthroughs either in technology, or
    in the exploration of a revolution in the conduct of military affairs.
        Enough is enough! Information technology and its application is
    sufficiently advanced that most such efforts should move entirely out
    of the S&T arena. Any component exploration that is needed should be an
    orderly portion of service acquisition development. This change in
    determining what is appropriate for S&T and what is properly a limited
    development activity is overdue. Much more is known today about how to
    construct such information systems to support both military and civil
    business processes.
        Today and in the future it should be rare that DARPA, in
    particular, engages in constructing such prototypes unless the main
    program focus is on the exploration some dramatically new technology
    for which the information system provides a context.
        I co-chaired the 2001 Defense Science Board Summer Study on the
    subject of defense science and technology. The DSB would be glad to
    provide members of this Committee with that report, and to brief
    members and staff. We have a number of recommendations that are
    consistent with my theme today, which is ``today, DOD S&T must seek
    more technology breakthroughs''.
        I offer just three examples where a breakthrough is possible and
    needed. Two of them come directly from that DSB study:
        Cyber-security.--Essentially all information security technology is
    built upon a perimeter defense model. Just like the kings who built
    moats around castles centuries ago, today current intrusion detection
    software is another. Like moats and the Maginot Line, information
    system perimeter defenses do not work. They cannot work--especially in
    a military context. The military and the intelligence community, as
    well as civil society, need a better solution. DOD/DARPA should field a
    major effort seeking a new breakthrough in cyber-security. There exist
    promising, but unexplored, new approaches. I anticipate a couple of
    decades of basic research work are required.
        Military command of forces, when all forces have (what they need
    of) complete situational awareness.--There has been much discussion of
    a revolution in military affairs and network centric warfare. The S&T
    prototype information systems that relate to revolutionary command and
    control have stressed control, not command. Such systems collect,
    catalog, transmit, display, and process data; that is they offer new
    tools for control of information. But these prototypes do not offer
    many genuinely new approaches to command. The virtual presence,
    entertainment oriented, computer games, involving hundreds of thousands
    of players, offer a new venue for exploring genuinely new ideas about
    command, expressing commander intent, and operating with flatter
    command structures. Yet, the DOD is yet to create a truly future-
    focused research effort to explore command large numbers of forces that
    have situational awareness equal or better than that of the commander.
        Reduce the terror of biowarfare agents.--Bioagents are a terror
    weapon in part because the nation lacks effective and immediate
    therapeutic responses. Let's address this problem! Today, it takes
    roughly 10 to 15 years to develop a safe drug for a specific purpose.
    Modern genomics and proteomics provide new tools: rapid and high
    throughput empirical laboratory processes and computation-based drug
    design. When it can be used, computational analysis is much faster than
    laboratory experimentation. In both cases, more specific knowledge at
    the molecular level enables the discovery of drugs that are more
    specific. This makes possible the desired intervention with fewer
    negative side effects. Our Defense Science Board study recommends a
    high-risk research effort to reduce pathogen-targeted drug discovery
    from years to days! Is that reduction possible? Substantial reduction
    is clearly possible. A fresh, no-holds-barred approach that is focused
    specifically on biopathogens is needed to find out. Pharma industry
    will not see a market for biowarfare agent drugs and will not build the
    necessary pathogen databases. The Health and Human Services department,
    which asserts the Federal Drug Administration procedures, is unlikely
    to think in terms of reducing years long processes to days. Reducing
    pathogen drug discovery is a DOD challenge.
        These are just three examples of research challenges that require
    knowledge and technology breakthroughs. Each could enable genuinely new
    military capability.
        In this time when no military peer exists, the DOD should reduce
    investment in incremental programs in order to invest in leapfrog
    advances. In my view, fully half of the budget of DARPA, the defense
    agency whose goal is to make breakthroughs, should be invested in
    efforts that have some potential of producing breakthroughs. This would
    require a substantive reorientation of the DARPA investment portfolio.
        Thank you, Mr. Chairman, for this opportunity to address this
    Committee.

        Senator Inouye. Our next witness is director of Government
    relations of the National Military Family Association, Ms.
    Joyce Wessel Raezer. Ms. Raezer, welcome.
    STATEMENT OF JOYCE WESSEL RAEZER, DIRECTOR, GOVERNMENT
                RELATIONS, NATIONAL MILITARY FAMILY
                ASSOCIATION, INC.
        Ms. Raezer. Good morning, Mr. Chairman.
        Mr. Chairman, the National Military Family Association
    (NMFA) thanks you for this opportunity to testify on behalf of
    military families and for your understanding of the link
    between quality of life and the retention of a quality force.
    NMFA's written statement provides greater detail on our
    perspective regarding the military's quality of life in these
    challenging times. As a member of the military coalition, we
    also endorse its testimony, which you will be hearing later
    this morning.
        NMFA thanks you, Mr. Chairman and the subcommittee, for
    your leadership in providing the funding over the past several
    years to improve the personnel benefits and compensation
    package necessary to support a strong and ready force. We ask
    that you continue the support of our service members and ensure
    funds are available for all of our important components of the
    compensation and quality of life package, pay, housing
    allowances, commissaries, health care, dependent education,
    child care and permanent change of station moves.
        Fiscal year 2002 brought good news and bad news to military
    families facing a mandated Permanent Change of Station (PCS)
    move. Congress did increase the reimbursement rates for many of
    the expenses borne by families when they move. Unfortunately,
    however, just as word was getting out about these improved
    reimbursements, some families began hearing from their service
    personnel branches that because of cuts in PCS funding their
    summer move might have to be delayed until fall, after school
    starts.
        NMFA applauds congressional efforts to encourage the
    services to reduce the numbers of PCS moves service members
    make. We have unpacked enough boxes, enrolled our kids in
    enough new schools, and had to leave enough good jobs to know
    that families should not move just for the sake of moving. We
    believe, however, that an appropriate baseline must be
    established for all types of military moves and reduction
    targets set from that baseline before significant cuts are
    made.
        NMFA thanks the Congress for the funding provided for the
    defense health system and for the continued direction to DOD to
    improve TRICARE operations in such areas as access and claims
    processing. Although the fiscal year 2003 budget request calls
    for what is believed to be a more accurate level of funding for
    the program, NMFA urges this subcommittee to continue its
    efforts to ensure full funding to meet the needs for military
    readiness of both the direct care and purchased care segments
    of TRICARE.
        NMFA also thanks this subcommittee for its support of
    Department of Defense and civilian schools attended by large
    numbers of military children. Congressional authorization and
    appropriations for the DOD supplemental impact aid funding and
    additional funding for schools educating large numbers of
    military special needs children helps civilian districts most
    affected by the military presence in a community.
        NMFA is pleased to note that your support for the education
    of military children is contagious. DOD has now established an
    educational opportunities directorate to help installations and
    school districts reduce the transition problems military
    children face as they move. Increasing numbers of installations
    and commanders are promoting partnerships in local schools to
    support the education of all children. Among the most
    successful of these partnership activities is the joint venture
    education forum in Hawaii. By working together, military and
    education leaders in Hawaii have helped to allocate funding you
    have provided and raised both the level of military support for
    the State schools' and education leaders' understandings of the
    unique needs of military children.
        As our military juggles existing deployments and missions
    with the war on terrorism and homeland defense, the military
    family and community feel the strain. Support services for
    families of deployed service members are wonderful, but they
    are expensive. NMFA urges the Congress to provide the same
    level of support for family readiness programs as other
    components of mission readiness. NMFA also urges the Congress
    to ensure that the families of all members of the total force
    have access to the training, information, and support needed to
    ensure family readiness while the service member is performing
    the mission.
        While successful in military operations, the total force
    concept has not yet reached the family support arena. Our Guard
    and Reserve families tell us they need better information about
    benefits such as health care and sometimes education and
    assistance in dealing with changed financial circumstances.
    They tell us their family program coordinators are stretched
    too thin to provide all the assistance needed by geographically
    dispersed families. They also tell us they need the same kind
    of access to child care as their active duty peers, who can use
    installation child development centers and family care
    providers.
        Mr. Chairman, we thank you again for your advocacy and pay
    and benefit improvements necessary to retain the quality force
    that now protects our homeland and wages war against terror. We
    ask you to remember that in time of war, mission readiness is
    tied to service member readiness, which is tied to family
    readiness. Military members and their families look to you for
    continued support for the compensation and benefit packages
    that enhance their readiness and quality of life. Please do not
    let them down.
        Thank you.
        [The statement follows:]

                   Prepared Statement of Joyce Wessel Raezer

        Mister Chairman, the National Military Family Association (NMFA)
    thanks you for the opportunity to present this testimony on behalf of
    military families. We thank you and the Members of this Subcommittee
    for your attention to issues affecting the quality of life of
    servicemembers and their families and for your understanding of the
    link between quality of life and the retention of a quality force. We
    thank you, especially, for your efforts in the first session of the
    107th Congress, which resulted in:
      --A pay package that provided across-the-board and targeted
            increases, amounting to the largest pay increase since 1982
      --Funding increases for the Basic Allowance for Housing (BAH) to
            decrease average out-of-pocket costs for the DOD standard for
            each grade to 11.3 percent
      --Improvements and adequate funding for the Defense Health System
      --Appropriation of $30 million in DOD supplemental Impact Aid funding
            for civilian schools serving large numbers of military
            children, as well as additional funding to meet repair and
            maintenance needs in these districts and to help them serve
            military children with special education needs
        NMFA believes that the most important message we can bring to you
    today is that the momentum begun to improve military pay, benefits, and
    quality of life during the 106th Congress and continued last year in
    the first session of the 107th Congress must intensify as our
    servicemembers and their families face the challenges of the war on
    terrorism. The critical issues facing military personnel and families
    prior to September 11--pay, housing, health care, family support, and
    education for their children--have not gone away. The families we
    represent, including our 120 installation NMFA Representatives who
    report to us regularly, say they recognize the support the Congress has
    given them over the past few years and see the very real benefits of
    your actions. They also tell us, however, that military families today
    face greater challenges because of the ongoing war on terrorism and the
    new mission of homeland defense. After a decade of military force
    downsizing, high optempo, and seemingly-ever-increasing deployments and
    family separations, many in the military community already felt
    stretched too thin before September 11. The open-ended nature of the
    war on terrorism and homeland defense, coupled with the fears of
    additional terrorist attacks at home and new security measures on
    installations, leave military families and the people who support them
    wondering how to define ``normal'' in June 2002.
        In this statement, we will highlight just a few of the issues
    affecting the quality of life of military families today: Health Care,
    military spouse employment, Permanent Change of Station (PCS) funding,
    family readiness, family member education, and the special challenges
    facing families of mobilized National Guard and Reserve members.
                    health care gains for military families
        After a rocky start over several years, the TRICARE system is
    providing most of the promised benefit for most active duty military
    families. Recent legislative provisions have improved the benefit,
    especially by making the TRICARE Prime Remote Program available for
    active duty families living with their sponsor in locations outside the
    catchment area of a Military Treatment Facility (MTF). Although DOD
    anticipates that the full implementation of the program will occur this
    fall--1 year late--families have been able to take advantage of a
    waived charges provision, which enables them to have the same lower
    out-of-pocket costs for health care as other active duty families in
    TRICARE Prime living where a MTF or Prime network is available.
        NMFA is also pleased to report that the partnership established
    between the DOD Office of Health Affairs, the TRICARE Management
    Activity (TMA), and the beneficiary associations continues, to the
    benefit of both beneficiaries and the Department. Although much of the
    focus of the frequent meetings of association representatives and DOD
    personnel over the past year was to work out implementation details of
    the TRICARE for Life benefit, other TRICARE benefits and programs were
    discussed and beneficiary input sought. NMFA appreciates the
    information received in these meetings and the opportunity for dialogue
    with the persons responsible for managing DOD health care policies and
    programs.
        NMFA would like to congratulate DOD for the implementation of the
    TRICARE Senior Pharmacy program in April 2001 and TRICARE for Life in
    October 2001. By restoring the promise of lifetime health care to
    Medicare-eligible military beneficiaries, Congress and the Department
    of Defense 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.
        We also thank TMA for increasing access during the past year to a
    program important to many of our most vulnerable families: the Women,
    Infants, and Children Overseas (WIC-O) program. 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 gratified that this valuable nutrition program is available to a
    growing number of families. Last spring, we testified before this
    Subcommittee that five WIC-Overseas sites had opened. Although TMA did
    not meet its target of having all sites open by the end of 2001, it has
    steadily expanded the number of program sites and outreach to families
    and, at last report, expects to have a WIC-O Office at each overseas
    installation by the end of this year.
                         health care challenges remain
        However grateful we are for recent benefit improvements, program
    implementations, and for the increased opportunities for beneficiary
    input, NMFA remains apprehensive about several issues: funding,
    beneficiary access to health care, the development of a new generation
    of TRICARE contracts, and the ability of National Guard and Reserve
    families to transition easily into TRICARE when the servicemember is
    called to active duty. Although the fiscal year 2003 budget request
    calls for what is believed to be a more accurate level of funding for
    the Defense Health Program, NMFA urges this Subcommittee to continue
    its efforts to ensure full funding of the entire Defense Health
    Program, to include meeting the needs for military readiness and of
    both the direct care and purchased care segments of TRICARE.
        Although recent TRICARE surveys highlight continued improvements in
    beneficiary access to care, NMFA continues to hear of problem
    geographic locations and scenarios that point to unresolved access
    issues. Over the past year, an increasing number of TRICARE Prime
    beneficiaries, including active duty members, are telling NMFA they are
    unable to obtain an appointment at the MTF within the Prime access
    standards. At some locations, we suspect that the full range of
    resources needed for MTF optimization have not been provided. We are
    especially concerned about reports of staffing shortages within
    military Service health care specialties. At other locations, we
    suspect the problem is rooted in the alternative financing provisions
    in the TRICARE regional contracts. In TRICARE Regions 1, 2, and 5, the
    contract calls for the MTF rather than the managed care support
    contractor to pay for care received by a Prime beneficiary enrolled to
    the MTF who must be sent for care in the civilian sector. The TRICARE
    Prime access standard for a specialty appointment is thirty days.
    Beneficiaries tell us, however, they often are told by clinics and
    appointment clerks at the MTFs that appointments are not available and
    that they should ``call back next month.'' They are not offered the
    option to schedule an appointment with a TRICARE network provider
    downtown. They report that when they use the magic words ``access
    standard'' or ask to be referred to a civilian provider, an appointment
    often becomes available. NMFA is concerned that the alternative
    financing contract provision creates a barrier to the cooperation
    needed between the MTF and the managed care support contractor to
    ensure beneficiaries receive care within TRICARE Prime access
    standards.
        NMFA also continues to hear that beneficiaries in certain sections
    of the country face increasing difficulties in finding civilian
    providers willing to accept TRICARE rates as payments. Although the
    TRICARE contractors' lists of network providers in many communities
    seem adequate at first glance, beneficiaries who call these providers
    for an appointment are often told that they are taking no new TRICARE
    patients. This scarcity of providers is not just a problem for TRICARE
    Prime patients. Beneficiaries using TRICARE Standard also report that
    providers are unwilling to have too high a proportion of TRICARE
    patients in their caseloads. Providers cite problems with TRICARE
    claims processing, low reimbursement rates, and the hassles associated
    with becoming authorized as a TRICARE provider as reasons not to
    participate. Beneficiaries look both to DOD and the TRICARE contractors
    to ease the administrative burden on providers, fix the claims
    problems, and ensure that reimbursement rates are set at the proper
    level. On paper, TRICARE is a very robust health care program and
    benefit compared to many other insurance plans; however, a robust
    benefit is no benefit if the beneficiary cannot find a provider willing
    or able to provide the needed health care.
        As we watch DOD prepare for competition on a new round of TRICARE
    contracts, NMFA is concerned that some of the issues that affect
    beneficiary access, provider satisfaction, and costs to the government
    may remain unresolved. A clear line of command and accountability must
    be established so that beneficiaries with problems accessing care or
    with concerns about the quality of their care can be assured their
    problem will be fixed. Beneficiary and provider education must be
    consistent across regions and must include information not just for
    Prime beneficiaries and network providers, but also for TRICARE
    Standard beneficiaries and non-network providers. Although DOD has made
    progress in improving portability and providing a uniform benefit
    across the regions, the elimination of regional differences and
    barriers to portability remains a challenge for the new round of
    contracts.
        As the military Services continue their optimization efforts to
    provide care to more patients through the direct care system, resources
    must be available to ensure beneficiary access. Robust provider
    networks and adequate reimbursement levels to encourage providers to
    treat TRICARE Standard beneficiaries are needed in the purchased care
    segment of TRICARE to provide care to beneficiaries unable to obtain
    care within the MTFs. In the new TRICARE contracts, the rules governing
    beneficiaries' access to the TRICARE benefit, such as the list of
    procedures requiring preauthorization, must be standardized across all
    regions and communicated in multiple formats to beneficiaries and
    providers.
                   health care for guard and reserve families
        Accessing providers willing to accept TRICARE patients and
    understanding the benefit and the rules inherent in the military
    medical system are especially worrisome issues for some of TRICARE's
    newest beneficiaries: the families of Guard and Reserve members called
    to active duty. The varieties of Guard or Reserve orders, the
    complexities of the TRICARE system, and the geographic dispersion of a
    unit's members and families combine to make communication about the
    benefit and access to assistance when there is a problem very
    difficult. TRICARE contractors and representatives of the TRICARE
    region Lead Agents routinely conduct TRICARE briefings for members of
    units about to mobilize; unfortunately, in most cases, family members--
    the people who will actually have to deal with the system once the
    servicemember deploys--are not in attendance. If the servicemember
    lives in a different TRICARE region from where his unit is located, he
    will receive the wrong region's information for his family at the
    briefing.
        DOD has tried to ease Guard and Reserve families' transition into
    TRICARE by creating a demonstration project that waives the annual
    TRICARE deductible; eliminates the requirement for the beneficiary
    living within the catchment area of a military treatment facility to
    obtain a Non Availability Statement (NAS) before receiving inpatient
    care from a civilian hospital; and pays the charge of 115 percent over
    the TRICARE Maximum Allowable Charge (TMAC), rather than only the TMAC
    rate. This demonstration project should help patients maintain the
    continuity of care they need by increasing the likelihood that they can
    continue seeing the family's civilian doctor at minimal cost. NMFA has
    learned, however, that many families have not learned about the
    demonstration, and thus are unable to make an informed choice about
    whether to join TRICARE Prime if they are eligible. Families of Guard
    or Reserve members activated for over 179 days are eligible to join
    Prime, the lowest cost option in TRICARE. Because Prime is managed
    care, however, and Prime patients must go to a provider in the Prime
    network, the patient may not be able to continue to see their current
    doctor. The pregnant spouse of a Guard or Reserve member activated for
    over 179 days should be offered the option of remaining in TRICARE
    Standard (with no deductible and higher reimbursements under the
    demonstration) so that she could stay with her civilian doctor even if
    the doctor is not part of the TRICARE network. Unfortunately, because
    all families are not being told about this option, some women are
    signing up for Prime, and then told in the middle of their pregnancy
    that they must switch providers.
        NMFA believes that Guard and Reserve members and their families
    deserve access to accurate information tailored for their needs. We
    applaud the Region 2 TRICARE Lead Agent who has established a Reserve
    Liaison position within the Lead Agent's office. This person directs
    the region's information efforts to the Guard and Reserve population
    and also answers questions from beneficiary. A Reserve member himself,
    the liaison understands the issues affecting this group of new TRICARE
    beneficiaries.
        Every TRICARE region's Lead Agent should have such a liaison to
    improve the flow of accurate information to beneficiaries and provide a
    reliable source of assistance should beneficiaries experience
    difficulties.
                    permanent change of station improvements
        NMFA is grateful to the Congress for helping to remedy one of the
    greatest financial stressors on the military family: the out-of-pocket
    costs associated with Permanent Change of Station (PCS) moves.
    Increases in PCS reimbursements and allowances included in the fiscal
    year 2002 NDAA and effective over the next 2 years will ease the
    financial burden for many servicemembers and their families when the
    government orders them to move. Increases in military pay and Basic
    Allowance for Housing (BAH) received the most attention from
    servicemembers and families after enacted in the last session of
    Congress; however, NMFA anticipated that the PCS reimbursements would
    be equally appreciated as the summer move season kicked off and as more
    families learned of these changes. Word was beginning to filter out
    about these changes when, unfortunately, some families began hearing
    from their military Service personnel branches that the Service would
    not have enough money to move them on schedule this summer. The Navy,
    for example announced in early March that the $30 million cut it
    received in PCS funding would result in the delay of some moves until
    the next fiscal year. For families with school-age children, delaying
    until October a planned summer move that would have enabled their
    children to begin the school year at their new school is not an option.
        Military families understand the mission requirements that
    occasionally force them to remain at a duty station longer than
    anticipated or even force them to make that mid-school year move.
    However, they want to know that, when the servicemember needs a move to
    advance his or her career or when they have finished their time in an
    overseas or remote tour, they will be able to make the move as planned
    and not be told there is no money available to move them. Families do
    not understand how Congress could both increase reimbursement amounts
    and decrease the appropriation used to pay for PCS moves.
        NMFA applauds Congressional efforts to encourage the Services to
    reduce PCS moves that neither enhance a servicemember's career nor meet
    mission requirements. Many moves, however, are non-discretionary--
    including accession moves, separation moves, and moves associated with
    shifts in unit basing. NMFA believes that the types of discretionary
    moves and their frequency should be calculated first and then annual
    targets established from this baseline.
        NMFA also encourages the Congress to continue pressing DOD for
    improvements in the move process. Although the series of pilots
    established by DOD at the direction of Congress have been allowed to
    expire, the data from those pilots must be collected, reported, and
    analyzed. The best practices identified from the pilots must be put in
    place whenever possible to bring needed improvements. Military families
    should have realistic expectations about the quality of their military
    move; movers and the military Services must ensure that the customer
    service associated with the move meets the expectations of family
    members.
        NMFA urges the Congress to ensure that adequate funding is provided
    to move the military members and their families due for PCS moves this
    summer and to continue its direction to the Services to reduce total
    PCS moves, but only after an appropriate baseline has been established.
    PCS improvements identified through an evaluation of data collected
    from the move pilot projects must be made for all moves, and not just
    for another round of pilots.
                           military spouse employment
        NMFA appreciates Congressional efforts to improve the education and
    job opportunities of military spouses. Sixty-three percent of military
    spouses are in the labor force, including 87 percent of junior enlisted
    spouses (E-1 to E-5). The loss of the spouse's income at exactly the
    time when the family is facing the costs of a PCS move is further
    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 spouse's unemployment is due to the servicemember's change of
    duty location. States frequently determine that the decision of a
    military spouse to move with the servicemember is a ``voluntary quit''
    and the benefit is denied. Spouses need the assistance of the military
    leadership and possibly friends in Congress to help raise the level of
    awareness about the inequities of these determinations so that more
    States will approve unemployment compensation for military spouses.
                        family readiness in time of war
        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 5 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.
        As our military juggles existing deployments and missions with the
    war on terrorism and homeland defense mission, the military family's
    lifeline--its community--feels the strain. Family services are
    important even to an installation not pressured by high perstempo or
    war-related deployments. Family centers, military chaplains, and
    installation mental health professionals help ease the transition to
    the military environment for newly-arrived families. They provide
    financial counseling, information on accessing local social services,
    parenting classes, opportunities to learn about the community, as well
    as opportunities to volunteer to help others. Military youth programs
    offered by installation youth services and chaplains provide meaningful
    activities for many military youth, especially in the vulnerable
    preadolescent years. Additional services set up to support families
    when units deploy include counseling services, e-mail and video
    teleconferencing centers, and special family activities. These services
    ease the strain of deployment for families left behind and reassure the
    servicemember that the family is being looked after.
        Because of the events of September 11, the deployments associated
    with the war on terrorism and homeland defense are different for
    families than the previous decade's regular deployments to Bosnia,
    Kosovo, and other areas. Many deployment locations are secret and the
    servicemembers' return dates are often unknown. And because they are
    being told to prepare for the long-term, and that they must live not
    only with the fact of deployments, but also the threat of more domestic
    terrorism, families know that the support services needed will be
    different from both the Gulf War and the deployments of the past
    decade. The e-mail services, dedicated support personnel, and unit
    support centers are wonderful, but expensive. Too often, the funding
    provided for contingency operations does not include enough for the
    support services needed at home. Installations must find the money out
    of their own operations and maintenance accounts to set up the family
    programs needed when units deploy.
        NMFA is grateful to the Congress for including in this year's NDAA
    the provision in Sec. 652 granting DOD authority to provide additional
    assistance in fiscal year 2002 to families of members of the Armed
    Forces serving on active duty ``to ensure that the children of such
    members obtain needed child care, education, and other youth
    services.'' This assistance is to be directed primarily to providing
    family support and child care for children of servicemembers deployed
    or ordered to active duty in connection with Operation Enduring
    Freedom. Report language states that the intent of this section is to
    ensure that the Secretary of Defense has the authority to provide the
    types of family support services provided during the Persian Gulf War.
    NMFA is concerned, however, that resources are not yet available to
    enable the Services to provide all of the support services needed by
    the families, unit family volunteers, and Service support personnel
    trying to cope with the current situation.
        The Congressional direction to provide support services at least at
    the baseline level of what was provided in the Gulf War is appropriate.
    Some resources for information and support are more accessible now
    thanks to the internet and e-mail than they were in Desert Storm; more
    units have family readiness groups with a network of better-trained
    volunteers than those who rallied to support the troops and each other
    in Desert Storm. Desert Shield and Desert Storm came at the end of a
    decade of military build-up and increased resourcing, but by the end of
    the war, most observers noted that the family support structure was
    stretched to the end of its limits. The current combined war on
    terrorism and homeland defense mission come at the end of a decade of
    military downsizing and increased missions. Many volunteers and
    installation support staff were already strained before September 11--
    NMFA wonders where the back-up is for these dedicated front-line family
    support workers when we will need to rely on them for a long term
    measured in years rather than months.
        NMFA applauds the DOD Office of Military Community and Family
    Policy, whose staff, assisted by chaplains, MWR, and family support
    staff from the Services and by staff from other organizations and
    agencies, quickly set up the support center for family members of the
    victims of the terrorist attack on the Pentagon. The center, located in
    a nearby hotel, was accessible to the families and provided counseling,
    benefit information, financial assistance, and other help all in one
    location. The lessons learned from the operation of this center should
    assist installation family support staff in providing the services
    needed by families facing the high stress of wartime deployments. One
    of the key lessons is the importance of the accessibility of the
    services to families who need them. The kind of incident that could
    cause an installation to increase security and lock-out everyone who
    does not live on the base or work in certain critical jobs would also
    be the kind of incident that would increase the demand for family
    support services. By locating the Pentagon assistance center outside of
    any military installation, DOD provided easy access for those needing
    the assistance. Most military families live off-base. NMFA has long
    promoted more outreach by family centers and installation support
    personnel into the civilian communities where many military families
    live so that family members unable to get to the installation for these
    programs can still receive the assistance they provide. The possibility
    of further incidents that could heighten the demand for support
    programs while, at the same time, causing installations to restrict
    access makes this outreach even more imperative.
        Since quality family support contributes to the readiness of the
    mission, NMFA believes that the cost of family support must be factored
    into the cost of the contingency and appropriate funding budgeted and
    provided upfront.
                supporting the schools that support our children
        NMFA thanks this Subcommittee for its support of schools operated
    by the Department of Defense Education Activity (DODEA). DOD schools
    have received a wealth of favorable publicity during the past year on
    its test scores, minority student achievement, parent involvement
    programs, and partnership activities with the military community. The
    quality of these schools is a testament not only to the generous
    support provided by the government, but also to the commitment of
    military families to quality education. Although they appreciate the
    long history of Congressional support for these schools, parents of
    military children in the DOD Domestic Schools are concerned about an
    upcoming study on whether some or all of these schools should be turned
    over to local civilian public school districts. NMFA is grateful that
    the Congress wants to gather as many facts as possible before deciding
    the future of these schools and anticipates that families, commanders,
    and communities will have the opportunity to provide input into this
    study.
        Because approximately 80 percent of military children attend
    civilian public schools, NMFA is also grateful for Congressional
    support of quality education for these children and their civilian
    classmates. Congressional authorization and appropriations for the DOD
    Impact Aid supplemental funding, and the additional funding for schools
    educating large numbers of military special needs children, helps those
    districts most affected by the military presence. This Subcommittee's
    additional appropriations to help schools educating military children
    in Hawaii and Alaska have also had a positive effect on the quality of
    education provided in these States. NMFA is also pleased to note the
    increased involvement by military leaders in activities designed to
    promote quality education. In Hawaii, the Joint Venture Education Forum
    (JVEF), with equal members from the Pacific Command and Hawaii's State
    education office, has raised the level of military involvement in the
    local schools. It helped allocate the funding provided by the Congress
    to fix facilities and purchase needed school materials. The JVEF is
    currently sponsoring a survey to gauge military parents' concerns about
    the schools so that future projects will target efforts where most
    needed. By working together, the military and education leaders in
    Hawaii have created a partnership model that will result in improved
    educational quality for all children.
        Your assistance for all schools--DOD and civilian--that educate
    military children will be even more important this year. Many schools
    educating military children, because they are located on or near
    military installations, have identified additional security concerns in
    the wake of the September 11 attacks. Schools' mission to ensure
    military children are focused on learning became more complicated with
    the terrorist attacks and the subsequent deployments. Children are
    affected by the absence of a parent, even when the parent is just on a
    civilian business trip. Knowing that parent is away on a military
    mission that is featured on the nightly news adds tremendously to the
    stress for the child. Children under stress may ``act out'' in class or
    may not be able to concentrate on school work. The uncertainty of
    deployment length and, in some cases, the uncertainty about the
    whereabouts of the deployed member raises the stress level even
    further. Fears about possible further terrorist acts in the United
    States make things worse as children ask: ``Why did Mom or Dad have to
    leave when we might be in danger here?''
        Schools near military installations that educate many military
    children understand what happens in a deployment situation, but need to
    ensure that additional counseling and other resources are available to
    help. They often have access to family support personnel at the
    installation for assistance. On the other hand, schools with children
    of now-activated Guard and Reserve members are often dealing with
    ``military children'' for the first time and are doing it without that
    safety net of the installation family center, chaplains, health
    professionals, and counselors. They are calling NMFA, looking for
    resources on how to set up support groups for children and families or
    on how to be aware of problems associated with a parent's deployment.
    Usually, the stresses facing families did not originate with the
    schools; however a school's inability to support a child through the
    stresses will affect that child's ability to learn. School can become
    the one stable element in a family's life during a deployment.
        NMFA also urges the Congress to be aware that several school
    districts--both DOD and civilian--are also facing a challenge caused by
    the DOD initiative to privatize military family housing. As more
    housing for military families is built either on a military
    installation or in a part of the civilian community, the school
    district serving that committee may see shifts in enrollment and be
    called upon to provide more school facilities. NMFA believes that DOD
    and the Services must share in the solution to the school facility
    problem caused by the privatization initiative. Many schools will not
    have the resources to provide adequate school facilities or even buses
    to move children from the new housing to existing schools within the
    shortened construction timeline under the privatization ventures. NMFA
    believes that an increase in the supplemental Impact Aid
    appropriations, with an amount fenced to help school districts deal
    with facility or transportation needs caused by housing privatization,
    may be necessary in future years. Additional funding may also be needed
    for DOD schools at CONUS installations undergoing privatization. NMFA
    urges the Congress to ensure that the schools educating military
    children have the resources they need to provide security for the
    building, students, and staff, and also the resources to provide
    counseling and other assistance to families and training to teachers on
    the issues facing families of deployed servicemembers. In providing
    oversight and resources to support military family housing
    privatization projects, the Congress should also consider the needs of
    school districts charged with educating the military children living in
    the housing.
                      national guard and reserve families
        As of May 29, 83,746 National Guard and Reserve members were on
    active duty in support of Operations Noble Eagle and Enduring Freedom.
    Most of the issues facing the families of these members are similar to
    those facing families of active duty members who are deployed, but with
    a different spin and often a different intensity. The Guard or Reserve
    family may be living the life of a military family for the first time
    and most are dealing with the deployment-associated stresses without
    the backup of military installation family support resources. Although
    there is much talk within DOD and the Services about the ``total
    force'' comprised of active and reserve component melded together to
    accomplish the mission, what NMFA hears from Guard and Reserve families
    tells us that the ``total force'' concept has not yet fully reached the
    family support arena.
        NMFA has been in regular contact with Guard and Reserve family
    support personnel and with families over the past few months. We have
    heard wonderful stories of families caring for each other, of the
    leadership attempting to ease the problems servicemembers and families
    face, and of employers showing their commitment to their employees by
    paying their health care premiums or the differential between their
    military and civilian pay. We have also heard many of the frustrations
    faced by these families, frustrations that often begin even before the
    servicemember receives orders. National Guard and Reserve members are
    proud of the contribution they make to the nation's defense and their
    families are proud of them. Families are frustrated, however, at the
    many difficulties they encounter in accessing information,
    understanding their benefits, adjusting to a new family income level
    that is often smaller than before the member mobilized, and finding
    themselves the only military family in the neighborhood. Because they
    are often the only military family in the neighborhood, they feel they
    are being ignored and that the family's contributions toward the war
    effort are unnoticed and unappreciated.
        Since Desert Storm, the Guard and Reserve, like the active
    component, have devoted more resources toward building family readiness
    groups and ensuring that family members are registered in the Defense
    Enrollment Eligibility Reporting System (DEERS) and have military ID
    cards. Thanks to National Guard State and Reserve regional family
    readiness coordinators and unit volunteers, more families have learned
    about their benefits and how to deal with issues that arise when the
    member is activated. Unfortunately, the offices of these family
    coordinators and unit volunteers are often one-deep, leaving them with
    neither the time nor stamina to address all the issues facing the
    families of deployed members. Basic support services, such as
    communication, continue to be a problem in many Guard and Reserve
    units. Communication and family support are more difficult in the Guard
    and Reserve than in the active force because of the geographic
    dispersion of the members and their families. Unlike the active units
    located on one installation with the families all within reasonable
    proximity to the installation, members of Guard and Reserve units are
    scattered, often in several States. When the units hold family
    readiness meetings or pre-deployment briefings, only the families
    closest to the unit headquarters can come to the briefings. Units must
    ask families to pay their own way to family meetings, often to include
    overnight accommodations. Therefore, many cannot come and miss out on
    important information and the opportunity to get to know other
    families.
        The lack of benefit information and persistent communication
    difficulties are common themes in comments to NMFA from Guard and
    Reserve families. The Office of DOD Reserve Affairs has posted a great
    deal of information on its website. Its Family Readiness Toolkit, for
    example, contains useful information; however, many families report
    difficulties in accessing the tool kit without causing computer
    problems. Guard and Reserve families ask for standardized materials
    that are appropriate to all services, so that if an Army Reserve member
    happened to live close to a Navy installation, he or she would
    understand how to access services there. They also ask for better
    information about how to access benefit information or financial
    assistance. Resources are available to help provide emergency financial
    assistance to Guard or Reserve members. The military service relief
    societies and the Red Cross's National Guard Assistance Fund are among
    the options; however, many members and leaders at the unit level do not
    know these services are available. NMFA suggests that DOD strengthen
    and perhaps formalize partnerships with national organizations such as
    the American Red Cross and U.S. Chamber of Commerce to enlist their
    assistance through their local chapters in setting up community-based
    support groups for military family members. The groups could include
    not only spouses and significant others of deployed members, but also
    the parents of servicemembers. Involving the local community leaders in
    setting up these support groups would address two of the common
    concerns expressed by some of these isolated families: the feeling that
    they are the only families in town going through the strain of
    deployment and the sentiment that people not associated with the
    military do not appreciate their sacrifice.
        Compensation issues are also of concern among Guard and Reserve
    members. Many have taken cuts in pay, without their employer
    volunteering to pay the difference between their civilian pay and the
    Guard or Reserve salary. In addition to earning less, some Guard and
    Reserve members were also caught in some problems with pay processing.
    For some families, the lack of payment has led to overdue payments on
    bills, and occasional threats to foreclose on their mortgage or turn
    them over to collection. Pay and personnel systems for activated Guard
    and Reserve members must work in coordination so families do not have
    to deal with bill collectors.
        The cost of meeting unique family readiness needs for National
    Guard and Reserve families must be calculated in Guard and Reserve
    operational budgets and additional resources provided. DOD must partner
    with other organizations and explore new means of communication to
    provide information and support to geographically dispersed Guard and
    Reserve families.
                              military child care
        Since September 11, both active and reserve component families'
    need for child care and youth services from families has increased with
    the operational demands connected with the war on terrorism and
    homeland defense activities. Some installations have responded with
    extended duty child care, at Child Development Centers and in Family
    Child Care homes and are even waiving families' copayments for these
    extended hours. Child Development Centers and Family Child Care homes,
    however, cannot meet all of the need, especially for the families of
    the National Guard and Reserve members called to active duty. Most
    Guard and Reserve families do not live near a military installation
    where they could access a military Child Development Center, even if it
    had space. Approximately 53 percent of Selected Reserve members are
    married with children; 5.4 percent of reserve component members are
    single parents, compared with 6.2 percent of the active force. When the
    servicemember is not home to help care for children, the family will
    need more child care. In some cases, military spouses are quitting
    their jobs or dropping out of school because they cannot find the child
    care they need at an affordable rate.
        In the fiscal year 2000 NDAA, Congress provided DOD with the
    flexibility to increase the availability of child care and youth
    programs through partnerships with civilian agencies and other
    organizations. The Services set up several pilot programs to take
    advantage of this flexibility and obtain more care off the
    installation. Under the provisions of the law, DOD is to submit a
    report this year to the Congress outlining what it had done. NMFA is
    looking forward to hearing of these initiatives and hopes that some of
    them have been directed at servicemembers, including Guard and Reserve
    members called to active duty, who cannot access installation Child
    Development Centers. In 2000, only 2.8 percent of DOD child care was
    provided by Family Child Care homes located off-base; 5.3 percent was
    provided through resource and referral services. Guard and Reserve
    families, as well as active duty families living and/or working longer
    distances from an installation need assistance not just with finding
    quality child care near their homes, but also in paying for that care.
    When a military family enrolls their child in a military Child
    Development Center or Family Child Care home, the cost of that child's
    care is shared between the government through appropriated funds and
    the servicemember. When a military family who cannot access child care
    through the military places their child in a civilian child care
    facility, that family bears the entire cost.
        National Guard and Reserve members are essential to today's
    military mission. Concerns about finding and affording quality child
    care when called to active duty affect their mission readiness, just as
    they affect the ability of other active duty members. The child care
    needs of activated Guard and Reserve members must be calculated in DOD
    and Service estimates of demand for child care services, and assistance
    must be given to these families in accessing child care. This
    assistance should start with referral services, but will probably also
    need to include subsidies for certain members.
        NMFA encourages DOD and the Services to make better use of the
    flexibility given them by Congress and to partner with community-based
    child care companies, agencies, and local school districts to assist
    members of the Guard and Reserve called to active duty in meeting their
    child care needs.
          military families and communities--ready to meet the mission
        Members of the Uniformed Services--active and reserve component--
    are doing the nation's work today all over the world. They ask the
    nation to give them the tools they need to do that job: equipment,
    training, and leadership. They also look to the nation for recognition
    that their job is not nine to five 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 retention
    decisions, 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. They also look to the nation to understand that quality
    of life is not just about pay. It is about having a safe, well-
    maintained place to live. It is about access to quality health care
    without bureaucratic complexities. It is about a quality education for
    children. It is about meeting the aspirations of a spouse for a career
    and a couple for a secure retirement. It is about respect for a job
    well done.
        We thank this Subcommittee and the Congress for your advocacy for
    pay and benefit improvements necessary to retain the quality force that
    now protects our homeland and wages war against terror. Your actions
    have helped to rebuild military members' trust and to ease the crisis
    in recruiting and retention. We ask you to remember that in time of
    war, even more than during peacetime deployments, mission readiness is
    tied to servicemember readiness, which is tied to family readiness. The
    stability of the military family and community and their support for
    the force rests on the nation's continued focus on the entire package
    of quality of life components. Military members and their families look
    to you for continued support for that quality of life. Please don't let
    them down.

        Senator Inouye. Thank you very much. Most Americans are not
    aware that the situation has changed in our military. I
    participated in the ancient World War II, and at that time 96
    percent of the men in my regiment had no dependents. Only four
    had dependents, 4 percent. They were married, and a few had
    children. Today the average is about 70 percent with families,
    and so our military is now a family affair, and we are well
    aware of that.
        For example, we know that at Walter Reed, for example,
    there are more--well, pediatricians than orthopedic surgeons.
    We have more gynecologists than orthopedic surgeons. Those are
    the realities of this day, and we will do our best to make
    certain that the families maintain a high quality of life.
        Ms. Raezer. Thank you very much.
        Senator Inouye. Thank you. Our next witness is a member of
    the Public Policy Committee of the Lymphoma Research
    Foundation, Ms. Alayna Kassan.
    STATEMENT OF ALAYNA KASSAN, MEMBER, PUBLIC POLICY
                COMMITTEE, LYMPHOMA RESEARCH FOUNDATION
        Ms. Kassan. Good morning, Mr. Chairman. My name is Alayna
    Kassan, and I am here today to represent the Lymphoma Research
    Foundation (LRF) and the thousands of people who are living
    with a blood cancer, either lymphoma, leukemia, or multiple
    myeloma. LRF and its partners in the Blood Cancer Coalition
    believe that this is a time of great opportunity for blood
    cancer research, and that a corresponding program would be a
    logical and wise addition to the congressionally directed
    medical research program (CDMRP). I am here today to
    respectfully request that $16 million be provided for blood
    cancer research in the CDMRP.
        Four years ago, at the age of 27, I was diagnosed with
    Hodgkin's disease, a form of disease that typically strikes
    teenagers and young adults between the ages of 16 and 34. For
    over a year, prior to my diagnosis, my immune system was so
    compromised that I constantly battled flu-like symptoms, lost
    more than 20 pounds, had trouble functioning both inside and
    outside of work, and often could not even get out of bed.
    Though I was diligent about seeking medical attention, my
    doctors were wrongly convinced I was depressed or had an eating
    disorder and my cancer went undiagnosed.
        Unfortunately, my story is not unique. Unlike some other
    forms of cancer, there are no means of prevention, screening,
    or early detection for the blood cancers. They are difficult to
    diagnose because their symptoms are often confused with those
    of other illnesses. As such, patients are often misdiagnosed or
    diagnosed late in the course of their disease.
        Thanks to advances in research, more than 80 percent of
    patients diagnosed with Hodgkin's disease today will be cured.
    Happily, I have been cancer-free since completing chemotherapy
    and radiation treatments, and I am expected to live a long and
    healthy life. However, the treatment I received does put me at
    an increased risk for other health problems, including
    secondary cancers in the radiation field. Notwithstanding, my
    family and I are extraordinarily grateful for the recent
    medical breakthroughs that made it possible for me to stand
    here before you today as a lymphoma survivor. Had I been
    diagnosed 20 years earlier, I might not have been lucky enough
    to be with you today.
        While my story is ultimately one of success, the statistics
    in hematological cancers overall are quite grim. Today, there
    are approximately 700,000 people living with one of the three
    blood cancers, with lymphoma being the most common. This year,
    approximately 100,000 Americans will be diagnosed with this
    cancer, and almost 60,000 of them will die. While the overall
    rate of all types of cancers is on the decline, that trend is
    not seen in the non-Hodgkin's lymphoma and myeloma. The
    incidence of non-Hodgkin's lymphoma has nearly doubled since
    the 1970's, and the mortality rate is increasing at a faster
    rate than other cancers.
        The blood-related cancers know no barriers in terms of age,
    race, or gender. Although leukemia strikes 10 times as many
    adults as children, it is still the leading cause of death
    among children under age 15. All three diseases have a
    particularly high incidence among men of middle age, and
    leukemia and lymphoma are the leading fatal diseases of men
    under age 35.
        Additionally, the causes of the blood cancers are not
    clear, although exposure to certain chemicals appears to
    increase the risk of lymphoma and is the subject of much
    research. Furthermore, research has suggested links between
    exposures to certain viruses and the risk of developing
    lymphoma.
        Recently, I was invited to take part in the assembly of a
    blue ribbon panel to evaluate the National Cancer Institute's
    blood cancer research portfolio. The results of the
    deliberations of this leukemia, lymphoma, and myeloma progress
    review group (PRG) is a 5-year research plan that has been
    published and widely circulated among specialists in the field,
    patients, and policymakers. The PRG report recommended a number
    of actions, including develop innovative strategies to reduce
    the time for new blood cancer therapies to 2 years, implement
    strategies to improve the clinical trial system, and enhance
    investment in research to understand the causes of the blood
    cancers.
        As you may know, the Department of Defense currently funds
    breast, prostate, and ovarian cancer research programs through
    the CDMRP. The DOD research initiatives are complementary to
    the cancer research program at the MCI, and have been widely
    praised for their planning and oversight systems that involve
    both researchers and patient advocates.
        I would like to share with you some of the many compelling
    reasons for establishing a blood cancer program at the DOD,
    including the service connection between Agent Orange exposure
    and blood cancers, the unexplained increasing incidence of
    blood cancers in the general population, and the influence of
    blood cancer research on the development of treatments for
    other nonblood cancers. In fact, the combination chemotherapy
    and radiation treatment that I received for Hodgkin's disease
    is now being used in other cancers, and yielding promising
    results.
        Last year, this subcommittee included in its bill a new
    research initiative directed at chronic myelogenous leukemia
    (CML). It is certainly understandable to focus on CML as a
    first step because of the exciting research that yielded the
    treatment. We would recommend, however, that a broader approach
    to blood cancer research is warranted, and again respectfully
    request that $60 million be provided for blood cancer research
    in the CDMRP.
        It is my sincere hope and belief that your investment in
    blood cancer research will result in a greater understanding of
    these devastating diseases, and ultimately many more happy
    endings such as mine.
        I thank you for the opportunity to appear before this
    subcommittee today.
        [The statement follows:]

    Prepared Statement of Leonard M. Rosen, Member, Board of Directors; and
          Chair, Public Policy Committee, Lymphoma Research Foundation

        Mr. Chairman and distinguished Members of the Subcommittee, it is a
    great pleasure to appear before you today on behalf of the Lymphoma
    Research Foundation (LRF). LRF, the result of a recent merger of the
    two leading lymphoma research and education organizations, is a
    national organization dedicated to eradicate lymphoma and serve those
    touched by this disease. We are pleased to announce our merger because
    we believe it represents an important step forward in our ability to
    address the challenge of lymphoma. We believe this is a particularly
    promising time for new approaches to research on lymphoma and the other
    blood-related cancers, and we appreciate the opportunity to present
    some ideas to you.
        Although the mission, expertise, and special knowledge of LRF
    relates to lymphoma, the most commonly occurring hematological cancer,
    including both Hodgkin's disease and non-Hodgkin's lymphoma, in this
    testimony I will address all of the blood cancers. LRF has joined its
    colleagues from other blood cancer research, education, and advocacy
    organizations to advance a responsible public policy agenda that
    relates to all of the blood cancers. We believe that recommendations
    related to research initiatives at the Department of Defense (DOD)
    should pertain to all of the blood cancers rather than to only one of
    these cancers.
                    the burden of the blood-related cancers
        There are approximately 700,000 people living with one of the three
    hematological cancers--lymphoma, leukemia, and multiple myeloma. This
    year, approximately 100,000 Americans will be diagnosed with one of
    these cancers, and almost 60,000 will die from one of them.
    Unfortunately, the good news regarding declines in incidence for most
    cancers does not hold true for the blood-related cancers. NCI has
    reported that the rate of new cases and deaths for all cancers combined
    has declined between 1990 and 1997, but that trend is not seen in non-
    Hodgkin's lymphoma and myeloma. The incidence of non-Hodgkin's lymphoma
    has nearly doubled since the 1970's. In addition, the mortality rate
    from non-Hodgkin's lymphoma is increasing at a faster rate than other
    cancers.
        The blood-related cancers know no barriers in terms of age, race,
    or gender. Young children through the elderly are diagnosed with the
    blood-related cancers. Although leukemia strikes ten times as many
    adults as children, it is still the leading cause of death among
    children under age 15. All three diseases have a particularly high
    incidence among men in middle age, and leukemia and lymphoma are the
    leading fatal diseases in men under age 35.
        Unlike some other forms of cancer, there are no means of
    prevention, screening, or early detection for the blood cancers. They
    are difficult to diagnose because their symptoms--fatigue, weight loss,
    and symptoms related to a compromised immune system--are often confused
    with those of other illnesses. As a result, patients are often
    misdiagnosed or are diagnosed late in the course of their disease.
        The causes of the blood cancers are not clear, although exposure to
    certain chemicals appears to increase the risk of lymphoma and is the
    subject of much research. In addition, research has suggested links
    between exposures to certain viruses and the risk of developing
    lymphoma.
                       the state of blood cancer research
        The National Cancer Institute (NCI), at the urging of patient
    advocates and researchers, recently convened a blue ribbon panel of
    scientists, physicians, industry, and patient advocates to evaluate the
    NCI blood cancer research portfolio, identify opportunities and
    challenges in blood cancer research, and make recommendations for
    research in the field. The result of the deliberations of this group,
    called the Leukemia, Lymphoma, and Myeloma Progress Review Group (PRG),
    is a 5-year research plan that has been published and widely circulated
    among specialists in the field, patients, and policymakers.
        The PRG report acknowledged the tremendous advances that have been
    made in blood cancer research. These include:
      --Research that is providing information about ways to use the body's
            immune system to fight disease.--The first monoclonal antibody
            was developed and approved for the treatment of indolent B-cell
            non-Hodgkin's lymphoma. This is the first in a series of
            monoclonal antibodies that will use the body's immune system to
            fight cancer. Another form of targeted therapy is
            radioimmunotherapy, in which an antibody carries a radioactive
            particle to the tumor to enhance the antibody's ability to
            attack and kill its target. A new radioimmunotherapy was
            approved for use at the end of 2001, representing an important
            new treatment option for individuals who may have failed other
            treatments. Cancer vaccines, which work to establish an immune
            response against cancer cells, are currently being tested in
            lymphoma patients. These trials are still underway and
            therefore the results are not in.
      --The development of less toxic and more targeted therapies than
            traditional chemotherapy.--Many of you are probably familiar
            with the development of the new drug called Gleevec, which was
            originally approved for the treatment of chronic myelogenous
            leukemia (CML), and has also been approved for treatment of a
            solid tumor, gastrointestinal stromal tumor. This drug is based
            on an understanding of a genetic flaw that causes CML and on a
            strategy to correct that ``flaw.'' This drug has been heralded
            as the first of the so-called targeted cancer therapies which
            have limited side effects, and some have described it as a
            ``cure'' for CML, although it is certainly too early to make
            that determination.
      --Research that will help physicians diagnose the specific type and
            subtype of blood cancers.--Important work at NCI has led to a
            greater understanding of the subtypes of lymphoma and which
            subtypes are most likely to respond to treatment. As this basic
            science finding is translated into new diagnostic tools,
            physicians will be able to offer individuals a more precise
            diagnosis and help patients make more informed treatment
            decisionmaking.
                         recommendations for the future
        The PRG report recommended a number of actions that should be taken
    to improve blood cancer research and enhance treatments for these
    diseases. Among the recommendations were the following:
      --Develop innovative strategies and structures to reduce the time for
            development of new blood cancer therapies from a period of 5-10
            years to 2 years.--The report proposed that funding be made
            available for new consortia models that bring together academic
            researchers, government, industry, and patient advocates. These
            multi-institutional research centers would facilitate the
            translation of basic research findings into new therapies.
      --Implement strategies to improve the clinical trials system.--
            Advances in blood cancer drug treatment depend on a well-
            functioning clinical trials system, and the PRG report
            recommended that efforts be made to increase the rate of
            participation of blood cancer patients in clinical trials. If
            trials must be constructed to enroll patients according to
            their disease subtype, there will be special challenges to
            prompt and full accrual to these trials, and new trial designs
            may be necessary.
      --Enhance the investment in research to understand the causes of the
            blood cancers.--Research suggests that exposure to certain
            chemicals and to certain viruses may increase the risk of
            lymphoma, and a greater investment in this inquiry is
            necessary.
               recommendations of lrf and blood cancer coalition
        LRF and its partners in the Blood Cancer Coalition, The Leukemia &
    Lymphoma Society and the Multiple Myeloma Research Foundation, believe
    that this is a time of great opportunity for blood cancer research and
    that a blood cancer research program would be a logical and wise
    addition to the Congressionally Directed Medical Research Program
    (CDMRP). The Blood Cancer Coalition applauds the Subcommittee for its
    longstanding support for the breast and prostate cancer research
    programs and its more recent support for the ovarian cancer research
    program. These programs have been hailed by researchers and patient
    advocates as model research initiatives, and the Subcommittee is to be
    congratulated for its commitment to them.
        Last year, this Subcommittee included in its bill a new research
    initiative directed at CML. It is certainly understandable to focus on
    CML as a first step, because of the exciting recent CML research that
    yielded the treatment Gleevec. We would recommend, however, that a
    broader approach to blood cancer research is warranted and respectfully
    request that $16 million be provided for blood-cancer research in the
    CDMRP.
        There are compelling reasons for inclusion of all of the blood
    cancers, including CML, in the CDMRP.
    Link of Agent Orange to Blood Cancers
        Agent Orange is a toxic chemical that was used to defoliate jungle
    terrain and clear vegetation around enemy military installations.
    Recent studies prove that individual exposure to Agent Orange causes an
    increased risk of developing lymphoid malignancies. The Department of
    Veterans Affairs recognizes hematological diseases such as non-
    Hodgkin's lymphoma, Hodgkin's disease, and multiple myeloma as service-
    connected for Vietnam Veterans, based on exposure to Agent Orange or
    other herbicides. In 2000, the National Academy of Sciences predicted
    that lymphoma, leukemia, and myeloma would account for the second
    largest number of cancer cases diagnosed among Vietnam Veterans.
        LRF believes that the connection between Agent Orange exposure and
    blood cancers, as well as their increasing incidence in the general
    population and the serious treatment challenges associated with these
    diseases, make the blood-related cancers a logical investment for the
    Committee.
    Impact of Blood Cancer Research on Other Cancers
        In addition to the service links to the blood cancers, there are
    other powerful reasons to invest in blood cancer research. Key advances
    in blood cancer research have contributed to significant improvements
    in the treatment of other, non-blood cancers. Researchers believe that
    understanding the blood cancers helps us identify new treatments for
    these cancers and also for solid tumors.
        Curing cancer with drugs began with breakthroughs in the 1950s in
    the treatment and cure of blood cancers. Many chemotherapy agents that
    are now used in the treatment of a wide range of solid tumors evaluated
    from agents that were originally used in treatment of blood cancers.
    The concept of cancer staging to accurately define disease severity and
    target appropriate therapy began in lymphoma and is now used in all
    cancers. The strategy of combining chemotherapy with radiation therapy
    began in the treatment of Hodgkin's disease and is now widely used in
    the treatment of many solid tumors. Many modern day therapeutic
    interventions like monoclonal antibodies that target and disable
    antigens on the cell surface thought to be responsible for cell
    proliferation began in the blood cancers but hold promise for breast,
    prostate, ovarian, and other forms of cancer. Work on vaccines for
    lymphoma has been in the forefront of vaccine research. As you can see,
    research on the blood cancers has had many positive benefits for cancer
    research overall.
        A strong cancer research effort, like that included in the CDMRP,
    would profit from a focus on blood cancer research. LRF and the Blood
    Cancer Coalition are convinced that an investment in blood cancer
    research through the CDMRP would benefit not only blood cancer patients
    but also patients with other cancers.
        As is true in many areas, the research potential in blood cancers
    far outstrips available resources. Additional resources would enable
    the many outstanding researchers in the field to build on their
    sophisticated understanding of normal and malignant cell biology to
    develop new treatments, and we urge you to accelerate that research
    process by including a blood cancer research initiative in the CDMRP.
        We appreciate the opportunity to appear before the Subcommittee
    today.

        Senator Inouye. I can assure you that we will very
    carefully study this, because blood cancer is a curse that we
    would like to help you wipe out if that is at all possible. As
    you know, we are working assiduously on breast cancer, on
    prostate cancer, and maybe this should be our next area. We
    will do our best.
        Ms. Kassan. Thank you, Mr. Chairman.
        Senator Inouye. Our next witness is from the Children's
    Hospital of Pittsburgh and the Joslin Diabetes Center, Mr. Ron
    Violi and Dr. Sven Bursell.
    STATEMENT OF RONALD L. VIOLI, CHILDREN'S HOSPITAL OF
                PITTSBURGH
    ACCOMPANIED BY DR. SVEN BURSELL, DIRECTOR, JOSLIN VISION NETWORK,
                JOSLIN DIABETES CENTER

        Mr. Violi. Thank you, Mr. Chairman. Thank you for the
    opportunity to be here today. At Children's Hospital of
    Pittsburgh we are focused on improving, predicting, and
    preventing and finding the cure for juvenile diabetes.
        We have talked to you in the past about the work of our
    principal investigator, Dr. Massimo Trucco, who we have here
    with us today, and his work on defining the genetic
    susceptibilities of resistance to type I diabetes. The focus
    remains and has been broadened to include advances in islet
    transportation and cell regeneration research.
        In recent years, we have seen islet transplantation used in
    the treatment of patients with type 1 diabetes. However, these
    patients face rejection and must be treated with a lifetime
    regime of immunosuppressants.
        For fiscal year 2003, Dr. Trucco will concentrate on
    methods of care for young diabetics who cannot tolerate the
    toxic drugs that are used to fight rejection. He has been
    successful in developing protocols that preserve the
    transplantation in islets without the need for
    immunosuppressants. In fact, his methods have proven to be
    effective in laboratory mice, and have enabled the regeneration
    of pancreatic endocrine cells.
        Another strategy effective in the lab involves the
    isolation of bone marrow stem cells from the bone marrow of
    diabetic patients. Once these cells are isolated, they are
    trained to produce insulin and are reinfused into the patients,
    who will be able to accept them without the need for
    immunosuppressants. These protocols have shown promising
    results, and will next need to be tested in primates before
    going to human trials.
        The diabetic research program at Children's Hospital of
    Pittsburgh is regarded as a world-class, state-of-the-art
    research center that is having a tremendous impact on diabetes
    research both nationally and internationally. For us to
    continue this groundbreaking work, we respectfully request $7.6
    million in Federal funding for fiscal year 2003 so that we may
    expand our efforts on this important work that we have done so
    far. Please know that we are grateful for the support you have
    shown us in the past, and for the support we have received from
    the Department of Defense and especially our colleagues at Fort
    Detrick. We are hopeful you will be able to support this
    request, and we will answer any questions. Thank you.
        Dr. Bursell. Mr. Chairman, I also thank you for your
    support of the joint diabetic project in the past and the
    opportunity to testify here today. I am Dr. Sven Bursell, the
    director of the Joslin Vision Network, and the Joslin Diabetes
    Center portion of this request is for $7.6 million. The Joslin
    Vision Network (JVN) is based on remote sight retinal imaging,
    which is the core of this project. It is on display today in
    the Dirksen Senate ground floor room 50, where we will be
    demonstrating real time retinal imaging.
        By December of 2002, we will have deployed a total of 20
    independent JVN imaging sites and seven centralized reading
    centers operating off their own servers in the Department of
    Defense infrastructure, concentrating on sites in Hawaii, the
    Walter Reed Army Medical Center, in Alaska at the Elmendorf Air
    Force Base, Clearwater, Florida, and San Diego, the Navy. We
    are also focusing on other sites such as the Arweda Clinic in
    Northern New Mexico.
        The JVN validation studies have shown that JVN eye care
    program is equivalent to current clinical gold standards of
    dilated eye photography and dilated ophthalmologist eye
    examination. The results have been published in the Journals of
    Ophthalmology and Retina. The next generation JVN application
    has been developed, and now uses totally nonproprietary
    hardware and software.
        We anticipate that the current level of funding for 2003
    will allow us to provide support for existing JVN systems and
    to target new deployments for 15 additional JVN systems at 10
    additional sites that will be identified in collaboration with
    participating agencies. This will make a total of 35 sites
    deployed through the DOD and VA that we will be operating.
        Work on the development of an interactive comprehensive
    diabetes management program was initiated in 2001, and involved
    leaders in diabetes clinical management, education, lifestyle
    modification, and medical infomatics from the Joslin Diabetes
    Center, Department of Defense, Veterans Health Affairs and
    Indian Services. The data indicate that a three to sevenfold
    health care cost reduction can be realized while still
    maintaining quality of care excellence using this disease
    management system. Production of this system will go into place
    at the end of the summer, and the prototype is also on display
    in the Dirksen Building today.
        We will incorporate image enhancement and retinopathy
    feature detection algorithms and full automation into our newly
    developed retinal imaging system. This will further facilitate
    the imaging of different fields required for diabetic
    retinopathy diagnosis, reduce the time for retinal imaging and
    assessment, increase cost efficiency, and significantly
    increase patient throughput and satisfaction.
        We are also initiating a collaborative program with
    Children's Hospital of Pittsburgh, focusing on the
    identification of genes associated with increased risk for
    diabetic complications. This is important, as we know that some
    of the diabetic patients will develop complications much more
    rapidly than others.
        Thank you again, sir.
        [The statement follows:]

                     Prepared Statement of Ronald L. Violi

                                  introduction
        Mr. Chairman and members of the Committee, we would like to thank
    you for the opportunity to submit written testimony on behalf of
    Children's Hospital of Pittsburgh and the Joslin Diabetes Center
    regarding their collaborative initiative, the Joint Diabetes Project.
        As you are aware, 3 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 have made
    important progress since the program's inception and remain
    enthusiastic and optimistic about our work together in the future.
                                    summary
        This request of $15,200,000 represents the collective costs of both
    institutions, to be divided equally between our respective endeavors
    with The Department of the Army, RDT&E.
    Children's Hospital of Pittsburgh: Plan for Fiscal Year 2003
        Children's Hospital of Pittsburgh is nationally and internationally
    recognized for its diabetes research program, led by our principal
    investigator, Dr. Massimo Trucco. Dr. Trucco directs the activities of
    the Pediatric Research Section of the Diabetes Institute of the
    University of Pittsburgh at Children's Hospital, where new and
    promising programs have been initiated with the very specific goal of
    improving the prediction, prevention and possibly, the cure of Type 1
    (juvenile) diabetes.
        As we have mentioned in the past, Dr. Trucco conducted
    groundbreaking research in 1998 in which he identified a common
    childhood virus as being one of the possible triggers for diabetes in
    those who are genetically predisposed. Since undertaking the Joint
    Diabetes Project, he has employed state-of-the art technology (i.e.,
    microarray in suspension and pyrosequencing) to better define genetic
    susceptibility and resistance markers of Type 1 diabetes.
        These new technical approaches have allowed us to develop screening
    protocols that are reliable, less time consuming (they can be performed
    in under 30 minutes), are less costly and more importantly, can be
    applied to entire populations.
                       fiscal year 2003 program overview
        For fiscal year 2003, 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 screen Army personnel, and
    later other military personnel and their dependents for genetic
    susceptibility to diabetes. By using the above-referenced advanced
    testing technology, individuals who are identified as being genetically
    and immunologically at-risk for developing Type 1 diabetes will be
    selected to be enrolled in new promising human diabetes prevention
    trials that are presently undergoing the close monitoring of an NIH-
    supported scientific committee of which Dr. Trucco is a selected
    member.
        The clinical practicality of treating Type 1 diabetics with islet
    transplants obviating the need for exogenous insulin replacement,
    became evident once the first 7 successful transplants were officially
    announced by the Edmonton group in Canada. This study proved two major
    points: the technical feasibility of improved islet isolation
    procedures and transplantation modalities and second, that more than
    one donor is required to obtain an appropriate beta cell mass to treat
    one recipient. However, even with an appropriate beta cell mass, islet
    transplants are still susceptible to immune rejection. To protect the
    graft against the negative consequences of this process, the Edmonton
    team used a cocktail of potent immunosuppressive drugs. The recipients
    are required to maintain this regimen of immunosuppression for their
    entire lifetime
        Complementary efforts will be promoted to provide care for young
    diabetic patients who cannot be treated with the conventional protocols
    for islet transplantation because of the toxicity of the necessary
    immunosuppressive regimen. To this aim, Dr. Trucco will be testing
    tolerization protocols that are designed to preserve transplanted
    islets without the need of immunosupression. These protocols have been
    proven to be very effective in laboratory mice in promoting the
    regeneration of the endocrine cells of the pancreas that had been
    damaged by immunocompetent cells present in the recipient.
        An alternative strategy, also proven to be successful in the animal
    model, involves the isolation of bone marrow stem cells from the bone
    marrow of diabetic patients. Once these cells are isolated, they will
    be ``educated,'' using in vitro methods, to produce insulin and will be
    re-infused into the recipient, who will then be able to accept the
    newly trained cells without the need of immunosuppression.
        These protocols have produced very promising results in the rodent
    animal model of the disease, but need to next be tested in non-human
    primates before they can be safely transferred to human trials. We have
    already begun to undertake this work in collaboration with primate
    experts who were recently recruited from Oregon. The preliminary
    results of these studies will soon be submitted for publication.
        In addition, we will continue to work closely with our colleagues
    at Joslin by utilizing their telemedicine network to allow us to
    centralize the data that is stored from our studies. This will enable
    us to develop a large shared database of generic 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. Through these efforts, we
    can provide early detection of those who are at increased risk of
    developing complications and can manage their care through the use of
    telemedicine, thus improving patient care, reducing complications and
    lowering the associated cost of care.
    Fiscal Year 2003 Children's Hospital of Pittsburgh Funding Request--
            $7,600,000
        The diabetes research program at Children's Hospital of Pittsburgh
    is regarded as a world-class, state of the art research center that is
    having a tremendous impact on diabetes research, both nationally and
    internationally.
        While we recognize the constraints under which the Committee is
    working this year, we are respectfully requesting $7.6 million in
    Federal funding for fiscal year 2003 so that we may continue our
    efforts and expand upon the important work that has already been done.
    The proposed budget will consider expenditures associated with:
    Medical Technology to Improve the Predication and Prevention of Type 1
            Diabetes
    Salary Support................................................  $500,000
    Equipment..................................................... 2,500,000
    Supplies/Reagents............................................. 1,500,000
    Management Cost (mailing, receiving, bar-coding, and storing
        blood samples)............................................ 1,500,000
    CHP & Joslin Joint Program (mapping of genes predisposed to
        diabetes complications)...................................   500,000
    Department of Defense Administrative Fee...................... 1,100,000
                        --------------------------------------------------------------
                        ____________________________________________________

          Total CHP/Diabetes Project Costs........................ 7,600,000
                             joslin diabetes center
    Fiscal Year 2002 Status Report
        JVN Deployment.--By December 2002 we will have deployed a total of
    11 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. In the VA
    system we will have deployed a total of 8 remote imaging sites, 4
    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 39
    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 2001 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.
        JVN Application Enhancement.--The 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 emerging 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.
        Deployment of the Advanced System.--The initial prototypes of the
    system have been tested, issues identified and optical designs modified
    during 2002. The final optical design for the new non-mydriatic retinal
    imaging system has been completed and a patent is being sought for the
    optical design of the illumination component of the retinal imaging
    system. The prototype is currently under production and it will be
    tested on the JVN system at the Joslin Diabetes Center from April
    through June of 2002. By October or November of 2002 we anticipate
    producing a number of production units to be deployed in existing JVN
    sites for further testing in the clinical environment. The rationale
    for this development effort was to enable a portable and significantly
    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 first phase of
    the application was developed using the existing JVN database of 48,000
    retinal images that have already undergone manual grading for diabetic
    retinopathy. The validation testing provided a sensitivity that
    indicated the need for improvement of the algorithm before
    implementation in the reading center. 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 75 percent.
    Collaborative Program with Children's Hospital of Pittsburgh An initial
    symposium that includes investigators from the JVN and Children's
    Hospital of Pittsburgh was 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
    development of a program that can significantly impact on the care of
    diabetic patients.
    Fiscal Year 2003 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 28 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 on the development
    of an interactive comprehensive diabetes management program was
    initiated in 2001 and involved leaders in diabetes clinical management,
    education, lifestyle modification and medical informatics from the
    Joslin Diabetes Center, the Department of Defense, the Veteran Health
    Affairs and the Indian Health Services. The rationale for this effort
    was the recognized need to be able to provide a continuum of care for
    diabetic patients in contrast to the current more disjointed care that
    is provided. This need was further highlighted by recent results from
    the Diabetes Prevention Program (DPP). The patients were randomized to
    either intensive life style modification, metformin or placebo
    treatment. After follow up of 4.6 years, life style reduced the
    progression to diabetes by 58 percent. Moreover, the development of
    diabetes was reduced by 31 percent. The results indicated that one of
    the primary reasons for the success of this study was the
    implementation of a case management program. This is exactly what we
    are developing for the CDMP, namely a care manager centric interactive
    application that provides more continuous and immediate contact between
    patients, care managers and physicians over secure websites. 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. 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. 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

    DOD Admin & Mgmt Costs (@ 12 percent).........................$1,012,000
    DOD-JVN Expenses.............................................. 1,932,000
    Joslin-JVN Expenses........................................... 1,932,000
    Shared CDMP Costs............................................. 1,824,000
    Cost Benefit Analysis.........................................   400,000
    Collaborative Project with CHP................................   500,000
                        --------------------------------------------------------------
                        ____________________________________________________

          TOTAL, Joslin Diabetes Center........................... 7,600,000
                                    summary
        For fiscal year 2003, Federal funding for the Joint Diabetes
    Project will allow both Children's Hospital of Pittsburgh and the
    Joslin Diabetes Center to continue their work to improve the diagnosis
    and treatment of enlisted personnel and their dependents with diabetes.
    Through the concentration of efforts and resources, it is our intent to
    work collaboratively to find a cure for diabetes.

    Joint Diabetes Project, Fiscal Year 2003 Funding

    Children's Hospital of Pittsburgh.......................      $7,600,000
    Joslin Diabetes Center..................................       7,600,000
                        --------------------------------------------------------
                        ____________________________________________________
          Total Program Costs...............................      15,200,000

        Mr. Chairman, we are pleased to be a part of this project with the
    Department of Defense and we are grateful for the support that you and
    your colleagues have provided to us. Please know that we would be
    grateful for your continued support again this year.

        Senator Inouye. What sort of arrangement do you have with
    the Indian Health Service?
        Dr. Bursell. Currently we are using the technology and
    infrastructure that was developed through the DOD program to
    supply clinical services and systems for the Indian Health
    Services.
        Senator Inouye. As you know, the Native Americans have a
    higher incidence of diabetes than any other group. Can you
    provide this committee with a little memo on your activities
    with the Indian Health Service?
        Dr. Bursell. I would be very happy to do so, sir.
        Senator Inouye. I appreciate that. Thank you very much.
        Our next witness is from the Naval Reserve Association,
    Captain Marshall Hanson, and the National Association of
    Uniform Services, National Military Veterans Alliance, Colonel
    Charles C. Partridge.
    STATEMENT OF CAPTAIN MARSHALL HANSON, CO-CHAIR, NAVAL
                RESERVE ASSOCIATION, ON BEHALF OF THE
                NATIONAL MILITARY VETERANS ASSOCIATION
    ACCOMPANIED BY COLONEL CHARLES C. PARTRIDGE, CO-CHAIR, NATIONAL
                ASSOCIATION FOR UNIFORMED SERVICES, ON BEHALF OF THE
                NATIONAL MILITARY VETERANS ALLIANCE

        Captain Hanson. Mr. Chairman, I am Marshall Hanson. I would
    like to thank you for the opportunity to testify. The overall
    goal of the National Military and Veterans Alliance is a strong
    defense.
        We acknowledge the support that your committee has been
    providing to the young men and women who are deployed overseas
    and stationed at home, but we also believe the comprehensive
    care of the dependents of these young warriors allow the
    members of our Armed Services to better concentrate on their
    jobs. We believe that funding lifelong medical and dental care
    for all of the uniformed service beneficiaries, regardless of
    age, active or reserve status or location support this goal.
        Details are provided in our submitted testimony, but we
    would like to call attention to the need of funding TRICARE
    providers and in turn supporting the troubled TRICARE network.
    This is especially hard on the families of reservists who do
    not relocate when their warriors are mobilized. We hope the
    committee will support money for military treatment subvention
    and utilization of veterans affairs hospitals as TRICARE
    providers.
        Lastly, we should not forget the needs of our soldiers,
    sailors, marines, and airmen in the field. Quality of life
    includes quality on the job. The National Military Veterans
    Alliance feels it is important to invest defense dollars for
    equipment procurement beyond the administration's budget. The
    service chiefs have provided nonfunded requirements for both
    the active and reserve components that will be needed by our
    people in the near future.
        I will be followed by my codirector.
        Colonel Partridge. Good morning, Mr. Chairman. I am Chuck
    Partridge with the National Association of Uniformed Services
    and the National Military Veterans Alliance. We want to thank
    you and this committee for the strong support you gave in
    enacting TRICARE for Life and the Senior Pharmacy benefit. That
    has made a tremendous difference in the lives of our members.
    We have some more work to do on the TRICARE Standard benefit
    for those under 65, and we will be getting some proposals over
    here within the next few months, but we really want to thank
    you. It would not have happened without this committee.
        I would also like to mention one other point that is off
    the point of medical. It is the Defense Commissary Agency. The
    plan is to cut, and the cuts have begun, 2,650 spaces out of
    the Defense Commissary Agency and to cut funding for the next
    year by $137 million, and this is being done based on some very
    limited studies and incomplete analysis. We are concerned that
    as this proceeds, the service and the hours, we are going to
    lose some smaller commissaries, so we are asking this committee
    to leave flexibility in the appropriations process for
    restoring these funds next year if it does prove this is a
    problem.
        The authorizing committees have directed that the General
    Accounting Office (GAO) look at it, and that will be done, as
    well as other studies, and I think they will be prepared to act
    once the results are in, but of course they will need funding
    if they need to restore it.
        Once again, Mr. Chairman, thank you for your support for
    the men and women of our Armed Forces, and we will be glad to
    answer any questions.
        [The statement follows:]

                     Prepared Statement of Marshall Hanson

                                  introduction
        Mister Chairman and distinguished members of the Committee the
    National Military and Veterans Alliance (NMVA) is very grateful for the
    invitation to testify before you about our views and suggestions
    concerning defense funding issues.
        The Alliance was founded in 1996 as an umbrella organization to be
    utilized by the various military and veteran associations as a means to
    work together towards their common goals. The Alliance's organizations
    are:
      --American Military Retirees Association
      --American Military Society
      --American Retiree Association
      --American World War II Orphans Network
      --AMVETS National Headquarters
      --Catholic War Veterans
      --Class Act Group
      --Gold Star Wives of America
      --Korean War Veterans Foundation
      --Legion of Valor
      --Military Order of the Purple Heart
      --National Association for Uniformed Services
      --National Gulf War Resource Center
      --Naval Enlisted Reserve Association
      --Naval Reserve Association
      --Non Commissioned Officers Association
      --Society of Medical Consultants to the Armed Forces
      --Society of Military Widows
      --The Retired Enlisted Association
      --TREA Senior Citizens League
      --Tragedy Assistance Program for Survivors
      --Uniformed Services Disabled Retirees
      --Veterans of Foreign Wars
      --Vietnam Veterans of America
        The preceding organizations have almost five million members who
    are serving our nation, or who have done so in the past and their
    families.
                 defense commissary agency funding and staffing
        Commissaries are arguably the number one benefit of the non-pay
    portion of the military pay and compensation package. Now the benefit
    is under attack!
        While our highly trained and motivated military force is proving
    the force and might of the world's only superpower, their families
    convenient access to high quality food at savings that approach 30
    percent from military commissaries is in serious jeopardy.
        Why is this happening? Why would the Department of Defense want to
    reduce the commissary benefit? The answer is money. DOD wants to reduce
    the subsidy for the commissary system that provides food and other
    essentials to troops and families around the world, which will end up
    in the military community losing the benefit.
        We understand that the Defense Commissary Agency is in the process
    of eliminating 2,650 personnel positions (from a total of less than
    20,000) by 1 October 2002 and reducing funding by $137,000,000 for
    fiscal year 2003. We believe that a reduction of this size will degrade
    the quality of the benefit by eliminating smaller commissaries and
    reducing days and hours of operation.
        These cuts are not Congressionally mandated but were proposed by
    the Administration and approved by the Authorizing Committees with
    language expressing concern. We believe that as the effects of these
    cuts are felt in fiscal year 2003, additional funding will be needed to
    restore the health of the commissary system.
        We all understand the importance of saving scarce taxpayer's
    dollars. Every taxpayer dollar collected must be used wisely to keep
    down the amount of taxes the government collects; this is only common
    sense. Therefore, every government agency, department or system must be
    as efficient as possible. In that regard, the leaders of the commissary
    system have been and are continuing to make internal changes to improve
    efficiencies and reduce overhead operating costs. However,
    streamlining, improving internal operations and implementation of cost
    saving measures must not reduce the value of the benefit.
        Commissaries are a key component of the military pay and
    compensation package. Any action that reduces the benefit means a
    diminished quality of life and more out of pocket costs.
                           active and reserve forces
        We understand that DOD plans budget cuts, with the services again
    looking at end strength reductions especially in the Reserve Components
    at a time that we fight a War against undefined terrorist factions.
        The Secretary of Defense's office is conducting a series of studies
    emphasizing transformation, relying on costly, undeveloped
    technologies, seeking dollar savings by reducing end strength in a
    flexible, adaptive fighting force.
        We request that you consider language in the appropriations bill to
    direct DOD to cease further reductions in both Active and Reserve
    components until the threats to our Nation are properly determined and
    a National Defense Strategy is clearly defined.
        In addition, we ask that funds be provided utilizing the National
    Guard and Reserve Equipment Account. While the Senate has wanted to
    reduce the NGREA, the services have failed in their responsibility to
    budget for Reserve equipment; until this is resolved we believe the
    NGREA should be used for this purpose.
        Reserve members were quick to step forward, some have already
    sacrificed their lives during this war as part of this nation's total
    force. In recognition, we ask for parity between active and reserve
    components when it comes to pay and compensation and retirement. We
    encourage this committee to support future hearings dealing with pay
    and compensation as these proposals are developed.
        current and future issues facing uniformed services health care
        The National Military and Veteran's Alliance would like to thank
    the Sub-Committee and the Full Appropriations Committee for its
    leadership in passing 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.
        Mr. Chairman, the overall goal of the National Military and
    Veteran's Alliance is a strong National Defense. We believe that
    comprehensive, lifelong medical and dental care for all Uniformed
    Service beneficiaries regardless of age, status or location supports
    this goal. In light of these overall objectives, we would request that
    the committee examine the following proposals.
                           uniform claims and billing
        It has been the long term hope that part of the growing costs of
    medical treatment in both the Department of Defense and the Department
    of Veteran Affairs could be paid by billing private insurance companies
    and Medicare/Medicaid systems (DOD and VA Subvention). Numerous
    attempts to improve these financial streams have failed. In part this
    failure has been caused we believe because the various systems do not
    share the same system for claims and billing. Since the dominant system
    of all medical claims in the country is clearly Medicare if DOD and the
    DVA adopted the Medicare claims system ALL parties--Private Insurance
    Companies, DOD, the DVA and Medicare/Medicaid would know what medical
    services, pharmaceuticals, laboratory services and the like have been
    provided. Such a uniform billing plan could also lead to improvements
    in allowing the VA to be a fully participating TRICARE network
    provider. This does not solve the other billing problems but at least
    it would put all the parties on the same sheet of music.
                             dod and va subvention
        The attempt of Medicare subvention (having Medicare pay for
    treatment of its beneficiaries at MTFs) with the DOD has been a huge
    disappointment. The Department of Defense has received no stream of
    payments. Medicare's required'' level of effort'' has never been
    reached by an MTF. But this goal should not be abandoned. The active
    duty member, his or her working spouse, the Veteran and the Military
    Retiree have all spent their working careers paying money into the
    Medicare system. The taxes have been paid but if they receive treatment
    in a MTF or a DVA hospital or clinic the facility receives nothing from
    Medicare to help pay for that beneficiary. Of course, the people sworn
    to protect the Medicare trust fund like the situation as it is. And who
    can blame them? However the financially strained medical systems of the
    VA and DOD should receive some of the support their patients have paid.
    Again, if DOD and the VA adopted Medicare's billing system it could
    support an effective attempt at subvention.
            the department of veterans affairs as a tricare provider
        At this time 80 percent of Veteran Affairs installations are
    nominally TRICARE providers in the TRICARE Networks. However, last year
    TRICARE paid only $3.7 million to VA facilities for care provided to
    TRICARE beneficiaries. Part of the problem is clearly the previously
    discussed failure to have one system of Medical Record keeping and one
    method of claims and billing. Therefore, the change suggested above to
    follow Medicare's claims and billing system could alleviate some of the
    problems. It is also crucial to solve this problem so that the VA can
    qualify to be a TRICARE for Life provider. It could be a way to help
    improve coordination and predictability as well as a cost saving for
    both the DVA and DOD if the VA became a qualified Medicare provider. If
    this was accomplished then Medicare Part A or Part B would be first
    payer and TFL would pay the rest. This could be a serious stream of
    money (primarily from Medicare) to the VA for non-service connected
    treatment that the VA provides to military retirees. But unless and
    until the VA qualifies as a MEDICARE provider, this is not possible.
    Since the door has been opened to coordinate Medicare payments and
    TRICARE by the coordination of their benefits in TRICARE for Life this
    would be a coordination that should make sense for all three
    Departments and would most importantly, improve the treatment of many
    beneficiaries.
                   joint mtf/visn/tricare contractor projects
        When looking far into the future we can see coordinated networks
    for a region's Military Treatment Facility (MTF), its Veterans
    Integrated Service Network (VISN) and the civilian TRICARE contractor.
    This would actively use the VA as a provider of specialty health care,
    save money for DOD and plan a core of coordinated services. A test
    program in the Central TRICARE region called the Central Regional
    Federal Health Care Alliance has just been rolled out to look at, and
    coordinate areas of practice including possibly: ``catastrophic case
    management, telemedicine, radiology, mental health, data and
    information systems, prime vendor contracting, joint provider
    contracting, joint administration processes and services and education
    and training.'' The governing board's members of this experiment
    include DOD's Lead Agent for the Region, VA's VISN Director and the
    president and CEO of the Region's TRICARE Contractor. If this plan
    succeeds in improving the health care of the beneficiaries and,
    hopefully, saving money for the taxpayers perhaps its form can be
    transported or modified for other regions.
                           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 TFL was enacted by NDAA for
    fiscal year 2001, be allowed to participate in TFL without enrolling in
    Part B Medicare.
             military health care in puerto rico and virgin islands
        The TRICARE benefit in Puerto Rico and the Virgin Islands is
    different than that provided in the United States. NMVA believes that
    the TRICARE triple option benefit should be implemented in Puerto Rico
    and the Virgin Islands in the same manner that it is being offered in
    the United States. Further, the FEHBP Demonstration program has been
    highly successful in Puerto Rico and is due to end on 1 January 2003.
    NMVA strongly recommends that the FEHBP demonstration in Puerto Rico be
    extended and made a permanent program.
          include physician and nurse specialty pay in retirement pay
                                  computations
        The military services continue to lose top quality medical
    professionals (doctors and nurses) at mid-career. A major reason is the
    difference between compensation levels for military physicians and
    nurses and those in the private sector.
        Results of a recent survey of military urologists show that pay and
    benefits are the most important factors impacting retention. Improving
    specialty pay/bonuses and including specialty pay/bonuses in retired
    pay calculations would aid retention. More than half of mid-level
    military urologists (5-15 years of service) have not made their future
    career decisions. The survey also showed that 83 percent of senior
    military urologists, those with over 15 years of service, plan to
    retire at the earliest opportunity. Therefore, prompt action to retain
    these and other highly skilled medical professionals is needed.
        NMVA recommends that prompt action be taken to improve these
    special pays and to include them in the retired pay calculations.
       end preauthorization requirements/non-availability statements for
                                tricare standard
        When the TRICARE program was begun, beneficiaries understood that
    options would include a fee-for-service plan (TRICARE Standard), a
    preferred-provider plan (TRICARE Extra) and an HMO (TRICARE Prime).
    However, TRICARE standard is not a fee-for-service plan. Beneficiaries
    who use the TRICARE Standard plan must obtain pre-authorizations to
    obtain care out of the Military Treatment Facilities or the networks.
    TRICARE Standard should be a true fee-for-service plan and no
    preauthorization or non-availability statement should be required.
                                     fehbp
        The NMVA has been a long time supporter of legislation that would
    provide military personnel the option of participating in the Federal
    Employees Health Benefit Program. Currently, a bill introduced in the
    107th Congress, H.R. 179, would provide that option. NMVA believes 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. 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.
                                    summary
        Mr. Chairman and distinguished members of the Sub-Committee, we
    want to thank you for your leadership and for holding these hearings
    this year. You have made it clear that the military continues to be a
    high priority and you have our continuing support.

        Senator Inouye. I can assure you, Mr. Partridge, we will do
    our best to resist closing the commissaries, and at the least
    slow down the process. Many Americans feel that commissaries
    are not necessary because you have all these shopping malls and
    Wal-Mart and K Mart and what-have-you, but we do have
    commissaries because they provide better bargains than most of
    these organizations, and with the limited pay we provide our
    military personnel the least we can do is provide them with
    adequate and reasonable shopping. We will do our best.
        Colonel Partridge. Thank you, Mr. Chairman.
        Captain Hanson. Thank you, Mr. Chairman.
        Senator Inouye. Our next witness is the associate professor
    of electrical engineering at the University of Nevada, Dr.
    James Henson. Welcome, Dr. Henson.
    STATEMENT OF DR. JAMES HENSON, ASSOCIATE PROFESSOR OF
                ELECTRICAL ENGINEERING AT THE UNIVERSITY OF
                NEVADA, ON BEHALF OF THE COALITION OF
                EPSCoR STATES
        Dr. Henson. Good morning, Mr. Chairman. My name is Jim
    Henson. I am associate professor of electrical engineering at
    the University of Nevada. Thank you for the opportunity to
    testify on behalf of the coalition of the 21 States and Puerto
    Rico that participate in the experimental program to stimulate
    competitive research (EPSCoR).
        I am here today to speak in support of both the Defense
    Department's science and engineering research program and an
    important component of that research, the Defense Department's
    experimental program to stimulate competitive research at
    EPSCoR. The coalition wishes to be associated with the
    statement of the Coalition for National Security Research in
    support of additional funding for defense research and
    development. I wish to commend the subcommittee for its strong
    support for funding DOD S&T programs, and urge you to maintain
    a stable investment in the Department's S&T efforts.
        The coalition of EPSCoR States strongly supports the
    Department's budget request. The Defense EPSCoR program is a
    small but significant part of the larger program, and therefore
    the coalition recommends that Congress appropriate $25 million
    to the Defense EPSCoR (DEPSCOR) program. DEPSCoR is a research
    and development program that was initiated by the National
    Science Foundation through a merit review process.
        DEPSCoR is improving our Nation's science and technology
    capability by funding research activities at universities and
    nonprofit organizations and States that historically have not
    received significant Federal R&D funding. Research is funded
    only if it is in areas that are important to national defense.
        My own experience with the DEPSCoR program is a good
    example of how it works. Since joining the university in 1991,
    I have been continuously involved in defense sponsored research
    efforts funded separately by the U.S. Army Waterways Experiment
    Station, the U.S. Army Research and Engineering Laboratory of
    the U.S. Air Force Office of Scientific Research, and most
    recently the U.S. Army Research Office through the DEPSCoR
    program.
        My own research involves a simulation analysis of high
    resolution radar imaging systems and systems imagery. Potential
    applications include high-speed generation of radar imaging for
    interactive war game simulation, preparation of pilot briefing
    material, automatic target detection and recognition algorithm
    development, automatic terrain interrogation and assessment,
    and the evaluation of sensor performance for next generation
    radar systems.
        The objective of our current Army research-sponsored
    DEPSCoR research program is to provide a fundamental
    understanding of radar texture through the development of
    techniques through the analysis of high-speed synthesis radar
    imagery for naturally occurring distributed targets as a
    function of radar sensor parameters such as frequency,
    depression angle resolution, and imaging modes.
        This project, funded through the DEPSCoR program in April
    2001, is already providing results that will more accurately
    allow us to model naturally occurring terrains and enhance our
    image analysis products. The funds associated with the project
    are supporting master's level graduate students with salary and
    tuition in the University of Nevada's electrical engineering
    department. The education, training, and technical preparation
    of these engineers for potential careers in Government
    laboratories and intelligence agencies is just as important as
    the research itself.
        As a group, these students must be considered a national
    asset which must be encouraged and mentored to ensure the
    continued superiority of our military and intelligence
    services. I would like to note the coalition believes the
    Department should reevaluate the current one to two matching
    requirement for DEPSCoR, since it is significantly higher than
    other defense research programs.
        Once again, Mr. Chairman, the Coalition of EPSCoR States
    supports funding the Defense Department's research programs,
    particularly budget function 6.1 and 6.2. With the beginning of
    the war against global terrorism, the technological demands
    facing our military have increased. New research must be
    pursued to meet new challenges in the field of information
    warfare, high technology terrorism, proliferation of weapons of
    mass destruction, and threats into other parts of the world.
        It is essential Congress assure 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 2003 budget request keeps pace with
    the needs of science and technology.
        Finally, the Coalition of EPSCoR States believes a $25
    million Defense EPSCoR program will ensure that Federal funding
    dollars are being used in a cost-effective way, and that the
    EPSCoR States are contributing to the Nation's defense efforts.
        Thank you for your consideration of this request.
        [The statement follows:]

                     Prepared Statement of Dr. James Henson

        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 Jim Henson. I am an Associate Professor of Electrical
    Engineering at the University of Nevada. I am here today to speak in
    support of both the Defense Department's science and engineering
    research program and an important component of that research, the
    Defense Department's Experimental Program to Stimulate Competitive
    Research (EPSCoR). This statement is submitted on behalf the Coalition
    of EPSCoR States and the twenty-one States and Puerto Rico that
    participate in EPSCoR.\1\
    ---------------------------------------------------------------------------
        \1\ Alabama, Alaska, Arkansas, Hawaii, Idaho, Kansas, Kentucky,
    Louisiana, Maine, Mississippi, Montana, Nebraska, Nevada, New Mexico,
    North Dakota, Oklahoma, Puerto Rico, South Carolina, South Dakota,
    Vermont, West Virginia, and Wyoming.
    ---------------------------------------------------------------------------
        The Coalition wishes to be associated with the statement of the
    Coalition for National Security Research in support of additional
    funding for Defense research and development. This Subcommittee has
    long demonstrated its strong support for the Department's science and
    technology research, which have produced the innovations, and
    technological breakthroughs that have contributed to ensuring that our
    fighting men and women have the best available systems and weapons to
    support them in executing their national defense missions. The bench
    science the Subcommittee has wisely supported in our Nation's
    universities and laboratories has produced significant benefits for the
    people in the field and on the front lines. The Coalition of EPSCoR
    States strongly urges you to maintain a stable investment in the
    Department's science and technology (S&T) efforts.
        The Coalition of EPSCoR States strongly supports the Department's
    budget request for basic research. The Defense EPSCoR program is a
    small, but significant, part of this larger program. The Coalition
    recommends that Congress appropriate $25 million to the Defense
    Department's budget for the Defense Experimental Program to Stimulate
    Competitive Research (Program Element PE 61114D).
        EPSCoR is a research and development program that was 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 the quality of their
    research capabilities 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. EPSCoR seeks to
    advance and support the goals of the program through investments in
    four major areas: research infrastructure improvement; research cluster
    development and investigator-initiated research; education, career
    development and workforce training; and outreach and technology
    transfer.
        With the movement of the Nation toward an S&T policy increasingly
    aimed at global competitiveness and economic well-being, it is
    imperative that all States have a sufficient S&T base. Science and
    technology capability, like education in general, cannot be limited to
    a select few States and institutions for our Nation to progress and
    maintain world leadership.
        The Defense Experimental Program to Stimulate Experimental Research
    (DEPSCoR) was authorized by Section 257 of the Fiscal Year 1995
    National Defense Authorization Act (Public Law 103-337). The Defense
    Department's EPSCoR helps build national infrastructure for research
    and education by funding research activities in science and engineering
    fields important to national defense. DEPSCoR'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.
        The Defense EPSCoR 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.
        My own experience with the DEPSCoR program is a good example of how
    it works. Since joining the University in 1991, I have been
    continuously involved in Defense-sponsored research efforts funded
    separately by the U.S. Army Waterways Experiment Station, the U.S. Army
    Cold Regions Research and Engineering Laboratory, the U.S. Air Force
    Office of Scientific Research, and most recently, the U.S. Army
    Research Office through the DEPSCoR program.
        Access to common view battlefield conditions from a variety of
    airborne and land-based sensors is a critical element that permeates
    all U.S. Army battle dynamics and that represents a key technology in
    the planning and conduct of future missions. This common view must be
    accurate and of high fidelity in order to achieve the commander's
    objectives and aid a common, collaborative, real-time picture of the
    battlespace including weather, terrain, environment and their combined
    effects on reconnaissance, surveillance, and targeting systems.
        To support this mission, my own research involves the simulation
    and analysis of high-resolution radar imaging systems and system
    imagery. Potential applications include high speed generation of radar
    imagery for interactive war game simulations, preparation of pilot
    briefing materials, automatic target detection and recognition
    algorithm development, automatic terrain interrogation and assessment,
    evaluation of sensor performance for next generation radar systems, and
    tactical decision aid development.
        The objective of our current Army Research Office-sponsored DEPSCoR
    research effort is to improve our fundamental understanding of radar
    texture through the development of techniques for the analysis and high
    speed synthesis of radar imagery for naturally occurring distributed
    targets as a function of radar sensor parameters such as frequency,
    depression angle, resolution, detector type, and imaging mode.
        This project, funded through the DEPSCoR program in April 2001, is
    already producing results that will allow us to more accurately model
    naturally occurring terrains and enhance our simulation and image
    analysis products.
        At this time the funds associated with the project are supporting
    five Masters-level graduate students with salary and tuition in the
    University of Nevada's Electrical Engineering Department. The
    education, training, and technical preparation of these engineers for
    potential careers in government laboratories and intelligence agencies
    is just as important as the research itself. As a group, these students
    must be considered a national asset which must be encouraged and
    mentored to insure the continued superiority of our military and
    intelligence services.
        Last year the Defense Department issued an announcement of a
    competition under the aegis of the fiscal year 2002 Defense EPSCoR
    program. A total of 244 projects were received from the 19 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), 54 projects
    were selected this Spring for funding with $15.7 million appropriated
    for fiscal year 2002. The average award was $291,000.
        The partnership concept also extends 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.
        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.
        The EPSCoR program yields 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 Nevada
    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, but we respectfully request that you provide $25
    million for the Defense EPSCoR program for fiscal year 2003.
        In addition, the Coalition recommends that the Defense Department
    develop a statewide infrastructure development program in eligible
    States. Currently, the DEPSCoR program provides only for individual
    investigator grant support. A statewide infrastructure development
    program similar to the infrastructure development program managed by
    the National Science Foundation will enable eligible States to
    strengthen their defense research capabilities.
        Finally, the DEPSCoR program requires a one-to-two matching
    requirement, a match that is significantly higher than many other
    Defense research programs. This requirement places a burden on the
    individual participating States. The Coalition believes the Department
    should re-evaluate the value of the current matching requirement.
        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 funding for
    the Defense Department's research programs, particularly Budget
    Functions 6.1 and 6.2. With the beginning of the war against global
    terrorism, 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 2003 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.
        Finally, the Coalition of EPSCoR States believes a $25 million
    Defense EPSCoR program with the modifications suggested will ensure
    that Federal dollars are being used in a cost-effective way and that
    the EPSCoR States are contributing to the Nation's Defense efforts.
    Thank you for your consideration of this request.

        Senator Inouye. I am looking over your testimony and
    listening to you. Does the University of Nevada carry out all
    of this, such as, radar imaging systems potential application
    include radar imagery, interactive war games simulation?
        Dr. Henson. Mr. Chairman, that is my own research area, and
    I do considerable software development for the DOD agencies
    that I indicated, and they apply those products in various
    ways, some of which----
        Senator Inouye. What do your five graduate students do?
        Dr. Henson. Pardon me?
        Senator Inouye. The graduate students.
        Dr. Henson. They are supported under this research funding
    as research assistants for me.
        Senator Inouye. So you have had good results?
        Dr. Henson. Indeed.
        Senator Inouye. Well, we will try to keep that up.
        Dr. Henson. Thank you, Mr. Chairman.
        Senator Inouye. Thank you very much.
        Our next witness is the Department of Pharmacology, Howard
    University College of Medicine, Research Society on Alcoholism,
    Dr. Robert Taylor.
    STATEMENT OF DR. ROBERT TAYLOR, CHAIRMAN, DEPARTMENT OF
                PHARMACOLOGY, HOWARD UNIVERSITY COLLEGE OF
                MEDICINE, ON BEHALF OF THE RESEARCH SOCIETY
                ON ALCOHOLISM
        Dr. Taylor. Good morning, Mr. Chairman. I am Dr. Robert
    Taylor. I am a medical doctor, a professor in the medical
    school, and researcher on alcoholism, a disease that devastates
    our society. Today I am presenting testimony on behalf of the
    Research Society on Alcoholism that I will call the RSA.
        The RSA is a professional research society. Its 1,400
    members conduct basic clinical psychosocial research on
    alcoholism and alcohol abuse. The society's mission is to
    promote research that can lead the way toward prevention and
    treatment of alcoholism, a disease that has probably affected
    everyone in this room in some way.
        In recent years the RSA has presented testimony to this
    committee about alcoholism and alcohol problems in the
    military, a serious problem that compromises military readiness
    and the health and safety of our military personnel. The
    society has appreciated the past support of the subcommittee
    and the Congress in listing alcoholism among the eligible
    research areas for which applications may be submitted for peer
    review and potential funding under the Department of Defense
    peer-reviewed medical research program.
        Although this program is relatively new, being created by
    Congress in 1999, the DOD reports that alcohol-related research
    projects funded from 1999 to 2000 produced interesting research
    outcomes ranging in areas from basic research biology of
    alcoholism to clinically applicable findings, stating that
    alcohol abuse prevention is another topic area of interest due
    to the impact it can have on the readiness of the military
    personnel.
        Now, Mr. Chairman, the problem is that the RSA is
    disappointed that in the fiscal year 2002 Defense Department
    conference agreement alcoholism was dropped from the research
    projects to be funded by the DOD peer-reviewed research
    program. This is especially disheartening, after the
    subcommittee listed alcoholism in the Senate fiscal year 2000
    Defense Appropriations Committee report. That is Senate Report
    107-109.
        Our request from the RSA is quite simple. We request this
    subcommittee make sure that alcoholism is included among the
    research topics listed under the DOD peer-reviewed medical
    research program for fiscal year 2003. According to the 1998
    defense survey of health-related behaviors among military
    personnel, the most recent survey the Department has conducted
    on health-related matters in the Armed Services, heavy drinking
    among military men is over 40 percent more prevalent than in
    the civilian sector, and among young men 18 to 25 the rate of
    alcohol use is about twice that for the military than for
    civilians.
        Among military personnel on the lowest pay grades, about 1
    in 5 experience productivity loss due to drinking, 1 in 6
    report serious consequences of drinking, and 1 in 10 report
    symptoms of alcohol dependence. Finally, heavy drinkers are
    more likely to report a higher number of days each month with
    mental health problems and the need for evaluation of
    depression.
        While alcohol research is funded by the National Institute
    on Alcohol Abuse and Alcoholism at National Institute on Health
    (NIH) and the Department of Veterans Affairs, few studies
    funded by these organizations 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. Thus, the RSA urges the DOD to fund research into the
    causes, consequences, prevention and treatment of alcohol abuse
    and alcoholism among our military personnel who choose to serve
    their country in an environment quite different from civilian
    life.
        Now, Alcohol research has reached a critical juncture, and
    the scientific opportunities are numerous. We have great
    advances over the last 2 or 3 years in terms of where we are
    going with our research in genetics, prevention, and in
    treatment as well.
        In conclusion, the RSA urges the subcommittee to include
    alcoholism among the research topics listed under the DOD peer-
    reviewed medical research program for fiscal year 2003, and the
    RSA respectfully suggests to the subcommittee that the
    magnitude and consequence of alcohol misuse in the military
    calls for a dedicated, continuous, and focused alcohol research
    effort supported by the DOD.
        Thank you, Mr. Chairman. I will answer any questions if you
    have them.
        [The statement follows:]

                      Prepared Statement of Robert Taylor

        The Research Society on Alcoholism (RSA) appreciates the
    opportunity to present its views to the Defense Appropriations
    Subcommittee. RSA is a professional research society whose 1,400
    members conduct basic, clinical, and psychosocial research on
    alcoholism and alcohol abuse. The Society's mission is to promote
    research that can lead the way toward prevention and treatment of
    alcoholism.
        In recent years, our organization has submitted testimony to this
    subcommittee about alcoholism and alcohol problems in the military, a
    serious problem that compromises national preparedness and the health
    and safety of our military personnel. We have appreciated past support
    from the Congress by including alcoholism research among the
    recommended research areas for funding under the Department of Defense
    (DOD) Peer Reviewed Medical Research Program.
        RSA was disappointed, however, that the fiscal year 2002 Defense
    Department Conference Agreement dropped alcoholism from the research
    projects to be funded under the Peer Review Program, especially after
    this Subcommittee listed alcoholism in the Senate fiscal year 2002
    Defense Appropriations Committee Report (Senate Report 107-109).
        The RSA respectfully requests that the Subcommittee include
    alcoholism under the research topics recommended for funding under the
    DOD Peer Review Medical Research Program in fiscal year 2003.
    Statistics continue to show that alcohol abuse remains a significant
    problem in the military and is an issue of considerable relevance to
    troop performance and the safety of our service personnel.
        Although the Peer Reviewed Medical Research Program created by
    Congress in fiscal year 1999 is still relatively new, the DOD reported
    that projects funded in fiscal year 1999 and fiscal year 2000 produced
    interesting research outcomes, ranging in areas from the basic research
    biology of alcoholism to clinically applicable findings research. 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.
        In the military, the costs 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,
    the most recent survey the Department has conducted on health related
    behaviors in the armed services, one in four young military men engages
    in heavy drinking, defined as having five or more drinks at least once
    a week.
        The prevalence of heavy drinking is particularly high among service
    men that are not married (23.9 percent), those in the Army (17.2
    percent) and Marine Corps (23.0 percent), and for personnel in the E1-
    E3 pay grades (25.9 percent). Further, 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), and 1 in 10 reports symptoms of alcohol
    dependence (10.2 percent). Because these negative effects are most
    prominent among the junior enlisted personnel, the absolute numbers of
    personnel experiencing drinking problems are quite large. Finally,
    heavy drinkers are more likely to report a higher number of days each
    month with mental health problems and the need for evaluation of
    depression.
        A research team at a national research center in Berkeley,
    California found that drinking rates of young adults prior to entering
    the military are about the same as their age cohorts in the general
    population. This year, this longitudinal study is seeking to explain
    how and why the drinking rates of military youth are higher after 2
    years in service.
        Importantly, although heavy alcohol use and associated negative
    effects have declined significantly since 1980 when the first DOD
    Health Survey was conducted, rates have been relatively stable over the
    past decade and there was no decline from 1995 to 1998. These findings
    stand in striking contrast to dramatic declines in rates of illicit
    drug use among military personnel over the same period, with a decrease
    from 37 percent in 1980 to 6 percent in 1998. The unchanging, high
    levels of heavy drinking and negative alcohol-related consequences
    highlight the critical need for more programmatic effort and resources
    directly targeting alcohol use in the military. In the 1998 DOD survey,
    a substantial proportion of current heavy alcohol drinkers had a
    history of alcohol treatment since entering the military, indicating
    that they are at high risk for future alcohol-related problems and
    additional treatment episodes.
        Research 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. While alcohol
    research is funded primarily at the National Institute on Alcohol Abuse
    and Alcoholism (NIAAA) at the National Institutes of Health and at the
    Department of Veterans Affairs (VA), 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. The Research Society on Alcoholism urges the
    DOD to fund research into the causes, consequences, prevention, and
    treatment of alcohol abuse and alcoholism among our military men and
    women who choose to serve their country in an environment quite
    different from civilian 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. Naltrexone works best in conjunction with
    psychotherapeutic interventions. It is not known what adjunctive
    therapies would be most appropriate for the military population. 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.
        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 problem of alcoholism and alcohol abuse in the military.
        Request.--The Research Society on Alcoholism urges the Subcommittee
    to support the following two initiatives:
        (1) Include alcoholism among the research topics listed under the
    DOD Peer Reviewed Medical Research Program.
        (2) Provide a $10 million targeted allocation to a focused alcohol
    research effort that 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 among the men and women serving
    in our armed forces.
        Thank you for your consideration of these requests.

        Senator Inouye. Dr. Taylor, I will take it upon myself to
    urge my colleagues to make certain that alcoholism is among the
    research topics listed under the peer-reviewed medical research
    program.
        Dr. Taylor. Thank you, Mr. Chairman.
        Senator Inouye. I thank you, sir. Our next witness is from
    the Lovelace Respiratory Research Institute, Edmundo Gonzales.
    STATEMENT OF DR. EDMUNDO GONZALES, ON BEHALF OF THE
                LOVELACE RESPIRATORY RESEARCH INSTITUTE
        Dr. Gonzales. Thank you, Mr. Chairman. I am testifying on
    behalf of Dr. Rogene Henderson, who because of a flight that
    was canceled cannot be here, so she asked me to read her
    statement, with your indulgence.
        Senator Inouye. Please do.
        Dr. Gonzales. We thank the senior Senator from New Mexico,
    Senator Domenici, for introducing us. We in fact have a long
    past history in the area of respiratory research.
        Chairman Inouye and members of the subcommittee, thank you
    for the opportunity to speak to you on this important matter.
    It is clear from the recent history that our Nation faces the
    risk of terrorist acts at home. The Lovelace Respiratory
    Research Institute (LRRI), because of its past Federal
    investments, has unique facilities and equipment that can be
    used to address the key questions related to the DOD mission
    and to the homeland security.
        From its studies under the aegis of the Atomic Energy
    Commission on the health effects of inhaled fission products to
    the more recent studies on complex airborne pollutant mixtures,
    the LRRI has served the Nation's needs by providing information
    on how best to protect the public health from airborne noxious
    agents. Now the country faces threats from terrorism, and LRRI
    stands ready to again meet this country's needs.
        The LRRI's ability to monitor, to characterize, and to
    define the health effects of chemical, biological, and
    radioactive agents can be marshalled to help diminish risk from
    scenarios of terrorist attack. Therefore, we propose the
    establishment of a national respiratory research initiative
    project at Lovelace.
        The Lovelace program will include three major components.
    One is the establishment of the National Atmospheric Exposure
    and Decontamination Simulation Laboratory. This laboratory will
    allow simulation for combustion and explosion processes that
    study the dispersal, exposure, and cleanup scenarios for
    chemical, biological, and radioactive materials. The facility
    would be open to collaborative use by national laboratories,
    universities, and private companies engaged in federally funded
    R&D work of critical national importance.
        The second component of the program will be the
    establishment of the Lovelace Institute Air Assault Science
    Center. This center will allow Lovelace scientists and
    collaborators to focus on issues directly related to these
    terrorist attacks. These will include studies in the dispersal
    of spores of biological agents, development of new detectors
    for identifying airborne biological agents, development of
    sampling strategies suitable for radioactive aerosols released
    from dirty bombs, development of protective technology for
    biological, chemical, or radiological active aerosols, and
    assessment of inhaled dose from various types of terrorist
    attacks.
        The third component of the Lovelace program will be to
    provide scientific support for the DOD Center for Terrorism and
    Manpower Readiness efforts regarding health effects. These
    studies will include characterization of acute lung injury due
    to trauma and smoke inhalation. Continuation of our studies on
    the effect of low levels of chemical warfare agents on the
    immune system, studies on protecting troops against adenovirus
    infectious agents, novel methods of health surveillance or
    early detection of bioterrorist attacks, study of lung disease
    risk from dirty bomb explosions, and development of models to
    predict toxicity of low doses of threat agents.
        The Lovelace Institute has a longstanding record of
    focusing aerosol exposure and health research on important
    national issues related to inhaled toxic agents. Much of the
    fundamental facilities and equipment and expertise required to
    address these homeland security issues are already in place,
    but are engaged on other issues, but what we need is core
    funding to marshall these resources to meet specific homeland
    security research needs and to complement the existing physical
    and human resources necessary.
        We wish to create a focused rapid response capability for
    working with the Department of Defense on their mission and
    other key agencies to provide real time information to
    military, law enforcement, and public health authorities when
    the threat is first identified.
        [The statement follows:]

    Prepared Statement of Dr. Rogene Henderson, Senior Scientist, Lovelace
                         Respiratory Research Institute

        The Lovelace Respiratory Research Institute (LRRI) has an
    established national and international reputation for its ability to
    handle critical questions regarding the generation, monitoring and
    study of the toxic effects of airborne noxious agents. From its early
    studies of the health effects of fission products to its more recent
    studies on complex airborne pollutant mixtures, the LRRI has served the
    nation's needs to know how best to protect the public health from
    noxious agents. Now, as the country faces threats from terrorism, the
    LRRI stands ready once again to meet the country's needs. The LRRI's
    ability to characterize and define the health effects of chemical,
    biological, and radioactive agents, along with the history of
    delivering scientific answers, uniquely qualifies us to help diminish
    risk from scenarios of terrorist attack. Because of past investment,
    the Lovelace Institute has the facilities and equipment that allow our
    scientists to test exposure models for biological clues that lead to
    cures and preventives.
      the department of defense partnership with the national respiratory
                          research initiative project
        This Lovelace Initiative proposes the formation of a partnership
    with the DOD to address the national needs that now face our country.
    These proposed projects include: The National Atmospheric Simulation
    Laboratory, The Lovelace Institute Aerosol Science Center, and Projects
    Supporting Counter Terrorism and Manpower Readiness.
        Accordingly, the Lovelace Institute is requesting $10 million to
    advance this partnership with DOD with the following component
    projects:
    The National Atmospheric Simulation Laboratory
        The DOD faces serious challenges in developing force protection
    measures against chemical, biological, and nuclear (CBN) agents for
    personnel, facilities, supplies, and equipment in vulnerable off-
    battlefield locations such as supply, training, and staging areas
    (i.e., fixed and temporary bases), office buildings, housing and
    schools (including dependents and civilian personnel), supply depots,
    and transport (air, sea, and land operations). Actions against both DOD
    and civilian targets on 9-11 demonstrated the vulnerability to
    disruption of operations from fire and exposure to airborne combustion
    products and dusts from structural materials. The subsequent anthrax
    attacks demonstrated how easily small amounts of CBN materials, and the
    difficulty of implementing isolation and clean-up operations and
    determining readiness for return to normal service could disrupt
    operations. The ``war on terrorism'' is very likely to involve sporadic
    and poorly-anticipated enemy actions against personnel, facilities, and
    resources (e.g., water and food supplies) dispersed among civilian
    populations.
        DOD requires an improved ability to predict, assess, and overcome
    off-battlefield threats to extremely diverse targets of CBN agents. DOD
    requires an improved knowledge of: (1) the dispersion of hazardous
    materials in physically-complex off-battlefield environments; (2) the
    rapid but thorough assessment of airborne and surface-deposited CBN
    agents in workplaces and residences (including contamination of
    personnel), storage areas, supplies and equipment; (3) the efficacy of
    alternate containment and clean-up strategies; and (4) the criteria for
    determining when safe operations can be resumed.
        A laboratory for simulating combustion and CBN contamination,
    dispersal, exposure, and clean-up scenarios in off-battlefield DOD
    operations is necessarily a critical component of the strategy to
    improve off-battlefield force protection. Scenarios involving various
    ``real-world'' combinations of rooms, wall and floor coverings,
    furniture, ductwork, supplies, storage areas, equipment, and vehicles
    need to be duplicated for tests using real and simulated CBN agents
    under controlled conditions.
        The capabilities of the government-owned Inhalation Toxicology
    Facility located on Kirtland AFB in Albuquerque, NM and leased to the
    Lovelace Respiratory Research Institute (recently renewed for 25-years)
    will be extended as a national resource for the conduct of research
    requiring simulation of human exposure atmospheres. This world-renowned
    facility is currently used by LRRI for its research requiring
    atmospheres of airborne materials for studies of environmental air
    pollutants, new aerosolized therapeutic agents, and hazards from
    specific chemicals.
        This initiative will create a resource broader in capability than
    required by LRRI for its existing studies by: (1) enhancing portions of
    the facility to create additional capability to work with highly-
    hazardous chemical and biological agents and to simulate indoor
    contamination scenarios; and (2) actively opening the facility to
    collaborative use by national laboratories and universities, or private
    companies engaged in Federally-funded R&D work of critical national
    importance.
    The Development of the Lovelace Institute Aerosol Science Center
        A major threat of terrorist attack is in the form of exposure to
    the biological agents or radioactive aerosols from explosion of dirty
    bombs. In these scenarios, lethal or harmful aerosols of biological or
    radioactive materials are released and inhaled by people. The victims
    of the ``anthrax attacks'' were subjected to inhaling anthrax spores
    dispersed by opening mail and suspended in the air. Anthrax spores were
    used to kill persons who were exposed to the spores. Other biological
    agents are capable of a similar outcome. Explosion of a dirty bomb
    containing radioactive material could contaminate a wide area and cause
    acute and chronic effects in victims inhaling the radioactive aerosol.
        As in the proposal submitted for the Exposure and Decontamination
    Simulation Laboratory, Lovelace has the specialized scientific ability
    needed to study aerosolized agents. These attacks demonstrated the
    ability to select victims (members of the U.S. Congress), use common
    ordinary delivery systems, and trigger the attack in a strategic and
    directed manner. Material for making dirty bombs is easy to obtain and
    could easily be used for terrorist attack. We do not know how much
    radioactive aerosol could be produced in such a scenario.
        We also need to develop new detection instruments and evaluate the
    efficacy of control technology to minimize inhalation exposure. The
    proposed Lovelace Institute Aerosol Science Center will allow aerosol
    scientists at Lovelace to focus on issues directly related to terrorist
    attacks. Lovelace has acquired aerosol expertise relevant to
    bioterrorism and radioactive aerosol through collaborative works with
    Sandia National Laboratories for developing a detector of biological
    agents and by working with the Department of the Army to study
    radioactive aerosols from explosive environments. We propose to
    investigate the following issues:
      --Mechanisms to disperse spores by opening envelop and contents
            leaking in mailrooms. We propose to study these phenomena in
            the Exposure and Simulation facility.
      --Development and evaluation of new detectors for rapidly identifying
            airborne biological agents.
      --Developing sampling strategy and air sampling instruments that are
            suitable for studying radioactive aerosol from dirty bombs.
      --Development and evaluation of control and protection technology
            that is suitable to minimize exposure of biological or
            radioactive aerosols.
      --Assessment of an inhaled dose of aerosol from a terrorist attack
            and determination of the potential health risks.
        The Lovelace Institute has over 55 years of experience in aerosol
    science and represents a huge national resource in combating today's
    chemical, nuclear and biological threats through the air that we
    breathe. Already in place are the scientists, equipment, and
    laboratories to accomplish the technical goals listed above. What is
    not in place is an infrastructure to accomplish these tasks rapidly in
    the face of a new real world threat such as occurred in the recent
    anthrax attack. Re-stated, what we propose to create is a rapid
    response team with the appropriate new equipment, operating procedures,
    pre-constructed protocols, pre-approved animal model studies and
    simulation laboratories to be able to immediately provide real-time
    information to military, law enforcement and public health authorities
    when a threat is first identified.
        Specifically, expanding on the above list, we will create the
    systems to duplicate particular aerosol dispersal situations in the
    laboratory in such a way as to predict the area and rate of dispersal
    of a given aerosol, the magnitude of expected penetration into the
    airways and lungs, the most effective method of protection for
    individuals who must work in the presence of the aerosol and provide
    real time suggestions of technical solutions for mitigating the spread
    and cleansing the affected areas.
        Along with the development of these rapid response capabilities, we
    will develop new technologies for on-site evaluation of the nature of
    the suspected or known aerosol including the ability to determine the
    size, density, porosity and ``stickiness'' of the suspect agent. Thus,
    a rapid response simulation laboratory plus the development of new on-
    site mobile technologies will be created to meet the current and
    expected future threats of dispersal of toxic or biologically active
    agents through an aerosol. Added to these capabilities will be expanded
    nuclear aerosol experience gathered over 50 years of work for the DOE
    in the study of the health effects of aerosolized radio nuclides.
    Providing Scientific Support for DOD Counter Terrorism and Manpower
            Readiness
        The Lovelace Institute is prepared to address major areas of
    concern in regard to the health effects of terrorist attacks,
    including, the effects of low-level exposure to nerve agents, the
    appropriate treatment of trauma-induced lung injury, and the protection
    of military personnel from opportunistic lung infections. The LRRI
    proposes the following studies to address these and other concerns, to
    help improve the nation's homeland defense.
                Characterization of Acute Lung Injury Due to Trauma or
                        Smoke Inhalation
        Bio-terrorism attacks often result in lung injury either from
    trauma due to explosions or from inhalation of smoke due to fires.
    Trauma-induced lung injury can lead to a condition known as acute
    respiratory distress syndrome (ARDS) in which the lung fills with
    protein-rich infiltrates and large numbers of neutrophils, leading to
    respiratory insufficiency. Another common lung injury in bio-terrorist
    attacks is due to smoke inhalation. This project will address the
    mechanisms involved in both types of injury using animal models of
    trauma- and smoke-induced lung injury. New proteomic approaches will
    characterize the lung response to such injuries and will point to new
    therapeutic approaches for the care of the affected individuals.
                Effect of Chemical Warfare Agents on the Immune System
        Although the nerve gas, sarin, has rarely been used in warfare,
    because of the ease and low cost of production, it is a tool of mass
    destruction in the hands of terrorist groups and rogue nations. The
    threat of nerve gas-related terrorism has become a major concern after
    the September 11th terrorist attack. While the people in the immediate
    vicinity of a nerve gas attack would be exposed to clinical/lethal
    doses, the majority of people surrounding the area are likely to be
    exposed to subclinical doses of the agent. In the 1994-95 Japanese
    subway sarin attacks, 19 people died and more than 6,000 people
    exhibited some degree of sarin toxicity, in spite of rapid medical
    attention. Many of the surviving victims have shown signs of
    immunodeficiency. Our preliminary results suggest that subclinical
    doses of sarin impairs T cell function, and the effects of sarin on the
    immune system are mediated through the central nervous system.
    Moreover, sarin-exposed animals have dramatically reduced serum
    glucocorticoid levels. To understand the cellular and molecular bases
    of sarin-induced immunosuppression, we propose to expose rats to
    subclinical doses of sarin by daily inhalation for 5 days. We
    hypothesize that the effects of sarin on T cell function are relayed
    through the sympathetic pathway of the autonomic nervous system, and
    might be reversed by treatment with ganglionic blockers. Moreover,
    changes in serum glucocorticoid levels might serve as a biomarker for
    cholinergic toxicity.
                Protecting Against Adenovirus Infectious Agents
        Adenoviruses of Subgenus B and E, including serotypes 3, 4, and 7,
    have been shown to be important causative agents of lower acute
    respiratory infections especially children and military training
    personnel. While much is known regarding the pathogenesis of adenovirus
    subgenus C viruses, these viruses are in general associated with very
    mild respiratory disease. Currently, no animal models of pathogenesis
    of subgenus B and E adenovirus-induced pneumonia been reported. The
    proposed studies will provide new information regarding adenoviral-
    induced pneumonias that significantly impact and hinder the
    mobilization of new military training personnel.
        This laboratory is currently investigating the pathogenesis of
    adenoviruses Ad 3, Ad 4 and Ad 7h, which have been isolated from
    patients. In a mouse model of pathogenesis, Ad 3 and Ad 7 cause
    significantly more lung inflammation as compared to Ad 5. Importantly,
    peribronchiolar and alveolar inflammation are markedly increased by
    subgenus B adenoviruses. Coinciding with increased lung inflammation,
    lung remodeling and epithelial cell injury are present during acute
    infection of Subgenus B adenoviruses. In addition, important lung
    homeostatic functions, such as fluid balance, host defense, and
    surfactant regulation are altered during acute infection. Current
    projects are elucidating the molecular mechanisms of altered lung
    function and increased pathogenesis in these novel animal models.
    Delineating the critical function of viral genes in the mechanisms of
    lung pathogenesis during acute subgenus B infections of the lung is
    also under investigation.
        Host defense against adenoviral infections, particularly subgenus B
    adenoviruses has not been investigated. Previous work from this
    investigator has shown that the normal lung microenvironment contains
    proteins that modulate adenovirus infections in vivo. Future work from
    this laboratory will use a proteomics strategy to elucidate novel
    antiviral factors that mitigate adenoviral pathogenesis in the lungs of
    established animal models. Collectively, further understanding of the
    natural host defense mechanisms against adenovirus will provide
    important insight into therapeutic strategies against adenoviral-
    mediated lung disease.
        The development of animal models to understand adenoviral
    pathogenesis, particularly to infection by adenovirus serotypes
    associated with severe disease in immunocompetent hosts, will be
    essential for the testing of antiviral and vaccine therapies. This
    laboratory is focused toward understanding molecular mechanisms of lung
    pathogenesis and altered lung function during acute adenoviral
    infection. Genomic and proteomic strategies will allow rapid assessment
    of important mediators in both effector functions of pathogenesis, as
    well as viral host defense of the healthy lung. Likewise, elucidation
    of important viral-host interactions will provide novel information
    regarding adenoviral-mediated lung disease in human populations and
    suggest potential targets for intervention.
                Mechanisms of Dispersion of Biological Agents
        After the September 11th terrorist attack, Americans have also been
    the victims of bioterriorism. Anthrax spores were used to kill selected
    persons. These biological agents were in powder form inside the mail.
    Some of the spores were dispersed by opening the mail and some just
    leaked out of the envelope. The dispersed spores were suspended in the
    air and caused respiratory symptoms by inhalation. There is no
    systematic study of the mechanisms of dispersion of biological agents
    and therefore, it is difficult to adopt an effective preventive method
    for this type of bioterrorist act. The objectives of the proposed study
    are (1) to understand the mechanisms of dispersion of biological agents
    during mail opening and leaking, (2) to investigate inhalation of the
    dispersed spores, (3) to assess the risk of the inhaled biological
    agent, and (4) to develop preventive methods for minimizing dispersion
    of biological agents. These studies will improve understanding of how
    the biological agents are dispersed and inhaled by exposed persons as
    well as help to develop preventive measures.
                Novel Methods of Health Surveillance for Early Detection of
                        Bio-terrorist Attacks
        Problems in detecting a bioterrorist attack are similar to problems
    encountered in detecting other disease outbreaks. Often small outbreaks
    are missed because of limitations in the diagnosis and reporting of
    diseases. Even large outbreaks can be missed when people do not seek
    health care, when laboratory tests are not performed or when the
    information is not relayed to public health officials. Detection can
    also be delayed until people are ill enough to justify seeking medical
    treatment. This occurred in several recent anthrax infections.
        A series of studies were conducted at the Lovelace Respiratory
    Research Institute to evaluate novel methods to enhance disease
    surveillance. A study of nurse hot line data from Milwaukee, Wisconsin,
    showed more than a 17-fold increase in calls for diarrhea during the
    1993 Milwaukee cryptosporidiosis outbreak. Moreover, consistent
    patterns of seasonal variation in diarrhea- and vomiting-related calls
    were detected from the Baltimore, Maryland and Albuquerque, New Mexico,
    hot lines. The study concluded that nurse hot line calls may provide an
    inexpensive and timely method for improving disease surveillance and,
    as a result, would rapidly evaluate the potential effects of
    bioterrorist attacks.
        We propose to modify nurse hot line information systems to add
    triage for specific biosterrorist events, test these modified systems
    and implement the systems in nurse hot line call centers. Lovelace
    Health Systems (LHS) is a supplier of nurse hotline protocols. In
    addition, LHS operates a nurse telephone triage service as does the
    University of New Mexico Medical Center. These are the only two call
    centers in Albuquerque. LHS is also part of a nationwide nurse hotline
    system operated by CIGNA Healthcare Systems. We propose to field test
    the modified nurse hotlines
                Lung Cancer Risk Estimates for Aerosolized Materials (Beta-
                        Emitting Radionuclides) from ``Dirty Bombs''
        Dirty bombs are low technology weapons containing radioactive
    materials that could potentially be used by terrorist groups.
    Radioactive materials (beta-emitting radionuclides) released into the
    air could be inhaled and cause early or late health effects in
    bystanders. Understanding the risk for health effects is necessary for
    managing such events. A U.S. Nuclear Regulatory Commission document
    (NUREG/CR-4214), completed in 1989, provides methods for estimating the
    radiological health risks of nuclear power plant accidents that can be
    used for evaluating nuclear terrorism related scenarios, including
    those involving dirty bombs. Since the publication of NUREG/CR-4214,
    data has become available that would significantly improve risk
    estimates for both early effects (pulmonary fibrosis) and late effects
    (lung cancer). Recent study of workers in the Russian nuclear weapons
    production has shown that early effects occurred at doses lower than
    expected based on the NUREG/CR-4214 models. In addition, lifespan
    studies in dogs have been completed at Lovelace Respiratory Research
    Institute that provide cancer data that is unavailable from studies of
    human populations. This experimental data will be used to refine the
    risks for health effects from inhaled radioactive materials that might
    be released from a dirty bomb. Improved risk estimates will assure that
    best information is being used to protect the health of the American
    public.
                Development of a Model to Assess the Toxicity of Low Doses
                        of Anthrax or Radiation
        Dr. Scott's career has largely focused on developing models for
    predicting risk to humans from exposure to low doses of radiation. Risk
    models have been developed for stochastic effects of low-dose radiation
    (e.g. cancer induction) as well as for health effects (lethality and
    morbidity) that arise in humans after exposure to moderate and high
    doses. His risk models are used in the MACCS/MACCS2 codes developed at
    Sandia National Laboratories for the U.S. Nuclear Regulator Commission
    for nuclear accident risk assessment and in the corresponding European
    code COSYMA. The risk models have also been used by the National
    Radiological Protection Board in the UK for assessing consequences of
    nuclear incidents and have impacted on decision making for the U.S.
    Department of Defense related to exposure of military personnel
    resulting from a nuclear detonation. The risk models allow for
    evaluating risks for specific health effects of exposure to single
    radiations, combinations of different radiations (including from
    internal and external sources as may arise from a terrorist act) and
    for brief or chronic exposure. In addition to risk modeling, Dr. Scott
    has also been involved in respiratory tract dosimetry modeling for
    inhaled toxicants such as high-specific-activity plutonium oxide
    particles. He has introduced novel approaches to characterizing risk
    from inhaled toxicants when small numbers of highly toxic particles are
    airborne. For such scenarios, probabilistic descriptions of intake and
    risk are used. The Crystal-Ball-based computer program his research
    group developed assigns a probability for intake (via inhalation) of
    highly toxic airborne material (e.g. plutonium oxide) for exposure
    scenarios of interest and accounts for inter-individual variability in
    respiratory function characteristics as well as for variability in
    aerodynamic characteristics of the airborne toxicant. The dosimetry
    model can be applied to males and females and for different ages. The
    risk and dosimetry models used by his research group could be adapted
    for application to a variety of terrorist-related exposure scenarios
    for U.S. citizens (e.g. inhalation exposure to anthrax).

        Senator Inouye. Do your studies and research suggest that
    your programs have potential for great success?
        Dr. Gonzales. I am not a scientist, Mr. Chairman, but the
    success is the fact that we had completed our work on the
    studies of inhalation of fission radioactive products to the
    point that the Department of Energy felt that it was no longer
    necessary to complete. We have done most of the work. Our
    scientists participated with the Russian incident in Chernobyl,
    and we are the experts in the area. We are used to
    accomplishing what we set out to do.
        Senator Inouye. I thank you very much, Mr. Gonzales.
        [The information follows:]
                Questions Submitted by Senator Pete V. Domenici
        Question. I understand that the $10 million that Lovelace
    Respiratory Research Institute is requesting for partnership with the
    Department of Defense will be divided among three component projects.
    However, would you please provide us with a full accounting of how you
    expect these resources to be allocated between the proposed Simulation
    Laboratory, the Aerosol Science Center, and the Counter-terrorism
    support?
        Answer. The projects will be conducted over a three-year period
    with the $10 million allocated in the following manner:

                                  [In millions]

    Simulation Laboratory.............................................  $3.6
    Aerosol Science Laboratory........................................   3.6
    Counter-terrorism Support Activities..............................   2.8
                                                                      ______
          Total.......................................................    10

        More specifically:
    Simulation Laboratory
        A facility for simulating contamination/exposure environments is
    necessary to conduct research to improve detection, characterization,
    and mitigation of Nuclear, Chemical, and Biological (NBC) terrorism
    threats. The simple containment chambers used in past studies of
    aerosol dispersion and animal exposures to NBC agents do not adequately
    simulate the contents and complexity of real-world office, school/
    daycare, housing, workplace, vehicle, or outdoor public environments.
    Laboratories especially modified to simulate dispersion-contamination-
    clean-up scenarios and to conduct studies of biological agents are not
    only necessary for the aerosol dispersion and health research to be
    conducted by Lovelace, but are also necessary for validating detection
    and mitigation technologies developed elsewhere. The latter need is
    evident from agency contacts (DARPA, EPA) Lovelace has already
    received.
        Existing government-owned facilities at the inhalation toxicology
    laboratory on KAFB will be modified using the requested funds to
    provide: (a) multiple (2-3) rooms capable of being configured to
    simulate different (e.g., the above) environments and having room-scale
    containment controls suitable for contamination with NBC agents
    followed by clean-up and re-use; (b) laboratories for secure storage of
    limited amounts of NBC agents and preparation of experimental set-ups;
    (c) laboratories for precisely-controlled exposures of animals to NBC
    agents other than in the simulation rooms; and (d) units for safely
    disposing of contaminated materials while maintaining complete
    separation of NBC hazardous materials from off-site public waste
    streams (sewage, landfill). The majority of the laboratories will be
    capable of operation at the biosafety P-3 level, with a small area
    capable of operation at the biosafety P-4 level. The requested funding
    will also allow conduct of initial ``proof of concept'' studies linking
    the Lovelace aerosol dispersion and health outcomes studies (described
    in accompanying sections) under realistic environmental conditions.
        Although the simulation laboratory will be primarily used for
    studies funded wholly at Lovelace by DOD and other agencies, the
    facility will also be used by agencies to validate detection and
    mitigation technologies developed by other organizations (especially
    LANL and SNL). Agencies soliciting development of improved technologies
    through other funding mechanisms will require ``test beds'' in which
    alternate technologies can be compared under identical conditions.
    Moreover, the basic operations (safety, security, etc.) of the
    simulation laboratory will be continually staffed by Lovelace to
    facilitate its use as a ``user facility'' by other organizations (e.g.,
    UNM) requiring P-3 or modest P-4 biosafety capability.
    Aerosol Science Laboratory
        The Aerosol Science Center will be devoted to the study of the
    release and dispersions of NBC agents under conditions of a terrorist
    attack. A major threat of terrorist attack is exposure to the NBC
    agents in the form of airborne particulates or aerosols. Biological
    aerosols such as anthrax spores and chemical agents can be readily
    released into a room or other public areas. An explosion of a dirty
    bomb containing radioactive material could contaminate a wide area. The
    Aerosol Science Center will allow Lovelace scientists and collaborators
    to focus on issues directly related to terrorist attacks. These
    include:
      --Studies of the dispersal of spores of biological agents,
      --Development of new detectors for airborne biological and
            radioactive agents,
      --Development of sampling strategies suitable for radioactive
            aerosols released from dirty bombs,
      --Development of protective technology for NBC aerosols, and
      --Assessment of inhaled dose from various types of terrorist attacks.
        There is a need for additional and upgraded facility alternations
    and equipment that are more directly related to the completion of the
    studies envisioned for the Aerosol Center. These include upgrading: The
    aerosol generation and sampling equipment; the aerosol wind tunnels;
    and the testing facilities for nuclear and biological aerosols, and
    state-of-art aerosol instrumentation.
        In the initial studies, we propose to examine the release of
    biological aerosols from envelopes and packages. This study will
    provide insights into the limitations and capabilities of bioterrorism.
    We will also study personal protection equipment for their efficiency
    in reducing exposure to biological agents. In addition to the DOD
    studies, the Aerosol Center in conjunction with the Simulation
    Laboratory, will serve as a validation laboratory for other agencies
    such as DOE, CDC and EPA to evaluate detectors, sampling strategies,
    and protection technology developed through other funding mechanisms.
    Counter-terrorism Support Activities
        The counter-terrorism support activities will address health effect
    issues related to the major types of agents that terrorists might use
    in attacks on U.S. citizens.
                Nuclear Agents--$1.8 million
        Dirty bombs are low technology weapons containing radioactive
    materials that could potentially be used by terrorist groups to
    contaminate large areas with radionuclides. If such occurs, it will be
    essential to quickly evaluate the degree of contamination of
    individuals, so that appropriate triage measures can be taken.
        The Lovelace studies will directly address this problem in a
    multifaceted approach. Animal studies will be conducted to determine
    the association between the degree of contamination and the presence of
    sensitive, easily available biomarkers of genotoxicity that can be
    measured in circulating blood lymphocytes. The animals will be exposed
    to simulated atmospheres from dirty bomb explosions, using information
    from our national laboratories on the appropriate source terms. The
    animal studies will provide data for use in mathematical modeling the
    dosimetry and the health risks from the exposures to allow quantitative
    health risk assessments for exposed individuals. Finally, we will
    develop a health surveillance strategy for rapid detection of
    bioterrorist attacks.
                Biological Agents (Program and Costs for these studies are
                        included in item II above.)
        Biological weaponry, particularly microbes (anthrax) and viruses
    (smallpox), continue to possess substantial risk from bioterrorism. The
    contribution of Lovelace in this area will be in addressing the gap in
    our knowledge of how these agents are dispersed. These studies are
    described in the proposals for the aerosol science laboratory described
    above. No health studies are planned at Lovelace.
                Chemical Agents--$1.0 million
        Nerve gases are chemical agents of terrorism that have already been
    used, for example, in the subways of Tokyo. While we know the effects
    of high levels of nerve agents, there is little information on the
    effects of the low levels of exposure that would be experienced by the
    vast majority of people involved in a terrorist attack. The LRRI,
    through studies funded under the DOD Gulf War initiative, has already
    conducted studies on the effects of low-level exposure of animals to
    the nerve gas, sarin. The findings indicate that low-level exposures
    suppress the immune system and alter the density of muscarinic
    acetylcholine receptor sites in the brain. These initial findings must
    be followed up to determine the exact nature of the immune suppression
    and the effect of the altered receptor sites on behavior. These studies
    are essential to understand the appropriate treatment of persons
    exposed to low levels of nerve gas following a terrorist attack.
        Question. After initial establishment of this partnership, what
    level of continued support would be required to sustain your research
    operations?
        Answer. We anticipate two components to the funding of our proposed
    partnership with DOD: Alternation and Upgrade costs for the current
    facilities and equipment mostly driven by items I and II; and multi-
    year funding for ongoing maintenance of these alterations, and for
    research programs in all three items I, II and II.
        We foresee that the funding requested will cover a three-year
    period. In that time we anticipate completion of the setup of the
    simulation laboratory and the aerosol science facility. These
    facilities, once established, will be available for use by other
    institutions for facilitation of federally funded research related to
    homeland defense and for validation of tools developed by others for
    use in protection against terrorist attacks. Funding from these
    external agencies is expected to help support the maintenance of the
    facility. Therefore we estimate that funding required for maintenance
    of the facilities will be no more than $0.5 million/yr.
        To continue the health effects research described under the
    counter-terrorism support activities will require a collaborative
    agreement with the DOD to continue those parts of the research most
    pertinent to DOD needs. Good progress on the projects is expected to
    occur within the three-year period of support, but the projects are
    multifaceted, and will undoubtedly require additional support for
    follow-up on some key initial findings. The funding required would also
    depend, in part, on other research needs of the DOD that may arise. One
    might estimate that a continued support of $3 million/yr would allow
    Lovelace to follow-up the earlier work and to respond quickly to new,
    urgent needs that may arise as the result of a terrorist attack.

        Senator Inouye. Now may I call upon representatives of the
    Department of Software and Electrical Engineering, Mr. Frank
    Lutz and Dr. Frank Tepfenhart, and the dean of the School of
    Science, Technology and Engineering of Monmouth University.
    Dean Francis Lutz.
    STATEMENT OF DR. WILLIAM TEPFENHART, DEPARTMENT OF
                SOFTWARE AND ELECTRICAL ENGINEERING, SCHOOL
                OF SCIENCE, TECHNOLOGY AND ENGINEERING OF
                MONMOUTH UNIVERSITY
    ACCOMPANIED BY DR. FRANCIS LUTZ, DEAN, SCHOOL OF SCIENCE, TECHNOLOGY
                AND ENGINEERING, MONMOUTH UNIVERSITY

        Dr. Lutz. Mr. Chairman, we thank you for the opportunity to
    speak with you this morning about the increased threat of
    bioterrorist attacks we are facing and the important role
    defense funding should play in developing homeland security
    countermeasures that could reduce human suffering and the loss
    of life.
        We recognize the important role the Centers for Disease
    Control and the Department of Health and Human Services play in
    the development of the biological and chemical countermeasures
    needed in an attack, but we believe strongly that the
    Department of Defense should take a lead in developing the
    logistics software information and engineering systems
    capability that will be needed to recognize and respond rapidly
    to a bioterrorist attack.
        The science and technology programs within defense have
    always been important to the conduct of basic and applied
    research by the engineering and science education communities.
    These programs enable new initiatives that sustain the
    technological currency of our defenses. Now they can and should
    also enhance our capacity to respond more rapidly to the
    consequences of covert bioterrorist attacks. Monmouth
    University wants to meet the need to develop a coordinated
    information system that can quickly identify patterns of
    research resulting from such attacks.
        We have natural sources of disease that can escalate into a
    problem of frightening proportions. Now we also have enemies of
    the State that would celebrate the spread of a deadly disease
    throughout the American populace. A major health threat can
    arise anywhere and spread like wildfire. Responses to health
    threats are for the most part local. It is at a local doctor's
    office or a local hospital that a patient will be diagnosed and
    treated. The county health department likely will be the first
    line of defense in containing a disease. A failure at the local
    level to respond rapidly and appropriately could escalate a
    problem into a catastrophe.
        We want to provide information systems that allow local,
    county, and State health departments to be a coordinated first
    line of defense. Our first effort toward this goal is a rapid
    response system. It is intended to provide early warnings of
    health threats, identify correct responses, task appropriate
    resources, and track the evolution of the problem. By providing
    the ability to more rapidly identify and correctly respond to a
    health threat, we hope to limit the number of illnesses and
    fatalities associated with a given outbreak.
        The rapid response system will contain a database that
    captures the current and past state of health within the
    community. This data can be processed using epidemiological
    models to predict the future. Variations from those
    expectations indicate possible problems and alert the county
    that actions are necessary.
        Once an alert has been triggered, the correct procedure for
    responding to the problem can be identified. Responses must
    take into account requirements for isolating infected
    individuals for distribution of medications, maintaining public
    order, and so on. Appropriate response is built upon knowledge
    about roads, waterways, population distributions, and
    structures for use as emergency shelters.
        As we have seen with our national intelligence agencies, it
    is necessary to share information among all affected agencies
    in order to prevent catastrophic events. The same is true
    within the health services community. The rapid response system
    will utilize and exploit data bases located at hospitals,
    veterinary hospitals, schools, nursing homes, and other local
    sources that contain data about the state of health at the
    county level. It will provide data to State and national
    systems. This kind of information-sharing enables a coordinated
    State and/or national response to a health threat.
        As of today, the number of victims of the attack on the
    World Trade Center who are Monmouth County, New Jersey
    residents totals 147. Too many of us know a victim or a
    victim's family member.
        Mr. Chairman, we appreciate the opportunity that you have
    given us to present our efforts, and we add our thanks to those
    of others to you and the committee for your continued support
    of the science and technology programs within Defense.
        Thank you.
        [The statement follows:]

                  Prepared Statement of Dr. William Tepfenhart

        Mr. Chairman, members of the committee, I thank you for the honor
    to speak with you this morning about the increased threat of bio-
    terrorist attacks we are facing and the important role defense funding
    should play in developing homeland security counter measures that could
    reduce human suffering and loss of life. We recognize the important
    roles that CDC and HHS play in the development of the biological and
    chemical counter measures encountered in an attack. But we believe
    strongly that DOD should take a lead in developing the logistics,
    software engineering and information systems capability we will need to
    recognize and respond rapidly to a bio-terrorist attack.
        We know how important the Science and Technology Programs within
    Defense have always been to the conduct of basic and applied research
    by the engineering and science education communities. These programs
    enable new initiatives that sustain the technological currency of our
    defenses. Now they can, and should, also enhance our capacity to
    respond more rapidly to the consequences of covert bio-terrorist
    attacks.
        Monmouth University wants to meet the need to develop a coordinated
    information system that can quickly identify patterns of disease
    resulting from a covert bio-terrorist attack. We believe that it is not
    so much a matter of if a health threat of major proportions arises, but
    when. We have natural sources of disease that can escalate into a
    problem of frightening proportions. We have enemies of the state that
    would celebrate the spread of a deadly disease through the American
    populace. Already, anthrax has been delivered through our mail as a
    weapon of terror.
        A major health threat can arise anywhere and at anytime. It can
    spread like wildfire through the population. Responses to health
    threats are, for the most part, local. It is at a local doctor's office
    or hospital that a patient will be diagnosed and treated. The county
    health department shall be the first line of defense in containing a
    disease. A failure at the local level to respond rapidly and
    appropriately will enable a problem to escalate into a catastrophe.
        At Monmouth University, we want to provide information systems that
    allow local, county and State health departments to be a coordinated
    first line of defense. Our first effort towards this goal is the Rapid
    Response System. It shall provide early warnings of health threats,
    identify correct responses, task appropriate resources, and track the
    evolution of the problem. By providing the ability to rapidly identify
    and correctly respond to a health threat, we hope to limit the number
    of illnesses and fatalities associated with a given outbreak.
        The Rapid Response System shall contain a database that captures
    the current and past state of health within the community. This data
    shall be processed utilizing epidemiological models to predict the
    future. Variations from expectations shall indicate possible problems
    and alert the county that actions are necessary. The introduction of a
    new disease into the region will also trigger alerts.
        Once an alert has been triggered, the correct procedure for
    responding to the problem shall be identified. Responses are all
    encompassing. It is necessary to take into account requirements for
    isolating infected individuals, distribution of medication, maintaining
    public order, and other social factors. Appropriate responses shall
    build upon knowledge about roads, waterways, population distributions,
    and structures for use as emergency shelters. A response must be
    thorough to be effective.
        As we have seen with our national intelligence agencies, it is
    necessary to share information among all affected agencies in order to
    prevent catastrophic events. The same is true within the health
    services community. The Rapid Response System shall utilize and exploit
    data bases located at hospitals, veterinary offices, schools, nursing
    homes, and other local sources that contain data about the state of
    health at the county level. It shall provide data to State and national
    systems. This kind of information sharing enables a coordinated State
    and/or national response to a health threat. It is only by taking such
    a broad view to the problem that we can limit the consequences of major
    health threats.
        As of today, the number of victims of the attack on the World Trade
    Center who were Monmouth County, New Jersey residents totals 147. Many
    of us know a victim or a victim's family member.
        Monmouth University is committed to making America a safer place to
    live. We appreciate the opportunity that you have given us to present
    our efforts. We look forward to the collaboration needed to develop
    this rapid response capability.
        Thank you.

        Senator Inouye. Has your university started any program to
    develop this rapid research response center?
        Dr. Lutz. We are in the process of trying to form
    coalitions locally so we could have the capability to develop
    the center as soon as we can.
        Senator Inouye. And you feel you do have the capability?
        Dr. Lutz. Yes, sir.
        Senator Inouye. Dr. Tepfenhart.
        Dr. Tepfenhart: We have given our statement together. I am
    here to answer any technical questions you may have. Thank you.
        Senator Inouye. Thank you, and we will study your proposal.
        Dr. Lutz. Thank you very much.
        Senator Inouye. Our next witness is from the University of
    Tulsa, Oklahoma. Dr. Tom Landers.
    STATEMENT OF DR. THOMAS L. LANDERS, EXECUTIVE DIRECTOR,
                CENTER FOR AIRCRAFT AND SYSTEMS/SUPPORT
                INFRASTRUCTURE, ON BEHALF OF THE COALITION
                OF OKLAHOMA INSTITUTIONS OF HIGHER
                EDUCATION
        Dr. Landers. Good morning, Mr. Chairman. I am statewide
    executive director of the CASI Center, which is the Center for
    Aircraft and Systems Support Infrastructure, which is a
    coalition of Oklahoma universities, including Tulsa University
    of Oklahoma and Oklahoma State University. We appreciate the
    opportunity to present testimony about the motivating national
    interest for CASI and our approach to serve those needs.
        Modern aircraft fleets, both military and civilian, have
    become increasingly expensive to develop, maintain, and
    operate, yet the DOD mission requires the fighting force
    capable of high readiness and mobility, so we continue to rely
    on our existing inventory of aircraft, many of which are aging
    systems, as referred to earlier this morning in the testimony
    by the American Society of Mechanical Engineers. An example is
    the KC-135, our primary air-to-air refueling platform, used
    heavily in Operation Enduring Freedom.
        The fleet has an estimated replacement cost of $40 billion.
    Every effort must be made to promote fleet readiness in this
    time of mobilization and to prolong the fleet life ultimately
    to as much as 80 years. Thus, the maintenance, repair, and
    overall capabilities of the Air Force's logistics centers are
    vital to force readiness in support of the war-fighter. The
    engineering and management challenges in this arena are not
    less than those for new weapons systems, and thus require the
    best of Government, industry, and university partnership. We
    gratefully acknowledge Congress' incremental funding to DOD for
    the CASI program in the past 2 years, and I might add that we
    appreciate the support of the Oklahoma Regions for Higher
    Education and the universities, which have invested about $1
    million in center infrastructure and project cost-sharing in
    the center's start-up phase.
        Since Oklahoma is an EPSCoR State, and you have heard
    testimony earlier this morning about EPSCoR, I might add that
    the vision for this center emerged from the Oklahoma EPSCoR
    process.
        One of the many successful CASI projects last year
    illustrates our potential impact on force readiness. It
    involved technology for maintenance of the B-1 bomber
    Pitotstatic Probe Interface, which is essential for aircraft
    flight control of the B-1 and other weapons systems employed
    during Operation Enduring Freedom.
        Due to active project participation by our faculty,
    students, civilian engineers of the Air Force, and uniformed
    maintainers, that team approach has resulted in very successful
    and rapid adoption by the Air Force, so the Air Force is
    estimating that the annual cost savings resulting from that
    will be at least $500,000 per year, which is like a 1-month
    payback on that $30,000 project. But perhaps more importantly,
    the capacity to generate sorties, bombing missions, is
    increased through compression of the aircraft's turn-around
    cycle by a factor of 7 to 1, from 2 weeks to 2 days.
        Today we respectfully request an additional $8 million of
    congressional incremental funding in the pending fiscal year
    2003 budget. The Air Force has defined and prioritized the use
    of previous funding, and will do so for the fiscal year 2003
    funding. Plans include an expanded program of summer quick-look
    projects such as the B-1 project that I mentioned. In-depth
    engineering support and technology insertion activities on
    these and other priority issues for the logistics centers,
    education and training programs to meet those centers'
    workforce needs of the future, and augmentation of technical
    and programmatic capabilities at the CASI universities so they
    will be able to better support in the future, in addition to
    further engagement of our regional universities, including the
    University of Central Oklahoma, and Langston University.
        Over the past 3 years, the CASI Coalition has become a
    credible partner of the Oklahoma City Air Logistics Center. We
    seek to provide expanded service to them and to other DOD
    logistics centers, and the requested funding is viable to grow
    the center toward that end.
        Thank you, and may I answer any questions.
        Senator Inouye. Dr. Landers, thank you for your testimony.
    We will certainly look into this as we proceed into the markup.
    Thank you very much.
        Dr. Landers. Thank you.
        [The statement follows:]

                    Prepared Statement of Thomas L. Landers

        Mr. Chairman and members of the Subcommittee, we thank you for the
    opportunity to submit this testimony for Oklahoma's Center for Aircraft
    and Systems/Support Infrastructure (CASI). This testimony will identify
    the motivating national interest 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 $3 million for
    the CASI program. Today we respectfully request an additional $8
    million in the pending fiscal year 2003 budget. The Air Force is
    actively leading the definition and prioritization of initiatives to
    utilize the proposed incremental funding. Plans include an expanded
    program of summer collaborative initiation projects, in-depth problem
    solving on these and other priority topics, collaborative engineering
    support/technology insertion activities, education/training support,
    augmentation of technical and programmatic capabilities at the CASI
    universities, and expansion of statewide participation by regional
    universities.
                         statement of national interest
        The United States is operating in a new era that requires a
    military force capable of high readiness and mobility. The aircraft
    fleets to support this mission have become increasingly expensive to
    develop, maintain, and operate. Fewer new aircraft are being built and
    the existing fleets must be retained in service periods that, in some
    cases, dramatically exceed the original design lifetime. For example,
    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. Thus, the maintenance, repair, and overhaul (MRO)
    capabilities of the Air Force's Air Logistics Centers (ALCs) are vital
    to force readiness in support of the warfighter. 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 MRO costs of these
    aircraft are rapidly increasing, fleet replacement is both expensive
    (e.g. $40 billion for the existing fleet of more than 600 C/KC-135
    aircraft) and lengthy (years before initial availability and decades
    for full fleet replacement). 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 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.
    However, the private sector sometimes lacks the specific expertise
    needed at the critical times to fully support the ALCs. There is also a
    need for an independent source of alternative approaches, innovations,
    translational R&D, and new technology insertion. 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
    engaged CASI to provide specialized and complementary expertise.
                           casi mission and approach
        CASI is the first academic entity of its type in the nation
    focusing on creation of a state-wide, multi-disciplinary approach for
    conducting applied research and development, modeling, technology
    insertion, and engineering support activities for aircraft MRO
    sustainment. CASI has been organized under the aegis of Oklahoma's
    State Regents for Higher Education to provide a single point of contact
    through which the aviation community may access the capabilities of
    universities in the State. CASI supports public and private-sector
    partners with economics-based life-cycle engineering, management
    methods, and technology insertion to assist aircraft fleet owners in
    increasing readiness, lowering maintenance cycle times and costs,
    promoting environmental compliance, and improving safety.
        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; and the University of Oklahoma Health
    Sciences Center. Langston University is the CASI Affiliate institution,
    providing expertise in information technology and Center outreach.
    Other regional institutions such as the University of Central Oklahoma
    and Cameron University are also involved, in technical topics such as
    corrosion electrochemistry and digital design capture. Representatives
    on the CASI Board of Directors act under the authority of the Vice-
    Presidents of Research at the respective universities. The Board
    includes Dr. John Nazemetz of Oklahoma State University (Co-Director),
    Dr. James Sorem of the University of Tulsa (Co-Director), and Dr.
    Thomas Landers of the University of Oklahoma (Executive Director).
        The OC-ALC Technology Thrust Areas represent the kinds of
    engineering support required by the Air Logistics Centers: Structural/
    Materials, Avionics/Electronics/Software, Information Technology,
    Environmental, and Depot Industrial Processes. Expertise is dispersed
    throughout Oklahoma's Higher Education System corresponding to these
    requirements, including:
      --Corrosion management, high performance materials, aircraft
            coatings, and ultra-precision surface finishing methods.
      --Fatigue and fracture mechanics.
      --Modeling, simulation, and forecasting for reliability, physics of
            failure, and logistics.
      --Supportability and economic cost-of-ownership modeling and business
            management.
      --Hazardous waste stream abatement, remediation, advanced
            environmental monitoring methods, and pollution prevention
            technologies.
      --Industrial, manufacturing, and human factors engineering (e.g.,
            man-machine studies, resource allocation, machining and
            metrology, process improvements, material handling and
            logistics, metrics and benchmarking, and industrial hygiene).
      --Information Technology in cyber-security and in the product
            realization and sustainment process, including digital
            collaborative design, database management, and data mining.
      --Avionics and ground electronics supportability applications such as
            real-time aircraft health assessment, fault isolation and
            detection, repair verification testing and calibration.
        In fiscal year 2000, the CASI consortium established a cost-share
    program designed to stimulate the CASI collaboration with the OC-ALC
    and other air logistics centers. The Oklahoma Experimental Program to
    Stimulate Competitive Research (EPSCoR) office, Oklahoma State Regents
    for Higher Education, and CASI universities provided seed funding for
    this initiative. The State Regents and CASI universities have also
    invested substantial resources over $1 million to develop the center
    infrastructure, including Center leadership and activation of contract
    mechanisms. The State cost share programs have fostered several new
    technology insertion activities with collaborating entities at the OC-
    ALC.
        During the past 3 years, CASI faculty and students have initiated
    approximately $6 million in projects supporting OC-ALC through
    contracts managed by firms in the private sector. These projects span
    the five Technology Thrust Areas. Five projects (5 faculty) in summer
    of 2000, 19 projects (23 faculty) in summer 2001, and 18 projects (23
    faculty) in summer 2002 have initiated collaboration with mission-
    critical programs at OC-ALC. These summer projects immerse the faculty
    and students in the problem domains and foster both short-term benefits
    to force readiness and long-term benefits to the growing partnership.
    Two projects in Summer 2001 demonstrate the positive impact of CASI
    work on force readiness, particularly in terms of reduced costs and
    process cycle times:
      --B-1B (Lancer) Pitotstatic Probe Interface.--This project involved
            development of leak-testing and calibration apparatus,
            technology and process, significantly benefiting B-1B force
            readiness. The project resulted in estimated cost reductions of
            $500,000 per year (a 1-month payback) and compression of the
            calibration cycle time by a factor of 7:1, from 2 weeks to 2
            days. The Air Force anticipates rapid force adoption due to
            active participation and highly favorable reception by
            maintenance staff.
      --E-3A (AWACS) Torque Tube Reengineering.--This project involved
            rapid prototyping and reverse engineering, resulting in a
            viable sourcing of scarce replacement parts. Through
            substitution of machined aluminum for cast titanium,
            replacement parts may be fabricated by a wide range of small
            businesses or even on base at the ALC in a few days. The
            previous sourcing required a lead-time of months.
        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
    decade. The CASI program introduces students to ALC mission and career
    opportunities.
        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.

        Senator Inouye. Now may I call upon the director of
    biodefense, University of Medicine and Dentistry of New Jersey,
    Dr. Nancy Connell.
    STATEMENT OF DR. NANCY CONNELL, DIRECTOR, THE CENTER
                FOR BIODEFENSE, UNIVERSITY OF MEDICINE AND
                DENTISTRY OF NEW JERSEY
        Dr. Connell. Greetings, Mr. Chairman, members of the
    committee. My name is Dr. Connell, and I am the director of the
    Center for Biodefense at the University of Medicine and
    Dentistry of New Jersey (UMDNJ).
        I would like first to thank the committee for its support
    of the Center for Biodefense over the past 3 years. UMDNJ is
    the Nation's largest freestanding public university in the
    health sciences. Located on five statewide campuses, the
    university is well-positioned to respond to chemical and
    biological terrorist attack through our expertise in infectious
    disease research and statewide resources in public education,
    training, emergency response, and planning.
        The Center for Biodefense was created in 1999 in
    anticipation of the possibility of bioterrorist attacks taking
    place in the United States. We are a truly collaborative effort
    engaged with State and local organizations such as the New
    Jersey Department of Health Office of Emergency Management to
    enhance our current capabilities and ensure consistency with
    their plans to coordinate activities in their fight against
    terrorism.
        With the support of this committee, UMDNJ has achieved over
    $8 million in targeted appropriations to develop the center's
    programs in research, education, training, public health, and
    emergency response. Funding secured for the center for fiscal
    years 2000 and 2001 is focused on research to better understand
    the human immune response to infection by a wide range of
    agents. Through proposals accepted by the U.S. Army medical
    defense research program, we at the center aim to develop
    faster, more efficient methods of identifying specific
    infections.
        Using gene chip technology, by the end of 2002 staff at the
    center will have characterized and compared the genetic
    response of human cells to infection by nine different agents,
    most of them select agents, including anthrax. We hope then to
    be able to differentiate one infection from the other by
    scrutinizing the immune response of the victim, and not by
    trying to identify the presence of the organism itself.
        In fiscal year 2003, the center will continue this work by
    testing new Deoxyribonucleic Acid (DNA) chips designed to
    display genetic sequences to allow for this rapid screening and
    positive identification of the presence of the agent in
    question. Experiments conducted by the center over the last 2
    years is using large amounts of data for UMDNJ scientists to
    draw upon in developing new directions in basic research in
    infectious diseases such as immunotherapy and vaccine.
        We respectfully request funding of $4 million for the
    Center for Biodefense to enhance and expand our scientific
    research agenda. The center's high containment biosafety level
    3 laboratory facilities act as a backup or surge capacity lab
    in the event that the New Jersey State labs are again
    overwhelmed by a State or national emergency.
        UMDNJ is respectfully seeking $2 million to upgrade and
    maintain its Biohazard Safety Level (BSL)-3 capabilities at a
    state of constant readiness and to expand its existing
    facilities in order to provide additional surge capacity and
    backup support for New Jersey and regional State laboratories
    in the event of another bioterrorist event.
        The center's other activities include emergency response
    planning, education, and training. In the wake of the 1993
    attack on the World Trade Centers, the university hospital
    Emergency Medical Services (EMS) set up a mutual aid compact
    with New York City in the wake of that first attack in 1993. As
    you all know, New York City lost communications and incidence
    command when the trade towers fell. What you may not know is
    that it was UMDNJ's emergency medical department and the center
    staff who were able to replace fallen communications, command
    facilities, and personnel in a fully coordinated manner for
    several weeks following the September 11 attack.
        New Jersey's overall response was a triumph of interagency
    cooperation, and the work accomplished by UMDNJ and the center
    leading up to this event was a major contributor to the State's
    achievements and the entire region's response to the worst
    terrorist attack in U.S. history.
        Support received from Congress in fiscal year 2002 is
    enabling the center to establish a statewide system of
    equipment, personnel, and training to further enhance the
    capabilities of New Jersey's first responders to react to and
    mitigate a mass casualty event. In fact, UMDNJ is already
    playing a significant role in the forthcoming expansion of
    surveillance activities in the State by training
    epidemiologists and improving infrastructure in local and
    county health departments.
        Practical lessons in epidemiology surveillance and other
    public health issues are already presented to local and State
    officials through the center's educational program. Since
    October 2001, more than 100 presentations have reached target
    audiences in most of the State's 21 counties, including law
    enforcement agencies.
        Support is formally and respectfully requested to address
    these kinds of requirements for the center's mass casualty
    response system, and to expand its training of emergency
    responders and public health officers on strategies to combat
    terrorism, and this would include development of a local
    statewide real time surveillance system.
        The Center for Biodefense is playing a critical role in the
    counterterrorism and bio defense activities within the State of
    New Jersey. We believe that a comprehensive approach
    encompassing research, education, public health initiatives and
    emergency response represents a model that could be
    successfully emulated in other regions of the Nation. We stand
    ready to offer our expertise to further our country's homeland
    defense initiatives.
        We wish again to thank the members of the committee for
    past support of UMDNJ's bioterrorism efforts and applaud the
    critical role you play in meeting our Nation's needs to prepare
    for these emerging threats.
        Thank you very much, and I will take questions.
        Senator Inouye. The members of the subcommittee looked upon
    this as the Lautenberg project. We will do our best to continue
    it.
        Dr. Connell. Thank you very much.
        [The statement follows:]

                    Prepared Statement of Dr. Nancy Connell

        Mr. Chairman and honorable members of this committee, my name is
    Dr. Nancy Connell and I am the Director of the Center for BioDefense at
    the University of Medicine and Dentistry of New Jersey--New Jersey
    Medical School.
        The University of Medicine and Dentistry of New Jersey (UMDNJ) is
    the largest freestanding public university of the health sciences in
    the country. The University is located on five statewide campuses
    including three 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 has created 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.
        UMDNJ's scientific and academic expertise uniquely positions us to
    develop a comprehensive, statewide program to combat chemical and
    biological terrorist attacks. With the strong support of the committee,
    UMDNJ has achieved over $8 million in Congressional targeted
    appropriations to develop a Center for BioDefense in New Jersey, with
    programs focused on research, education, training, public health and
    emergency response. The Center is engaged with various local and State
    organizations, such as the New Jersey Office of Emergency Management,
    the New Jersey Department of Health and Senior Services, and the Newark
    Department of Health to enhance current capabilities, ensure
    consistency within contingency plans and coordinate the Center's role
    in the fight against terrorism.
        UMDNJ established the Center for BioDefense in 1999 in anticipation
    of the possibility of bioterrorism attacks taking place in the United
    States. This foresight proved timely, as the country was subjected to
    an unprecedented release of a bioweapons agent, Bacillus anthracis, in
    the fall of 2001.
        Congressionally directed appropriations of $3.2 million secured for
    the Center in fiscal year 2000 and 2001 are focused on scientific
    research to better understand the human immune response to infection by
    a wide range of agents. Through proposals accepted by the U.S. Army
    Medical Defense Research Program, scientists at the Center aim to
    develop faster, more efficient methods of identifying specific
    infections.
        This work is vitally important in protecting all Americans,
    especially in the event of multiple and simultaneous use of biological
    weapons.
        Researchers at the Center theorize that detecting the use of a
    bioweapons agent, such as anthrax or plague, could be accomplished by
    looking at the host's cellular response within the first few hours
    after infection. This is because within minutes of infection the body
    mounts an immune response. Researchers can then determine whether early
    infection leads to specific profiles of gene expression, a
    characteristic pattern that can differentiate one infection from
    another. Using gene chip technology, by the end of 2002, staff at the
    Center will have characterized and compared the genetic response of
    human cells to infection by nine different agents, including anthrax.
    The other agents that are being studied are plague, tularemia,
    glanders, hantavirus, dengue virus, influenza virus, monkeypox and
    multidrug-resistant TB.
        In fiscal year 2003, the Center for BioDefense will continue this
    work by amassing the data collected so far and testing new ``DNA
    chips'' that will be designed to display sequences allowing for the
    rapid screening and positive identification of the agent in question.
    Additional experiments will focus on understanding the functions of the
    genes identified in the first 2 years of the funded research. During
    2001-2002, Center scientists will have identified key aspects of the
    human immune response to infection by listed agents. These experiments
    will yield large amounts of data for UMDNJ scientists to draw upon in
    developing new directions in basic research in infectious diseases,
    such as immunotherapy and vaccines. For example, last fall
    neurochemists at UMDNJ-New Jersey Medical School predicted the long-
    term effects of exposure of neurons to anthrax toxins and began studies
    of the molecular basis of these interactions. We now know, as we
    predicted, that many of the victims of last fall's attacks who
    recovered from inhalation anthrax have lasting nuerological problems.
    UMDNJ respectfully requests funding of $4 million for the Center for
    BioDefense to enhance and expand its scientific research agenda.
        In addition to research, the Center for BioDefense is playing an
    increasingly important role in all other areas of counter-terrorism and
    biodefense activities within the State of New Jersey and across the
    nation.
        The Center's high containment (BSL-3) laboratory facilities act as
    a backup, or surge capacity lab, in the event the New Jersey State labs
    are overwhelmed by a State or national emergency. This is an important
    element in the State's planning and response to the anthrax outbreak
    last year. In addition, Center staff in the BSL-3 labs offer resources
    and assistance to law-enforcement agencies for specialized training in
    such topics as recognizing a clandestine biological laboratory. Staff
    expertise and BSL-3 support is lent to industry and other academic
    institutions as well.
        In order to remain at the cutting edge of biodefense research, and
    to remain a resource in the war on terrorism, UMDNJ is proposing to
    upgrade, expand and maintain the BSL-3 laboratory. Support of $2
    million is respectfully sought to maintain the current BSL-3 Lab at a
    state of constant readiness and to upgrade and expand existing
    facilities. These enhanced laboratory facilities will provide
    additional surge capacity and back-up support for the NJ State
    laboratories in the event of a bioterrorist event.
        The Center's other activities include emergency response planning,
    education and training. The Center and UMDNJ's extensive Emergency
    Medical Services (EMS) department were planning, preparing, exercising
    and training with New Jersey's first responders and alongside New York
    EMS and law enforcement personnel long before September 11th. A mutual
    aid compact had been implemented following the first World Trade Center
    bombing years ago. On September 11, when New York officials had to ask
    many to withhold their help because it could not be effectively
    integrated into their emergency operations, these officials actually
    reached out to the Center for BioDefense and UMDNJ, along with the New
    Jersey State Police, and requested their assistance. Having co-trained
    with New York personnel for years, UMDNJ and Center staff were able to
    replace fallen communications, command facilities and personnel in a
    fully coordinated manner for several weeks following the September 11th
    terrorist attacks. UMDNJ's commitment to success was evident in the New
    Jersey response to this event as our Emergency Medical Services
    department coordinated all actions of the State's EMS contingent for
    the 2-week duration of our involvement. New Jersey's overall response
    was a triumph in interagency cooperation; the work accomplished by
    UMDNJ and the Center leading up to this event was a major contributor
    to the State's achievement.
        Congressionally targeted appropriations approved for the Center in
    fiscal year 2002 are enabling us to establish a regional statewide
    system of vehicles, equipment and personnel to further enhance the
    capabilities of New Jersey's first responders to react to and mitigate
    mass casualty events. The Center's staff provides training to first
    responders on how to fully utilize the capabilities of these assets.
        While the responsibility of surveillance rests within the State and
    local governments, UMDNJ has played a significant role in the
    forthcoming expansion of surveillance activities in the State. Funded
    through the Centers for Disease Control, New Jersey will be expanding
    central state and local capacities for surveillance. UMDNJ will work
    closely with the State to train new epidemiologists and improve
    infrastructure in local and county health departments. Practical
    lessons in epidemiology, surveillance, and other public health issues
    are already presented to local and State officials through the Center's
    education programs. At these forums, strategies to combat bioterrorism
    are taught, much in the same manner as in the military's ``War
    Colleges.'' More than 90 education and training presentations given by
    the Center since October 2001 have reached each region of the State and
    most of its 21 counties. UMDNJ is respectfully requesting $2 million to
    address equipment requirements of its mass causality vehicles, and to
    sustain and expand its training of emergency responders, government
    officials and public safety health officers on strategies to combat
    bioterrorism.
        Additionally, the Center for BioDefense is poised to develop a
    real-time EMS-based surveillance system to be integrated with the
    University's electronic medical records system that now covers 1,000
    faculty physicians and 200,000 patients. In conjunction with the
    State's existing and proposed surveillance systems, this enhanced
    system, integrating data from the State's busiest EMS systems operated
    by or affiliated with UMDNJ, will help public health officials to more
    quickly detect acts of bioterrorism and other threats to the public
    health. UMDNJ respectfully seeks $2 million for this initiative.
        The Center for BioDefense at UMDNJ is playing a critical role in
    the counter-terrorism and biodefense activities within the State of New
    Jersey. In the future we will work to expand even further our
    cooperative efforts with neighboring States to insure that our region
    is well prepared to meet the new threats of bioterrorism. Our
    comprehensive approach to bioterrorism, encompassing research,
    education, public health initiatives and emergency response represents
    a model that could be successfully emulated in other regions of the
    nation. We stand ready to offer our expertise to further our nation's
    preparedness.
        We wish to thank the Members of this Committee for their support of
    UMDNJ's initiatives that has allowed us, in a few short years, to gain
    a State and national reputation for leadership and rapid response to
    terrorism. We look forward to continuing to provide leadership within
    these areas.
        Thank you.

        Senator Inouye. Our next witness is the executive director
    of the American Society for Bone and Mineral Research, National
    Coalition for Osteoporosis and Related Bone Diseases, Ms. Joan
    Goldberg.
    STATEMENT OF JOAN GOLDBERG, EXECUTIVE DIRECTOR, THE
                AMERICAN SOCIETY FOR BONE AND MINERAL
                RESEARCH, ON BEHALF OF THE NATIONAL
                COALITION FOR OSTEOPOROSIS AND RELATED BONE
                DISEASES
        Ms. Goldberg. Mr. Chairman, thank you. I am Joan Goldberg,
    as you said, executive director of the American Society for
    Bone and Mineral Research, and also representing the National
    Coalition for Osteoporosis and Related Bone Diseases. I am here
    to urge you and your colleagues to continue the support for
    maintaining the Department of Defense Bone Health program.
        Bone health is an essential element of military readiness.
    The President's budget seeks to assure military readiness by
    keeping our first-to-fight forces trained and equipped to adapt
    to emergency threats. This requires the ability to endure
    vigorous exercise during training and combat.
        From the moment a soldier gets his or her orders, he or she
    faces new physical demands, including frequent weight-bearing
    activities such as marching, running, and carrying heavy
    equipment, all of this to develop a high level of physical
    fitness. An increase in weight borne heightens the risk of
    stress factors, and the military is carrying more than ever.
    Dietary deficiencies add to the risk.
        On March 4, as reported in The Washington Post, our troops
    climbed the forbidding slopes of the Takora Gar Mountain in
    Afghanistan. They were carrying upwards of 80 pounds on their
    backs in military gear. They also took turns carrying their
    wounded comrades on the uneven terrain in freezing cold at high
    altitude awaiting helicopter rescue. Their joints swelled. With
    soldiers less well-conditioned, a fracture or broken leg or
    foot could have spelled the difference between survival and
    death.
        Stress fractures occur too frequently and impair military
    readiness. They are costly in service time lost and medical
    expense. The incidence of stress fracture among U.S. military
    is high. From an estimated 1 to 20 percent. The highest rates
    are for women. Stress fractures are most common in the legs and
    feet, but they also occur in the ribs and upper extremities.
    For healing to occur, a recruit must stop running or marching
    for weeks. For many of our military in Afghanistan and
    elsewhere, the time simply is not available.
        The DOD recognizes stress fracture is a major problem and
    has supported the following research:
        A study in San Diego that found a direct correlation
    between current and prior fitness levels in stress fracture,
    and developed a tool being tested for its predictive value.
        A University of Ohio investigation revealed that
    reproductive function is not disrupted in women because of an
    increase in intensive training or a low fat diet, as commonly
    believed. Rather, menstrual cessation, which means a drop in
    estrogen production, which has a harmful impact on bones,
    occurs because the calorie or energy intake is insufficient to
    meet the increased energy demands of intensive training, and
    you can see that in 5 days.
        Another study found that dehydroepiandrosterone (DHEA), a
    hormone, may help maintain and improve bone mass in women with
    low estrogen, such as women with anorexia nervosa.
        Another demonstrated that alcohol consumption increases the
    risk of skeletal injury during rigorous exercise by inhibiting
    bone remodeling and reducing bone mass.
        These findings are directly translatable into strategies to
    improve the military's bone health through improved physical
    conditioning and diet, but we need to learn more to develop
    more prevention approaches, better diagnostic tools, and
    improve treatment approaches.
        For example, another DOD study discovered that ultrasound
    alone is not helpful in predicting fracture, but new
    technologies, including a new Positron Emission Tomography
    (PET) device, looks promising. Another study just published in
    the Journal of Bone and Mineral Research indicated that Cox-2
    inhibitors slow or stop bone healing in fractures in animals,
    while an editorial suggested a change in treatment for humans
    based on this evidence.
        New studies are urgently needed to identify new strategies
    to eliminate stress fracture during physically intensive
    training, in combat, to optimize physical training, and
    nutrition standards for helping young men and women, and to
    develop practical methods and markers to predict impending
    injury.
        Promising DOD research is ongoing. It includes
    investigations of vitamin D and calcium intake, exercise, and
    new diagnostic methods, among others. 2002 funding will likely
    address the effective resistance training on bone structure and
    function, practical monitoring strategies to identify
    individuals at risk, and interventions to optimize bone
    turnover to favor building bone.
        Mr. Chairman, stress fractures erode the military's
    physical capabilities and reduce military readiness. We thank
    you for your past well-spent support for funding. We
    respectfully request that the Department of Defense maintain an
    aggressive and sustained bone health research program at the
    level of $12 million in fiscal year 2003.
        Thank you.
        [The statement follows:]

                      Prepared Statement of Joan Goldberg

        Mr. Chairman and Members of the Committee, I am Joan Goldberg,
    Executive Director of the American Society for Bone and Mineral
    Research. I am here today on behalf of the National Coalition for
    Osteoporosis and Related Bone Diseases to urge your support in
    maintaining the bone health research program within the Department of
    Defense and providing sufficient funding to sustain the program.
        Bone health is an essential element of military readiness. The
    President's budget ``seeks to assure military readiness by keeping our
    ``first to fight'' forces trained and equipped to adapt to emerging
    threats.'' A major component of being trained and equipped is assuring
    that the physical health of our troops is at a level to endure the
    vigorous exercise during training and during operational activities
    associated with combat. In peacetime or combat, soldiers are at risk
    for injury, incapacitation, and degraded performance resulting from
    injuries such as stress fractures--all of which compromise the mission,
    readiness, and budget of the Armed Forces.
        From the moment a soldier gets his/her orders, that individual
    undergoes a new set of physical demands. Military training utilizes
    frequent weight-bearing activities, such as marching and running, to
    develop a high level of physical fitness. It also introduces additional
    factors such as carrying a pack, wearing boots, and training on uneven
    terrain. The increase in weight bearing increases the risk of stress
    fractures to the lower extremities. Factors such as low bone density,
    dietary deficiencies, menstrual irregularities, insufficient/inadequate
    exercise and sleep deprivation also contribute to the development of
    stress fractures, yet the optimum diet, amount of sleep and type of
    exercise best employed for bone health are not known.
        Stress fractures are extremely costly to overall U.S. military
    readiness in terms of both service time loss and medical expenses.
    Costs due to stress fractures just among the 2,000 female Marine
    recruits trained annually are estimated to be $1,850,000 per year, with
    4,120 lost training days and an extended training period. The incidence
    of stress fracture among U.S. Military recruits is high, ranging from
    approximately one to 20 percent, with higher rates reported for women
    than for men, with women suffering a higher rate of particularly
    debilitating pelvic stress fractures. Stress fractures are most common
    in the tibia (legs) and metatarsals (feet), but also occur in non-
    weight bearing bones, including the ribs and upper extremities. In
    order for healing to occur, the stress must be removed, which means
    that a recruit would have to stop running or marching for a period of
    time in order for healing to occur.
        The DOD has recognized stress fracture as a major problem and,
    through its Army Military Operational Medicine Research Program,
    supports research to advance the understanding of methods to improve
    bone health of its recruits. This research will result in strategies to
    eliminate stress fracture during physically intensive training and
    combat; to optimize physical training and nutrition standards for
    healthy young men and women; and to develop practical methods and
    markers to predict impending injury (poor physical fitness at the time
    of entry into recruit training is a strong predictor of injury).
                                current studies
        Developing an injury model based on training, physiological and
    population-related factors, and refining predictions of stress fracture
    based on loading, bone damage and remodeling estimates.
        Determining if a protein-based supplement food bar can promote an
    increase in bone mass in physically active young military trainees with
    adequate calcium intakes. If a measurable benefit to bone mineral
    accretion can be demonstrated through the use of a nutrient supplement,
    this could be of immediate use in military feeding strategies.
        Examining gait patterns associated with stress fracture risk and
    specifically determining structural and biomechanical factors that
    contribute to tibial stress fracture risk. Identification of
    biomechanical factors associated with stress fracture may lead to
    development of preventive measures such as strategies for gait
    modification to reduce loading rates.
        Comparing recovery times from tibial stress fracture in subjects
    treated with electric field stimulation. This study will also determine
    the most cost effective approaches to diagnosis and treatment of tibial
    stress fracture to accelerate return to duty. Stress fracture healing
    time using conservative but generally favored treatments of rest from
    weight bearing activity averages 3 months, making this a significant
    cost to military readiness.
        Assessing the effects of oral contraceptives use on bone mineral
    density and incidence of stress fracture in young female runners. (An
    earlier study looked at oral contraceptives and discovered decreased
    peak bone mass in the rat.)
        Determining if skeletal physiology including PTH, vitamin D, bone
    turn over, and bone density at the beginning of military training
    predicts risk of stress fractures. To determine if calcium intake,
    exercise patterns and menstrual function during military training
    contributes to the level of peak bone mass and risk of stress fractures
    over 4 years at the U.S. Military Academy.
                                recent findings
        Research has demonstrated that thoughtful modification of physical
    training programs can delay the time to stress fracture occurrence and
    reduce the overall incidence of stress fractures without compromising
    physical standards or training level. This research is expected to
    provide information to further reduce training injuries through better
    identification of at risk individuals, and through scientifically based
    training, dietary, and medical interventions.
        A meta-analysis of 76 studies demonstrated that progressive
    resistance and aerobic training increase and/or maintain bone density
    in women.
        Another ongoing study discovered DHEA may help maintain or improve
    bone mass in low estrogen women, such as those with anorexia nervosa.
        Scientists also found that ethanol consumption increases the risk
    of skeletal injury during rigorous exercise by inhibiting bone
    remodeling and reducing bone mass. Moreover, when bone is subject to
    lack of movement (e.g., after injury), ethanol worsens the negative
    effects. (Bed rest, for example, already has a negative impact on
    bone.)
        It has also been found that 1 week of rest early in basic training
    provides no protective effect against stress fracture in male soldiers.
                                 areas of need
        Research is needed to better relate the effects of types of
    physical training with specific diets and health habits in terms of
    their impact on the acquisition of peak bone mass. Also, longitudinal
    studies of bone physiology and bone remodeling in physically active
    populations need to be conducted, in addition to identifying the
    influences of specific types of intense physical training.
        Mr. Chairman, stress fractures erode the physical capabilities and
    reduce the effectiveness of our combat training units, essentially
    compromising military readiness. Therefore, it is imperative that the
    Department of Defense maintains an aggressive and sustained bone health
    research program at a level of $12 million in fiscal year 2003.

        Senator Inouye. I did not realize that stress fractures
    were this commonplace in the military.
        Ms. Goldberg. Very common. There are a lot of different
    studies, and this actually is a report of the ongoing research
    going on at the Department of Defense. Some studies find 6
    percent, 10 percent. It depends on whether they are looking at
    officers in training or recruits. It is also common in the rest
    of the population.
        Senator Inouye. Is it primarily dietary?
        Ms. Goldberg. We know that dietary puts you at risk. We
    also know that poor physical conditioning before starting
    physical training is another factor. We think that sleep
    deprivation and alcohol consumption are also involved, and we
    are trying to identify exactly what is the best nutrition and
    physical conditioning to help prevent that. Genetics may be
    involved as well.
        Senator Inouye. We will check this out. Thank you very
    much.
        Our next witness is the director of the legislative
    programs of the Fleet Reserve Association, Master Chief (Ret.)
    Joe Barnes.
    STATEMENT OF MASTER CHIEF JOE BARNES, (RET.), DIRECTOR,
                LEGISLATIVE PROGRAMS, FLEET RESERVE
                ASSOCIATION
        Chief Barnes. Mr. Chairman, Fleet Reserve Association (FRA)
    appreciates the opportunity to present its views on the 2003
    defense budget. The association thanks this distinguished
    subcommittee for its leadership and strong support for the pay,
    health care and benefit improvements enacted in recent years.
    My statement today addresses the end strength's pay and other
    priority personnel issues. Bob Washington, FRA's director of
    member services, is speaking later on behalf of the military
    coalition.
        The National Fleet Reserve Association (NFRA) strongly
    supports the coalition's positions on health care, reserve
    issues, and other quality of life programs. First, FRA supports
    an increase in end strength to ease both operational and
    personnel tempos now imposed upon a force too small to sustain
    the war on terrorism, while at the same time attempting to meet
    other operational commitments.
        Second, the association recommends continued progress
    toward closing the military pay gap by funding higher than
    civilian pay increases. Congress is also urged to repeal the
    law that authorizes annual military pay caps below civilian
    wage levels.
        Third, Congress should be commended for authorizing the
    Navy to determine the amounts of sea pay and submarine pay its
    personnel receive. Although the sea pay program expanded,
    submarine pay rates have not changed for 13 years. FRA requests
    support for the appropriations necessary to cover the cost of
    the new rates for these programs.
        Fourth, the association again encourages Congress to fully
    authorize and fund the concurrent receipt of military retired
    pay and veterans disability compensation for disabled retirees.
    This was authorized for 2002 contingent upon funding being
    included in the 2003 budget. The Senate Budget Committee
    allocated funding in its budget resolution to authorize and
    gradually fund concurrent receipt beginning in 2003 for
    military retirees rated 60 percent and above. This mirrors
    language in the House budget resolution, and indicates progress
    towards FRA's objective of full concurrent receipt for all
    disabled retirees.
        Fifth, FRA appreciates the increases in the allowance for
    temporary lodging expenses authorized for 2002 and the
    authority to raise PCS per diem rates. However, service members
    still incur significant cost in complying with relocation
    orders.
        Sixth, the 2003 budget reduces commissary funding by $137
    million, and eliminates over 2,600 positions from stores and
    headquarters staff by September 30, 2003. FRA is concerned that
    the size and scope of the reductions may negatively impact
    quality and service to customers. FRA strongly recommends full
    funding of the commissary benefit in 2003 and beyond, and
    opposes any efforts to privatize commissaries.
        Seventh, spouse employment is a major consideration in the
    well-being and retention of service members. FRA salutes
    Congress for adopting provisions last year to provide military
    spouses with financial and other assistance and job training
    and education. The association urges continued support and
    sufficient funding for these programs in the fiscal year 2003
    budget. FRA encourages your review of other issues addressed,
    including the needed reform of the survivor benefit plan and
    equity amendments to the Uniformed Services Former Spouses
    Protection Act.
        Finally, two FRA initiatives are discussed, the extension
    of a dislocation allowance to retiring service members, and the
    retention of the final month's retired pay by surviving spouses
    at the time of the retiree's death. If authorized, the
    association asks your support for these proposals.
        Thank you again, Mr. Chairman, and I stand ready to answer
    any questions you may have.
        [The statement follows:]

                        Prepared Statement of Joe Barnes

                                  introduction
        Mr. Chairman: The Fleet Reserve Association (FRA) is grateful to
    have been invited to present its statement on the fiscal year 2003
    Defense Budget. The Association's President and Board of Directors also
    thank you and the members of the Subcommittee staff for the outstanding
    quality of life successes gained over the years for the men and women
    serving in the Armed Forces of the United States. FRA salutes each of
    you for a job well done.
        The FRA is the oldest and largest Association in the United States
    representing enlisted men and women of the Sea Services whether on
    active duty, in the reserves, or retired. Established in 1924, FRA's
    primary mission is to act as the premier ``watchdog'' organization for
    maintaining and improving quality of life for Sea Service personnel. In
    the past 5 years, for example, FRA led the way in a campaign to amend
    the military's ``Redux'' retirement system for the better and provided
    a pay study referenced by Congress in the adoption of pay reform for
    mid-grade enlisted personnel in 2001, and subsequently by Congress in
    2002 with regard to further revising the pay for all noncommissioned
    and petty officers in grades E5 thru E9.
        There are other issues and programs advocated by FRA over the past
    few years that are now a reality including sea duty pay reform, Tricare
    for Life and expanded pharmacy benefits for older military retirees.
    The latter are major benefit enhancements also advocated by The
    Military Coalition which is comprised of 33 nationally prominent
    military and veterans organizations.
        FRA is the leading enlisted association in the Coalition and has
    the distinction of holding two of the six elected offices (President
    and Administrator) in the Coalition. Additionally, three of nine
    Coalition committees are co-chaired by members of FRA's legislative
    staff.
        The Association strongly endorses all Coalition positions on health
    care, reserve issues, and other quality of life programs. This
    statement addresses some of the same issues including end strengths,
    basic pay, commissary funding, concurrent receipt, PCS reform, and
    spousal employment plus other in-house concerns such as submarine pay.
                                 end strengths
        In a recent appearance before the Senate Armed Services Committee
    the Chairman, Joint Chiefs of Staff, avowed that the Armed Forces will
    defeat terrorism ``no matter how long it takes or where it takes us.''
    Missing from the statement was the promise to succeed ``no matter how
    many uniformed service members are needed to do the job.''
        Since 1995, FRA has annually requested increases in military
    manpower. Operational levels involving uniformed members of the Army,
    Navy, Marine Corps, Air Force, and Coast Guard escalated significantly
    over the past decade to a point where the United States does not have
    adequate numbers of military personnel to fully accommodate the many
    commitments ordered by the Department of Defense and area commanders-
    in-chief.
        Today, those engagements have accelerated to meet anti-terrorism
    campaigns directed by the Bush Administration, including Transportation
    (Coast Guard and Federal Aviation Administration), and other
    governmental agencies involved in homeland defense measures. Over
    70,000 National Guard and Reservists are now serving in some active
    duty capacity, while increased numbers of active duty service members
    are assigned duties in and near Afghanistan and in other foreign
    locations on land and sea.
        Press reports indicate the Army has told the Pentagon it needs
    20,000 to 40,000 additional troops over the next 5 years, the Air Force
    7,000 and possibly more than 20,000, and Marine Corps an additional
    2,400. The Navy declined to offer a specific number. However, the
    Secretary of Defense isn't favorable to the increase in manpower. FRA
    must support the military services. Before September 11 some defense
    officials, both civilian and military, complained that uniformed
    personnel were doing more with less, were over deployed, overworked,
    and stretched thin--this during a peace time environment. Now that the
    United States has ordered troops into Afghanistan and surrounding
    areas, military personnel are stretched even more. Nevertheless, the
    troops are serving magnificently. The question is: How much longer?
        Recommendation.--That this Subcommittee agrees to increase funding
    to ease both operational and personnel tempos now imposed upon a force
    not sufficient in numbers to sustain current operational commitments.
    Although Congress authorized a small increase in the fiscal year 2002
    strengths of the Navy and Air Force, the numbers fell short of their
    needs. The Army and Marine Corps, however received no increase in
    manpower, but are seeking increased numbers. FRA recommends that the
    Senate give greater credence to the needs of the individual services by
    adopting the House's increase in uniformed manpower for fiscal year
    2003. The following warning is noteworthy in a Navy Times editorial of
    12/10/01, 'Don't overextend military:' Time and again, America's armed
    forces have shown they'll do what it takes to serve their country. But
    history offers a warning: Work them too hard, keep them away from home
    too long, overlook their welfare and eventually they will walk.
                                   basic pay
        FRA salutes the 106th and 107th Congresses for authorizing pay
    reform for mid-career enlisted personnel effective on July 1, 2001, and
    again on January 1, 2002, as well as for senior enlisted members in pay
    grades E8 and E9. FRA is particularly pleased that its 1999 study on
    mid-career noncommissioned and petty officers pay played a significant
    part in opening the path to pay reform for enlisted personnel in pay
    grades E5 and above.
        The Association understands that the Administration is seeking an
    additional $300,000,000 in fiscal year 2003 to execute further pay
    reform for mid-career enlisted personnel and to target raises for
    critical officer grades. FRA welcomes this initiative while recognizing
    the importance of Congress' commitment to increase military pay each
    year by 1/2 percent more than the average wage hike in the civilian
    sector to help close the pay gap by the year 2006.
        FRA appreciates Congress' resolve to provide comparable pay for the
    Nation's Armed Forces personnel. This should have been authorized years
    ago when the gap was closed by double digit pay increases in 1981 and
    1982. In the Uniformed Services Pay Act of 1981, Congress made it clear
    it was trying to restore in current dollars the relationship of
    military compensation to pay in the private sector ``that existed in
    1972 when Congress adopted the All-Volunteer Force.''
        Congress also declared that substantial' improvements in pay rates
    ``are necessary in fiscal year 1982'' to provide necessary incentives
    for a career of military service. Additionally, the Senate found fault
    with the mechanism determining comparability indices used at that time
    for proposing annual increases in military pay, and suggested that a
    better mechanism be developed within the next year. However, budget
    constraints since then and until recently prevented any improvement in
    developing legislation addressing the pay gap.
        Recommendation.--That this Subcommittee adequately fund Congress'
    commitment to closing the military pay gap by 2006 through the use of
    higher-than-civilian-pay increases to military basic pay. However, in
    order not to allow military pay to again fall behind that in the
    civilian community, Congress must act to repeal the law that authorizes
    capping annual military pay increases below that of civilian wages.
    Additionally, FRA recommends that future pay increases for the Armed
    Forces be based on the performance value of each pay grade within its
    own category; enlisted, warrant officers, and commissioned officers.
    For example: If senior NCOs and petty officers have a greater value to
    the military than warrant or commissioned officers of certain pay
    grades, then the basic pay for the senior enlisted should be of a
    greater premium. The opposite would also apply.
                             sea and submarine pay
        Congress is to be lauded for authorizing the Navy to determine the
    pay its personnel will receive for sea and submarine duty. The Navy has
    taken steps to expand its career sea pay program to include junior
    personnel and has diverted funds totaling $150,000,000 to finance the
    new rates. Submarine pay is however, another matter. The rates have not
    changed for 13 years and the purchasing power of submarine pay has
    deteriorated significantly. There is no money in the Navy's fiscal year
    2002 budget to increase the rates to reflect the arduous duty required
    of a submariner.
        Today's operational commitments and shortages of manpower place
    even heavier burdens on personnel deployed on naval ships and
    submarines. They are deserving of higher rates for their outstanding
    effectiveness in discharging their mission to provide the United States
    with the world's most efficient and powerful naval force.
        Recommendation.--Congress is urged to consider the sea and
    submarine duty programs as an imperative part of the Nation's vital
    defenses. Both programs should be funded independently. FRA requests of
    Congress the necessary appropriations to cover the costs of the new
    rates for the two pays as established by the U.S. Navy.
                               concurrent receipt
        The Fiscal Year 2002 National Defense Authorization Act (NDAA)
    includes a provision addressing the concurrent receipt of military non-
    disability retired pay and any VA compensation for service-connected
    disabilities. Currently, the receipt of VA compensation causes a like
    reduction to a retired service member's military retired pay. As a
    result, retired service members believe they are forced to pay for
    their service connected disabilities.
        The fiscal year 2002 NDAA authorizes concurrent receipt but only if
    the Administration seeks that authorization and includes funding in its
    fiscal year 2003 budget. This did not happen, however, the Senate
    Budget Committee allocated funding in its fiscal year 2003 Budget
    Resolution to authorize and gradually fund over several years
    concurrent receipt for military retirees rated 60 percent and above.
    This mirrors language in the House Budget Resolution for fiscal year
    2003. Unfortunately, the Senate resolution has yet to come to the
    Senate floor for debate.
        FRA is not privy to the Administration's reason for not endorsing
    concurrent receipt. However, government officials often reference a
    1993 Congressional Research Service report citing programs (i.e.--
    social security, unemployment compensation, black lung disease) that
    have offsets or limits in concurrent receipts. However, the report
    states emphatically that: ``. . . veterans' disability compensation is
    always payable fully and concurrently with income or benefits from
    nonmilitary sources because concern about preserving work incentives
    for disabled veterans and the long-standing policy that disabled
    veterans who are able to work in the private economy after separation
    from military service should not be penalized.'' (Emphasis added.)
        The report further noted that its review listed 25 pairs of
    programs that in a broad sense might be relevant to policies pertaining
    to military retired pay and veterans' compensation. ``However,'' the
    report warns, ``many of the program pairs are not similar enough to the
    veterans' situation to be instructive.'' (Emphasis added.)
        Actions relative to tax changes to the military's disability
    retirement system forced many retired service members to seek redress
    from the Veterans Administration, later the Department of Veterans
    Affairs (VA). Before 1975 military disability pay was tax exempt. The
    Tax Reform Act of 1976 forced the Department of Defense (DOD) to change
    the rules so that only a percentage of the member's disability retired
    pay attributable to combat-related injuries would be tax-exempt.
    Subsequently, many retiring service members petitioned the VA for
    relief for service-connected injuries.
        Service members, whether in uniform or retired, are considered
    Federal employees, subject not only to Title 10, U.S. Code, but Title
    5, U.S. Code, the latter that governs the conduct and performance of
    government employees. Both active and retired Federal civilian
    employees eligible for veterans' compensation may also receive full
    benefits of Federal civil service pay or Federal civil service
    retirement payments, including disability retirement with no offsets,
    reductions, or limits.
        Recommendation.--FRA encourages Congress to fully authorize and
    fund concurrent receipt of military non-disabled retirement pay and
    veterans' compensation program as currently offered to other retired
    Federal employees--including those receiving benefits under the Federal
    Government's disability program. Congress must remember that U.S.
    service members not only had a major hand in the creation of this
    Nation, but have contributed more than any group to the military and
    economic power of the United States for more than 200 years.
                    permanent change of station (pcs) reform
        FRA appreciates the significant increases in the Temporary Lodging
    Expense (TLE) allowance authorized for fiscal year 2002 and the
    authority to raise PCS per diem expenses to match those for Federal
    civilian employees in fiscal year 2003. There are significant steps to
    upgrade allowances that had been unchanged in over 15 years. Even with
    the much-needed changes, however, servicemembers continue to incur
    significant costs in complying with relocation orders.
        For example, PCS mileage rates have not been adjusted since 1985.
    The current rates range from 15 to 20 cents per mile and are
    significantly lower than the temporary duty mileage rate of 36.5 cents
    per mile for military members and Federal civilians. Members are
    authorized time off for house-hunting trips in advance of a PCS
    relocation, but unlike Federal civilians, they must do so at personal
    expense. FRA also believes that adequate funding for the Relocation
    Assistance Program is essential.
        Recommendation.--FRA urges continued up-grades of permanent change
    of station reimbursement allowances in fiscal year 2003 to recognize
    that the government, not the servicemember, should be responsible for
    paying the cost of doing the government's business.
                                  commissaries
        The President's fiscal year 2003 budget reduces Defense Commissary
    Agency (DeCA) funding by $137,000,000 and eliminates over 2,600
    positions from stores and headquarters staff by September 30, 2003.
    While DeCA indicates there will be no loss in service to the customer,
    FRA is concerned that the size and scope of the reductions may
    negatively impact quality and service to customers, including
    additional store closings, reduced hours, longer cashier lines and
    reduced stock on story shelves. This would have a significant adverse
    impact on the benefit, which is widely recognized as a valuable part of
    the service member's compensation package and a cornerstone of quality
    of life benefits. FRA strongly opposes any efforts to privatize
    commissaries and strongly supports full funding of the commissary
    benefit in fiscal year 2003 and beyond.
        Recommendation.--FRA opposes privatization of commissaries and
    strongly supports full funding of the benefit to sustain the current
    level of service for all commissary patrons.
                               spousal employment
        Recently the Armed Forces have become concerned with the plight of
    military spouses who lose employment when their service member husbands
    or wives are transferred to new locations. Studies indicate that many
    military families suffer significant financial setbacks when spouses
    leave employment to accompany their military sponsor on permanent
    changes of station (PCS). Some losses are substantial. Worse, yet, is
    the lack of equal or even minimal employment opportunities at new duty
    stations.
        Spousal employment is a major consideration in the retention of the
    service members and the services are launching new programs to assist
    spouses in finding full or temporary employment to include counseling
    and training. Other initiatives will help spouses find portable'
    employment in companies with customer-service jobs that can be done at
    remote locations. Further, Federal and State cooperation to provide
    unemployment benefits is required to provide unemployment compensation
    equity to military spouses forced to leave jobs due to PCS orders
        Recommendation.--FRA salutes Congress for the provisions it adopted
    in the fiscal year 2002 NDAA to provide military spouses with financial
    and other assistance in job training and education. The Association
    urges Congress to continue its support of the military's effort to
    effect a viable spousal employment program and to appropriate
    sufficient funds to assure the program's future success.
                         other quality of life concerns
                             survivor benefit plan
        FRA believes the Federal Government continues to renege on its
    commitment to members of the uniformed services who opt to participate
    in the military's Survivor Benefit Plan (SBP). The plan was to be
    patterned after the Civil Service/Federal Employees Retirement Systems
    with the cost to be shared; 40 percent by the government and 60 percent
    by participating military retirees. Both of these points appear
    numerous times in congressional hearings on SBP before the House and
    Senate Armed Services Committees.
        Hearings in the 94th, 95th, 96th, and 99th Congress' note that the
    military's SBP should ``conform identically to the formula'' or
    ``function in an identical fashion'' to the civil service plan. During
    a September 1976 hearing conducted by the House Armed Services
    Committee, a Department of Defense General Counsel letter of July 26,
    1976, was inserted for the record. The letter read that if Congress
    failed to make certain corrections to the military's SBP as it had
    authorized for the civil service plan, it would ``constitute an
    unwarranted inequity that has extremely adverse impact on the morale of
    retirees and those nearing retirement.''
        The 40-60 share between the government and the participating
    military retiree is reported in Senate Hearing No. 99-298 of June 20,
    1985 that lists five different references to the intent of the plan to
    share the cost at the above percentage figures. Spokesmen for the
    Congressional Budget Office and Department of Defense referred to the
    cost-sharing as follows:
      --(CBO).--Under current law, members retiring today will bear about
            62 percent of the cost of the Survivor Benefit Plan; roughly
            consistent with the 60 percent goal for cost-sharing.
      --(DOD).--The legislative history of the SBP shows an intent that the
            Government contribute approximately 40 percent of the benefits.
        There is reluctance by Congressional sources to accept the fact
    that the military's Survivor Benefit Plan was designed to emulate the
    civil service plan or that the participating service member was to
    incur but 60 percent of the program's costs.
        Equity has gone the way of all good intentions. Military SBP
    participants have seen their share of the plan's cost rise above the 70
    percent factor (approximately 73 percent overall, 79 percent for those
    enrolled since the 1970s.) The rise in the plan's cost-sharing for
    military retirees was predicted as early as 1980 (Senate Report No. 96-
    748, p. 7) and again in 1996 (Military Compensation Background Papers,
    Fifth Edition, Sep. 1996, p. 691). In fact, DOD, in the Senate Report
    referenced immediately above, warned that if certain changes were not
    made to the Plan, ``the officer portion of the cost sharing will
    escalate to 76 percent, while enlisted members share 125 percent of the
    costs.'' Nearly 10 years earlier, in the September 1, 1976, House
    hearing referenced above, a DOD General Counsel letter of August 30,
    1976, was inserted for the record. It stated that over time,
    ``inflation will cause the cost of the SBP participant to become
    increasingly out of balance with the cost to his or her counterpart
    participating in the comparable plan for Federal civil servants.''
    Meanwhile, the civil service and Federal employees' plans remain at
    participating costs of 50 percent and 58 percent, respectively.
        There is yet another cost-sharing inequity that exists in the
    military SBP. Participants in the plan pay premiums over a much longer
    period than their counterparts in the civil service/Federal employees'
    plans. This gives the Federal retiree a far more advantageous benefit-
    to-premium ratio.
        FRA is in agreement with Retired Air Force Colonel Mike Lazorchak
    who wrote in Navy Times, January 15, 2001, ``(E)ach year Congress fails
    to pass more meaningful SBP rates, military retirees are forced to give
    the government an ever-increasing interest-free loan in return for
    their benefits. Admittedly, an increase in the government subsidy will
    require Congress to increase the annual contribution to the Military
    Retirement Trust Fund, most of this increase is merely a repayment of
    the interest-free loans that military retirees have been required to
    give the government for decades.''
        Recommendation.--The high cost of participating in the military's
    Survivor Benefit Plan is contrary to the intent of Congress to pattern
    it after the Civil Service/Federal Employees survivor plans. Congress
    is urged to amend the military's Survivor Benefit Program to repeal the
    minimum post-62 SBP annuity over a period of 10 years. [35 percent to
    40 percent in October 2002, to 45 percent in October 2005, and 55
    percent no later than October 2011.] Additionally, to further amend the
    year 2008 to 2003, at which time the military retiree who has paid
    premiums for 30 years and is at least 70 years of age, will be a paid-
    up participant. In the event the authorizing committee agrees to the
    above amendments, FRA urges the Subcommittee to appropriate the
    necessary funding.
                uniformed former spouses protection act (usfspa)
        The USFSPA was enacted nearly 20 years ago, the result of
    Congressional chicanery that denied the opposition an opportunity to
    express its position in open public hearings. With one exception, only
    private and public entities favoring the proposal were permitted to
    testify before the Senate Manpower and Personnel Subcommittee. Since
    then, Congress has made 23 amendments to the Act: eighteen (18)
    benefitting former spouses. All but two of the 23 amendments were
    adopted without public hearings, discussions, or debate. In the nearly
    20 years since the USFSPA was adopted, opponents of the Act or many of
    its existing inequitable provisions, have had but one or two
    opportunities to voice their concern to a congressional panel. The last
    hearing, in 1999, was conducted by the House Veterans Affairs Committee
    and not before the Armed Services panel having oversight authority for
    amending the USFSPA.
        FRA believes that Congress is avoiding its responsibility to the
    men and women who serve or have served in the Armed Forces of the
    United States. For nearly 200 years, Congress controlled the pay and
    allowances of active, reserve, and retired military personnel. The
    States had no say as to how Federal payments would be regulated, even
    when the recipient retired from military service. In fact, the Federal
    courts ruled that in retirement the member was still in the military
    service and was in all respects still performing service'. This led to
    the term, ``reduced pay for reduced but continuing service.'' In short,
    military retired (or retainer) pay is not a pension or an annuity.
    Through the media and other public forums, members of Congress,
    reporters, and outside advocates for the enactment of a former spouses
    protection act, used the term ``pension'' to describe military retired
    pay. Today, the word has nearly replaced its true nomenclature.
        Few provisions the USFSPA protect the rights of the service member.
    They are unenforceable by the Department of Justice or DOD. If a State
    court violates the right of the service member under the provisions of
    USFSPA, the Solicitor General will make no move to reverse the error
    because the Act fails to have the enforceable language required for
    Justice or Defense to react. The only recourse is for the service
    member to appeal to the court, which in many cases gives that court
    jurisdiction over the member that it didn't have when the original
    ruling violated the Act. Some State courts also award a percentage of
    veterans' compensation to ex-spouses; a clear violation of U.S. law.
        Recommendation.--That Congress take a hard look at the USFSPA with
    the purpose of amending the language so that the Federal Government is
    required to protect its service members against State courts that
    ignore provisions of the Act and modify other provisions that weigh
    heavily in favor of former spouses. FRA urges the distinguished members
    of the Subcommittee to suggest to their colleagues on the Armed
    Services Committee that hearings be scheduled to determine required
    changes to the Act.
                             dislocation allowance
        Throughout a military career, service members endure a number of
    permanent changes of station (PCS). Most often the moves require
    additional expenses for household relocations. Such expenses may
    include, but are not limited to, loss of rent deposits, abandonment or
    forced sale of items that must be replaced, added wear and tear on
    household goods in transit, disconnecting and connecting telephone
    service and other utilities, and the purchase of some furniture
    replacements for the new home.
        To help defray these additional costs, Congress in 1955 adopted the
    payment of a special allowance termed ``dislocation allowance''--to
    recognize that duty station changes and resultant household relocations
    reflect personnel management decisions of the Armed Forces and are not
    subject to the control of individual members. In 1989, Congress
    increased the allowance from one month's basic allowance for quarters
    (BAQ) to two months.
        Service members retiring from the Armed Forces are not eligible for
    dislocation allowances, yet many are subject to the same additional
    expenses as their active duty counterparts. In August 2000, the Marine
    Corps Sergeants Major Symposium recommended the payment of dislocation
    allowances to retiring members who, in the opinion of the Sergeants
    Major, bear the same financial consequences on relocating as their
    active duty counterparts. Both reflect management decisions.
        Recommendation.--That if the authorizing committee should amend 37
    USC, 407, to authorize the payment of dislocation allowances to members
    of the Armed Forces retiring or transferring to the Fleet Reserve or
    Fleet Marine Reserve, the Association requests the necessary funding to
    execute the payments.
             termination of retired pay on date of retiree's death
        FRA believes it is insensitive for the Federal Government to
    continue recovering the balance of the retired pay of a member of the
    Armed Forces whose death occurs on any date in the final month of the
    retiree's life. Current regulations require the military's finance
    center to terminate payment of retired pay upon notification of the
    retiree's demise. Further, to recoup outstanding retired pay checks or
    direct deposit payments including any check or deposit paid for the
    month in which the retiree dies.
        Eventually, the finance center will pay the eligible survivor for
    each day the retiree was alive during the month of demise. Meanwhile,
    the eligible survivor will experience a considerable drop in income.
    The retiree, unlike his or her active duty counterpart, will receive no
    death gratuity and, in the case of many of the older enlisted retirees,
    will not have adequate insurance to provide a financial cushion for
    their surviving spouses. Although the SGLI program was initiated in
    1965, it covered the retiree only up to 120 days after the effective
    date of retirement. Retirees were then authorized to purchase an
    individual policy of permanent insurance in an amount equal to the SGLI
    coverage from any participating company in the program.
        The problem is one of finances. When the service member retires,
    his or her income decreases by two-thirds. The average retiree is an
    enlisted member in grades E5 thru E7 (74 percent of total enlisted
    retirees in fiscal year 2000) whose monthly fiscal year 2000 retired
    pay averaged only $965. It was much less in the earlier years. Simply
    stated, the majority of retirees with families could ill afford to
    convert their SGLI policies. Others believed that the military would
    pay a death gratuity to the family when the member passed away in
    retirement.
        Recommendation.--If the authorizing committee should adopt the
    retention of the final payment, the Subcommittee is requested to
    provide the necessary funding. Retirement and its related activities is
    a most agonizing if not a arduous experience for many military retirees
    and families transitioning to an unfamiliar civilian lifestyle. Upon
    his or her demise, in consideration of the member's service to the
    Nation and the trauma surrounding the member's death, the surviving
    spouse should be authorized to retain the final retired pay check/
    deposit covering any month in which the member was alive for at least
    24 hours.
                                   conclusion
        Mr. Chairman. In closing, allow me to again express the sincere
    appreciation of the Association's membership for all that you and the
    distinguished Subcommittee and staff have done for our Nation's
    military personnel over these many years.

        Senator Inouye. Some of the matters you have suggested are
    in the jurisdiction of the Armed Services Committee. We will
    advise them of your concern.
        Chief Barnes. Thank you, Mr. Chairman.
        Senator Inouye. We will look at some of your
    recommendations very seriously, sir.
        Chief Barnes. Thank you, Mr. Chairman.
        Senator Inouye. Thank you.
        Our next witness is the director of research at the Johns
    Hopkins University Applied Physics Laboratory, representing the
    Association of American Universities, Dr. John Sommerer.
    STATEMENT OF DR. JOHN SOMMERER, DIRECTOR FOR RESEARCH,
                JOHNS HOPKINS UNIVERSITY APPLIED PHYSICS
                LABORATORY, ON BEHALF OF THE ASSOCIATION OF
                AMERICAN UNIVERSITIES
        Dr. Sommerer. Good morning, Mr. Chairman, and thank you for
    this opportunity to testify today. I am the chief technology
    officer at the Applied Physics Laboratory at Johns Hopkins, and
    my remarks today are submitted on behalf of the Association of
    American Universities, a national association of State
    universities and land grant colleges. We want to thank the
    subcommittee and you, Mr. Chairman, for your support of science
    and technology research programs in the Department of Defense.
        The universities play the largest role in basic defense
    research, receiving more than 60 percent of this funding, as
    well as substantial funding for applied defense research and
    advance technology development. As you know, the Quadrennial
    Defense Review, the Defense Science Board, and the
    administration all advocate a strong S&T program funded at
    about 3 percent of the overall DOD budget. I am here today to
    urge the committee to continue their support and, if possible,
    to increase funding in this area for fiscal year 2003 to reach
    the 3 percent goal as quickly as possible.
        Our prior investments in science and technology prepared
    the military for war in Afghanistan, and you have seen some of
    these technologies at work, we all have on the news. A
    satellite navigation receiver that you can hold in your hand,
    even while on horseback, tells you where you are within a few
    feet, and the products of that investment are becoming
    pervasive in the commercial market.
        Soldiers are communicating by satellites with small radios
    to call in air support. Lasers, recently laboratory tools, are
    now in the field to determine ranges and designate targets for
    smart bombs, and soon micromechanical devices no bigger than a
    pen operating within artillery shells will increase their
    accuracy. All these military capabilities resulted from
    breakthroughs in DOD-funded science and technology research.
        Let me point to another vital product of the basic research
    funding at universities, an educated workforce that can keep
    our troops equipped with advance technology. The students who
    participate in research today become the highly qualified
    scientists and engineers that go on to work in academia,
    industry, and the Federal laboratories.
        The Applied Physics Lab is a division of Johns Hopkins, but
    our mission, as contrasted with that of pure research, is to
    enhance the security of the Nation by applying technology in
    practical ways to military operational problems. We help create
    solutions and also let the military forces know what technology
    can do for them. To paraphrase Churchill, a gap exists between
    inventors who know what they could invent if only they knew
    what was wanted, and the soldiers who know what they want and
    would ask for it if only they knew how much science could do
    for them. It is our job to bridge that gap.
        Let me give one example. Basic research in quantum physics
    served as the foundation of my laboratory's development of the
    world's first prototype practical cryptographic system where
    secret information can be transmitted from one place to another
    with no possibility of undetected interception. In other words,
    information security guaranteed by the laws of physics.
        That expertise is now focused on the development of a
    practical approach to quantum computing, a goal that, if
    achieved, would enable the efficient breaking of the majority
    of codes in use today and permit information security only for
    those with quantum cryptographic systems. Essentially, no
    present-day information would be secured by encryption any
    more.
        For example, a lot of the information on the Internet is
    encrypted, things like your credit card number, and it could
    all be broken in real time. We need to know if quantum
    computing is really feasible, to learn how to use it ourselves,
    and to make sure that our national security codes do not become
    vulnerable to others.
        It would be a pleasure to welcome you or your staff to the
    applied physics lab so you could see first-hand other exciting
    research being done with the support of the Department of
    Defense and of this subcommittee.
        Thank you again for permitting me to testify today.
        [The statement follows:]

                    Prepared Statement of Dr. John Sommerer

        Mr. Chairman and members of the subcommittee: Thank you for the
    opportunity to testify today. My name is John Sommerer, and I am the
    Director for Research at the Johns Hopkins University Applied Physics
    Laboratory. My remarks today are submitted on behalf of the Association
    of American Universities (AAU), which includes 63 of North America's
    most prominent public and private research universities. This testimony
    is also submitted on behalf of the National Association of State
    Universities and Land-Grant Colleges (NASULGC). These two 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).
        I am here today to support an appropriation of $11 billion, 3
    percent of the overall Department of Defense (DOD) budget, for DOD
    science and technology programs (6.1, 6.2 and 6.3) in fiscal year 2003.
    This recommendation is consistent with the recommendations of the
    Quadrennial Defense Report and the Defense Science Board, as well as
    experts such as Pete Aldridge, Under Secretary Acquisition, Technology,
    and Logistics, who have all called for a DOD S&T budget that reflects 3
    percent of the overall DOD budget.
        The war on terrorism points out the urgency of our military's need
    to be prepared for unforeseen threats and to use advanced technology to
    defend our allies abroad as well as protect our security at home.
    University research discoveries have made major contributions to the
    nation's technological edge. These include ARPANET (forerunner of the
    Internet), inertial navigation, radar and electronic warfare, precision
    guidance, advanced materials, and reduced radar cross-section
    technology. Researchers today are helping to prepare the U.S. military
    to be ready for new threats of the 21st century, including nuclear,
    chemical, biological, and other asymmetric threats such as terrorism
    and cyber attacks. U.S. military troops are currently rewriting the
    rules of war in Afghanistan with new technologies, such as the Predator
    Unmanned Aerial Vehicle that circles and watches for enemy activity,
    the Rapid Multilingual Support Device that helps to issue instructions
    and orders in targeted languages, and advanced laser-guided weapons.
    All these resulted from breakthroughs in DOD-funded science and
    technology research.
        University-based research produces important advances in knowledge
    and helps keep top scientists and engineers involved in defense
    research. Equally important, the students who receive hands-on research
    training today become the highly qualified scientists and engineers who
    go on to work in academia, industry, and Federal laboratories tomorrow.
    DOD is the third largest Federal funder of university research (after
    the National Institutes of Health and the National Science Foundation).
    The funds are awarded under competitive merit review procedures to
    assure high quality. Nearly 350 universities and colleges conduct DOD-
    funded research and development. Universities receive more than 60
    percent of defense basic research funding. They also receive
    substantial funding for applied defense research and advanced
    technology development.
        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.
        It would be a pleasure to welcome you or your staff to the Applied
    Physics Lab so that you can see first-hand the exciting research being
    done with the support of the Department of Defense and this
    subcommittee. In addition, I would like to invite you to an exhibit
    featuring interactive examples of DOD-sponsored research to be held on
    Wednesday, July 10 from 4:30 to 7:30 p.m. in the Rayburn House Office
    Building Foyer.
        Thank you again for permitting me to testify today.

        Senator Inouye. Where is your Applied Physics Lab?
        Dr. Sommerer. It is located in Howard County, Maryland,
    about halfway between Washington and Baltimore, Senator.
        Senator Inouye. We might just take up your invitation.
        Dr. Sommerer. Thank you very much.
        Senator Inouye. Thank you very much. Our next witness, the
    dean of the School of Fisheries and Ocean Sciences of the
    University of Alaska, Consortium for Oceanographic Research and
    Education, Dr. Vera Alexander.
    STATEMENT OF DR. VERA ALEXANDER, DEAN, SCHOOL OF
                FISHERIES AND OCEAN SCIENCES, UNIVERSITY OF
                ALASKA, ON BEHALF OF THE CONSORTIUM FOR
                OCEANOGRAPHIC RESEARCH AND EDUCATION
        Dr. Alexander. Thank you, Chairman Inouye, and thank you
    very much for the opportunity to testify this morning. My name
    is Vera Alexander. I am dean of the School of Fisheries and
    Ocean Sciences at the University of Alaska, and I appeal to you
    on behalf of the 66-member institutions of the Consortium for
    Oceanographic Research and Education (CORE). CORE represents
    the mainstream of American academic oceanographic research, and
    I want to take the opportunity this morning to discuss with you
    the community's concerns about the state of the U.S. academic
    research fleet, also known as the University National
    Oceanographic Laboratory System (UNOLS) fleet.
        Since the end of World War II and the adoption of the model
    for support for public research, the academic community has
    been the leader in understanding problems related to the
    oceans. During this period, the support from the Navy has been
    critical in addressing the many questions about our seas and
    the results from these investigations have contributed to the
    primacy of the United States military.
        An essential component for quality oceanographic research
    is the ability of investigators to go to sea, and that calls
    for modern, capable science platforms. This requirement was
    recognized many years ago, leading to the Navy's development
    and support of public and supported academic research vessels,
    known today as the University National Oceanographic Laboratory
    System, UNOLS fleet. UNOLS is an organization of academic
    oceanographic institutions working in cooperation with agencies
    of the Federal Government to ensure broad access to the modern,
    well-operated research vessels, submersibles, and facilities
    which are required to support a healthy and vigorous research
    program in the ocean sciences.
        Through the UNOLS fleet, the oceanographic research
    institutions have been able to help the Oceanographer of the
    Navy and the Chief of Naval Research meet the research needs of
    their customers, America's sailors and marines. The UNOLS fleet
    is able to support the Navy's science needs because in the past
    four decades the Navy, the National Science Foundation, and
    universities and research institutions have made substantial
    investments in research infrastructure.
        It is because we have research vessels at sea that much of
    the research that is so important to the naval war-fighter can
    be conducted. Quite simply, without a robust fleet of ships at
    sea, a broad number of crucial areas of research will not be
    available to the Navy.
        Now, here is the problem. Unfortunately, in the coming
    decade many of the current UNOLS vessels will reach retirement
    age. At the University of Alaska, for example, the research
    vessel ALPHA HELIX will reach retirement age in 2005. The
    research vessel GYRE at Texas A&M University will be ready for
    retirement in 2006.
        In the coming decade, at the rate of about one a year, we
    will see nearly all of the ocean and regional class vessels
    currently in service come up for retirement. If resources are
    not dedicated soon to begin recapitalizing the academic
    research fleet, the research capability afforded the Navy by
    the UNOLS fleet will be severely diminished.
        This looming crisis in fleet infrastructure has not gone
    unnoticed. In December 2001, after extensive discussion in both
    Federal agencies and the academic community, the Federal
    Oceanographic Facilities Committee, which is known as FOFC,
    completed charting the future for the academic research fleet,
    a long-range plan for renewal. It should be noted the
    Oceanographer of the Navy and the Deputy Chief of Naval
    Research both sit on the committee, and this report clearly
    outlined the state of vessels within the fleet and examined
    what will be required to replace ships when they reach
    retirement age, and provided a time line for fleet replacement
    that ensures that the fleet remains state-of-the-art.
        This report has received broad support within the academic
    community. It has received the endorsement of the UNOLS
    council. More importantly, though, it has received the support
    of the Federal agencies who use the UNOLS fleet. In December,
    the plan was approved by the National Ocean Research Leadership
    Council, of which the Secretary of the Navy is a member.
        In addition to the effort that has been done to address the
    general needs of the fleet, there has been considerable work
    undertaken to provide for a replacement of the next research
    vessel scheduled to retire, the research vessel ALPHA HELIX. In
    fact, tomorrow I will be chairing a design review panel at the
    National Science Foundation on the Alaska Regional Research
    Vessel, the ARRV. Because of the design funding made available
    already by the National Science Foundation, we will be in a
    position in fiscal year 2004 to start building the ship.
        While the ARRV will operate primarily in the Alaska region,
    which has the majority of the continental shelf and coastline
    of the United States, the vessel has much broader national
    impact in the academic research community. Inherent in all
    UNOLS vessels is the fact that they are a shared resource. They
    provide a platform for researchers from around the country to
    conduct their research for the Navy.
        In addition to being a shared tool, the ARRV is the most
    pressing need in the fleet. There will be a long line of
    vessels in the next 10 to 12 years that will need to be
    replaced, and the longer we wait to replace the first one, the
    longer we will have to wait to replace the GYRE and the other
    eight vessels that will follow it. More importantly, the cost
    will also go up with time, if we wait. Acting now, we will keep
    the fleet's capabilities modern, in the long term save the
    taxpayers money.
        While the FOFC plan is a specific and comprehensive
    blueprint for the future of the fleet, it requires necessary
    funding to actually keep the fleet afloat. On behalf of the
    academic oceanographic community, CORE requests that in this
    year's appropriation bill you strongly encourage the Navy to
    provide funding in the fiscal year 2004 request to begin
    recapitalizing the academic research fleet. Without strong
    encouragement from Congress, we fear that the unique
    capabilities the fleet provides the Navy will begin to decline.
        Thank you for the opportunity to testify. I would be happy
    to answer any questions.
        [The statement follows:]

                    Prepared Statement of Dr. Vera Alexander

        Chairman Inouye, Ranking Member Stevens, and members to the
    subcommittee thank you for the opportunity to testify this morning. My
    name is Dr. Vera Alexander. I am Dean of the School of Fisheries and
    Ocean Sciences at the University of Alaska. I appear before you on
    behalf of the 66 member institutions of the Consortium for
    Oceanographic Research and Education. CORE represents the mainstream of
    American academic oceanographic research. I want to take the
    opportunity this morning to discuss with you the oceanographic
    community's concerns about the state of the U.S. academic research
    fleet, also known as the UNOLS Fleet.
        Since the end of World War II and the adoption of Vannevar Bush's
    model of public support for basic research, the academic community has
    been the leader in understanding problems related to the oceans. During
    this period the support from the Navy has been critical in addressing
    the many questions about our seas, and the results from these
    investigations have contributed to the primacy of the United States'
    military.
        An essential component for quality oceanographic research is the
    ability of investigators to go to sea, and that calls for modern,
    capable science platforms. This requirement was recognized many years
    ago, leading to the Navy's development and support of publicly-
    supported academic research vessels, known today as the University-
    National Oceanographic Laboratory System (UNOLS) fleet.
        UNOLS, is an organization of academic oceanographic institutions
    working in cooperation with agencies of the Federal Government to
    ensure broad access to the modern, well operated, state of the art
    research vessels, submersibles and facilities required to support a
    healthy and vigorous research program in the ocean sciences. Through
    the UNOLS fleet, oceanographic research institutions have been able to
    help the Oceanographer of the Navy and the Chief of Naval Research meet
    the research needs of their customers, America's sailors and marines.
        The UNOLS fleet is able to support the Navy's science needs because
    in the past four decades the Navy, the National Science Foundation and
    universities and research institutions have made substantial
    investments in research infrastructure. It is because we have research
    vessels at sea that much of the research that is so important to the
    naval warfighter can be conducted. Quite simply without a robust fleet
    of ships at sea, a broad number of crucial areas of research will not
    be available to the Navy.
        Unfortunately in the coming decade many of the current UNOLS
    vessels will reach retirement age. At the University of Alaska for
    example, the R/V Alpha Helix will reach retirement age in 2005. The R/V
    Gyre at Texas A&M will be ready for retirement in 2006. In the coming
    decade at a rate of one a year, we will see nearly all of the Ocean and
    Regional Class vessels currently in service come up for retirement. If
    resources are not dedicated soon to begin recapitalizing the academic
    research fleet, the research capability afforded the Navy by the UNOLS
    fleet will be severely diminished.
        The looming crisis in fleet infrastructure and has not gone
    unnoticed. In December 2001, after extensive discussion in both Federal
    agencies and the academic community, the Federal Oceanographic
    Facilities Committee, completed Charting the Future for the Academic
    Research Fleet, A Long Range Plan for Renewal, also known as the FOFC
    report. It should be noted that the Oceanographer of the Navy and the
    Deputy Chief of Naval Research both sit on the committee. The FOFC
    report clearly outlined the state of the vessels within the fleet,
    examined what will be required to replace ships when they reach
    retirement age, and provided a timeline for fleet replacement that
    ensures the fleet remains state-of-the-art.
        This report has received broad support within the academic
    community. It has received the endorsement of the UNOLS Council. Maybe
    more importantly though, it has received the support of the Federal
    agencies who use the UNOLS fleet. In December, the plan was approved by
    the National Ocean Research Leadership Council, of which the SECNAV is
    a member.
        In addition to the effort that has been done to address the general
    needs of fleet, there has been considerable work undertaken to provide
    for the replacement of the next research vessel scheduled to retire,
    the R/V Alpha Helix. In fact tomorrow, I will be chairing a design
    review panel at the National Science Foundation on the Alaska Regional
    Research Vessel, the ARRV. Because of the design funding made available
    by the National Science Foundation, we will be in a position in fiscal
    year 2004 to begin building the ship.
        While the ARRV will operate primarily in the Alaska region, the
    vessel has a much broader national impact in the academic research
    community. Inherent in all UNOLS vessels is the fact that they are
    shared resource providing a platform for researchers from around the
    country to conduct their research for the Navy.
        In addition to being a shared tool, the ARRV is the most pressing
    need in the fleet. There will be a long line of vessels in the next 10
    to 12 years that will need to be replaced. The longer we wait to
    replace the ARRV, the longer we will have to wait to replace the R/V
    Gyre, and the other eight vessels that will follow it. More
    importantly, the longer we wait to build the ships, the more expensive
    the vessels get. Acting now will both keep the fleets capabilities
    modern and in the long-term save taxpayers money.
        While the FOFC Plan is a specific and comprehensive blueprint for
    the future of the fleet it requires the necessary funding to actually
    keep the fleet afloat. On behalf of the academic oceanographic
    community, CORE requests that in this year's appropriation bill you
    strongly encourage the Navy to provide funding in fiscal year 2004
    request to begin recapitalizing the academic research fleet. Without
    strong encouragement from Congress, we fear that the unique
    capabilities that the fleet provides the Navy will begin to decline.
    Thank you for the opportunity to testify and I will be happy to answer
    any questions.

        Senator Inouye. I will get together with Senator Stevens to
    work on a replacement for the ALPHA HELIX. I think we can do
    it.
        Now may I call upon the director of legislative affairs,
    Non Commissioned Officers Association of the United States of
    America, Ms. Kimberlee D. Vockel.
    STATEMENT OF KIMBERLEE D. VOCKEL, DIRECTOR OF
                LEGISLATIVE AFFAIRS, NON COMMISSIONED
                OFFICERS ASSOCIATION OF THE UNITED STATES
                OF AMERICA
        Ms. Vockel. Thank you, Mr. Chairman. Thank you for this
    opportunity to present the defense funding priorities of the
    Non Commissioned Officers Association (NCOA) for fiscal year
    2003. While I am unable to highlight all of the areas the
    association believes should be funded, I have chosen to focus
    on five specific provisions of the Senate Defense authorization
    bill, S. 2514, that are particularly important to the enlisted
    men and women serving in the Armed Services.
        NCOA's first funding priority for fiscal year 2003 is the
    active duty basic pay raise. Last year, the subcommittee
    provided funding for a substantial and much-needed pay raise.
    However, the 2002 increase was only one step toward pay
    comparability for active duty service members. S. 2514
    authorizes a 4.1 percent across-the-board pay raise for active
    duty service members and a targeted pay raise ranging from 5.5
    to 6.5 percent for mid to senior noncommissioned officers. NCOA
    recommends the subcommittee ensure funding for this pay raise.
        NCOA's second defense funding priority is an increase in
    the basic allowance for housing. The 2000 National Defense
    Authorization Act provided for an elimination of out-of-pocket
    housing costs for active duty service members by 2005. Last
    year's defense bill brought us closer to that elimination by
    dropping the out-of-pocket expenses to 11.3 percent of the
    national median housing cost. S. 2514 further decreases the
    expenses to 7.5 percent. Considering the increasing cost of
    off-base housing, utilities, and transportation, NCOA
    recommends that this subcommittee provide funding to accelerate
    the elimination of out-of-pocket expenses in 2003.
        The association's third defense funding priority concerns
    the selected reserve Montgomery GI bill. S. 2514 authorizes an
    extension of the usage period for the reserve GI bill from 10
    to 14 years. In today's high op tempo guard and reserve
    environment, service members find it increasingly difficult to
    juggle employment and school commitments with family and
    reserve responsibilities. A part-time student guardsman or
    reservist could easily exceed the 10 years currently authorized
    to complete an undergraduate degree. NCOA recommends that this
    subcommittee ensure that reserve personnel accounts are
    adequately increased to cover the extension of the selected
    reserve Montgomery GI bill usage period an additional 4 years.
        NCOA's fourth defense funding priority concerns defense
    health care. The 2001 National Defense Authorization Act
    created TRICARE Prime remote coverage for families of service
    members assigned to areas where there is no TRICARE Prime
    option. However, the program require that the family member
    reside with the service member. Since there are many
    circumstances where service members are assigned unaccompanied,
    this program unintentionally excludes the families that
    desperately need the TRICARE Prime remote coverage. S. 2514
    authorizes expanding eligibility to those family members who
    are unable to reside with the service member. NCOA recommends
    that this subcommittee ensure full funding of the defense
    health programs to include the expansion of TRICARE Prime
    remote coverage.
        NCOA's fifth funding priority is concurrent receipt. For
    many years, the association has fought to get Congress to
    authorize and fund the concurrent receipt of military retired
    pay and VA disability compensation. S. 2514 authorizes
    concurrent receipt for military retirees with a 60-percent
    disability rating and above. While this is a positive step in
    the right direction, NCOA recommends that this subcommittee
    appropriate funds to allow all disabled retirees to receive
    veterans disability compensation concurrently with receipt of
    their full earned military retired pay.
        Mr. Chairman, thank you again for this opportunity to
    present the funding priorities of the Noncommissioned Officers
    Association. I would be happy to answer any questions you may
    have.
        Senator Inouye. I believe your recommendations are
    reasonable, and I will make certain that this matters are
    studied by the committee.
        Ms. Vockel. Thank you, sir.
        [The statement follows:]

                   Prepared Statement of Kimberlee D. Vockel

       executive summary--fiscal year 2003 appropriations recommendations
    Basic Pay Raise
        Basic Pay Raise NCOA recommends that this Subcommittee appropriate
    the necessary funds to provide a 4.1 percent across-the-board pay raise
    for servicemembers and a targeted pay raise ranging from 5.5 percent to
    6.5 percent for mid to senior noncommissioned officers. NCOA further
    recommends future additional increases in annual pay adjustments well
    above the Employment Cost Index (ECI) with the objective of restoring
    pay comparability for uniformed service personnel as soon as possible.
    NCOA further recommends that the Subcommittee consider the
    recommendations of the Ninth Quadrennial Review of Military
    Compensation to reform basic military pay tables to provide more
    appropriate pay adjustments between grades.
    Basic Allowance for Housing
        NCOA recommends that this Subcommittee appropriate the funds needed
    for the acceleration of projected funding increases to match local
    housing costs, by grade, at every CONUS location as soon as possible.
    In view of the existing pay comparability gap and the rising private
    sector housing costs, NCOA believes it does not serve retention and
    readiness interests to delay elimination of out of pocket expenses
    until 2005.
    Extension of Reserve GI Bill Delimiting Period
        NCOA recommends that this Subcommittee ensure that Reserve
    Personnel accounts are adequately increased to cover the extension the
    Reserve Montgomery GI Bill benefits usage period an additional 4 years
    beyond the current 10-year eligibility window.
    Continuation of TRICARE Prime Remote Eligibility
        NCOA recommends that this Subcommittee ensure full funding of the
    Defense Health Program to include the expansion of TRICARE Prime Remote
    coverage to include active duty servicemembers' family members who are
    unable to reside with the servicemember.
    Concurrent Receipt
        NCOA recommends that this Subcommittee appropriate funds to allow
    disabled uniformed service retirees to receive veterans' disability
    compensation concurrently with receipt of their full earned military
    retired pay.
    National Call to Service Program
        NCOA recommends that this Subcommittee not appropriate funds for
    the National Call to Service Program at this time to allow for more
    thorough discussions and analysis.
                                  introduction
        Mr. Chairman and distinguished members of this Subcommittee, on
    behalf of the Non Commissioned Officers Association (NCOA), which
    represents active duty, reserve component, retired, and veteran
    enlisted servicemembers and their families, I would like to express our
    sincere appreciation for the opportunity to present the Association's
    views on issues surrounding the defense appropriations for fiscal year
    2003.
              fiscal year 2003 national defense authorization bill
        NCOA is pleased that the fiscal year 2003 National Defense
    Authorization bill (S. 2514) addresses so many of the ongoing needs of
    the men and women serving in the Armed Services. While the 2003 Defense
    bill includes numerous quality-of-life provisions that are beneficial
    to the men and women of the Armed Services, the Association would like
    to use this opportunity to highlight five personnel/quality of life
    provisions that are of particular concern to the enlisted ranks. The
    following are five provisions for which the Association requests this
    Subcommittee provide appropriated funds:
      --4.1 percent across the board pay raise, with targeted pay raises
            for mid to senior noncommissioned officers ranging from 5.5
            percent to 6.5 percent;
      --Increase in the housing allowance that moves the reduction of the
            average out-of-pocket expenses for off-post housing to 7.5
            percent, coming closer to eliminating out-of-pocket expenses by
            2005;
      --Extension of the Reserve GI Bill delimiting period from 10 to 14
            years;
      --Continuation of TRICARE Prime Remote eligibility for dependents
            residing at remote locations after departure of sponsors for
            unaccompanied assignments; and
      --Concurrent receipt of retired pay and VA disability compensation
            for a service-connected disability.
        The Association would also like to take this opportunity to express
    its concerns about the ``National Call to Service Program'' provision.
                                basic pay raise
        The debate between Congress and the Pentagon on how to define and
    address the pay gap between military and civilian pay continues;
    however, recognition of the existence of the gap is universal. In 1999,
    Congress initiated the ``comparability-plus'' plan that would increase
    basic pay by the Employment Cost Index (ECI) plus .5 percent until
    2006. For the 4th year in a row, the Authorizers have approved a pay
    raise, at the request of the Department of Defense, for servicemembers
    of 4.1 percent, which is above the rate of inflation. They have also
    acknowledged the need to enhance the pay of mid to senior
    noncommissioned officers by providing a 5.5 to 6.5 percent targeted pay
    raise. Regardless of the definition or means of elimination, the fiscal
    year 2003 pay raise is needed to get servicemembers closer to their
    civilian counterparts.
        On May 17, 2002, the Department of Defense released its 9th
    Quadrennial Review of Military Compensation (QRMC), which focused on
    military basic pay and special and incentive pays and bonuses. The
    study identified two fundamental tenets of an effective military
    compensation system: balance and flexibility \1\. Based on these
    tenets, the QRMC provided two important policy recommendations that
    NCOA believes should be weighed by this Subcommittee when considering
    defense appropriations for fiscal year 2003. The following are those
    recommendations: \2\
    ---------------------------------------------------------------------------
        \1\ Ninth Quadrennial Review of Military Compensation, May 17,
    2002, Department of Defense, page 185.
        \2\ Id.
    ---------------------------------------------------------------------------
      --The first priority is to ``get basic pay right.'' Basic pay is the
            foundation of the compensation system. If basic pay is not set
            at an appropriate level, the system will become imbalanced,
            requiring other compensation tools to fill the gap. Today,
            basic pay has fallen behind for some segments of the force,
            particularly mid-grade enlisted personnel and junior officers.
            This deficit is due primarily to the fact that the traditional
            basis for evaluating the adequacy of military pay is no longer
            valid. Today the Department pays its enlisted force as high
            school graduates and its officers as college graduates. In
            fact, the educational levels across the force are significantly
            higher.
      --A new basis for comparing military and civilian pay is needed. For
            enlisted personnel, a composite profile of the earnings of high
            school graduates, those with some college, and college
            graduates serves as an appropriate comparison for different
            segments of the force. For officers, civilians with
            baccalaureate or advanced degrees working in professional and
            technical occupations are the appropriate comparison group. The
            earnings of warrant officers are appropriately compared to a
            composite profile of civilians with some college and college
            graduates. Getting basic pay right first is the basis for
            balance in the military compensation system.
        The QRMC recommended that a targeted pay raise is needed for E-5
    through E-7 in fiscal year 2003, ``to further narrow the differential
    to the 70th percentile of civilian earnings.'' \3\ The study also found
    that targeted raises for grades E-8 and E-9 are necessary ``to preserve
    promotion incentives to these grades.'' \4\
    ---------------------------------------------------------------------------
        \3\ Id, page 187.
        \4\ Id.
    ---------------------------------------------------------------------------
    NCOA Recommends
        That this Subcommittee appropriate the necessary funds to provide a
    4.1 percent across-the-board pay raise for servicemembers and a
    targeted pay raise ranging from 5.5 percent to 6.5 percent for mid to
    senior noncommissioned officers. NCOA further recommends future
    increases in annual pay adjustments well above the Employment Cost
    Index (ECI) with the objective of restoring pay comparability for
    uniformed service personnel as soon as possible. NCOA further
    recommends that the Subcommittee consider the recommendations of the
    Ninth Quadrennial Review of Military Compensation to reform basic
    military pay tables to provide more appropriate pay adjustments between
    grades.
                          basic allowance for housing
        With increasing costs of off-base housing, utilities, and
    transportation, as well as a pay comparability gap that is only slowly
    being addressed, the out-of-pocket expenses for living off-base are as
    vital an issue for enlisted families as is the basic pay raise. In the
    Fiscal Year 2000 National Defense Authorization Act, Congress approved
    a plan that would eliminate out-of-pocket expenses by 2005. While NCOA
    applauds Congress' efforts to reduce these expenses for servicemembers'
    and their families, the Association asserts that the elimination should
    be accelerated.
        Out-of-pocket expenses were reduced to 11.3 percent of the national
    median housing costs for each grade in the Fiscal Year 2002 National
    Defense Authorization Act, and the fiscal year 2003 Defense bill
    authorizes a reduction to 7.5 percent. The proposed reduction for 2004
    is 3.5 percent of the national median housing costs for each grade, and
    0 percent in 2005. Living in high-cost areas can reduce the
    effectiveness of raises in basic pay, since enlisted families are
    forced to use their pay raises to make up their housing costs.
    NCOA Recommends
        NCOA recommends that this Subcommittee appropriate the funds needed
    for the acceleration of projected funding increases to match local
    housing costs, by grade, at every CONUS location as soon as possible.
    In view of the existing pay comparability gap and the rising private
    sector housing costs, NCOA believes it does not serve retention and
    readiness interests to delay elimination of out of pocket expenses
    until 2005.
                 extension of reserve gi bill delimiting period
        Individuals who initially join the National Guard or Reserve from
    civilian life become eligible for the Selected Reserve Montgomery GI
    Bill (MGIB). Eligibility requirements include possession of a high
    school diploma, agreement to serve 6 years in the Selected Reserve, and
    completion of initial active duty for training. In today's high-OPTEMPO
    Guard and Reserve environment, servicemembers find it increasingly
    difficult to juggle employment and school commitments with family and
    Reserve responsibilities. A part-time student-Guardsman or Reservist
    could easily exceed the 10 years currently authorized for Reserve MGIB
    benefits to complete an undergraduate degree. To enable successful
    completion of educational goals and access to all earned educational
    benefits, the period of benefit eligibility should be extended beyond
    completion of the 10-year eligibility period.
    NCOA Recommends
        That this Subcommittee ensure that Reserve Personnel accounts are
    adequately increased to cover the extension of the Reserve Montgomery
    GI Bill benefits usage period an additional 4 years beyond the current
    10-year eligibility window.
                continuation of tricare prime remote eligibility
        NCOA is grateful for the fiscal year 2001 NDAA provision
    authorizing TRICARE Prime Remote coverage for families of
    servicemembers assigned to areas where there is no TRICARE Prime
    option. However, this program has a shortcoming in that it requires
    that the family member must reside with the servicemember. This
    requirement may be reasonable when the family has a choice of
    accompanying the member, but this is not always the case. It can prove
    particularly troublesome for family members whose sponsor has Permanent
    Change of Station (PCS) orders that are ``unaccompanied.'' In such
    circumstances, there can be many good reasons why the family finds
    itself living in an area without Prime access while awaiting the end of
    the unaccompanied tour.
        Further, families of deployed Guardsman and Reservists called to
    active duty for over 179 days are eligible for the Prime Remote
    benefit, but in most circumstances the servicemember is sent far from
    their residence, and the family remains behind. Other circumstances
    where families are separated include families who may return to their
    home of record during deployment and college students residing away
    from home. These families are unfairly burdened by having to pay much
    higher copayments for care than their counterparts fortunate enough to
    have an opportunity to reside with the sponsor.
    NCOA Recommends
        That this Subcommittee ensure full funding of the Defense Health
    Program to include the expansion of TRICARE Prime Remote coverage to
    include active duty servicemembers' family members who are unable to
    reside with the servicemember.
                               concurrent receipt
        NCOA has long held that military retired pay and veterans'
    disability compensation are paid for different purposes, and one should
    not offset the other. Specifically, retired pay is earned compensation
    for completing a career of arduous uniformed service, while veterans'
    disability compensation is paid for pain and suffering and loss of
    future earnings' potential caused by a service-connected disability.
    NCOA strongly believes the time has come to recognize this essential
    distinction by authorizing and appropriating the concurrent receipt of
    military retired pay and disability compensation paid by the Department
    of Veterans Affairs (VA).
        The Fiscal Year 2002 National Defense Authorization Act authorized
    the elimination of the offset of retirement pay by disability
    compensation; however, the language stipulated that the President had
    to request funding in his budget request and that Congress had to pass
    offsetting legislation. While this did nothing substantive for disabled
    military retirees, it did set the stage for Congress to move toward
    eliminating the offset. The fiscal year 2003 National Defense bill
    authorizes eliminating the offset by 2007 for retirees with VA
    disability ratings 60 percent and above. Previous attempts to fix this
    inequity have all been met with the same response-the cost is too
    large. But, the cost to men and women in uniform who have been injured
    while serving this Nation is far greater. No one disabled in the course
    of serving his or her country should have to forfeit an earned
    retirement--for years of faithful and dedicated service--in order to
    receive VA disability compensation for the wounds, injuries, or
    illnesses incurred in such service.
        Congress recently affirmed a similar principle in repealing the
    outdated statutory provision that, before October 1, 1999, required
    partial forfeiture of military retired pay by retired servicemembers
    who accepted post-service employment as Federal civilians. The same
    rationale applies to disabled servicemembers. That is, both categories
    of retirees deserve to receive the full retired pay they earned by
    virtue of their career of military service. Just as they should not be
    required to forfeit that retired pay based on their subsequent civilian
    employment, they should not have to pay a retired pay penalty because
    their service in uniform caused them long term disability. Compensation
    for the latter condition must be provided in addition to their earned
    retired pay, not in place of it.
    NCOA Recommends
        That this Subcommittee appropriate funds to allow disabled
    uniformed service retirees to receive veterans disability compensation
    concurrently with receipt of their full earned military retired pay.
                        national call to service program
        One of President Bush's initiatives since taking office has been to
    encourage Americans to volunteer their time and skills to a cause
    greater than themselves. Following the horrific attacks on Americans on
    September 11, 2001, American citizens scrambled to find ways to offer
    their services to assist in America's recovery. Blood and financial
    donations increased exponentially, and citizens flocked to provide
    other recovery services where they could. There is no doubt that
    Americans felt an unprecedented desire to contribute to their nation.
    With a decisive military response quickly following the worst terrorist
    attack on American soil, service in the military became a popular
    option for many. Regardless of the means by which Americans gave their
    time, the motivation was the same-service before self, the recognition
    of the need to serve a cause greater than themselves. The concept of an
    ``all volunteer'' military follows that same motivation. Because the
    United States no longer drafts individuals to serve in the military, we
    must rely on men and women to answer the call to serve their country.
        The National Call to Service Program provision in the Senate
    version of the fiscal year 2003 National Defense Authorization bill
    appears to be designed to support the President's volunteerism
    initiative, as well as to make military service more attractive for
    those looking for a way to serve the country in its time of need. While
    NCOA recognizes the many benefits of this program, the Association has
    many more concerns. With no apparent feedback from the various services
    and a generally negative response from the Association's members, NCOA
    believes that this program needs further analysis to determine its
    long-term effects on the services and their recruiting practices.
    Without thorough discussions of this issue having taken place, the
    Association cannot support this provision at this time.
    NCOA Recommends
        That this Subcommittee not appropriate funds for the National Call
    to Service Program at this time to allow for more thorough discussions
    and analysis.
                                   conclusion
        The Non Commissioned Officers Association (NCOA) would again like
    to offer its thanks to this Subcommittee for the opportunity to present
    the Association's views on defense appropriations for fiscal year 2003.
    While the Association's focus is not necessarily on the weapons and
    equipment provisions in the Defense Authorization bill, the Association
    maintains its view that these items are essential to the well-being of
    the men and women serving in the Armed Services. With that said, NCOA
    would like to ask that the five personnel/quality of life provisions
    previously outlined in this testimony be given special attention by
    this Subcommittee and that this Subcommittee will ensure funding for
    their successful implementation. These five provisions, the basic pay
    raise, the increase in housing allowances, the extension of the Reserve
    GI Bill delimiting period, the extension of TRICARE Prime Remote
    eligibility, and concurrent receipt, are all important issues to our
    members and their families. Your support of these programs would be
    greatly appreciated.

        Senator Inouye. Our next witness is the executive director
    of the Reserve Officers Association of the United States, Mr.
    Jason Spiegel.
    STATEMENT OF JAYSON L. SPIEGEL, EXECUTIVE DIRECTOR,
                RESERVE OFFICERS ASSOCIATION OF THE UNITED
                STATES
        Mr. Spiegel. Thank you, Mr. Chairman. On behalf of the
    80,000 members of the Reserve Officers Association (ROA), I am
    grateful for the opportunity to present ROA's views with
    respect to the defense appropriations bill for 2003. I have a
    written statement which, with your permission, I will submit
    for the record.
        Let me thank you and the committee for your strong support
    of the men and women of the Reserve component. Your faith and
    confidence in our dedication, achievements, and competence have
    not been misplaced.
        The Department of Defense and the Congress have both made
    it clear that the future of our national defense policy will
    continue to depend significantly upon the Reserve components.
    This total force policy is being fully vindicated today by the
    83,000 men and women of the Guard and Reserve who have been
    mobilized in support of Operations Noble Eagle and Enduring
    Freedom. In fact, no major extended operation involving U.S.
    military forces is possible without using our Reserve forces.
        My written statement details various unfunded Reserve
    requirements. In the interest of time, I shall limit my remarks
    to two specific areas, equipment and the Congress of the
    Interallied Confederation of Reserve Officers.
        With respect to equipment, this Congress long ago
    recognized that Reserve equipment shortfalls are the major
    inhibiter of Reserve force readiness. The Congress has for the
    past several years added funds to procurement specifically to
    provide equipment for the Reserves, equipment that would not be
    readily available through normal service channels. As a result,
    Reserve force equipment readiness has improved steadily.
        These Reserve equipment funds remain vitally important to
    the Reserve's ability to perform their mission. The Reserves
    cannot train to maintain the active components' new state-of-
    the-art equipment if the Reserves have only old and substitute
    equipment handed down by the active components. Moreover,
    logistical cost and strain involved in maintaining the parts
    required for multiple incompatible systems is no longer
    fiscally sound. DOD has indicated that it wishes to fund
    Reserve force equipment within the normal budgetary processes.
    The results thus far have been disappointing. Absent the
    significant and consistent improvement in DOD's approach to
    Reserve component equipment procurement, we believe that the
    National Guard and Reserve equipment appropriation must remain
    an essential element of Reserve force readiness.
        Each of the Reserve components has specific high priority
    equipment shortfalls. With respect to the Army Reserve, we
    would draw your attention to the biological integrated
    detection system. This system detects any biological agents
    which may be released anywhere in the world by a hostile force.
    There are only two such units currently in the Army inventory,
    one on active duty, one in the Reserve. The Reserve unit was
    mobilized immediately after September 11, and is continuing to
    perform its mission throughout the world.
        In addition, $28 million is required to complete the $42
    million buy for the next unit, which is scheduled to be fielded
    next fiscal year in St. Louis. The Army Reserve also has needs
    for additional humvees and high frequency radios.
        The other services primarily have aviation needs. The Navy
    Reserve needs additional C-40 Air Force for its inter-theater
    airlift mission, the Marine Corps Reserve requires F/A-18
    upgrades so that its Reserve aircraft are compatible with the
    active aircraft, and the Air Force Reserves needs two C-17's
    and 10 C-40A's necessary for its critical air mobility mission.
        Let me turn now to the Congress of the Interallied
    Confederation of Reserve Officers. This is a forum that brings
    together reservists from all the North Atlantic Treaty
    Organization (NATO) and Partnership for Peace (PFP) countries
    to discuss issues and advise the Commander in Chief (CINC).
    Confederation of Reserve Officers (CIOR) is not a private
    organization. It is an official organ of the NATO Military
    Committee chartered under MC-248. Mr. Chairman, your colleague,
    Senator Thurmond, was the international vice president of CIOR
    back in the mid-1950's.
        Each year, a NATO country hosts the International Congress
    of CIOR, and in 2004 the Congress is scheduled to be held in
    the United States. DOD has decided not to support this meeting
    because of the war on terrorism, and has urged that the meeting
    be moved to another NATO country. We believe that is exactly
    the wrong signal to send to our NATO allies, and we ask that
    the Congress provide $500,000 in fiscal year 2003 to prepare
    for and execute the CIOR Congress in 2004 to be held in the
    United States.
        There is report language in the Senate Armed Service
    Committee (SASC) report that does urge that DOD reverse itself
    and support this Congress.
        With that, Mr. Chairman, I will answer any questions that
    you may have.
        [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 2003.
        To say that this is an extraordinary year, a year like no other in
    recent history, has become a truism that belies the harsh reality of
    September 11th and its aftermath. So much has changed so obviously in
    our outlook, our way of living, and our approach to doing the nation's
    business, that it is requires no further enumeration.
        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
        Before September 11th, the results of recent force structure
    studies 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 emerging homeland security missions and the findings and
    recommendations of the National Security (Hart-Rudman) Commission, the
    administration's initial Defense assessment, the National Defense
    Strategy, and the 2001 QDR and its directed comprehensive review of
    Reserve forces.. Evolutionary or revolutionary, these changes will
    ultimately hinge on affordability and the prudent acceptance of risk.
    Thus far there has been notable growth in defense spending, but how far
    that growth will go toward remedying the deficiencies of the previous
    decade remains to be seen.
        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 transformed 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 significantly transforming 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 must
    and 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 $23.5M. 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.
    Army Reserve Unit Sustainment Training
        The Army had insufficient total obligation authority (TOA) to fully
    resource all fiscal year 2003 unit training and collective training
    requirements and ensure sufficient train-up time for the Army after
    mobilization to meet required readiness levels. Supply, maintenance and
    unit management activities, command inspections, safety programs, and
    emergency preparedness training/operations will not be conducted and
    pushed into IDT periods. The level of funding required is $107 million
    and is funded at $50.0 million, leaving a critical shortfall of $57
    million. The executable/critical shortfall for Army Reserve Unit
    Sustainment Training is $57 million
    Operations And Maintenance, Army Reserve (OMAR)
        The fiscal year 2003 DOD budget request for the Army Reserve
    Operations and Maintenance (OMAR) account is $1.9 billion. We believe
    there is at least a $165.1 million executable/critical OMAR shortfall
    in the fiscal year 2003 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.
    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 7,344 is 1,646 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 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 There is no funding for the fiscal year 2003 ramp
    leaving a $8 million shortfall. The executable/critical shortfall for
    the USAR MILTECH program is $8 million.
    Advertising
        Army Reserve advertising is underfunded by at least $9.7 million in
    the fiscal year 2003 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 2003 recruiting advertising requirement is $61
    million, but it is funded at only $50.3 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. In addition, there are greater
    than ever needs to recruit special skills such as medical and
    linguists. 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 $9.7
    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 C4/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 C2, soldier's pay, mobilization, training, sustainment, and
    administration. The executable/critical shortfall for the RCAS Life
    Cycle Support is $7.1million.
    Force Protection
        The Army Reserve has insufficient force protection funds. The
    events of September 11th raised the visibility of significant security
    deficiencies at several Army Reserve facilities. Funding the entire
    Force Protection program is crucial if the Army Reserve is to close its
    installations and maintain the minimum ATFP standards. If the program
    remains critically underfunded, Army Reserve facilities will remain
    unprotected and face a continuing terrorist threat. Current funding
    levels do not permit the Army Reserve to upgrade and repair facilities
    in accordance with the new DOD antiterrorism/force protection
    standards. The $52 million requirement is funded at $28 million leaving
    a critical shortfall of $24 million. The executable/critical shortfall
    is $24.0 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 $896 million
    fiscal year 2003 equipment modernization requirement.
                               air force reserve
        Thank you for your continued interest in how the Air Force Reserve
    is doing as it responds to today's unique challenges while supporting
    active duty Air Force and Joint Commanders. ROA is especially
    appreciative of your support in the fiscal year 2002 Defense
    appropriations for pay and allowance increases, as well as funding
    school and special training. Your efforts to fund military construction
    and reserve equipment help to address continuing shortages. Support in
    recruiting and advertising helped our recruiters achieve an outstanding
    accession rate of 105 percent and command retention rates were exceeded
    in all categories during fiscal year 2001. For the coming year,
    recruiters will have an additional challenge facing them due to the Air
    Force enforcing stop-loss for over half of the year.
    Highlights
        The Air Force Reserve operates 447 aircraft and is mission-ready
    and able to deploy within 72 hours. The Air Force Reserve has 9,245
    reservists in support of Noble Eagle/Enduring Freedom down from a high
    of 12,500. They have also provided between 2,000 and 3,000 volunteers
    in other active duty statuses to those mission areas. The challenge
    will be to support Air Expeditionary Force (AEF) commitments with
    volunteers while continuing to support Noble Eagle/Enduring Freedom.
    The Reserve provided to AEF over 14,000 personnel during each of the
    first two 15-month cycles.
    Requirements
        Of particular concern is the increased need for potentially 2,000
    or more personnel in the fields of security, intelligence, information
    operations, space, and maintenance. Additional issues of concern during
    the current tempo are:
      --Fund 3- and 6-year reenlistment bonuses for the Selected Reserve up
            to 20 years to encourage retention of trained personnel
      --Fund increased prior service enlistment bonus ($5,000 to $8,000) to
            encourage prior service personnel to continue their military
            service (similar to non-prior service recruits)
      --Remove the appropriation prohibition on security forces so billets
            can be filled with Reserve full-time support personnel
      --Fund increased end strength ceilings during mobilizations
        Just as with Desert Shield/Storm, recent events have once again
    reminded everyone of the critical need for the Air Force Reserve to be
    a Total Force participant. The Reserve provides the Air Force with a
    surge capability in aircrew, support personnel, and airframes. It is
    imperative the Air Force Reserve remains a constant contributor to our
    nation's defense by being equipped with the latest equipment and weapon
    systems.
        Modernization requirements are:

    ------------------------------------------------------------------------
                                                                   Cost in
             Fiscal year 2003 requirements            Quantity     Millions
    ------------------------------------------------------------------------
    C-17s.........................................            2          TBD
    C-40s.........................................           10          TBD
    KC-135 Engine Kits............................       2 kits          $54
    C-130 Js......................................         3 ac       $217.9
    F-16 Commercial Central Interface Unit--            80 kits         $7.3
     Upgrade......................................
    F-16 Processor Upgrade (Color)................     23 units        $3.71
    Tactical Radios (SCOPE SHIELD II).............      41 sets        $9.25
    Motor Vehicles For Med UTC's (Multi-Yr).......       34 veh        $1.87
    Snow Removal Vehicles.........................        7 veh         $1.2
    Land Mobile Radios (Multi-Yr).................    5.5 bases        $4.08
    Intrusion Detection System (Multi-Yr).........      5 bases       $2.063
    Hydrant Fueling Trucks........................     9 trucks         $1.4
    Truck Tractors................................    10 trucks        $0.77
    Utility Truck (4x4)...........................     5 trucks       $0.152
    Flightline Video Surveillance System..........    4 systems        $0.72
    Next Generation NVGs..........................      30 sets         $1.5
    ------------------------------------------------------------------------

                                 naval reserve
        Since September 11th, 2001, the Naval Reserve has recalled
    approximately 10,000 Selected Naval Reservists to support Operations
    Noble Eagle and Enduring Freedom. The great preponderance of those
    mobilized has been dedicated to the conduct and execution of Operation
    Enduring Freedom. The majority of these Naval Reservists have been
    recalled individually based on specific skills. They include
    significant numbers of law enforcement officers and security
    specialists. Entire units of the Naval Coastal Warfare commands were
    activated. Medical, supply, intelligence and other specialties are been
    heavily tasked. Naval Reserve pilots are keeping the flow of men and
    materiel flowing to the theater of operations.
        Funding for fiscal year 2002 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 19 percent
    of the Navy, yet expends only 3 percent of the budget.
        Naval Reserve end-strength was reduced from 88,900 in fiscal year
    2001 to 86,011 in fiscal year 2002. 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 while
    the nation girds for the long-haul in the war on terrorism. ROA
    strongly urges the Congress to increase Naval Reserve end-strength to
    87,500 to support the increased requirements imposed by Operations
    Enduring Freedom and Noble Eagle for the foreseeable future.
        Several Naval Reserve personnel programs in particular should be
    maintained or increased in fiscal year 2003: (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 $10 million for fiscal year 2003 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 increase the level of funding
    for this effort in fiscal year 2002 by $2.5 million in order to
    implement the non-prior service enlistment bonus program. (3)
    Additional active duty funding for schools should be provided in the
    amount of $4 million. (4) Incentive pay for Reserve personnel in hard
    to fill and hard to maintain specialties, such as medical programs,
    should be increased by $4 million. (5) Lastly, new funding should be
    provided to fund the funeral honors support program.
    Naval Reserve Equipment Requirements
        Fiscal year 2002 was marked by a sharp decline in procurement of
    equipment for the Naval Reserve. Total Naval Reserve equipment
    procurement has steadily declined from $260 million in fiscal year 1997
    to about $35 million in fiscal year 2002, with NGREA and congressional
    add-ons virtually disappearing and P1R equipment shrinking
    precipitously. This rapid downturn in real dollars is of significant
    concern since the readiness of Naval Reserve hardware units is in great
    jeopardy. In summary, given the force-multiplying effect of today's
    Naval Reserve and its proven potential as a cost-effective force
    multiplier to assist in additional missions, the Naval Reserve must
    continue to receive sufficient funding and to hold and receive updated
    warfighting equipment if the United States is to be expected to have a
    well-trained contingency force ready to respond in the event of
    national emergency.

                 NAVAL RESERVE FISCAL YEAR 2003 EQUIPMENT NEEDS
                              [Dollars in millions]
    ------------------------------------------------------------------------
             UNFUNDED EQUIPMENT REQUIREMENT              Cost      Quantity
    ------------------------------------------------------------------------
    C-40A Transport Aircraft........................      $189.0           3
    Littoral Surveillance System....................        30.0           1
    IT-21 Fleet Readiness Infrastructure Support....        17.0  ..........
    F/A-18 Mod, ECP 560 & AN/AAS....................        37.0           6
    Naval Coastal Warfare TOA.......................        70.0  ..........
    P-3C AIP/Block Mod Update III Kits..............        27.0           3
    P-3C/BMUP Kits..................................        27.0  ..........
    FLIR Targeting Pod..............................         7.5           5
    C-130T Avionics Modernization Program...........         4.0          20
    F-5 Avionics Modernization......................        16.0           4
    CH-60 Helicopter................................        88.0           4
    ------------------------------------------------------------------------

        Equipment modernization is the most critical priority for the Naval
    Reserve. ROA strongly urges the Congress to provide $527.5 million to
    support the vital and continuing Naval Reserve unfunded equipment needs
    in fiscal year 2003.
                              marine corps reserve
        Nearly 5,000 Marine Corps Reservists have been recalled under the
    partial mobilization declared by the President. Marine Reservists are
    in every theater of the war on terrorism. They are in Guantanamo Bay,
    Cuba, guarding Al Qaeda detainees and they were in Kandahar,
    Afghanistan securing the heartland of the Taliban. Every Marine is
    first and foremost a Marine and a rifleman.
        ROA urges the Congress to maintain Selected Marine Corps Reserve
    end-strength at 39,558 (including 2,261 Active Reservists) in order to
    ensure the Marine Corps capability to be the first expeditionary
    American force to meet and defeat the enemy anywhere in the world.
    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 18 Cs 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.
    A safe and consistent fielding of the V-22 Osprey tilt rotor flight
    system 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 earlier fielding of
    the V-22 across the Total Force.

         MARINE CORPS RESERVE FISCAL YEAR 2003 UNFUNDED EQUIPMENT NEEDS
                              [Dollars in millions]
    ------------------------------------------------------------------------
             UNFUNDED EQUIPMENT REQUIREMENT              Cost      Quantity
    ------------------------------------------------------------------------
    F/A-18A ECP-583 (12 USMCR aircraft).............       $70.0          36
    CH-53E Helicopter Night Vision System (HNVS)            45.0  ..........
     ``B'' Kits.....................................
    KC-130 APR V2 Radar Warning Receiver............         2.0  ..........
    CH-53E External Cargo Load Improvements.........         3.3  ..........
    CH-53E APR-39A V2 Radar Warning Receiver........        20.0  ..........
    NBC Equipment...................................         0.8  ..........
    KC-130T Avionics Modernization..................         8.5  ..........
    CH-53E SLEP Risk Assessment.....................        15.0  ..........
    CH-53E Aircrew Procedure Trainer (APT) Flight           12.8           1
     Simulator......................................
    AH-1W Aircrew Procedures Trainer (APT) Flight           10.0           1
     Simulator......................................
    Supplemental Aviation Spares Package............         7.0  ..........
    Reserve Manpower Management System 21st Century.         1.2  ..........
    Initial Equipment Issue (Reserves)..............         6.5  ..........
    ------------------------------------------------------------------------
    Aviation equipment funded through Aircraft Procurement Navy
      appropriation.

        ROA recommends that the Congress authorize and appropriate $202.1
    million for these critical unfunded Marine Corps Reserve equipment
    priorities.
              interallied confederation of reserve officers--cior
        The Reserve Officers Association is asking the Congress to provide
    support, through the Department of Defense, for the 2004 International
    Summer Congress of the Interallied Confederation of Reserve Officers
    (CIOR) and the Interallied Confederation of Reserve Medical Officers
    (CIOMR) that will be hosted by the United States. This is a United
    States nationally sponsored event, not a private association
    conference. U.S. military team members, most of whom are world-class
    athletes, will compete in international team sporting events, including
    orienteering, obstacle courses and marksmanship, equivalent to
    triathlon ``Ironman'' sports competitions, against other nationally
    sponsored teams over a period of ten days. A host of other activities
    focused on military professional development, information exchange, and
    leadership will also highlight the agenda.
        This CIOR International Summer Congress was last held in the United
    States in 1993 in Washington and ROA, as agent for CIOR, deeply
    appreciated the support of the Department of Defense, and its
    contribution of personnel and resources. That Summer Congress was a
    tremendous success and highlighted the outstanding athletes and Reserve
    military forces of the United States, as well as the Capitol of our
    nation. It should be noted that Senator Strom Thurmond previously
    served as the United States International Vice President for CIOR. CIOR
    was created in 1948 prior to the Washington Treaty of 1949 that formed
    NATO. It serves the sole purpose of supporting NATO under a NATO
    Military Committee charter that empowers CIOR to advise NATO on Reserve
    forces and to advocate and demonstrate a strong public diplomacy for
    the citizen-soldier on behalf of NATO.
        ROA strongly urges the Congress to support the commitment to,
    planning for, and execution of the 2004 CIOR/CIOMR Summer Congress in
    Washington, D.C., to include fully funding the Military Competitions
    and the Young Reserve Officers Workshop events in the 2004 Summer
    Congress. Congress is further requested to create a discrete budget
    line for CIOR/CIOMR in the Department of Defense account, and
    appropriate $500,000 in fiscal year 2003 for the purpose of supporting
    the 2004 CIOR Summer Congress. By so doing, Congress will signal
    unequivocal U.S. support for this important foreign policy and national
    security activity.
                                   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 Inouye. Well, I will suggest to my subcommittee
    that we, on behalf of Senator Thurmond, provide the money.
        Mr. Spiegel. Thank you, sir. We appreciate it.
        Senator Inouye. Thank you very much.
        Our next witness is the vice president of public policy,
    the Leukemia & Lymphoma Society, Mr. George Dahlman.
    STATEMENT OF GEORGE DAHLMAN, VICE PRESIDENT, PUBLIC
                POLICY, THE LEUKEMIA & LYMPHOMA SOCIETY
        Mr. Dahlman. Thank you, Mr. Chairman, for this opportunity
    to testify on behalf of the Leukemia & Lymphoma Society. I am
    George Dahlman, as you know, vice president, public policy, for
    the society. I am also the parent of a child with leukemia.
        During its 52-year history, the society has been dedicated
    to finding a cure for the blood cancers. Those are leukemia,
    lymphoma, and myeloma. The society is both the largest private
    organization dedicated to blood cancers and also the Nation's
    second-largest private cancer organization. In 2002 we are
    providing $38 million in research grants and a wide range of
    services to patients and their families throughout our 59
    chapters across the country.
        A great deal of progress is being made in the treatment of
    many blood cancers. Over the last two decades there have been
    impressive strides in the treatment of childhood leukemia. Just
    last year, a new therapy was approved for chronic myelogenous
    leukemia (CML) called Gleevec. It is a so-called targeted
    therapy that corrects the molecular defect that causes the
    disease.
        Despite the advances in these diseases, they pose a
    continuing risk to Americans. In 2002, more than 100,000 people
    will be diagnosed with a blood-related cancer, and almost
    60,000 will die from them. Taken together, the blood cancers
    are fifth among cancers in incident, and second in mortality.
        Why are these diseases important to the Department of
    Defense? They are important for a number of reasons. First,
    research on blood-related cancers have special relevance to the
    Armed Forces because these are the cancers that appear among
    individuals with chemical warfare and nuclear exposure. Higher
    incidences of leukemia have long been substantiated in extreme
    nuclear incidents in both military and civilian populations,
    and recent studies have proven that individual exposure to
    chemical agents such as Agent Orange in the Vietnam War caused
    an increased risk of lymphoid malignancies.
        This point was driven home in The Washington Post yesterday
    in its description of a plot to explode a so-called dirty bomb,
    and the number of cancer cases that would result from such an
    incident.
        Secondly, research in the blood cancers has traditionally
    pioneered treatments in other cancers. Chemotherapy and bone
    marrow transplants are two striking examples of treatments
    first developed in the blood cancers now being applied to other
    malignancies. The more recent example of Gleevec and its
    targeted molecular approach to treatment clearly continues that
    tradition.
        That relevance and opportunity was recognized last year
    when Congress appropriated $5 million to begin the initial
    research into chronic myelogenous leukemia through the
    Pentagon's peer reviewed program. Since that program was
    announced, members of the society, patient advocates, and
    leading researchers have enthusiastically welcomed the
    opportunity to become a part of that program. Unfortunately, $5
    million does not go very far in medical research.
        Recognizing that fact, and the opportunity here, a
    bipartisan group of 31 Members of Congress have requested that
    the program be modestly increased to $16 million and be
    expanded to include all of the blood cancers, leukemias,
    lymphomas, and myelomas. This would provide the research
    community with the flexibility to build on the pioneering
    tradition that has characterized this field.
        DOD research on the other forms of blood-related cancer
    addresses the importance of preparing for civilian and military
    exposure to the weapons being developed by several hostile
    nations, and to aid in the march to a more effective treatment
    to all who suffer from these diseases.
        The Leukemia and Lymphoma Society, along with its partners
    in the Blood Cancer Coalition, the Lymphoma Research Foundation
    and the Multiple Myeloma Research Foundation strongly endorses
    and enthusiastically supports this effort, and respectfully
    urges the committee to include this funding in the fiscal year
    2003 defense appropriations bill.
        That concludes my statement, Mr. Chairman. I would be happy
    to answer questions.
        [The statement follows:]

                      Prepared Statement of George Dahlman

                                  introduction
        I am pleased to submit this statement on behalf of The Leukemia &
    Lymphoma Society (LLS). The Society is the largest private organization
    dedicated to blood-related cancers and is the nation's second largest
    private cancer organization. During its 52-year history, the LLS has
    been dedicated to finding a cure for the blood cancers--leukemia,
    lymphoma, and myeloma. Our central contribution to the search for a
    cure is funding a significant amount of basic and translational
    research in the blood cancers. In 2002, we will fund almost $38 million
    in research grants. In addition to our role as a funder of research, we
    provide a wide range of services to individuals with the blood cancers,
    their caregivers, families, and friends through our 59 chapters across
    the country. Finally, we advocate responsible public policies that will
    advance our mission of finding a cure for the blood cancers.
        We are pleased to report that impressive progress has been made in
    the treatment of many blood cancers. Over the years, there have been
    steady and impressive strides in the treatment of the most common form
    of childhood leukemia, and the survival rate for that form of leukemia
    has dramatically improved. And just last year, a new therapy was
    approved for chronic myelogenous leukemia, a form of leukemia for which
    there were previously limited treatment options, all with serious side-
    effects. This new therapy, a signal transduction inhibitor called
    Gleevec, is a so-called targeted therapy which corrects the molecular
    defect that causes the disease, and does so with few side effects.
        LLS contributed to the early research on Gleevec, as it has
    contributed to basic research on a number of new therapies. We are
    pleased that we played a role in the development of this life-saving
    therapy, but we realize that our mission is far from complete. Many
    forms of leukemia and lymphoma present daunting treatment challenges,
    as does myeloma. There is much work still to be done, and we believe
    the research partnership between the public and private sectors--as
    represented in the Department of Defense's Congressionally Directed
    Medical Research Program--in an integral part of that effort and should
    be strengthened.
             the grant programs of the leukemia & lymphoma society
        The grant programs of the LLS are in three broad categories: Career
    Development Grants, Translational Research Grants for early-stage
    support for clinical research, and Specialized Centers of Research. In
    our Career Development program, we fund Scholars, Special Fellows, and
    Fellows who are pursuing careers in basic or clinical research. In our
    Translational Research Program, we focus on supporting investigators
    whose objective is to translate basic research discoveries into new
    therapies.
        The work of Dr. Brian Druker, an oncologist at Oregon Health
    Sciences University and the chief investigator on Gleevec, was
    supported by a translational research grant from LLS. Dr. Druker is
    certainly a star among those supported by LLS, but our support in this
    field is broad and deep. Through the Career Development and
    Translational Research Programs, we are currently supporting more than
    400 investigators in 33 States and ten foreign countries.
        Our new Specialized Centers of Research grant program (SCOR) is
    intended to bring together research teams focused on the discovery of
    innovative approaches to benefit patients or those at risk of
    developing leukemia, lymphoma, or myeloma. The awards will go to those
    groups that can demonstrate that their close interaction will create
    research synergy and accelerate our search for new therapies,
    prevention, or cures.
                        impact of hematological cancers
        Despite enhancements in treating blood cancers, there are still
    significant research opportunities and challenges. Hematological, or
    blood-related, cancers pose a serious health risk to Americans. These
    cancers are actually a large number of diseases of varied causes and
    molecular make-up, and with different treatments, that strike men and
    women of all ages. In 2002, more than 100,000 Americans will be
    diagnosed with and almost 60,000 will die from these cancers. For some,
    treatment may lead to long-term remission and cure; for others these
    are chronic diseases that will require treatments on several occasions;
    and for others treatment options are extremely limited. For many,
    recurring disease will be a continual threat to a productive and secure
    life.
      --Taken together, the hematological cancers are fifth among cancers
            in incidence and second in mortality.
      --Almost 700,000 Americans are living with a hematological malignancy
            in 2002.
      --Almost 60,000 people will die from hematological cancers in 2002,
            compared to 40,000 from breast cancer, 30,200 from prostate
            cancer, and 56,000 from colorectal cancer.
      --Blood-related cancers still represent serious treatment challenges.
            The improved survival for those diagnosed with all types of
            hematological cancers has been uneven. The 5-year survival
            rates are:
          Hodgkin's disease--83 percent
          Non-Hodgkin's lymphoma--53 percent
          Leukemias (total) 45 percent
          Multiple Myeloma 29 percent
          Acute Myelogenous Leukemia 14 percent
      --Individuals who have been treated for leukemia, lymphoma, and
            myeloma may suffer serious adverse events of treatment,
            including second malignancies, organ dysfunction (cardiac,
            pulmonary, and endocrine), neuropsychological and psychosocial
            aspects, and quality of life.
                                     trends
        Since the early 1970s, incidence rates for non-Hodgkin's lymphoma
    (NHL) have nearly doubled.
        For the period from 1973 to 1998, the death rate for non-Hodgkin's
    lymphoma increased by 45 percent, and the death rate for multiple
    myeloma increased by more than 32 percent. These increases occurred
    during a time period when death rates for most other cancers are
    dropping.
        Non-Hodgkin's lymphoma and multiple myeloma rank second and fifth,
    respectively, in terms of increased cancer mortality since 1973.
        Recent statistics indicate both increasing incidence and earlier
    age of onset for multiple myeloma.
        Multiple myeloma is one of the top ten leading causes of cancer
    death among African Americans.
        Despite the significant decline in the leukemia death rate for
    children in the United States, leukemia is still one of the two most
    common diseases that cause death in children in the United States.
        Lymphoma is the third most common childhood cancer.
                        causes of hematological cancers
        The causes of hematological cancers are varied, and our
    understanding of the etiology of leukemia, lymphoma, and myeloma is
    limited. Chemicals in pesticides and herbicides, as well as viruses
    such as HIV and EBV, play a role in some hematological cancers, but for
    most cases, no cause is identified. Researchers have recently published
    a study reporting that the viral footprint for simian virus 40 (SV40)
    was found in the tumors of 43 percent of NHL patients. These research
    findings may open avenues for investigation of the detection,
    prevention, and treatment of NHL. There is a pressing need for more
    investigation of the role of infectious agents or environmental toxins
    in the initiation or progression of these diseases.
                    importance to the department of defense
        This type of medical research is particularly important to the
    Department of Defense for a number of reasons.
        First, research on blood-related cancers has significant relevance
    to the armed forces, as the incidence of these cancers is substantially
    higher among individuals with chemical and nuclear exposure. Higher
    incidences of leukemia have long been substantiated in extreme nuclear
    incidents in both military and civilian populations, and recent studies
    have proven that individual exposure to chemical agents, such as Agent
    Orange in the Vietnam War, cause an increased risk of contracting
    lymphoid malignancies. In addition, bone marrow transplants were first
    explored as a means of treating radiation-exposed combatants and
    civilians following World War II.
        Secondly, research in the blood cancers has traditionally pioneered
    treatments in other malignancies. This research frequently represents
    the leading edge in cancer treatments that are later applied to other
    forms of cancer Chemotherapy and bone marrow transplants are two
    striking examples of treatments first developed in the blood cancers.
        Now, research into these types of cancers is creating great new
    opportunities for the understanding and treatment of a wide range of
    cancers. Scientists are investigating several new approaches to the
    treatment of blood cancers, and the results of one of those exciting
    endeavors--the new therapy called Gleevec, to treat chronic myelogenous
    leukemia (CML)--continues that pioneering trend. Although that drug is
    receiving great praise and is even being hailed as a possible cure for
    CML, research by blood cancer scientists on the cellular mechanisms of
    cancer growth will clearly enhance our understanding not only of blood-
    related cancers, but all cancers.
        Investigators are working to develop a system of molecular
    classification of hematological malignancies that may enable
    development of treatments that are specific for each cancer. Genetic
    and molecular analyses of hematological cancers are identifying targets
    for drug development. Gleevec--based on an understanding of the genetic
    change that leads to this disease, is hopefully just the first of other
    similar drugs that are targeted to intercept a cellular malfunction
    that leads to cancer.
        Other innovative approaches include cancer vaccines employing
    immunotherapy to enhance the recognition and destruction of cancer
    cells; laboratory-designed monoclonal antibodies to use the specificity
    of an antibody directed against a tumor antigen to target therapy to
    the tumor, sparing normal cells; and use of an antibody to carry a
    radioactive isotope or toxin to the cancer cells.
        The public and private investment in research has yielded knowledge
    of the nature of hematological cancers and advances in treatment. These
    studies have served as a model for treatment of other cancers and have
    contributed to our understanding of diseases associated with
    autoimmunity and aging. Research in blood cancers has also contributed
    to our understanding of disease associated with autoimmunity and aging,
    such as lupus, rheumatoid arthritis, and Alzheimer's diseases. The pace
    of discovery has recently accelerated, and there is great potential for
    significant new advances in treating these diseases in ways that are
    more targeted and less toxic.
        The potential in this field was recently illustrated with the
    release of a report by the Leukemia, Lymphoma and Myeloma Progress
    Review Group (LLM-PRG). In December 2000, the National Cancer Institute
    (NCI) convened a blue-ribbon panel of extramural researchers,
    clinicians, and advocates to provide advice on the NCI's blood cancer
    research program. This group of experts made a series of
    recommendations aimed at strengthening the blood cancer research
    program. One of those recommendations was for a public-private sector
    translational research consortium with the lofty goal of reducing by
    half the period of time necessary for development of a new blood cancer
    therapy. This idea is one that we would like to see developed further,
    because it reflects our philosophy that collaboration and cooperation
    are critical to improvements in cancer treatment; it also reinforces
    the commitment of LLS to increase our investment in translational
    research in order to speed the movement of basic research findings to
    the bedside.
        It is this valuable translational approach to research--getting
    therapies from the research bench to the bedside--that has
    characterized our emphasis and which has now been made the emphasis in
    the initial CML research in the DOD program.
        Finally, while the incidence of many cancers is declining, the
    incidence of non-Hodgkin's lymphoma has increased dramatically since
    the 1970s and recent statistics indicate both increasing incidence and
    earlier age of onset for multiple myeloma. The reasons for these
    trends--which stand in, marked contrast to those for many other
    cancers--are not understood. It is absolutely critical that possible
    links between environmental exposure to toxins and blood-related
    cancers be thoroughly investigated. In total, some 110,000 Americans
    will be diagnosed with a blood-related cancer this year, and more than
    60,000 will die from them.
        From a medical research perspective, it is a particularly promising
    time to build a DOD research effort focused on blood-related cancers.
    That relevance and opportunity were recognized last year when Congress
    appropriated $5 million to begin initial research into chronic
    myelogenous leukemia (CML) through the Congressionally Directed Medical
    Research Program (CDMRP). As members of the Committee know, a
    noteworthy and admirable distinction of the CDMRP is its cooperative
    and collaborative process that incorporates the experience and
    expertise of a broad range of patients, researchers and physicians in
    the field. Since the CML program was announced, members of the Society,
    individual patient advocates and leading researchers have
    enthusiastically welcomed the opportunity to become a part of this
    program and contribute to the promise of a successful, collaborative
    quest for a cure.
        Unfortunately, $5 million does not go very far in medical research.
    Recognizing that fact and the opportunity this research represents,
    Senators Jack Reed and Mike DeWine, along with a number of your
    colleagues, have requested that the program be modestly increased to
    $16 million and that it be expanded to included all the blood cancers--
    the leukemias, lymphomas and myeloma. This would provide the research
    community with the flexibility to build on the pioneering tradition
    that has characterized this field.
        The Leukemia & Lymphoma Society strongly endorses and
    enthusiastically supports this effort and urges the Committee to
    include this funding in the fiscal year 2003 Defense Appropriations
    bill.
        We believe that building on the foundation Congress initiated last
    year would both significantly strengthen the CDMRP and accelerate the
    development of cancer treatments. As history has demonstrated,
    expanding its focus into areas that demonstrate great promise; namely
    the blood-related cancers of leukemia, lymphoma and myeloma, would
    substantially aid the overall cancer research effort and yield great
    dividends.

        Senator Inouye. Thank you. What will $16 million do?
        Mr. Dahlman. We are hopeful it will complement a lot of the
    work being done by other agencies at NIH, and be able to give
    them a start at looking at what some complementary research
    might be.
        Senator Inouye. It is not duplicating?
        Mr. Dahlman. No, it is not. A precedent has been set
    through the program, through the breast cancer program and the
    prostate cancer program. They have all been very innovative
    programs.
        Senator Inouye. Thank you very much. I think I am one of
    the cosponsors.
        The next witness is the cochairman of the Health Care
    Committee of the Military Coalition, Senior Chief Robert
    Washington, United States Navy (Ret.).
    STATEMENT OF SENIOR CHIEF ROBERT WASHINGTON, (RET.),
                USN, COCHAIRMAN, HEALTH CARE COMMITTEE, THE
                MILITARY COALITION
        Chief Washington. Thank you, Mr. Chairman. The Military
    Coalition is most grateful for your leadership and strong
    support of last year's improvement in military health care,
    pay, and other benefits. The coalition also appreciates this
    opportunity to present its concerns for 2003.
        The coalition recommends increasing end strength to match
    demanding operational commitments, reauthorization of funding
    for the proposed pay increases, and restoration of full pay
    comparability. The coalition also urges fully funding Guard and
    Reserve force end strength and missions and funding for
    concurrent receipt relief in 2003, along with the reform of the
    SBPP program authorized by the Armed Services Committee. The
    balance of my statement will address health care concerns.
        Recent landmark legislation enacted for uniformed services
    beneficiaries demonstrates Congress recognizes the
    extraordinary demands and sacrifices of the uniformed service
    career. The coalition is grateful that priority was placed on
    the over-65 population and active duty beneficiaries. However,
    similarly aggressive action is needed to make TRICARE more
    responsive to the needs of the under-65 beneficiaries, and to
    address other issues crucial to all TRICARE beneficiaries.
        Despite the initiative this subcommittee has promoted, our
    members tell us they have difficulty in finding TRICARE
    providers in certain areas. Complaints run the course from
    insufficient reimbursement to demanding administrative
    requirements. The loss of providers due to reimbursement
    restriction has escalated since the TRICARE maximum allowable
    charge rates were tied to Medicare rates. During the current
    controversy over the reimbursement level, providers are simply
    refusing to take new Medicare patients, or are dropping out of
    the program altogether. Those unwilling to accept Medicare
    patients because of reimbursement are also reluctant to be
    TRICARE providers.
        The coalition urges consideration of additional steps to
    ensure provider participation and urging DOD to help implement
    existing authority to increase reimbursement when necessary to
    attract providers, reduce administrative requirements, and take
    additional steps to ensure rapid implementation of electronic
    claim processing.
        There are problems with the coordination of TRICARE
    Standard benefit with other health insurance, and there is an
    inequity in benefit administration. If a beneficiary has other
    health insurance that pays 115 percent of the allowable charge,
    TRICARE pays nothing, leaving the beneficiary responsible for
    the remainder of the bill. This is a denial of benefit, and it
    unfairly shifts costs to beneficiaries. As a result, under-65
    beneficiaries may have to give up their TRICARE benefit due to
    private sector employment that provides private health
    insurance.
        We urge the subcommittee to eliminate the 115 percent
    billing limit when TRICARE is compared to other health
    insurance and reinstate the benefit methodology, the same
    benefit afforded to TRICARE for Life beneficiaries. The
    coalition also urges funding to expand TRICARE primary remote
    to family members who are unable to reside with service
    members. We also urge the expansion of TRICARE coverage for
    ready Reserve and National Guard members and their families to
    ensure an adequate health care safety net for them.
        During this national crisis and the increased mobilization
    of the Guard and Reserve, this is an important continuity of
    care matter, as well as a recruitment and retention issue.
        In conclusion, Mr. Chairman, I thank you again for the
    opportunity for me to present the coalition's views.
        [The statement follows:]

                    Prepared Statement of Robert Washington

        Mister Chairman and distinguished members of the subcommittee, 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
      --Air Force Women Officers Associated
      --AMVETS
      --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, U.S. Coast
            Guard
      --Commissioned Officers Association of the U.S. 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.
                                personnel issues
        Mr. Chairman, The Military Coalition (TMC) is most grateful to the
    leadership and members of this Subcommittee for their strong support
    leading to last year's significant improvements in military pay,
    housing allowances and permanent change of station allowance
    enhancements. But as much as Congress accomplished last year, very
    significant inequities and readiness challenges remain to be addressed.
        In testimony today, The Military Coalition offers its collective
    recommendations on what needs to be done to address these important
    issues and sustain long-term personnel readiness.
                              active force issues
        Since the end of the Cold War, the size of the force and real
    defense spending have been cut more than a third. But national leaders
    also have pursued an increasingly active role for America's forces in
    guarding the peace in a still-dangerous world--even more so since last
    September--so that today's servicemembers are being deployed many times
    more often than those of the mid-1980s. The increased personnel tempo
    necessary to meet continued and sustained training and operational
    requirements has required servicemembers to work progressively longer
    and harder every year.
        Personnel Strengths and Operations Tempo.--The Coalition has been
    dismayed at low force levels and the very modest Service requests for
    additional end strength increases resulting in high operational tempo
    levels. The force is unduly stressed due to insufficient numbers of
    personnel to support the war on terrorism and associated operational
    requirements, resulting in a negative impact on the quality of life for
    uniformed services personnel.
        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 consider all possible manpower options to ease
    operational stresses on active, Reserve and Guard personnel.
        Pay Raise Comparability.--The Military Coalition is extremely
    appreciative of the Subcommittee's support during the last 3 years in
    reversing the routine practice of capping servicemembers' annual pay
    raises below the average American's. The January 2002 pay raise, the
    largest in 20 years, and the increased allowances approved last year
    provided more appropriate financial recognition for career and high-
    performing servicemembers. But the Coalition urges the Subcommittee to
    do more.
        As significant as the recent gains in military pay have been, it
    must be acknowledged that the annual increases approved so far will
    make up only about half of the cumulative pay raise sacrifices imposed
    on servicemembers over the previous two decades. 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.
        The President's Budget proposes an average 4.8 percent raise for
    fiscal year 2003, which would shrink the gap another 1.2 percentage
    points. Even at that rate, it would take another 6 years to restore
    full comparability. But current law would only reduce the gap by one-
    half percentage point per year through 2006--and then once again begin
    capping military raises below private sector wage growth.

        The Coalition urges the Subcommittee to fund the Administration-
    proposed raise and restore full pay comparability on the quickest
    possible schedule. The Military Coalition believes all members need and
    deserve annual raises at least equal to private sector wage growth.
                       national guard and reserve issues
        Support of Active Duty Operations.--National Guard and Reserve
    members and units shoulder ever-greater day-to-day operational
    workloads. Along with active duty forces, they increasingly have come
    to face many of the same challenges as their active counterparts.
        Compounding the problem for National Guard and Reserve personnel,
    their increasing support of day-to-day active duty operations also has
    placed greater strains on the employers of these members. This support
    has become less and less certain as National Guard and Reserve members
    have taken longer and more frequent leaves of absence from their
    civilian jobs. In the last few months, the requirements of the war on
    terrorism led to the activation of over 76,000 National Guard and
    Reserve members for homeland defense and overseas deployments.
        The Military Coalition urges continued attention to ensuring an
    appropriate match between National Guard and Reserve force strengths
    and missions, and appropriations sufficient to fully fund those
    strengths and missions.
                         retirement and survivor issues
        While issues affecting retired pay and survivor benefits for
    uniformed services personnel (and their dependents) fall under a
    different subcommittee, the Coalition would like to express its concern
    over two important subjects.
        Concurrent Receipt of Military Retired Pay and VA Disability
    Compensation.--The Coalition has long held that military retired pay
    and veterans disability compensation are paid for different purposes,
    and one should not offset the other. Specifically, retired pay is
    earned compensation for completing a career of arduous uniformed
    service, while veterans disability compensation is paid for pain and
    suffering and loss of future earnings' potential caused by a service-
    connected disability.
        Previous attempts to fix this inequity have all been met with the
    same response--the cost is too large. But the cost to men and women in
    uniform who have been injured while serving this Nation is far greater.
    No one disabled in the course of serving his or her country should have
    to forfeit an earned retirement--for years of faithful and dedicated
    service--in order to receive VA disability compensation for the wounds,
    injuries, or illnesses incurred in such service.
        Rep. Michael Bilirakis' HR 303 and Sen. Harry Reid's S. 170 would
    correct the unfair and outdated retired pay/disability compensation
    offset, and these bills enjoy cosponsorship of 86 percent of the House
    and 76 percent of the Senate, respectively.
        The Coalition believes strongly that that level of cosponsorship
    support is inconsistent with continued inaction, and that there needs
    to be a greater correlation between what Congress says and what it
    does. The remaining disabled warriors of the Greatest Generation and
    Korea have earned and deserve better treatment, and Congress needs to
    provide substantive relief as a matter of urgency before any more of
    their number fade into history.
        Last year, Congress opted to leave the issue to the Executive
    Branch. The sad reality is that Administrations of any party have been
    consistently reluctant to seek the budget resources to solve expensive
    personnel equity problems. Military members have had to look to
    Congress to do the right thing, and more often than not, Congress has
    done so.
        With other options exhausted, it is finally time for Congress to
    take real action to address the grossly unfair financial penalties
    visited for so long on those who already have suffered most for their
    country--military retirees disabled as a result of their service.
        The Military Coalition urges Subcommittee leaders and members to
    voice their support of concurrent receipt to House and Senate leaders
    most strongly, to ensure authority and funding for substantive
    concurrent receipt relief in fiscal year 2003--including appropriated
    funding for the necessary increases for DOD deposits in the military
    retirement trust fund .
        Reduction in Age-62 Survivor Benefit Plan (SBP) Annuity.--Since SBP
    was first enacted in 1972, retirees and survivors have inundated DOD,
    Congress and military associations with letters decrying the reduction
    in survivors' SBP annuities that occurs when the survivor attains age
    62. The amount of the reduction varies by the circumstances in each
    case. Before age 62, SBP survivors receive an annuity equal to 55
    percent of the retiree's SBP covered retired pay. At age 62, the
    annuity is reduced to a lower percentage, down to a floor of 35 percent
    of covered retired pay. For many older retirees, the amount of the
    reduction is related to the amount of the survivor's Social Security
    benefit that is potentially attributable to the retiree's military
    service. For members who attained retirement eligibility after 1985,
    the post-62 benefit is a flat 35 percent of covered retired pay.
        Although this age 62 reduction was part of the initial SBP statute,
    large numbers of members who retired in the 1970s (or who retired
    earlier but enrolled in the initial SBP open season) were not informed
    of it at the time they enrolled. This is because the initial
    informational materials used by DOD and the services to describe the
    program made no mention of the age 62 offset.
        These retirees and their spouses are often stunned to learn of this
    reduction in survivor benefit, and they are further dismayed to learn
    that the survivor reduction attributed to the retiree's Social
    Security--covered military earnings applies even to widows whose Social
    Security benefit is based on their own work history.
        To add to these grievances, the DOD Actuary has confirmed that the
    40-percent government subsidy for the SBP program--which has been cited
    for more than two decades as an inducement for retirees to elect SBP
    coverage--has declined to less than 27 percent. The statute assumed
    that retiree premiums would cover 60 percent of expected long-term SBP
    costs based on the Actuary's assumptions about future inflation rates,
    interest rates, and mortality rates. However, actual experience has
    proven these assumptions were too conservative, so that retiree
    premiums now cover 73 percent of expected SBP benefit costs. In effect,
    retirees are being charged too much for the long-promised benefit.
        In addition, a significant inequity exists from the military
    retiree's standpoint in that the survivor benefit plan coverage
    provided for federal civilian employees provides both a higher post-62
    benefit and a higher government subsidy, as indicated in the chart
    below.

              FEDERAL CIVILIAN VS. MILITARY SBP ANNUITY AND SUBSIDY
                                    [Percent]
    ------------------------------------------------------------------------
                                              CSRS \1\   FERS \2\   Military
    ------------------------------------------------------------------------
    Post-62 percent Of Ret Pay.............         55         50         35
    Gov't Subsidy..........................         50         42         27
    ------------------------------------------------------------------------
    \1\ Civil Service Retirement System.
    \2\ Federal Employees Retirement System.

        Some might argue that federal civilians warrant higher benefits and
    subsidies on the basis of their extended careers, but that is false
    reasoning. Military members, except for disabled members, must serve at
    least 20 years to qualify for retirement and often serve much longer.
    While many federal civilian employees do, in fact, serve even longer
    periods, this is not necessary to qualify for retirement and survivor
    coverage, as many nondisabled federal civilians qualify for retirement
    after serving considerably less than 20 years--and can do so with as
    little as 5 years' service, depending on age.
        The Fiscal Year 2001 Defense Authorization Act included a ``Sense
    of Congress'' provision specifying that legislation should be enacted
    to increase the SBP age-62 annuity to ``reduce (and eventually
    eliminate)'' the different levels of annuities for survivors age 62 and
    older vs. those for younger survivors. But that statement of support
    remains to be translated into substantive relief.
        The Military Coalition strongly supports legislation sponsored by
    Sen. Thurmond and Rep Miller (S. 145 and H.R. 548, respectively) that,
    if enacted, would eliminate the disparity in a three-stage process--
    raising the minimum SBP annuity to 40 percent of SBP-covered retired
    pay immediately; to 45 percent on October 1, 2004; and to 55 percent on
    October 1, 2011.
        We appreciate only too well the cost and other challenges
    associated with such mandatory spending initiatives, and believe this
    incremental approach offers a reasonable balance between the need to
    restore equity and the need for fiscal discipline. Despite a shrinking
    federal surplus, action is needed now to correct this long-standing
    inequity.
        The Military Coalition strongly recommends elimination of the age-
    62 Survivor Benefit Plan annuity reduction and additional appropriated
    funding to cover the associated increases in DOD deposits to the
    military retirement/SBP trust fund.
                               health care issues
        The Military Coalition (TMC) is most deeply appreciative of the
    Subcommittee's exceptional efforts over the last 2 years to honor
    government health care commitments to uniformed services beneficiaries,
    particularly for Medicare-eligibles and active duty members and
    families. The long and impressive list of accomplishments that this
    Subcommittee has provided funds for is worth enumerating once more:
      --Authorization of TRICARE For Life (TFL) and the TRICARE Senior
            Pharmacy Program (TSRx) for Medicare-eligibles;
      --Establishment of the Military Medicare-eligible Retiree Health Care
            Fund to guarantee funding for older beneficiaries' care
            beginning Oct. 1, 2002;
      --Reduction of the TRICARE Catastrophic Cap on retired beneficiaries'
            out-of-pocket expenses from $7,500 to $3,000 per year per
            family;
      --Elimination of TRICARE Prime copayments for active duty family
            members;
      --Expansion of TRICARE Prime Remote for active duty families assigned
            where Prime is not available; and
      --Full funding of the defense health program in fiscal year 2002, for
            the first time in many years.
        These and other subcommittee-sponsored enhancements are saving
    military beneficiaries thousands of dollars a year and represent the
    greatest military health care advancements in a generation. However,
    much remains to be done to fully implement this host of laudable
    initiatives, to address certain chronic program shortcomings, and to
    address remaining initiatives that will be essential to providing a
    more equitable and consistent health for all categories of TRICARE
    beneficiaries, regardless of age or geography.
        The Coalition looks forward to continuing its productive and
    cooperative efforts with the subcommittee's members and staff in
    pursuit of this common objective.
             provide adequate funding for the defense health budget
        A top Coalition priority for fiscal year 2003 is to work with
    Congress and DOD to ensure continued full funding of the Defense Health
    Budget to meet readiness needs and deliver needed care, through both
    the military direct care system and managed care support contracts, for
    ALL uniformed services beneficiaries, regardless of age, status or
    location. 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. The Subcommittee's continuing
    conscientious scrutiny of the adequacy of annual budget proposals will
    be essential to avoid a return to the chronic underfunding situations
    that previously led to execution shortfalls, shortchanging of the
    direct care system, inadequate equipment capitalization, failure to
    invest in infrastructure and substitution of annual emergency
    supplemental funding requests for candid and conscientious budget
    planning.
        In years past, part of the funding problem was attributable to the
    lack of a clearly defined benefit. With the introduction of TFL, the
    benefit is more clearly defined and funding requirements should be
    better understood.
        The Military Coalition strongly recommends the Subcommittee
    continue its watchfulness to ensure full funding of the Defense Health
    Program, to include military medical readiness, TRICARE, and the DOD
    peacetime health care mission.
                        tricare for life implementation
        The Coalition is pleased to report that, The Coalition is actively
    engaged in two OSD-sponsored TFL action groups working with DOD to
    facilitate implementation. From our vantage point, the Defense
    Department continues to be committed to implement TFL consistent with
    Congressional intent and is working vigorously toward that end.
        The Coalition is concerned that DOD appears not to have budgeted
    the necessary funds to adequately inform beneficiaries and providers
    about the upgraded TFL and TSRx benefits. In most cases, informing
    beneficiaries was left to the managed care support contractors. The
    result was a great disparity in the quantity and quality of notice
    members received about these benefit changes. In many cases, the MCSCs
    put limited resources into mailings and beneficiary briefings because
    they had not budgeted for such things, and received little, if any,
    extra funding from DOD for this purpose.
        In many cases, beneficiaries' best sources of information were
    magazines and other TFL- or TSRx-specific publications published by
    beneficiary associations. Unfortunately, many beneficiaries did not
    have access to the association publications and thus were inadequately
    informed.
        The Coalition recommends the subcommittee establish safeguards to
    ensure adequate funding is provided for beneficiary education whenever
    significant changes occur in military health or pharmacy programs.
                            improvements in tricare
        The Coalition is pleased that the fiscal year 2001 NDAA made an
    effort to address the lack of physician participation in TRICARE by
    requiring:
      --DOD to designate specific rates for reimbursement for services in
            certain localities where access to health care services would
            be severely impaired; and
      --Prepare reports analyzing the utility of increased reimbursements
            to ensure the availability of network providers, and to
            determine the extent to which physicians are choosing not to
            participate in contracts to provide health care in rural areas.
        However, beneficiaries in certain geographies continue to report a
    lack of provider participation in TRICARE, thus limiting in access and
    choice. Despite initiatives to improve the program, we continue to hear
    complaints from providers of low and slow payments, and burdensome
    administrative requirements and hassles. These problems must be
    addressed by increasing reimbursement, streamlining claims processing
    requirements, greater reliance on electronic claims technology and
    eliminating unnecessary reporting requirements. Only by decreasing the
    administrative burden placed on providers and building a simplified and
    reliable claims system that pays in a timely way can Congress and DOD
    hope to establish TRICARE as an attractive program to providers and a
    dependable benefit for beneficiaries.
        A key problem is that, since 1991, TRICARE fees have been tied to
    Medicare reimbursement rates that have been in continual decline. While
    Congress has previously given the authority to the Secretary of Defense
    to increase reimbursements and mandated improvements in TRICARE
    business practices, only some of these improvements have been
    implemented. To date, the Secretary of Defense has made only very
    limited use of his existing authority to increase participation by
    raising reimbursement levels. Because of the slow pace of change and
    reluctance to use existing authorities, there has been little increase
    in provider participation.
        Once providers have left the system, promises of increased
    efficiencies have done little to encourage them to return. Lessons
    learned from TFL implementation demonstrate the effectiveness of
    electronic claims processing. TFL has dramatically improved access to
    care for Medicare-eligibles by streamlining administrative procedures,
    processing claims electronically, making the system simple for
    providers, and paying claims on time.
        But TRICARE remains a morass of paper claims, bureaucratic
    layering, and low and slow payments that has stubbornly resisted the
    kinds of upgrades that are essential to make TRICARE an attractive and
    reliable program for providers and beneficiaries. Having implemented
    dramatic improvements in health coverage for Medicare-eligibles over 65
    and active duty dependents, it is essential for the subcommittee to
    apply similar aggressive action to make TRICARE similarly responsive to
    the needs of under-65 beneficiaries.
        The Military Coalition most strongly urges the Subcommittee to
    ensure sufficient funding to raise reimbursements where necessary to
    attract adequate provider participation and to take additional steps as
    necessary to ensure funding for needed TRICARE upgrades, including
    rapid implementation of electronic claims processing.
                                   conclusion
        The Military Coalition would like to reiterate its profound
    gratitude for the extraordinary progress this Subcommittee has made in
    seeking to restore health care equity for all uniformed services
    beneficiaries, particularly those who are Medicare-eligible. The
    Subcommittee's efforts to authorize the implementation of TFL and TSRx
    are giant steps toward honoring the lifetime health care commitment.
    With minor refinements, TFL should provide a comprehensive and
    equitable health care benefit for all Medicare-eligible beneficiaries
        But much work remains to be done with the TRICARE program. More
    urgent effort is essential, both by Congress and DOD, to enable TRICARE
    to attract and retain quality health care providers and to ensure
    prompt upgrade of the claims processing system, to deliver a more
    uniform health care benefit across all ages and geographic areas.
                               closing statement
        Thank you very much for the opportunity to present the Coalition's
    views on these critically important topics. We look forward to
    addressing further details of these and other issues with you and the
    Subcommittee staff.

        Senator Inouye. I will personally take this matter to the
    attention of the authorizing committee, and we will try to work
    out something that will carry out your recommendations.
        Chief Washington. Thank you, Mr. Chairman.
        Senator Inouye. Thank you very much, sir.
        Our next witness is the senior vice president of the
    Biologics, Celera Genomics, American Society of Tropical
    Medicine and Hygiene, Dr. Stephen Hoffman.
    STATEMENT OF DR. STEPHEN L. HOFFMAN, M.D., SENIOR VICE
                PRESIDENT, BIOLOGICS, CELERA GENOMICS, ON
                BEHALF OF THE AMERICAN SOCIETY OF TROPICAL
                MEDICINE AND HYGIENE
        Dr. Hoffman. Good morning, Mr. Chairman. I am Stephen
    Hoffman, senior vice president of biologics at Celera Genomics.
    I am a retired Navy Captain, the former director of the Navy's
    malaria vaccine development program, and I was fortunate to
    work for 2 years in the wonderful Inouye Building in Silver
    Spring. I am the immediate past president of the American
    Society of Tropical Medicine and Hygiene (ASTMH) and I am here
    this morning to present testimony on the society's behalf.
        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, public health, and bioterrorism
    defense. In fact, most of our country's leaders in bioterrorist
    defense are members of our society.
        The DOD medical research programs play a critical role in
    our Nation's infectious disease and bioterrorism defense
    efforts. Furthermore, the programs are vitally important to
    maintain the health of our troops. Working with the private
    sector and other U.S. public health agencies, DOD scientists at
    the U.S. Army Medical Research Institute for Infectious
    Diseases, the Walter Reed Army Institute of Research and the
    Naval Medical Research Center, and DOD medical laboratories
    abroad are helping us to better understand diagnose, treat, and
    prevent infectious and tropical diseases. Such diseases include
    malaria, Acquired Immune Deficiency Syndrome (AIDS), dengue,
    diarrheal diseases, and hepatitis.
        Infectious diseases are the second leading cause of death
    worldwide, accounting for over 13 million deaths. Twenty well-
    known diseases, including TB, malaria, cholera, 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 Human
    Immunodeficiency Virus (HIV), Ebola, and hepatitis C, agents
    for which therapy is not optimal, or does not exist at all.
        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.
        A significant accomplishment made by military scientists
    and their corporate partners is the discovery of the first
    prototype vaccine that prevents valsifera malaria. Novel
    vaccines such as the Deoxyribonucleic Acid (DNA) vaccine for
    malaria are being developed under the leadership of scientists
    at the Naval Medical Research Center. Most recently, licensure
    has been awarded for malarone, a new drug for the prevention
    and treatment of malaria. Another antimalarial 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 life span of only about 10
    years. Replacements must be sought continually. The society
    believes the military overseas laboratories deserve special
    attention and mention. The U.S. Army and the Navy currently
    support medical research labs located in five developing
    countries, 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 diseases, 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
    strengthens collaborations between the United States and
    foreign countries, expanding our knowledge and understanding of
    infectious diseases, and providing hands-on training for both
    the U.S. and local students and investigators, and for local
    health authorities.
        The society supports the Global Pathogen Surveillance Act,
    S. 2487, recently introduced by Senators Biden, Helms, Frist,
    and Kennedy, that includes additional resources to increase the
    number of personnel and expand operations at the overseas labs
    operated by the DOD and the Centers for Disease Control and
    Prevention (CDC) as part of an effort to enhance the capacity
    of developing nations to track, monitor, and report infectious
    disease incidents and outbreaks.
        We request and urge 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, and our Nation's continued commitment to
    this research is critically important, given the resurgent and
    emerging infectious disease threats that exist today.
        The STMH urges the subcommittee to make DOD infectious
    disease research a high priority in the DOD budget for the
    fiscal year 2003.
        Thank you.
        [The statement follows:]

                 Prepared Statement of Stephen L. Hoffman, M.D.

        Good morning Mr. Chairman and Members of the Subcommittee. I am
    Stephen Hoffman, Senior Vice President of Biologics at Celera Genomics.
    I am also the immediate Past President of the American Society of
    Tropical Medicine and Hygiene (ASTMH), and I am here this morning to
    present testimony on the Society's behalf. 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, and
    bioterrorism defense.
        The Department of Defense (DOD) medical research programs play a
    critical role in our nation's infectious disease and bioterrorism
    defense 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.
        A January, 2000, unclassified report from the CIA's National
    Intelligence Council labeled 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 September
    30, 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.
        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.
        The Society supports the Global Pathogen Surveillance Act (S. 2487)
    recently introduced by Senators Biden, Helms, Frist and Kennedy that
    includes among the bill's provisions additional resources to increase
    the number of personnel and expand operations at the overseas
    laboratories operated by the Department of Defense and Centers for
    Disease Control and Prevention as part of an effort to enhance the
    capacity of developing nations to track, monitor and report infectious
    disease incidents and outbreaks.
        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. In the recent Report of the
    Commission on Macroeconomics and Health of the World Health
    Organization it was estimated that malaria alone reduces the economic
    growth of Africa by more than 1 percent per year, adding up to hundreds
    of billions of dollars of lost income in the long run.
        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 mosquitoes 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 10 years. Replacements must be sought continually.
        In 1987 Congress mandated that the DOD establish the HIV Vaccine
    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.
        Although the Administration has transferred this program to the
    National Institute on Allergy and Infectious Diseases at the National
    Institutes of Health, the Society hopes this Subcommittee will oversee
    the transfer of this program. It is critical that the overseas
    collaborations and agreements facilitated by the current leadership
    from the Walter Reed Army Institute of Research be preserved to ensure
    the continued progress of current and planned clinical trials to test
    the efficacy of new vaccine products.
        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 2003.
        Conclusion.--Our borders remain porous to infectious and tropical
    diseases, including most recently the West Nile Virus, which has been
    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 Inouye. What you have provided us today is very
    important. You can be sure this matter will be seriously
    discussed, because it is right here with us right now.
        Dr. Hoffman. Thank you
        Senator Inouye. Thank you very much.
        Our next witness represents the National Breast Cancer
    Coalition, the president, Fran Visco.
    STATEMENT OF FRAN VISCO, PRESIDENT, NATIONAL BREAST
                CANCER COALITION
        Ms. Visco. Thank you very much, Mr. Chairman. I am here as
    a 15-year breast cancer survivor, and on behalf of the National
    Breast Cancer Coalition, 600 member organizations, and 70,000
    individual members across the country to thank you for your
    ongoing leadership and support of this program.
        Mr. Chairman, you know as well as I do the enormous success
    of this program. It has been incredible. We have created a
    model of new scientific research that has been replicated not
    just by other biomedical research programs in the Department of
    the Army, but worldwide. Other countries, across this country,
    programs have come to learn about the success of this program
    and to replicate it.
        This program is a collaboration of the military, the
    scientific community, and the lay public. We are not here on
    behalf of one institution. As you know, this program funds
    scientists around the world, in just about every State of this
    country, and it funds innovation. It funds issues and proposals
    that are relevant to breast cancer, those that will make a
    significant impact. It fills gaps in the traditional funding
    stream.
        There is no bureaucracy associated with this. We are able
    to respond rapidly to changes in the science, changes in the
    scientific community, changes in the need of women and their
    families, women with this disease. It has just truly been an
    incredible partnership whose success has not been matched
    elsewhere in the scientific community.
        One of the most important components of this program is the
    fact that it is transparent. The American taxpaying public
    knows where the money has gone. It can go into the Army program
    web site and see what has been funded and, as you know, every
    other year there is a meeting called the Era of Hope, where
    scientists who have been funded by the program report on the
    progress of their research to the public, and that meeting will
    happen in September in Orlando.
        It has just been incredible. On behalf of the program, as a
    member of the integration panel, and as a woman who has been
    diagnosed with breast cancer, I urge the committee to continue
    this program with level appropriation so that we can continue
    the innovative work we have done, continue to create new
    models.
        I have a little anecdote I would like to tell you. Last
    year, Dr. Rick Klausner, who was then Director of the National
    Cancer Institute (NCI), was talking to me about the success of
    the DOD program, and he was referencing a number of the new
    mechanisms we have put in place for the scientific community to
    respond to, and what he said to me was, they were just
    brilliant, and he wished that he could do that at NCI, but he
    cannot, so there you have proof that we are filling gaps. We
    are not replicating what is happening, and we are really making
    a significant difference for women and their families in this
    country.
        So again I thank you, and I urge you to continue the
    program.
        [The statement follows:]

                     Prepared Statement of Fran Visco, J.D.

        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 Fran Visco, a breast cancer survivor, a wife and mother, a
    lawyer, and President of the National Breast Cancer Coalition. On
    behalf of NBCC, and the more than 3 million women living with breast
    cancer, I would like to thank you for the opportunity to testify today.
        Last year, your subcommittee appropriated, and the Full House and
    Senate passed a DOD appropriations bill, which included $175 million
    for the BCRP--level funding from the previous year. Due to the
    extraordinary circumstances facing us last year, the Conference
    Committee cut the Defense Health Programs across the board by 15
    percent--bringing funding for the DOD Peer Reviewed BCRP to $150
    million for fiscal year 2002. For fiscal year 2003, we are requesting
    that you support a $175 million appropriation--bringing funding up to
    the original amount approved by the Subcommittee last year--for the DOD
    to continue its work to help eradicate 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 l99l 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 both innovative, and incredibly streamlined. It
    continues to be overseen by a group of distinguished scientists and
    activists, as recommended by the Institute of Medicine (IOM). 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 new avenues of research in breast cancer. Since
    1992, more than 600 breast cancer survivors have served on the BCRP
    review panels. Their vital role in the success of the BCRP has led to
    consumer inclusion in other biomedical research programs at DOD. In
    addition, this program now serves as an international model.
        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 rarely 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. This
    is true of other DOD award mechanisms as well.
        For example, the Innovator awards are structured to recognize
    talented individuals, rather than projects, from any field of study by
    providing funding and freedom to pursue creative, potentially
    breakthrough research that could ultimately accelerate the eradication
    of breast cancer. In addition, in the area of training, the DOD BCRP
    has launched innovative programs such as Physician-Scientist Training
    Awards, which are intended to support the training of new breast cancer
    clinical research physicians.
        Also, Historically Black Colleges and Minority Universities/
    Minority Institutions Physicians' Training Awards (``Minority
    Institution'' awards) are intended to provide assistance at an
    institutional level. The major goal of this award is to support
    collaboration between multiple investigators at an applicant Minority
    Institution and a collaborating institution with established investment
    in breast cancer research, for the purpose of creating an environment
    that would foster breast cancer research and, in which Minority
    Institute faculty would receive training toward establishing successful
    breast cancer research careers.
        These are just a few examples of innovative approaches at the DOD
    BCRP that are filling gaps in breast cancer research. 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 program's momentum.
        The DOD BCRP also focuses on moving research from the bench to the
    bedside. A major feature of the awards offered by the BCRP is that they
    are designed to fill niches that are not offered by other agencies. The
    BCRP considers translational research to be the application of well-
    founded laboratory or other pre-clinical insight into a clinical trial.
    To enhance this critical area of research, several research
    opportunities have been offered. Clinical Translational Research
    Awards, for investigator-initiated projects that involve a clinical
    trial within the lifetime of the award, make up the majority of the
    BCRP's translational research portfolio. The BCRP expanded its emphasis
    on translational research by offering 5 different types of awards that
    support work at the critical juncture between laboratory research and
    bedside applications. For instance, the Clinical Bridge Award mechanism
    was developed in fiscal year 2000 to sponsor novel research focused
    around clinical trials.
                            scientific achievements
        The BCRP research portfolio is comprised of many different types of
    projects, including support for innovative ideas, infrastructure
    building to facilitate clinical trials, and training breast cancer
    researchers.
        One of the most promising outcomes of research funded 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 HER2-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 HER2-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 HER2-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.
                            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 1992, the BCRP has been responsible for managing $1.2 billion
    in appropiations, which has resulted in 2,837 awards for fiscal year
    1992-2000. The areas of focus of the DOD BCRP span a spectrum and
    include basic, clinical, behavioral, environmental sciences, and
    alternative therapy studies, to name a few. The BCRP benefits women and
    their families by maximizing resources; the program offers awards that
    fill existing gaps in breast cancer research. Scientific achievements
    that are the direct result of the DOD BCRP are undoubtedly moving us
    closer to eradicating breast cancer.
        The outcomes of the BCRP-funded research can be gauged, in part, by
    the number of 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 Federal Government can truly be proud of its 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 recognizes the
    independent evaluations of the DOD Breast Cancer Research Program, as
    well as reiterates its own 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.
        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 judgment 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 in 2000. A
    third Era of Hope meeting has been scheduled for this year.
        The DOD Peer-Reviewed Breast Cancer Research Program has attracted
    scientists with new ideas and has continued to facilitate new thinking
    in breast cancer research and research in general. 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.
               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 cures and preventions 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 over a
    month ago, many of the women and family members who supported the
    campaign to gain the 2.6 million signatures came to NBCC's Annual
    Advocacy Training Conference here in Washington, D.C. More than 600
    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 to Washington, D.C. from across the country to
    deliver their message about 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 the opportunity to submit testimony and for
    giving hope to the 2.6 million women living with breast cancer.

        Senator Inouye. This subcommittee is most pleased to have
    been your partner for over 10 years, and though we are not
    scientists, we have provided the funds to provide for
    scientists, and I think the total sum to date has exceeded $1
    billion.
        Ms. Visco. Yes, that is correct, more than $1 billion.
        Senator Inouye. Anyway, after having spent that amount, you
    do not think we are going to give up, do you?
        Ms. Visco. No, and we will not, either. The partnership
    will continue.
        Senator Inouye. We will do our best.
        Ms. Visco. Thank you very much.
        Senator Inouye. Thank you, and our next witness is a member
    of the National Prostate Cancer Coalition, Mr. John Willey.
    STATEMENT OF JOHN WILLEY, MEMBER, BOARD OF DIRECTORS,
                NATIONAL PROSTATE CANCER COALITION
        Mr. Willey. Mr. Chairman, my name is John Willey. I am a
    veteran of Vietnam. I served on a guided missile cruiser off
    the coast of North Vietnam, and also on river patrol boats
    along the Cambodian border. I am also a prostate cancer
    survivor, president of a small investment company here in
    Washington, as well as on the board of directors of the
    National Prostate Cancer Coalition.
        I would like to thank you for the honor and opportunity to
    share my remarks on behalf of the National Prostate Cancer
    Coalition (NPCC). The NPCC is the largest grassroots advocacy
    organization dedicated to ending the devastating impact of
    prostate cancer on America's families. Our coalition includes
    patient advocates, research organizations, health
    professionals, minority groups, veterans groups, survivors and
    families who are touched by and concerned about this
    debilitating and deadly disease.
        Mr. Chairman, I am here today to request that the committee
    restore the Department of Defense congressionally directed
    medical research program to its fiscal year 2001 level of $100
    million. I would also ask you to maintain sufficient funding at
    the Center for Prostate Disease Research at Walter Reed, where
    many advances in fighting prostate cancer have been made.
        Our Nation currently faces many challenges. While we fight
    a war on terrorism on many fronts, we must also fight a war on
    cancer in order to protect Americans against one of the biggest
    health challenges facing the Nation. About as many Americans
    will lose their lives to cancer this year as have lost their
    lives on all of the battlefields during the 20th century.
        For the last decade, prostate cancer has been the most
    commonly diagnosed nonskin cancer of either sex, and the
    leading cause of male cancer death. As you know, about 85
    percent of individuals in active and Reserve military service
    are men, about 2 million. If you apply the average risk to that
    group across the Nation, about 300,000 servicemen will be
    diagnosed with prostate cancer during their lifetimes. Men who
    have served in Korea and Vietnam when Agent Orange was used
    will have a proportionately higher risk of prostate cancer.
        Prostate cancer research is vital to the future health and
    well-being of all American servicemen and, indeed, all
    Americans. The disease knows no bounds. It affects men of all
    races, ethnicities, economic backgrounds. Former New York City
    Mayor Rudy Giuliani, retired General H. Norman Schwartzkopf,
    baseball manager Joe Torre, Dusty Baker, even members of this
    committee have faced prostate cancer, and I deeply appreciate
    their willingness to raise the awareness about this disease by
    speaking out publicly and openly about their fights with
    prostate cancer and supporting efforts to escalate the war
    against prostate cancer.
        Despite the prevalence of prostate cancer among men, there
    is hope that a cure will be found. Many advancements in
    prostate cancer research are being made by the CDMRP and at
    Walter Reed, which has helped to determine the efficacy of the
    prostate specific antigen blood test, the PSA blood test. This
    is important work. The team at Walter Reed has contributed
    significantly to the current evidence that suggests that early
    detection through PSA reduces prostate cancer mortality.
        NPCC believes that PSA, along with the digital rectal exam,
    saves lives and we encourage all men over 50, younger if
    African American or if they have a family history of prostate
    cancer, to resolve to be screened annually. As a prostate
    cancer survivor, I firmly believe that screening and medical
    research save lives.
        Mr. Chairman, because of you and your colleagues' attention
    to this matter, research continues to move forward. However,
    because of funding reductions in the prostate cancer research
    program we are unable to fund any clinical trials during fiscal
    year 2002. If funding continues to be less than $100 million,
    the most valuable and crucial tool for getting research to
    patients will be nonexistent. By ensuring that the CDMRP is
    fully funded, we are confident that a cure for this disease can
    be reached.
        As patient advocates, we strongly believe in making the
    most out of our finite resources, and hold the CDMRP
    accountable on how it manages taxpayers' dollars. The NPCC
    encourages accountability by making every dollar of your
    appropriation count towards life-saving research. Accordingly,
    research dollars can go further if you continue to reduce the
    15 percent of the appropriation that is lost to departmental
    set-asides and overhead costs, ensuring more money for life-
    saving research.
        From its inception, the DOD program has been the most
    efficient federally directed prostate cancer program by
    building accountability mechanisms into its basic operations.
    Its research is dedicated to increase evidence-based medicine,
    and it subjects itself to regular review efforts. The program
    is also dedicated to nonduplication.
        Mr. Chairman, the leadership of the committee in the past
    has made a real difference in the lives of men like me, and
    more than a million men who are battling prostate cancer. I
    certainly do not envy your position in the choices you have to
    make, but I would urge you to fully fund the DOD appropriation
    for prostate cancer research.
        If you have any questions, I would be glad to answer them.
        [The statement follows:]

                       Prepared Statement of John Willey

        Mr. Chairman and members of the committee, my name is John Willey,
    I am veteran of the Vietnam War, where I served on a Guided Missile
    Cruiser off the coast of North Vietnam and on River Patrol Boats in the
    Mekong delta along the Cambodian border. I am also a prostate cancer
    survivor, President of Chartered Investments here in Washington, and
    serve on the board of the National Prostate Cancer Coalition (NPCC). I
    would like to thank you for the honor and opportunity to share these
    remarks on behalf of the National Prostate Cancer Coalition.
        The NPCC is the largest grassroots advocacy organization dedicated
    to ending the devastating impact prostate cancer has on America's
    families. Our coalition includes patient advocate groups, research
    organizations, health professionals, minority groups, veterans groups,
    survivors and families who are touched by or concerned about this
    debilitating and often deadly disease.
        Mr. Chairman, I am here today to request that the committee restore
    the Department of Defense Congressionally Directed Medical Research
    Program (CDMRP) to its fiscal year 2001 funding level of $100 million.
    I would also like to ask that you maintain sufficient funding for the
    Uniformed Services of the Health Sciences (USUHS) and Walter Reed Army
    Medical Center (WRAMC) program, Center for Prostate Disease Research
    (CPDR), at Walter Reed Army Hospital at which many advances in fighting
    the disease have been made.
        Our nation currently faces many challenges. As President George W.
    Bush recognized in his State of the Union address earlier this year,
    providing homeland safety is built upon protection of the economic,
    educational, and health security of all Americans. While we fight the
    war on terrorism on many fronts, we must also fight the war on cancer
    in order to protect Americans against one of the biggest health
    challenges facing the nation. About as many Americans will lose their
    life to cancer this year as have lost their lives on the battlefields
    fighting for this country during the twentieth century. For the last
    decade, prostate cancer has been the most commonly diagnosed nonskin
    cancer, of either sex, and the second leading cause of male cancer
    death. It is no secret that prostate cancer is of serious concern to
    all American men, especially those who protect our country. Since 1996,
    the NPCC has been dedicated to ending to impact of this most silent
    killer in the cancer community, silent because it often has few, if
    any, visible symptoms and, until recently, was a disease men were
    ashamed to discuss in public.
        Mr. Chairman, we know your committee understands the seriousness of
    this issue and shares the common concern that 189,000 men will be
    diagnosed with the disease, and 30,000 men will die from it this year.
    We both have a keen interest in ending this epidemic, and, on behalf of
    those whose lives have been devastated by this disease, we greatly
    appreciate your support for prostate cancer research.
        While neither the NPCC nor I knows the full impact of prostate
    cancer among our men in uniform, we can offer some estimates. We know
    that about 85 percent of individuals in active or reserve military
    service are men, about two million individuals. If you apply the
    average risk to this group, more than 300,000 service men will be
    diagnosed with prostate cancer during their lifetimes. Prostate cancer
    is of serious concern to American veterans. As well, men who served in
    uniform in Korea and Vietnam, when Agent Orange was used, may bear an
    increased risk of prostate cancer. Prostate cancer research is vital to
    the future health and well being of all American servicemen--and all
    Americans.
        This disease knows no bounds; it affects men of all races,
    ethnicities and economic backgrounds. Former New York City Mayor Rudy
    Giuliani and actor Barry Bostwick, who plays the mayor of New York on
    television; Denver Mayor Wellington Webb; retired General H. Norman
    Schwarzkopf; baseball managers Joe Torre and Dusty Baker and even
    members of this committee have all faced prostate cancer. I deeply
    appreciate their willingness to raise awareness about this disease by
    speaking publicly and openly about their fights with prostate cancer
    and supporting efforts to escalate the war against prostate cancer.
        I am saddened to report that the number of men at risk of prostate
    cancer will likely continue to expand considerably. As baby boomers
    become seniors over the next decade, cancer incidence and mortality
    rates are expected to increase by as much as 25-30 percent. Without a
    significant investment in research, early detection and prevention, the
    impact on human lives will be devastating. Even more distressing is the
    unequal burden of this disease. The incidence of prostate cancer among
    African American men is up to 60 percent higher, and their mortality
    rate is double that of white males. The risk can be even greater in
    families with a history of the disease. One close relative with the
    disease doubles a man's risk and having three close relatives with
    prostate cancer virtually assures a diagnosis during his lifetime.
        While these statistics are disturbing, there are signs of hope that
    we are entering an exciting and promising time for prostate cancer
    research. Opportunities in drug development and new treatments have
    expanded dramatically in the last few years. The recent mapping of the
    human genome and therapies targeted to molecular mechanisms in cancer
    cells almost certainly mean that we stand at the threshold of even more
    promising, innovative and life-saving advancements. Many of these
    advancements are being forged at the CDMRP and at the CPDR, which has
    also helped to determine the efficiency of the prostate specific
    antigen (PSA) blood test. Through its important work, the team at WRAMC
    has contributed significantly to the current evidence that suggests
    that early detection through PSA reduces prostate cancer mortality.
    NPCC believes that the PSA along with the Digital Rectal Examination
    (DRE) saves lives, and we encourage all men over 50, younger if African
    American or with a family history of prostate cancer, to resolve to be
    screened annually.
        I was diagnosed with prostate cancer in 1996. As a survivor, I
    firmly believe that screening and medical research save lives. Mr.
    Chairman, because of you and your colleagues' attention to this matter,
    research continues to move forward. However, because of funding
    reductions, the prostate cancer research program was forced to
    discontinue all clinical trials in fiscal year 2002. If funding
    continues to be less than $100 million, clinical trials, the most
    valuable and crucial tool in getting new treatment to patients, will be
    non-existent at the CDMRP. By ensuring that the CDMRP is funded
    appropriately, I am confident that a cure for this disease is in reach.
        Allow me to provide some background on the CDMRP and its
    importance. The CDMRP prostate cancer research program is unique.
    Within the research resources of the Federal Government, it is the only
    program to offer organ site-specific research grants. If a researcher
    has a good idea, a funded grant at the DOD program is 100 percent
    dedicated to prostate cancer. The impact on solving the problem of
    prostate cancer is not subjected to the ``fuzzy math'' of other
    departments' calculations of organ site relevance.
        As a businessman, I can also attest to the ``good business sense''
    that the program incorporates. As stated in the CDMRP's Annual Report
    for 2001, the program has ``challenged the scientific community to
    design innovative prostate cancer research that would foster new
    directions, address neglected issues and bring new investigators into
    the field.'' The cornerstones of the program's research efforts are the
    ``Idea Development'' and ``New Investigator'' grants. Both of these
    awards seek innovative and revolutionary studies that deviate from
    previous research. Their goal is to stimulate ``venture research''
    projects that reward sometimes speculative but promising ideas that can
    and have lead to huge returns on investments. This system contrasts
    other departments' grant processes that tend to favor research in which
    ``proof-of-principle'' has already been established.
        From its inception, the DOD program has been the most efficient
    Federally directed prostate cancer program by building accountability
    mechanisms into its basic operation. Its research is dedicated to
    increase evidence-based medicine, and it subjects itself to regular
    reviews of this effort. The program is also dedicated non-duplication
    of effort, investigating in projects that are unique and are not
    receiving funding from other sources. In addition, the DOD program has
    engaged survivors of prostate cancer into its accountability practices
    from the very outset of its development. I have several friends and
    colleagues that have the honor of sitting on the Prostate Cancer
    Integration Panel, joining other consumers and a diverse group of
    scientists in the oversight of the CDMRP program and its projects. This
    sort of consumer input helps drive the program to be more ambitious and
    creative in seeking out new areas of research, by keeping a focus on
    what is important to survivors, advocates, and researchers alike.
        In one exciting study that is being conducted through the PCRP,
    researchers at John Hopkins University, headed by Dr. Samuel R.
    Denmeade, are able to produce several chemicals, called prodrugs, that
    are activated to kill prostate cancer cells specifically. This
    promising research could lead to more effective prostate specific
    cancer drugs.
        Unfortunately, the CDMRP is not always able to award grants to
    worthwhile projects. From fiscal year 1997 to fiscal year 2000, the
    CDMRP received approximately 1,900 proposals but was only able to fund
    roughly 440 of them, spending $176.2 million in prostate cancer
    research compared to $890.8 million spent on breast cancer research
    from fiscal year 1992-fiscal year 2000. Despite funding less than 25
    percent of these proposals, the program has produced exceptional
    results. Over 370 research projects have been published in scientific
    journals and over 25 have received a patent or licensing.
        Funding these programs, however, is not enough. As patient
    advocates, we strongly believe in making the most of finite resources
    and hold the CDMRP accountable for how it manages taxpayer funds. The
    DOD program is a model Federal effort that has set the standard for
    prostate cancer research. The program's innovative research has earned
    respect and recognition, especially for its success in translating
    basic research from the laboratory bench to the clinic, where new
    treatments do patients the most good.
        The NPCC encourages accountability by making every dollar of your
    appropriation count toward life saving research. These research dollars
    can go further if you continue to reduce the 15 percent of the
    appropriation that is lost to departmental set asides and overhead
    costs.
        Mr. Chairman, the leadership of this committee in the past has made
    a real difference in the lives of people like me--and the more than a
    million other men who are battling prostate cancer on a daily basis. I
    certainly do not envy the position you and your colleagues find
    yourselves in--there are some very hard choices to make in the process
    of allocating what is needed to protect Americans.
        As the committee considers its fiscal year 2003 allocations, we ask
    you to remember to continue the war on prostate cancer as part of your
    guarantee of health security for all Americans. The NPCC asks you for
    the funds needed to help end prostate cancer as a health concern for
    America's families. Let Americans die ``with the disease'' rather than
    ``from it,'' and provide the CDMRP prostate cancer research program
    with no less than $100 million for peer review research in fiscal year
    2003.
        General Norman Schwarzkopf, a wise military leader and himself a
    prostate cancer survivor, recently discussed cancer research in the
    context of military strategy: ``There always comes a time when you must
    get on with the battle. You cannot sit back and do nothing because
    you'll never have perfect intelligence on the enemy. Base your battle
    plan on the best information you have, and be ready to modify your
    strategy and line of attack. The important thing is just get on with
    it.''
        Your support will allow advocates, clinicians and researchers to do
    just that.
        Mr. Chairman, I thank you and the committee for the opportunity to
    appear before you today.

        Senator Inouye. During the last fiscal year, as you know,
    we had no choice because of the sudden urgency in fighting
    terrorism and in order to provide funds for that we were forced
    to make cuts. This time the moving force on this is the senior
    Senator from Alaska, Ted Stevens, and I am certain he is going
    to insist that we go as soon as possible to what you are
    seeking.
        Mr. Willey. Thank you very much. The number $100 million is
    critical for clinical trials, and clinical trials is critical
    for progress.
        Senator Inouye. We will do our best.
        Our next witness is the president of the American Chemical
    Society (ACS), Dr. Eli Pearce.
    STATEMENT OF DR. ELI PEARCE, PRESIDENT, AMERICAN
                CHEMICAL SOCIETY
        Dr. Pearce. Mr. Chairman, good morning, and thank you for
    the opportunity to testify. My name is Eli Pearce, and I am the
    president of the American Chemical Society (ACS), a
    congressionally chartered organization comprising 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
    defense research.
        First, allow me to thank the subcommittee for the
    substantial increases it provided for defense research in
    fiscal year 2002. These funds are an important step toward
    reversing the declines in defense research programs experienced
    in the 1990's.
        This year, the American Chemical Society urges you to
    increase the science and technology, or S&T program to $11
    billion, a growth of 11 percent from last year's level. This is
    not an arbitrary target. It is consistent with a longstanding
    recommendation reiterated last fall by the Department's own
    Quadrennial Defense Review, or QDR. This report called for 3
    percent of annual spending to be devoted to S&T in order to
    achieve the Department's objectives.
        The QDR states, and the ACS agrees, that a strong, steady
    investment in S&T is important to maintaining our technological
    edge over adversaries, and it is absolutely critical to the
    Department's efforts to transform the Armed Services.
    Revolutionary capabilities arising from the integration of new
    scientific discoveries and emerging technologies will require
    the best in scientific and engineering insight and skill.
        For example, the Army imagines nanotechnology science
    leading to uniforms that can detect threats from chemical or
    biological weapons, render the wearer invisible to infrared
    detection, and change colors as needed. Equipment based on
    nanoscience could reduce the weight a soldier has to carry from
    up to 145 pounds to only 45 pounds.
        While these technologies may be theoretically feasible,
    they will never exist without the fundamental scientific
    advances that can only come from a great deal of hard work, a
    few brilliant experiments, and the sustained robust investment
    in S&T. The long-term payoffs of investment in S&T are usually
    the most apparent, but research programs can also produce very
    rapid returns.
        For example, following the September 11 tragedies, DOD
    established a counterterrorism technology task force to
    identify budding technologies that could be transitioned from
    the S&T program into the field in 30 days. The results of this
    effort included the thermobaric bomb recently deployed in
    Afghanistan. According to Dr. Ron Sega, Director of Defense,
    Research and Engineering, the product went from chemistry to
    weapon in just 3 months.
        Although concentrated effort and extra funding were
    essential for rapid deployment in this case, the wealth of
    options available to DOD was the result of consistent long-term
    investment in S&T. This new technology now joins the long line
    of successful innovations nurtured by DOD S&T programs,
    including night vision and global positioning satellites which
    have become central to military capabilities.
        I would also like to say a few words about DOD's basic
    research program. DOD basic research not only supports mission-
    critical science, but also helps maintain the vitality of the
    many science and engineering disciplines essential to the
    military. In fact, 60 percent of DOD basic, or 6.1 research, is
    conducted in universities, engaging some of the Nation's best
    and most innovative scientific minds in the technical
    challenges posed by the Department's national security mission.
    Currently, DOD must decline almost as many highly rated grant
    proposals as it can fund. These are lost opportunities.
        DOD-supported academic research also trains the next
    generation of scientists and engineers. Investing in young
    people, encouraging them to develop careers in military science
    and technology is just as important to our future national
    security as investing in new weapons systems. This should be
    considered when you work to establish adequate S&T funding
    levels.
        Mr. Chairman, we fully recognize that crafting budgets with
    limited resources means difficult decisions. However, the ACS
    believes that a strong investment today in the defense science
    and technology programs, especially the 6.1 basic research
    accounts, can serve to protect the lives of soldiers and
    maintain our military's preeminent position both in the near
    and more distant future. In an environment where technology
    changes rapidly and future threats are uncertain, it is also an
    essential part of adequately managing risks to our national
    security. To meet the challenges of today and the
    transformation challenges of tomorrow, we simply have no choice
    but to invest in cutting edge science.
        Thank you, Mr. Chairman, for your attention to this
    important matter. The American Chemical Society looks forward
    to assisting you in any way possible, and I would be happy to
    answer any questions.
        [The statement follows:]

                        Prepared Statement of Eli Pearce

        Chairman Inouye and Members of the Subcommittee. Good morning and
    thank you for the opportunity to testify. My name is Eli Pearce and I
    am the President of the American Chemical Society, a congressionally
    chartered organization that 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 defense research. First, allow me to thank the
    subcommittee for the substantial increases it provided for defense
    research in fiscal year 2002. These funds are an important step towards
    reversing the declines the defense research programs experienced in the
    1990's.
        This year, the ACS urges you to increase the Science and Technology
    (or S&T) program again, to $11 billion, a growth of eleven percent from
    last year's level. This is not an arbitrary target. It is consistent
    with a long-standing recommendation--reiterated last fall--by the
    Department's own Quadrennial Defense Review, or QDR. This report called
    for three percent of annual spending to be devoted to S&T in order to
    achieve the Department's objectives.
        The QDR states, and the ACS agrees, that a strong, steady
    investment in S&T is important to maintaining our technological edge
    over adversaries, and it is absolutely critical to the Department
    efforts to ``transform'' the armed services. Revolutionary capabilities
    arising from the integration of new scientific discoveries and emerging
    technologies will require the best in scientific and engineering
    insight and skill.
        For example, the Army imagines nanotechnology science leading to
    uniforms that can detect threats from chemical or biological weapons,
    render the wearer invisible to infrared detection, and change colors as
    needed. Equipment based on nanoscience could reduce the weight a
    soldier has to carry from up to 145 pounds to only 45 pounds. While
    these technologies may be theoretically feasible, they will never exist
    without the fundamental scientific advances that can only come from a
    great deal of hard work, a few brilliant experiments, and a sustained,
    robust investment in S&T.
        The long-term pay-offs of investment in S&T are usually the most
    apparent, but research programs can also produce very rapid returns.
    For example, following the September 11th tragedies, DOD established a
    Counter Terrorism Technology task force to identify budding
    technologies that could be transitioned from the S&T program into the
    field in thirty days. The results of this effort included the
    thermobaric bomb, recently deployed in Afghanistan. According to Dr.
    Ron Sega, Director of Defense Research and Engineering, the project
    went from ``chemistry-to-weapon'' in just three months. Although
    concentrated effort and extra funding were essential for rapid
    deployment in this case, the wealth of options available to DOD was the
    result of consistent, long-term investment in S&T. This new technology
    now joins the long line of successful innovations nurtured by DOD S&T
    programs--including night vision and global positioning satellites,
    which have become central to military capabilities.
        I would also like to say a few words about DOD's basic research
    program. Basic research supported by the Department not only supports
    mission-critical science, but also helps maintain the vitality of the
    many science and engineering disciplines essential to the military. In
    fact, 60-percent of DOD basic, or ``6.1'', research, is conducted in
    our nation's universities, engaging some of the nation's best and most
    innovative scientific minds in the technical challenges posed by the
    Department's national security mission. Currently, DOD must decline
    almost as many highly rated grant proposals as it can fund. These are
    lost opportunities. DOD-supported academic research also trains the
    next generation of scientists and engineers. Investing in young people,
    encouraging them to develop careers in military science and technology,
    is just as important to our future national security as investing in
    new weapons systems. This should be considered when you work to
    establish adequate S&T funding levels.
        Mr. Chairman, we fully recognize that crafting budgets with limited
    resources means difficult decisions. However, the ACS believes that a
    strong investment today in the defense science and technology program,
    especially the 6.1 basic research accounts, can serve to protect the
    lives of soldiers and maintain our military's preeminent position both
    in the near and more distant future. In an environment where technology
    changes rapidly and future threats are uncertain, it is also an
    essential part of adequately managing risks to our national security.
    To meet the challenges of today and the transformation challenges of
    tomorrow, we simply have no choice but to invest in cutting-edge
    science.
        Thank you for your attention to this important matter. The American
    Chemical Society looks forward to assisting you in any way possible.

        Senator Inouye. As you are aware, the administration is not
    supportive of the full amount. Notwithstanding that, I can
    assure you we will do our best to increase at least partially.
        Dr. Pearce. Thank you.
        Senator Inouye. Thank you very much, sir.
        Representing the Coalition for National Security Research,
    Dr. Allan Schell.
    STATEMENT OF DR. ALLAN SCHELL, ON BEHALF OF THE
                COALITION FOR NATIONAL SECURITY RESEARCH
        Dr. Schell. Thank you, Mr. Chairman. I am with the
    Institute of Electrical and Electronics Engineers United States
    of America (USA), and the former chief scientist of the Air
    Force Laboratory System, but I am here to testify on behalf of
    the Coalition for National Security Research (CNSR), which is a
    broadly based group of scientific, engineering, mathematical,
    and behavioral societies, universities, and industrial
    associations committed to a stronger defense science and
    technology base.
        We urge the subcommittee to approve robust and stable
    funding for the Department of Defense basic research, applied
    research, and advanced technology development elements in
    fiscal year 2003. Specifically, CNSR joins many other
    organizations in urging the subcommittee to increase the S&T
    program to $11 billion in fiscal year 2003, which is 3 percent
    of the overall departmental budget, as recommended by the
    Defense Science Board, the Quadrennial Defense Review, the
    House and Senate Armed Services Committees, and other
    officials. CNSR strongly supports DOD's S&T programs across all
    defense organizations, particularly those supporting the
    Nation's universities.
        We also want to express deep appreciation for the
    committee's past support and for the fiscal year 2002 funding
    approved for these programs. With consideration of the fiscal
    year 2003 budget, it is important to recognize the vital role
    DOD S&T plays in ensuring the Nation's future national
    security, and it also contributes, as has been mentioned by
    other speakers, to the education of tomorrow's scientists,
    engineers, and policymakers. It provides a critical investment
    in several areas and, in fact, many of the hard sciences, the
    DOD is funding the majority of the research programs.
        As you are aware, previous investments in defense science
    and technology have led to breakthrough developments in areas
    such as thermobaric bombs, distributed networking, advanced
    materials, global navigation, precision guidance, and stealth
    technology. The challenges of a new era in homeland defense and
    asymmetric threats, infrastructure protection, among others,
    place an even greater emphasis on the need for forward-looking
    science and technology. When there are these big shifts in our
    concerns, that is the time when we need to strengthen the basic
    sciences that we do across the Nation, and the technology that
    transitions it, and the support of this subcommittee is
    critical to ensuring that we maintain a viable S&T base.
        I would like to take a moment to highlight one specific
    example from a long list of technologies resulting from your
    investment in defense science and technology. The integrated
    high performance turbine engine technology program is a joint
    Department of Defense, National Aeronautics and Space
    Administration (NASA), and private industry R&D effort to
    develop more efficient and reliable engines for military
    aircraft by increasing engine thrust-to-weight ratio and, in
    fact, on the boards now is an improvement of 40 percent over
    the baseline engines of the thrust-to-weight ratio. This leads
    to potential savings estimated at over $16 billion per year in
    operating cost. The impact of these engine improvements is
    enormous, and it spills over into the civilian sector as well
    in terms of the amount of fuel saved to deliver the same amount
    of cargo or passengers.
        Despite substantial appreciation for the importance of DOD
    S&T programs on Capitol Hill, total research within DOD has
    declined in constant dollars. This decline is a real threat to
    America's ability to maintain its competitive edge, and the
    advantage for defense of our Nation. We strongly recommend that
    a small portion of proposed increases be directed for national
    security, be directed to the core S&T research accounts to
    achieve the $11 billion funding target.
        In closing, I want to thank the subcommittee for its
    continued support of defense S&T, and for the opportunity to
    appear here today. The Coalition for National Security Research
    looks forward to assisting you in any way possible.
        [The statement follows:]

                     Prepared Statement of Dr. Allan Schell

        Good morning Mr. Chairman and Members of the Subcommittee, my name
    is Dr. Allan Schell. I am with the Research and Development Policy
    Committee at the Institute of Electrical and Electronics Engineers-USA
    and a former chief scientist of the Air Force laboratory system with
    over 30 years of experience in DOD research programs. 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.
        We urge the subcommittee to approve robust and stable funding for
    Department of Defense (DOD) basic (6.1), applied (6.2) and advanced
    technology development (6.3) elements in fiscal year 2003 (fiscal year
    2003). Specifically, CNSR joins many other organizations in urging the
    subcommittee to increase the S&T program to $11 billion in fiscal year
    2003, or 3 percent of the overall departmental budget, as recommended
    by the Defense Science Board, the Quadrennial Defense Review, the House
    and Senate Armed Services Committees and numerous departmental
    officials. 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. They feed our procurement needs, enhance our readiness and
    modernization efforts, provide technologies to protect our forces, and
    contribute to the most technologically advanced, best trained, lethal,
    fighting force in the world. I also want to express deep appreciation
    for the Committee's past support and for the fiscal year 2002 funding
    approved for these programs.
        With consideration of the fiscal year 2003 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 to the education of tomorrow's scientists, engineers and
    policy makers. 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.
        As you are aware, previous investments in defense science and
    technology have led to breakthrough developments in areas such as
    thermobaric bombs, 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, unmanned air,
    land and sea vehicles, 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.
        Now I would like to take a moment to highlight one specific example
    from a long list of technologies resulting from your investment in
    defense S&T. The Integrated High Performance Turbine Engine Technology
    (IHPTET) program is a joint Department of Defense, NASA and private
    industry R&D effort designed to develop more efficient and reliable
    engines for military aircraft by increasing engine thrust-to-weight
    ratio on military aircraft by 30 percent. DOD is citing potential
    savings of as much as $16 billion per year in operating costs as a
    result. In addition, the spillover benefits are already evident, as the
    technology is currently being used by commercial airlines allowing for
    less expensive and more reliable civil air travel.
        Some additional examples of the results of DOD S&T investments
    which have both national security and domestic applications follow.
        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 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 insects 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 computational 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 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.
        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.
        Despite substantial appreciation for the importance of DOD S&T
    programs on Capitol Hill, total research within DOD has declined in
    constant dollars during the last decade. This decline poses a real
    threat to America's ability to maintain its competitive edge and to
    pursue a capability-based--rather than a threat-based--defense as
    detailed by departmental leadership. We strongly recommend that a small
    portion of proposed increases for national security activities be
    directed to the core S&T research accounts to achieve the $11 billion
    funding target, an increase which allows for both preparation and
    protection of the men and women in our future military.
        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.
        Attachment: The Case for Defense Science and Technology Funding
        A listing of recent report excerpts and statements by officials on
    the role basic research programs play in supporting national security
    missions and the appropriate level of funding for such activities.
        In an increasingly demanding and unpredictable security
    environment, U.S. military forces must be ready to meet America's
    security obligations both at home and abroad. Future military
    capabilities depend on a higher level of investment in science and
    technology (S&T) funding. Further supporting this conclusion, the
    following is a list of findings from recent reports on S&T research:
        ``A robust research and development effort is imperative to
    achieving the Department's transformation objectives. DOD must maintain
    a strong science and technology (S&T) program that supports evolving
    military needs and ensures technological superiority over potential
    adversaries.''----Quadrennial Defense Review Report, 2001 http://
    www.defenselink.mil/pubs/qdr2001.pdf (page 41)
        ``To provide the basic research for these capabilities, the QDR
    calls for a significant increase in funding for S&T programs to a level
    of three percent of DOD spending per year.''----Quadrennial Defense
    Review Report, 2001 http://www.defenselink.mil/pubs/qdr2001.pdf (page
    41)
        ``DOD S&T is vital to future of U.S. military balance of power.
    Over the past century, technical developments funded by the military
    have had an enormous impact on military capabilities and have been
    decisive in the outcome of conflicts.''----Report of the Defense
    Science Board Task Force on Defense Science and Technology Base for the
    21st Century, 1998 http://www.acq.osd.mil/dsb/sandt21.pdf (page 21)
        ``Tomorrow's military capabilities depend, in part, on today's
    investment in enabling technologies that can be integrated into new or
    existing systems and employed using new operational concepts.''----2002
    Annual Defense Report to Congress, DRAFT Report
        ``Our Armed Forces depend on the Department's S&T program to
    deliver unique military technologies for the combat advantage that can
    not be provided by relying on commercially available technology.''----
    2002 Annual Defense Report to Congress, DRAFT Report
        ``The President should propose, and Congress should support,
    doubling the U.S. government's investment in science and technology
    research and development by 2010.''----Road Map for National Security:
    Imperative for Change, Hart-Rudman Commission, 2001 http://
    www.nssg.gov/PhaseIIIFR.pdf (page 32)
        ``A strong Science and Technology (S&T) program provides options
    for responding to a full range of military challenges. Technological
    superiority has been a characteristic of our Armed Forces and one of
    the foundations of our national military strategy. It is through the
    Department's investment in S&T that we develop the technology
    foundation necessary for modernization efforts, discover new
    technologies that produce revolutionary capabilities, and provide a
    hedge against future uncertainty.''----2002 Annual Defense Report to
    Congress, DRAFT Report
        ``In this Commission's view, the inadequacies of our systems of
    research and education pose a greater threat to U.S. national security
    over the next quarter century than any potential conventional war that
    we might imagine. American national leadership must understand these
    deficiencies as threats to national security.''----Road Map for
    National Security: Imperative for Change, Hart-Rudman Commission, 2001
    http://www.nssg.gov/PhaseIIIFR.pdf (page ix)
        ``The Commission supports the DOD goal to increase science and
    technology investment to 3 percent of the overall budget, and
    encourages continued progress toward this goal in the fiscal year 2003
    budget.''----Commission on the Future of the U.S. Aerospace Industry,
    Second Interim Report, 2002 http://www.aerospacecommission.gov--
    Coalition for National Security Research--www.cnsr.org (202) 624-1426
    SCIENCE AND TECHNOLOGY QUOTES--2002--Coalition for National Security
    Research--www.cnsr.org (202) 624-1426
        ``Science and Technology form the base for the second generation of
    transformation.''----Under Secretary of Defense (AT&L) Pete Aldridge,
    AIAA Conference, February 19, 2002.
        ``Our S&T investment is projected to increase over the FYDP, to
    approach 3 percent of the total DOD budget, as we invest more heavily
    in transformational technologies and transition those technologies out
    of S&T and into systems at a faster pace.''----Pete Aldridge--Under
    Secretary of Defense for Acquisition, Logistics and Technology, March
    6, 2002, House Armed Services Committee Military R&D and Procurement
    Subcommittees Hearing
        ``The prerequisite to achieving the transformation force outlined
    in the QDR is our commitment to a strong Science and Technology (S&T)
    program. S&T is the critical link between vision and operational
    capabilities.''----Gen. John Jumper, Chief of Staff, United States Air
    Force, March 7, 2002, Senate Armed Services Committee Hearing on
    Defense Authorization.
        ``In the war against terrorism, S&T is the enabler which links
    innovative research to warfighter and homeland defense
    requirements.''----Rear Adm. Jay Cohen, Chief of Naval Research,
    Testimony to Senate Armed Services Committee Emerging Threats and
    Capabilities Defense Authorization Hearing, April 10, 2002.
        ``Many of the capabilities and systems that are in the field today
    are the result of a conscious decision, years ago, to invest in Science
    and Technology (S&T) programs. The future security and safety of our
    nation depends in part on a strong research and development
    foundation.''----Director of Defense Research and Engineering, Ron
    Sega, April 10, 2002 Senate Armed Services Committee Emerging Threats
    and Capabilities Defense Authorization Hearing
        ``The technological advantage we enjoy today is a legacy of decades
    of investment in S&T. Likewise, our future warfighting capabilities
    will be substantially determined by today's investment in S&T.''----Air
    Force Written Testimony, April 10, 2002 SASC ETC Defense Authorization
    Hearing.
        ``Homeland security efforts will depend on technologies such as
    biometrics, next-generation detection devices designed to find traces
    of chemical or biological agents, dashboard electronics to ensure
    efficient border crossing for trucks and other vehicles, simulation
    software, and advanced encryption-standard codes.''----Office of
    Homeland Security Director Tom Ridge, at the Electronic Industries
    Alliance's annual conference, 2001.
        ``The key to maintaining U.S. technological preeminence is to
    encourage open and collaborative basic research. The linkage between
    the free exchange of ideas and scientific innovation, prosperity, and
    U.S. national security is undeniable. This linkage is especially true
    as our armed forces depend less and less on internal research and
    development for the innovations they need to maintain the military
    superiority of the United States.''----National Security Advisor
    Condoleeza Rice, November 1, 2001 letter to Center for Strategic and
    International Studies Co-Chairman, Dr. Harold Brown.
        ``S&T programs constitute the basis for the technological
    superiority upon which our armed forces have established our nation as
    the world's foremost military power. . . . Our present military
    strength is the result of substantial S&T investments made a generation
    ago. . . . In a similar vein, our nation's prospective security and
    military dominance ultimately depends on its ability to perpetuate
    technological advantages over the next few decades. S&T programs will
    enable us to maintain this advantage. . . . It is imperative,
    therefore, that we act to fund S&T at 3 percent of the total defense
    budget.''----April, 2002 letter from Senate Armed Services Committee
    members: Joseph Lieberman, Rick Santorum, Susan Collins, Edward
    Kennedy, Wayne Allard, Bob Smith, Jean Carnahan, Ben Nelson, Pat
    Roberts, Jeff Bingaman, Jeff Sessions, Ben Dayton, Bill Nelson, and
    James Inhofe to Committee Chairman Carl Levin and Ranking Member John
    Warner.
        ``The committee commends the Department of Defense commitment to a
    goal of 3 percent of the budget request for the defense science and
    technology program and progress toward this goal. The committee views
    defense science and technology investments as critical to maintaining
    U.S. military technological superiority in the face of growing and
    changing threats to national security interest around the world, and
    believes that both the defense agencies and the military departments
    have vital roles in DOD's science and technology investment
    strategy.''----House Armed Services Committee, report language in the
    fiscal year 2003 Defense Authorization Committee report, May 3, 2002.
        ``The Committee feels that a robust defense science and technology
    program is a requirement in order to develop the new systems and
    operational concepts that will enable transformation. . . . The
    Committee fully supports the Department's stated goal of investing 3
    percent of the defense budget into science and technology programs. . .
    . The Committee urges the Department and each of the military services
    to achieve the 3 percent goal as soon as practicable.''----Senate Armed
    Services Committee report language in the fiscal year 2003 Defense
    Authorization Committee report, May 15, 2002.

        Senator Inouye. Thank you very much. As I indicated to Dr.
    Pearce, notwithstanding the opposition of the administration,
    we will do our best to increase the funding to whatever extent
    the committee can handle.
        Dr. Schell. Thank you, Mr. Chairman.
        Senator Inouye. Our next witness is the director of
    legislation of the Naval Reserve Association, Captain Marshall
    Hanson.
    STATEMENT OF CAPTAIN MARSHALL HANSON (RET.), DIRECTOR
                OF LEGISLATION, NAVAL RESERVE ASSOCIATION
        Captain Hanson. Thank you, Mr. Chairman. On behalf of
    nearly 88,000 naval reservists, the Naval Reserve Association
    would like to express our deepest appreciation to your
    subcommittee for your efforts over the last couple of fiscal
    years. In the next couple of months, a number of outcomes and
    events will be converging. Your allocation of appropriations
    and sage leadership will help set the backdrop.
        The Secretary of Defense's Office is conducting a series of
    studies emphasizing transformation of the duty status and the
    roles of the Guard and Reserve. Additionally, the services are
    in the midst of budget planning for fiscal year 2004. Despite
    the projected increases in the defense budget being considered
    by Congress, force planners are tailoring the future more with
    pruning shears than by adding additional bolts of cloth. The
    cause of this may be the miliary's approach to do more with
    less. The reality is, the wear and tear is beginning to catch
    up on our Armed Forces equipment and the expensive needed
    procurements are still being pushed into the future to avoid
    visible cost.
        The war is continuing to be waged and is expanding
    globally. Collateral effects have affected the peoples of
    Israel, Palestine, Pakistan, and India. Where our military will
    be in the coming month will be tolled by events yet to come.
        The Naval Reserve Association has concerns for the future
    structure of the Naval Reserve force because of the possibility
    that portions of the Naval Reserve may become the bill-payer.
    We suspect that there are a number of people in planning who
    have their sites on the Naval Reserve hardware units.
    Decommissioning of a Reserve P-3 squadron, Reserve CB
    battalions, fleet hospital units, or naval coastal defense
    units would be a way to balance the Navy's budget. Personnel
    accounts could also be tempting. Comments have already been
    heard as to why so large a Reserve is needed, when only a small
    portion of it was mobilized.
        What we request that your committee includes is language in
    the appropriations bill to direct DOD to cease further
    reductions in both active and Reserve component end strengths
    until the threats to our Nation are properly determined and a
    national defense strategy is clearly defined. The force
    planners for the active component have again failed to satisfy
    congressional wishes and include complete Reserve component
    needs in their Program Objective Memorandum (POM) budget.
        Reserve equipment is being programmed into the outyears, if
    included at all. With the Future Years Defense Program (FYDP)
    that does not come close to meeting the current needs of
    equipment, ships, and aircraft, the naval requirements for the
    most part fall out of and off the table. We cannot count on the
    once-robust National Guard and Reserve equipment allowance to
    level the playing field, although last year's increased and
    unfunded appropriations helped, it just scratched the surface.
        The Naval Reserve, like other Reserve services, is
    dependent upon Congress to provide for the reservist equipment
    needs. Over the last 50 years there has been a historical cycle
    in support of the Guard and Reserve. When money is tight,
    sentiments run against the Guard and Reserve components. DOD
    studies become plentiful, reviewing roles and missions,
    manpower utilization, and how the total force policy should be.
    The initial result seems always to suggest cutting back on the
    Guard and Reserve, yet historically, as the next crisis arises,
    it is always the Guard and Reserve that is called upon to help
    combat the new threat.
        With 60 percent of the Navy's budget in manpower accounts,
    it invests only 3 percent of its total obligation authority to
    the resources and people of its Reserve. For this investment,
    it has a ready force of men and women with skills, talents, and
    motivation that are unique. The Naval Reserve, which represents
    20 percent of the Navy, is a needed insurance policy at a very
    small price.
        When reservists serve side-by-side with active duty, you
    cannot differentiate them, yet inequities still exist with
    assigned duty, allowances, benefits, and retirement. Your
    efforts in past fiscal years have helped bring remedy, but our
    common goal should be to continue toward parity both on the
    battlefield and at home.
        Thank you for the opportunity to testify. I stand ready for
    any questions.
        [The statement follows:]

                     Prepares Statement of Marshall Hanson

                                  introduction
        On behalf of nearly than 88,000 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.
        In the next couple of months a number of outcomes and events will
    be converging. Your allocation of appropriations and sage leadership
    will help set the backdrop.
        Due this month to the Secretary of Defense is a review by the
    office of the Assistant Secretary of Defense for Reserve Affairs (ASD/
    RA) to define Reserve Roles and Missions. A further study has been
    contracted by ASD/RA on defining Reserve Component Duty Statues. The
    emphasis of each of these studies is transformation with a goal to
    suggest new designs.
        Additionally, the Services are in the midst of budget planning for
    fiscal year 2004. Despite the projected increases in the Defense Budget
    being considered by Congress, force planners are tailoring the future
    more with pruning shears, than by using additional bolts of cloth.
        The cause for this may be the military's approach to ``do more with
    less.'' Reality is that wear and tear is beginning to catch-up with our
    armed forces equipment, and the expense of needed procurements is still
    being pushed further into the future to avoid visible costs.
        The War is continuing to be waged and is expanding globally.
    Collateral effects have affected the peoples of Israel, Palestine,
    Pakistan and India. Where our military will be in the coming months
    will be tolled by events yet to come.
        The Naval Reserve Association has concerns for the future structure
    of the Naval Reserve Force because of the possibility that portions of
    the Naval Reserve may become the bill payer. We suspect that there are
    a number of people in planning who have their sights on Naval Reserve
    hardware units. Redistribution of a Reserve P-3 Patrol Wings, Reserve
    Seabee Battalions, Fleet Hospital units, or Naval Coastal Warfare/
    Littoral Surveillance units would be a way to balance the Navy budget.
        Personnel accounts could be too tempting also. Comments have been
    already been heard, as to why so large a Reserve is needed when only a
    small portion of it was mobilized.
        We request that your committee include language in the
    appropriations bill to direct DOD to cease further reductions in both
    Active and Reserve component end strengths until the threats to our
    Nation are properly determined and a National Defense Strategy is
    clearly defined.
        The force planners for the active component have again failed to
    satisfy Congressional wishes and include Reserve component needs in
    their POM (Programs Objectives Memorandum) Budget. Reserve equipment is
    being slid into the out years, if included at all. With a FYDP that
    doesn't come close to meeting the procurement needs of equipment, ships
    and aircraft, the Naval Reserve requirements for the most part fall off
    (introduction continued) the table. We cannot count on the once robust
    National Guard and Reserve Equipment (NGRE) Allowance to level the
    playing field. Although last year's increase to $10 million
    appropriation helped, it just scratched the surface.
        The Naval Reserve, like other Reserve Services, is dependent upon
    Congress to provide for the Reservist's equipment needs. An equipment
    list is included with this report. Yet, if the Naval Reserve could
    spend added dollars on just one piece of equipment not funded in the
    Administrations budget, that next money would go to the C-40A logistics
    airlift. The Congress has provided the Naval Reserve with five of its
    six C-40A aircraft. The need is for twenty-one more aircraft.
        Over the last fifty years, there is a historical cycle for the
    support of the Guard and Reserve. When money is tight, sentiments run
    against the Reserve Components. DOD studies become plentiful reviewing
    roles and missions, manpower utilization, and total force policy. The
    initial result seems always to suggest cutting back the Guard and
    Reserve. Yet, historically, as a crisis arises soon after these cuts
    are planned, it is the Guard and Reserve that are called upon to help
    combat the threat.
        The Naval Reserve invests about three percent of it's total
    obligation authority into the resources and people of its Reserve, and
    for this investment it has a ready Force of men and women with skills,
    talents and motivation that are unique, and that can be surged as
    needed. The Reserve is a needed insurance policy, at a small price.
        When Reservists serve side by side with Active Duty, you can not
    differentiate them. Yet inequities still exist with assigned duties,
    allowances, benefits, and eventually retirement. Obsolete and aged
    equipment cause additional divergence. Your efforts in past fiscal
    years have helped bring remedy, but our common goal should be to
    continue toward parity both on the battlefield and at home.
        Thank you, for the opportunity to testify.
    Anticipated Fiscal Year 2003 Unfunded Requirements Readiness Shortfalls
    RPN
        Non-Prior Service (NPS) Bonus ($2.5M).--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 for over 84,000 SELRES.
        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).--Combat Commander
    requirements are greater than available funding. This will allow for
    greater direct and indirect support for Combat Commanders'
    requirements. It will allow Commander Naval Reserve to increase the
    amount of contributory support that can be provided to gaining commands
    for command exercises, mission support, conferences, exercise
    preparations, and unit conversion training. These funds also provides
    annual training for 4,500 members who ``drill for points only'' in
    voluntary training units (VTUs).
                             recruiting shortfalls
        Reserve Recruiter Support & Advertising.--Aggressive national
    recruiting advertising campaigns needs to be maintained. With higher
    retention rates in the active fleet, the Naval Reserve must rely on
    non-prior service recruits. Advertising campaign includes media and
    market research, and placement of advertising in television, print,
    radio, direct mail, and public service announcements.
    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.

    Projected costs--Unfunded equipment and training requirements

                            [In millions of dollars]

                                                                      Amount
    PROCUREMENT:
        Airlift, C-40A Transport Aircraft (3), replacing aging C-9
          aircraft.................................................... 189.0
        Coastal/Expeditionary Warfare, upgrade equipment and small
          boats.......................................................  76.0
        Seabees: Naval Construction Forces............................  27.0
        C-130T Avionics Modernization, standardize cockpit configs of
          all N&MCR aircraft..........................................   3.5
        FLIR Kits (AAS-51Q) for SH-60B, procure forward looking
          infrared....................................................   7.0
        F/A-18A Mod, ECP 560, upgrade USNR precision munitions
          capability (6) aircraft.....................................  36.6
        F-5 Radar Upgrade, replace existing radars....................  16.0
        Individual Protective Equipment, to train units in gear
          required for CINC tasking...................................   7.0
        IT CNRF Infrastructure, upgrade network infrastructure not
          included in NMCI............................................  17.0
        Littoral Surveillance System, procuring (1) system for year
          for regional/port surveillance..............................  30.0
        Operational Flight Trainer upgrade/mod, to match current P-3C
          configuration...............................................  12.0
        P-3C/BMUP Kits, to achieve commonality with Active P-3C UD III
          squadrons...................................................  27.0
        P-3C CDU upgrades, to increase counter drug capabilities......   3.0
        P-3C/AIP Kits, to improve ASW capability/target sensing,
          enhance weapons suite.......................................  27.0
    PERSONNEL FUNDING:
        Active Duty for Training, Fleet support funding to meet Combat
          Commander rqmnts............................................  10.0
        Active Duty for Training, Schools.............................   4.0
        Funeral Honors Support........................................   2.0
        Incentive Pay for Reserve Personnel (Medical Programs and
          others).....................................................   4.0
        Non-Prior Service Enlistment Bonus, NPS bonus program to
          compete with other RC's.....................................   2.5
    OPERATIONS AND MAINTENANCE:
        Base Operation Support, equipment furnishings and vehicles to
          complete MILCON.............................................   4.0
        IT Legacy, Reserve sustainment, $$'s required to operate
          legacy IT systems a minimum.................................   6.0
        IT Reserve Modernization, upgrading existing legacy systems to
          perform new functions.......................................  8.75
        NMCI, Naval Marine Corps Intranet, expanding system to SELRES
          and TAR personnel...........................................  33.0
        Facility Sustainment, Restoration, and Modernization
          (including demolition)......................................  20.5
    MILITARY CONSTRUCTION:
        BEQ Naval Air Station Atlanta.................................  6.75
        Naval Reserve Center Montana w/land...........................   6.0
        Naval Air Station JRB New Orleans:
            Engine Maintenance Shop Addition..........................   1.5
            Hazardous Material Storage................................   2.7

    Alphabetical listing, not in order of priority.

        Senator Inouye. We will remember your profound words, when
    reservists serve side-by-side with active duty you cannot
    differentiate them. Thank you very much.
        Captain Hanson. Thank you, sir.
        Senator Inouye. Our next witness is the deputy director of
    the national security foreign relations division of the
    American Legion, Dennis ``Mike'' Duggan.
    STATEMENT OF DENNIS ``MIKE'' DUGGAN, DEPUTY DIRECTOR,
                NATIONAL SECURITY--FOREIGN RELATIONS
                DIVISION, THE AMERICAN LEGION
        Mr. Duggan. Good afternoon, Senator, and the American
    Legion, the Nation's largest organization of wartime veterans,
    welcomes and appreciates this opportunity to present its views
    on the fiscal year 2003 defense appropriations budget. We wish
    to continually thank you and your subcommittee for all you have
    done on behalf of the Armed Forces of the United States.
        This budget is the first defense budget since 9/11. It
    contains some $48 billion in defense spending than the current
    2002 defense budget. It also represents 3.3 percent of our
    gross domestic product, up from 2.9 percent of gross domestic
    product in the fiscal year 2002 budget. Following some 5
    consecutive years of small budget increases and some 13 years
    of underbudgeting, a decade of overuse of a small military will
    necessitate, in our view, sustained investments, but this is a
    good budget, we believe, and it is certainly a very good first
    step in that direction.
        We believe that if we are to win the war on terrorism and
    defend the homeland in this decade and beyond, we must provide
    for the Department of Defense's greatest assets, namely, our
    men and women in uniform. They are doing us proud in
    Afghanistan and around the world. We have always asked our
    military, just as we were asked at one time, to risk our lives
    if need be, but we should not also subject military families to
    repeated unaccompanied deployment and substandard housing, if
    at all possible. Quality of life, we feel, for our servicemen
    and women are overall greatly enhanced by this budget, and we
    are grateful for that.
        But as we know, there are currently over 80,000 mobilized
    reservists on duty, and the military stop loss policy is in
    effect. Our military, our view, has been stretched thin even
    before Operations Enduring Freedom and Noble Eagle. We also
    would encourage an increase in service end strength, as I
    believe a number of the services have already requested.
        Modernization for the Armed Forces has been delayed and
    curtailed for a long time. Since 1990, the average age of our
    Air Force aircraft has increased from about 13 years old to
    currently about 22 years old. Today's Navy we understand has
    about 315 ships, but the rate of shipbuilding and retirement of
    ships in the fiscal year 2003 budget, it could shrink our fleet
    to fewer than 250 ships. Recognizably, modernization and
    transformation is a process, and it is an expensive process but
    it is one that must continue.
        With regard to concurrent receipts, much has been said
    about that. We would only add our voice that we urge full
    concurrent receipt for all disabled military retirees.
        Legislation, we would add, introduced in the House would
    allow reservists to begin receiving retired reservist pay at
    age 55 instead of 60. The American Legion supports that
    initiative.
        The war on terror is highlighting a 10-year trend in
    increased reliance on the National Guard and Reserves. A full
    review, we believe a total force compensation equity is long
    overdue. Continuing mission requirements together with a small
    active force structure we believe called for that.
        The American Legion also has deep concerns over the Defense
    Commissary Agency, or the proposal to abolish all full-time
    wage grade and GS positions and convert them to part-time
    positions while reducing war powers. We understand this
    reduction in force is taking place in most, if not all of the
    280 commissaries. The impact on benefits and customer service
    will be deeply felt by these cutbacks. We adamantly oppose that
    proposal. Commissaries are a key component of the military pay
    and compensation package.
        In closing, this budget we believe is a good budget. It
    supports and funds the war on terrorism, and our Armed Forces
    as well. More needs to be done, we believe, in the years ahead,
    and the American Legion urges the following as a minimum.
        First of all, sir, continued quality of life improvements,
    second, defense spending as a percentage of gross domestic
    product still continue at the 3.3 or even higher percentage,
    thirdly, enhanced military capabilities with emphasis on
    modernization and transformation, and finally that the National
    Guard and Reserves must be realistically manned, resourced,
    structured, equipped, and trained, fully deployable, and
    maintained at high readiness levels in order to accomplish
    their indispensable roles and missions in today's military.
        Mr. Chairman, this concludes our statement, sir. 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 authorization for fiscal year
    2003. The American Legion values your leadership in assessing and
    authorizing adequate funding for America'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 an
    uncertain world.
        On September 11, 2001, America was viciously attacked by terrorists
    destroying symbols of American strength and prosperity and killing
    thousands of Americans within a few short hours. Yet within weeks, the
    United States responded by positioning armed military forces in
    Afghanistan and attacking those responsible. As Secretary of Defense
    Donald Rumsfeld has noted, we are still in the early stages of what is
    predicted to be a long, dangerous global war on terrorism. This war has
    two fronts: one overseas, waged against armed terrorists and the second
    being fought here in the United States to protect and secure the
    Homeland. Indeed, the freedoms and liberties that form this nation are
    made possible by the peace and stability provided by the brave men and
    women of the U.S. Armed Forces.
        The American Legion adheres to the principle that this nation's
    armed forces must be well manned and equipped, not to pursue war, but
    to preserve and protect peace. The American Legion strongly believes
    that past military downsizing was more budget-driven than threat
    focused. Once Army divisions, Navy carrier battle groups, and Air Force
    fighter wings are eliminated from the force structure, they cannot be
    rapidly reconstituted regardless of the threat or emergency
    circumstances. Military recruitment has also been sporadic in the face
    of obvious quality-of-life concerns, frequent and lengthy deployments,
    the recession and in spite of the patriotic American spirit which has
    followed the terrorist attacks of September 11th.
        Mr. Chairman, the President's proposed budget contains funding to
    fight the war on terrorism and selectively modernize the existing
    force. A decade of overuse of the military and its under-funding,
    however, will necessitate sustained investments, and this budget
    proposal, in our view, represents a good first step. Still, this
    proposed budget does not address increasing the military endstrengths
    of the Services, accelerating ship production, or funding full
    concurrent receipt of military retirement pay and VA disability
    compensation for disabled military retirees.
        If America's Armed Forces are to be successful in the war on
    terror, and remain prepared for the wars of tomorrow, adequate funding
    must be provided to take care of the Department's greatest assets,
    namely, our men and women in uniform. Today's active duty, Guard and
    Reserve personnel are accomplishing their mission in Afghanistan and
    around the world--and today, thanks to their accomplishments in the war
    on terrorism, morale appears to be high.
        The American Legion National Commander Richard Santos has visited
    American troops in Germany, Kosovo, Macedonia and South Korea, as well
    as a number of installations throughout the United States. During these
    visits, he was able to see firsthand the urgent need to address real
    quality-of-life challenges faced by servicemembers and their families.
    He has spoken with military families on issues of concern to include
    Womens' and Infants' Compensation (WIC), quality of life issues for
    servicemembers, and the heightened operational tempo. These concerns
    play a key role in the recurring recruitment and retention woes and
    should come as no surprise. The American Legion supports a reduction in
    the high operational tempo and lengthy deployments by increasing
    military endstrengths. Military missions were on the rise before
    September 11th and deployment levels remain high, it appears the only
    way, to reduce repetitive overseas tours is to increase military
    endstrengths for the services.
        Also, military pay must be on par with the competitive civilian
    sector. If other benefits, like health care improvements, commissaries,
    adequate living quarters, quality child care, and school systems are
    reduced, they will only serve to further undermine efforts to recruit
    and retain the brightest and best this nation has to offer.
                                 modernization
        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. To those who would argue
    that the nation cannot afford such an investment, we must ask just what
    is the cost of freedom? 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 and the home front, and deter and defeat
    terrorism, it must be capable of providing and projecting force with
    complete confidence, using state-of-the-art weaponry, in a timely
    manner.
        According to the Commanders in Chief of the services, the U.S.
    military is not currently prepared to fight a war similar to the
    Persian Gulf War.
                                   readiness
        In recent years, overly 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 and 13 years of reduced defense
    budgets. We have seen the 1st Infantry and 10th Mountain Divisions
    affected by 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. 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 borrowing crewmembers from other ships in order to
    deploy. Back-to-back tours undoubtedly adversely impact crew integrity,
    morale, and readiness. Hands-on training, actual flying hours, and
    ammunition have been 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. We
    salute the Administration for increasing readiness funding in this
    budget. Recognizably, many readiness problems are systemic and will
    require years to fix.
                        quadrennial defense review (qdr)
        The American Legion supports the force structure proposed by the
    Base Force Strategy of the first President Bush administration, that
    is, 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 believes America can no longer afford to become
    the world peace enforcer by dispatching forces on unbudgeted operations
    every time the United Nations passes a resolution to do so. The
    American Legion believes Congress needs to remain involved in the
    decision-making process regarding the commitment of U.S. military
    forces. These forces should be deployed only when the vital national
    interests of America are clearly at stake; the efforts are supported by
    the will of the American people and Congress; and a clear exit strategy
    exists. Congress needs to be involved in the policy of committing U.S.
    troops before troops are committed, not afterwards.
                           procurement/transformation
        Only a few major systems currently in production would be funded in
    the fiscal year 2003 defense budget. The funding level for procurement
    is improved but that improvement needs to continue. The American Legion
    fully supports the Army's Transformation Program. Major development
    programs that The American Legion 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. Unquestionably, the Navy needs to upgrade its
    aging fleet and acquire more submarines. The American Legion strongly
    believes that the rate of annual shipbuilding needs to be increased so
    that at least 8-10 ships are built annually.
        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.
        America's winning technology in the Persian Gulf War, like its
    victorious all-volunteer force, did not develop overnight, but had its
    genesis in the decade of the 1980's. The modernization of the Armed
    Forces since the end of the Persian Gulf War, unfortunately, has been
    delayed. The 2003 budget request addresses each of the six
    transformational goals mentioned by the Secretary of Defense in his
    congressional testimony. It accelerates funding for the development of
    transformation programs as well as modernization. Recognizably,
    transformation is a process that must continue.
        The Chairman of the Joint Chiefs of Staff during fiscal year 1998
    defense budget hearings called for procurement budgets of $60 billion
    annually, which for the first time was reflected in the fiscal year
    2001 budget. Army procurement dollars alone have plummeted by almost 80
    percent since the mid-1980's, and by 67 percent for all the services.
    Trade-offs to maintain readiness within budget constraints have caused
    the Services to cancel a number of weapons systems and to delay others.
        A number of defense consulting firms have predicted that the Armed
    Forces are heading for a ``train wreck'' unless annual defense budgets
    called for procurement accounts in the $118 billion range, rather than
    in the $45-$60 billion range.
        In light of potential biological/chemical threats to our military
    forces, 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 have not been sensitive enough to
    detect sub-acute levels of chemical warfare agents. Improved biological
    detection equipment also needs to be expedited.
        The American Legion urges Congress to preserve America's defense
    industrial base by continuing to fund research, development and
    acquisition budgets so as to retain its technological edge in the 21st
    Century and assure that military production can surge whenever U.S.
    military power is committed. Some of these capabilities, such as tank
    production and shipbuilding, need to be retained. Key industrial
    capabilities that preserve more of the defense industrial base need to
    be identified and retained.
        The American Legion opposes termination or curtailment of essential
    service modernization programs, diminution of defense industrial
    capabilities, and rejects the transfer 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 U.S. forward deployed forces is imperative; any
    dismantling of acquisition programs used to defend the American people
    is imprudent. America should focus on developing and deploying an anti-
    ballistic missile detection and intercept system that is capable of
    providing an effective defense against limited attacks of ballistic
    missiles.
                                quality of life
        A major National Security concern of The American Legion is the
    enhancement of the quality-of-life issues for service members,
    Reservists, National Guard, military retirees, and their families.
    During the first session of Congress, President Bush and Congress made
    marked improvements in an array of quality-of-life issues for military
    personnel and their military families. These efforts are much needed
    enhancements that must be sustained. The cost of freedom is ongoing,
    from generation to generation.
        In the fiscal year 2002 defense budget, the President and Congress
    addressed improvements to the TRICARE system to meet the health care
    needs of military beneficiaries; enhanced Montgomery GI Bill
    educational benefits; and improved services for homeless veterans. For
    these actions, The American Legion applauds your strong leadership,
    dedication, and commitment. However, a major issue still remains
    unresolved: the issue of concurrent receipt of full military retirement
    pay and VA disability compensation without the current dollar-for-
    dollar offset. The issue of concurrent receipt appeared in the fiscal
    year 2002 Budget Resolution and the Fiscal Year 2002 National Defense
    Authorization Act but the administration did not include funding in the
    fiscal year 2003 defense budget to fund legislation ending this
    inequity. Every day, new severely disabled retirees are joining the
    ranks of American heroes being required, by law, to forfeit military
    retirement pay.
        Recently, 14 soldiers and 2 airman were awarded Purple Hearts
    during the War on Terrorism. These newest American heroes would be the
    latest victims of this injustice should their war wounds result in
    debilitating medical conditions. During the State of the Union Address,
    one such future recipient, SFC Ronnie Raikes, was sitting next to the
    first Lady. Concurrent receipt legislation in both chambers (S. 170 and
    H.R. 303) has overwhelming support by your colleagues. Enactment of
    corrective legislation and fully funding concurrent receipt are actions
    to properly reward heroism and courage under fire for brave
    servicemembers such as SFC Raikes.
        Military personnel and their families endure a life of service in
    the military in spite of salaries, living conditions, and forfeiture of
    personal freedoms that most Americans would find unacceptable. The
    American Legion applauds the President's request of $94.3 billion for
    military pay and allowances to help improve the quality of life for
    America's servicemembers.
        Specifically, The American Legion recommends the following issues
    be addressed to improve the overall quality of life for America's men
    and women in uniform:
      --Closing the Military Pay Gap With the Private Sector.--The previous
            Chairman of the Joint Chiefs of Staff 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 somewhat behind the private sector. The
            American Legion applauds the proposed 4.1 percent military pay
            raise. 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 continued excitement
            in the field. We urge you to support the Administration's
            proposed military pay and allowances increases.
      --Basic Allowance for Housing (BAH).--The American Legion supports
            full funding of BAH, but maintains that it 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
            neighborhood where they reside and the schools their children
            may attend. Ironically, in order to protect their families from
            the limitations of the standard, the lowest ranking (who are
            obviously paid the least) must expend additional out-of-pocket
            dollars. Secretary of Defense Rumsfeld has established a goal
            of eliminating all out-of-pocket housing expenses by 2005. The
            President's proposal to reduce the servicemember's share of
            housing costs from 11.3 percent to 7.5 percent is a solid step
            toward reaching that goal. The American Legion fully supports
            the President's proposal and commends the Secretary for
            establishing such a goal.
      --Montgomery G.I. Bill Enhancements (MGIB).--The American Legion
            applauds the improvements in the MGIB contained in Public Law
            107-103, but more needs to be accomplished. 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 the veterans' educational benefits package for the
            21st Century must be designed to recruit outstanding
            individuals and to serve as a successful transition instrument
            from military service back to the civilian workforce.
        The American Legion supports passage of major enhancements to the
    current All-Volunteer Force Education Assistance Program, better known
    as the Montgomery GI Bill (MGIB), to include the following:
      --The dollar amount of the entitlement should be indexed to the
            average cost of a college education including tuition, fees,
            textbooks, and other supplies for a commuter student at an
            accredited university or college for which they qualify;
      --The educational cost index should be reviewed and adjusted
            annually;
      --A monthly tax-free subsistence allowance indexed for inflation must
            be part of the educational assistance package;
      --Enrollment in the MGIB should be automatic upon enlistment,
            however, benefits will not be awarded unless eligibility
            criteria have been met;
      --The current military payroll deduction ($1200) requirement for
            enrollment in MGIB must be terminated;
      --If a veteran enrolled in the MGIB acquired educational loans prior
            to enlisting in the Armed Forces, MGIB benefits may be used to
            repay existing educational loans;
      --If a veteran enrolled in MGIB becomes eligible for training and
            rehabilitation under Chapter 31, of Title 38, U.S.C., the
            veteran shall not receive less educational benefits than
            otherwise eligible to receive under MGIB;
      --A veteran may request accelerated payment of monthly educational
            benefits at any time after meeting the criteria for eligibility
            for financial payments;
      --Eligible members of the Select Reserves, who qualify for MGIB
            educational benefits shall receive an appropriate amount of
            tuition assistance and subsistence allowance and have up to 5
            years from their date of separation to use MGIB educational
            benefits.
      --Commissaries.--The American Legion urges Congress to preserve full
            federal funding of the military commissary system and to retain
            this vital non-pay compensation benefit. Furthermore, The
            American Legion fully supports the full-time usage of
            commissary stores by members of the Reserve components, that
            the system not be privatized and that DECA manpower levels not
            be further reduced.
      --Improving Substandard Housing and Working Conditions in Europe and
            Korea.--A large percentage of the military family housing and
            work facilities, particularly in Europe and Korea, are
            substandard and in need of extensive repair and modernization.
            The U.S. European Command Commander-In-Chief, General Joseph
            Ralston, said that working conditions at some bases in Europe
            were so bad that troops are better off deploying to Bosnia. The
            American Legion supports improvements to substandard housing
            and working facilities in Europe and Korea.
                               reserve components
        The decreasing number of active duty personnel 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 in the War on Terrorism 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. Over 80,000 Guardsmen and
    Reservists have been activated for Operation Enduring Freedom.
        The American Legion supports improved quality-of-life benefits such
    as those contained in the Soldiers and Sailors Relief Act for the 6-
    7,000 Guardsmen who are securing over 400 airports in America.
        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 and lowering the eligible age for
    receiving military retirement benefits to age 55.
                     health care for military beneficiaries
        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 1.3 million Medicare-eligible military retirees and dependents.
    While TRICARE for Life came with its own funding stream in fiscal year
    2002, authorization must be budgeted to provide for the program in
    fiscal year 2003. The American Legion recommends that you continue to
    make this important program a reality by providing the necessary
    funding. The American Legion also applauds your work last year in
    eliminating TRICARE co-payments for active duty family members.
        Earlier this year, The American Legion presented testimony before
    the Presidential Task Force to Improve Health Care Delivery to our
    Nation's Veterans. The following points were made with regard to the
    Military Health System (MHS) and the Veterans Health Administration and
    are included here for your consideration:
      --The American Legion adamantly supports retaining the integrity of
            the separate MHS and VA health care delivery systems dedicated
            to their primary mission. Access to each system is an earned
            benefit resulting from honorable military service.
      --The American Legion strongly recommends maintaining access for
            veteran and military beneficiaries, especially for specialized
            services in both DOD and VA systems.
      --The American Legion advocates developing additional DOD-VA resource
            sharing joint ventures.
      --The American Legion supports maximizing utilization of health care
            sharing partnerships between all regional VA and DOD/TRICARE
            providers.
      --The American Legion supports improving information technology to
            include electronic medical records.
      --The American Legion supports allowing Veterans Health
            Administration (VHA) to utilize Medicare reimbursement for
            enrolled Medicare-eligible veterans and TRICARE for Life
            retirees being treated for nonservice-connected conditions.
      --The American Legion supports DOD and VA joint procurement ventures,
            expanding joint medical education, and training and improving
            relations between DOD and VA in Homeland Security emergency
            preparedness.
        The American Legion urges Congress to resist any efforts to close
    the Uniformed Services University of Health Sciences (USUHS). The
    American Legion is convinced that the USUHS is an economical source of
    career medical leaders who serve this nation during peace and war and
    provide military health care consistency and stability. The American
    Legion urges the Congress to retain and fully fund USUHS as a continued
    source of career military physicians for the Army, Navy, Air Force and
    U.S. Public Health Service. The American Legion also supports the
    construction of an Academic Center to accommodate the USUHS Graduate
    School of Nursing.
                         other military retiree issues
        The American Legion believes strongly that quality-of-life issues
    for retired military members and families 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 before, 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 concurrently. 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 plans are fundamentally
            different. Longevity retirement pay is designed primarily as a
            force management tool to attract high-quality members to serve
            for 20 years. A veteran's disability compensation is paid for a
            disability, injury or disease incurred or aggravated during
            active-duty military service. Monetary benefits are related to
            the residual effects of the injury or disease and subsequently
            reduced employment and earnings potential. Action should be
            taken 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. 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. The American Legion
            believes that the provision for a lifetime annuity to former
            spouses should be terminated upon their remarriage. Based on
            this current provision, monthly provisions for life are being
            granted to former spouses regardless of marital status, need,
            or child custodial arrangements. Judicial determinations of
            appropriate support should be determined on a case-by-case
            basis and not be viewed as an ``entitlement'' by former spouses
            as exists under current law. The American Legion urges hearings
            on the USFSPA.
                                   conclusion
        Twenty-nine 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. The fiscal year
    2003 defense budget, while recognizing the War on Terrorism and
    Homeland Security, represents a good first step in the right direction.
        What more 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 BAH, BAS, 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 which this
            budget begins to do.
      --The new Quadrennial Defense Review strategy needs to call for
            enhanced military capabilities to include force structures,
            increased endstrengths and improved readiness which are more
            adequately resourced.
      --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.
      --Legislation granting full concurrent receipt of military retired
            pay and VA disability compensation for disabled military
            retirees.
        Mr. Chairman, this concludes The American Legion statement.

        Senator Inouye. Director Duggan, I am certain you are well
    aware the words of the American Legion are always seriously
    considered here.
        Mr. Duggan. Thank you, sir.
        Senator Inouye. Thank you.
        Our next witness is a member of the board of directors of
    the National Brain Injury Research Treatment and Training
    Foundation, Mr. Martin B. Foil, Jr.
    STATEMENT OF MARTIN B. FOIL III, MEMBER, BOARD OF
                DIRECTORS, NATIONAL BRAIN INJURY RESEARCH,
                TREATMENT AND TRAINING FOUNDATION
        Mr. Foil. Good afternoon, Mr. Chairman. Thank you for
    allowing me to be here today. My name is Marty Foil, and I am
    the brother of a young man with a severe brain injury. I serve
    as the vice chairman of the National Brain Injury Research,
    Treatment and Training Foundation, and as the executive
    director of Hines Farm, a facility in Huntsville, North
    Carolina, built to care for individuals like my brother who
    live with long-term disabilities as a result of brain injury.
        You may be familiar with my father, Martin Foil, Jr., who
    comes each year to testify. He sends his regrets that he could
    not be here today, and we ask that his written testimony be
    submitted for the record.
        Senator Inouye. It will be received, sir, with thanks.
        Mr. Foil. Thank you.
        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 DOD health
    affairs budget under operation and maintenance for the defense
    and veterans head injury program (DVHIP). The DVHIP is a
    significant contribution to the health of the United States
    military and veteran populations.
        The DVHIP is a component of the defense military health
    system providing direct care at military treatment facilities
    and veterans' hospitals throughout the Nation. The primary
    purpose of the DVHIP is to provide state-of-the-art medical
    care to personnel sustaining concussions and more severe brain
    injury while on active duty so as to get them back to work or
    to appropriate rehabilitation as soon as possible.
        As you know, brain injury is the leading cause of death and
    disability in young Americans. Almost 2 million brain injuries
    occur each year, and of those approximately 90,000 lead to
    long-term severe disability as a result. Males age 14 to 24
    have the highest incidence of injuries.
        Brain injury is also a leading combat concern in modern
    warfare. Our written testimony includes an example of a Special
    Forces officer recently injured in combat who was cared for
    through the DVHIP program from acute care through rehab and
    community reentry. Shortly after he began rehab, officials
    wanted to award him the Purple Heart, but the DVHIP doctors
    advised waiting until he had healed a bit from his injury, as
    he had little discretion over his speech and needed some time
    to recover. After 14 weeks of intensive treatment, he was able
    to monitor his thoughts, say what he chose, cook and care for
    himself, and travel independently on public transportation.
        The DVHIP is prepared to provide a full continuum of care
    for troops sustaining brain injuries during this critical time
    in our history. Additionally, new research is needed to study
    the effects on the brain from chemical and biological threats
    in order to develop adequate responses and possible
    preventative efforts.
        We are grateful for your support for the DVHIP over the
    years, and hope that you will again provide funding to help
    provide the best care possible to our Nation's men and women in
    uniform. We are also pleased that for the second year in a row
    some 20 members of the congressional Brain Injury Task Force
    and six Senators from both sides of the aisle sent letters to
    you and Chairman Lewis in support of funding the DVHIP.
        I respectfully request your support for $5 million in the
    DOD appropriations bill for the DVHIP, and I am happy to answer
    any questions you might have at this time.
        Senator Inouye. I can assure you we will do our very, very
    best.
        Mr. Foil. Thank you, Mr. Chairman.
        [The statement follows:]

                   Prepared Statement of Martin B. Foil, Jr.

        Dear Chairman Inouye, Senator 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 as a volunteer 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\
    Professionally, I am the Chief Executive Officer and Chairman of
    Tuscarora Yarns in Mt. Pleasant, North Carolina.\3\
    ---------------------------------------------------------------------------
        \1\ NBIRTT is a non-profit national foundation dedicated to the
    support of clinical research, treatment and training.
        \2\ JJBIC in Charlottesville, Virginia, provides brain injury
    rehabilitation to military retirees, veterans and civilians through an
    innovative and cost effective day treatment program. JJBIC is a new
    lead DVHIP treatment site.
        \3\ I receive no compensation from this program. Rather, I have
    raised and contributed millions of dollars to support brain injury
    research, treatment, training and services.
    ---------------------------------------------------------------------------
        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 fiscal year 2003 under Operation and Maintenance for the
    Defense and Veterans Head Injury Program (DVHIP).
        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 for the Advancement of
    Military Medicine and the Uniformed Services University of the Health
    Sciences (USUHS).
              the defense and veterans head injury program (dvhip)
        The DVHIP is a component of the military health care system that
    integrates clinical care and clinical follow-up, with applied research,
    treatment and training. The program was created after the Gulf War to
    address the need for an overall systemic program for providing brain
    injury specific care and rehabilitation within DOD and DVA.
        The most critical component of the program to military readiness is
    the assessment of mild brain injury on combat performance. Working with
    paratroopers at Fort Bragg, North Carolina, Marines at Camp Pendleton,
    California and cadets at the U.S. Military Academy at West Point, New
    York, the DVHIP has developed basic combat casualty care protocols to
    ensure treatments for brain injury are available in the field. Early
    identification of injured soldiers not only assists in immediate
    readiness efforts, but facilitates long term management as well as the
    study of brain injury resulting from battlefield operations.
        In addition to supporting and providing treatment, rehabilitation
    and case management at each of the 8 primary DVHIP traumatic brain
    injury (TBI) centers,\4\ 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.
    ---------------------------------------------------------------------------
        \4\ 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; John
    Jane Brain Injury Center, Charlottesville, VA; Hunter McGuire Veterans
    Affairs Medical Center, Richmond, VA; Wilford Hall Medical Center,
    Lackland Air Force Base, TX.
    ---------------------------------------------------------------------------
                    dvhip in action in the war on terrorism
        Head injury is a leading combat concern in modern warfare.
    Neurotrauma (traumatic brain and spinal cord injuries) accounts for
    almost 25 percent of combat casualties. In addition, secondary brain
    injuries--resulting from stroke, cerebral ischemia, seizures which are
    induced by radiation, exposure to ionizing or iron plasma, nerve
    agents, cyanide, toxic concentrations of oxygen, neurotoxicity due to
    central nervous system (CNS) malaria or treatment with antimalaria
    agents, and other CNS traumas, have a significant impact on the health
    and readiness of military personnel. Many of the currently feared
    terrorist threats would involve secondary brain injuries, particularly
    those involving chemical or biological neurological insults.
        The DVHIP is prepared to provide a full continuum of care for
    military personnel injured during current and potential future
    hostilities. More research is needed, however, to study the neural
    pathways of neurotoxicity to develop adequate responses to and possible
    prevention of some of the more insidious terrorist potentialities.
        One example of the scope of the DVHIP is the care of a Special
    Forces soldier recently injured in combat (Sgt. X). He suffered a head
    injury with both injury to his brain and skull, along with a neck
    fracture and amputation of several digits of his hand. Additionally, he
    sustained multiple shrapnel injuries. After evacuation and
    stabilization at the Landstuhl Army Medical Center, he was transferred
    to Walter Reed Army Medical Center, Washington, D.C. (WRAMC). While at
    WRAMC, DVHIP personnel worked with Neurosurgical and Neurology staff in
    caring for Sgt. X in the Intensive Care Unit (ICU). The effects of
    brain injury and sleep disruption from trans-Atlantic med-evacuation
    transport resulted in his disoriented and agitated state in the ICU.
    His day/night cycle was reestablished while the surgical teams rendered
    further care. When he was ready for transfer to acute rehabilitation,
    Sgt. X was transferred to the VA Palo Alto Health Care System in
    California (another lead DVHIP site).
        Although high ranking military officials were interested in
    awarding Sgt. X a Purple Heart immediately, the DVHIP staff strongly
    advised against this as Sgt. X was exhibiting many symptoms of brain
    injury which could potentially do harm to himself and his career.
    Consistent with the severity of his injuries, he spoke all his thoughts
    without regard to discretion, he was unable to problem solve and his
    memory for simple new material was very limited. In addition, his hand-
    eye coordination was greatly impaired such that he could not pick up
    objects, yet he felt compelled to act quickly ``because that's what
    sergeants do.'' The highly trained brain injury specialist staff at the
    Palo Alto VA worked with Sgt. X in a coordinated, integrated manner.
    Each therapist received information about how the immediate preceding
    session went and could incorporate the information into the current
    session. This way they were able to confront the patient with evidence
    of both his problems and how to get around them, as well as show him
    areas of intact function. Sgt. X was taken out into the community in a
    closely supervised manner on a weekly basis to both teach and assess
    how he was doing in the ``real world.''
        After 14 weeks of intensive treatment (including 4 weeks of home
    convalescence to implement what he had learned in the rehabilitation
    unit), Sgt. X had improved to the point that he could be left at home
    alone, take public transportation independently, and was no longer
    ignoring the left part of space. He had normal hand-eye coordination;
    he could monitor his thoughts and say what he chose; and he had
    improved in problem solving to the point that he solicited advice from
    others about his plans. He could plan, shop for and prepare a meal for
    himself and others. He was still impulsive and made serious decisions
    too quickly. He had visual spatial problems which prevented him from
    working towards his hopes of becoming a mechanic and he lost his temper
    rapidly, but he was well on the road to recovery and independence. His
    extended family was kept informed by face-to-face meetings with the
    team, telephone conferences and supervised passes.
        DVHIP Case Management was involved from the time of the initial
    referral, to assisting the Army with Sgt. X's medical retirement
    proceedings, to managing discharge arrangements. At the time of
    discharge, Sgt. X had developed plans for several months post discharge
    and was set up with VA outpatient services close to his local
    community.
        This is just one example of what DVHIP does for thousands of
    military personnel each year--from being ready to care for injured
    troops in the acute care setting to neuro-rehabilitation involving the
    entire patient to full community integration.
                       dvhip projects and accomplishments
    Combat Training and Sports
        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.
                Fort Bragg Paratrooper Study
        Over 5,100 paratroopers have been tested at baseline; 142 post
    injury; 11 both pre and post injury.
        The analysis of symptom and cognitive reporting has lead to the
    development of a clinical feedback form.
        A concussion care clinic staffed with military and DVHIP personnel
    has been established that enhances the level of care for active duty
    personnel at Ft. Bragg.
        A helmet study has been initiated regarding current Kevlar helmets
    which were designed only to protect from penetrating injury. This study
    will enhance protection from closed head injury, such as obtained
    during paratrooper maneuvers. Two helmet liners tested by Natick Labs
    will be compared with the current helmet. Based on laboratory testing,
    it is expected that both liners are to be at least as protective as the
    current model.
                United States Military Academy at West Point
        Approximately 2,000 cadets have been tested at baseline; 64 cadets
    studied post concussion; 28 uninjured controls.
        Grade I concussion analysis results were published in the August
    2001 issue of Neurology, demonstrating that reaction time abnormalities
    persist even after all symptoms of the concussion have remitted.
        DVHIP personnel were invited to perform testing at the Armed Forces
    Boxing Championships at Fort Huachuca, Arizona. The work with all
    military boxing competitions is to enhance safety at these morale-
    building events.
                Camp Pendleton Marine Protocol
        A training project involving corpsmen and military medical
    providers on the specifics of concussion care was successfully
    completed.
        The concussion care clinic has cared for and followed over 300
    concussed Marines.
    Neuro-rehabilitation
        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.
        The John Jane Brain Injury Center in Charlottesville, Virginia, is
    now a core component of the DVHIP and provides intensive inpatient
    rehabilitation to active duty military personnel and veterans.
    Pharmaceutical Interventions
        The Tampa Veterans Hospital will evaluate the anticonvulsant
    medication, valproate, in the treatment of agitation following
    traumatic brain injury.
        The use of a sertraline protocol for post-acute post concussive
    symptoms was initiated at WRAMC and is being extended to other DVHIP
    sites. This study will determine if treatment with sertraline, a
    serotonin selective medication, will decrease symptoms of post
    concussive syndrome, which often limits duty effectiveness. Such a
    treatment could be very beneficial to military personnel recovering
    from concussions.
        Two proposals for multi-center randomized controlled trials are
    currently awaiting funding. One involves Donepezil treatment for memory
    problems after TBI, and the other uses Citalopram for treatment of
    generalized anxiety following TBI. Generalized anxiety is a component
    of many post-traumatic stress situations, as well as post-TBI. An
    effective treatment of these symptoms of irritability, sleep disorder,
    and excessive worry would be of great use to affected military and
    veterans with this disorder.
    Data Management
        Over the past year, the data management section has audited 28,471
    evaluation forms. These forms represent approximately 5,170 evaluations
    on approximately 1,560 TBI patients. The DVHIP database represents one
    of the largest collections of data on TBI patients in existence.\5\
    Follow-up data from several time periods post-injury is available on
    many patients. To move data tracking, entry and quality control
    processes into the 21st century, the data management section has been
    involved with the automation of many evaluation components. Many of
    these components are now ready for implementation. Paperless and web
    based data management systems are also being reviewed to enhance DVHIP
    databases for future studies.
    ---------------------------------------------------------------------------
        \5\ 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.
    ---------------------------------------------------------------------------
    Education and Training
        DVHIP educational projects include a telemedicine initiative
    involving a fall prevention teleconference and regional video
    teleconference on mild TBI evaluation and management, and a
    telemedicine project to determine the ability to assess patients from
    afar regarding their development of post concussive symptoms following
    mild traumatic brain injury. In addition, DVHIP research findings were
    disseminated at eight renowned national and international professional
    meetings and conferences.
                           fiscal year 2003 projects
        While funding is critical to continue the full spectrum of care for
    military personnel and veterans sustaining brain injuries, DVHIP
    investigators also plan to use the DVHIP Registry Data to follow up
    with individuals with mild TBI to determine the amount of persisting
    symptoms and their current functioning. Because most studies evaluate
    clinic or hospital samples, this unselected series could offer
    important information regarding recovery without complications compared
    with persisting difficulties.
        Funding is also needed to compare two low-cost treatment
    interventions to enhance recovery. Both educational interventions and
    focused case management systems are believed to enhance recovery and
    appropriate utilization of medical resources. This study will compare
    individuals treated with standard of care discharge instructions with a
    population with enhanced provider and patient education regarding head
    injury; a system where enhanced case management has been implemented;
    and a population with both programs (focused education and enhanced
    case management). This four group design will permit identification of
    those components that are most helpful in after-discharge recovery from
    TBI.
                                   conclusion
        The DVHIP is an integral part of the military health system,
    providing state of the art care and innovative treatments to our
    nation's military personnel and veterans sustaining brain injuries. The
    unique collaborative efforts of the DVHIP, combining clinical research,
    treatment, rehabilitation and training, contribute significantly to
    improving health care in the U.S. military.
        The current hostilities significantly raise the risk of injury to
    our troops, and the DOD and DVA must continue to be prepared to provide
    the best medical care possible to our men and women in uniform. Sgt. X
    and his colleagues deserve no less.
        I respectfully urge your support for $5 million for the DVHIP in
    the fiscal year 2003 Defense Appropriations bill in the DOD Health
    Affairs budget under Operation and Maintenance to continue this
    important program.

        Senator Inouye. Our next witness is executive director of
    the Illinois Neurofibromatosis, Inc., Ms. Kim Bischoff.
    STATEMENT OF KIM BISCHOFF, EXECUTIVE DIRECTOR, ILLINOIS
                NEUROFIBROMATOSIS, INC.
        Ms. Bischoff. Thank you, Mr. Chairman, for the opportunity
    to appear before you today to discuss the Army's
    neurofibromatosis research program. I am Kim Bischoff, the
    executive director of Illinois Neurofibromatosis, which is a
    participant in a coalition of neurofibromatosis, or NF advocacy
    groups, but more importantly, I am the mother of Jennifer, a
    young woman who has neurofibromatosis.
        Let me first tell you about neurofibromatosis. It is a
    terrible genetic disorder involving uncontrolled growth of
    tumors along the nervous system which can result in
    disfigurement, deformity, deafness, blindness, it can cause
    brain tumors, cancer, and death. It is the most common
    neurological disorder caused by a single gene, afflicting
    approximately 100,000 Americans, but most strikingly, research
    has shown that NF is closely linked to cancer, brain tumors,
    learning disabilities, and heart disease potentially affecting
    150 million Americans in this generation alone.
        As you may recall, Mr. Chairman, NF research is directly
    related to military purposes because of its close implication
    with tissue degeneration and regeneration, and with the nervous
    system degeneration, deafness and balance. Indeed, this
    subcommittee in past report language has stated that the Army-
    supported research on NF includes important investigations into
    genetic mechanisms governing peripheral nerve regeneration
    after injury.
        Thanks to this subcommittee's strong support for NF
    research, the Army's NF research program has been funded at
    increasing levels since fiscal 1996. In the past 7 years,
    Congress has provided funding for a total of $90 million to the
    program, which has funded 80 awards to researchers across the
    entire country. These grants support innovative groundbreaking
    research which has been phenomenally successful in advancing
    our knowledge of NF faster than many scientists believed was
    possible. This program has produced critical breakthroughs in
    NF research such as the development of advanced animal models
    and clinical trials.
        Mr. Chairman, with a proven track record of success, the
    Army's NF research program is now poised to fund translational
    and clinical research which is both the most promising and the
    most expensive direction that NF research has taken. In the
    last 2 years, the program has granted its first two clinical
    trial awards, but because of limited funds had to decline other
    clinical trial applications that scored excellent in the peer
    review process. This is why scientists closely involved with
    the Army's program believe that the high quality of scientific
    application would justify a much larger program than is
    currently being funded. Therefore, I am here today to
    respectfully request an appropriation of $25 million in your
    fiscal year 2003 Department of Defense appropriation bill for
    the Army's neurofibromatosis research program.
        Mr. Chairman, in addition to providing a clear military
    benefit, the DOD's neurofibromatosis research program also
    provides hope for the 100,000 Americans like my daughter who
    suffer from NF, as well as the untold millions of Americans who
    suffer from NF's related diseases such as cancer, learning
    disabilities, heart disease, and brain tumors. Leading
    researchers now believe that we are on the threshold of a
    treatment and cure for this terrible disease. With this
    subcommittee's continued support, we will prevail.
        Thank you for your support of this program, and I
    appreciate the opportunity to present this testimony to the
    subcommittee.
        [The statement follows:]

                       Prepared Statement of Kim Bischoff

        Thank you, Mr. Chairman, for the opportunity to appear before you
    today to present testimony to the Subcommittee on the importance of
    continued funding for Neurofibromatosis (NF), a terrible genetic
    disorder directly associated with military purposes and closely linked
    to many common ailments widespread among the American population.
        I am Kim Bischoff, Executive Director of Illinois NF Inc., which is
    a participant in a national coalition of NF advocacy groups. I have
    been actively involved in creating awareness of NF and promoting
    scientific research in this area since 1985, and I have a 18-year old
    daughter with NF. I am here on behalf of the 100,000 Americans who
    suffer from NF as well as approximately 150 million Americans who
    suffer from diseases linked to NF, including some of the most common
    forms of cancer, congenital heart disease, hypertension, and learning
    disabilities.
        Mr. Chairman, I am requesting increased support, in the amount of
    $25 million, to continue the Army's highly successful NF Research
    Program (NFRP). The program's great success can be seen in the
    commencement of clinical trials only ten years since the discovery of
    the NF1 gene. Now, with NF in the expensive but critical era of
    clinical and translational research, scientists closely involved with
    the Army program have stated that the number of high-quality scientific
    applications justify a much larger program.
                                  what is nf?
        NF is a genetic disorder involving the uncontrolled growth of
    tumors along the nervous system which can result in terrible
    disfigurement, deformity, deafness, blindness, brain tumors, cancer,
    and/or death. NF can also cause other abnormalities such as unsightly
    benign tumors across the entire body and bone deformities. In addition,
    approximately one-half of children with NF suffer from learning
    disabilities. It is the most common neurological disorder caused by a
    single gene. While not all NF patients suffer from the most severe
    symptoms, all NF patients and their families live with the uncertainty
    of not knowing whether they will be seriously affected one day because
    NF is a highly variable and progressive disease.
        Approximately 100,000 Americans have NF. It appears in
    approximately one in every 3,500 births and strikes worldwide, without
    regard to gender, race or ethnicity. It is estimated that 50 percent of
    new cases result from a spontaneous mutation in an individual's genes
    and 50 percent are inherited. There are two types of NF: NF1, which is
    more common, and NF2, which primarily involves acoustic neuromas,
    causing deafness and balance problems, as well as other types of tumors
    such as schwannomas and meningiomas.
        Most strikingly, research has shown that NF is closely linked to
    cancer, brain tumors, learning disabilities, and heart disease,
    potentially affecting over 150 million Americans in this generation
    alone.
                        nf's connection to the military
        NF research is directly related to military purposes because it is
    closely implicated with tissue degeneration and regeneration, to
    nervous system degeneration, deafness and balance. Indeed, this
    Subcommittee, in past Report language, has stated that The Army-
    supported research on NF includes important investigations into genetic
    mechanisms governing peripheral nerve regeneration after injury from
    such things as missile wounds and chemical toxins, and it is important
    to gaining a better understanding of wound healing. This subcommittee
    also stated that NF may be relevant to understanding Gulf War Syndrome
    because of the involvement of the nervous system.
                         the army's nf research program
        Recognizing NF's importance to both the military and to the general
    population, Congress has given the Army's NF Research Program strong
    bipartisan support. After the initial three-year grants were
    successfully completed, Congress appropriated continued funding for the
    Army NF Research Program on an annual basis. From fiscal year 1996
    through fiscal year 2002, this funding has amounted to $90.3 million,
    in addition to the original $8 million appropriation. Between fiscal
    year 1996 and fiscal year 2001, 223 proposals have been received and
    approximately 80 awards have been granted to researchers across the
    country, with another 20 expected this year. This research has produced
    major advances in NF research, such as the development of advanced
    animal models and clinical trials.
        In order to ensure maximum efficiency, the Army collaborates
    closely with other federal agencies that are involved in NF research,
    such as NIH and the VA. Senior program staff from the National Cancer
    Institute (NCI), for example, sit on the Army's NF Research Program's
    Integration Panel which sets the long-term vision and funding
    strategies for the program.
        Because of the enormous advances that have been made as a result of
    the Army's NF Research Program, research in NF has truly become one of
    the great success stories in the current revolution in molecular
    genetics, leading one major researcher to conclude that more is known
    about NF genetically than any other disease. Accordingly, many medical
    researchers believe that NF should serve as a model to study all
    diseases.
                               future directions
        The NF research community is now ready to embark on projects that
    translate the scientific discoveries from the lab to the clinic. This
    translational research holds incredible promise for NF patients, as
    well as for patients who suffer from many of the diseases linked to NF.
    This research is costly and will require an increased commitment on the
    federal level. Specifically, increased investment in the following
    areas would continue to advance NF research and are included in the
    Army's NF research goals:
      --Clinical trials
      --Development of drug and genetic therapies
      --Further development and maintenance of advanced animal models
      --Expansion of biochemical research on the functions of the NF gene
            and discovery of new targets for drug therapy
      --Natural History Studies and identification of modifier genes--such
            studies are already underway, and they will provide a baseline
            for testing potential therapies and differentiating among
            different phenotypes of NF
      --Development of NF Centers, tissue banks, and patient registries.
                            fiscal year 2003 request
        Mr. Chairman, the Army's highly successful NF Research Program has
    shown tangible results and direct military application with broad
    implications for the general population as well. The program is now
    poised to fund translational and clinical research, which is both the
    most promising and the most expensive direction that NF research has
    taken. Increased funding is needed to continue to build on the
    successes of this program and to fund this translational research to
    continue the enormous return on the taxpayers' investment.
        In the last two years, the program has granted its first two
    clinical trial awards but had to decline other clinical trial
    applications that scored in the ``Excellent'' range in the peer review
    process because of limited funds. This is why scientists closely
    involved with Army program believe that the high quality of the
    scientific applications would justify a much larger program than is
    currently funded.
        Therefore, I am here today to respectfully request an appropriation
    of $25 million in your fiscal year 2003 Department of Defense
    Appropriations bill for the Army Neurofibromatosis Research Program.
        Mr. Chairman, in addition to providing a clear military benefit,
    the DOD's Neurofibromatosis Research Program also provides hope for the
    100,000 Americans like my daughter who suffer from NF, as well as the
    tens of millions of Americans who suffer from NF's related diseases
    such as cancer, learning disabilities, heart disease, and brain tumors.
    Leading researchers now believe that we are on the threshold of a
    treatment and a cure for this terrible disease. With this
    Subcommittee's continued support, we will prevail.
        Thank you for your support of this program and I appreciate the
    opportunity to submit this testimony to the Subcommittee.

        Senator Inouye. How is your daughter doing now?
        Ms. Bischoff. She is doing quite well, thank you.
        Senator Inouye. Well, if I had my way, I suppose we would
    give you everything you want. It sounds pretty good. I will do
    my best to convince my colleagues.
        Ms. Bischoff. Thank you.
        Senator Inouye. The next witness is the senior vice
    president for Government and international affairs for Cross
    Match Technologies, Mr. Bob Bucknam.
    STATEMENT OF ROBERT B. BUCKNAM, SENIOR VICE PRESIDENT
                FOR GOVERNMENT AND INTERNATIONAL AFFAIRS,
                CROSS MATCH TECHNOLOGIES, INC.
        Mr. Bucknam. Good afternoon, Mr. Chairman. Mr. Chairman, as
    you said, I am Robert Bucknam, senior vice president for
    Government and international affairs with Cross Match
    Technologies, Inc. I would ask respectfully, Mr. Chairman, that
    our prepared statement which was submitted be made a part of
    the record.
        Senator Inouye. Without objection.
        Mr. Bucknam. Thank you, and I can briefly summarize my
    remarks. Thank you for the opportunity to share our experience
    with you regarding the application of biometric finger print
    systems in ensuring the security of our personnel, facilities,
    and information in the Department of Defense. Cross Match
    Technologies, Mr. Chairman, is a privately held corporation
    located in Palm Beach Gardens, Florida, and is a leading global
    manufacturer and provider of forensic quality finger print
    capture and identification equipment and systems.
        This technology was invented in the United States by Cross
    Match Technologies, an American corporation. In the past year,
    several criminal justice agencies have tested, evaluated, and
    operationally utilized the entirety of Cross Match
    Technologies' product line. Favorable results, in keeping with
    similar experiences throughout the Federal, State, and local
    law enforcement communities have led to a growing interest in
    existing and about-to-be-introduced technologies from Cross
    Match.
        Cross Match employs over 150 professionals and our chairman
    and Chief Executive Officer (CEO), Ted Johnson, has built a
    quality team of experts in the field of optics, electronics,
    and manufacturing. Live scan systems, Mr. Chairman, are used to
    electronically create finger print records used to populate as
    well as search the Federal Bureau of Investigation (FBI's)
    integrated automated finger print identification system and
    data base.
        Cross Match leads the digital, inkless, live scan finger
    printing market in a number of respects. It was the first to
    achieve the highest FBI finger print image quality rating, the
    first and only to capture and store 1,000 dots per inch
    resolution, which is double the industry norm. It is self-
    calibrating, which is a key for mobile applications. First and
    only one to provide a submitting from Florida seaports. First
    to design a portable live scan system that is robust and
    durable for mobile use. First live scan provider to submit via
    the Internet, over the virtual private network, to the Office
    of Personnel Management and the American Association of Airport
    Executives for airport employee background checks, and our
    Verifier 300 single fingerprint reader meets strict standards,
    and has been implemented in numerous domestic and international
    border control sites.
        Our commitment to innovation, precision, and strict
    customer requirements have resulted in continuous improvement
    to our fundamental designs and aggressive R&D programs, and an
    emphasis on interoperability and changing needs. Our biometrics
    systems provide accuracy, speed, and dependability, while
    constantly lowering cost.
        Currently, Cross Match is engaged with the Navy to develop
    a cutting edge application of two new systems for purposes of
    credentialing and access control. To ensure success, Cross
    Match has created a team, working with the Navy, to develop a
    pilot program dedicated to supporting and responding
    specifically to unique requirements which can then be applied
    more widely throughout other DOD entities after appropriate
    testing and operational verification.
        In addition to DOD, we have established a competitive
    advantage internationally, selling and installing and servicing
    our systems to over 200 customers in the United States and 34
    countries worldwide, including airports and seaports, law
    enforcement and corrections, financial industry, Government
    assistance and welfare programs, children's services,
    immigration and Border Patrol and nuclear power plants.
        Enhancing security with intelligent biometric finger print
    technology will minimize the cost and manpower needed to ensure
    the security of our personnel facilities and information
    domestically and around the world. Military biometrics systems
    which accurately identify and verify, as well as reduce
    manpower and cost, can be deployed in a timely fashion.
        Biometric intelligence security systems are automated,
    flexible and thorough. They increase efficiency at high volume
    access points. Biometric intelligence systems can meet the
    needs of our intelligence forces, and is an effective method of
    identifying and verifying personnel and their security access
    authorizations.
        Using each individual's unique finger print in either an
    intelligent card or a data base, a base-wide or asset-wide
    biometric system would provide a security net. Through
    authorization coding you can protect those valued assets with
    higher levels of security than that for less demanding access.
    An access can be dynamic. It can be changed centrally, related
    to different threat situations.
        The variety of our products, Mr. Chairman, include
    everything from the Identification (ID) 1000, which is a 10-
    print live scan system, to the ID 1500, which is a palm print
    system, live scan system that captures forensic quality images,
    our MV-5, which is a portable forensic quality fingerprint
    capture device, which is used also--it has on it a 2-D or smart
    card reader for on-the-spot mobile verification, and our
    Verifier 300, which is a single print.
        We also have a number of new products coming online, Mr.
    Chairman, including a four-slap live scan system, which is a
    low cost alternative to the ID-1000, and a credentialing and
    access system.
        In sum, Mr. Chairman, our products are robust, reliable,
    durable, mobile, efficient, and cost-effective, and our
    biometric fingerprinting systems can be an important asset in
    protecting our personnel facilities and information in the
    Department of Defense.
        Thank you very much, Mr. Chairman, for this opportunity to
    testify before the subcommittee.
        [The statement follows:]

                    Prepared Statement of Robert B. Bucknam

        Mr. Chairman and distinguished members of the Senate Subcommittee
    on Defense Appropriations: Thank you for the opportunity to share our
    experience with you regarding the application of biometric fingerprint
    systems in ensuring the security of our personnel and facilities in the
    Department of Defense (DOD). Cross Match Technologies is a privately
    held corporation located in Palm Beach Gardens, Florida, and is a
    leading global manufacturer and provider of forensic quality
    fingerprint capture and identification equipment and systems. This
    technology was invented in the United States by Cross Match
    Technologies, an American company.
        In the past year, several criminal justice agencies have tested,
    evaluated and operationally utilized the entirety of Cross Match
    Technologies' product line. Favorable results, in keeping with similar
    experiences throughout the federal, state and local law enforcement
    communities have lead to a growing interest in existing and about to be
    introduced technologies from Cross Match Technologies. The following is
    an overview of the company, its products, and our plans to keep pace
    with the growing number of applications for digital fingerprint
    technologies as required by the Department of Defense, as well as many
    other federal agencies.
        Cross Match was founded in 1996 for the purpose of designing and
    manufacturing forensic quality opto-electronic devices for the
    biometrics community. Cross Match employs over 150 professionals.
    Chairman and CEO Ted Johnson has built a quality team of experts in the
    fields of optics, electronics and manufacturing, committed to making
    Cross Match a world-leading supplier of fingerprint-based, biometric
    solutions. As demonstrable proof of the company's intent, its founding
    engineers hold many key worldwide patents in the fields of optics and
    opto-electronics.
        Live-Scan systems are used to electronically create fingerprint
    records used to populate as well as search the FBI's Integrated
    Automated Fingerprint Identification System (IAFIS) database. Cross
    Match leads the digital, inkless, Live-Scan fingerprinting market:
      --First to achieve the highest FBI fingerprint image quality rating
            ``Appendix F''.
      --First and only to capture and store 1,000 dots per inch resolution,
            double the industry norm.
      --First and only Live-Scan system that self calibrates (key for
            mobile applications).
      --First and only Live-Scan provider submitting from Florida seaports.
      --First to design a ``portable'' Live-Scan system that is robust and
            durable for mobile use.
      --First Live-Scan provider to submit via the internet over Virtual
            Private Network to the Office of Personnel Management and
            American Association of Airport Executives for airport employee
            background checks.
      --Our Verifier 300 single fingerprint reader meets strict American
            National Standards Institute--National Institute of Standards
            and Technology (NIST) requirements and implemented in numerous
            domestic and international border control sites.
        Our commitment to innovation, precision, and strict customers'
    requirements have resulted in continuous improvement to our fundamental
    designs, an aggressive R&D program, and an emphasis on interoperability
    and changing needs. Cross Match is committed to value, and does so
    without compromise. Its biometrics systems provide accuracy, speed and
    dependability, while constantly lowering the cost of ownership.
        An example of Cross Match's dedication to innovation is reflected
    in a recently received $2 million award from NIST for an ATP (advanced
    technology program) to develop an innovative, non-optical very low cost
    high resolution fingerprint capture technology with far reaching
    potential impact on the industry.
        Currently, Cross Match is engaged with a major Department of
    Defense agency to develop a cutting edge application of two new systems
    for purposes of credentialing and access control. To ensure success,
    Cross Match has created a team working with the customer to develop a
    pilot program dedicated to supporting and responding specifically to
    unique requirements--which can then be applied more widely throughout
    other DOD entities after appropriate testing and operational
    verification.
        In addition to its Department of Defense customers, Cross Match has
    established a competitive advantage internationally, selling,
    installing and servicing its systems to over 250 customers in the U.S.
    and 34 other countries worldwide. These include:
      --Airports and Seaports
      --Law Enforcement/Corrections
      --Financial
      --Government Assistance/Welfare
      --Children's Services
      --Immigration/Border Patrol
      --Nuclear Power Plants
        Enhancing security with intelligent biometric fingerprint
    technology will minimize the cost and manpower needed to ensure the
    security of our personnel and facilities domestically and around the
    world.
        Strategic decisions must be made to ensure cost-effective force
    protection for the entire DOD community.
        Cross Match's technology currently exists to meet critical needs.
    Its commercial, off-the-shelf products have proven to be effective in
    local criminal, investigation, and driver license identification
    systems. Military biometric systems, which accurately identify and
    verify, as well as reduce manpower and costs, can be deployed in timely
    fashion. Biometric intelligent security systems are automated,
    flexible, and thorough; they increase efficiency at high volume access
    points. Cross Match's biometric security systems efficiently and cost-
    effectively identify and verify access authorization for large numbers
    of people so military personnel can carry out core military missions
    and focus on breaches of security.
        The need for heightened security has focused our personnel and
    financial resources on checking and double-checking large numbers of
    people. Some security processes currently in use are labor intensive,
    able to be compromised, and costly. To maintain an acceptable level of
    force protection, military personnel and financial resources have been
    diverted from core military missions to security. Automating security
    with intelligent technology will minimize the cost and manpower needed
    to track large numbers of people; those resources can then be deployed
    against the few, who are threatening our security and our way of life.
        There are several factors that make security for the U.S. Military
    more costly and labor intensive than most other government or industry
    needs:
      --The U.S. military has such a high volume of personnel that it is
            imperative they have a cost-effective, non-labor intensive, and
            reliable method of identifying and verifying that people are
            actually the individuals who have authorization to enter bases,
            access buildings, participate in training, deploy on missions,
            maintain military equipment and highly valued assets, and for
            other purposes.
      --Unlike other security applications, military activities operate and
            deal with high volumes of personnel 24-hours-a-day, 7-days-a-
            week.
      --There is a wide range of security authorization levels throughout
            the military personnel, and access authorization is dynamic.
      --Military assignments and deployments continuously change personnel
            and locations. The opportunity for human error is significantly
            greater than in a more stable environment.
        A biometric intelligent system provides an automated method of
    identifying and verifying personnel and their security access
    authorizations. Using each individual's unique fingerprint and either
    an Intelligent Card or a database, a base-wide or asset-wide biometric
    system would provide a security net. The authorization information and
    fingerprint records stored on an Intelligent Card or in a database
    would identify personnel; identity is verified by comparing an
    individual's fingerprint with the stored fingerprint record. Through
    authorization coding, the military services would be able to protect
    their most valued assets with a higher level of security than that
    required for less demanding access control. In addition, access
    authorization data is dynamic--it can be changed centrally in reaction
    to changing threat status, troop movements, and other circumstances.
    Human error and other breaches of security can thereby be minimized.
        Manpower requirements and related funding for DOD installation and
    personnel security are extremely high because the military must
    maintain round-the-clock access control and large numbers of personnel
    must pass through check points at each security authorization level. In
    addition to being costly and diverting military personnel from core
    mission activities, there can be extensive delays and human error with
    a labor-intensive security plan. Employing biometric intelligent
    systems automatically provides access to large numbers of people and
    requires security personnel for non-matches. In addition to being more
    cost-effective and allowing military personnel to return to their
    critical mission assignments, a biometric system also minimizes access
    delays and associated inconvenience to personnel.
        Biometric systems are cost-effective, efficient, and dynamic. In
    addition to access control applications, they can be used to track and
    monitor military personnel as well as allied or enemy personnel. An
    example of such an application is recording and/or identifying
    battlefield casualties.
        The following describes our vast array of products that may be of
    interest:
      --ID 1000 10 Print Live Scan System.--The first and only FBI approved
            livescan system that is portable, rugged, self calibrating and
            low in cost. It is now the only livescan product to achieve
            1,000 dots per inch.
      --ID 1500 Palm Print Live Scan System.--The ID1500 Palm Image capture
            device is able to acquire high quality, forensic quality images
            which can be used in forensic and criminal investigations.
      --MV5 Fingerprint Capture Device.--Our portable forensic quality
            fingerprint capture device, the MV5, is used by the CJIS
            section of the FBI to train users of the NCIC 2000 single
            finger identification system. This product has numerous
            security applications and with the addition of a built in ``2-
            D'' or Smart Card reader can do ``on-the-spot'' ID
            verification.
      --Verifier 300 Fingerprint Capture Device (USB, Video and
            Ethernet).--Our forensic quality single fingerprint readers are
            fully compatible with the requirements of the FBI for image
            size, quality and 500 dpi resolution and have applications in
            Registration for National ID, Employee/Passenger ID badges,
            Immigration, welfare, and Drivers license ID. and can be used
            for high security Physical as well as Information/Network
            Access Control.
        We also introduce three new products created to meet immediate
    security demands:
      --Four Slap Live Scan System.--Low Cost alternative to ID1000.
            Provides for the creation of a livescan fingerprint record
            using flat instead of rolled prints. Result is a very fast easy
            to use and affordable livescan system
      --Credentialing System.--Employee ID badges can be made from the
            fingerprint and picture record collected from the livescan
            record. These cards will contain biometric fingerprint
            information
      --Access Control System.--With the Cross Match Access control reader,
            the ID badge (from above) and your fingerprint become the key
            for physical Photo ID record or information access.
        In summary, Cross Match's attention to detail is important in a
    developing industry. High quality and customer satisfaction is Cross
    Match's highest priority. Cross Match concentrates its technologies in
    compliance to national industry standards. This provides the ability to
    share data between disparate databases. Precision is coupled to
    customer needs by continuous close dialog. Cross Match Technologies'
    biometric fingerprint systems can be an important asset in protecting
    our personnel and facilities in the Department of Defense.
        Thank you for the opportunity to testify before the Subcommittee
    today.

        Senator Inouye. Are your systems at the present time
    operational within the Department of Defense?
        Mr. Bucknam. We have some that are currently operational in
    the Department of Defense.
        Senator Inouye. What type of systems do you have?
        Mr. Bucknam. The basic system, Mr. Chairman, is the ID
    1000, as I described, which is the 10-print live scan system,
    which again has the benefit of interoperability. As you well
    know from your many years in Government, and from my almost 27
    years in Government, the worst thing you can do is create
    smokestacks that do not communicate with one another. Our
    system is a system that is, as I say, completely interoperable.
    It communicates with other systems, the data bases, and when
    you have it you can build up from it, so we are currently in
    use in DOD, and hoping to increase that usage far and wide.
        Senator Inouye. Thank you very much, sir.
        Mr. Bucknam. Many thanks, Mr. Chairman.
        Senator Inouye. Our final witness is a professor of
    electrical engineering at the University of Tennessee, Dr.
    Mongi Abidi.
    STATEMENT OF DR. MONGI ABIDI, PROFESSOR OF ELECTRICAL
                ENGINEERING, UNIVERSITY OF TENNESSEE,
                KNOXVILLE, ON BEHALF OF THE UNIVERSITY
                PROGRAM IN MOBILE ROBOTS FOR NUCLEAR,
                BIOLOGICAL, AND CHEMICAL THREAT DETECTION
        Dr. Abidi. Thank you, Mr. Chairman. I appreciate the
    opportunity for your allowing me to testify before your
    committee.
        Senator Inouye. Thank you for your patience.
        Dr. Abidi. Honorable members of the committee, ladies and
    gentlemen, my name is Mongi Abidi. I am a professor of
    electrical engineering of the University of Tennessee,
    testifying on behalf of the university program in mobile robots
    for nuclear, biological, and chemical threat detection.
        Long before September 11, the Army Tank Automotive and
    Armament Command, or TACOM, in Warren, Michigan, Wayne State
    University in Detroit, and the University of Tennessee at
    Knoxville were independently but actively developing crucial
    robotic and sensing technologies to detect nuclear, biological,
    and chemical agents, NBC for short.
        The most challenging task in preventing NBC attacks is to
    detect, identify, and contain these deadly agents. However,
    because of the threat, they pose to soldiers, first responders,
    security, and emergency personnel and the population at large,
    the only safe way known to man to handle such threat situations
    is to use remotely operated robots equipped with intelligent
    sensors that can identify these agents before humans are
    exposed.
        This Army program has already developed robotic prototypes
    which can perform under-vehicle inspection. All of us know that
    vehicles entering the Capitol premises today, for instance, are
    still inspected using a mirror on a stick. The technologies
    integrated by the Army TACOM are at least one order of
    magnitude safer, faster, and more accurate in detecting NBC
    threats.
        These robotic systems can be used also for the detection of
    ordinary explosives and other contraband hidden under vehicles
    entering secure facilities like military bases, large Federal
    buildings, nuclear power plants, Federal laboratories housing
    large nuclear and/or biological weapons, and/or nuclear waste
    material, one of the components of a dirty bomb, if I may add.
        This technology has broad civilian use as well, at airports
    and shopping malls, and during events involving a large number
    of vehicles like sporting events. It is a vast improvement in
    homeland security over the current method of using the mirror-
    on-a-stick approach which we presently use to inspect cars
    coming into the Capitol.
        Technologies needing further development include imaging,
    sensors, and robotic mobility for on-road and off-road
    inspection in order to provide the added intelligence and
    agility for these systems.
        To expedite the development of these robots, a
    multidiscipline, multiuniversity program in coordination with
    selected Government agencies and potential vendors of nuclear,
    chemical, and biological sensors is an efficient combination to
    achieve this goal. Appropriate funding to integrate these
    technologies should lead to the rapid deployment of complete
    robotic systems that can address both military and homeland
    security needs.
        I thank the committee for the opportunity to speak before
    you on such an important matter to us all, and I appreciate it.
        [The statement follows:]

                       Prepared Statement of Mongi Abidi

        Honorable Members of the Committee, Ladies and Gentlemen: My name
    is Mongi Abidi, I am a Professor of Electrical Engineering at the
    University of Tennessee, testifying on behalf of the of the University
    Program in Mobile Robots for Nuclear, Biological, and Chemical Threat
    Detection.
        Long before September 11, the Army Tank Automotive and Armament
    Command (or TACOM) in Warren Michigan, Wayne State University in
    Detroit, and the University of Tennessee in Knoxville, were
    independently but actively developing crucial robotic and sensing
    technologies to detect nuclear, biological, and chemical agents: NBC
    for short.
        The most challenging tasks in preventing NBC attacks is to detect,
    identify, and contain these deadly agents. However, because of the
    threat they pose to soldiers, first responders, security and emergency
    personnel, and the population at large, the only safe way known to man
    to handle such threat situations is to use remotely operated robots
    equipped with intelligent sensors that can identify these agents before
    humans are exposed.
        This Army program has already developed robotic prototypes which
    can perform under vehicle inspection. All of us know that vehicles
    entering the capital premises today, for instance, are still inspected
    using a mirror-on-a-stick. The technologies integrated by the ARMY-
    TACOM are at least one order of magnitude safer, faster, and more
    accurate in detecting NBC threats.
        These robotic systems can be used also for the detection of
    ordinary explosives and other contraband hidden under vehicles entering
    secure facilities, like military bases, large federal buildings,
    nuclear power plants, federal laboratories housing large nuclear and/or
    biological weapons and/or nuclear waste material. This technology has
    broad civilian use, as well, at airports and shopping malls, and during
    events involving a large number of vehicles, like sporting events. It
    is a vast improvement in homeland security over the current method of
    using a mirror-on-a-stick approach.
        Technologies needing further development include imaging, sensors,
    and robotic mobility for on-road and off-road inspection, in order to
    provide the added intelligence and agility for such a system. To
    expedite the development of these robots, a multi-discipline, multi-
    university program in coordination with selected government agencies
    and potential vendors of nuclear, chemical, and biological sensors, is
    an efficient combination to achieve this goal. Appropriate funding to
    integrate these technologies should lead to the rapid deployment of
    complete robotic systems that can address both military and homeland
    security needs.
        I thank the committee for the opportunity to speak before you on
    such an important matter to us all.

        Senator Inouye. Doctor, is your under-vehicle inspection
    system operational at this time?
        Dr. Abidi. At this time, there are several prototypes that
    were developed by the Tank Automotive Command, and the Tank
    Automotive Command have sought independently on their own the
    expertise that we have at the University of Tennessee to add
    the sensors to allow it to navigate independently, because it
    will not be feasible to let a human being drive this vehicle.
    You need to operate it from a distance.
        Senator Inouye. About how much would this cost?
        Dr. Abidi. These devices presently are developed at a cost
    of about $10,000, to be able to do simple visual inspections,
    but the addition of sensors like chemical, biological, nuclear
    sensors will probably double or triple the cost, but the
    modularity of the concepts that we are providing will allow for
    a system or a person to again choose what sensors to use, so
    the cost would vary, but this is the future, in my view, for
    detecting serious threats like the threats that they mention in
    my report.
        Senator Inouye. I thank you very much, sir.
        Dr. Abidi. Thank you. I appreciate your patience.

                             CONCLUSION OF HEARINGS

        Senator Inouye. I want to thank all the witnesses who
    testified, and as noted at the outset, this will conclude our
    hearings for the fiscal year 2003 budget. Now we will begin our
    work.
        Thank you very much.
        [Whereupon, at 1:15 p.m., Wednesday, June 12, 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
    Allen, Colonel John R., Commandant of Midshipmen, United States
      Naval Academy, Department of Defense...........................   605
        Prepared statement...........................................   605
        Question submitted to........................................   625
    Alexander, Dr. Vera, Dean, School of Fisheries and Ocean
      Sciences, University of Alaska, on behalf of the Consortium for
      Oceanographic Research and Education...........................   732
        Prepared statement...........................................   734

    Barnes, Master Chief Joe, (ret.), Director, Legislative Programs,
      Fleet Reserve Association......................................   722
        Prepared statement...........................................   723
    Bester, Brigadier General William T., Chief, Army Nurse Corps,
      U.S. Army, Nurse Corps, Department of Defense..................   421
        Prepared statement...........................................   424
    Blickhahn, Lieutenant Second Class Andrew, United States Military
      Academy, U.S. Army, Department of Defense......................   597
        Statement of.................................................   604
    Bond, Senator Christopher S., U.S. Senator from Missouri,
      questions submitted, 119, 174, 256, 258, 302, 305, 370, 376, 594, 625
    Brannon, Brigadier General Barbara C., Assistant Surgeon General,
      Nursing Services, U.S. Air Force, Nurse Corps, Department of
      Defense........................................................   421
        Prepared statement...........................................   438
    Brubaker, Brigadier General David, USAFR-NG, Deputy Director, Air
      National Guard, National Guard Bureau, Department of Defense...   177
        Prepared statement...........................................   184
    Bursell, Dr. Sven, Director, Joslin Vision Network, Joslin
      Diabetes Center................................................   681
    Butler, Benjamin H., Deputy Legislative Director, National
      Association for Uniformed Services.............................   631
        Prepared statement...........................................   633
    Byrd, Senator Robert C., U.S. Senator from West Virginia,
      questions submitted by......................................... , 461

    Carlton, Lieutenant General Paul K., Jr., USAF, Surgeon General
      of the Air Force, Health Affairs, Department of Defense........   379
        Prepared statement...........................................   406
        Questions submitted to.......................................   466
    Clark, Admiral Vernon E., Chief of Naval Operations, Department
      of the Navy, Department of Defense.............................   329
        Prepared statement...........................................   331
        Questions submitted to.......................................   368
    Cochran, Senator Thad, U.S. Senator from Mississippi:
        Prepared statement...........................................     9
        Questions submitted by..........., 61, 107, 118, 369, 375, 527, 530
        Statements of.................................., 178, 471, 534, 603
    Connell, Dr. Nancy, Director, the Center for Biodefense,
      University of Medicine and Dentistry of New Jersey.............   714
        Prepared statement...........................................   716
    Cowan, Vice Admiral Michael L., MC, USN, Surgeon General of the
      Navy and Chief, Bureau of Medicine and Surgery, Health Affairs,
      Department of Defense..........................................   379
        Prepared statement...........................................   396
        Questions submitted to.......................................   465

    Dahlman, George, Vice President, Public Policy, The Leukemia &
      Lymphoma Society...............................................   750
        Prepared statement...........................................   751
    Dallager, Lieutenant General John R., Superintendent, United
      States Air Force Academy, Department of Defense................   611
        Biographical sketch of.......................................   614
        Prepared statement...........................................   611
        Questions submitted to.......................................   625
    Davis, Lieutenant General Russell C., USAFR-NG, Chief, National
      Guard Bureau, Department of Defense............................   177
        Prepared statement...........................................   184
        Questions submitted to.......................................   254
    Dean, CMSGT Richard M., (ret.), Director, Marketing and
      Communications, Air Force Sergeants Association................   643
        Prepared statement...........................................   644
    Domenici, Senator Pete V., U.S. Senator from New Mexico:
        Prepared statement...........................................   662
        Questions submitted by................, 61, 173, 254, 257, 457, 706
        Statement of.................................................     6
    Dorgan, Senator Byron L., U.S. Senator from North Dakota,
      statements of.................................................. 7, 67
    Drew, Ensign Benjamin A., United States Naval Academy, Department
      of Defense.....................................................   605

    England, Hon. Gordon R., Secretary of the Navy, Department of the
      Navy, Department of Defense....................................   309
        Prepared statement...........................................   313
        Questions submitted to.......................................   367
        Statement of.................................................   312

    Feinstein, Senator Dianne, U.S. Senator from California:
        Prepared statement...........................................   153
        Questions submitted by.......................................   170
        Statement of.................................................     5

    Garner, Cadet First Class Todd, United States Air Force Academy,
      Department of Defense..........................................   611
    Goldberg, Joan, Executive Director, the American Society for Bone
      and Mineral Research, on behalf of the National Coalition for
      Osteoporosis and Related Bone Diseases.........................   718
        Prepared statement...........................................   720
    Gonzales, Dr. Edmundo, on behalf of the Lovelace Respiratory
      Research Institute.............................................   700

    Hanson, Captain Marshall, Co-Chair, Naval Reserve Association, on
      behalf of the National Military Veterans Association...........   687
        Prepared statement...........................................   688
    Harkin, Senator Tom, U.S. Senator from Iowa, questions submitted
      by...........................................................166, 590
    Henderson, Dr. Rogene, Senior Scientist, Lovelace Respiratory
      Research Institute, prepared statement.........................   701
    Henson, Dr. James, Associate Professor of Electrical Engineering
      at the University of Nevada, on behalf of the Coalition of
      EPSCoR States..................................................   692
        Prepared statement...........................................   693
    Holleman, Deirdre Park, Esquire, Legislative Director, The
      Retired Enlisted Association...................................   655
        Prepared statement...........................................   656
    Hollings, Senator Ernest F., U.S. Senator from South Carolina,
      statement of...................................................     3
    Hutchison, Senator Kay Bailey, U.S. Senator from Texas:
        Questions submitted by.......................................   57,
                  62, 114, 121, 175, 302, 306, 367, 375, 377, 458, 464, 527
        Statement of.................................................     5
    Inouye, Senator Daniel K., U.S. Senator from Hawaii:
        Opening statements....1, 65, 125, 177, 309, 379, 469, 531, 597, 631
        Questions submitted by.......................................   43,
                  60, 106, 117, 161, 368, 375, 448, 460, 465, 466, 586, 594

    Jones, Dr. Anita, former Director of Defense Research and
      Engineering and Quarles Professor of Engineering at the
      University of Virginia.........................................   663
        Prepared statement...........................................   664
    Jones, General James L., Commandant, U.S. Marine Corps,
      Department of the Navy, Department of Defense..................   336
        Prepared statement...........................................   338
        Questions submitted to.......................................   375
    Jumper, General John P., Chief of Staff, Department of the Air
      Force, Department of Defense...................................   469
        Prepared statement...........................................   476
        Question submitted to........................................   530
        Statement of.................................................   474
    Juvenile Diabetes Research Foundation International, prepared
      statement......................................................   642

    Kadish, Lieutenant General Ronald T., Director, Missile Defense
      Agency, Department of Defense..................................   125
        Prepared statement...........................................   131
        Questions submitted to.......................................   161
    Kassan, Alayna, Member, Public Policy Committee, Lymphoma
      Research Foundation............................................   676
    Kohl, Senator Herb, U.S. Senator from Wisconsin:
        Prepared statement...........................................     9
        Questions submitted by.......................................    49

    Landers, Dr. Thomas L., Executive Director, Center for Aircraft
      and Systems/Support Infrastructure, on behalf of the Coalition
      of Oklahoma Institutions of Higher Education...................   711
        Prepared statement...........................................   712
    Lanzilotta, Lawrence, Principal Deputy Comptroller, Department of
      Defense........................................................   531
    Leland, Dr. John, Chair, DOD Task Force of the Inter-Council
      Committee on Federal Research and Development, The American
      Society of Mechanical Engineers................................   658
        Prepared statement...........................................   660
    Lennox, Lieutenant General William J., Jr., Superintendent,
      United States Military Academy, U.S. Army, Department of
      Defense........................................................   597
        Biographical sketch of.......................................   601
        Prepared statement...........................................   599
        Question submitted to........................................   625
    Lescavage, Rear Admiral Nancy J., Director, Navy Nurse Corps,
      Nurse Corps, Department of Defense.............................   421
        Prepared statement...........................................   432
    Lutz, Dr. Francis, Dean, School of Science, Technology and
      Engineering, Monmouth University...............................   708

    McCarthy, Lieutenant General Dennis M., USMCR, Commander, Marine
      Forces Reserve, Reserves, Department of Defense................   261
        Prepared statement...........................................   293
    McConnell, Senator Mitch, U.S. Senator from Kentucky, questions
      submitted by...................................................   111
    Myers, General Richard B., U.S. Air Force, Chairman, Joint Chiefs
      of Staff, Office of the Secretary, Department of Defense.......   531
        Prepared statement...........................................   553
        Questions submitted to.......................................   594

    Partridge, Colonel Charles C., Co-Chair, National Association for
      Uniformed Services, on behalf of the National Military Veterans
      Alliance.......................................................   687
    Peake, Lieutenant General James B., MC, USA, Surgeon General of
      the Army and Commanding General, U.S. Army Medical Command,
      Health Affairs, Department of Defense..........................   379
        Prepared statement...........................................   392
        Questions submitted to.......................................   460
    Plewes, Lieutenant General Thomas J., USAR, Chief of Army
      Reserve, Reserves, Department of Defense.......................   261
        Prepared statement...........................................   262
        Questions submitted to.......................................   302

    Raezer, Joyce Wessel, Director, Government Relations, National
      Military Family Association, Inc...............................   666
        Prepared statement...........................................   667
    Roche, Hon. James G., Secretary of the Air Force, Department of
      the Air Force, Department of Defense...........................   469
        Prepared statement...........................................   476
        Questions submitted to.......................................   527
    Rosen, Leonard M., Member, Board of Directors; and Chair, Public
      Policy Committee, Lymphoma Research Foundation, prepared
      statement......................................................   678
    Rumsfeld, Hon. Donald H., Secretary of Defense, Office of the
      Secretary, Department of Defense...............................   531
        Prepared statement...........................................   543
        Questions submitted to.......................................   586

    Schultz, Lieutenant General Roger C., USAR-NG, Director, Army
      National Guard, National Guard Bureau, Department of Defense...   177
        Prepared statement...........................................   184
        Questions submitted by.......................................   257
    Shelby, Senator Richard C., U.S. Senator from Alabama:
        Prepared statements..........................................8, 128
        Statements of...........................................8, 127, 471
    Sherrard, Lieutenant General James E., USAFR, Chief of Air Force
      Reserve, Reserves, Department of Defense.......................   261
        Prepared statement...........................................   286
    Shinseki, General Eric K., Chief of Staff, United States Army,
      Department of the Army, Department of Defense..................    65
        Prepared statement...........................................    69
        Questions submitted to.......................................   117
        Statement of.................................................    78
    Sommerer, Dr. John, Director for Research, Johns Hopkins
      University Applied Physics Laboratory, on behalf of the
      Association of American Universities...........................   730
        Prepared statement...........................................   731
    Specter, Senator Arlen, U.S. Senator from Pennsylvania, questions
      submitted by..................................................54, 592
    Spiegel, Jayson L., Executive Director, Reserve Officers
      Association of the United States...............................   741
        Prepared statement...........................................   743
    Stevens, Senator Ted, U.S. Senator from Alaska:
        Prepared statement...........................................   598
        Questions submitted by.....................................456, 463
        Statements of........................2, 66, 126, 310, 380, 470, 532

    Taylor, Dr. Robert, Chairman, Department of Pharmacology, Howard
      University College of Medicine, on behalf of the Research
      Society on Alcoholism..........................................   696
        Prepared statement...........................................   698
    Tepfenhart, Dr. William, Department of Software and Electrical
      Engineering, School of Science, Technology and Engineering of
      Monmouth University............................................   708
        Prepared statement...........................................   709
    Totushek, Vice Admiral John, USNR, Chief of Naval Reserve,
      Reserves, Department of Defense................................   261
        Prepared statement...........................................   281
        Questions submitted to.......................................   305

    Van Nest, Ronald L., CRNA, M.A., Van Nest and Associates, on
      behalf of the American Association of Nurse Anesthetists.......   650
        Prepared statement...........................................   651
    Violi, Ronald L., Children's Hospital of Pittsburgh..............   681
        Prepared statement...........................................   683
    Vockel, Kimberlee D., Director of Legislative Affairs, Non
      Commissioned Officers Association of the United States of
      America........................................................   735
        Prepared statement...........................................   737

    Weaver, Major General Paul, (ret.), on behalf of the Juvenile
      Diabetes Research Foundation International.....................   640
    White, Hon. Thomas E., Secretary of the Army, Department of the
      Army, Department of Defense....................................    65
        Prepared statement...........................................    69
        Questions submitted to.......................................   106
        Statement of.................................................    67
    Winkenwerder, Hon. William, Jr., Assistant Secretary of Defense
      for Health Affairs, Health Affairs, Department of Defense......   379
        Prepared statement,..........................................   384
        Questions submitted to.......................................   448
    Wolfowitz, Dr. Paul, Deputy Secretary of Defense, Office of the
      Secretary, Department of Defense...............................     1
        Prepared statement...........................................    17
        Questions submitted to.......................................    43
        Summary statement............................................    10

    Zaccaro, Dr. Stephen, Associate Professor of Psychology at George
      Mason University, on behalf of the American Psychological
      Association....................................................   636
        Prepared statement...........................................   637
    Zakheim, Dr. Dov, Under Secretary of Defense, Comptroller, Office
      of the Secretary, Department of Defense........................     1
        Questions submitted to.......................................    60

                                 SUBJECT INDEX

                                  ----------

                             DEPARTMENT OF DEFENSE

                          Department of the Air Force

                                                                       Page
    Additional committee questions...................................   526
    Air Force:
        Academy......................................................   517
        Recruits.....................................................   474
    Air power........................................................   473
    Airborne laser program...........................................   521
    B-1 bomber.......................................................   529
    B-2..............................................................   525
    C-5..............................................................   520
    C-17......................................................515, 516, 530
        In Jackson, Mississippi......................................   524
    Close air support................................................   471
    Core competencies................................................   483
    Depot provisions.................................................   528
    F-22......................................................473, 475, 515
        Aircraft.....................................................   509
        Raptor.......................................................   527
    Global Hawk program.......................................512, 522, 523
    Guard and Reserve................................................   473
    High demand personnel............................................   516
    Information technology...........................................   475
    Intelligence surveillance and reconnaissance.....................   472
    Joint Strike Fighter...........................................525, 528
    KC-135...........................................................   518
        Fleet........................................................   520
    Maxwell Air Force Base...........................................   518
    Mission capable rates............................................   519
    Nanotechnology research..........................................   529
    National Systems Engineering Institute...........................   514
    Operation Noble Eagle............................................   525
    People...........................................................   503
    Pilot shortfall..................................................   517
    Predator.........................................................   523
    Readiness......................................................473, 482
    Recruiting goals.................................................   516
    Russian aircraft.................................................   475
    Space-based infrared system......................................   513
        High orbit...................................................   521
    Space-based radar..............................................523, 527
    Spare parts......................................................   475
    Surface-to-air missiles..........................................   475
    Tanker aircraft, leasing.........................................   520
    Tankers..........................................................   519
    The year in review...............................................   479
    Transformation.................................................472, 498
    Unmanned aerial vehicle..........................................   511
        Pilot training...............................................   517
        Pilots for...................................................   512

                             Department of the Army

    A commitment to the future.......................................    78
    Additional committee questions...................................   105
    Advanced Army rapid emplaced bridge..............................   118
    Afghanistan update...............................................    96
    AH-64A and AH-64D (Longbow) Apache helicopters...................   120
    Army:
        Contracting officers.........................................   116
        Fiscal year 2003 medical research budget.....................   114
        Helicopters..................................................    84
    Army National Guard:
        Aircraft.....................................................   106
        Paladin acquisition..........................................   105
    Chemical demilitarization program...............................89, 112
    Chemical/biological training.....................................   119
    Civil support team coordination..................................   109
    Cold weather gear................................................    88
    Composite materials..............................................   107
    Crusader and Comanche............................................    94
    Digitization.....................................................   123
    Directed energy weapons..........................................   101
    Foreign language expertise.......................................   108
    Fort Bliss:
        ATSA relocation..............................................   124
        Capacity.....................................................   115
        Water........................................................   115
    Funding, adequacy of.............................................   103
    Future combat systems (FCS)......................................   111
        And LSI......................................................   122
        Army/Marine Corps cooperation on the.........................   123
        Lead systems integrator (LSI)................................   121
    Gulf war illness (GWI) research..................................   114
    High mobility trailer procurement................................    89
    Homeland:
        Defense....................................................106, 117
        Security.....................................................   113
    Hydra-70.........................................................   124
        Rocket system................................................   108
    Interim brigade combat team (IBCT)...............................   121
        Capabilities.................................................    82
        MILCON for...................................................    97
        Status of....................................................    81
    Israel, tactical high energy laser negotiations with.............   101
    Lead systems integrator..........................................   122
    Medium tactical vehicles, family of..............................   116
    Military Heritage Institute....................................104, 105
    Military personnel end strength..................................   106
    Objective Force, fielding the....................................    83
    Operations tempo, increased......................................   112
    Patriot advanced capability 3 (PAC-3):
        Deployment...................................................   101
        Testing......................................................   100
    Remote acoustic hemostasis technology............................   118
    Reserve component:
        Augmentation.................................................    91
        Personnel call-up............................................    84
    Science and technology (S&T) and system demonstration and
      development (SDD)..............................................    87
    Senior DOD proponent.............................................   109
    Soldiers:
        On point for the Nation......................................    71
        Protecting...................................................    97
    Space and Missile Defense Command................................   100
    Special Forces teams equipment...................................    85
    Strategic:
        Environment..................................................    70
        Framework....................................................    70
    Technology maturity..............................................    98
    The Army vision: People, readiness, and transformation...........    71
    U.S. Army South relocation.......................................   116
    U.S. troops, recognition of......................................    80
    Unmanned aerial vehicles (UAVs)..................................   123
    Wheeled vehicle maintenance......................................   123

                             Department of the Navy

    AAAV program.....................................................   352
    Additional committee questions...................................   366
    Budget shortfalls................................................   372
    Current readiness: Operating the Navy and Marine Corps...........   320
    DD-X program.....................................................   358
    DDG program......................................................   362
    EA-6b program....................................................   354
    Executive summary................................................   377
    Fire support.....................................................   359
    Fiscal year 2003--A dramatic improvement for the Department of
      the Navy.......................................................   314
    Future readiness: Transforming the force.........................   324
    Joint Strike Fighter (JSF).......................................   367
    LPD-17 amphibious ship...........................................   360
    Marine Corps':
        Relevance: Power projection from the sea-base................   339
        Role: A scalable, sustainable, forcible entry force..........   340
        Transformation: Concepts, technologies, and organizations....   341
    Military construction............................................   368
    Military personnel fiscal year 2002 supplemental.................   369
    Navy readiness and procurement...................................   333
    Navy's role in the 21st century..................................   332
    Navy-Marine Corps: The power of teamwork.........................   313
    Network-centric warfare..........................................   368
    Northern Edge exercise...........................................   352
    Personnel retention and recruiting...............................   363
    Philippines......................................................   355
    Precision munitions..............................................   354
    Sailors and marines: Investing in the heart of the team..........   318
    Sailors: Our most valuable asset.................................   335
    Seabees..........................................................   362
    Security posture.................................................   351
    Shipbuilding.....................................................   350
        Request......................................................   368
    Strategic context................................................   331
    T-45 training aircraft...........................................   375
    Terrorism, leading the way: Navy-Marine Corps operations in the
      global war on..................................................   315
    U.S.S. Inchon....................................................   367

                                 Health Affairs

    Additional committee questions...................................   448
    Anthrax threat...................................................   404
    Armed Forces Institute of Pathology (AFIP).......................   452
    Central command surgeon..........................................   405
    Coordination, communication and collaboration....................   387
    Defense enrollment eligibility reporting system (DEERS)..........   452
    Defense Health Program (DHP).....................................   448
        Funding request..............................................   412
    Department of Health and Human Services (HHS)....................   459
    DOD/VA cooperation...............................................   459
    Facility capacity and cost.......................................   460
    Force health protection (FHP)....................................   458
        And medical readiness........................................   385
    Health professionals recruiting and retention....................   464
    Homeland defense.................................................   404
    Joint military-civilian exercises................................   405
    Joint venture hospitals..........................................   457
    Life support for trauma and transport (LSTAT)....................   463
    McGuire Air Force Base...........................................   404
    Medal of honor...................................................   416
    Medical expense and performance reporting system (MEPRS).........   450
    Medical personnel retention......................................   413
    Military health information systems..............................   388
        Funding......................................................   384
    Military medical personnel.......................................   388
    Military treatment facilities (MTF)............................449, 466
    National Prion Research Project..................................   464
    Operation Enduring Freedom.......................................   404
    Outcomes management initiative...................................   461
    Recruiting.......................................................   405
    Retention/TRICARE................................................   457
    T-NEX............................................................   449
    Third Party Collection Program (TPCP)............................   460
    Transformation...................................................   418
    TRICARE..............................................386, 417, 456, 458
    TRICARE for life.................................................   417

                             Missile Defense Agency

    ABM Treaty.......................................................   163
    Additional committee questions...................................   161
    Airborne laser (ABL)......................................147, 173, 175
    Allied cooperation...............................................   149
    Annual appropriations............................................   146
    Arrow............................................................   149
    Capability-based acquisition.....................................   144
    Controversial programs:
        Navy area-wide defense.......................................   164
        SBIRS-low satellite..........................................   165
        The THAAD missile............................................   166
    Cost control.....................................................   158
    Costs..........................................................154, 170
    Fort Greely and early capability.................................   167
    General/budget oversight.........................................   171
    Management challenge.............................................   162
    MDA spending data................................................   157
    Midcourse budget.................................................   172
    Missile Defense Program execution................................   164
    Missile defense spending.........................................   152
    Navy area defense................................................   157
    Nuclear interceptors                                                166
        Tipped.....................................................146, 154
    Nuclear warheads.................................................   170
    Organization and oversight.......................................   168
    Overcoming countermeasures.......................................   161
    Oversight and test bed...........................................   172
    Patriot PAC-3..................................................143, 151
    Radar............................................................   155
    Scientific workforce availability................................   160
    Small business...................................................   150
    Space based infrared system (SBIRS) low........................148, 174
    Technology and integration.......................................   145
    Test bed/X-band radar............................................   171
    Tests............................................................   170
    Theater high altitude area defense (THAAD).....................143, 152
    Theater missile defense..........................................   142
    Threat.........................................................158, 159
    WSMR testing.....................................................   173

                             National Guard Bureau

    A legacy in homeland security....................................   188
    Additional committee questions...................................   254
    Air National Guard:
        Director's overview..........................................   220
        Equipping the................................................   228
        In Fargo, North Dakota.......................................   243
        Infrastructure...............................................   233
        Preparing for the future.....................................   224
        Safety program...............................................   237
        Today........................................................   222
        Training the.................................................   236
    Armored brigade..................................................   240
    Army National Guard:
        Director's overview..........................................   196
        Equipping the................................................   203
        Knowledge infrastructure.....................................   218
        Missioning the...............................................   217
        Organizing the for success...................................   202
        Preparing for the future.....................................   200
        Sustaining the...............................................   208
        Today........................................................   197
        Training the.................................................   210
    ARNG Patriot Battalion...........................................   258
    C-17...........................................................183, 242
        Basing in Jackson, Mississippi.............................242, 243
    CBRN.............................................................   256
    Chief, National Guard Bureau closing thoughts....................   238
    Civil support team...............................................   245
    Counterdrug operations.........................................254, 257
    Domestic air combat patrols......................................   239
    Equipment shortages..............................................   252
    Executive summary................................................   184
    F-15.............................................................   244
    First responder..................................................   250
    Force, manning the...............................................   201
    Guard and Reserve modernization..................................   244
    Homeland security................................................   183
    KC-135...........................................................   183
    Lightning II targeting pods......................................   182
    Misconduct.......................................................   258
    Missions.........................................................   248
    Mobilization.....................................................   246
    National Guard Bureau............................................   187
    National Guard Posture Statement--Fiscal Year 2003...............   184
    Northern Command.................................................   256
    On guard for the 21st century....................................   193
    150th Fighter Wing...............................................   255
    Protecting America...............................................   186
        At home and abroad...........................................   184
    Quality installations............................................   214
    Quality of life..................................................   183
    Readiness, resources to..........................................   207

                                  Nurse Corps

    Afghanistan......................................................   436
    Air Force recruiting.............................................   436
    Certified registered nurse anesthetists..........................   443
    Civilian joint programs..........................................   447
    Graduate School of Nursing.......................................   447
    Loan repayments..................................................   443
    Nurse research program...........................................   437
    Nursing research program.........................................   445
    Pentagon on September 11, 2001...................................   435
    Practical nurses.................................................   437
    Primary care optimization........................................   437
    Retention rates..................................................   437
    Special operations support.......................................   435
    Training.........................................................   436
    Uniformed Services University of the Health Services.............   446

                            Office of the Secretary

    ABM Treaty.......................................................   589
    Accomplishing several missions simultaneously....................    11
    Additional committee questions..................................43, 586
    Afghanistan:
        Expansion of role in.........................................    59
        Situation in.................................................   571
        U.S. commitments in..........................................    33
        U.S. role in.................................................   572
    Aircraft and ships, average age of...............................   575
    Allies and the United States, capabilities gap between...........    37
    Arab-Israeli relations...........................................    41
    Armed forces, future of our......................................   549
    Aviation security................................................   582
    Ballistic missile defense........................................    47
    Ballistic Missile Defense-Missile Defense Agency.................    43
    Budget:
        Fiscal year 2003 priorities..................................   541
        Tradeoffs....................................................   542
    C-17.............................................................   581
        Funding......................................................    28
        Getting more and pilots......................................   580
    Cold war era programs, elimination of............................    49
    Compensating military people.....................................   577
    Contractor personnel.............................................    61
    Cost savings.....................................................    23
    Counterdrug training.............................................   593
    Counterterrorism Fellowship Program..............................   564
    Critical infrastructure..........................................    55
    Critical missions................................................   535
    Crusader.........................................................   592
        Alternatives to..............................................   540
        Army transformation and......................................   538
        Deployability................................................   565
        Why terminate now............................................   539
    C\4\ISR..........................................................   551
    DD(X) Program....................................................    52
    Defense emergency response fund..................................    48
    Defense Health Program...........................................    44
    Defense request, affordability of................................    32
    Directed energy..................................................    55
    DOD consultants..................................................    31
    EC-130 aircraft.................................................43, 593
    F-22, adjusting procurement quantities...........................   574
    Federal acquisition system.......................................    51
    Future conflicts, strategy on....................................    49
    Future cost increases............................................    53
    General aviation airports........................................   583
    Gulf war illness.................................................    62
    International Criminal Court.....................................   548
    Iowa Army Ammunition Plant (IAAP)................................   590
    Joint Strike Fighter.............................................   594
    Joint warfighting capabilities, improving........................   555
    Legislative affairs staffing.....................................   586
    Major theater wars...............................................    55
    Marine expeditionary brigade vehicles............................    52
    Military Commission Procedures Act...............................    54
    Military construction........................................56, 59, 62
    Military personnel:
        Issues, other miscellaneous..................................    60
        Strains on...................................................    25
    Military strategy, risk in.......................................   592
    Military transformation..........................................   588
    Missile defense..................................................   545
        Funding......................................................   566
            Cuts.....................................................   575
        Oversight of.................................................   590
        Support group................................................    30
        Test Facility and X-band radar...............................    29
    Modernization, procurement and readiness.........................   547
    Morale and retention.............................................   594
    Navy shipbuilding................................................   587
    New defense strategy............................................18, 544
    Nuclear Posture Review and first use.............................   569
    Nuclear weapons, security and management of......................   584
    Office of Strategic Influence....................................    28
    Pentagon waste...................................................   591
    People...........................................................   548
        Military personnel...........................................    23
    Permanent change of station (PCS):
        Funding......................................................   565
        Moves........................................................   565
    Program terminations and transformation..........................   536
    QDR, new directions from the.....................................    12
    Requirements generation process..................................    50
    Resources for this historic challenge............................    10
    Rising costs and must-pay bills..................................    12
    Rockets, reductions in funding for training......................    52
    SBIRS-Low....................................................53, 61, 63
    Science and technology funding...................................   576
    Shipbuilding....................................................51, 567
    Sinai, U.S. troops in the........................................    34
    Space:
        Programs....................................................48, 589
        U.S. reliance on.............................................   578
    Strategic lift...................................................   568
    Strategic nuclear weapons reductions.............................   583
    Submarines, need for new.........................................    36
    Supplemental:
        Appropriations, fiscal year 2002.............................    28
        Spending of appropriations and bring down overseas
          deployments................................................    35
    Systems, cutting unneeded........................................    36
    Tactical:
        Aircraft purchases...........................................    45
        Fighter aircraft.............................................   594
    Tanker aircraft leasing..........................................    46
    $10 billion contingency request..................................    26
    Terminations.....................................................   545
    Terrorism:
        Budget topline and war on....................................   534
        Congressional hearing on policies and consultation...........    40
        Funding war on...............................................    31
        Global war on................................................   553
    Terrorist:
        Specific threats.............................................   562
        Threats......................................................   561
    Theater Aerospace Command and Control Simulation Facility
      (TACCSF).......................................................   579
    Tradeoffs.......................................................24, 549
    Transformation...................................................38, 58
        Goals........................................................   536
    U.S. Armed Forces, transformation of the.........................   557
    U.S. military, critical issues for the...........................   559
    U.S.S. Inchon....................................................    57
    United States, spending to directly defend the...................   567
    Vaccine production...............................................    58
    War reserve, recapitalization of aging...........................    53
    Weapons, investments in new......................................   563

                                    Reserves

    Additional committee questions...................................   301
    Army Guard and Reserve, increase of full-time support of.........   303
    Army Reserve:
        Equipment status of..........................................   303
        Strategic storage of equipment for...........................   302
    Biological detection capabilities................................   302
    Current bonus systems............................................   285
    Employer support.................................................   285
    Family of medium tactical vehicles...............................   304
    Final thoughts...................................................   291
    Foreword.........................................................   271
    Health care......................................................   300
    Highlights of 2001...............................................   286
    Infrastructure...................................................   297
    Manpower.........................................................   280
    Marines and their families.......................................   294
    Modernization....................................................   286
        And transformation...........................................   297
    Naval Reserve Association........................................   271
    Navy Reserve:
        C-40 aircraft for............................................   306
        FA-18A aircraft in...........................................   307
    New missions.....................................................   291
    On Target, Online--Strategic Funding Priorities for the Naval
      Reserve........................................................   271
    Private sector support...........................................   298
    Readiness........................................................   265
        And transformation/modernization.............................   289
        Current......................................................   296
    Recruiting.......................................................   299
        And retention.........................................264, 285, 288
    Relevance........................................................   266
    Reserve facilities & infrastructure: Improving quality of service
      and quality of life............................................   277
    Resourcing.......................................................   270
    Supporting the fleet from the air and sea: Meeting strategic
      funding priorities.............................................   272
    The Association Voice of the Naval Reserve.......................   271
    Upgrading information technology and systems.....................   275
    Your Marine Corps Reserve today..................................   293

                        United States Air Force Academy

                   United States Military Academy, U.S. Army

                          United States Naval Academy

    Academy standards................................................   624
    Air Force Academy:
        Funding for the..............................................   618
        Technology curriculum........................................   622
    Air Force honor system...........................................   620
    Applicants, qualifications of....................................   614
    Athletes:
        Admission standards for......................................   622
        Recruitment of...............................................   623
    Body.............................................................   611
    Branching question, response to..................................   616
    Cadet exposure with the USNG and USAR Forces.....................   625
    Cadets and midshipmen............................................   625
    Challenges.......................................................   613
    Curriculum revision..............................................   614
    Enrollment, increased............................................   619
    Honor code-student responsibility................................   620
    Midshipmen exposure to National Guard and Reserve Forces.........   625
    Overview.........................................................   611
    Private funding..................................................   619
    Scholar-athlete scholarships.....................................   623
    Service academies, appropriated funds for........................   617
    Technology and the service academies.............................   621
    United States Air Force Academy Cadet Wing.......................   615

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