[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/
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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.
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    \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.
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    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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