    [Senate Hearing 107-696]
    [From the U.S. Government Publishing Office]

                                                     S. Hrg. 107-696, Pt. 1

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2003

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

                                    HEARINGS

                                   before the

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                          ONE HUNDRED SEVENTH CONGRESS

                                 SECOND SESSION

                                       ON

                                    S. 2225

    AUTHORIZING APPROPRIATIONS FOR FISCAL YEAR 2003 FOR MILITARY ACTIVITIES
       OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND FOR
    DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE PERSONNEL
      STRENGTHS FOR SUCH FISCAL YEAR FOR THE ARMED FORCES, AND FOR OTHER
                                    PURPOSES

                                   ----------

                                     PART 1

                                MILITARY POSTURE
                              SERVICE SECRETARIES
                             NUCLEAR POSTURE REVIEW
                        UNIFIED AND REGIONAL COMMANDERS
                                 SERVICE CHIEFS
          ATOMIC ENERGY DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY

                                   ----------

                    FEBRUARY 5, 12, 14; MARCH 5, 7, 14, 2002

             Printed for the use of the Committee on Armed Services
    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                  2003--Part 1

    MILITARY POSTURE  b   SERVICE SECRETARIES  b   NUCLEAR POSTURE REVIEW
      b   UNIFIED AND REGIONAL COMMANDERS  b   SERVICE CHIEFS  b   ATOMIC
             ENERGY DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY

                                                     S. Hrg. 107-696, Pt. 1

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2003

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

                                    HEARINGS

                                   before the

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                          ONE HUNDRED SEVENTH CONGRESS

                                 SECOND SESSION

                                       ON

                                    S. 2225

    AUTHORIZING APPROPRIATIONS FOR FISCAL YEAR 2003 FOR MILITARY ACTIVITIES
       OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND FOR
    DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE PERSONNEL
      STRENGTHS FOR SUCH FISCAL YEAR FOR THE ARMED FORCES, AND FOR OTHER
                                    PURPOSES

                                   __________

                                     PART 1

                                MILITARY POSTURE
                              SERVICE SECRETARIES
                             NUCLEAR POSTURE REVIEW
                        UNIFIED AND REGIONAL COMMANDERS
                                 SERVICE CHIEFS
          ATOMIC ENERGY DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY

                                   __________

                    FEBRUARY 5, 12, 14; MARCH 5, 7, 14, 2002

             Printed for the use of the Committee on Armed Services

                         U.S. GOVERNMENT PRINTING OFFICE
    43-526 PDF                 WASHINGTON DC:  2003
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                         CARL LEVIN, Michigan, Chairman

    EDWARD M. KENNEDY, Massachusetts     JOHN WARNER, Virginia
    ROBERT C. BYRD, West Virginia        STROM THURMOND, South Carolina
    JOSEPH I. LIEBERMAN, Connecticut     JOHN McCAIN, Arizona
    MAX CLELAND, Georgia                 BOB SMITH, New Hampshire
    MARY L. LANDRIEU, Louisiana          JAMES M. INHOFE, Oklahoma
    JACK REED, Rhode Island              RICK SANTORUM, Pennsylvania
    DANIEL K. AKAKA, Hawaii              PAT ROBERTS, Kansas
    BILL NELSON, Florida                 WAYNE ALLARD, Colorado
    E. BENJAMIN NELSON, Nebraska         TIM HUTCHINSON, Arkansas
    JEAN CARNAHAN, Missouri              JEFF SESSIONS, Alabama
    MARK DAYTON, Minnesota               SUSAN COLLINS, Maine
    JEFF BINGAMAN, New Mexico            JIM BUNNING, Kentucky

                         David S. Lyles, Staff Director

                  Judith A. Ansley, Republican Staff Director

                                      (ii)

                                C O N T E N T S

                                  ----------

                        CHRONOLOGICAL LIST OF WITNESSES
                                Military Posture
                                february 5, 2002

                                                                       Page

    Rumsfeld, Hon. Donald H., Secretary of Defense; Accompanied by
      Hon. Dov S. Zakheim, Comptroller, Department of Defense........    10
    Myers, Gen. Richard B., USAF, Chairman, Joint Chiefs of Staff....    27

                              Service Secretaries
                               february 12, 2002

    White, Hon. Thomas E., Secretary of the Army.....................   109
    England, Hon. Gordon R., Secretary of the Navy...................   119
    Roche, Hon. James G., Secretary of the Air Force.................   136

                     Results of the Nuclear Posture Review
                               february 14, 2002

    Feith, Hon. Douglas J., Under Secretary of Defense for Policy....   320
    Gordon, Gen. John A., USAF (Ret.), Administrator, National
      Nuclear Security Administration................................   330
    Ellis, Adm. James O., Jr., USN, Commander in Chief, United States
      Strategic Command..............................................   341

        Unified and Regional Commanders on Their Military Strategy and
                            Operational Requirements
                                 march 5, 2002

    Blair, Adm. Dennis C., USN, Commander in Chief, United States
      Pacific Command................................................   399
    Schwartz, Gen. Thomas A., USA, Commander in Chief, United Nations
      Command, U.S. Forces Korea, Combined Forces Command Korea......   421
    Speer, Maj. Gen. Gary D., USA, Acting Commander in Chief, United
      States Southern Command........................................   441

                                 Service Chiefs
                                 march 7, 2002

    Shinseki, Gen. Eric K., USA, Chief of Staff, United States Army..   509
    Clark, Adm. Vernon E., USN, Chief of Naval Operations............   520
    Jones, Gen. James L., USMC, Commandant of the Marine Corps.......   529
    Jumper, Gen. John P., USAF, Chief of Staff, United States Air
      Force..........................................................   544

          Atomic Energy Defense Activities of the Department of Energy
                                 march 14, 2002

    Abraham, Hon. Spencer, Secretary of Energy; Accompanied by Dr.
      Everett Beckner, Deputy Administrator for Defense Programs,
      National Nuclear Security Administration; and Ambassador Linton
      F. Brooks, Deputy Administrator for Defense Nuclear Non-
      Proliferation, National Nuclear Security Administration........   688

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2003

                                  ----------

                           TUESDAY, FEBRUARY 5, 2002

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

                                MILITARY POSTURE

        The committee met, pursuant to notice, at 9:32 a.m. in room
    SH-216, Hart Senate Office Building, Senator Carl Levin
    (chairman) presiding.
        Committee members present: Senators Levin, Kennedy, Byrd,
    Cleland, Landrieu, Reed, Akaka, Bill Nelson, E. Benjamin
    Nelson, Carnahan, Dayton, Bingaman, Warner, Inhofe, Santorum,
    Roberts, Allard, Hutchinson, Sessions, Collins, and Bunning.
        Committee staff members present: David S. Lyles, staff
    director; Christine E. Cowart, chief clerk; and Gabriella
    Eisen, nominations clerk.
        Majority staff members present: Daniel J. Cox, Jr.,
    professional staff member; Madelyn R. Creedon, counsel; Kenneth
    M. Crosswait, professional staff member; Richard D. DeBobes,
    counsel; Evelyn N. Farkas, professional staff member; Richard
    W. Fieldhouse, professional staff member; Creighton Greene,
    professional staff member; Gerald J. Leeling, counsel; Peter K.
    Levine, general counsel; Michael J. McCord, professional staff
    member; Arun A. Seraphin, professional staff member; and
    Terence P. Szuplat, professional staff member.
        Minority staff members present: Judith A. Ansley,
    Republican staff director; Charles W. Alsup, professional staff
    member; L. David Cherington, minority counsel; Edward H. Edens
    IV, professional staff member; Brian R. Green, professional
    staff member; William C. Greenwalt, professional staff member;
    Gary M. Hall, professional staff member; Carolyn M. Hanna,
    professional staff member; Mary Alice A. Hayward, professional
    staff member; Ambrose R. Hock, professional staff member;
    George W. Lauffer, professional staff member; Patricia L.
    Lewis, professional staff member; Thomas L. MacKenzie,
    professional staff member; Ann M. Mittermeyer, minority
    counsel; Suzanne K.L. Ross, research assistant; Joseph T.
    Sixeas, professional staff member; Carmen Leslie Stone, special
    assistant; Scott W. Stucky, minority counsel; and Richard F.
    Walsh, minority counsel.
        Staff assistants present: Dara R. Alpert, Daniel K.
    Goldsmith, and Thomas C. Moore.
        Committee members' assistants present: B.G. Wright,
    assistant to Senator Byrd; Frederick M. Downey, assistant to
    Senator Lieberman; Andrew Vanlandingham, assistant to Senator
    Cleland; Jeffrey S. Wiener, assistant to Senator Landrieu;
    Elizabeth King, assistant to Senator Reed; Davelyn Noelani
    Kalipi, assistant to Senator Akaka; William K. Sutey, assistant
    to Senator Bill Nelson; Eric Pierce, assistant to Senator Ben
    Nelson; Neal Orringer, assistant to Senator Carnahan; Brady
    King, assistant to Senator Dayton; Benjamin L. Cassidy,
    assistant to Senator Warner; Christopher J. Paul, assistant to
    Senator McCain; J. Mark Powers, assistant to Senator Inhofe;
    George M. Bernier III, assistant to Senator Santorum; Robert
    Alan McCurry and James Beauchamp, assistants to Senator
    Roberts; Michele A. Traficante, assistant to Senator
    Hutchinson; Arch Galloway II, assistant to Senator Sessions;
    Kristine Fauser, assistant to Senator Collins; and Derek
    Maurer, assistant to Senator Bunning.

           OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

        Chairman Levin. Good morning. The committee meets this
    morning to receive testimony from Secretary of Defense Donald
    Rumsfeld and Chairman of the Joint Chiefs of Staff General
    Richard Myers on the posture of United States Armed Forces and
    on the President's proposed defense program for fiscal years
    2003 to 2007.
        We all have known General Myers for many years, but this is
    his first opportunity to testify before the committee as
    Chairman of the Joint Chiefs of Staff. We give him a special
    welcome, and we welcome all of our witnesses today on this very
    important subject.
        As we meet today, America's Armed Forces continue to risk
    their lives in and around Afghanistan and, of course, in other
    places around the world. Some have been injured in Afghanistan,
    others have given their lives. This Nation is forever indebted
    to them and their families for their sacrifice.
        Senator Warner and I traveled to the Afghan theater to
    visit with our forces over Thanksgiving. Other members of the
    committee have since traveled to the region, and I know that my
    colleagues join me when I say that these men and women are
    nothing short of inspiring. They are performing a complex,
    challenging mission with extraordinary courage, skill, and
    determination. They know their mission and they know that
    America appreciates and supports them.
        The success of our forces has been remarkable. Osama bin
    Laden, if alive, is on the run and hiding. Many of his al Qaeda
    terrorists have been captured or killed. The Taliban regime
    that harbored them is no more. The Afghan people have been
    liberated from tyranny and an interim government is in place in
    Kabul. Nations around the world have been put on notice America
    is determined to protect itself from more attacks and to bring
    terrorists to justice.
        The excellence behind that success was not built in months.
    The success of our forces in Afghanistan is a tribute to our
    recruitment, training, and investments over many years, and it
    is a tribute to the leadership of the two witnesses that we
    have here today. Secretary Rumsfeld and General Myers, the
    country is grateful for your leadership of our Armed Forces
    during this dangerous time for our Nation.
        This committee will look carefully at the conduct of the
    operations in Afghanistan as we work with the Department of
    Defense to shape our forces for the future. On Thursday, the
    committee will receive testimony from the commander of
    Operation Enduring Freedom, General Tommy Franks, in both open
    and closed session.
        One of the lessons of this operation is that we enhance our
    security when we make common cause with other nations in
    pursuit of common goals. The path to a safer world and a more
    secure America rarely comes from a go-it-alone approach, but
    rather from working with allies, partners, and other nations,
    and from remaining engaged in critical regions of the world.
        Future success on the battlefield will also depend on
    success in managing the Department of Defense and in preparing
    our military for tomorrow's missions. The Department's budget
    request provides important funding for the war against
    terrorism and improves the quality of life of our forces and
    their families by increasing pay and benefits, especially
    health care. It includes funding for increased purchases of
    precision munitions and for unmanned aircraft, which proved so
    critical to the success of our military operations in
    Afghanistan.
        The administration is proposing the largest increase in
    military spending in two decades. This proposed increase comes
    without a comprehensive strategy or a detailed plan to guide
    that spending. The administration has not yet issued a national
    security strategy, a national military strategy, or a detailed
    plan for the size, structure, shape, and transformation of our
    military.
        We all appreciate the pressures on the Department while it
    conducts a war. At the same time, I trust that Secretary
    Rumsfeld agrees that an overall strategy and clear plans are
    essential if we are to make wise decisions on the future of our
    Armed Forces.
        We also continue to await a report on the steps that the
    Department plans to take to ensure that taxpayers' money is
    spent wisely. The administration is requesting $48 billion
    above the fiscal year 2002 level. In his last testimony before
    this committee 7 months ago, Secretary Rumsfeld candidly
    stated: ``I have never seen an organization that could not
    operate at something like 5 percent more efficiency if it had
    the freedom to do so.'' He went on to say that the taxpayers
    have a right to demand that we spend their money wisely, and
    further said that he could not tell the American people that we
    are doing that.
        The committee will be interested to hear how much progress
    has been made on this front. I know that the Secretary is
    active on many fronts. Waging a war is number one, and some of
    these other needs and considerations have to be delayed. But I
    know as soon as the Secretary is able to address these issues
    that he is going to do so while carrying on the other more
    pressing and more comprehensive responsibilities.
        Finally, we look forward to the Department's plan for
    carrying out what the Quadrennial Defense Review (QDR) called
    the military's highest priority: homeland security. A new
    combatant command will apparently coordinate the Department's
    role in homeland security. Congress awaits the decision on how
    the Pentagon intends to organize itself to oversee this
    mission. General Myers testified at his confirmation hearing in
    September that ``this whole issue of homeland defense or
    homeland security needs a lot more thought.'' The committee
    looks forward to the specifics which Secretary Rumsfeld and
    General Myers could share with us this morning on that
    important mission.
        America's Armed Forces are performing admirably in their
    fight against al Qaeda. This committee will do all in its
    power, as it has done in years before, to ensure that our
    forces have the resources, tools, and technology they need to
    prevail in their fights. We are determined to preserve a high
    quality of life for our forces and their families, sustain
    readiness, and transform the Armed Forces to meet the threats
    and challenges of tomorrow. At this point, I would like to
    submit the statements of Senators Akaka and Landrieu.
        [The prepared statements of Senators Landrieu and Akaka
    follow:]

                 Prepared Statement by Senator Mary L. Landrieu

        Mr. Chairman, thank you for holding this invaluable hearing to
    discuss the Department of Defense's budget posture for fiscal year
    2003, the future spending priorities for our Armed Forces beyond 2003,
    and, of course, America's response to the terrorist attacks on U.S.
    soil.
        Since September 11, Secretary Donald Rumsfeld has shown deft
    leadership in guiding his department in the war efforts against those
    who made a poor decision when they targeted America for their misguided
    wrath. Secretary Rumsfeld's response to the terrorist attacks has been
    measured and wholly appropriate. He moved deliberately and with great
    scrutiny to develop a plan that would increase security. The Secretary
    has crafted a mission for our Armed Forces and the Nation that will
    root out terrorist cells around the world and bring them to justice.
        General Myers, you are the embodiment of the fact that those who
    serve in our Nation's military are America's best and brightest. Your
    guidance and confidence lead every soldier, sailor, airman, and marine
    to be expertly trained, confident in themselves, and confident in the
    person next to them. Americans can sleep better tonight knowing that
    the Joint Chiefs, the commanders in chiefs (CINCs), and other uniformed
    leaders, with you in the cockpit, are working in unison to create the
    best methods to defend our shores, ensure liberty, and defeat our
    enemies.
        I want to paraphrase Winston Churchill's words of caution, as we
    are only at the end of the beginning of this war, but the war is
    progressing well. In 4 short months since we attacked al Qaeda and
    Taliban forces in Afghanistan, those forces have fled and are now in
    disarray. In a formerly lawless land, an interim government has been
    established, music is playing in the streets, and despair and
    destitution have been replaced with hope. Again, our mission is far
    from over, as Osama bin Laden's presence is unknown and al Qaeda cells
    exist in 30 or more other countries. But, we will provide justice for
    those who died as a result of September 11 bombings, and we will win
    the war on terrorism.
        Yesterday, President Bush officially released his budget for fiscal
    year 2003. I support the President's call for an expanded and more
    robust defense budget. America is at war, and we must spend whatever is
    necessary, yet prudent, to protect and secure our citizens and allies
    and thwart our enemies. As I stated previously, I concur with the
    President that the war on terrorism will be a long war. It will not end
    in Afghanistan. Rather, America must be prepared to fight this war for
    years to come in new and different ways.
        Nevertheless, while I applaud the President's goals and his
    tremendous determination and perseverance as our commander in chief, I
    am concerned that the President's budget does not most effectively and
    efficiently provide for the defense of our Nation, our Constitution,
    and those in uniform who defend our Nation and constitution.
        (1) Quality of life and military construction: While the
    President's budget makes important strides to improve housing on our
    military bases and gives military personnel a 4.1 percent pay raise,
    the military construction budget actually represents a $1.6 billion
    decrease in funding in fiscal year 2003 versus fiscal year 2002. This
    decrease from $10.6 billion to $9 billion is disheartening in light of
    the major increases President Bush has endorsed. The budget proposal
    cautions against wide-spread repairs to bases that could be closed in
    the next Base Realignment and Closure (BRAC) round in fiscal year 2005.
    There is value in that statement. Yet, we must make necessary repairs
    to best provide for the men and women in our Armed Forces. We cannot
    jeopardize the quality of life of our troops.
        Despite our superior technology, wars are and always will be won
    with people. The men and women in our Armed Forces are our most vital
    asset, and we must dedicate critical resources to them. In fighting a
    war, a military is only as strong as its weakest link. Soldiers with
    low morale are poor soldiers. The first step toward creating a sound
    and lethal fighter is to provide him or her with the necessary tools
    and support to grow, flourish, and be confident. Those tools include
    training facilities that are modern, providing a sound education and
    opportunity for the service man or woman's spouse and children,
    providing comfortable housing, and providing quality healthcare to the
    service member and his or her family.
        We cannot maintain our greatness if we are not committed to the
    upkeep of our base communities and robust investment in infrastructure.
    As General Myers has stated, it would currently take 100 years to make
    the necessary re-investments in infrastructure to rehabilitate our
    bases. To wait a century is unfathomable and unacceptable. We cannot
    house our troops in quonset huts for another 100 years. If we do, our
    superiority as the pre-eminent military in the world will be
    jeopardized and our retention and recruitment rates will suffer
    mightily. It is inexcusable for the administration's commitment to
    quality of life to decrease at a time when our troops should know that
    their government places them in high esteem.
        (2) DOD must commit to defending the homeland. Prior to World War
    II, America rarely involved itself in international affairs, and the
    military was primarily concerned with defending our borders from enemy
    attack. Since World War II, our military has expanded abroad, and our
    military now has a reach on every continent. Along the way, the focus
    became not to defend America at home, but to defend her abroad. I
    support DOD's need for a global reach and presence, but I fear that
    along the way, DOD has grown less concerned with the defense of a
    direct attack on American soil and less concerned about actively
    participating in homeland defense.
        As this reluctance has grown, the American people are more desirous
    than ever to see the Department of Defense re-establish itself as
    America's guardian at home, not within Europe or Asia. Since September
    11, DOD has grappled with how to best defend the 50 states, but what
    seems best to DOD as a matter of ease and status quo does not seem best
    to providing a definitive defense and counter-attack to future
    invasions at home.
        In furtherance, I am pleased to see President Bush commits $9.3
    billion for anti-terrorism efforts, but the meager $700 million for
    counter-terrorism only indicates that DOD is not interested in
    involving our military at home. National Guard units are well-trained
    and can respond to an attack, but they cannot provide the muscle or the
    sense of security that the Army, Air Force, Navy, and Marines can
    deliver. Our ultimate responsibility is at home. DOD must not be
    constrained by the notions of ``Posse Comitatus.'' This antiquated law
    must not stand in the way of providing our Nation with the best self-
    defense.
        I recognize that plans and reforms to the way our military
    positions itself within the United States cannot materialize overnight.
    However, such plans must materialize and not fall prey to the status
    quo. I maintain hope that modifications of the Unified Command Plan
    will establish a definitive chain of command responsible for homeland
    security and defense. No idea should be dismissed, including the
    creation of a CINC for homeland defense. Any new command or revised
    chain of command must have all the necessary resources and manpower
    required to defend against and defeat invaders. American citizens
    expect and deserve such protections.
        (3) We must make a commitment to science and technology. The
    Department's science and technology programs play a key role in our
    efforts to transform our military to meet the emerging threats of the
    21st century. The Quadrennial Defense Review, which was published last
    year, stated that DOD must invest 3 percent of its funding toward
    science in technology. The fiscal year 2003 defense budget calls for an
    11 percent increase in expenditures, yet the science and technology
    budget did not receive the funding supported by the QDR. Rather, the
    science and technology budget was cut by nearly $200 million. In fact,
    this year's budget falls $1.4 billion short of the 3 percent goal. If
    the QDR is meant to be a roadmap for the Department of Defense, it
    should not be so quickly dismissed by those who authored it.
        True transformation--a stated goal in the QDR and in the
    President's budget--will come through the advancement of DOD science
    and technology programs, so, in essence, transformation has been dealt
    a blow by the very same budget proposal. The research and industry
    supported by the science and technology budget enable Americans to
    quickly bring their innovations into the battlefield. Such innovations
    save lives In the past, science and technology funding has advanced
    warfighting and peacemaking at break-neck speed. As a result, our
    troops now have biological sensors, precision weapons, unmanned aerial
    vehicles (UAVs) and more at their disposal in Afghanistan. Surely our
    casualties would have mounted without them. Yet, the dedication to
    science and technology is absent from the President's budget. I hope
    this departure from the goal of transformation within the President's
    budget proposal does not pervade the congressional review process of
    the budget or harm our service members.
        I am proud of our the men and women of our Armed Forces for their
    response to September 11 and the vigor in which they have fought the
    war on terrorism. No one would have expected any less because they have
    such a fine leader in General Myers. I am also grateful for the
    leadership shown by President Bush, Secretary Rumsfeld, and the entire
    Cabinet. President Bush's budget proposal is a good basis from which to
    fight the war on terrorism, and I agree with the document in large
    part, including a call to increase spending for fiscal year 2003.
    Nevertheless, I think there are some fundamental areas of our Nation's
    defense that are not adequately addressed in this budget proposal. I
    look forward to working with the President, Secretary Rumsfeld, and
    General Myers to best provide for our Nation's defense during the
    coming year.
                                     ______

                 Prepared Statement by Senator Daniel K. Akaka

        Thank you, Mr. Chairman. I add my welcome to Secretary Rumsfeld and
    Chairman Myers this morning, and thank them for taking the time to
    discuss the fiscal year 2003 budget request with this committee. I am
    pleased to see the continued emphasis on quality of life for military
    members as reflected in the military construction amounts in the budget
    request.
        I support the administration's priority on improving the
    warfighting readiness of our forces through increased training
    resources and the enhancement of joint training.
        I remain concerned, however, about our ability to maintain the
    superior readiness of the United States military in light of the
    increased Operations Tempo (OPTEMPO) and potential expansion of the war
    on terrorism.
        I am also concerned about the administration's decision to
    eliminate pay parity between the Federal workforce and the military. As
    we are reminded of how indistinguishable personal safety is from
    national security, it is critical to remember that human expertise is
    the most important national security resource we have. This expertise
    is important to the homeland security functions of both the military
    and the Federal Government.
        I look forward to working with the administration to dedicate the
    necessary resources to ensure national security, maintain the United
    States military superiority and readiness, and enhance our homeland
    security.

        Chairman Levin. I will now turn to my partner, Secretary--
    ``Secretary''--Senator Warner.
        Senator Warner. Years ago.
        Chairman Levin. And proud of it.

                    STATEMENT OF SENATOR JOHN WARNER

        Senator Warner. Mr. Chairman, that was an excellent opening
    statement and it parallels in large measure the statement that
    I was going to deliver. Therefore, to save time, I will ask to
    put my statement in the record and just make a few heartfelt
    remarks.
        First, Mr. Secretary, we are privileged to have your lovely
    wife with us this morning. I know she does not wish to be
    singled out, but she does exemplify the spouses who stand
    behind the men and women of the Armed Forces and indeed those
    in the civilian service throughout the Department. It has been
    a tremendous and arduous task for all of you here, particularly
    since September 11, and I wish to commend her and all in like
    positions.
        Mr. Secretary, as you and I reflected the other day, we go
    back a few years together and have seen quite a few incidents
    in this country. But in my judgment, not since World War II,
    when this Nation was united like never before in its history,
    has this Nation been more strongly united behind its President
    and most particularly, those who proudly wear the uniform of
    our Nation. In large measure that is because of the leadership
    of the President, yourselves, Mr. Secretary and General Myers,
    and those in uniform under your supervision.
        This country is going to move forward and carry out both
    here at home and abroad, the orders of the President to do
    everything we can to eliminate the threat posed by terrorism,
    not only for the United States, but the whole world.
        I wish to commend you, Mr. Secretary, for the manner in
    which you have made yourself available to the Nation's public,
    largely through the press, and your visits, both abroad to the
    troops and here at home to military installations.
        No matter how much we read and observe on television, your
    own means to communicate frankly, honestly, and bluntly, with a
    sense of humor here and there, is terribly important. Those of
    us who remember Vietnam recall that the home front, for some
    very valid reasons, was not unified behind the servicemen and
    women, and it was exceedingly difficult for those in uniform to
    carry out their missions.
        The chairman mentioned the budget and we shall review the
    budget request. I talked yesterday at lunch with you about it
    in some detail. It is the largest increase in defense spending
    since the early 1980s, and as I said yesterday, it is crucial
    to preserve our democracy. We have no choice as a Nation but to
    move forward and support our President.
        I frankly think, Mr. Secretary, you are going to see strong
    bipartisan support for this budget. We have to make certain
    that, as you have allocated to your colleague Tom Ridge the
    responsibilities of homeland defense, that budget items are
    properly allocated between the two accounts. As you told us
    yesterday at lunch, you, together with the Director of the
    Central Intelligence Agency, have worked together as partners
    in putting this budget together.
        We also have the item of some $10 billion in the budget,
    which I think is a wise insertion because it gives the
    President and yourself the flexibility to move expeditiously if
    new challenges or new threats face our Nation. Congress has,
    and will, continue its oversight. As I said yesterday, I think
    we will have to fine-tune some means by which Congress reviews,
    perhaps contemporaneously, how you are going to make those
    particular expenditures in that budget item.
        Also, I go back to a quote by our President from September
    1999 at the Citadel: ``We must as a Nation renew the bond of
    trust between the American people and the American military, .
    . . defend the American people against missiles and terror; and
    . . . begin creating the military of the next century.''
        In my judgment, the budget request before us carries out
    that commitment he made to this Nation well before September
    11. It shows he was looking into the future and making plans
    for what none of us at that time or even now can fully
    comprehend--the type of threat that struck this Nation on
    September 11.
        I again commend the President for his leadership. Yes, his
    polls are strong now, but situations change. But what will not
    change, and he has repeatedly told this Congress, is his strong
    commitment to carry forward this mission and deter terrorism
    against this country. There is no timetable in this war on
    terrorism. Both of you have repeatedly reminded the American
    people of that and I think they are prepared to accept that as
    we move forward.
        Lastly, Mr. Secretary, as I look at this budget and as I
    look at military budgets worldwide, particularly those of our
    valued allies in NATO, they simply are not moving apace with
    their expenditures, calling on their citizens to reach into
    their pockets and providing for their respective Armed Forces
    in the same way that our President and I think this Congress
    will call on the citizens of this country.
        I am not sure what the solution is, but you and I and
    others have the burden to explain to the American people: Yes,
    we are the world leader, but terrorism is common to all of us,
    and there should be a greater sharing of the financial burdens
    and the hardships as we move forward in this unified battle
    against terrorism. I hope you will touch on that in your
    comments to this committee.
        With that, I conclude my brief remarks, and also saying
    that I strongly support the concept that we need a CINC for
    homeland defense, General. I am not sure just how and when you
    will go about formalizing that. You have the authority under
    existing law, but it may be well advised to involve Congress,
    because in my consultation with the governors they want to
    fully support our President on homeland defense, but they are
    concerned as to exactly how these funds, considerable sums, are
    to be expended and also the relationship between their guard
    and the active forces that will be augmented to bring about
    this Homeland Defense Command, the CINC for America, referred
    to now as CINCNORTH.
        I think the greater involvement in Congress is going to
    strengthen and also, frankly, showcase the importance of how
    the President and yourselves are moving out to defend us here
    at home. He mentioned in his Citadel speech in September 1999
    the need to strengthen homeland defense, again showing our
    President's wisdom in looking into the future and to the
    threats.
        Good luck, and my very best to the men and women of the
    Armed Forces under your command.
        [The prepared statement of Senator Warner follows:]

                   Prepared Statement by Senator John Warner

        Thank you, Mr. Chairman. I join you in welcoming Secretary Rumsfeld
    and General Myers.
        Secretary Rumsfeld, we had great confidence in confirming you as
    Secretary of Defense. I want to add my personal thanks for your
    remarkable performance as our ``secretary of war'' in this important,
    all-out global war on terrorism.
        General Myers, I welcome you to your first posture hearing. You are
    no stranger to this committee, and we look forward to working with you
    to win this war, further improve our Armed Forces, and prepare them for
    the future.
        I commend President Bush for submitting a budget that continues the
    commitment he made to our service men and women, past and present, to
    their families, and to all American citizens to have the best trained,
    best equipped, and most respected military in the world. As then
    Governor Bush stated at the Citadel in September 1999, we must, ``. . .
    renew the bond of trust between the American people and the American
    military; . . . defend the American people against missiles and terror;
    and, . . . begin creating the military of the next century.'' The
    budget request before us advances these worthy goals.
        The $48 billion increase in defense spending contained in the
    request represents the largest increase in defense spending since the
    early years of the Reagan administration. Those increases in the early
    1980s were crucial to winning the Cold War. The increases now will be
    crucial to winning the war on terrorism and preventing such evil forces
    from threatening us again.
        President Bush has properly focused this budget on protecting the
    United States, our forces deployed overseas, and our allies from
    attack--whatever the source--by doubling funding for combatting
    terrorism, by continuing robust funding for missile defense, and by
    substantially increasing funding for cutting edge technologies, such as
    unmanned vehicles.
        As we meet this morning, our Nation is at war; at war against a
    global network of terrorism that so brutally attacked this nation on
    September 11. While many of us had predicted the emergence of new and
    nontraditional threats, we were all rudely shaken by the reality and
    ruthlessness of the attacks we faced on September 11.
        Far from breaking the spirit of this great Nation, the terrorist
    attacks of September 11 have rallied the nation and, indeed, the entire
    civilized world to fight and defeat the scourge of terrorism which
    threatens us all. In the 5 months since we were attacked, our Nation
    has accomplished a lot. Al Qaida is fractured, and many of its members
    are on the run. The Taliban regime in Afghanistan that provided a safe
    haven for al Qaeda has been destroyed. Afghanistan has been liberated.
        The men and women of the U.S. military--together with those of our
    coalition partners--are to be commended for their superb performance in
    this war on terrorism. You both are to be commended for the leadership
    you have provided.
        As we begin our review of the President's budget request, we must
    be ever mindful of the soldiers, sailors, airmen, and marines on the
    front lines. We must assure the American people and our men and women
    in uniform that we are doing everything possible to help win this war
    on terrorism, provide our armed forces the resources they need, and
    fully prepare them to deal with future threats.
        Winning the war on terrorism and protecting our Nation is not just
    about destroying the Taliban and al Qaeda in Afghanistan. It is a
    global effort that must be prosecuted and sustained until the threat is
    destroyed. We must track down terrorists and those who harbor them. It
    is a war we must win.
        I am encouraged by what I have seen so far with regard to the
    budget before us. Your continued commitment to our uniformed personnel
    and their families through pay raises, quality of life and
    infrastructure improvements is essential. The priority you have given
    to combating terrorism at home and abroad is commendable. Your focus on
    transforming our Armed Forces to meet the expected and unexpected
    threats of this new century is critical to our national security.
        There is consensus in Congress, in the administration, and among
    the American people that significantly increased investment in defense
    and national security is necessary and prudent. September 11 was a
    ``wake-up call'' for all of us. As President Bush reminded us last
    week, ``the price of preparedness is high, but the price of
    indifference can be catastrophic.''
        Thank you.

        Senator Warner. At this point, I would like to submit the
    written statement of Senator Strom Thurmond.
        [The prepared statement of Senator Thurmond follows:]

                  Prepared Statement by Senator Strom Thurmond

        Thank you, Mr. Chairman,
        Mr. Chairman, as the Armed Services Committee begins the review of
    the fiscal year 2003 defense budget, I want to congratulate you and the
    ranking member, Senator Warner, on your leadership during the last
    session. The change in the majority was seamless and, more important,
    the tradition of committee's bipartisan approach to national security
    lives on. As I begin my 43rd and final year on the committee, I
    continue to believe that this bipartisan approach to national security
    has been a major contributor to the strength of our military forces.
        Secretary Rumsfeld and General Myers, welcome. I want to echo the
    comments of my colleagues on your leadership of the Department of
    Defense and our military services. Since the horrendous events of
    September 11, you have confronted an entirely new challenge. A
    challenge that no one could have imagined before that tragic date. It
    was your leadership that brought about the swift results in
    Afghanistan, more important, it was your leadership that brought a new
    approach to our defense strategy and the transformation of our Armed
    Forces into focus. I know these times have been both a professional and
    personal challenges. I thank you for your dedication and leadership and
    look forward to the changes you will make within the Department of
    Defense.
        Mr. Chairman, the President's budget request for fiscal year 2003
    is the largest increase to the defense budget since 1981. It represents
    nearly a 30 percent increase over the 1998 defense budget which was the
    first major increase to the defense budget since the end of the Cold
    War. The proposed $379 billion for fiscal year 2003 is a huge
    investment in defense and in my judgement one that is long overdue.
    Although I support the funding level, I am concerned about some
    specifics that I have read and heard in the media. It appears that we
    are still dedicating significant resources toward procuring legacy type
    systems. I hope that once we receive the details on the budget this
    perception is wrong and that there is a focus on developing the
    technology and systems that will equip our soldiers, sailors, airmen,
    and marines with the capability they need to fight the battles of the
    future.
        Although equipping our forces is critical, we must not neglect the
    quality of life of our military personnel and their families. Last
    year's budget provided a significant increase in military construction
    funding, I am disappointed that this year's budget does not keep pace
    with that level of funding. The living and working conditions that we
    provide to our men and women in uniform are as critical to their war
    fighting capability and morale as the latest weapon systems. I urge the
    committee to carefully review the proposed construction program and
    make the changes required to ensure it meets the critical needs of our
    personnel.
        Mr. Chairman, I look forward to another productive year and a
    continued close relationship with our two distinguished witnesses. We
    all have a common goal of ensuring the security of our Nation and
    nothing must interfere with achieving that aim.
        Before I close, I want to pay tribute to our Armed Forces and the
    men and women who daily risk their lives in the service of our Nation.
    I especially want to express my condolences to the families of the men
    and women who have made the ultimate sacrifice in the service of our
    Nation. God bless them all.
        Thank you, Mr. Chairman.

        Chairman Levin. Thank you, Senator Warner.
        There is going to be a vote at 10:30. My plan is that we
    will continue the hearing right through that vote, and
    hopefully enough of us can vote early so we can get back in
    time to pick up. After the opening statements of Secretary
    Rumsfeld and General Myers, there will be a 6 minute round of
    questions for each Senator on the basis of the early bird rule.
        Again, we give Secretary Rumsfeld, General Myers, and Dr.
    Zakheim a very warm welcome. Secretary Rumsfeld.

      STATEMENT OF HON. DONALD H. RUMSFELD, SECRETARY OF DEFENSE;
    ACCOMPANIED BY HON. DOV S. ZAKHEIM, COMPTROLLER, DEPARTMENT OF
                                DEFENSE

        Secretary Rumsfeld. Thank you very much, Mr. Chairman and
    members of the committee. I certainly want to join the chairman
    and Senator Warner in expressing our appreciation to the men
    and women in the Armed Forces. They are, as you said, doing an
    absolutely superb job. You cannot travel anywhere in the world
    or in this country and visit with them and not come away with a
    great deal of energy, pride, and confidence.
        I also want to say that from the first day on September 11
    when Senators Levin and Warner arrived at the Pentagon, we
    recognized the very strong bipartisan support that this
    committee has given the Department of Defense. We recognize it,
    appreciate it, and value it. Thank you.
        I have submitted a fairly lengthy statement for the record,
    which I will not read through. I have some other remarks that I
    would like to deliver at this point.
        Chairman Levin. Your statement will be made part of the
    record.
        Secretary Rumsfeld. Thank you, sir.
        The events of September 11 shattered many myths, including
    the illusion that the post-Cold War world would be one of
    extended peace, where America could stand down, cut defense
    spending, and focus our resources and attention on domestic and
    personal priorities. We learned on September 11, that that
    really is not the case.
        When the Cold War ended, a defense drawdown took place that
    went too far. In my view it overshot the mark. Many on this
    committee of both parties fought an uphill battle to provide
    the resources the Department needed. With the benefit of 20-20
    hindsight, the reality is that our country spent much of the
    1990s living off the investments that the American people made
    during the 1980s.
        Through the prism of September 11 we can now see that our
    challenge today is not simply to fix the underfunding of the
    past, but it is to accomplish several difficult missions at
    once: win the worldwide war on terrorism; restore capabilities
    by making delayed investments in procurement, people, and
    modernization; and prepare for the future by transforming the
    defense establishment to fit the 21st century.
        There are some who say this may be too much to ask, that
    any one of these challenges is daunting and tackling them all
    at once is not a good idea. I disagree. I think we can do it
    and I think we must do it.
        Our adversaries are watching what we do. They are studying
    how we have been successfully attacked, how we are responding,
    and how we may be vulnerable in the future. We stand still at
    our peril.
        For these reasons, President Bush has sent to Congress a
    2003 defense budget request of $379 billion, a $48 billion
    increase from the 2002 budget. He includes $19.4 billion for
    the war on terrorism; a $10 billion contingency fund; and $9.4
    billion for a variety of programs related to the war, a good
    portion of which goes to force protection here in the United
    States, which is at a totally different level than it has
    previously been.
        That is a great deal of hard-earned tax dollars. But let me
    try to put it in context. Last year, before this committee, I
    said that a decade of overuse and underfunding had left us in a
    hole sufficiently deep that the President's 2002 budget, which
    also had a significant increase, still left shortfalls in a
    number of critical areas, including infrastructure,
    procurement, and operations and maintenance. Moreover, I
    advised this committee that just to keep the Department going
    in 2003 on a straight line basis with no improvements, simply
    covering the costs of inflation and realistic budgeting, we
    estimated that the DOD would require a budget of $347 billion,
    an $18.3 billion increase over 2002.
        Well, as high as it may have sounded then, it turned out
    that that estimate was a bit low. If you combine the cost of
    inflation plus military health care, retirement benefits, pay
    increase, realistic estimates for weapons costs, and readiness
    and depot maintenance, then the correct figure just to have a
    straight line over 2002 is $359.4 billion.
        When one adds that to the $19.4 billion in this budget for
    the war on terrorism, the total comes to $378 billion out of a
    request of $379 billion. That is a significant investment. We
    are investing it differently. We are accelerating programs we
    consider transformational and made program adjustments to
    achieve something in the neighborhood of $9.3 billion in
    proposed savings and adjustments to be used for transformation
    and other pressing requirements.
        At the same time, we are fully funding those areas we must
    in order to continue reversing years of underinvestment in
    people, readiness, and modernization.
        The 2003 budget request before you was guided by the result
    of last year's defense strategy review. Given the questions
    that some people posed last year, I must say that it is really
    quite remarkable what the people in the Department of Defense
    have accomplished. In 1 year, 2001, the Department has
    developed and adopted a new defense strategy; replaced the
    decade-old two major theater war construct for sizing our
    forces with a new approach much more appropriate to the 21st
    century; and adopted a new approach for balancing war risks, as
    opposed to people risks, against the risks of not modernizing
    sufficiently. It is not an easy thing to do because we are
    comparing apples and oranges, but the Department has worked
    mightily to try to do a much better job than has been the case
    in the past--reorganized and revitalized the missile defense
    research and testing program.
        We have reorganized the Department to better focus on space
    capabilities. Because of the nuclear posture review mandate
    adopted by Congress, we have adopted a new approach to
    strategic deterrence that increases our security while allowing
    deep reductions in strategic nuclear weapons. As you pointed
    out, Mr. Chairman and Senator Warner, within a week or so we
    will present to the President a new unified command structure.
        All this was done with about half of our leadership being
    new during the first half of the year and while conducting the
    war on terrorism. That is not bad for a defense establishment,
    military and civilian, public and private, executive and
    legislative, that has a reputation for being impossibly
    resistant to change. I think that is quite a year.
        When I look back on that challenging year, I feel we made
    good progress, thanks to the superb work of the men and women
    in the Department who have put forth an enormous effort.
        In the course of the defense reviews, we identified six key
    transformational goals around which we will focus our defense
    strategy. They are: First, to protect the homeland and forces
    overseas;
        Second, to project and sustain power in distant theaters;
        Third, to deny enemy sanctuary;
        Fourth, to protect information networks from attack;
        Fifth, to use information technology to link up U.S. forces
    so that they can truly fight jointly; and
        Sixth, to maintain unhindered access to space and to
    protect U.S. space capabilities from enemy attack.
        The President's 2003 budget requests advances in each of
    these six transformational goals. With respect to protecting
    bases of operation and homeland defense, the President's budget
    requests a number of programs, including a refocused missile
    defense research, development, and testing program and the
    development of biological defenses. It requests about $8
    billion for programs to support defense of the homeland and
    forces overseas, $45.8 billion over the 5-year Future Years
    Defense Plan (FYDP), which is an increase of about 47 percent.
        Denying the enemy sanctuary: This budget requests $3.2
    billion for programs to support this objective and $16.9
    billion over the 5 years, an increase of 157 percent.
        Projecting power in denied areas: Today in many cases U.S.
    forces depend on vulnerable foreign bases to operate, creating
    incentives for adversaries to develop access denial
    capabilities to keep us out. The 2003 budget requests $7.4
    billion for programs to help ensure the ability to project
    power over long distances and $53 billion over the 5-year
    period, an increase of 21 percent.
        Leveraging information technology: A key transformational
    goal is to leverage advances in information to seamlessly
    connect U.S. forces in the air and on the sea and ground. The
    President's budget requests $2.5 billion for programs to
    support this objective or $18.6 billion over the 5 years, an
    increase of 125 percent.
        Conducting effective information operations: As information
    warfare takes an increasingly significant role in modern war,
    our ability to protect our networks and to attack and cripple
    those of an adversary will be critical. The President's 2003
    budget requests $174 million for programs to support this
    objective and $773 million over the 5-year period, an increase
    of 28 percent.
        Last, strengthening space operations: From the dawn of
    time, a key to victory on the battlefield has been to control
    the high ground. Space is indeed the ultimate high ground. The
    2003 budget requests about $200 million to strengthen space
    capabilities and $1.5 billion over the 5-year period, an
    increase of 145 percent.
        Of course, we cannot transform the military in 1 year or
    even in a decade, nor would it be wise to do so. Rather, we
    intend to transform some relatively modest percentage of the
    force, turning it into the leading edge of change that will
    over time lead the rest of the force into the 21st century.
        Moreover, investments in transformation cannot be measured
    in numbers alone. Transformation is not about weapons systems
    particularly. It is more about changing how we think about war.
    All the high-tech weapons in the world will not transform our
    Armed Forces unless we transform the way we think, train,
    exercise, and fight.
        Modernization, procurement, and readiness: As we have
    transformed for the threats we face, we also have to prepare
    our forces for conflicts that we may have to fight during this
    decade by improving readiness, increasing procurement, and
    selectively modernizing. To deal with the backlog that resulted
    from the procurement holiday of the last decade, we have
    requested some $68.7 billion for procurement in the 2003
    budget. That is an increase of about 10 percent over 2002.
    Procurement is projected to grow steadily over the 5-year
    defense program to more than $98 billion in 2007, and it will
    increasingly fund transformation programs over the period of
    time.
        We have requested $150 billion for the operations and
    maintenance account in fiscal year 2003, including substantial
    funding for the so-called readiness accounts of tank miles,
    steaming days, and flying hours for the services.
        If we are to win the war on terror and prepare for
    tomorrow, we have to take care of the Department's greatest
    asset, the men and women in uniform. We are competing with the
    private sector for the best young people our Nation offers, and
    we cannot simply count on their patriotism and willingness to
    sacrifice alone to attract them. That is why the President's
    2003 budget requests some $94 billion in military pay and
    allowances, including a $1.9 billion across the board 4.1
    percent pay increase; $300 million for targeted pay raises for
    the mid-grade officers and non-commissioned officers (NCOs);
    $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 in 2003,
    putting us on the track to eliminate out-of-pocket housing
    costs for the men and women in uniform by 2005; and $10 billion
    for education, training, and recruitment, as well as a
    breathtaking $22.8 billion to cover the realistic costs of
    military health care.
        Smart weapons are worthless unless they are in the hands of
    smart, well-trained, highly-motivated soldiers, sailors,
    airmen, and marines. While this budget includes proposed
    increases in a number of areas, it also includes a number of
    savings. We are committed to pursuing what works and stopping
    what does not. For example, we terminated the Navy Area Missile
    Defense program because of delays, poor performance, and cost
    overruns. We are proceeding towards a goal of a 15 percent
    average reduction in headquarters staff and the Senior
    Executive Council of the Department is seeking additional ways
    to ensure that we manage the Department more efficiently.
        We need to save more, but two things make it difficult.
    First was the decision not to make deep cuts in manpower. Now,
    in the midst of a war on terror whose final dimension is still
    unknown, we do not believe is the time to be cutting manpower.
    We now have 60,000 Guard and Reserves that have been called up
    and another 10,000 who have been held in the service, for a
    total of 70,000 people.
        It is interesting to note that the largest theater for the
    United States is not Afghanistan today; it is Salt Lake City
    and the environs where we have people there for the Olympics.
    We literally have more people in the area around Salt Lake City
    for the Olympics than we do in Afghanistan.
        Second, Congress' decision to put off base closures for a
    couple of years means that the Department will have to continue
    supporting between 20 to 25 percent more infrastructure than we
    believe is needed for the force. I know this committee was
    forceful in urging base closing and we appreciate that. It is a
    fact, however, that with the 2-year delay we have to continue
    providing force protection for the bases even though we believe
    a substantial number of the bases, something in the
    neighborhood of 20 to 23 percent, are not currently needed.
        I have another concern, Mr. Chairman, and it is a hard
    thing to specify because no one congressional earmark is
    critical. Each one looks reasonable. But when one looks at the
    changes made, some 2022 individual programs and line items, the
    effect of it overall means that a fairly substantial portion of
    the budget that we proposed last year was changed. I think it
    is something like 13 percent of all research, development, test
    and evaluation programs, some 995 changes, 8.6 percent of all
    the procurement programs--436 individual changes, and 15
    percent of all military construction, or 146 changes.
        Congress clearly has the constitutional right to do that.
    There is no question about that. Any one of these individual
    earmarks when looked at seems very reasonable. I do think,
    however, it is important for all of us to step back and look at
    them in the aggregate and ask what the effect of that is year
    after year and if that is really the way we feel it is best to
    conduct our business.
        After counting the costs of keeping the Department moving
    on a straight line and the costs of the war and the savings
    generated, we are left with about $9.8 billion, so-called free
    money to invest in transformational activities. It is a lot of
    money, but it requires us to make a lot of difficult tradeoffs.
        Just to get it up on the table before we start, we were not
    able to meet our objective of lowering the average age of
    tactical aircraft. We are investing in unmanned aircraft, the
    F-22, and the Joint Strike Fighter, which require significant
    up-front investments, and will be coming on the line in future
    years. But in the current year, the average age of aircraft
    will not be declining as we had hoped.
        Second, while the budget funds faster growth in science and
    technology, we were not able to meet our goal of 3 percent of
    the overall budget, though we are slightly higher than the
    President's request from 2002.
        Third and most importantly, we clearly were not able to
    fund shipbuilding at a replacement rate in 2003, and we must do
    that in the future. As with every Department, the Department of
    the Navy had to make choices, and I know they will be up here
    next week to discuss the choices they made where they decided
    to place more money in operations and maintenance and other
    accounts than in shipbuilding.
        The fiscal year 2003 shipbuilding budget is $8.6 billion.
    It procures five ships. This is for several reasons. First,
    there are a number of problems, including contractor problems.
    But also, past shipbuilding cost estimates were off and they
    needed to be funded. So this year's shipbuilding budget is
    funding some of the cost increases that were not budgeted from
    prior years.
        Second, the Navy made a calculation that in the short term
    we can maintain the desired Navy force level at the proposed
    procurement rate because of the relatively young age of the
    fleet. A lot of the ships were purchased during the 1980s and
    the average age of the Navy, I am told, is at or is slightly
    better than the average age that is expected and targeted. They
    felt it is more important now to deal with significant needs
    that have been underfunded in recent years, such as shortfalls
    in munitions, spare parts, and steaming hours, which are fully
    funded in this budget.
        Further, we are investing significant sums in nuclear-
    powered cruise missile attack submarine (SSGN) conversions,
    which do not count in ship numbers because while they give us
    new capabilities, they do not buy new ships as such.
        The Navy's future year defense plan budgets 5 ships in
    2004, 7 in 2005, 7 in 2006, and 10 in 2007.
        Finally, the $379 billion that we are talking about here is
    a great deal of money, but consider that New York City's
    Comptroller's Office has estimated that the local economic cost
    of the September 11 attack in New York City alone will add up
    to about $100 billion; estimates of the cost to the national
    economy range to about $170 billion last year; estimates range
    as high as almost $250 billion a year in lost productivity,
    sales, jobs, airline revenues, and advertising; and most
    importantly the loss in human lives and the pain and suffering
    of so many thousands of Americans who lost husbands, wives,
    fathers, mothers, sons, daughters, sisters, and brothers.
        The President's proposed defense budget amounts to about
    3.3 percent of our gross domestic product. When I came to
    Washington in 1957, during the sixties, and in the Eisenhower
    and Kennedy era, we were spending about 10 percent of our gross
    national product on defense. It is about 3.3 percent in this
    budget proposal. In those days we were spending over 50 percent
    of the Federal budget on defense. This budget proposes that we
    spend, I believe, 16.9 percent of our Federal budget on
    defense.
        I point that out because there has been a mistake repeated
    throughout history that free nations tend to recognize the need
    to invest in their Armed Forces only after a crisis has already
    arrived. In 1950, just 5 years after the allied victory in
    World War II, General Omar Bradley urged President Truman to
    spend $18 billion on defense. The service chiefs gave an even
    higher estimate to Congress, around $23 billion. The services'
    estimate was still higher, around at $30 billion.
        President Truman concluded that the country could not
    afford anything more than $15 billion. The fact was that 6
    months later we were at war in Korea, and just as suddenly we
    found that we could in fact afford, not just $18 billion, but
    $48 billion, a 300 percent increase, because the war was on.
        We need to work together to see that our country makes the
    investments necessary to deter wars, not just to win them. Let
    us do so with our experience on September 11 in mind and with a
    renewed commitment to ensure that once the fires burn out, the
    war ends, and the Nation rebuilds that we will not forget the
    lessons learned at the cost of so many innocent lives and we
    will not go back to the old ways of doing things.
        Thank you, Mr. Chairman.
        [The prepared statement of Secretary Rumsfeld follows:]

                 Prepared Statement by Hon. Donald H. Rumsfeld

                                  INTRODUCTION

        Mr. Chairman, members of the committee.
        On September 11, terrorists attacked the symbols of American
    freedom, prosperity, and military might--killing thousands. In just a
    few short weeks, the United States responded. We built coalitions,
    positioned our forces, and launched devastating military strikes
    against Taliban and al Qaeda strongholds in Afghanistan. Before the
    fires at the World Trade Center burned out, the Taliban had been driven
    from power and the terrorists were on the run.
        We are still in the early stages of a long, dangerous, and global
    war on terrorism. But while much work remains, we can take notice of
    the achievements of our brave men and women in uniform, who have
    accomplished so much in so little time--and who, at this moment,
    continue to risk their lives in dangerous corners of the world.
        September 11 changed our Nation forever. As time passes and wounds
    heal, we should not forget the horror of what befell us that day, and
    go back to old ways of doing things. We owe it to those who died
    September 11 and those who will come after us to ensure that our Nation
    learns--and heeds--the lessons of that fateful day.
        The events of September 11 shattered many myths--among them, the
    illusion that the post-Cold War world would be one of extended peace,
    and that after four decades on high alert, America could relax, stand
    down, and cut defense spending.
        We learned on September 11 that this is not the case--and that all
    the things that we Americans hold dear--freedom, security, prosperity--
    all these are made possible by the peace and stability our Armed Forces
    provide. To preserve these precious gifts, we need to invest in the
    capabilities that the men and women of the Armed Forces need to defend
    our country and our interests.
        This truth was well understood during the Cold War. Then, Americans
    lived with the knowledge that a dangerous adversary had thousands of
    missiles on hair-trigger alert, pointed at their homes, schools, and
    places of work. We spent what was necessary for the Armed Forces to
    deter that adversary, defend our people, and contribute to peace and
    freedom. We succeeded.
        But when the Cold War ended, so did the consensus behind a robust
    investment in our national defense. A defense drawdown took place that
    went too far--overshooting the mark by a wide margin. Many on this
    committee, Democrats and Republicans alike, fought an uphill battle to
    secure the resources needed. Hindsight is 20/20, and the truth is that
    we spent much of the 1990s living off of the investments made during
    the Cold War, instead of making the new investments needed to address
    the fast-approaching threats of this new century.
        Our military was asked to do the impossible: to stay ready for
    near-term threats, take on a range of new missions, and prepare for the
    21st century--all this while absorbing sizable budget cuts. They did
    their best--they always do--but to meet the near-term challenges, they
    were forced to put off critical investments in people, modernization,
    and the future. Every year those investments were put off, the hole we
    were in grew deeper--and the task of digging out more difficult.
        Now, through the prism of September 11, we can see the error of
    that approach. Today, the consensus to spend what is necessary on
    national defense has been restored.
        But as we undertake the task of rebuilding, we must do so with eyes
    wide open, aware of the size of the task facing us, and what will be
    required.
        Our challenge today is to accomplish three difficult missions at
    once:

            (1) To win the worldwide war on terrorism;
            (2) To restore our force by making long-delayed investments in
            areas like procurement, people, infrastructure, and
            modernization; and in addition; and
            (3) To prepare for the future by transforming for the 21st
            century.

        Each of these tasks must be done--none can be put off. We have no
    choice but to fight and win today's war on terror; but we must also
    modernize our forces for the wars we may have to fight later in this
    decade; and, because of the long lead-times in bringing new
    capabilities online, we must prepare now for the wars we may have to
    fight in the next decade--in 2010 and beyond.
        There are some who say this is too much to ask of our Armed
    Forces--that any one of these challenges is daunting--but that doing
    all three at once--fighting a war, modernizing, and transforming at the
    same time--is too difficult. It is not. We can do it.
        But even if it were impossible, we would have no choice but to get
    about the task. Why? Because our adversaries are transforming. They are
    studying how we were successfully attacked, how we are responding, and
    how we may be vulnerable in the future. They are developing dangerous
    new capabilities, and new ways of fighting, to take advantage of what
    they see as our weaknesses and vulnerabilities. We stand still at our
    peril.
        Far from being a time to put off transformation, now is the moment
    to pursue it more aggressively. If we do not, new enemies will find new
    ways to strike us--and with the increasing power and range of weapons
    today, those attacks could well surpass the death toll of September 11.

                                THE 2003 BUDGET

        But transforming our Armed Forces, fighting the war on terror, and
    selectively modernizing our existing force can't be done without
    sizable investments over a sustained period.
        Because of that, President Bush sent to Congress a 2003 defense
    budget request of $379 billion--a $48 billion increase from the 2002
    budget. That is the largest increase since the early 1980s--a
    significant investment.
        It includes $19.4 billion for the war on terrorism--a $10 billion
    contingency fund that will be available, if needed, for the war, plus
    $9.4 billion for a variety of programs related to the war, including:

             $3 billion for counter-terrorism, force protection,
            and homeland security;
             $1.2 billion for continuing increased air patrols over
            the continental United States; and
             $800 million for converting Tomahawk cruise missiles
            to newer versions and for increased procurement of precision
            munitions such as the Joint Direct Attack Munition (JDAM) and
            Laser Guided Bombs (in addition to what was already funded).

        Providing U.S. forces faster, more precise, real-time intelligence
    will be critical to transformation. The President's 2003 budget
    includes investments to improve U.S. intelligence collection, analysis,
    processing, and dissemination.
        Moreover, the President has made clear that this is not a one-time
    increase. It is a commitment to sustained investments over many years.
    That is why the President's 5-year projected budget for 2003-2007 is
    $2.057 trillion--about $400 billion higher than when he took office.
        That is a great of money--hard earned tax dollars. But it should be
    put in context.
        Last year, before this committee, I explained that a decade of
    overuse and under-funding had left us in a hole so deep, that the
    President's 2002 budget, while a significant increase, would still
    leave shortfalls in a number of critical areas--including
    infrastructure, procurement, and operations and maintenance.
        Moreover, I advised this committee that just to keep the Department
    going in 2003 on a straight-line--with no improvements, simply covering
    the costs of inflation and realistic budgeting--we estimated that DOD
    required a budget of $347.2 billion--an $18.3 billion increase over the
    President's 2002 request.
        Well, as high as it may have sounded then, it turns out my estimate
    was low. When one combines the costs of inflation, plus the ``must
    pay'' bills (like military health care, retirement benefits, and pay),
    plus realistic cost estimates for weapons, readiness and depot
    maintenance, the correct figure is $359.4 billion.
        When one adds to that the $19.4 billion in this budget for the war
    on terrorism, the total comes to $378.8 billion out of a $379.3 billion
    budget.
        That is still a significant investment of the taxpayer's money. We
    are investing it differently--by accelerating programs we consider
    transformational. We have also made program adjustments to achieve $9.3
    billion in proposed savings, to be used for transformation and other
    pressing requirements. At the same time, we are fully funding those
    areas we must to continue reversing years of under-investment in
    people, readiness, and modernization.
        While it does not correct a decade of under-funding, it is a lot of
    money. We need to invest that money wisely if we are to accelerate
    transformation and continue our efforts to reverse years of under-
    investment in people, readiness, and modernization, while fighting the
    war on terrorism. Allow me to briefly set forth how the budget
    addresses each of these challenges.

                              NEW DEFENSE STRATEGY

        The budget before you is driven by the results of last year's
    defense strategy review. When President Bush took office, he asked the
    senior civilian and military leaders of the Department to take a hard
    look at the emerging security environment and consider whether a new
    defense strategy was needed. Given the questions some posed last year,
    I must say that it is really quite remarkable what the people of this
    Department accomplished. In 1 year--2001--the Department has:

             Developed and adopted a new defense strategy;
             Replaced the decade-old two major theater war (MTW)
            construct for sizing our forces, with a new approach more
            appropriate for the 21st century;
             Adopted a new approach for balancing risks;
             Reorganized and revitalized the missile defense
            research and testing program, free of the constraints of the
            Anti-Ballistic Missile (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; and
             Within a week or so we will present to the President a
            new Unified Command Structure.

        We did all this while fighting a war on terrorism. Not a bad start
    for a defense establishment--military and civilian, executive and
    legislative, public and private--that is supposedly so resistant to
    change.
        In January of last year, we initiated a series of informal
    strategic reviews. We found a Department filled with dedicated men and
    women--uniformed and civilian--who were doing their best under
    difficult circumstances to maintain the readiness of our Armed Forces.
    We also found that the pressure to prepare for near-term risks was
    crowding out efforts to prepare for longer-term challenges. While we
    found some transformation underway (such as development of the unmanned
    combat aircraft employed in Afghanistan), we also found some efforts
    were without clear goals, measures of success, or the necessary
    resources. We found chronic under-funding of procurement and
    infrastructure, and a culture that did not seem to embrace or reward
    innovation.
        These reviews helped pave the way for the Quadrennial Defense
    Review (QDR), during which the senior civilian and military leaders of
    the Department came to the unanimous conclusion that a new approach was
    needed for the 21st century. The President's budget has been designed
    to fund the priorities we identified in the QDR process.
        In the QDR, we made three major decisions. First, we decided to
    move away from the two MTW construct for sizing our forces--an approach
    that called for maintaining forces, capable of marching on and
    occupying the capitals of two aggressors at the same time and changing
    their regimes. That approach served us well in the immediate post-Cold
    War period, but after a decade it threatened to leave us too narrowly
    focused on preparing for two specific conflicts, and under-prepared for
    other contingencies and 21st century challenges.
        To ensure we have the resources to prepare for the future, and to
    address the emerging challenges to homeland security, we needed a more
    realistic and balanced assessment of our near-term war fighting needs.
    Instead of maintaining two occupation forces, we will place 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 his regime. Since neither aggressor would know which conflict
    would be selected for regime change, the deterrent is undiminished. But
    by removing the requirement to maintain a second occupation force, we
    can free up resources for the various lesser contingencies that face us
    and be able to invest for the future.
        Second, to prepare for the future, we decided to move away from the
    old ``threat based'' strategy that had dominated our Nation's defense
    planning for nearly half-a-century, and adopt a new ``capabilities
    based'' approach--which focuses less on who might threaten us, or
    where, or when, and more on how we might be threatened--and what
    capabilities we need to do to deter and defend against those threats.
        Under the new approach, we will develop a portfolio of military
    capabilities that will not only help us fight and win the wars of the
    21st century, but also help to prevent them. Our goal is to influence
    the decision-making of potential adversaries--to deter them not only
    from attacking us with existing capabilities, but by demonstrating the
    futility of potential military competition, to dissuade them from
    building dangerous new capabilities in the first place.
        Third, to put our capabilities-based approach into action, we
    identified six key transformational goals around which we will focus
    our defense strategy and develop our force. These are:

             First, to protect the U.S. homeland and our bases
            overseas;
             Second, to project and sustain power in distant
            theaters;
             Third, to deny enemies sanctuary--so they know no
            corner of the world is remote enough, no mountain high enough,
            no cave or bunker deep enough, no SUV fast enough, to protect
            them from our reach;
             Fourth, to protect U.S. information networks from
            attack;
             Fifth, to use information technology to link up
            different kinds of 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 well before the September 11 attacks
    on Washington and New York. Our experiences that day, and in the course
    of the Afghan campaign, have served to validate those conclusions, and
    to reinforce the importance of moving the U.S. defense posture in these
    new directions.
        In the 21st century, new adversaries may not to be discouraged from
    attacking us by the traditional means of deterrence that kept the peace
    during the Cold War--namely, the threat of nuclear retaliation. The
    terrorists who struck us on September 11 certainly were not deterred.
        This is why the President concluded that stability and security in
    the new century require a new approach to strategic deterrence that
    enhances our Nation's security while reducing our dependence on nuclear
    weapons. With the Nuclear Posture Review, we have proposed deep cuts in
    offensive nuclear forces, combined with strengthened conventional
    capabilities and a range of new active and passive defenses against
    weapons of mass destruction (WMD) and all forms of delivery--to be
    supported by a revitalized defense infrastructure and improved
    intelligence. This new triad of nuclear, conventional, and defensive
    capabilities will help deter and defend against the wider range of
    threats we will face in the decades ahead.
        The 2003 budget request is designed to advance each of the six
    transformational goals. It does so by accelerating funding both for the
    development of transformational programs--programs that give us
    entirely new capabilities--as well as by funding modernization programs
    that support the 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 $68.7 billion for procurement--a $7.6 billion increase. It
    funds 13 new transformational programs, and accelerates funding for 22
    more existing programs.
        We have established a new Office of Force Transformation to help
    drive the transformation process, and have tasked each of the services
    to develop Service Transformation Roadmaps by the summer of 2002.
        All together, transformation programs account for roughly 17
    percent of investment funding (RDT&E and procurement) in the
    President's 2003 budget request--and will rise to 22 percent over the 5
    year FYDP.
        This is a significant investment in the future. However, the
    investment in transformation cannot be measured in numbers alone.
    Transformation is not just about new weapons--it is about new ways of
    thinking and new ways of fighting. In some cases, it does not involve
    new capabilities at all.
        In Afghanistan, U.S. Special Forces are using a mix of capabilities
    in ways that had never been tried before, coordinating air strikes with
    the most advanced precision guided weapons, with cavalry charges by
    hundreds of Afghan fighters on horseback. The effect has been
    devastating--and transformational.
        The goal is not to transform the entire military in 1 year, or even
    in one decade. That would be both unnecessary and unwise.
    Transformation is a process, and, because the world is not static, it
    is a process that must continue. In short, there will be no point where
    our forces will have been ``transformed.'' Rather, we aim to transform
    between 5-10 percent of the force, turning it into the leading edge of
    change that will, over time, continue to lead the rest of the force
    into the 21st century.
        We cannot know today precisely where transformation will take us.
    It is a process that will unfold over time. But we believe we know the
    directions we want to take the force. Our goal is to move our military
    from service-centric forces armed with unguided munitions and combat
    formations that are large and easily observable, manpower intensive,
    earth-bound capabilities, and transform a growing portion into rapidly-
    deployable joint-forces made up of less manpower intensive combat
    formations armed with unmanned, stealthy, precision-guided
    capabilities, and unmatched space capabilities.
    1. Protecting Bases of Operation/Homeland Defense
        Even before September 11, the senior civilian and military leaders
    of the Department had concluded that defending the U.S. homeland from
    attack, and protecting U.S. forward bases, should be our top priority.
    For most of our history, thanks to favorable geography and friendly
    neighbors, U.S. territory was left largely unscathed by foreign
    aggressors. As we painfully learned on September 11, this will not be
    the case in the 21st century.
        Future adversaries are at this moment developing a range of new
    capabilities with which to threaten the U.S.: new forms of terrorism,
    cyber attacks, ballistic missiles, cruise missiles, 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; and
                     $797 million for sea, air, and space-based
                    systems to defeat missiles during their boost phase.

        The 2003 budget requests roughly $8 billion for programs to support
    defense of the U.S. homeland, and $45.8 billion over the 5 year FYDP
    (2003-7)--an increase of 47 percent since 2000.
    2. Denying Enemies Sanctuary
        Another objective of transformation is to deny sanctuary to
    enemies--to make certain they understand that if they attack the United
    States, there is no corner of the world remote enough, no mountain high
    enough, no cave deep enough, no bunker hardened enough, no SUV fast
    enough for them to escape the reach of the U.S. Armed Forces.
        To achieve that objective, we must have the capability to locate,
    track, and attack--both mobile and fixed targets--any where, any time,
    at all ranges, and under all weather conditions, 24 hours a day, 7 days
    a week, 365 days a year. This will require changes in our intelligence
    collection, analysis, production, and distribution. It also requires
    development of new capabilities for long-range precision strike--
    including unmanned capabilities--as well as the ability to insert
    Special Operations Forces into denied areas and allow them to network
    with our long-range precision-strike assets.
        To achieve this, we must develop new data links for connecting
    ground forces with air support; new long-range precision strike
    capabilities; new, long-range, deep penetrating weapons that can reach
    our adversaries in the caves and hardened bunkers where they hide; and
    special munitions for underground attack.
        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; and
             $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.

        The 2003 budget requests $3.2 billion for programs to support our
    objective of denying sanctuary to America's adversaries, and $16.9
    billion over the 5 year FYDP (2003-7)--an increase of 157 percent.
    3. Projecting Power in Denied Areas
        In the 21st century, we will be increasingly called upon to project
    power across long distances. Today, however, to operate in distant
    theaters, our forces in many cases depend on vulnerable foreign bases.
        Potential adversaries see this--and they will seek to develop new
    weapons and ways of fighting to keep U.S. forces out of their
    neighborhoods--so-called ``access denial'' capabilities. These
    capabilities could include: saturation attacks with ballistic and
    cruise missiles to deny U.S. access to overseas bases, airfields and
    ports; advanced air defense systems to deny U.S. access to hostile
    airspace; anti-ship cruise missiles, advanced diesel powered subs,
    sophisticated sea mines to threaten U.S. ability to project Naval and
    amphibious forces; as well as the use of chemical and biological agents
    against deployed U.S. forces.
        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 Future
            Years Defense Program (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; and
             $88 million for new Hypervelocity Missiles that are
            lighter and smaller (4 ft. long and less than 50 lbs.) 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
    5 year FYDP (2003-7)--an increase of 21 percent.
    4. Leveraging Information Technology
        Another transformation goal is to leverage rapid advances in
    information technology to improve the connectivity and joint war
    fighting capabilities of different types of U.S. forces. The goal is to
    find new ways 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 opportunities here to give U.S. forces unparalleled battlefield
    awareness are impressive--if they can ``see'' the entire battlefield
    and the enemy cannot, their ability to win wars grows exponentially.
    But as our dependence on information networks increases, it creates new
    vulnerabilities, as adversaries develop new ways of attacking and
    disrupting U.S. forces--through directed energy weapons and new methods
    of cyber attack.
        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;
            and
             $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.

        The 2003 budget requests $2.5 billion for programs to support this
    objective of leveraging information technology, and $18.6 billion over
    the 5 year FYDP (2003-7)--an increase of 125 percent.
    5. Conducting Effective Information Operations
        As information warfare takes an increasingly central role in modern
    war, our ability to protect our information networks--and to attack and
    cripple those of adversaries--will be critical to America's success in
    combat.
        To do so, we must find new ways to more fully integrate information
    operations with traditional military operations, while developing new
    computer network defenses, electronic warfare capabilities, and the
    ability to influence an adversary's perceptions of the battlefield.
        Many of the programs supporting this objective are, for obvious
    reasons, 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 5
    year FYDP (2003-7)--an increase of 28 percent.
    8. Enhancing Space Operations
        From the dawn of time, a key to victory on the battlefield has been
    to control the high ground. Space is the ultimate ``high ground.''
        One of our top transformational goals, therefore, is to harness the
    United States' advantages in space. Space can provide an ability to see
    what enemies are doing, anywhere in the world ``24-7-365''--and to
    ensure global secure communications for U.S. forces.
        This will require moving operations to space, improving the
    survivability of U.S. space systems, and developing a space
    infrastructure that assures persistent surveillance and access.
        As we become increasingly dependent on space for communications,
    situational awareness, positioning, navigation, and timing, space will
    necessarily become an area we have to defend. Adversaries are likely to
    develop ground-based lasers, space jamming, and ``killer'' micro-
    satellites to attack U.S. space assets.
        They will do so whether or not we improve U.S. space capabilities--
    because the U.S. economy and our way of life are growing increasingly
    dependent on space--making U.S. space assets inviting targets for
    asymmetric attack. Consider for a moment the chaos that would ensue if
    an aggressor succeeded in striking our satellite networks: cell phones
    would go dead; ATM cards would stop functioning; electronic commerce
    would sputter to a halt; air traffic control systems would go offline,
    grounding planes and blinding those in the air; and U.S. troops in the
    field would see their communications jammed and their precision strike
    weapons would stop working.
        Today, in so far as we know, no nation has the capability to wreak
    such havoc. We must make sure no one can. Our goal is not to bring war
    into space, but rather to defend against those who would. Protecting
    U.S. military and commercial assets in space from attack by foreign
    aggressors must be a priority in the 21st century.
        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 5 year FYDP (2003-7)--an increase
    of 145 percent.

                                     * * *

        Of course, many of the programs I have described support several
    transformation goals. For example, the Trident-SSGN conversion will
    help support our goals of operating in access denial environments and
    denying enemy sanctuary. Together, they represent an emerging portfolio
    of transformational capabilities that should enable us to defend
    freedom in the dangerous century ahead.
        Again, it is important to emphasize that transformation is not an
    event--it is an ongoing process, a journey that begins with a
    transformed ``leading edge'' force, which, in turn, leads the U.S.
    Armed Forces into the future.
        Moreover, it is not only about changing the capabilities at our
    disposal, but changing how we think about war. Imagine for a moment
    that you could go back in time and give a knight in King Arthur's court
    an M-16. If he takes that weapon, gets back on his horse, and uses the
    stock to knock his opponent's head, it's not transformational.
    Transformation occurs when he gets behind a tree and starts shooting.
        All the high-tech weapons in the world won't transform the U.S.
    Armed Forces, unless we also transform the way we train, exercise,
    think, and fight.

                                     * * *

        As we transform for the wars of 2010 and beyond, we must also
    prepare the forces for wars they may have to fight later in this
    decade, by improving readiness, increasing procurement and selective
    modernization.
        To advance transformation and deal with the backlog that resulted
    from the ``procurement holiday'' of the last decade, we have requested
    $68.7 billion for procurement in the 2003 budget request--an increase
    of 10.6 percent over fiscal year 2002. Procurement is projected to grow
    steadily over the 5 year FYDP to $98 billion in fiscal year 2007, and
    will increasingly fund transformation programs over time.
        We have requested $140 billion for operation and maintenance (O&M)
    accounts in 2003. This includes substantial funding for the so-called
    ``readiness accounts''--tank miles, steaming days, and flying hours for
    the Army, Navy, and Air Force--with only minor shortfalls. Funding
    includes:

             Aircraft operations/flying hours: $11.8 billion, up
            from $11.3 billion in fiscal year 2002;
             Army OPTEMPO: $3.7 billion, up from $3.3 billion in
            fiscal year 2002;
             Ship operations: $2.4 billion, up from $2.3 billion in
            fiscal year 2002;
             Depot maintenance: $4.8 billion, up from $4.5 billion
            in fiscal year 2002; and
             Training: $10.0 billion, up from $9.4 billion in
            fiscal year 2002.

                           PEOPLE/MILITARY PERSONNEL

        If we are to win the war on terror, and prepare for the wars of
    tomorrow--in this decade and beyond--we must take care of the
    Department's greatest asset: the men and women in uniform. They are
    doing us proud in Afghanistan and around the world--and today, thanks
    to their accomplishments in the war on terrorism, morale is high.
        But if we want to attract and retain the necessary force over the
    long haul, we need to know we are looking for talent in an open market
    place, competing with the private sector for the best young people our
    Nation has to offer. If we are to attract them to military service, we
    need to count on their patriotism and willingness to sacrifice to be
    sure, but we must also provide the proper incentives. They love their
    country, but they also love their families--and many have children to
    support, raise, and educate. We ask the men and women in uniform to
    voluntarily risk their lives to defend us; we should not ask them to
    forgo adequate pay and subject their families to sub-standard housing
    as well.
        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 pay raise and $300 million for the option for targeted pay-
    raises for mid-grade officers and NCOs. It 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 off-base 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. The budget also includes $10
    billion for education, training, and recruiting, and $18.8 billion to
    cover the most realistic cost estimates of military healthcare.
        Together, these investments in people are critical, because smart
    weapons are worthless to us unless they are in the hands of smart,
    well-trained soldiers, sailors, airmen, and marines.

                                  COST SAVINGS

        While this budget proposes increases in a number of important
    areas, it also includes a number of terminations. We have proposed
    terminating a number of programs over the next 5 years that were not in
    line with the new defense strategy, or which 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 and 1000 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 Space-based Infrared
    Radar System (SBIRS) programs. Regarding 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 by managing the
    Department in a more business-like manner. 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 them suitable for use in future
    conflicts. This should add some $1.5 billion of advanced combat
    capability to today's aging B-1 fleet over the next 5 years--without
    requiring additional dollars from the taxpayers. These are the kinds of
    practices 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.
        We would have liked to save more. Several things have held us back.
    One example was our decision not to make deep cuts in manpower. Before
    September 11, the services were considering such cuts as trade-offs for
    other needs. In retrospect we are finding that 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. It is clear now--in the midst of the war on terror, the final
    dimensions of which are unknown--that it is not the time to cut
    manpower. Our goal is to avoid having to increase manpower end-strength
    by refocusing our country's forces, by tightening up on the use of
    military manpower for non-military purposes, and by phasing down some
    of the domestic and the many of the international activities that the
    U.S. military is currently engaged in.
        Defense is a manpower intensive business--some 60 percent of
    defense costs are related to manpower (pay, healthcare, etc.). That
    leaves only about 40 percent of the operating budget for everything
    else. So without end-strength cuts, DOD is limited in what can be done.
        Second, Congress's decision to put off base-closure for 2 more
    years means that the Department will have to continue supporting
    between 20-25 percent more infrastructure than is needed to support the
    force. I know that members of this Committee worked hard to prevent a
    delay--and we appreciate that support. But the decision to holdup the
    process another 2 years will end up costing the taxpayers in the range
    of $6 billion annually.
        Further, because of the new force protection requirements for
    forces here in the U.S., DOD is forced to spend to protect 25 percent
    more bases than we need.
        Moreover, we are forced to put off investments in infrastructure
    replacement because we can't know which bases will be kept and which
    may be closed. It would have been a waste of the taxpayers' money to
    invest significant sums in modernizing bases that could eventually be
    closed.
        By putting off modernization, we are making the cost of modernizing
    more expensive--since the costs of repairing and replacing decrepit
    facilities grow exponentially each year the investments are put off. So
    the decision to delay base closure will ultimately be an expensive one
    for the taxpayers.
        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 2003-2007 FYDP to this end. But most of those
    investments had to be delayed until the out-years, when we will know
    which facilities will be closed.
        The 2-year delay in base-closure should not 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 the delay in BRAC is already causing.
        This leads to another area of concern: earmarks. Mr. Chairman, I
    asked DOD Comptroller Dov Zakheim to check, and he reports to me that
    last year alone--in the 2002 budget--Congress made changes to 2,022
    individual programs and line items. In some cases, Congress either
    increased or cut requested programs, and in others Congress added
    funding for un-requested programs.
        Congress changed 13 percent of all Research, Development, Test and
    Evaluation programs--995 different changes in all; 8.6 percent of all
    procurement programs--436 individual changes; and 15 percent of all
    military construction programs--146 individual changes.
        Now each of these individual changes probably seems modest--and
    each one is. But in the aggregate, their effect is substantial. We find
    the Department like Gulliver, with thousands of Lilliputian threads
    over the Department. No one, individual thread kept Gulliver down. But
    in the aggregate, he couldn't get up.
        Between the 2,000-plus earmarks and changes, and the hundreds of
    reports Congress requires DOD to prepare every year, we find ourselves
    killing thousands and thousands of trees, and spending hour after hour
    trying to figure our how we can do our jobs and show respect for the
    taxpayers dollars that they deserve.
        Mr. Chairman, I don't know quite how it happened, but over the past
    2 decades distrust seems to have developed between Congress and the
    executive branch. Possibly the executive branch did some things that
    caused distrust in Congress, and Congress has, for whatever reasons,
    decided that they want to try to micromanage the Department by putting
    literally thousands of earmarks on the legislation. We need to find a
    compromise of some sort.

                                   TRADE OFFS

        After considering the costs of keeping the Department moving on a
    straight-line, plus the costs of the war, we have roughly a $9.8
    billion increase. That's a lot of money. But it required us to make a
    number of difficult 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 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.
             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.

        The fiscal year 2003 shipbuilding budget is $8.6 billion and
    procures 5 ships--two DDG-51 destroyers and one Virginia class
    submarine, one LPD-17 Transport Dock Ship, and one T-AKE Dry Cargo
    Ship. There are several reasons for this level. One problem involves
    contractor difficulties. Also, we are forced to fund ongoing programs
    where, for whatever reasons, cost estimates were too low.
        Second, the Navy has made a calculation that, in the short term, we
    can maintain the required force level at the current procurement rate
    because the current average age of the fleet is at an acceptable level.
    Specifically, we are still benefiting from the sizable shipbuilding
    investments of the 1980s. The Navy concluded that it was 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, which are all fully funded in this budget. Further, the budget
    would also invest significant sums in SSGN conversion, which do not
    count in the shipbuilding totals because, while they do provide new
    capabilities, they do not buy new ships.
        To sustain the Navy at acceptable levels, the U.S. 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.
        So we have not done everything we hoped to be able to do. But these
    remain our goals and we intend to get these trends on the upswing in
    the years ahead.

                                   CONCLUSION

        Three hundred seventy-nine billion dollars is a great deal of
    money. But consider: the New York City comptroller's office has
    estimated the local economic cost of the September 11 attacks on the
    city alone will add up to about $100 billion over the next 3 years.
    Money magazine estimates of the cost of September 11 to the U.S.
    economy at about $170 billion last year--and some estimates range as
    high as $250 billion a year in lost productivity, sales, jobs, airline
    revenue, media and advertising, and costlier insurance for homes and
    businesses.
        That is not to mention the cost in human lives and the pain and
    suffering of so many thousands of Americans who lost husbands and
    wives, fathers and mothers, sons and daughters, and sisters and
    brothers that terrible day.
        The message is clear: we must invest so our country can deter and
    defend against the now clear new threats--against those who might wish
    to attack and kill our people. All together, this proposed defense
    budget amounts to 3.3 percent of our Nation's Gross Domestic Product.
    Compared to the cost in lives and treasure if we fail to stop another
    September 11 or worse, it is cheap at that price.
        It is a tragedy repeated throughout history: free nations seem to
    have difficulty recognizing the need to invest in their Armed Forces
    until a crisis has already arrived. In 1950--just 5 years after the
    allied victory in World War II--General Omar Bradley urged President
    Truman to spend at least $18 billion on defense. The Joint Chiefs
    requested an even higher amount at $23 billion, and the services'
    estimate was higher still at $30 billion. But the President concluded
    the country couldn't ``afford'' that much--$15 billion was as much as
    the U.S. could ``afford.''
        Six months later, the United States was suddenly at war in Korea.
    Just as suddenly, the President, Congress, and the American people
    found they could ``afford'' $48 billion just fine--a 300 percent
    increase.
        In this time of crisis, let us work together to make the
    investments necessary to win this war--and to prevent the next one. Let
    us do so chastened by our experiences on September 11, and with a
    renewed commitment to ensure that, once the fires burned out, the war
    ends, and the Nation rebuilds, we won't forget the lessons learned at
    the cost of so many innocent lives; that we won't go back to old ways
    of doing things. The lives of our children and grandchildren depend on
    it. Thank you.

        Chairman Levin. Thank you, Secretary Rumsfeld.
        General Myers.

       STATEMENT OF GEN. RICHARD B. MYERS, USAF, CHAIRMAN, JOINT
                            CHIEFS OF STAFF

        General Myers. Mr. Chairman, Senator Warner, other
    distinguished members of the committee: Thank you very much for
    the opportunity to appear before you today. It is very much an
    honor to report on the state of our Nation's Armed Forces.
        We are a military force and a Nation at war, and as the
    Secretary said, the attacks of September 11 shattered the prism
    through which we all looked at the world. In the span of a few
    minutes, we confirmed the historic reality that adversaries can
    strike at us anywhere in the world, even inside our own
    borders.
        When President Bush came to the Pentagon the following day,
    the assembled troops told him: We are ready, Mr. President.
    They spoke for themselves and all the men and women of our
    services. As we found out, they were right.
        Take the crew of the U.S.S. Enterprise: on their way home
    from a 6-month deployment, they learned of the attacks. Each
    man and woman on board felt a shudder as the rudder came hard
    over and they increased to flank speed and came to a new
    heading to arrive off the Pakistani coast the next morning.
        Or take the young marines of the 15th Marine Expeditionary
    Unit (MEU) aboard the U.S.S. Peleliu off the coast of Australia
    who began cleaning their weapons, knowing that they could in a
    short time be fired in combat.
        Our bomber crews in receipt of alert orders began planning
    their strike missions a few days later, and our Army Rangers
    and Green Berets began to collect detailed intelligence as they
    received their orders to go fight in Afghanistan.
        They were all ready to defend our freedom and to strike
    back against our Nation's enemies. Fighting together as a joint
    team, they have achieved much in the first phase of this global
    war against international terrorism. Like many of you, I visit
    some of them, and I saw them working hard on the front lines,
    getting the mission done regardless of the formidable obstacles
    that they had to overcome. I saw them proudly wearing their
    country's flag on the sleeves of their desert BDUs and on their
    flight suits. I saw in their eyes strength, courage, and
    commitment, and I knew these young Americans would get the job
    done.
        As I talked with them, one message came through loud and
    clear: This is truly a total force effort. Unless you ask, you
    do not know whether you are talking to someone from the Reserve
    or Active component. Many of our Reservists and Guardsmen did
    not wait to be called up. They volunteered. I heard about one
    Navy Reservist who sold his business so he could serve without
    distraction. I think you will agree that these American heroes
    are unmatched in the world and we have every reason to be proud
    of them.
        When I was a young fighter pilot, I never imagined that
    some day we would have to fly combat air patrols over Detroit,
    New York, and many other locations here at home. But that,
    along with other defensive actions, is exactly what we have
    done in the 5 months since this war began. These actions on the
    home front are called Operation Noble Eagle and they include
    more than 13,000 combat air patrol sorties over the United
    States, flown by the National Guard, Reserves, Active-Duty, and
    NATO air crews. The Air Force alone has committed 260 planes
    and 1,200 airmen flying almost 57,000 hours from 29 different
    bases.
        We have also established a Homeland Security Joint Task
    Force to provide the command and control of our homeland
    security task. We are helping our busy Coast Guard by
    augmenting port security. We also have 7,200 national guard
    troops at 444 airports and we are protecting many critical
    infrastructure sites.
        Our overseas offensive actions have included air, land, and
    maritime operations, with three primary objectives: to disrupt
    and destroy global terrorist organizations; to eliminate safe
    havens for terrorists; and to prevent access to weapons of mass
    destruction by terrorist groups.
        General Tommy Franks and his entire team have done a
    tremendous job in Afghanistan with Operation Enduring Freedom
    and the results so far speak for themselves. Working closely
    with our coalition partners and Afghan opposition forces, we
    drove the Taliban from power and severely degraded the al Qaeda
    network. The plan worked and it continues to work. The Taliban
    were forced to surrender all major cities to opposition forces,
    and a number of Taliban and al Qaeda leadership personnel were
    either killed or captured. We destroyed their training camps,
    centers, and command and control sites.
        For the first time, we combined humanitarian operations
    with combat operations as we air dropped rations, medical
    supplies, and shelters, thus helping avert a humanitarian
    disaster of potentially extraordinary proportions. Our efforts
    have helped the Afghan people reclaim their lives.
        These results have been achieved with about 60,000 deployed
    troops in the Central Command area and about 4,000 on the
    ground in Afghanistan. Our success has been enabled by the
    following key factors: Clear and well-established national
    security goals; the overwhelming support of the American
    people; outstanding leadership from the President and the
    Secretary of Defense; great support from Congress; and close
    inter-agency coordination; patience in formulating our response
    to the attacks; great support from our coalition partners and
    the anti-Taliban forces; good planning from Central Command
    that was well executed; superb assistance from the services and
    supporting unified commands, particularly Transformation
    Command; flexibility and adaptability at the tactical level;
    and ultimately, our great soldiers, sailors, airmen, marines,
    and Coast Guardsmen who made it all happen.
        But there remains much to do. Even as we continue the long-
    term effort to win this global war, we must also sustain other
    global commitments, such as Operation Northern Watch, Operation
    Southern Watch, other responsibilities in the Persian Gulf, the
    Balkans peacekeeping mission, and the defense of the Korean
    Peninsula.
        To fulfil our range of commitments and protect our global
    interests, we must make the investments necessary to maintain
    the quality of our force while preparing for future challenges
    of the 21st century. The best means of accomplishing these
    goals are to improve our joint warfighting capability and
    transform the Armed Forces into a 21st century force.
        With the help of Congress, we have come a long way in
    recent years toward improving our joint warfighting
    capabilities. Certainly the operations in Afghanistan are proof
    of our progress, but there is much more to be done.
        To illustrate, let us consider the issue of
    interoperability. In recent years we have gotten pretty good at
    making sure that our legacy systems work well together. For
    example, we took a Cold War anti-submarine platform, the Navy's
    venerable P-3, put some different data links and sensors on it,
    and have used it in support of ground units to hunt for Taliban
    and al Qaeda in Afghanistan. We also used P-3s in tandem with
    AC-130 gunships, the Joint STARS, and Marine Corps attack
    helicopters. That they all worked together is a tribute to the
    ingenuity of all the people involved.
        But we need to make sure that new systems are conceived,
    designed, and produced with joint warfighting requirements in
    mind. To do that, we need to change our thinking to look at new
    systems as interchangeable modules that can plug and play in
    any situation and in any command arrangement. We have put a lot
    of effort into interoperability on the tactical level, like the
    modifications of the P-3 that I just described, but we must
    also concentrate on the operational level of warfare, where
    organizational and process improvements are just as important.
        The current focus of our efforts and the area with the
    greatest potential payoff is, I believe, in command, control,
    communications, computers, intelligence, surveillance, and
    reconnaissance (C\4\ISR). By improving our C\4\ISR, we can
    ensure our commanders have the best information available for
    rapid battlefield decisionmaking. We have made progress in
    recent years, but stovepipes continue to cause gaps and seams
    between our combatant commands and the forces that are provided
    by the services. These gaps and seams must be eliminated. Close
    cooperation across the services, combatant commands, and with
    other government departments is key to success in achieving our
    national security objectives.
        Additionally, we are developing a command and control
    architecture in our unified commands that will lead to an
    improved ability to accept and employ forces. We call this
    architecture the Standing Joint Force Headquarters. This
    headquarters will provide the combatant commanders the ability
    to employ an agile and lethal force using the integrated
    C\4\ISR network that I described earlier and further enhance
    our joint warfighting capabilities.
        The second key to maintaining the quality of our force and
    preparing for the future challenges is transformation. The
    Secretary has already laid out for you our transformational
    goals, but I would like to follow through with a couple of
    points. For me, transformation is simply fostering changes that
    result in a dramatic improvement over time in the way a
    combatant commander wages war. I am convinced that our force
    structure requires better flexibility and adaptability to
    achieve our national security objectives in this new
    international security environment.
        Such dramatic improvement requires not only technological
    change, but most importantly, changes in how we think and how
    we employ our capabilities to achieve more effective results in
    less time, with fewer lives lost, and with less cost. True
    transformation must include training and education, as the
    Secretary said, and changes in our doctrine and in our
    organizations.
        The second point on transformation is that, while sudden
    technical, organizational, or doctrinal breakthroughs are
    possible and should be vigorously pursued, it is important to
    note that transformation often results from an accumulation of
    incremental improvements. Let me give you an example. When I
    was flying F-4s in Vietnam, we lost a lot of airplanes to
    pilots trying to destroy single targets like bridges and anti-
    aircraft sites. We had to put a lot of people in harm's way to
    get the job done because our weapons systems were not very
    accurate.
        So we developed laser-guided bombs and found a way to steer
    them to the target. Nevertheless, we still had to have
    relatively good weather because you had to see the target to be
    able to put the laser-guided bomb on the target. Now, we still
    needed to put the aircraft in harm's way to keep the bombs on
    target, but we had achieved, I think, a significant improvement
    in bombing accuracy.
        Now let us think about where we are today. We have bombs
    that are impervious to the weather conditions, that steer
    themselves using satellite-generated global positioning system
    signals. Let me also point out that when the global positioning
    system was being developed and first deployed, no one was
    talking about using it for bombing. It was seen as a better
    navigational tool.
        So essentially, we have linked incremental improvements in
    several different technologies to achieve today our precision
    strike capability with accuracy that I believe amounts to truly
    transformational change.
        But this transformation is not just about more accurate
    bombs. The real transformation is in the target set, where we
    have advanced from needing multiple sorties to strike one
    target to using one sortie to strike multiple targets. There
    has also been a transformation in our thinking. Bombs are no
    longer regarded as solely area weapons. Instead, they can be
    used like bullets from a rifle, aimed precisely and
    individually.
        The foundation of that breakthrough, laid over 30 years ago
    in Vietnam, was tactical innovation in the midst of war. On
    that foundation we have built successive improvements to get
    where we are today. Of course, we are laying that same
    foundation of future breakthroughs in the midst of today's war.
        For example, the armed unmanned vehicle is a tactical
    innovation that we are just beginning to explore. We cannot
    accurately foresee the future for sure, but I am confident we
    are working on other capabilities that, when you couple them
    with the improvements of armed unmanned vehicles, have the
    potential to change significantly the way we fight and perhaps
    even the nature of warfare itself. That, and similar
    possibilities, are why I believe that the service
    recapitalization and modernization programs are so important to
    transformation.
        Members of the committee, I am pleased to say that our
    forces remain the most powerful and the best trained in the
    world. Their excellence is due in no small part to your
    unwavering support of our troops. We have made tremendous
    strides in recent years providing our people a comprehensive
    set of quality of life improvements, especially in the areas of
    pay, housing, and health care. But quality of life also
    includes adequate training, modern equipment, modern
    infrastructure, and adequate spare parts.
        I ask that we continue to keep faith with both our Active
    and Reserve component members, as well as our retirees.
    Sustaining the quality of life of our people is crucial to
    recruiting and retention, and is especially crucial to our
    readiness to fight. But more important, it is the right thing
    to do for our heroes who this very minute are serving in harm's
    way, defending our freedom. They are the practitioners of joint
    warfighting and the creators of transformation. They make
    things happen and should always be our top priority.
        The men and women of your Armed Forces are committed to
    achieving victory no matter how long it takes or where it takes
    us. They are counting on all of us to provide them the tools
    they need for success today and tomorrow. They certainly
    deserve our best effort.
        Mr. Chairman, I welcome the opportunity to work with you
    and the committee as we continue to fight against global
    terrorism, and I thank you again for the opportunity to be here
    with you today. I look forward to taking your questions.
        [The prepared statement of General Myers follows:]

               Prepared Statement by Gen. Richard B. Myers, USAF

        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 initial results 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 the strategic environment. Thus, elements of
    our force are 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
    prepare for 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
    steeled and ready to engage the enemy for as long as it takes to
    complete the mission. The threat that we face and the effort that will
    be required remind me in some ways of the situation faced by the United
    States after the attack on Pearl Harbor.
        While there are significant differences between that global war and
    this one, there is at least one key lesson to be remembered. During
    World War II, the services showed a remarkable capacity to learn from
    experience. At the beginning of the war, they faced conditions they had
    not prepared for, but managed to adapt themselves in the midst of the
    fight and within a short time had established an extraordinary degree
    of teamwork and combat efficiency. We face a similar task today--to
    defeat multiple enemies who are capable of striking us with asymmetric
    means from locations around the world. Winning this new global war will
    require us to exhibit the same flexibility in adapting to changing
    conditions and considering 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 force 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 maintain our quality force today and create the
    capabilities needed to meet the challenges of tomorrow. Guiding our
    efforts is the thought of the brave soldiers, sailors, airmen, marines,
    and coastguardsmen who are defending our way of life and who 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 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 simple: to disrupt and destroy global
    terrorist organizations, eliminate safe havens for terrorists, and
    prevent access to WMD by terrorist groups.
        In response to the terrorist attacks of 11 September 2001, we have
    been conducting both offensive and defensive operations. The Reserve
    components have been essential to these actions. As of late January
    2002, we had alerted just over 97,000 individuals for activation and
    completed the call-up of 64,013 people. Additionally, since 11
    September, the number of personnel, both Active and Reserve component,
    deployed to the U.S. Central Command area of responsibility increased
    from approximately 22,000 to about 60,000.
        The direct defense of the American homeland is called Operation
    Noble Eagle. This operation, comprised of actions to protect civil
    population centers, critical infrastructure, and special events, began
    with the dramatic shift in operational focus that the North American
    Aerospace Defense Command (NORAD) executed on 11 September. When the
    day began, NORAD's attention was on a large Russian air exercise in the
    Arctic. As the magnitude of the terrorist attacks quickly became
    apparent, the command ``shifted gears'' completely--to prepare to
    respond to further attacks, establish combat air patrols over key
    domestic locations, expand air operations, and accept command and
    control of Active component forces, including U.S. Navy ships with
    anti-aircraft systems to enhance the security of U.S. domestic
    airspace. 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 7,200 National Guard troops augmenting security at 444
    airports, which will continue at least through March of this year. We
    have also enhanced security at military and other government
    installations and for space launch operations at Cape Canaveral. The
    North American Treaty Organization (NATO) has provided airborne early
    warning aircraft and combined aircrews to augment our airspace
    protection activities under Article 5 of the NATO treaty. This has
    freed U.S. E-3 Airborne Warning and Control System aircraft to
    prosecute the war in forward areas. We have also established a Homeland
    Security Joint Task Force (JTF) to coordinate and provide command and
    control for homeland security operations.
        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. In
    2001, U.S. forces flew over 16,700 sorties employing over 17,000
    precision and freefall munitions in support of operations in
    Afghanistan. These operations included not only reconnaissance 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. Consider the examples of
    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--
    illustrations of the kind of versatility and flexible thinking that we
    need to foster.
        A second lesson is the ever-increasing importance of operations in
    the information domain. The actions in Afghanistan highlighted two key
    aspects of this topic. The first is the importance of 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 second aspect of information operations highlighted by the
    Afghan campaign is the importance of a well-integrated information
    campaign. To that end, the Department of Defense (DOD) activated an
    information operations task force focused on winning the information
    campaign against global terrorism. This task force is committed to
    developing, coordinating, deconflicting, and monitoring the delivery of
    timely, relevant, and effective messages to targeted international
    audiences.
        Additionally, 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 that
    bears repeating, is that the friction and fog of war remain difficult
    to overcome. Our adversaries are always thinking and reacting in an
    attempt to increase our difficulties and defeat our forces. Although we
    do our best to prevent errors, because 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
    types of difficulties will never be completely eliminated, but we
    continue to work hard to change this history.
        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 capability
    in the industrial base to manufacture adequate quantities of PGMs. We
    also need to protect our ability to surge to meet increased demands
    associated with sustained high-tempo operations. We ask for your
    continued help in building PGM inventories so we may react to future
    contingencies with our full capability to deliver this lethal combat
    power.
        Other weapon systems that have further validated their potential in
    Afghanistan are unmanned aerial vehicles (UAV). The increasing
    importance of these systems in a reconnaissance and surveillance role
    and their newly demonstrated potential for accomplishing combat
    missions is unmistakable. We will continue to experiment with
    additional roles and missions for these vehicles, improve their
    communications reach-back capabilities, and develop and acquire them at
    greater rates.
        The war has also validated our emphasis on the importance of
    interagency coordination and cooperation, especially the need for close
    partnership 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. We have established
    a Domestic Threat Working Group with the goal of sharing domestic
    threat information between the services, Defense Agencies, and
    Combatant Commanders. This group allows us to properly fuse domestic
    intelligence related to the antiterrorism effort.
        As the war continues, the Armed Forces will remain focused on the
    fundamental mission of homeland defense. Our enemies have exploited the
    openness of our society and the very freedoms that we cherish to attack
    our citizens. To better organize our forces at home and provide support
    to civil authorities, we are in the midst of modifying the Unified
    Command Plan to establish a combatant command responsible for homeland
    security. However, our first line of defense will remain our overseas
    forces.
        On that 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 Special Forces troops in the Philippines, 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. We are working
    diligently with our friends and allies to prevent the proliferation of
    WMD and their falling into the hands of terrorist organizations. Our
    challenge will be to prioritize resources and operations in support of
    that mission against the other security responsibilities to which we
    are also committed. We must remain trained and ready to execute the
    full range of military operations to simultaneously protect 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 form 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 so much more can be
    accomplished. I look forward to sharing with you after-action reports
    from Commander in Chief, Allied Forces Central Europe (CINCCENT) and
    his component and task force commanders for their recommendations
    regarding improvements to joint warfighting.
        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 joint force
    headquarters based on this architecture 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. Currently,
    the regional combatant commanders in chief and U.S. Joint Forces
    Command are developing proposals. 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 later this
    year or early next year. 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 any 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 we are acutely aware of the need to solve
    remaining interoperability shortfalls in our legacy C\4\ systems. 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 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 cultural 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 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 we
    are revising the Unified Command Plan to enable U.S. Joint Forces
    Command 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
    improved joint warfighting capabilities are necessary to succeed
    against future enemies, so too is transformation of the force a
    necessity.

                    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 an on-
    going process 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.
    This proved to be the case in World War II when an accumulation of
    incremental technical advances and tactical lessons, combined with a
    willingness to experiment, led to significant improvements in combat
    capabilities. While sudden technological, organizational, or doctrinal
    breakthroughs are possible and should be pursued vigorously, I believe
    our current modernization programs and those of the services will prove
    to be an engine of transformation in the 21st century as well. But we
    must ensure we are all heading down the same transformation path.
        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 cultural change 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 its interests, or those of its 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 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. We will, however, commence a
    detailed evaluation of the document in the near future with a view
    toward updating it in light of 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.
        As mentioned above, 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. For example, in
    Afghanistan we used the maximum available bandwidth, and as we continue
    the interlinking of networks, our bandwidth requirements are only going
    to increase. It is also imperative that we continue to hold the line on
    military radio frequency spectrum allocations. Additionally, 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 logistics situational
    awareness and allow us to control and use our logistics assets with
    greater effectiveness and efficiency.
        Finally, 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 the
    entire gamut of 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 2
    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 of areas 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 in chief 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 organizational patterns, 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. As a result, missions and
    responsibilities will blur across agency boundaries, and a decisive and
    timely interagency response to crises will be 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 development with 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 predominate and growing short-range ballistic
    missile threat. The fielding of PAC-3 missile defense is an important
    first step, but only partially covers potential threats. The recent
    cancellation of the Navy Area Defense program allows us to assess a
    wider 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 so as 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
    their responsibilities and the hardships they face. 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. Now, we must ensure
    the military health care system is fully funded. In view of today's
    security environment, we also must develop an 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 outyear
    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
    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, marines,
    and coastguardsmen 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 weapons of mass destruction (WMD), 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. Recent funding increases have helped address critical
    readiness concerns, but we must maintain an appropriate balance between
    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 with 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 an 83 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 capability 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 for several years to come to recapitalize
    today's force structure. The Fiscal Year 2003 President's Budget
    significantly increases current and outyear 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 11 September 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 total numbers of tankers,
    crew ratios, 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. They also have the potential to stress our Reserve component
    forces and their patriotic civilian employers who are sharing precious
    personnel resources that are vital to continued economic recovery. As
    we move forward in the war on terrorism, we will continue to analyze
    our end strength requirements and will keep Congress informed regarding
    the results.

                                   CONCLUSION

        I look forward to working closely with Congress this year as we
    progress toward attaining these goals. We face adversaries who would
    destroy our way of life. In response, your Armed Forces will not rest
    until we have achieved 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 conquer
    successfully 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 are doing a superb job. We owe them
    our best as we work through these issues. Thank you for the opportunity
    to present my views and your continued outstanding support of our
    soldiers, sailors, airmen, marines, and coastguardsmen.

        Chairman Levin. General Myers, thank you for that powerful
    statement. Thank you both.
        The vote is scheduled to begin just about now. Again, we
    will try to keep the hearing going right through the vote, some
    of us leaving early and coming back in time to continue with
    questions.
        Secretary Rumsfeld, the 2003 budget request contains a
    contingency request of $10 billion. It is stated to fight the
    war on terrorism. It is stated very generally. Other than the
    extraordinary circumstances that prevailed immediately after
    September 11 last year, Congress has generally not appropriated
    money in advance for unspecified military activities or
    contingency operations.
        My question is this: As requested, could those funds be
    used for any activities that the President or you decided to
    use them for? For instance, could that $10 billion be used to
    initiate military operations against any of the three countries
    specifically identified as terrorist states in the President's
    State of the Union message without further authorization or
    action of Congress?
        Secretary Rumsfeld. Mr. Chairman, the $10 billion
    contingency fund as proposed by the President clearly would not
    be spent if the United States were not engaged in the war on
    terrorism at the early part of 2003. Also, it is clear that the
    amount would have to be more in the event that we were engaged,
    because the $10 billion included in the contingency would only
    provide the current level of effort into the early months of
    2003. It would not carry us through the year.
        That being the case, if one assumed that we are in roughly
    the same circumstance we are today, still tracking down al
    Qaeda and Taliban pockets of resistance in Afghanistan and
    engaged in activities elsewhere in the world, the dollars would
    be roughly what we are currently spending. I think it is about
    $1.8 or $1.9 billion a month. So it would carry us through 3,
    4, or 5 months. If you disaggregate what the cost of the war,
    something between 50 percent and 30 percent is in the homeland
    defense category for combat air patrols, assistance on our
    borders and in our airports, and at a host of events, such as
    the Olympics, and the Super Bowl.
        My understanding is that the funds would be used for the
    war on terrorism that the President has announced. He has
    indicated that al Qaeda is in some 60 countries, and that the
    task has to be to root out those terrorists. I do not think
    there is anything in the budget that contemplates--it is such a
    relatively small amount of money, given the current demands on
    us--anything of the size that you are talking about.
        Chairman Levin. General Myers, there is some confusion as
    to exactly what our forces will be doing in the Philippines and
    I would like you to address that issue. The Philippine army
    units are going out on patrol to find and capture or destroy
    terrorist elements in the Philippines. One of our commanders
    there said that our forces will be going into dangerous places.
        Can you tell us what the mission is of the forces which are
    being deployed to the Philippines, and is it likely that they
    would be involved in what would normally be considered combat
    operations along with those patrols seeking out those terrorist
    groups?
        General Myers. Mr. Chairman, I know there has been some
    confusion over the role that Joint Task Force 510 will play in
    the Philippines. They are really there to assist the Philippine
    government and the Philippine Armed Forces in their quest to
    rid their country of terrorist organizations, in this case
    specifically the Abasayef group, which we know has some ties to
    the al Qaeda organization as well.
        What we hope to bring to them is some assistance, training,
    and advice in the areas of command and control, communications,
    and intelligence analysis and fusion of many sources of
    intelligence. We will do that, provide that advice and that
    training, down to the battalion level. This is not an operation
    like you saw in Afghanistan. This is assistance and this is
    training.
        To answer your other question, is it possible that our
    forces will come in harm's way. I think the answer to that has
    to be it is absolutely possible. This is a very dangerous
    group. They have kidnapped many people over time and they hold
    two Americans today, as I think we are all pretty well aware
    of. They have beheaded people, so we shouldn't think that our
    folks will not be in harm's way.
        But this is to assist and advise the Philippine Armed
    Forces so that they can take the fight to the enemy with our
    assistance.
        Secretary Rumsfeld. Mr. Chairman, may I comment on that?
        Chairman Levin. Yes. If you would, while you are commenting
    tell us, given that prospect, will Congress be given notice
    under the War Powers Act of that prospect?
        Secretary Rumsfeld. Let me just first elaborate briefly on
    General Myers' response. There are really two aspects to the
    existence of U.S. Armed Forces in the Philippines. One is, as
    the General indicated, training 4,000 or 5,000 Philippine
    troops to engage in trying to deal with terrorist groups.
        The other is that there may very well be some in the
    Philippines on an exercise, which is a separable thing. The
    reason I mention this is because there has been some
    sensitivity in the Philippines. They have a constitutional
    provision about foreign forces being in their country for
    combat purposes. The president of the Philippines and the
    Ministry of Defense of the Philippines have been very careful
    to properly characterize what our role is.
        What General Myers addressed is the problem of self-
    defense. Our troops are involved with assisting and training,
    with training essentially, and do have rules of engagement that
    permit them to defend themselves. But they are not there in an
    active military role, as the President of the Philippines and
    the Ministry of Defense of the Philippines has indicated.
        Chairman Levin. My time is up. We will pick up on that
    because I think there is still some real difference as to the
    prospect of them engaging in what is normally called combat and
    what the very purpose of the patrols that they will be joining
    is, unless you are saying they are not going out on those
    patrols, that they are going to be limited to a battalion
    level. If that is what you are saying, that is different
    because then they are not going out on the patrols that are
    seeking out to destroy the terrorist groups.
        General Myers. Mr. Chairman, the current plan is that they
    will advise at this point no lower than the battalion level, so
    I think your assumptions are correct.
        Chairman Levin. Senator Hutchinson.
        Senator Hutchinson. Thank you for calling the hearing
    today. I want to thank Secretary Rumsfeld and General Myers for
    the leadership they are providing our country in this war on
    global terrorism. As I told you before the hearing, Mr.
    Secretary, I think our country is fortunate to have you and
    your team at this time of great crisis. I am glad you are
    there.
        The sobering assessment that you have given in recent days
    in speeches and briefings, as well as the very strong and
    forceful language that the President appropriately used in the
    State of the Union address, continues to keep the American
    people on the alert and aware of the great challenges that we
    have ahead. This is not a short or easy prospect that we have.
    I think the assessments that you have given fully justify the
    kind of budget requests that you have laid out before us today.
        You mentioned in your prepared statement, Mr. Secretary,
    the $300 million budgeted 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. I am pleased with that and I want to ask you about it.
    Biological defense is something that I have been very involved
    in and concerned about.
        I have supported the administration in their desire for
    national missile defense and its rationale that we must not
    leave our cities and the American people defenseless against
    enemy attack. Yet when we look at the area of vaccine
    production and the possibility of a biological attack, the
    American people remain defenseless to a large extent against a
    threat that is arguably greater and more imminent than a
    missile attack.
        General Myers, in your submitted testimony you state that:
    ``In view of today's security environment, we must develop an
    adequate vaccine production capability.'' I am very pleased
    with the recognition of vaccine production as an immediate
    priority. As we send our troops into combat around the globe,
    it is critical that they have adequate protection against
    biological weapons.
        It seems to me there has been a growing consensus that the
    Department needs to establish an organic vaccine production
    capability, a government-owned/contractor-operated facility
    (GOCO) as the key to a vaccine acquisition strategy. The
    Department of Defense recommended this approach twice,
    including a report that was issued last August. This approach
    has been endorsed by the Gilmore Commission on Combatting
    Terrorism. The approach has been endorsed by the Institute of
    Medicine at the National Academy of Sciences and last year's
    defense authorization bill included the authority for the
    Department to go forward with a GOCO.
        Mr. Secretary and General Myers, will the Department be
    moving expeditiously on the planning, design, and construction
    of a vaccine production facility?
        Secretary Rumsfeld. My understanding of the current status
    is that the Department of Defense has been working closely with
    the Department of Health and Human Services. The decision as to
    whether to further fund a GOCO or a contractor-owned
    contractor-operated--I guess it is ``COCO''--production
    facility is pending the analysis of the national requirement
    for biodefense vaccines.
        Senator Hutchinson. General Myers, could you comment?
        General Myers. The only thing I would say, Senator
    Hutchinson, is that the requirement to have some sort of
    facility, however it is organized, is well-documented. I think
    the discussions and the process is going on to figure out the
    best way to do this. But from my standpoint, the requirement is
    a valid requirement.
        Senator Hutchinson. I think that the studies, as I cited
    them, show that the consensus has been for a GOCO. ``COCO'' has
    kind of a funny sound to it. GOCO sounds all right.
        Do we have any time frame on when we can expect decisions
    on which direction we go on an acquisition strategy?
        Secretary Rumsfeld. I do not know of a time frame on it. I
    can check.
        [The information follows:]

        The Department of Defense has intensified the focus on
    securing an assured source of safe and effective vaccines for
    use against biological warfare agents. To that end, DOD has
    coordinated an assessment of approaches to fulfill this
    requirement. This assessment included participation from the
    Department of Health and Human Services, the U.S. Department of
    Agriculture, the Office of Homeland Security, other federal
    agencies, and key executives in the pharmaceutical industry.
        As a result of this assessment, the DOD is recommending
    establishment of a high-level executive council, tentatively
    established with representatives from DOD, HHS, USDA, the
    Office of Homeland Security, and the President's Science
    Advisor, to address national vaccine requirements.
        Therefore, to allow full development of a national
    approach, the DOD is reconsidering the need for a government
    owned, contractor operated (GOCO) contractor owned, contractor
    operated (COCO) Vaccine Production facility as part of an
    overall program. Consequently, the current fiscal year 2003
    President's budget submission does not include funding for this
    effort. The recommendations of this new executive council will
    determine how we proceed with this program in the future.

        Senator Hutchinson. I would appreciate getting some
    guidance on that. I think it is a huge issue. We all understand
    the vulnerability that our forces, and indeed the American
    people face, to biological attack. It is a huge area of the
    weapons of mass destruction issue that we have to address,
    without alarm, or panic. We must move expeditiously because too
    much time has passed already completing a plethora of studies.
        Once again, I want to thank you. I just am very pleased
    with the kind of forceful and reassuring leadership that you
    have given our Nation and the American people. Thank you.
        Secretary Rumsfeld. Thank you, sir.
        Senator Warner. Mr. Secretary, some members have had to go
    vote. We apologize for some having to leave, but we want to
    keep the hearing rolling and use this time.
        You and I discussed yesterday at lunch my concern, and
    indeed I think the concern of many here in America, about the
    decline in military spending by some of our principal allies,
    particularly those in the North Atlantic Treaty Organization
    (NATO). Last week, Secretary Wolfowitz attended the Wehrkunde
    Conference, where the Secretary General of NATO, Lord
    Robertson, spoke. We know him well; we have a high respect for
    him. He was former chief of the defense for the British
    government.
        Robertson said: ``Europe has the status of a military
    pygmy''--strong words--``and is falling farther behind the
    United States in terms of military capabilities as a result of
    not investing enough in defense.''
        Our President, quite properly, is asking for the largest
    increase in defense spending in two decades, the last of that
    magnitude being under President Reagan. I think our taxpayers
    are ready to assume it. A bipartisan spirit exists in Congress.
    Terrorism is common to all nations in terms of its potential
    threats.
        What can you say to the American public here at this moment
    as we address this budget on that question?
        Secretary Rumsfeld. Senator Warner, it is a question that
    we all think a lot about and certainly, as a former ambassador
    to NATO, I have thought about it a good deal in terms of the
    contributions over the decades. I think it has to be said that
    during the period of the Cold War our NATO allies were involved
    and did invest, in varying degrees to be sure, and it did tend
    to ebb and flow over time. But thanks to the leadership of
    successive governments on both sides of the Atlantic, we were
    able to have the kinds of investments that enabled us to
    prevail in the Cold War.
        There are two points I would like to make with respect to
    this issue. First, with respect to the war on terrorism, we are
    receiving assistance from a number of countries, both NATO as
    well as non-NATO countries, in terms of dollars, in-kind
    contributions, and troops on the ground. I think at U.S.
    Central Command (CENTCOM) in Tampa, General Franks has
    approximately 20-plus countries with liaisons actively
    cooperating in intelligence-sharing, overflight rights, basing
    rights, troops, ships, and aircraft. There is a coalition that
    is functioning.
        Second, with respect to Lord Robertson's comments, he is
    basically right. For whatever reason, we are in a period in
    Europe where a lot of the governments have not been making the
    kinds of investments in defense that the NATO Council
    continuously calls on them to do. What is the answer to that? I
    do not know any better answer than anyone does.
        I suspect it is because we understand in this country, to
    our great credit, that all of our freedoms and opportunities
    depend on having a relatively peaceful and stable world. It is
    the Armed Forces of the United States that enables us, along
    with diplomacy and economic interaction, to contribute to peace
    and stability in the world and provide a deterrent to global
    conflicts.
        We also have no choice because at this moment in history
    our country has a leadership position. It is distinctive. Yet,
    there is no reason in the world why the European countries
    cannot do more. No country has to do everything. Those
    countries are perfectly capable of selecting out areas where
    they can be particularly helpful, and some have, there is no
    question about that.
        Senator Warner. If I could interrupt, I think your
    testimony today quite properly alluded to the tragic loss of
    life on 9-11, but also the extraordinarily severe impact on our
    Nation's economy. The figures that you relate today are
    staggering and should be considered not only here at home as we
    accept this request of our President for increased defense
    spending, but clearly abroad. They have the same tall
    buildings. They have the same vulnerable targets, and it could
    be at their doorstep next. I hope that those facts you related
    distressingly this morning will be taken to heart by them.
        Mr. Secretary, during the course of our visit to the region
    over Thanksgiving, Senator Levin and I met General Franks. We
    also shared four Thanksgiving dinners with our troops in 36
    hours, which was quite interesting. We will have General Franks
    here tomorrow before this committee. General Myers and
    Secretary Rumsfeld, he has done a brilliant job.
        Secretary Rumsfeld. Absolutely.
        Senator Warner. It is extraordinary to have had him in
    place at this particular point in time.
        While I was in that region and visited a carrier myself, I
    talked to him at length about the importance of our naval
    ships, which were able to bring platforms from which our
    aircraft could launch as close as possible to the targets,
    because of the waters in which they operated. Even in that
    proximity, as close as they could get, they still had many
    flying hours. Some of those missions were 4 and 5 hours to get
    in on target, to be there just 30 minutes or so, and then come
    back out, with significant refuelings.
        Mr. Secretary, I think you are the first Secretary in
    history to have been a naval aviator. Have you ever checked
    that out?
        Secretary Rumsfeld. No, sir, I have not.
        Senator Warner. Well, I think it is a point of history,
    having flown off those carriers yourself. I took note that your
    budget slipped funding for the carrier that has been planned
    for a number of years. When you look at the funding profile, I
    think it is not one that will cause any question about the
    carrier program. But I would like to have your reassurance that
    the carriers are still an integral part of our shipbuilding
    program, that this slipping of 1 year to enable technology to
    catch up with the construction contracts is in no way to be
    construed as a lessening of support in your Department for the
    naval aviation component and particularly those of carriers.
        Secretary Rumsfeld. No, sir. You have stated it correctly.
    I believe it is a 1-year slide to the right.
        Mr. Zakheim. That is correct.
        Secretary Rumsfeld. There is no question but that the
    Quadrennial Defense Review and the defense planning guidance
    that went out fully recognizes the importance of carriers in
    our capability.
        Senator Warner. That Quadrennial Defense Review had 108
    active duty surface combatants and 55 attack submarines, and
    our shipbuilding today will not enable us to maintain those
    force structures unless we begin to see an increase. I have so
    indicated to the Secretary of the Navy in my conversations with
    him yesterday and he gave me the assurance that they are going
    to address it in the out years.
        Now, turning to precision guided missiles, General Myers,
    in your written testimony you mention that over 17,000
    precision and free-fall munitions were employed in support of
    the operations in Afghanistan. You also mention the importance
    of maintaining sufficient industrial surge capacity to fill the
    need for these weapons during the sustained high-tempo
    operations.
        What percentage of the weapons used in Afghanistan were
    precision guided and does the fiscal year 2003 budget, which
    you are presenting today, restore and maintain sufficient
    inventory of these weapons?
        General Myers. Senator Warner, the good news is that both
    the supplemental for the war on terrorism in 2002 and the 2003
    budget do exactly what we need to do in terms of preferred
    munitions, which in the most case are precision munitions. The
    problem we found ourselves in is that we had some new munitions
    coming on board and we had not build up sufficient stocks to
    cover what all the unified commanders thought they needed for
    their war plans. We were in the process of doing it. It was
    kind of the normal process, if you will.
        We have significantly increased the funding again in the
    2002 supplemental for the war and in the 2003 budget to correct
    those deficiencies. One of the interesting things we are going
    to have to look at in the future is that Joint Direct Attack
    Munitions (JDAMs) quickly became the preferred munition. As I
    remarked in my statement, those were the global positioning
    system guided weapons that are useful in any conflict, but
    particularly useful in this conflict. In fact, we were using
    almost 3,000 a month during this conflict.
        Laser-guided bombs were used heavily as well, about 1,700 a
    month for those. They are both essentially built by one
    manufacturer each, and they have some subcomponents that are
    common to both of them with only one supplier. So we
    potentially have an industrial base issue. But we have ramped
    up production and we think the 2003 budget really supports that
    in all the services the Air Force and the Navy in particular.
        Senator Warner. Do you see our allies moving ahead on
    guided weapons? That is a key point.
        General Myers. Senator Warner, I think you bring up a very
    good point. The practical aspect of our allies and our partners
    underfunding defense is that as time goes on it becomes harder
    and harder for them to participate with U.S. forces as we get
    ahead of them in precision guided weapons and our ability to
    provide the strategic lift, be it sealift or airlift. That is
    an issue for our allies for sure, particularly in their ability
    to link with us. I talked about C\4\ISR. As time goes on, and
    the smaller their budgets get, we are going to find it very
    difficult to continue to work with some of these countries.
        Now, what the Secretary suggested is that they could
    specialize. Some nation could decide that strategic airlift
    could be their specialty and they could help in that regard.
    But regardless, this is an issue that will become more and more
    serious. We have transitioned our force. I think in Desert
    Storm 10 percent of the munitions we dropped were precision
    munitions and we have essentially flipped that percentage in
    Afghanistan, where upwards of 90 percent of our munitions were
    precision munitions. Our allies need to come with us on this
    journey to provide, as the Secretary said, the defense of
    freedom, so we do not have to fight these wars.
        Secretary Rumsfeld. I think it is worth mentioning that
    NATO invoked the article that said an attack against one nation
    is an attack against all, and as we sit here today NATO
    Airborne Warning and Control Systems (AWACS) are flying over
    the United States, assisting us with the homeland security
    aspect of our problem.
        We also do not want to lump all the allies together. There
    is no question that the United Kingdom, for example, has some
    very capable aspects of their armed services that have been
    contributing significantly in Operation Enduring Freedom.
        General Myers. Senator Warner, let me correct my number. It
    is a little greater than 60 percent precision munitions, not 90
    percent as I stated.
        Chairman Levin. Senator Kennedy.
        Senator Kennedy. Thank you very much, Mr. Chairman. I join
    in welcoming the Secretary and the Chairman to our committee.
        Certainly, some things were done right over the last 8
    years because our service men and women are performing so well,
    and we all take our hats off to them.
        We have a limited period to ask questions. I am going to
    give you three, Mr. Secretary. This is not multiple choice. If
    you can comment on them, I would appreciate it. We will start
    with a more technical one regarding science and technology. You
    have said we need the best-trained, best-led, and the best
    technology, yet your science and technology budget is
    effectively flat. I am not talking about the research and
    development budget; I am talking about your science and
    technology budget. Is this not necessary in terms of where we
    are going in the future?
        Second, if we compare shipbuilding to the Clinton program--
    they get up to 23 ships and you are at 17 ships. I know there
    is a difference, not a great deal of difference in the ships,
    but a rather significant difference. Even with your increase in
    budget, the shipbuilding budget is really dramatically lower
    than it was even in the Clinton program, which had a
    significantly lower defense budget. Perhaps you would want to
    make some comments. We will hear more from the Secretary.
        The third item, and perhaps the one I would hope that you
    might spend the most time addressing, is that I had the chance
    to go to Fort Detrick recently and see what the DOD is doing
    out there in regards to bioterrorism, both in equipping our
    service men and women with the vaccines and in making
    recommendations on how to preserve military service members and
    civilians.
        There is a good deal of expertise out there in terms of
    understanding what the Russians are up to. A number of them
    have been over with counterparts in the Soviet Union. I would
    be interested if you would comment on your own sense about the
    effectiveness of the storage of the various bioterrorism
    materials in the Soviet Union and how secure they are, as well
    as the scientists that have been working in those areas. As we
    are looking at the area of prevention, what are we doing in
    terms of the budget on the cooperative threat reduction (CTR)?
    That obviously applies to nuclear weapons, but it also can be
    used in terms of the bioterrorism.
        In your budget, what addresses that? Perhaps you would
    comment as to what is being done now and what you think should
    be done.
        Secretary Rumsfeld. Yes, sir. I will start and just make a
    brief comment on the science and technology budget. You are
    right, it is not up to the level we are aiming for, which is
    about 3 percent. I think in 2003 we are at about 2.7 percent of
    the overall budget. It is a very important aspect of the
    budget. Tradeoffs were made, choices were made, and that is
    where it came out. But I certainly agree with you that it is
    important.
        Dov, do you want to comment?
        Mr. Zakheim. Sure. On the numbers, we tend to look at what
    our request is compared to the immediately prior request,
    simply because there are a number of programs that Congress
    chooses to add. Just to have an apples to apples comparison we
    look at what we asked for in the previous year. We are up by
    over $1 billion relative to the previous year. We are actually
    slightly up even if one includes the congressional add-ons that
    took place in fiscal year 2002, although it is a small amount,
    something like $13 million.
        But more important in terms of the percentages, Senator, is
    that, even though our baseline is so much larger because of the
    increase, we are actually slightly above percentage-wise
    relative to what we asked for a year ago. A year ago we were at
    2.65 percent. Now we are at 2.68 percent. So we are headed
    toward the 3 percent goal. We are maintaining that goal even
    though the baseline is larger.
        Senator Kennedy. Just quickly because my time will be up, I
    was looking at really the science and technology rather than
    the total research and development budget.
        Mr. Zakheim. That is what I am referring to.
        Senator Kennedy. As I understand it, you have gone from
    $8.8 billion to $9.9 billion.
        Mr. Zakheim. That is right.
        Senator Kennedy. It is effectively flat and I think I have
    answered the question on it. I think it leads on into making
    sure we are going to have the cutting edge.
        Mr. Zakheim. Yes, but that is $1 billion, sir, which is not
    really flat. It is about over $8.8 billion. It is quite a
    significant increase when you are talking about $1.1 billion,
    sir.
        Senator Kennedy. On the ships, Mr. Secretary?
        Secretary Rumsfeld. Yes, sir. As I mentioned in my opening
    remarks and in the prepared statement, the Navy made some
    choices during this budget cycle that were based on their
    conclusion that, because the average age of ships in the Navy
    is relatively young because of the sizable number of purchases
    during the buildup period of the 1980s, they were better off
    making choices that tilted their funds toward the operation and
    maintenance accounts and toward some aviation accounts.
        They recognized that we cannot sustain the current size of
    the Navy if we are building ships at the rate that this current
    budget proposes, and this budget is down, I believe, about a
    billion dollars in shipbuilding. Therefore, if you look in the
    future year defense plan (FYDP), we do get up to 10 ships in
    the last year and I believe 6, 7, or 8 in the middle years,
    which will begin to correct the problem.
        There were bills from prior shipbuilding contracts that
    were much larger than had been programmed in that budget, and I
    believe that was something in excess of $600 million that we
    are paying this year for ships that were being budgeted in
    prior years. So we are having to pay off these overruns that
    existed.
        Do you want to comment additionally?
        Mr. Zakheim. Yes, sir. On the prior year contracts,
    Senator, if you took what we put in the 2002 budget for prior
    year shipbuilding, which was about $730 million, and you add
    what the Secretary just mentioned, about $645 million, you
    could have bought at least one ship and maybe two. The decision
    was made that we really needed to clean up our past act first.
    That goes to the heart of what we are trying to do with
    realistic budgeting and to have a better baseline from which to
    build more ships.
        As the Secretary said, because we have a fleet that is
    about 16 years old on average, it gives us a little bit of time
    to both clean up the past and get ready for the future.
        Senator Kennedy. I appreciate it. I know the time is
    running down, particularly where there are a number of the
    older ships, such as the auxiliary ships and other resupply
    ships. But I appreciate your comment and we will have a chance
    to talk to the Secretary about it.
        On the questions on the bioterrorism, Mr. Secretary?
        Secretary Rumsfeld. Dov, why do you not respond on that.
        Mr. Zakheim. Sure. Senator, we are funding the CTR program
    you referred to, commonly called Nunn-Lugar, at $416 million,
    which is roughly what we funded it at last year. Not all the
    money in the past has been expended and there has been a
    considerable buildup of unexpended funds.
        Many people have argued for that reason that we should not
    have put more money in. The administration and the Secretary
    felt that it was terribly important to keep funding CTR to send
    a message that we were prepared to do exactly what you were
    talking about. That is why we have maintained the level.
        Secretary Rumsfeld. With respect to the last part of your
    question, Senator Kennedy, we have to worry about the
    biological weapons and capabilities of Russia and how they are
    managed and how they are handled. We clearly have to worry
    about the people that were involved in developing those
    capabilities because they are available to other countries to
    assist. It is a very serious problem.
        Senator Kennedy. My time is up. I will send you just a
    brief note on that if I could, about some of the observations
    we have made out there, for whatever consideration you have.
        Secretary Rumsfeld. Good. Thank you.
        Senator Kennedy. Thank you very much. At this point, I
    would like to submit my opening statement for the record.
        [The prepared statement of Senator Kennedy follows:]

                Prepared Statement by Senator Edward M. Kennedy

        Thank you, Mr. Chairman. I join in welcoming Secretary Rumsfeld and
    General Myers, and I look forward to their testimony on the Fiscal Year
    2003 Defense Budget.
        I know I speak for all of us when I express our vast appreciation
    and respect for all the men and women in the Armed Forces who are
    fighting to uphold our values and to keep us free. Our first priority--
    indeed our number one responsibility--is to ensure that our Armed
    Forces have the resources to complete their mission.
        I fully support the President's goals of winning the war on terror
    and defending the homeland. I am concerned, however, that the large
    budget increase--the largest in over 20 years--is spent wisely on
    systems and new technologies that will improve our military's combat
    readiness. Additionally, it is unclear how this year's budget will be
    used to achieve the Department's transformation goals outlined in the
    quadrennial defense review. I am also concerned with the large national
    missile defense budget, particularly in light of current threat
    estimates. I look forward to hearing your comments on these areas.
        People must continue to be our number one priority. Recruiting,
    training, equipping, and retaining a technologically superior force
    will be the cornerstone of transforming our military and maintaining
    our superiority. I am pleased with the progress we have made in
    improving military pay, housing, and medical care and I look forward to
    closely working with the Department to continue these efforts.
        The key to our defense policy has been the ability to deter a
    potential adversary and should deterrence fail, our ability to fight
    and win. Deterrence may best be achieved through investments in science
    and technology. We should carefully study lessons learned from current
    operations to ensure we invest in the right systems and technologies to
    maintain our superiority in the future. We must improve our ability to
    gather, process, and disseminate intelligence information and convert
    that into knowledge for the warfighters. Our people deserve the very
    best intelligence. Our capability to understand and dissuade potential
    adversaries demands this.
        Should deterrence fail we must develop and maintain the capability
    to fight and win any future war. While this requires significant
    investments in transformational technologies and systems, we must also
    continue to modernize and procure systems to support our existing force
    structure. I would like to see more emphasis on ensuring adequate
    airlift and sealift capability that is essential to get our forces and
    equipment to the fight. I am also deeply concerned with our
    shipbuilding plan. I do not feel it adequately addresses the
    requirements necessary to support the forward presence strategy
    outlined in the QDR.
        The outstanding performance of our forces in Operation Enduring
    Freedom has validated the hard work and important decisions the
    Department and Congress have made with our past defense budgets. Now
    more then ever we must think to the future to ensure we maintain our
    readiness and enhance our technological edge. I look forward to working
    closely with you, Secretary Rumsfeld and General Myers, in the months
    ahead on these complex issues.

        Senator Kennedy. Senator Inhofe.
        Senator Inhofe. Thank you very much, Mr. Chairman.
        Let me first of all say that there is going to be some
    criticisms as to the level of the defense budget. There are a
    lot of us who feel that even what you have sent to us is still
    inadequate in many areas, as I think was pointed out by Senator
    Kennedy. I have some of these areas that I am very much
    concerned about.
        I have to say that I just returned in the last 5 days from
    Ramstein, Aviano, Vicenza, Camp Eagle in Bosnia, Camp Darby way
    down in the southern part of Italy, and the hospital at
    Landstuhl. The reason was that back when Republicans were
    important, I was the chairman of the Readiness and Management
    Support Subcommittee for about 6 years and so I have an
    orientation toward readiness. I have to say that in all cases
    we have a very high OPTEMPO. I think we all know that. We have
    a high level of dependency upon Guard and Reserves.
        I want to share something with you. At the hospital at
    Landstuhl, where all of those who are injured in the Afghan
    effort are immediately transferred to, I talked to a number of
    the troops who are over there, who are injured, and who are
    really paying a high price. Specialist Justin Bingool of the
    10th Mountain Division was crushed in an earthmoving effort
    over there. Chief Warrant Officer Fred Pellino of the 101st,
    along with Corporal Eldridge of the 101st, were both in that
    helicopter accident, which was a very tragic thing. Lastly,
    Seaman Latoya Stennis--oddly enough, the same name--was on the
    U.S.S. Stennis, and she was an entry level seaman who was swept
    off in a refueling accident from the Stennis in the Afghan
    theater.
        Just imagine being swept off, falling 66 feet into the
    water down below, and crushing both lungs. All four of these
    servicemembers said that their first concern was to get back
    with their unit. All four said, as did everyone else I talked
    to, those who were injured, that they were going to be career.
    I just cannot tell you how moving it is when we talk to these
    individuals. I know that you have done that, both of you,
    General Myers and Secretary Rumsfeld.
        But at the same time, while Senator Kennedy brought out
    some of the inadequacies of the budget, I see force structure
    as an inadequacy. These people are willing to do it now, but we
    know, and you have said many times, that this is going to be a
    long and sustained effort. We are using our Guard and Reserve
    to a point where we are losing some real critical military
    occupational specialties (MOSs). They do not want to leave, but
    they have to do it because these people, by their very nature,
    are maintaining a career.
        Since we are flat in our force structure--and I know that
    you would probably agree with me that we should be increasing
    it in the regular services--I would like to have your comments
    on that. If you do not feel we need to increase it, what we can
    do in terms of the problem that we are having with Guard and
    Reserve. They are doing a great job, but some of them just
    cannot continue with these deployments.
        Secretary Rumsfeld. Senator Inhofe, I share your feelings
    after visiting our troops and certainly thank you for your many
    visits to the troops. I know they are appreciated by the men
    and women you visit, as well as the rest of us.
        General Myers properly talked about the fact that this is a
    total force effort, and indeed it is. I mentioned that we have
    some 60,000 Guard and Reserve and another 10,000 people that
    are being held in, for a total of 70,000 that in the normal
    order of things would not be involved in the activities of the
    U.S. Armed Forces absent the war on terrorism.
        We are doing a variety of things to deal with it. For one
    thing, every time we get a homeland security request for the
    use of Guard and Reserve, what we have done is we have required
    that there be an exit strategy. So when they say they need men
    and women from the Armed Forces to go and handle the airport
    security, INS, or Customs, all of which they are, in each
    instance we have said: Look, those are basically civilian
    responsibilities and they should be handled by civilians; we
    are willing to help at the outset, but we need an exit
    strategy; and we need to be shown a plan where these
    organizations are going to establish training programs and get
    the right number of people that they need to do the jobs that
    need to be done.
        We feel that at least a non-trivial portion of the total is
    a temporary situation. Second, we are hopeful that we can
    reduce the demand on strip alerts and combat air patrols at
    some point in the period ahead. It varies with the threat
    assessment.
        The other thing I would say is that I have been making an
    effort, and I must say it is not easy, but making an effort to
    try to reduce some of the U.S. forces that are around the world
    in places like the Sinai and Iceland. We have been pulling down
    the number of troops along with our allies in Bosnia in a very
    responsible, measured rate, so that we can get others to
    backfill behind us in some of those activities.
        I agree with you that right now there is a very high
    OPTEMPO and PERSTEMPO and we need to recognize the stress it
    puts on people.
        Senator Inhofe. Mr. Secretary, I really do appreciate the
    stress that puts on people and that we are going to have to
    pull people in from other areas. I agree with you, it is going
    to be necessary.
        The week before, I spent some time on the two ships that
    will be deployed with the U.S.S. Kennedy from the east coast
    when the time comes. I am talking about the U.S.S. Whitney and
    the U.S.S. Wasp. One of the things that I found was that, while
    they had a chance to have inert training on Vieques they all
    came to the conclusion that they need unified training.
        Now, we passed in the section 1049 of the National Defense
    Authorization Act for Fiscal Year 2002 language that says that
    we will continue our training on Vieques as it has been in the
    past 50 years until such time as we get the certification of
    both the Chief of Naval Operations (CNO) and the Commandant,
    which has not happened. Now, let us keep in mind that all of
    those out there had come to the conclusion that we were lucky
    enough in this deployment to have training, even though it was
    inert training, and that we would not have had adequate
    training without that; and number two, it would have been
    better and our troops would be better trained if we had had
    live fire training.
        What are your plans to address that specific section of the
    fiscal year 2002 authorization bill?
        Secretary Rumsfeld. I am going to ask that the Secretary of
    the Navy and the Chief of Naval Operations respond more fully.
    But I do note here that the decision to train the U.S.S.
    Kennedy off the east coast rather than in Puerto Rico was made
    by the operational commander responsible for training the
    Atlantic Naval Forces. In response to the war on terrorism, we
    have had to modify the normal rhythms of deployment, upkeep,
    and predeployment training.
        Apparently, the Commander in Chief, Atlantic Fleet
    (CINCLANTFLT) decided to save transit time at sea by conducting
    the final training close to home port, and they used the saved
    days to focus on other predeployment issues facing the U.S.S.
    Kennedy.
        Senator Inhofe. Rather than have General Myers comment on
    that, General Myers, you stated----
        Senator Kennedy. The Senator's time has----
        Senator Inhofe. Mr. Chairman, let me get one more question
    in here; is that all right?
        General Myers, you stated that you noted a negative impact
    on the operational readiness caused by the usage restrictions
    and shortage of training areas and ranges. That is exactly what
    we are talking about here. If we were to lose this, this will
    have a domino effect on all ranges and all services, not just
    Navy and Marine Corps as we are talking about right now.
        Are you concerned about these, as you comment in your
    statement here? Do you not believe that this would have a
    negative effect on other ranges?
        General Myers. Senator Inhofe, I think what I am most
    concerned about is when we deploy carrier battle groups that
    they be trained and ready. I am worried about encroachment of
    training areas not only in the continental United States, but
    elsewhere in the world, because we have to be trained to be a
    ready force.
        In this particular case, like the Secretary said, I think
    this is primarily a Navy issue, and they are going to have to
    figure out if there are alternative ways to train. Any time we
    lose any training space though, we are not getting more of it,
    so it is only going to be a subtraction. But there are other
    ways we can hope to train.
        If I can tag onto that just a little bit on the end
    strength question, I know the services will come in with some
    end strength requests. I have not seen those yet, but we are
    all concerned about those. We spend a lot of resources for
    force protection, both here at home and abroad. I think clearly
    that is an area that is susceptible to solving some of our
    issues with technology and not being so manpower-intensive. So
    I think that is one of the things we can look at in terms of
    end strength.
        There are also some transformational initiatives, going
    back to your earlier question, that I think will hopefully save
    us some manpower. We have to look for those efficiencies at the
    same time as we look for legitimate requests for end strength
    increases.
        Senator Inhofe. I would only ask that you do confer with
    those responsible for the training, that was the non-unified
    training that was taking place, just to get their input. I
    think it is very important that you do that. Thank you.
        Senator Kennedy. Senator Byrd.
        Senator Byrd. Mr. Chairman and Mr. Secretary: I join in
    everything that has been said by all parties, expressing
    accolades to you and, in particular, to our service men and
    women. I have been very impressed with your performance as
    Secretary of Defense. I have seen a good many secretaries of
    defense. You are one of the best during my 50 years here in
    Congress. You have been forthright in your press conferences. I
    have viewed them, having been greatly impressed by your common
    sense approach and by your frank and up-front responses to
    questions.
        I am fully supportive of what we are doing in the war on
    terrorism up to this point. I have lived a long time and I will
    have served half a century in this body at the completion of
    this year. I have been a hawk for 50 years here in Congress.
    When I first came to Congress, I was opposed to the entry of
    Red China into the United Nations. I fought it. I supported
    appropriations for the war in Vietnam. I was with Generalissimo
    Chiang Kai-Shek and the Madam on their wedding anniversary in
    1955 on the island of Formosa. We do not hear that name cast
    about much any more.
        I was the last hawk to leave Vietnam. As the Democratic
    whip in a Democratically-controlled Senate, I offered an
    amendment supporting President Nixon in his efforts to bomb the
    Viet Cong enclaves in Cambodia because men were coming out of
    those enclaves and killing our men in Vietnam. I supported that
    against my then-Majority Leader, the late Mike Mansfield.
        So I think I have pretty good credentials. I join in the
    accolades, as I say. I am concerned as to where we are going. I
    am concerned not just with today or tomorrow, but with a year
    from now, 2 years from now, 3 years from now, 4 years from now.
        I think that under our Constitution we have a duty to ask
    questions. The President said at the Citadel 2 years ago:
    ``Sending our military on vague, aimless, and endless
    deployments is the swift solvent of morale. I will replace
    diffuse commitments with focused ones. I will replace uncertain
    missions with well-defined ones. We must be selective in the
    use of our military precisely because America has other great
    responsibilities that cannot be slighted or compromised.''
        Now, as a member of the United States Senate, as a Senator
    from the State of West Virginia, as chairman of the
    Appropriations Committee in the Senate, I have a duty to look
    ahead and try to see where we are going. The President is a
    very popular man at this moment. So was his father in Desert
    Storm. Fame is a vapor, popularity an accident. Riches take
    wings. Those who cheer today may curse tomorrow. I think we as
    Senators have to keep these things in mind.
        We need to ask questions. We have other great
    responsibilities that cannot be slighted or compromised. I am
    thinking of the baby boom generation. They are looking forward
    to the Social Security program. They are looking forward to
    Medicare. Our aging population is looking forward to drug
    prescriptions. We have great problems out there. Yet we have in
    this budget only a 2 percent increase for domestic
    discretionary programs generally speaking.
        Now, our time is very limited. I could ask many questions.
    Let me ask just two or three. I will ask them all at once and
    give you an opportunity to answer if you will. We say that we
    are spending $1 billion a month. We spent $7 billion in Vietnam
    in 4 months. We have a budget here that is going to spend over
    $1 billion a day on defense. Defense is the first priority of
    any nation. I do not take a back seat on that. I have supported
    defense programs. Practically every weapon system that has ever
    been thought of, I have been a supporter of it. So you are not
    looking at a naysayer, Mr. Secretary.
        But when we say we are going to bring these people to
    justice, we have already spent $7 billion; whom have we brought
    to justice thus far? When we say we are going to go into the
    caves, we are going to run them out of the caves, we are going
    to keep them on the run and there is no place to hide until we
    win victory, my question is what is victory? What is victory?
        So let me ask two or three questions. What is our goal in
    the war on terrorism? Is it to topple regimes that support
    terrorism? How will we know when we are winning victory? How
    will we know?
        You said just a few days ago that there will not be a
    signing ceremony on the U.S.S. Missouri to signal the end of
    the war on terrorism. But what will victory look like? How will
    I as John Q. Citizen know that I have accomplished my
    objective? What is the objective beyond what has been said: We
    will keep them on the run, we will run them down, they cannot
    hide, we will bring them to justice, victory will be ours. What
    is victory? What is going to be our standard of measurement?
        Also, the President in his State of the Union Address
    singled out Iran, Iraq, and North Korea. He said: ``All nations
    should know America will do what is necessary to ensure our
    Nation's security. We will be deliberate. Yet time is not on
    our side. I will not wait on events while dangers gather. I
    will not stand by as peril grows closer and closer.''
        Now, what does this mean? How about North Korea? The
    President included North Korea in his axis of evil. I wonder if
    the President has the authority to send U.S. troops into North
    Korea on the strength of the September 14 resolution?
        These are questions which I will ask. Now, it may be that
    you will not be able to answer these today. Maybe you will not
    have the time. But the questions ought to be asked. I have a
    responsibility to ask these questions, and I hope that we
    Senators will keep in mind this Constitution, which I hold in
    my hand. Yes, President Bush is the Commander in Chief, but
    take a look at this Constitution and see what powers this
    Constitution gives a Commander in Chief. Take a look also at
    the congressional powers in section 8.
        Let us not forget this Constitution. We are in a conflict
    now and we intend to win, but when will we know when we have
    won? How many more years will we be appropriating at the rate
    of a billion dollars a day, when we have the baby boom
    generation looking at it?
        We who are here are going to have to answer these
    questions. It may be the popular thing today to say ``me too.''
    So I say ``me too,'' but I also say that ``me too'' has a
    responsibility under this Constitution to look to other
    responsibilities to which the President referred in his speech
    at the Citadel, ``other great responsibilities.''
        So if I may just ask those two or three questions. Let me
    ask them again so that we will be clear: What is our goal? What
    is our goal in the war on terrorism, number one? How will we
    know when we have achieved our goal? What will victory look
    like? Finally, the specific question: How about North Korea,
    which the President included in his axis of evil? Do you
    believe that the President has the authority to send U.S.
    troops into North Korea on the strength of the September 14
    resolution, for which I voted? I thank you.
        Secretary Rumsfeld. Thank you, Senator Byrd, for your
    comments and your questions. There is no question that the
    defense request is an enormous amount of money. However, the
    fact is that it is about 3.3 percent of our gross domestic
    product. It is a much smaller demand today than it has been
    during my adult lifetime in terms of use of funds for defense
    purposes as opposed to non-defense purposes.
        As a percentage of the Federal budget, it is down from over
    50 percent to about 16.9 percent. So it is demanding a smaller
    percentage even though, as you point out, it is a much larger
    total number of dollars.
        Those questions are important questions, and I quite agree
    that it is appropriate for members of the House and the Senate
    to pose them and to pose them vigorously. I will do my best to
    respond to the first one, as to what is the goal. The goal is
    to recognize that we are living in a dramatically different
    period than we did in my time in Washington, dating back to the
    1950s.
        We had a big margin for error in those days, when weapons
    had shorter reach and less power. There were not multiple
    nations with weapons of mass destruction. Today we have a very
    modest margin for error. An error today, with the existence of
    weapons of mass destruction, changes the effects dramatically.
    So we cannot afford to make a mistake.
        It seems to me the goal is to recognize that the nexus
    between weapons of mass destruction and terrorist states that
    have those weapons and that have relationships with terrorist
    networks is a particularly dangerous circumstance for the
    world. You know that well and that was the essence of the
    President's State of the Union address.
        How will we know when we have won, so to speak? It is a
    very difficult thing to say, because there are not armies,
    navies, and air forces arrayed against each other. Instead,
    there are these terrorist networks that are hiding out there.
    We know thousands and thousands were trained in these terrorist
    training camps in 4, 5, 6, 8, or 10 countries. We know that
    they are well trained, and we have seen the training manuals
    that taught them and we saw the skill that was demonstrated on
    September 11.
        The complexity and difficulty of the problem is that we are
    putting pressure on them. You said we are chasing them, we are
    running them to ground, we are trying to root them out. That is
    true, and it is part of the law enforcement effort that is
    taking place. All across the globe, people are being arrested,
    people are being interrogated, intelligence information is
    being gathered, and intelligence information is being shared.
        The cumulative effect of the pressure that is being put on
    these--bank accounts are being closed. We are chasing them out
    of Afghanistan. We have other countries making arrests.
    Singapore just made a series of arrests that very likely
    stopped some very serious terrorist acts. All of that pressure
    is making life very difficult for those people. They are not
    going to be as successful in terrorizing and killing innocent
    people as they would otherwise have been.
        So how do we know when we have succeeded? I suppose we will
    know we have succeeded when our collective free world
    intelligence-gathering apparatus tells us that, in fact,
    countries are no longer harboring terrorists, that the
    countries where these terrorists have found haven have decided
    it is not in their interest to do that, countries like Iran,
    Iraq, Syria, Sudan, Somalia, and Libya, and all the others that
    have been on the terrorist list. Everyone knows those
    countries. They are no longer harboring terrorists; fewer
    people give money to terrorist organizations; fewer recruits
    are signed up by terrorist organizations; more people are
    fleeing terrorist organizations; and more people are
    functioning with a heightened degree of awareness and
    sensitivity, turning in people that in fact look like they may
    be engaged in terrorist acts. We have had some good success
    there.
        Is it as simple as World War II? No, it is not. It is much
    more complex. I appreciate your question.
        With respect to North Korea, I do not know that I can
    answer that question effectively. Obviously, these are
    judgments that the President of the United States makes. We do
    know certain things about North Korea. We know that they have
    probably 100,000 to 200,000 people in detention camps, that
    they are repressing their people, and that they are starving
    their people. We know they have a very active weapons of mass
    destruction program, including chemical, biological, and
    nuclear weapons. We know that they will sell almost anything to
    anyone on the face of the earth for hard currency, and they do
    it. They do it every single day.
        I would submit that the President's State of the Union
    message was very likely to let the world know what I just said:
    people best be careful about spreading weapons of mass
    destruction to terrorist networks, as the North Korean
    government has been wont to do.
        Senator Byrd. Mr. Secretary, I have greatly overextended my
    time. Thank you very much.
        Secretary Rumsfeld. Thank you, sir.
        Senator Kennedy. Senator Sessions.
        Senator Sessions. Thank you, Senator Kennedy.
        I serve under Senator Kennedy on the Subcommittee on
    Seapower and we have some real interest on those issues. I
    would like to join his expression of concern.
        I also want to, I know as Senator Kennedy intended, to try
    to take a look at where we are in seapower and what we can do
    to strengthen that.
        Mr. Secretary, we have come a long way since September 11.
    Our Nation was in shock and in a state of real unease. Through
    President Bush's vigorous leadership, the professional
    leadership of General Myers, and the effort of all the men and
    women in uniform, we have a good vision about where we need to
    go as a Nation. I salute you for it.
        I never thought that we could guarantee that Osama bin
    Laden would be captured and you made that clear from day one.
    But one thing that both the President and you said was that
    nations and governments that harbor him are going to be in big
    trouble. The Taliban, that government that harbored bin Laden,
    allowed him to operate and plan his attack on the United States
    to kill innocent American citizens, has fallen. It no longer
    exists, and I salute you for achieving that. I think that was
    very important as a signal to the world of the seriousness with
    which the United States takes these kind of activities.
        I am hopeful other nations in the future will think twice
    if they were to consider allowing terrorists to operate from
    within their countries or in fact support them directly.
        I say that with great appreciation for the leadership that
    you have given us. I also was a strong supporter of your
    initial vision for defense, that we must transform our Defense
    Department. President Bush said there may be generations of
    technology that we could leap. We never have enough money to do
    everything that we need to do. It is essential that we be as
    creative and as technologically advanced as possible.
        I am very appreciative of your commitment to transform our
    Defense Department, which was clear and unequivocal before
    September 11. I am sure that within the vast Defense
    Department, the defense contracting crew, and the politicians
    here in Congress, there is objections all along the way.
        My question to you is, after this military effort, after
    seeing at least this face of what a modern battlefield might
    look like, are you more or less convinced that we need to
    transform and what are some of your ideas in that regard?
        Secretary Rumsfeld. Thank you very much, Senator Sessions.
        There is no question of the many hours that General Myers
    and I spend together with the chiefs and with the senior
    officials in the Department. But what has taken place in
    Afghanistan has underlined and underpinned the efforts that we
    have been engaged in with respect to transformation. We have
    seen significant changes from the Desert Storm to Kosovo to
    Afghanistan, and it has pointed up the importance of
    information, battlefield, and situational awareness. It has
    pointed up the importance of connectivity and interoperability,
    as General Myers said in his opening statement.
        It has, in my view, underlined the importance of seeing
    that we exercise and train like we fight, and we are taking
    steps to see that we do a better job of that.
        I think that it is probably true of every war, every
    conflict, that you immediately begin the process of saying what
    are the lessons to be learned. We have started that already.
    Even though we are far from finished in Afghanistan and we have
    a lot more to do with respect to the war on terror, we have
    begun that process of trying to capture the important things
    that we have experienced already.
        I would say one thing about transformation. There is a
    tendency for all of us to think of it in terms of a weapons
    system or a new unique way of doing something. I think of it
    also in terms of people. General Richard Myers, General Peter
    Pace, and General John Jumper are three individuals that have
    very recently been placed in their posts by the President of
    the United States. All of us had discussions about
    transformation during the decisionmaking process as to who
    should be the new chairman and who should be the vice chairman.
        We now have 6 to 10 combatant commander openings coming up
    in the next 12 months. I would hazard a guess that 5 years from
    now, looking back, we will say that the single most
    transformational thing we did was to select those people. They
    will then fashion their staffs and their key people and they
    will be involved in the promotions of the people under them.
    Those decisions that are going to be made in the next 12 months
    will affect the United States of America for the next decade
    and a half.
        Senator Sessions. I think the American people have had an
    unusual opportunity to see you and your leadership style, and
    they have great confidence in you and your vision for our
    Defense Department. I think that there is a window of
    opportunity here. I hope that you will push it. Please know
    that I would like to support you in it.
        There are a number of issues on seapower that I am
    wrestling with. I am not exactly sure what the right number of
    ships should be for our Navy, but we need to know that. We need
    to know whether or not we can use some aging ships. We are
    decommissioning ships with projected life spans of 10 years or
    more left. I am not sure that is wise.
        We know that it takes three ships to keep one ship on
    station. Perhaps we can do a better job of forward-deploying or
    forward-stationing ships, and increase our effective ship force
    structure in that regard.
        There are a number of things that we could do there. Mr.
    Secretary, I would just ask if you are going to be looking at
    some of these potential changes that could effectively allow us
    to have more ships deployed than we have today, without maybe
    building as many new ships as we would like to build.
        Secretary Rumsfeld. Senator Sessions, thank you so much for
    your support on transformation and your generous comments.
    There has been the beginning of an analysis of shipbuilding and
    the size of the Navy, that is coming close to being completed,
    I believe----
        Mr. Zakheim. That is correct, sir.
        Secretary Rumsfeld. It has not been presented to me, but it
    addresses the issues that you, Senator Collins, Senator Warner,
    and so many others who have such an active interest in
    shipbuilding and the importance of the Navy and seapower have
    raised. I do not know the answer to your question as to
    reactivating ships. It is going to be a part of that study and
    I expect to be briefed on that some time in the period right
    ahead.
        I do know that there is not anyone involved in the Navy
    that made the recommendations for this particular shipbuilding
    budget, which we have all agreed is skinny. Everyone agrees
    that the number of ships, if you did a straight line projection
    using five ships a year, results in an unacceptably small Navy.
    There is just no question about that.
        We have no intention of doing that. As I believe came up in
    the discussion with Senator Warner, the fact is that the
    average age of our ships is relatively young. I think it is 15
    or 16 years and that is why the Navy made the choice they made.
    We can afford for a year or two to be underbuilding, as long as
    we recognize that in the out years we simply must get back up
    to the 7 to 10 level.
        In the meantime, we have to do a good job with respect to
    the shipyards of recognizing the importance of the industrial
    base and finding ways to balance the tasks that need to be done
    by way of engineering and other aspects of shipbuilding, even
    though we are living in a period with relatively low number of
    total ships.
        Senator Sessions. Just briefly, would you comment: Do you
    believe that the importance of dominance in space and unmanned
    vehicles is adequately addressed in this budget? Have you
    provided increases for those two areas that I think are clearly
    proven to be essential for the modern battlefield?
        Secretary Rumsfeld. I am personally satisfied that we have
    addressed the space issue in a responsible way. We have the
    kinds of increases that are going to be necessary to assure
    that we do not persist over a sustained period of time with a
    high degree of vulnerability, which realistically a country
    that is that dependent on space has to face.
        On the second part of your question, with respect the UAVs,
    the Department of Defense has fashioned the phrase ``low
    density, high demand assets.'' What that means is that there is
    a lot of demand for them and we did not buy enough of them. It
    is kind of a euphemism for, ``We did not have our priorities
    exactly right.''
        We are living in a period where that is a fact. We did not
    have our priorities quite right. We do not have enough of these
    aircraft. They have done a superb job, not just in Afghanistan,
    but in a variety of other intelligence-gathering activities. In
    this budget we have substantially increased the funding for
    unmanned vehicles and, life being what it is, it is going to
    take some time. Right now, not a week goes by that General
    Myers and I are not confronted by a combatant commander in some
    part of the world who is asking for additional unmanned aerial
    vehicles. We are in fact forced to deny them because there
    simply are not enough to go around.
        We are building them as rapidly as possible. Dov, you may
    want to comment on the specific dollars here.
        Mr. Zakheim. Certainly, sir.
        Senator, we are spending close to a billion dollars this
    year on unmanned vehicles, which is a significant ramp-up, as
    you well know, from where we were. For Global Hawk, which
    everyone has read about, the very long-range UAV, we will be
    spending in excess of $600 million. We are developing a new
    combat air vehicle, which essentially is a pilotless attack
    plane, but developed from the start that way. That is in excess
    of $140 million. Predator, which again everyone has heard
    about, is the UAV workhorse of Afghanistan and is funded at
    $150 million alone.
        So you have a major commitment that I think is
    unprecedented in the DOD.
        Senator Sessions. Thank you.
        Secretary Rumsfeld. It is not just for new aircraft,
    either. There is modernization taking place with respect to
    UAVs. We have lost a number of Predators because of weather and
    icing and we have lost a Global Hawk. We lost some because of
    control difficulties. We have some of these vehicles that are
    not armed, of course, and we are looking at different ways to
    improve their capabilities. We are also looking at some
    different sensors with respect to these aircraft.
        So it is an important area. It has been underlined by the
    Afghan situation and we are putting some beef behind it.
        Senator Sessions. Thank you. I think that is a good
    direction.
        Thank you, Mr. Chairman.
        [The prepared statement of Senator Sessions follows:]

                  Prepared Statement by Senator Jeff Sessions

        Mr. Chairman, I want to thank you for calling this hearing to
    receive the testimony of these two patriots about the future of our
    Armed Forces. I can't think of two more important people to testify
    during this critical time in our Nation's history, a time when we again
    find ourselves at war. Senator Warner, I appreciate your leadership as
    well and your insights on the many defense and national security issues
    facing our Nation during this war on terrorism.
        Mr. Secretary and General Meyers, thank you both for your
    leadership. During this current crisis you each have shown vision and
    perseverance while also leading the transformation of the Department of
    Defense. I, along with all Americans, deeply appreciate your continued
    leadership during Operation Enduring Freedom.
        The President's Fiscal Year 2003 Budget submission is based on his
    determination, and our's in Congress, to win the war on terrorism, and
    to protect the American people and our homeland from attack. It also
    includes a significant down payment on the transformation objectives
    which were articulated in the Quadrennial Defense Review. But, as you
    said during your remarks at the National Defense University last week,
    Mr. Secretary, transformation is as much a change in mindset, as it is
    acquiring new technology. The highly trained, professional members of
    our Armed Forces can and have innovatively employed older systems like
    B-52s which, coupled with our most advanced weapons and sensors,
    produced devastating results on the battlefield. These results can only
    be achieved by approaching our requirements and acquisition decisions
    with a capabilities-based mindset.
        The Air Force, for instance, espoused a new organizational concept
    last week that calls for developing ``ad-hoc task forces'' which are
    tailored to provide specific effects-based capabilities required by the
    warfighting ClNCs. I am sure that the use of B-52s loaded out with
    precision guided munitions as an on-call close air support weapon in
    Afghanistan was not something that was envisioned prior to the
    conflict. But the adoption of this tactic was driven by specific
    effects required by the CINC. I applaud this direct approach to solving
    problems and truly hope that this type of innovational thinking can be
    brought to bear not only on future battlefields, but also on other
    issues that the Department of Defense faces.
        Our current world-wide war against terrorism has also served to
    highlight the efficacy of having Naval forces forward deployed and
    ready to strike on call from the Commander in Chief. Our Navy-Marine
    Corps team was able to decisively influence the war on the ground in a
    landlocked country from ships on station 800 miles away.
        On a trip I took early last month to Japan to visit the Seventh
    Fleet, I was briefed on the aircraft carrier Kitty Hawk's unannounced
    and rapid deployment in support of Enduring Freedom. Kitty Hawk's
    ability to provide a mobile base for special operations forces is an
    example of the flexibility and transformation capability of naval
    forces at sea. While in Japan, I visited the U.S.S. O'Brien, a Spruance
    class destroyer. O'Brien is a 25-year-old ship that had just returned
    from combat operations. O'Brien was in excellent condition, completed
    all missions assigned to her and, according to her Commanding Officer
    and crew, has a lot of service life left. The Navy's plan to retire a
    significant number of these destroyers before the end of their planned
    service life causes me to be concerned that the Navy will be drawing
    its forces down below the QDR level. As we have heard in previous
    testimony, the burden of inadequate numbers of ships falls on the
    shoulders of our men and women in uniform. This brings me to one thing
    that concerns me about the President's Budget, and that is what appears
    to be the lack of funding in the shipbuilding account.
        I think we may need to look at new ways to keep our ships forward
    in theater and supporting the CINCs. We can do this by swapping crews
    of ships already deployed, increasing the number of ships that are
    homeported overseas, or by pre-positioning warships in a minimally
    manned status in strategic areas much like we do with our pre-
    positioned logistical supplies in Diego Garcia and other areas.
        Finally, the Army, particularly its Special Operations Forces, have
    performed superbly in the war against terrorism. We all can be very
    proud of them. I am excited about the transformational strides this
    service is considering. New equipment like the Interim Armored Vehicle,
    which will be rolled out in April at Anniston Army Depot in Alabama,
    and the Future Combat System will ensure that the Army continues to
    move towards a lighter, more lethal, force that is able to be deployed
    on short notice to support any of the warfighting CINCs. I am also
    immensely pleased with the progress that is being made at the home of
    Army Aviation, Fort Rucker, Alabama. Army Aviation will continue to
    play a key role in the war on terrorism, and the superb training that
    is being conducted at Fort Rucker will continue to be critical to the
    successful conduct of the war. One item I observed during a visit 2
    weeks ago is a necessity for advanced simulators and advanced simulator
    technology. I can only wonder if more hours in advanced simulators
    could have helped mitigate the recent spate of aviation accidents which
    have occurred in Southwest Asia. I feel that more advanced simulators
    are vital for the professionals at Fort Rucker and I hope this fiscal
    year 2003 budget and those in the future will fund the simulators Army
    Aviation needs.
        Once again, I'd like to thank you gentlemen for your comments
    today. I don't think the Nation could have asked for two more dedicated
    and talented professionals to lead us through the war on terrorism.
    Thank you, Mr. Chairman.

        Chairman Levin. Thank you, Senator Sessions.
        Senator Dayton.
        Senator Dayton. Thank you, Mr. Chairman.
        Mr. Secretary, General, I want to join with the others in
    paying tribute to you, to the President, to your military
    commands, and to our men and women of the Armed Forces for the
    very successful prosecution of this war in Afghanistan.
        Along with others in the Senate, I was in Afghanistan,
    Uzbekistan, and other countries in Central Asia in January.
    General Myers, I had the same kind of reaction as you expressed
    in your testimony to learning of Reservists with whom I had
    lunch who had volunteered for that duty and whose morale was
    extraordinarily high. I think their degree of professionalism
    and commitment is extraordinary. Obviously, as you both
    outlined, the superiority of the military operation and the
    advances that have been made even subsequent to the Gulf War
    have been very impressive. They have had the kind of
    devastating results that we want to demonstrate to the rest of
    the world as a consequence of the kind of heinous acts that
    were perpetrated on the United States in September.
        It is not my purpose here to debate the past, but given
    that success, I think I would like the hearing record to not
    reflect, at least not without some questioning, the aspersions
    that have been cast upon the previous administration. Reference
    has been made to a procurement holiday in the 1990s, which, if
    I believe the record is accurate, Mr. Secretary, the
    procurement budget that your administration inherited for 2001
    was in excess of $55 billion. If, as you say, we lived in the
    1990s off of the investments made in the 1980s, then it seems
    to me that you have to give some recognition to the fact that
    whatever level of preparedness and effectiveness we have today
    is at least in some part a result of investments that were made
    during the 1990s.
        That is not to say that more does not need to be done. I
    would not quarrel with your observation there. I think you and
    the President deserve due credit for both last year and this
    year sending that message loud and clear. As Senator Warner has
    indicated, there was bipartisan support last year and I believe
    there will be strong bipartisan support this year to doing
    whatever must be done.
        But I think it would be unfair not to realize or
    acknowledge that some of this technological and coordinated
    superiority that we have seen demonstrated is a result of the
    previous administration.
        I also think it is important in a context that does pertain
    to the future because, as Senator Byrd and others have noted,
    we and the administration also have to make some very critical
    choices in terms of our allocation of resources that are going
    to have real and long-term consequences for this Nation.
    President Clinton perhaps can be faulted, as was said here, for
    overshooting the mark in terms of reducing defense expenditures
    overall. But he also succeeded in reversing years of deficit
    spending and bequeathed to the Nation 4 years of budget
    surpluses.
        I give President Bush credit because from what I can tell
    the 10-year budget is presented very forthrightly in terms of
    its assumptions and its dollars. I think he has done a service
    because he has set forth clearly the critical choices that he
    has made and that this Congress is going to stand to review.
        The military increases that are being proposed, while they
    are necessary, essential, and unavoidable in the context of
    what occurred to this Nation on September 11, also have very
    real consequences for our Nation's financial security. I think
    it is in that context that this committee will have to be
    making its own decisions about this budget request.
        Last year, the Office of Management and Budget (OMB)
    projected on-budget surpluses every year for the next 10 years
    totaling $841 billion. Now, 1 year later, OMB is projecting on-
    budget deficits for the next 10 years of almost $1.5 trillion.
        The unified budget including the Social Security and
    Medicare trust funds, which I think is somewhat disingenuous,
    what I call sort of the Federal Government's version of Enron
    accounting, even there the total unified surplus has dropped by
    $2.5 trillion over the next 10 years, down to a $1 trillion
    level. This means that the Social Security and Medicare trust
    fund surpluses are funding these on-budget expenditures, which
    include defense along with all of our other functions of
    government, to the amount of $1.5 trillion over this decade.
    That means $1.5 trillion that is not going to pay down our
    national debt. It means arguably that in 10 years we will be
    less financially secure as a Nation as a result of these
    critical choices.
        As we have learned today, what you are proposing to spend
    is not enough to do everything that needs to be done. I just
    want to emphasize what I believe is the need to make some very
    critical choices in terms of how much money can we afford to
    spend on the military and still have that level of preparedness
    that we need. We must recognize that every dollar spent there
    is going to be one dollar less somewhere. It is going to be
    less either for other domestic programs or in drawing down our
    Social Security and Medicare trust fund surpluses which are
    going to impact our long-term security.
        So I guess my preamble here has exhausted my time, and I
    will be respectful of my time. But I do want to just conclude
    with one question. It picks up on something that Senator Inhofe
    said about Reservists and National Guard. I am very concerned,
    since Minnesota has a large contingent of Reservists and
    National Guard participating, in the inequities in the
    treatment of their pay and benefits to the active services.
        I want to just ask, in general, can we be assured that
    these pay and other benefit improvements, which I commend you
    for in your recommendations, will include also the Reserves and
    National Guard to the same degree as the Active Forces?
        Secretary Rumsfeld. Mr. Chairman, I just would like to make
    a brief comment. What you say, Senator Dayton, is of course
    correct. The weapons systems that are invested in in one period
    take years to be procured, acquired, developed, built, tested,
    and deployed. When I was Secretary of Defense in the 1970s, I
    was involved in the rollout for the F-16. We still have it. I
    approved the M-1 tank. We still have one. The B-1 bomber was in
    its earliest days.
        Every administration, every president, and every congress
    has available to them to contribute to peace and stability in
    the world not what they do during their time in office, but
    only what was done by their predecessors, and not simply their
    predecessors of 4 years or 8 years, but their predecessors of
    20 and 25, and in the case of B-52s, 30 or 35 years. That is a
    truth.
        I would add that there is practically nothing that this
    administration will ask Congress to invest in that will benefit
    this President during this term. The lags are too long, the
    times are too great. The legacy forces we are living with and
    we are dealing with were the result of decisions made by
    Congresses and presidents that go back up to four decades. I
    agree with that. I do not think anyone can contest it.
        Chairman Levin. Thank you very much.
        Senator Bunning.
        Senator Bunning. Thank you, Mr. Chairman.
        I would like to associate myself with Senator Sessions'
    remarks. I am sorry he is gone. But I also would like to go
    back to our success in Afghanistan. We combined our forces with
    the in-country forces, the Northern Alliance and the Southern
    Alliance, in assisting to run out the Taliban, which we did
    successfully. I would say that is a major accomplishment for
    the U.S. military. The U.S. military is capable of doing a heck
    of a lot more than just that.
        But I look at the al Qaeda results, the terrorist results
    other than the destruction of training camps, and the main
    people that are in charge, and you cannot tell me today whether
    they are alive or dead or where they are at. If we are going to
    spend a billion plus dollars a month, we ought to be able to do
    that. We ought to know one way or the other if Osama bin Laden
    is in Somalia or if he is in Iraq. We ought to know where his
    second of command is.
        Most, it seems like, al Qaeda leadership have escaped and
    now--you are shaking your head no, that is not true. Maybe you
    know more than I do?
        Secretary Rumsfeld. Who is shaking?
        Senator Bunning. No? Well, most of them seem to have
    escaped and left Afghanistan and are in other countries
    planning destruction again. We ought to be able to centralize
    our forces with others to make sure that that does not happen.
        You have come to us to ask approval of almost $380 billion
    worth of expenditures. I would like to have a little more
    assurance that you are going to finish the job that you started
    after September 11.
        Let me just give you one example that is in the budget that
    I have difficulty with. You said you are going to centralize
    aircraft and the F-22 was going to be an aircraft that the
    Army, Navy, and any other forces could use. Now, you have
    requested in your budget additional aircraft for each and every
    service. Maybe you can help me out. Is it because it is
    available? Is it because the F-22 is down the road too far?
    When we were going to go and get a unified aircraft that all
    the services could use, why are you requesting money for
    additional planes, as you just discussed, even the unarmed or
    unmanned planes? You just talked about that.
        In spite of the fact that we were successful with the
    Taliban, tell us more? Where are we going?
        Secretary Rumsfeld. Thank you, Senator. I will take a stab
    at it. I think it may be a little early to describe the
    situation in Afghanistan as a success, in this sense. You are
    quite right, the Taliban is no longer governing that country,
    but there are still pockets of Taliban there. There are still
    al Qaeda there, and there are still al Qaeda and Taliban just
    over the borders of that country, and it is still a very
    dangerous situation.
        It has been 4 months since September 11 and it has been a
    month less since October 7, when General Tommy Franks and the
    Central Command began the operation in Afghanistan. It is not
    over. I wish I could say it is over in Afghanistan.
        Senator Bunning. I did not say it was over. I just would
    like an update.
        Secretary Rumsfeld. I am saying I wish I could say it was
    over. It is not and we have work to do still.
        First of all, the task in my view has been to put enough
    pressure on terrorists and countries that harbor terrorists
    that they have difficulty recruiting, financing, organizing,
    and engaging in terrorist acts. Now, I do not doubt for a
    minute but that you are right, that they are out there planning
    additional terrorist acts right now. I agree with that.
        I would say that the pressure that has been put on, not
    just by our country but by countries across the globe, through
    law enforcement, on their bank accounts. Pressure in
    Afghanistan and in other places is making life very difficult
    for them. It is much more expensive for them to try to do their
    planning, and we have disrupted things.
        With respect to the aircraft, it is the Joint Strike
    Fighter that was to have the version for each of the services
    and the F-22 is earlier in the queue and is an Air Force
    aircraft. Possibly General Myers would want to comment on it,
    but I think that we will find that when the Joint Strike
    Fighter moves through its paces and its tests and its funding
    and is finally brought on line--when is that expected to be,
    the Joint Strike Fighter, do you recall?
        General Myers. We are only just getting started. I think it
    is about----
        Secretary Rumsfeld. It is in the very early stages.
        General Myers.--about 2010, sir.
        Secretary Rumsfeld. Something like 2010 for the Joint
    Strike Fighter. That is the aircraft that would have a version
    for each.
        Senator Bunning. Each individual service.
        I want to hold on with you because my time has almost
    expired. It was brought up before: with respect to Iraq, Iran,
    North Korea, when do you act when you absolutely know that they
    have weapons of mass destruction and they are capable of
    delivering them?
        Secretary Rumsfeld. Senator, those are judgments for the
    President and Congress. There is no question but that countries
    that have weapons of mass destruction and are capable of
    delivering them and are active as a terrorist state, so to
    speak, have relationships with terrorist networks. There is no
    question but that they pose a threat to the world. The
    President's State of the Union address and his comments
    underlined that very clearly.
        Senator Bunning. Thank you.
        Chairman Levin. Thank you, Senator Bunning.
        Senator Reed.
        Senator Reed. Thank you, Mr. Chairman.
        Secretary Rumsfeld, Dr. Zakheim, and Chairman Myers, thank
    you very much, not only for your testimony this morning, but
    for your distinguished leadership in very difficult times,
    leadership that is not only a function of competence but also
    great character. I thank you for that.
        Secretary Rumsfeld. Thank you.
        Senator Reed. Like many of my colleagues, I had the
    occasion to travel to the theater of operations to visit troops
    in Afghanistan. General Myers and Mr. Secretary, I share the
    same deep respect and profound regard for what they have done.
        I must say also I am particularly pleased at the leadership
    provided by some of my classmates, General Hagenbeck in the
    10th Mountain Division, General Dailey in the Special
    Operations Forces, and a near classmate, General Cody in the
    101st. Obviously, the sorting system works very well in the
    Army. They are commanding divisions and I am here.
        But one concern I have is that we are reaching a critical
    set of decisions about the follow-on to our very successful
    military operations. We have all pledged a long-term commitment
    to Afghanistan, but I think there is a reluctance, perhaps
    caused by political aversion, to the notion of nation-building
    and committing our forces to detailed planning for a military
    transition.
        The military international force is scheduled for about 6
    months. The British are commanding now. The Turks would like to
    take over. But my fear is that at that point, at some point in
    the near future, we will run into a situation where we have not
    made an effective transition.
        I would say in that context that any international force
    must rely upon the United States to participate, perhaps not
    putting troops on the ground, but in logistics, intelligence,
    and coordination with Central Command. Mr. Secretary, I guess
    the question comes down to this: Are you convinced that
    detailed planning is under way for a smooth transition so that
    we will not find ourselves in a situation where forces are
    drawn down, international components refuse to cooperate, or we
    do not have an effective coordination with those forces?
        Secretary Rumsfeld. Senator Reed, thank you. The question
    is truly an important one. What the President, myself, and
    General Myers have done is asked Central Command to send a
    modest team in to do an assessment with Fahim Khan, the interim
    defense minister, and with the Karzai interim government. We
    want to take a look at the existing proposals, and they are
    plural, at this stage for an Afghan national military, as
    opposed to what we have now where we have these different
    warlords with forces that are left over from the anti-Taliban
    effort.
        That work is starting immediately. There are a variety of
    ways of approaching it. I do not know what will be decided or
    what will be recommended by this assessment team, but I do know
    they are going to be coming back to General Franks, then
    General Myers, then to me, and ultimately we will go to the
    President.
        We have every intention of trying to be very helpful in the
    development of a national Afghan army. It could be a big help
    to us if they had such a series of units that could then go out
    and help us track down the Taliban and al Qaeda pockets. That
    could do a better job on the borders and contribute to
    stability in the country.
        That is one piece of the answer to your question. The other
    piece is the international security force, and that is of
    course unnatural, to have foreign forces in your country on a
    long-term basis. So the preference is to try to see that the
    Afghan government develops its own ability to provide for
    stability in the country, recognizing, as your question does
    and as we do, that that is not likely to happen quickly and
    there is a continued need for the international security
    assistance force.
        You correctly point out that we are involved in it. We are
    assisting with intelligence, logistics, and a quick reaction
    force in the event there is a problem. We are already working
    with the United Kingdom as the lead during the interim period
    to develop the country that will become the lead when the UK
    steps out. I do not know over what period of time the UK will
    continue to lead, but they are a very responsible military and
    country. I have every reason to believe that they will manage
    the transition to the new leader, whoever it may be, whichever
    country it might be, in a proper way and that we will be
    working with them to try to see that the requested number of
    ISAF forces are available.
        It is a very dangerous country, as many of you know. You
    have been there. There are a lot of land mines, criminals, and
    leftover Taliban and al Qaeda, and people are getting killed.
    It requires a security force and we are at the task that you
    have cited.
        Senator Reed. Mr. Secretary, it seems to me that the tasks
    that you have indicated are not going to be accomplished within
    a few months, perhaps not even a few years. We have a situation
    where we are implicitly committing to a multi-year stay, but we
    only have an international force that has been stood up for
    about 6 months, maybe a little longer.
        I think that disconnect not only will cause operational
    problems down the road, but also undercut our statements that
    we are there for the long term. As long as you have a notion
    that you can take public a consistent ongoing support for this
    international police force or international military force, I
    think that would be helpful on two fronts.
        I would like you to respond. I notice my time has expired
    and I will cease.
        Secretary Rumsfeld. Yes, sir. I think when you use the
    phrase we are there for the long term, it is in relationship
    with the Afghan government. I would not want it thought that we
    are there from a military standpoint for the long term, because
    those are judgments that have to be made down the road.
    Obviously, we have a good deal of other demands on our forces.
        That is why we were so pleased that the United Kingdom took
    up the international security assistance force and that people
    are stepping forward now to develop their own force.
        Senator Reed. Thank you.
        Chairman Levin. Thank you very much.
        Senator Allard.
        Senator Allard. Mr. Chairman, thank you.
        Mr. Secretary, I would like to compliment you on a very
    courageous budget. I know it is not easy to put together this
    kind of budget. We talk about flexibility and mobility in our
    Armed Forces, but we do not talk about flexibility and mobility
    perhaps in a more fundamental aspect of this process, and that
    is the budget, where you have to look at some older programs
    that perhaps do not serve us too well and look at newer
    programs which don't have not much of a constituency in
    Congress. So on that basis, I think you have put forward a very
    courageous budget.
        I have also noted that on the Space Commission report, you
    talked about the vulnerability of U.S. space assets. In your
    nomination hearing you reiterated your concerns about it, and
    then again last week you talked about protecting our space
    capabilities from enemy attack. I think that is one of those
    areas that we have to be vitally concerned about. I think that
    Senator Sessions in his questions properly brought out that
    issue. Perhaps maybe you would like to elaborate a little more.
        I just want you to know that when we are talking about
    space-based radar that I would like to do whatever I can to
    help to make sure and support you in your efforts, because I
    view that as very important in moving forward with modernizing
    this country's defenses.
        I have a question also for General Myers. I understand you
    are still in the process of modifying the unified command plan
    and the new plan will include a Northern Command to address the
    military functions of homeland defense. Can you give us some
    insight into the new command and especially in regard to those
    functions currently assigned to North American Aerospace
    Defense Command (NORAD)?
        Secretary Rumsfeld. Given the fact that General Myers is
    the combatant commander of Space Command, I think I may ask
    General Myers to answer both those questions.
        General Myers. Senator Allard, good afternoon.
        You are right; what the Secretary has done is implement a
    lot of the recommendations out of the Space Commission. I think
    the 2003 budget goes a long way to fixing some of the problems
    that we had in some of our space systems. We are putting a
    significant amount of money into our surveillance capability,
    which is the first step in ensuring that we can protect the
    assets that we have in space. So that is part of the 2003
    budget that you have either seen or will see.
        In terms of our space-based communications, as I think most
    everybody knows, we rely mostly on commercial communications
    capabilities in space for most of our needs. But for the 20 to
    30 percent that we think must be indigenous to the Department
    of Defense, we have fully funded those programs and programs
    like the advanced Extremely High Frequency (EHF) program. The
    follow-on to our U.S. Military Communications Satellite Program
    (MILSTAR) system, the Navy Multi-User Operating System (MUOS)
    program, the follow-on to the UHF program, have both been fully
    funded in 2003 and in the out years so we can deploy the
    appropriate constellations.
        If my memory serves me right, there is just about $90 or
    $91 million in the 2003 budget for space-based radar, and that
    is to prove the technology, cost-effectiveness, and military
    utility of such a system. I think it is time we get on with
    that and demonstrate its capabilities and see its military
    worthy. This is a system that, if it comes to fruition as we
    think it will, will give us the kind of persistence that we
    have talked about even in Afghanistan. One of the things the
    Predator gives us is persistence over the battle space. We are
    able to stay on station for long periods of time and surveil
    what we want to see.
        I can go back to my Vietnam days when we had our
    reconnaissance aircraft and that was primarily how we got our
    intelligence. The reconnaissance aircraft, they would have a
    sortie in the morning and they would have a sortie in the
    afternoon, and those were two snapshots in time. A lot of
    things happened before they got there and after they got there
    and before they got there again and after they left.
        With systems like space-based radar you have the potential,
    of course, to have this persistence. I think this budget has
    gone a long ways to ameliorating some of the concerns we have
    had in the past about some of our space assets.
        On space-based radar, I said $91 million. I think it is $48
    million in 2003. I was corrected by Dr. Zakheim. My memory did
    not serve me right as I thought it had, which is not the first
    time.
        In terms of the unified command plan, anything we say has
    to be modified with the fact this has not gone to the President
    yet and so he has not approved this plan. But the basics are
    the basics of a new Northern Command, if you will, that would
    focus primarily on the defense of the continental United States
    and our neighbors, would be this. There are really three parts
    of it.
        One of the parts would be the NORAD piece. NORAD already
    does the air sovereignty piece. It does the space warning and
    so forth. It would be a piece of this new command. In fact, the
    proposal is that the new unified commander would be dual-hatted
    as commander in chief NORAD as well. As you can imagine, we
    have started our discussions with our Canadian partners in this
    and they understand and are fine with that.
        We blend two other things with this new command. One is the
    support that the Defense Department traditionally supplies in
    times of other natural disasters, such as hurricanes, floods,
    and forest fires. So that support right now goes to the
    Secretary of the Army, and that would be something else this
    new command would worry about.
        The third piece is what we have already stood up, which is
    Joint Task Force for Civil Support. These are people that are
    trained to respond to chemical, biological, nuclear, or major
    explosive incidents in the United States as support to the lead
    Federal agency, or maybe it is a lead city agency or state
    agency, but as support to that.
        So those are the three main pieces: the NORAD piece, the
    natural disasters, and the response to chemical, biological,
    nuclear, or explosive incidents. We will propose that to the
    President and see how he disposes, and then we have about less
    than a year now, but we would like to stand this new command up
    on October 1, 2002, and we have time to work through the
    implementation plan. That is where we are.
        Senator Allard. Mr. Chairman, I would like 30 seconds just
    to summarize here. I think Senator Byrd asked a very pertinent
    question: With this defense, what is our world going to look
    like? I think that the answer is obvious if we phrase that
    question a little differently: What would this world look like
    if we do not move ahead with this budget? I think the answer is
    very obvious. We know what it is going to look like if we just
    look at New York. We know what it is going to look like if we
    look at the Pentagon. We know what it is going to look like if
    we look at every American's life and the impact that the attack
    of September 11 has had on American lives.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Allard.
        Secretary Rumsfeld. Thank you. I think that is a very
    important observation.
        I would add one thing on the unified command plan. Not only
    have we not presented it to the President, but after we get his
    okay then we begin the process of discussing it with our NATO
    allies because they are involved with Canada and various other
    parts of the world where the adjustments are going to be made.
    So it is going to be a process that is going to play out over a
    month or 2, I would think.
        Senator Warner. You are going to consult with us. I saw you
    make that clear.
        Chairman Levin. Senator Carnahan.
        Senator Carnahan. Thank you, Mr. Chairman.
        I recently returned from a visit to Central Asia along with
    several of my colleagues on this committee, and we visited the
    theater of operations. I was very impressed with the level of
    morale and the spirit of our troops. As one of them told me:
    ``We know why we are here.''
        I think what we see here is not only a testament to these
    young people, but also to our military leadership and to you,
    Mr. Secretary, because you have given us the steadfast
    leadership and you have innovatively conducted this war, and we
    thank you for what you are doing for our country.
        Secretary Rumsfeld. Thank you very much.
        Senator Carnahan. I am looking forward to working with you
    in funding, fighting, and winning this war on terrorism.
        There have been a number of questions asked today, so I
    will go to one that has not been addressed. I recently wrote
    you a letter and I shared my concerns about the emerging
    threats to the United States in Central, Eastern, Southeastern
    Asia, as well as eastern Africa. I pointed out that Navy
    fighters and long-range bombers are the only aircraft that can
    reach these areas of concern easily.
        We all know that the F/A-18C flew the bulk of the U.S. Navy
    strike missions in Afghanistan, so I believe it is important
    that we sufficiently fund their maintenance and continue to
    modernize their capabilities. The Navy is currently in a
    multiyear contract to procure the next generation of F/A-18s,
    the ``E'' model Super Hornet. I was disturbed that the
    President's budget cut the number of Super Hornets to be
    purchased in the year 2003.
        Given our future needs for tactical aircraft, it would seem
    to me that we should be increasing our capabilities rather than
    cutting them. I was wondering what your rationale is for this
    and if you would comment on that.
        Secretary Rumsfeld. Yes indeed, Senator. The Secretary of
    the Navy is, of course, going to be here next week and he and
    the Chief of Naval Operations will be delighted to discuss that
    in some detail. What took place was a decision that the F-18 is
    in full production until the Joint Strike Fighter comes out. It
    is a program that is supported by the United States Navy. You
    are correct, of course, that the numbers they are looking at
    are 44 planes instead of 48.
        On the other hand, the operation and maintenance accounts
    or the maintenance piece of it is, we believe, fully funded.
    Like always, choices had to be made and the Navy concluded that
    this was the appropriate thing for fiscal year 2003 and it
    should not in any way suggest any lack of support for the
    aircraft.
        Senator Carnahan. So you are saying there is not a
    possibility, then, that these other four would be built?
        Secretary Rumsfeld. I think that at the moment it looks as
    though the Navy and the Department have made their judgment,
    and the judgment is that they wanted to fully fund the
    maintenance accounts and therefore this particular number, 44,
    is what fell out of all of the choices that they had to make,
    and that is our recommendation.
        Senator Carnahan. Thank you. I would like to include my
    statement for the record.
        [The prepared statement of Senator Carnahan follows:]

                  Prepared Statement by Senator Jean Carnahan

        Thank you Mr. Chairman. I wish to welcome our distinguished panel
    today. I am looking forward to working with you and my Senate
    colleagues this year on the National Defense Authorization Act for
    Fiscal Year 2003.
        I recently returned from a trip to Central Asia with several of my
    colleagues on this committee where we saw our military personnel in the
    ``theater of operations'' first-hand. I must say, our soldiers,
    sailors, airmen, and marines are in good spirits.
        They are performing superbly, and professionally. Our success in
    Operation Enduring Freedom is truly a testament to these men and women,
    their military leaders, and you, Mr. Secretary--for your steadfast
    leadership and innovative conduct of this war against our terrorist
    enemies.
        Today, I look forward to hearing your testimony on the President's
    proposed budget. I am particularly pleased this year that the President
    has put such a strong focus on defense and homeland security spending.
        This budget takes an important step in the right direction--
    including a 4.1 percent pay raise for our troops, an increase in
    operation and maintenance accounts, and substantial investments in
    acquisitions and recapitalization of our forces.
        Our Nation is at war, and we cannot afford to shortchange these
    priorities.
        Thank you.

        Chairman Levin. Thank you, Senator Carnahan.
        Senator Roberts.
        Senator Roberts. I thank the distinguished chairman.
        Mr. Secretary, in our war on terrorism, where do you see
    the DOD headed as far as preemption is concerned? If we are
    worried about the weapons of mass destruction and those states
    that would produce, develop, or use that capability, it would
    seem to me we would be prepared or we should be prepared to
    take preemptive action rather than risking absorbing the
    consequences of an attack that we have all seen. Within the
    limits of security in this session, do you see the need to
    increase our intelligence capability, our precision weapons
    technology, and the use of Special Forces to militarily preempt
    a potential attack on the U.S. using any weapon of mass
    destruction?
        Secretary Rumsfeld. Senator, you ask where is the DOD
    going. I think the answer on preemption is really more where is
    the country or the President going. The DOD is going to go
    where we are told.
        You are right, the problem of terrorism is a unique one. It
    is distinctly different in the sense that you cannot defend
    everywhere at every time against every technique. Therefore,
    you have no choice in the case of terrorist acts, particularly
    with powerful weapons, but to go after the terrorists where
    they are. As the President has said, states that harbor
    terrorists, facilitate them, and finance them are every bit as
    serious a problem.
        We have increased intelligence in this budget; we have
    increased precision guided munitions; and we have increased I
    believe funds for the Special Forces. We recognize, as you do
    in your question, their importance in the distinctly different
    kind of a world we are living in.
        Senator Roberts. We need an Assistant Secretary of Defense
    for Special Operations and Low Intensity Conflict. We have been
    saying that on the Emerging Threats and Capabilities
    Subcommittee since 1999. Can we expect one in the near future?
    We do not have a nominee for that important position. It has
    been about a year. I am not complaining. You have to make the
    right choice, I understand that.
        Secretary Rumsfeld. The nomination process is a long and
    torturous one, and we have had a couple of people move along
    the path part of the way and fall off for a variety of reasons.
    We do intend to fill it, yes, sir.
        Senator Roberts. On the weapons of mass destruction, on the
    civil support teams, they used to be called Rapid Assessment
    Initial Detection (RAID) teams. Now they are Civil Support
    Teams (CST) teams. We tried to get an acronym with Senator
    Stevens and Senator Byrd involved so we can get it
    appropriated, but we could not come up with the right acronym.
    If you could suggest one, that might help.
        But we have 22 full-time National Guard personnel and now
    there are 32 of these teams authorized. Do you support
    establishing a team in every U.S. state and territory?
        Secretary Rumsfeld. It is not a question I have personally
    addressed.
        Senator Roberts. That is where teams would be 4 hours from
    any incident, regardless of what kind of threat would be
    involved, to inform the team in Washington. The first
    responders would have the first responsibility to identify
    exactly what they are dealing with. They must be highly
    trained; it would be a mission for the National Guard.
        Are we going to examine whether or not the Russians, with
    their expertise with anthrax and other biological pathogens
    that they actually produced, can be tapped into by the
    Cooperative Threat Reduction (CTR) and the DOD programs to
    address our homeland defense needs?
        Secretary Rumsfeld. With respect to the first question, Dr.
    Zakheim tells me we currently have 22 of those teams.
        Senator Roberts. Right.
        Secretary Rumsfeld. Your question is are we going to go to
    50?
        Senator Roberts. We have 22. They are authorized up to 32.
    We are going through the training. We had a GAO report that was
    not too kind, one of those again. So there has been an effort
    to say we need them in all 50 States. That was the goal with no
    special time frame.
        General Myers. Senator Roberts, I just think that is one of
    the things we have to look at in our new command.
        Senator Roberts. The changes in the military transformation
    include the intelligence community and their ability to rapidly
    collect and analyze in a very threat-rich environment. In view
    of the fact that many of the enemy combatants in the war on
    terrorism may be within our borders of our country, how will
    the military intelligence have to change to be able to receive
    information? Specifically, I am talking about the relationships
    between the Federal Bureau of Investigation (FBI), Central
    Intelligence Agency (CIA), and Defense Intelligence Agency
    (DIA). Can we get some courses in our various military schools
    to get us updated on that?
        Secretary Rumsfeld. That is certainly a worthwhile
    suggestion, Senator. I have been heavily focused on the non-
    homeland security piece and Deputy Secretary Wolfowitz has been
    very heavily focused on the homeland security piece, along with
    the Secretary of the Army. I have, however, observed in an
    awful lot of meetings your point being raised--the importance
    of fusing the intelligence information among the various
    agencies.
        I know for a fact that the DIA and the CIA have a
    relationship that I would characterize as closer than I have
    ever seen in my experience. I have watched the Department of
    Justice and the FBI improve their linkages with the Central
    Intelligence Agency and with the Defense Department. I do not
    know that we have the answers to this because it is complex and
    the FBI data tends to be decentralized out in the regions, as
    opposed to centralized, which makes it quite difficult to have
    the kind of fusing of intelligence and knowledge.
        Senator Roberts. Their mission has changed as well. I was
    suggesting that some specific education for the military
    leaders at our service war colleges and the National Defense
    University.
        I have one last question if I can, Mr. Chairman. Where are
    we going with NATO? We have had an excellent speech by Senator
    Lugar, pretty much saying that under the strategic concept of
    NATO that was adopted 2 years ago, my goodness, if we do not
    have terrorism in the laundry list of things that we ought to
    be worried about numero uno, what is going on? We had a
    delegation that came back, some sparks there, some meaningful
    dialogue, I remember 2 years ago.
        NATO is now in charge of things like crime, drugs, ethnic
    cleansing, the environment, and economics. I even said, do not
    put gum in the water fountain. I got a little bit upset about
    that in terms of the original purpose of NATO. Now we see some
    hesitancy on the part of NATO--at least that is in the press--
    under article 9.
        If NATO is not going to atrophy and if NATO is going to
    mean something, certainly we are going to have to have NATO
    take a very strong stance on terrorism, especially with regards
    to the terrorists within their countries.
        Where are we headed there? We are going to have NATO
    expansion coming up and we are going to have a hearing on that
    here fairly quickly. I am very worried about it.
        Secretary Rumsfeld. Yes, Senator. There is no question but
    that NATO is attentive and should be attentive to the problems
    of terrorism. It is something that they have addressed in each
    of the two meetings that I have been to at NATO. I am aware
    that they have invoked the article of the NATO Treaty
    involving--it is article 5--that an attack against one, and it
    was a terrorist attack, is an attack against all.
        I quite agree with you that they do need to focus on this,
    because that is part of the world we are living in.
        Senator Roberts. Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Roberts, and thank you
    again for the leadership which you showed over the years in the
    Subcommittee on Emerging Threats and Capabilities.
        Senator Nelson.
        Senator Bill Nelson. Mr. Secretary, my compliments to you.
    You are talking about the renewed cooperation with all of the
    intelligence agencies and how you have put it together for a
    highly visible event, such as the State of the Union or at the
    Super Bowl this past weekend. My compliments to all of the
    agencies involved, which was a combination of State, local, and
    Federal agencies.
        A delegation from this committee was the first to go into
    Guantanamo Bay. I was intrigued to find out that reporters from
    Europe in the press conference afterwards actually wanted to
    argue with my conclusions about the humanitarian treatment. Yet
    what I tried to say was that the most important purpose that I
    had there was to see if we were getting the information from
    the detainees.
        I take this occasion to tell you that our congressional
    delegation had concluded that we were not getting that
    information quickly enough. I know you followed our trip by a
    couple of days. They were just completing that wooden housing
    that was going to be air conditioned where two per structure
    could go through what they call the screening process. But up
    to that point they had not received that much information.
        I expressed in the press conference that I thought that
    that would accelerate by virtue of these new facilities that
    they could move into. Would you comment briefly on that, what
    you observed and what you know now?
        Secretary Rumsfeld. Yes, sir. I saw the screening rooms.
    They were completed. They were air conditioned. They were
    planning to start the next day with individual detainees for
    discussions. I have a feeling that your trip down there urged
    them on.
        I think that you are quite right, it is enormously
    important. If we are going to do everything humanly possible to
    protect this country and our deployed forces and our friends
    and allies from additional terrorist attack, going through that
    process of knowing what those detainees know is just enormously
    important and time sensitive.
        Senator Bill Nelson. While I was there we had our
    commanding officer stepping in for General Peter Pace as the
    Commander in Chief, Southern Command (CINCSOUTH), if I recall a
    two-star general. It is my understanding earlier here today you
    were talking about the importance of the selection of our
    combatant CINCs. Can we expect a four-star CINC to be appointed
    to U.S. Southern Command so that there is not a vacancy there,
    given your remarks earlier in this hearing?
        Secretary Rumsfeld. You bet.
        Senator Bill Nelson. Good. The quality of that position
    means alot to Latin America, such as having an officer like
    General Pace. That was an excellent choice and obviously you
    recognized that by bringing him up here.
        Secretary Rumsfeld. We did indeed. General Myers agree that
    he is doing a wonderful job for the country.
        Senator Bill Nelson. I believe so, too.
        Earlier you said that you are talking about taking North
    American Aerospace Defense Command (NORAD) and putting it under
    the CINC for homeland security. What does that do to Commander
    in Chief, U.S. Space Command (CINCSPACE)?
        Secretary Rumsfeld. The details are still being worked out
    and we have not fully briefed Congress. We have not presented
    it to the President. We have not gone through discussions with
    Canada completely. I know you have talked to the chief of the
    defense staff and I have mentioned it briefly to the Minister
    of Defense of Canada.
        General Myers. I think the theory here that the Secretary
    asked us to drive on is to, as much as we can in the new
    unified command plan, to focus people on their primary mission.
    So what it does in the case of the Space Command is that it
    does not dual-hat potentially the U.S. Commander of U.S. Space
    Command any longer. He does not have the NORAD responsibility.
    That will be the new U.S. Northern Command (NORTHCOM),
    supposedly. He or she will be able to focus on the task at hand
    and that is the space mission as that continues to grow and
    evolve.
        So that is kind of the rationale behind it. That is where
    the Secretary was pushing us. That also occurs in Joint Forces
    Command, which is going to be our change agent for
    transformation, experimentation, and joint training. The Joint
    Forces Command commander today has several hats. One of those
    is the responsibility for this Joint Task Force Civil Support,
    which would then again come under NORTHCOM. So again, to focus
    Joint Forces Command on what we think their most important task
    is, that is the rationale, sir.
        Chairman Levin. If I could interrupt just for one second,
    Mr. Secretary, to remind you that Congress has to be in on that
    consultation prior to the decision in this area.
        Secretary Rumsfeld. Yes indeed.
        Senator Bill Nelson. Mr. Chairman, I would conclude by
    suggesting to the Secretary and the Chairman that they may want
    to take a look at a budget that is not your budget, but it is
    going to have profound effects on you. I believe that the
    National Aeronautics and Space Administration (NASA) budget is
    being unwisely savaged. There is a 13 percent reduction in
    human space flight. The reason this is important is that the
    proposal takes space shuttle launches down to four. That is
    almost cutting it in half.
        The inevitable result is that you get rid of a good part of
    that launch force. How this affects you, Mr. Secretary, is that
    if we were ever to have legitimate threats or be down on some
    of our expendable launch boosters and-or pads, your only
    assured access to space is the shuttle. You might crank that
    into your thinking, even though it is not your budget.
        Secretary Rumsfeld. Thank you, Senator.
        Senator Bill Nelson. Thank you, Mr. Chairman.
        Chairman Levin. Thank you very much, Senator Nelson.
        Senator Collins.
        Senator Collins. Thank you, Chairman Levin.
        Mr. Secretary, I want to join with my colleagues in
    applauding your extraordinary leadership in the war against
    terrorism. I thank you, General Myers, and Dr. Zakheim, for
    being with us today.
        Last month, I was a member of the bipartisan delegation
    that several of my colleagues have referred to that journeyed
    to Central Asia. It was a wonderful opportunity not only to
    meet with the leaders of the countries involved in our
    coalition against the war on terrorism, but also to meet with
    our troops first-hand and hear their impressions. I was so
    impressed with their high morale, patriotism, professionalism,
    skills, and training. It truly was an inspiring trip for me.
        I also learned a great deal more about the absolutely
    critical role that our Navy has played, particularly our
    carrier battle groups, in launching operations in the war in
    Afghanistan. I fully realize and understand that the
    administration has inherited very serious budget and program
    shortfalls affecting shipbuilding, but I share the concerns
    that many of my colleagues have mentioned today that the budget
    before us does not restore shipbuilding to the levels that will
    sustain a 310-ship Navy nor our industrial base.
        My concern is that there seems to be a pattern in which the
    Department sincerely plans and hopes to increase ship
    construction rates in future years, but then ends up scaling
    back the plans when funding runs short. So I would like you to
    comment on the commitment of the Department to maintaining an
    adequately sized fleet. I realize that there may be dispute
    about exactly what the number should be, but I think there is
    widespread agreement among the experts that we have been
    heading in the wrong direction in future years.
        My concern is that if we do not start this year and instead
    only proceed with five ships this year, that we are just going
    to fall further and further behind.
        Secretary Rumsfeld. Senator Collins, thank you so much. I
    am delighted that you have been, and I knew you were, out
    visiting the troops. I know how important it is to them and we
    appreciate that.
        The shipbuilding part of the budget is a real dilemma for
    me because it is a matter of tough choices that have been made
    in the Department of the Navy as to what they thought made the
    most sense. They all agree with what you have said, that the
    straight line projection if you go at five, six, or even seven
    ships a year is going to take you to an unacceptable level of
    the Navy. Everyone agrees with that. Whether they think the
    Navy ought to be 280, 300, 340, or 360 ships, they all know it
    ought not to be down where it would go if we stayed at this
    particular level.
        The task they had was to figure out was how to get the
    funds to do the operations and maintenance accounts, which they
    think are enormously important, to deal with the aviation piece
    of the Navy, to fully fund the overruns from past shipbuilding
    that need to be added in for this year that were unexpected and
    in excess of $600 million, and still make a rational choice
    with respect to the number of ships.
        The judgment they made as I understand it, and Dov was
    involved in the decision with them, was that the average age of
    the Navy ships today is sufficiently low that we are not going
    to be going down on a straight line projection. We are going to
    be able to go down gently for a period.
        However, you then go off a cliff, as you suggest. We have
    all seen that forward year projections tend to look better than
    reality. All I can say is that this year is an awful lot better
    than the forward year projections from 3 or 4 years ago. So I
    have confidence that these forward year projections for 2004,
    2005, 2006, and 2007 are going to play out and that there is a
    very broad and deep feeling in the Department and in the
    administration that you are exactly right: we simply have to
    increase the number of ships in those out years, and we plan to
    do it.
        Senator Warner. Senator, will you yield me 2 seconds?
        Senator Collins. Certainly.
        Senator Warner. I have been in this shipbuilding business I
    guess about as long as anybody in the room. Look at the
    research and development costs for the former DD-21, now DD(X).
    It is almost $1 billion each fiscal year for the next 3 fiscal
    years. While that is not in the shipbuilding account as such,
    you cannot lose sight of that, and that is a contract I think
    you will have a great interest in the future, as you had in the
    past.
        Senator Collins. You are certainly correct about my great
    interest in that contract. I see the research and development
    for that account as benefiting now a whole family of ships,
    given the change in direction.
        General Myers, I visited the U.S.S. Theodore Roosevelt as
    part of my journey. The battle group had been at sea for 113
    consecutive days when we visited the aircraft carrier because
    of security and mission requirements. I am told that normally
    they would be going into port every 14 days. This obviously has
    caused a lot of strain. But again, morale was very high.
        But the operational tempo, the briefing that we got, was
    truly extraordinary. Could you comment further on the heavy use
    of our naval platforms in the war against terrorism and the
    impact of increased deployments on our naval forces?
        General Myers. You bet, Senator. I also visited U.S.S.
    Theodore Roosevelt and I think as of today they are over 135
    days deployed, because, as I mentioned in my opening statement,
    we are a Nation at war. We are asking an awful lot of all our
    people, and our sailors are included in that group.
        I too came away from my visit, which was I think just
    before yours, with an understanding of the high morale. They
    understood what they were doing. They understood the importance
    of it. There is nothing that the Joint Chiefs of Staff or the
    Secretary care more about than trying to maintain the
    operational tempo and the personnel tempo at acceptable levels,
    realizing that we are at war. So this will be more difficult
    perhaps than in peacetime for sure, and that is part of what we
    are seeing.
        What we are trying to do in terms of carrier deployments,
    though, is to stay on the double force presence policy that we
    currently have today, that they rotate on the schedules that
    the Chief of Naval Operations has set up and that we do not
    disturb that, so we can have our naval assets ready for
    whatever comes next. So we will continue to press that very
    hard. It is very high on our list. It is something we talk
    about among the Joint Chiefs quite regularly.
        Senator Collins. Thank you, Mr. Chairman.
        Chairman Levin. Senator Cleland.
        Senator Cleland. Thank you very much, Mr. Chairman.
        Mr. Secretary and General Myers, thank you both very much
    for your service to our country. I was just sitting here
    thinking that in the last 5 years I have been through two
    attacks on Saddam Hussein, the war in Bosnia, the war in
    Kosovo, and now the war in Afghanistan. I think one of the
    threads that certainly runs through our military engagements is
    the use of air power, particularly the use of high precision
    weapons. Others are the evolution on the battlefield of
    unmanned vehicles for reconnaissance and surveillance and the
    use of the Airborne Warning and Control System (AWACS) and the
    Joint Surveillance and Target Attack Radar System (JSTARS), for
    surveillance, intelligence, and reconnaissance capability.
        I have seen that increased to a very fine level. I
    appreciate your budget, Mr. Secretary, which continues to add
    to our capability in terms of battlefield intelligence and in
    terms of our high use of precision weapons. I do think that the
    combination thereof saves lives on the battlefield. In our last
    two engagements, in Kosovo and now in Afghanistan, I think we
    can be very proud as an American military that we have kept our
    casualties so low and our effectiveness has been very high.
        I also see that your budget does another thing that tracks
    with the way we go to war and that is the increased use of
    Special Operations Forces. I think that this war in Afghanistan
    has in effect combined massive use of intelligence with
    unmanned vehicles to seek out that intelligence, tremendous use
    of precision weapons, and the work of Special Forces.
        Mr. Secretary, is there any doubt in your mind, since your
    budget certainly funds this to an increased level, that this is
    the way we go to war now and increasingly so?
        Secretary Rumsfeld. Trying to look into the future is not
    easy. I think there is certainly a likelihood that you are
    right. However, we have to appreciate that the reason that we
    have not been faced with large armies, navies, or air forces is
    because we have such capable armies, navies, and air forces,
    and the deterrent effect is what drives people towards these
    asymmetrical activities that we need to deal with.
        I think that you are correct that the future is more likely
    to not repeat Afghanistan, but present more unusual situations.
    Let us put it that way. We certainly cannot forget that North
    Korea has a massive army and is a country that is just terribly
    repressive to its people and doing what it is doing with
    weapons of mass destruction, and there is no question but that
    Iraq has large conventional capabilities as well as an appetite
    for weapons of mass destruction.
        I think what we have to do is what our new strategy
    suggests: look less at specific threats and more at the kinds
    of capabilities that are likely to come at us. Certainly, when
    one does that you are driven in the direction that your
    question suggests.
        Senator Cleland. Thank you very much.
        In terms of changes and transformation of the American
    military to a new world and a new environment, to be leaner,
    meaner, more impactful and more mobile, may I say
    congratulations on your budget having money in it to begin the
    conversion of some Trident submarines from a strategic role in
    the Cold War. That was a role that provided for nuclear
    retaliatory response. The converted Trident submarines are
    tremendous platforms, stealth vehicles for more conventional
    use of high-level precision weapons, cruise missiles, and
    insertion of Special Forces. I think that conversion of those
    Tridents really fits in with where we are headed.
        Again, General Myers, thank you very much for your service.
    May I just say as chairman of the Subcommittee on Personnel, I
    am pleased that your budget includes a nice pay increase for
    the troops who are doing a tremendous job around the world.
        General Myers, every time I see you I think about our
    moment together on the morning of September 11, where we were
    together in my office at the very moment that the Pentagon
    itself was hit. You have done a tremendous job. You came in
    under tremendous pressure and we congratulate you for your
    service. Thank you all very much.
        Thank you, Mr. Chairman.
        General Myers. Thank you, sir.
        Senator Warner. Thank you, Senator. We all remember your
    advances last year on behalf of the G.I. Bill. I was privileged
    to join you on that. It took 4 or 5 years, but I think it is
    going to be a retention asset.
        If I might just say a few words before my chairman takes
    over, I noticed with great interest, Secretary Rumsfeld, that
    you listed cyberterrorism among the threats to this Nation.
    Indeed, when I was privileged to be chairman, I started a
    modest program buried down in the sinews of your system
    whereby, in return for educational benefits for young people
    who are willing to devote their lives at a university level in
    studying that subject, they would return to the Federal
    service, presumably either your Department or other
    Departments, and devote several years of obligated service.
        That program that I started has had slight growth and maybe
    you might want to take a look and see if it could not be
    augmented a bit. I think it is going to work out quite
    successfully for you.
        Also, on the subject of spectrum policy, I am privileged to
    have a number of high tech operations in my State that are
    carefully following this issue. I had the Chairman of the
    Federal Communications Commission, Mr. Powell, up the other
    day. We went over it, and in due course your administration and
    the Department of Defense will be working with the Commerce
    Department and other relevant agencies and departments in
    reviewing those allocations.
        I know that you will, of course, have the emphasis on
    national security, but I do hope that there can be some
    flexibility for the private sector, which really is in
    desperate need of some additional spectrum.
        Lastly on the question of missile defense funding, I think
    we have an appropriate budget this time. Even though that risk
    seems to be de minimis in the minds of some, in my judgment, it
    would only take one to cause devastation of just unacceptable
    proportions to the United States, be it an accidental firing or
    one done in anger by virtue of terrorism. So I think you have
    stepped out very well on that.
        Lastly, I would like to speak about military commissions.
    It is interesting that you have a study going on about the
    President's order of November 13, and I hope that that comes
    out. I think that we should go back and look at how that was
    done under our former chairman, Senator Nunn, at the time.
    Maybe at the time it was the right thing to do as these young
    men and women graduate from the academies, but I think it is
    something that should be looked at very carefully.
        Thank you again. It has been a very good hearing this
    morning. I commend you, the Chairman, General Myers, and Dr.
    Zakheim. Job well done, gentlemen.
        Secretary Rumsfeld. Thank you very much, Senator Warner.
        Chairman Levin. Thank you, Senator Warner.
        Just a few questions to close up. First, on the proposal
    that will be forthcoming to establish a new unified combatant
    command for homeland security, do you think it is likely that
    you will be seeking a change in the Posse Comitatus Act?
        Secretary Rumsfeld. No, sir. At the moment it looks as
    though the role for the U.S. military would be a supporting
    role, and we are involved in some very temporary activities
    that we have, as I indicated earlier, a way to move out of and
    exit. So at the moment that is not something that the
    administration has thought necessary.
        Chairman Levin. Let me go back, General, to the Philippines
    issue just for a moment. One of the reports quoted or stated
    that the U.S. Special Forces commander there said that U.S.
    soldiers would ``take operational instructions from Filipino
    commanders.''
        Do you know whether that is a quote. Is that accurate? Is
    that our policy?
        General Myers. Senator Levin, I do not know if the quote is
    accurate, but it is not the instructions that they have been
    given. The command and control of U.S. forces will stay in the
    U.S. chain.
        Chairman Levin. Including tactical control?
        General Myers. Absolutely.
        Chairman Levin. The other thing he said, which is not a
    quote but a summary, is that if a U.S. soldier were captured,
    U.S. forces would defer to Philippine authorities before
    mounting a rescue operation. Is that accurate?
        General Myers. Well again, I cannot talk to the veracity of
    the quote. I think on those kind of tactical situations we
    would have to evaluate it. As the Secretary said, the rules of
    engagement give you the right to self-defense. I think we
    probably should not speculate on what would actually happen,
    but it does not sound totally accurate to me.
        Chairman Levin. The question has been raised about the
    status of detainees at Guantanamo Bay and I want to ask about
    that issue. Am I correct that the President has not yet made a
    decision as to whether or not the Geneva Conventions apply to
    those detainees?
        Secretary Rumsfeld. I think the correct way to state it is
    that the United States, the President, and myself have made the
    statement that the detainees would be treated as if it did
    apply, and they have been in the past. They are currently being
    treated as such and they will be in the future.
        The technical, legal question is being considered in the
    White House at the present time.
        Chairman Levin. In this interim period until that decision
    is made, has the regulation of the Department of Defense
    relative to enemy prisoners of war, retained personnel,
    civilian internees, and other detainees been applied?
        Secretary Rumsfeld. I do not know that I follow the
    question precisely, but, as I say, we are now and we will in
    the future, regardless of what decision is made in the White
    House as to whether or not the Geneva convention applies as a
    matter of law, treat detainees the way they have been treated
    since the beginning.
        Chairman Levin. The specific question, which maybe you will
    need to answer then for the record, is in regards to Army
    Regulation 190-8, which says: ``If any doubt arises as to
    whether a person having committed a belligerent act and having
    been taken into custody by U.S. Armed Forces belongs to any of
    the categories enumerated in article 4 of the Geneva
    conventions, such person shall enjoy the protection of the
    present convention''--and here is the critical language here--
    ``until such time as their status has been determined by a
    competent tribunal.''
        Then it says that ``competent tribunal shall determine the
    status of any person not appearing to be entitled to prisoner
    of war status who has committed a belligerent act or engaged in
    hostile activities and who asserts that he or she is entitled
    to treatment as a prisoner of war or concerning whom any doubt
    of a like nature exists.''
        So, under our regulations, there has to be a competent
    tribunal, and I am not talking about the military tribunal.
        Secretary Rumsfeld. No, I understand.
        Chairman Levin. This is a different issue. My question is
    has this tribunal been convened for any of the prisoners, any
    of the detainees so far?
        Secretary Rumsfeld. My recollection of the details of the
    convention is that there is very little definition as to the
    phrase ``tribunal'' as you are using it in this context.
        Chairman Levin. In what sense little definition?
        Secretary Rumsfeld. That is to say there is no formal
    prescription as to exactly what would constitute such a
    tribunal.
        Chairman Levin. No, it is laid out in procedures. The
    membership is laid out. That is why maybe you better answer
    this for the record. But it sets forth the following
    procedures: the members of the tribunal; the recorder shall be
    sworn; who the president is; a written record shall be made of
    the proceedings; they shall be open except for deliberation;
    and who the officers are. It goes through great details.
        That is why, Mr. Secretary, rather than trying to answer
    this here now, if you feel better doing it, you could perhaps
    take a look at this Regulation 190-8 and let us know for the
    record if it is being applied, and if not, why not. I think
    that may be the short way to do it.
        [The information referred to follows:]

        Article 4 of the 1949 Geneva Convention relative to the Treatment
    of Prisoners of War specifies the categories of people who fall into
    the hands of the enemy who are entitled to be treated as prisoners of
    war (POWs). If a detainee falls within one of the Article 4 categories
    of persons entitled to POW status, then he is a POW. If a detainee
    clearly does not fall within one of the Article 4 categories, then the
    detainee does not receive POW status. When there is doubt, then a
    tribunal under Article 5 of the Convention is appropriate to determine
    the status of the detainee.
        The President has determined that the conflict with the al Qaeda is
    not covered by the Geneva Convention. The President has further
    determined that although the conflict with the Taliban is covered by
    the Geneva Convention, the Taliban detainees are not entitled to POW
    status under the terms of Article 4. Based on the President's
    determinations, there is no doubt regarding whether al Qaeda or Taliban
    detainees are entitled to POW status.
        The joint services regulation, Enemy Prisoners of War, Retained
    Personnel, Civilian Internees and Other Detainees (AR 190-8) (1 Oct
    1997), provides procedures for Article 5 tribunals should they be
    required. For example, the AR 190-8 procedures call for a three-officer
    panel. As noted, an Article 5 tribunal is only required ``should any
    doubt arise'' Regarding a detained individual's entitlement to POW
    status. No doubt has arisen regarding the POW status of al Qaeda and
    Taliban detainees.
        Despite the fact that al Qaeda and Taliban detainees are not
    entitled to POW status, we continue to treat them humanely and in a
    manner consistent with the principles of the 1949 Geneva Convention
    Relative to the Treatment of Prisoners of War.

        Secretary Rumsfeld. We will do that for the record.
        Chairman Levin. Is that okay? I do not mean to cut you
    short, either.
        Secretary Rumsfeld. No, that is fine.
        My comment, just for clarification, is when I said that my
    recollection of the convention, not the Army regulation--is
    that the convention is quite open as to what that is. What we
    have been doing, so that the record will be clear, is having
    the teams of people who interview these detainees make a
    judgment about them. There has not been doubt in the sense that
    the convention would raise about these people that I know of,
    and they have been then categorized as detainees as opposed to
    prisoners of war.
        I do not know that there is anyone who believes that they
    merit the standing of prisoner of war, anyone in the
    administration or anyone I have talked to.
        Chairman Levin. I thought that the President was deciding
    whether or not they are prisoners of war legally.
        Secretary Rumsfeld. No. Let me clarify that. This is an
    enormously complex issue, for me anyway. We believe in the
    Geneva convention very strongly. It is important. It provides
    protection for our soldiers because our soldiers behave as
    soldiers. They do not go around without uniforms, hiding their
    weapons, or killing innocent people intentionally.
        The convention was designed among countries to deal with
    conflicts between nations. The situation that we are in is that
    there is a technical question, a legal question, as to whether
    or not the United States should say that as a matter of law we
    interpret the convention to apply in the case of, for example,
    al Qaeda, which is not a nation. It is a terrorist
    organization. It was not a party to these conventions in any
    sense.
        The problem with doing that is it could cause some
    precedents that would be conceivably unfortunate. It is
    sufficiently complex that the administration is taking its time
    to look at it. In the event that the convention were to apply,
    then one would look at lawful combatants, noncombants, and
    unlawful combatants. They are very different. Noncombatants are
    civilians; unlawful combatants do not merit being treated as
    prisoners of war; and lawful combatants, like U.S. soldiers or
    the soldiers of any other country, do merit being treated as
    prisoners of war.
        In this instance, it is very clear that these were unlawful
    combatants, and as a result there has not been much debate that
    I have heard that these people would rise to the standing of
    prisoners of war. That is not to say that the Geneva convention
    does not apply. It could still apply as a matter of law, and
    that is the issue being discussed.
        There are three ways it could be tackled. One is the
    administration could say that they believe as a matter of law
    that the Geneva convention applies. They could, second, say
    that as a matter of law they have decided it does not, or it
    does not with respect to al Qaeda or Taliban. Third, they could
    say they do not need to address it because we have decided to
    treat the detainees as if it did apply, and we are not going to
    create a precedent by making a judgment.
        It is those options that are currently being considered by
    the White House, none of which would change their status as
    detainees. Nor would it change in any way the way they are
    being treated, because we are already treating them as if it
    does apply.
        Chairman Levin. The question for the record would then be,
    under our regulations, about when a tribunal must be triggered.
    If it does not apply, let us know why it does not apply.
        [The information referred to follows:]

        Article 4 of the 1949 Geneva Convention relative to the Treatment
    of Prisoners of War specifies the categories of people who fall into
    the hands of the enemy who are entitled to be treated as prisoners of
    war (POWs). If a detainee falls within one of the Article 4 categories
    of persons entitled to POW status, then he is a POW. If a detainee
    clearly does not fall within one of the Article 4 categories, then the
    detainee does not receive POW status. When there is doubt, then a
    tribunal under Article 5 of the Convention is appropriate to determine
    the status of the detainee.
        The President has determined that the conflict with the al Qaeda is
    not covered by the Geneva Convention. The President has further
    determined that although the conflict with the Taliban is covered by
    the Geneva Convention, the Taliban detainees are not entitled to POW
    status under the terms of Article 4. Based on the President's
    determinations, there is no doubt regarding whether al Qaeda or Taliban
    detainees are entitled to POW status.
        The joint services regulation, Enemy Prisoners of War, Retained
    Personnel, Civilian Internees and Other Detainees (AR 190-8) (1 Oct
    1997), provides procedures for Article 5 tribunals should they be
    required. For example, the AR 190-8 procedures call for a three-officer
    panel. As noted, an Article 5 tribunal is only required ``should any
    doubt arise'' regarding a detained individual's entitlement to POW
    status. No doubt has arisen regarding the POW status of al Qaeda and
    Taliban detainees.
        Despite the fact that al Qaeda and Taliban detainees are not
    entitled to POW status, we continue to treat them humanely and in a
    manner consistent with the principles of the 1949 Geneva Convention
    Relative to the Treatment of Prisoners of War.

        Secretary Rumsfeld. Good.
        Chairman Levin. Because the stakes here are great, as you
    point out, also for our own personnel.
        Secretary Rumsfeld. You bet.
        Chairman Levin. We have people who are not in uniform who
    are captured and we want to make sure that they are treated
    properly as well. So how we treat people and how we are
    perceived as treating people, because those can be different at
    times, becomes important in that regard, too, to protect our
    own people in circumstances where they may be captured and not
    in uniform.
        We thank you.
        Senator Dayton.
        Senator Dayton. Thank you, Mr. Chairman.
        I have two questions. Because of the hour I would be glad
    to take replies for the record, or you can answer them now,
    whatever you prefer. The first goes back again to the
    Reservists and members of the National Guard. As you indicated,
    Mr. Secretary, some 70,000 Reservists and members of the
    National Guard have been called up because of the war in
    Afghanistan. I think they are being called up for longer
    periods of time as well. So the financial sacrifices which they
    are making become, obviously, exacerbated by those increasing
    lengths of time.
        I commend you for what you are doing to increase military
    pay and benefits, but I would like to know specifically how
    that will apply to Reservists and members of the National
    Guard.
        Secretary Rumsfeld. I am advised that the pay increase
    applies to all. Just so the record will be very clear, the
    total number is 70,000. My understanding is that it is
    something like 60,000 Guard and Reserve and 10,000 that are
    being retained in the service past their normal discharge date.
        Senator Dayton. Your testimony implies that there is a
    targeted pay raise. The 4.1 percent pay raise is across-the-
    board, but it is then targeted for certain categories. Is there
    any targeting for the National Guard and Reserves, given the
    fact that some of the housing and the other benefits would not
    apply?
        Secretary Rumsfeld. I do not believe there is any targeting
    that would particularly apply to the Guard and Reserve, except
    what would apply to everybody. My recollection on the targeted
    pay raise is that you are right: it is 4.1 percent across the
    board, plus or minus 2 percent for certain targeted pay grades
    that are particularly in short supply and where we need to
    improve retention.
        Senator Dayton. Thank you.
        After meeting with the members of the National Guard in
    Minnesota and their spouses, particularly those who were called
    up to provide the airport security. I learned that because of
    the Posse Comitus Act, the Governor, instead of the President,
    called up the Guard. Because of this they were not eligible for
    some of the pay and benefits as well as being denied
    protections that are afforded those who are called up by the
    President, including being evicted from rental or mortgaged
    property and the cancellation of life insurance.
        Senator Wellstone and I introduced an amendment to the
    Defense Appropriations Bill which was adopted in the Senate
    that would have addressed this. The Department of Defense, at
    the time, had concerns about that. We were doing this at the
    last minute and the House did not concur, so it was dropped in
    the conference report.
        If you have any comments, fine. Otherwise, I would ask if
    the Department has specific objections to those remedies for
    the next go-around. I would certainly like to work with you.
    Otherwise, it seems to me that we are just taking care of some
    basic inequities, and I would ask if you would take another
    look at that, please.
        Secretary Rumsfeld. Senator, the interest is certainly a
    fair one. The decisions as to whether or not the Guard is
    called up by the State or by the Federal Government is based on
    the function that they are to perform. When the States call
    them up for State functions, as opposed to Federal functions,
    we have always felt, and continue to feel, that that is a State
    responsibility and the State legislation would be the proper
    place to change those circumstances.
        It does appear externally to look like an anomaly. If they
    are called up by the Federal system they are treated one way,
    and if they are called up by the State they are treated another
    way. There is good reason for that. It is because they are
    basically fulfilling a State function.
        Senator Dayton. I would agree with you, Mr. Secretary, and
    typically that is the case. I do not know whether there is a
    lesson. This might have just been an aberration in this
    circumstance. But given the length of time they have been
    called up now, to the extent those inequities apply to what is
    essentially service at the request of the President or the
    urging of the President, it might be something to look at as
    another one of these inequities that perhaps could be
    addressed. The financial penalties they pay for their service
    have been very significant, and they are doing an extraordinary
    job.
        Chairman Levin. I would like to thank our witnesses for,
    among their many extraordinary qualities, their staying power.
        We will stand adjourned. Thank you.
        [Questions for the record with answers supplied follow:]

                   Questions Submitted by Senator Carl Levin

                                  PHILIPPINES

        1. Senator Levin. Secretary Rumsfeld, there is a fair amount of
    confusion concerning the U.S. military presence in the Philippines. In
    the past, the Department has characterized our activity there as ``an
    operation'' or a ``mission.'' Yet, last Wednesday you referred to it as
    ``an exercise'' and the Philippine government calls it an exercise.
    Exercises involve training and simulations, but in this case, U.S.
    troops are authorized to engage a real enemy. Is this an operation or
    an exercise?
        Secretary Rumsfeld. We have deployed forces to the Philippines as
    part of the global war on terrorism to help the AFP (Armed Forces of
    the Philippines) to combat terrorism. This exercise is known as
    Balikatan 02-1. U.S. forces will train, advise, assist, and assess
    their AFP counterparts' capabilities. Because this training deployment
    is taking place near locations where there are hostilities, U.S. forces
    are authorized to exercise the right of self-defense. But they are not
    allowed to engage with the enemy outside of self-defense.
        [Deleted.]

        2. Senator Levin. Secretary Rumsfeld, regardless of what you call
    our activity in the Philippines, if U.S. troops are in a combat zone,
    the rules of engagement and command relationships must be clear.
    However, press reports indicate that U.S. and Philippine commanders
    have been unable to agree on ``terms of reference'' governing command
    relationships. Indeed, Philippine officials assert that U.S. forces
    will be under Philippine command and will not take independent action.
    Meanwhile, U.S. military spokespersons insist that U.S. troops will not
    be under Philippine command and will have authority to act
    independently, if necessary. How can we possibly resolve this impasse?
    How is it that we are currently deploying troops (220 out of the
    expected 650 total) to the area without such an agreement in place?
        Secretary Rumsfeld. The Terms of Reference (TOR) was signed before
    any U.S. forces were deployed to Basilan and before Exercise Balikatan
    02-1 began on February 14, 2002. On February 9, 2002, General Diomedio
    Villanueva (Chief of Staff of the AFP) and Rear Admiral W.D. Sullivan
    (J5 USCINCPAC) signed the TOR, which clearly states that U.S. forces
    will be under the command of U.S. officers at all times. The TOR also
    notes that U.S. forces will not unilaterally engage in combat, and they
    will respond to operational instructions from AFP commanders during
    field training exercises. These statements do not contravene U.S.
    command and control, but simply acknowledge that the AFP will provide
    instructions to the AFP and U.S. personnel operating together.

        3. Senator Levin. Secretary Rumsfeld, the Commander in Chief of the
    Pacific Command, Admiral Blair, was quoted in a New York Times article
    last week stating that the goal of U.S. military involvement in the
    fight against the Abu Sayyaf terrorist group is to help make Asia less
    hospitable to al Qaeda terrorists. Yet, this terrorist group is not the
    only insurgency in the Philippines, nor is it considered the strongest.
    Is the administration considering, or are we prepared to consider
    staying on in the Philippines to fight other insurgent or ``terrorist''
    groups that threaten the Philippine government?
        Secretary Rumsfeld. The current deployment is focused on the
    southern Philippines, particularly the island of Basilan, where the Abu
    Sayyaf Group (ASG) continues to hold three hostages, including two
    American citizens, Martin and Gracia Burnham. The ASG has been on the
    State Department Foreign Terrorist Organization list since 1997. It is
    one of the missions of this deployment to help the AFP defeat the ASG.
    We currently have no plans to expand beyond this mission. We will
    continue, however, to work closely with Manila to combat terrorism in
    the Philippines and the region.

        4. Senator Levin. Secretary Rumsfeld, Admiral Blair also reportedly
    stated that the U.S. military involvement in the fight against the Abu
    Sayyef terrorist group ``would last months but not years.'' President
    Arroyo stated that the exercise will last no longer than 6 months. Are
    we prepared to leave at the 6-month mark regardless of whether we have
    achieved our objectives?
        Secretary Rumsfeld, is there a definitive end-date to the current
    ``exercise'' or operation, or is this an open-ended commitment that we
    have assumed?
        Secretary Rumsfeld. This initial deployment will clearly last no
    longer than 6 months, as stated in the Terms of Reference. Within that
    period, USCINCPAC will provide an assessment and recommendations for
    any follow-on operations depending on the progress of current efforts.
    We will then work with the Government of the Philippines to see if any
    follow-on deployments would serve our purposes.

        5. Senator Levin. Secretary Rumsfeld, is there a definitive end-
    date to the current ``exercise'' or operation, or is this an open-ended
    commitment that we have assumed?
        Secretary Rumsfeld. See above (question #4).

                               HOMELAND SECURITY

        6. Senator Levin. Secretary Rumsfeld, you have reportedly forwarded
    to the President a proposal to establish a unified command for homeland
    security that would involve Canada and Mexico. Have you begun
    discussions with the Canadian and Mexican governments about this new
    command and any associated agreements that may need to be established
    with them?
        Secretary Rumsfeld. Yes, we have begun discussions with both the
    Canadian and Mexican governments in regards to the new Northern
    Command.

        7. Senator Levin. Secretary Rumsfeld, you have been discussing
    reorganizing the Department of Defense to better address homeland
    security challenges. Yet, there is still no proposal to replace the
    interim arrangement with Secretary White as the coordinator of such
    efforts. Given the increased funding for combating terrorism, who is
    ensuring that the right strategy is in place and that the budget
    addresses real priorities?
        Secretary Rumsfeld. In addition to his role as the interim DOD
    Executive Agent for Homeland Security, Secretary White was also
    directed by the President to serve as the acting Assistant Secretary of
    Defense for Special Operations/Low Intensity Conflict. The Office of
    the Assistant Secretary of Defense for Special Operations/Low Intensity
    Conflict compiled the combating terrorism inputs for the fiscal year
    2003 budget. Following September 11, 2001 and the initial prosecution
    of the Global War on Terrorism, the Department began a process of
    reviewing its strategy, analyzing its missions, and identifying its
    resource priorities. The Department is using this analysis in
    preparation for our fiscal year 2004 budget input for combating
    terrorism.
        On March 8, 2002, I signed a memorandum directing 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 will assume homeland defense and civil support responsibilities
    from Secretary White. This new staff will, among other duties, be
    responsible for coordinating with Governor Ridge's Office of Homeland
    Security on addressing priorities consistent with the National Homeland
    Security Strategy. When established, this new staff for homeland
    defense and civil support will also work with the Office of the
    Assistant Secretary of Defense for Special Operations/Low Intensity
    Conflict in the development of the fiscal year 2004 combating terrorism
    budget inputs.

        8. Senator Levin. Secretary Rumsfeld, did Secretary White provide
    input on combating terrorism to the budget and will he coordinate the
    implementation of the policies driving spending on procurement,
    research and development, and training?
        Secretary Rumsfeld. In addition to his role as the interim DOD
    Executive Agent for Homeland Security, Secretary White was directed by
    the President to serve as Acting Assistant Secretary of Defense for
    Special Operations/Low Intensity Conflict. The Office of the Assistant
    Secretary of Defense for Special Operations/Low Intensity Conflict
    compiled the combating terrorism inputs for the fiscal year 2003
    budget. Until the new staff for homeland defense and civil support is
    established, Secretary White will continue in both capacities to
    coordinate, with the appropriate OSD offces, the implementation of the
    policies driving spending on procurement, research and development, and
    training.

                       SPECIAL OPERATIONS--COMMANDO SOLO

        9. Senator Levin. Secretary Rumsfeld, our operations in Kosovo and
    Afghanistan have demonstrated that psychological operations are a
    crucial component of our efforts to defeat our enemies. Commando Solo
    overflight missions have broadcast messages to the populations in
    Afghanistan and the Balkans to explain our actions and recruit allies
    to our cause. I have no reason to believe that you and the Department
    disagree. Yet, I note that your budget does not include funding to
    continue the transition of the Commando Solo aircraft to the EC-130J.
    Without this continued annual support, the fleet will be divided in
    terms of training and deployment, substantially reducing unit
    responsiveness, and readiness. How do you justify the lack of funding
    for this critical asset?
        Secretary Rumsfeld. I am very proud of job that has been done by
    our Commando Solo crews in Afghanistan and the Balkans. Commando Solos
    are unique, high demand/low density platforms and continue to be a
    valuable asset for the Department.
        Transitioning from the EC-130E to the EC-130J model was a
    congressionally mandated program, and from fiscal year 1997-2001 funds
    were added to the Department's budget in support of this program. The
    original congressional intent was to fund eight EC-130Js as well as the
    modification of current Commando Solo special mission equipment. To
    date, funding has been provided for the conversion of five of eight EC-
    130J aircraft. The Department anticipated that congressional support
    for this program would continue however no funding was provided in
    fiscal year 2002.
        While steps are being taken to remedy the disconnect between how
    this program was traditionally funded and future funding methods, due
    to the amount of time it takes to modify and crossdeck (transfer) the
    psychological operations (PSYOP) broadcast equipment to these aircraft,
    split fleet operations will have to be extended longer than expected.
    In an effort to mitigate some of the impact on the fleet, I directed
    the Department to address the issue in our program review and recently
    added funding to mitigate special mission equipment obsolescence and
    degraded capability.

                  USE OF SPECIAL OPERATIONS TO FIGHT TERRORISM

        10. Senator Levin. Secretary Rumsfeld, given the demonstrated
    effectiveness of special operations forces in combating terrorism, what
    are your future plans for using these forces to fight global terrorism,
    and do such plans require an increase in special operations forces?
        Secretary Rumsfeld. There will always be a need for specially
    organized, trained, and equipped forces to perform missions critical to
    the U.S. It is safe to assume that Special Operations Force's unique
    capabilities will continue to be used in our fight against global
    terrorism. Currently, the Pentagon is conducting an in depth study to
    determine how Special Operations Forces should transform to meet the
    expanding war on global terrorism.
                                     ______

                   Questions Submitted by Senator Max Cleland

                                 TRANSFORMATION

        11. Senator Cleland. Secretary Rumsfeld, we are all in agreement
    that the transformation of the military is necessary to provide a more
    responsive and flexible force. I think we would also agree that in the
    area of transformation, the Department of Defense's ability to properly
    and accurately account for every defense dollar also needs to be
    addressed. The President's budget request calls for spending over
    $12,000 per second or over $1 billion per day on defense. Every dime
    may be necessary, but the recent collapse of Enron and the loss of many
    investors life savings, highlights the need for stringent accounting
    practices to ensure every dollar spent is done so in a responsible
    manner. We are all investors in this effort and the country deserves
    nothing less. As we prepare this year's defense budget, what accounting
    transformation has occurred or will occur regarding how the Department
    of Defense accounts for the $379 billion requested by the President?
        Secretary Rumsfeld.

             First, we are keeping financial management issues at
            the top of the agenda; the Department's senior leadership is
            engaged in financial transformation on a routine basis.

                     I convened an Executive Committee, at the
                    Under Secretary level, to provide strategic direction
                    and a Steering Committee, at the Assistant Secretary
                    level, to resolve the inevitable disagreements among
                    the components.

                            - The Executive Committee meets every quarter.
                            - The Steering Committee meets every other
                            month.

             Second, we are attacking the root cause of our
            reporting problems, i.e., an overly complex and outdated
            information system infrastructure.

                     To ensure financial transformation is
                    accomplished, the Secretary established under my
                    leadership, the Financial Management Modernization
                    Program--a comprehensive program that has been fully
                    funded, staffed, and strategically planned (critical
                    milestones and schedule).
                     For the first time ever, we developed a
                    Department-wide systems inventory. With this effort 85
                    percent complete, we have identified 673 information
                    systems. The inventory will be completed March 2002.
                     I am reviewing components information systems
                    initiatives to ensure they are smart investments and
                    are consistent with our transformation goals.

             Third, we are using performance data and measures to
            improve or resolve continuing problems such as untimely
            payments, problem disbursements, and inadequate recordkeeping.

                     From April 2001 to October 2001, we reduced by
                    41 percent the backlog of commercial payments.
                     We improved travel card management--reducing
                    delinquencies by 34.
                     We are also measuring the quality and accuracy
                    of financial information and have seen a 57 percent
                    reduction in payment recording errors since October
                    2000.

                                  PHILIPPINES

        12. Senator Cleland. Secretary Rumsfeld, I applaud the President in
    pursuing terrorism and evil wherever it is found. However, I am
    concerned that in our search for evil, we may fail to clearly define
    the mission, objectives, and end-state of proposed military actions.
    Media reports attribute comments to the Department of Defense officials
    as stating that U.S. soldiers in the Philippines would not be engaged
    in combat, yet, they would be assigned to accompany Philippine soldiers
    on patrols. Philippine officials have also given conflicting accounts
    of the U.S. troop mission. If there is confusion at the senior level,
    there is bound to be confusion at the soldier level. What is the
    mission of our forces in the Philippines? What is the timeline for
    completing the ``training''? What is the end-state of this training
    exercise?
        Secretary Rumsfeld. As part of the global war on terrorism, the
    Secretary of Defense has approved the deployment of U.S. forces to
    train, advise, assist, and assess the Armed Forces of the Philippines'
    (AFP) capabilities to combat terrorism. The mission of the deployment
    is to help the Government of the Philippines:

             continue the war on terrorism;
             defeat the Abu Sayyaf Group (ASG);
             help secure the release of U.S. hostages; and
             ensure that the Philippines does not become a haven
            for terrorists.

        To achieve this mission, U.S. forces will deploy to the AFP's
    Southern Command Headquarters through the battalion level where they
    will train, advise, assist, and assess their AFP counterparts. At this
    operational level, we do not expect U.S. forces to go out on patrols
    with AFP units.
        This phase of our deployment will last no longer than 6 months, as
    is stated in the Terms of Reference. Within that period, USCINCPAC will
    provide an assessment and recommendations for any follow-on operations
    depending on the progress of current efforts. We will then work with
    the Government of the Philippines to see if any such follow-on
    deployments would serve our purposes.

                                 WAGE SCHEDULES

        13. Senator Cleland. Secretary Rumsfeld, I would appreciate your
    thoughts on implementing Section 1113 of Public Law 107-107 (Fiscal
    Year 2002 National Defense Authorization Act) as it relates to the
    establishment of wage schedules and rates for prevailing rate
    employees.
        Secretary Rumsfeld. The Federal Wage System (FWS) uses wage surveys
    of local prevailing rates to determine blue-collar pay in a given wage
    area (132 wage areas in the United States). Section 1113 of Public Law
    107-107 provides a means for importing supplemental wage data from
    outside the local area and including it with local survey results (this
    is also known as the ``Monroney'' provision). These combined wage data
    are then used as a basis for establishing local wage rates in selected
    areas. While this survey process applies only to wage areas identified
    with significant production or repair in such specialized industries as
    aircraft, ammunition, artillery and combat vehicles, guided missiles,
    and shipbuilding, the wage survey results are applied to all blue-
    collar positions in the area, regardless of any industry affiliation.
        The Monroney provision is contrary to the principles of the FWS,
    since wage information imported into the wage area contravenes and
    distorts local survey results. The artificial increase of Federal wages
    in certain wage areas not only adds to payroll costs (estimated at an
    additional $14 million annually) but also enhances the possibility that
    government jobs will be less competitive than contractors in the area.
    While Public Law 99-145 granted the Department of Defense exemption
    from Monroney provisions from 1985 until 2002, the reinstatement of
    those provisions creates an ongoing and contentious issue. The
    Department asked that the exemption be continued; however, our request
    was not approved. Nevertheless, the Department continues to question
    whether use of the Monroney provision is appropriate, especially given
    the existence of several administrative remedies (special rates,
    increased minimum rates, unrestricted rates, and others) that are
    available to fully address local pay issues.

                             ACTIVE DUTY STRENGTHS

        14. Senator Cleland. General Myers, did any of the services request
    increases in their active duty strengths as part of their fiscal year
    2003 budget requests and what is your view on the need for such
    increases?
        General Myers. The Marine Corps requested an increase of 2,432
    active duty military strength as part of their fiscal year 2003 budget
    to establish a new 4th Antiterrorism Marine Expeditionary Brigade
    (MEB). The Army, Navy, and Air Force did not request an increase in
    their active duty strengths. As we move forward in the war on terrorism
    and protecting the homeland, the services should continue to review
    their short-term and long-term end strength requirements and make the
    necessary recommendations to the Department of Defense.
                                     ______

                Questions Submitted by Senator Mary L. Landrieu

                         TRANSFORMATION OF THE MILITARY

        15. Senator Landrieu. Secretary Rumsfeld, all four services under
    the Department of Defense and the Coast Guard face sweeping changes and
    new challenges to which they must rise in the coming years. In this
    time of threats from many non-state actors, it makes sense to pursue a
    capabilities-based approach to our warfighting strategy. This should
    not negate, however, many of the technologies we currently have in
    place. Will you make a concerted effort to fully utilize those
    currently employed systems which can be integrated into the
    transformation process, such as the B-52, which has proven time after
    time its worth in achieving very specific national security goals?
        Secretary Rumsfeld. To ensure we have the resources to prepare for
    the future, and to address the emerging challenges to homeland
    security, we need a more realistic and balanced assessment of our near-
    term warfighting needs. Looking to the future, it's important that we
    move away from the so-called threat-based strategy that had dominated
    our country's defense planning for nearly a half-century and adopt what
    we characterize as a capability-based strategy, one that focuses less
    on who might threaten us or where we might be threatened, and more on
    how we might be threatened. Instead of building our Armed Forces around
    plans to fight this or that country, we need to examine our
    vulnerabilities, asking ourselves what must be done to deter and defeat
    those threats. We need to change not only the capabilities at our
    disposal, but also how we think about war. All the high-tech weapons in
    the world will not transform U.S. Armed Forces unless we also transform
    the way we think, the way we train, the way we exercise, and the way we
    fight. As we consider the transformational steps ahead, we will
    certainly look at our existing technologies and capabilities, and
    determine their future role in our national security strategy.

        16. Senator Landrieu. Secretary Rumsfeld, do the plans for
    increasing military expenditures to $451.4 million by fiscal year 2007
    call for the full modernization of the B-52 fleet, including the `Ready
    Reserve' B-52s at Minot Air Force Base? After all, the B-52 has been a
    stalwart in Operation Enduring Freedom and is expected to remain in
    service until fiscal year 2040.
        Secretary Rumsfeld. The increased funding for B-52 modernization
    includes upgrades to aircraft navigation, avionics, computers,
    situational awareness, and electronic countermeasure systems for the
    required B-52 fleet. The Air Force maintains a requirement for 76 B-52
    aircraft as stated in the 2001 U.S. Air Force Long-Range Strike
    Aircraft White Paper and the 1998 Report of the Panel on Long-Range
    Airpower.

                               HOMELAND SECURITY

        17. Senator Landrieu. General Myers, you mentioned that the Unified
    Command structure may be modified to establish a combatant command
    responsible for homeland security. Can you share any preliminary
    models?
        General Myers. Yes, Senator. A preliminary model already exists.
    Since September 2001, U.S. Joint Forces Command has executed its
    assigned mission as supported CINC for land and maritime defense and
    for the civil support portions of the homeland security mission. U.S.
    Joint Forces Command has activated a 67-person provisional Joint Force
    Headquarters--Homeland Security (JFHQ-HLS), as well as supporting an
    implementation team to facilitate a future Unified CINC dedicated to
    the HLS mission.

        18. Senator Landrieu. General Myers, do you envision a homeland
    CINC?
        General Myers. Senator, we are currently studying the feasibility
    of creating a command to oversee homeland responsibilities.
    Additionally, we are drafting a terms of reference document that will
    help us in this effort.

                          RESERVE AND GUARD READINESS

        19. Senator Landrieu. Secretary Rumsfeld, you are of course, aware
    that over the past 10 years the number of days reservists have served
    on active duty has soared to levels which endanger their civilian
    employment. With the onset of Operations Enduring Freedom and Noble
    Eagle, over 7,000 Guardsmen stand watch in more than 440 airports
    around the country. Countless reservists have not only deployed
    overseas, but kept our shores and skies safe. They perform duties
    ranging from humanitarian and peacekeeping missions to assuming new
    responsibilities in responding to domestic incidents involving weapons
    of mass destruction. Do you see a resistance from employers to support
    this increase of Reserve and Guard duties and if so, do you have any
    recommendations to ease the burden on employers?
        Secretary Rumsfeld. The use of the National Guard and Reserve has
    changed significantly over the past decade, with members not only
    performing required training, but also supporting operations on a day-
    to-day basis. Employer support is critical to an individual's decision
    to remain in the selected Reserve. That support is even more important
    in a time of mobilization, when employees are absent from their
    employer for more extended periods of time. These absences create work
    problems and increased costs for both the employers and employees.
        At this time I do not see a resistance from employers to support
    this increased use of the Reserve components. I see our Nation's
    employers, both public and private, in full support of their employees.
    They have, as a general rule, been more than just supportive. Hundreds
    of employers have extended continued medical care, continued salaries,
    established support mechanisms for the families, and have taken
    extraordinary steps to show corporate support for all Reservists.
    However, as the period of the current call-up continues, sustaining the
    displays of employer patriotic support may become more of a challenge.
        The Department has programmed a significant increase in funding for
    employer support programs to strengthen the partnership between
    employers and the military, facilitate targeting of information to
    employers, enhance communications with industry, and to survey and
    improve overall attitudes of employers toward participation of their
    employees in the Guard and Reserve. We have taken positive steps to
    provide as much relief to employers as possible, primarily by
    restricting the length of involuntary call up to, in most cases, 1
    year. Some Reserve members may be recalled for longer periods, and some
    Reservists may volunteer for duty beyond the period of the involuntary
    call up. We want to ensure that no recalled reservist is kept on active
    duty for longer than required, and we are continuously reviewing our
    requirements to maintain that equilibrium.

        20. Senator Landrieu. Secretary Rumsfeld, is it your opinion that
    the Reserve component can maintain readiness, retention, and remain a
    force multiplier with this increasing demand, without a significant
    increase in their budget?
        Secretary Rumsfeld. I anticipate that there will be some level of
    increased Reserve component funding requirement based on the
    unexpected, unplanned, and unbudgeted utilization of the Reserve
    components. After the call-up, many of these personnel will still be
    required to perform their annual Reserve component military training
    requirements to stay current and qualified for their primary military
    assignments. Other members may be performing in their specialty and not
    need any additional event training. We are assessing the appropriate
    size of the funding increase driven by this greater-than-budgeted
    utilization, and plan to request that increase as part of the Fiscal
    Year 2002 Supplemental request.

                                     JSTARS

        21. Senator Landrieu. Secretary Rumsfeld, recent events have
    certainly shown the relevance of having flawless intelligence and
    integrated intra-theater operations. One platform that has become a
    cornerstone of our intelligence gathering efforts is JSTARS. Can we
    expect to see more technological growth and more airframes for this
    particular weapon system in the out-years?
        Secretary Rumsfeld. The Air Force currently operates 12 JSTARS
    aircraft and is funded to field 5 more by fiscal year 2005. These
    aircraft are based on the older Boeing 707 airframe. We are currently
    developing a new acquisition plan to upgrade and migrate the JSTARS
    ground surveillance mission and battle management mission to a newer,
    larger airframe. The Boeing 767 has been chosen and will host the next
    generation Active Electronically Scanned Antenna (AESA) radar as the
    first development spiral of a Multi-sensor Command and Control Aircraft
    capability. This 4th generation radar, known as the Multi-Platform
    Radar Technology Insertion Program (MP-RTIP), will provide 20-fold
    increase in power, 6-fold increase in the number of targets processed,
    a 300-fold increase in the number of tracks, and 10-fold increase in
    Synthetic Aperture Radar resolution. Furthermore, the MP-RTIP sensor
    will provide focused air-to-air surveillance for cruise missile
    defense. Subsequent development spirals would expand mission
    capabilities to include air surveillance missions. We plan to have the
    first MP-RTIP equipped aircraft operational by 2010.

                PUBLIC PRIVATE VENTURE AND MILITARY CONSTRUCTION

        22. Senator Landrieu. Secretary Rumsfeld, some recent estimates say
    that it will take $30 billion and more than 30 years just to fix the
    current backlog of military housing deficiencies. The National Defense
    Authorization Act for Fiscal Year 1996 included a series of new
    authorities allowing the Department of Defense to work with the private
    sector to build or renovate military housing by obtaining private
    capital to leverage government dollars, and use a variety of private
    sector approaches to create military housing faster and at less cost to
    American taxpayers. This legislation was extended to December 2004. Why
    has the military construction budget decreased by 10 percent in fiscal
    year 2003, yet the overall budget has increased by 10 percent?
        Secretary Rumsfeld. While the fiscal year 2003 military
    construction request is less than last year's request, it focuses
    funding on improving quality of life and resolving critical readiness
    shortfalls. With respect to quality of life, we have increased the
    military construction budget for family housing by $227 million from
    the President's fiscal year 2002 budget request. Furthermore, this
    budget maintains our commitment to single service members by requesting
    $1.2 billion for barracks, and to those living off base by reducing
    their out of pocket housing costs from 11.3 percent to 7.5 percent. In
    addition to these budgetary changes, we also accelerated the goal for
    eliminating inadequate housing from 2010 to 2007, an improvement of 3
    years.
        You also mention our Military Housing Privatization Initiative
    (MHPI), the availability of which Congress extended from December 31,
    2004 to December 31, 2012. These authorities allow the Department to
    leverage the capital and expertise of the private sector to improve the
    condition of military family housing sooner and at less cost (both up
    front and over the life cycle of a project). As I mentioned, we are
    committed to eliminating inadequate military family housing by 2007.
    The extension of these authorities gives the Department an important
    tool to meet that commitment.

        23. Senator Landrieu. Secretary Rumsfeld, do you support a broader
    expansion of this initiative to include permanent authority?
        Secretary Rumsfeld. The Department is interested in making the
    Military Housing Privatization Initiative authorities permanent, which
    is why we submitted legislation to that effect as a part of our fiscal
    year 2002 National Defense Authorization Bill. Congress instead elected
    to extend the availability of our privatization authorities from
    December 31, 2004 to December 31, 2012. Although not what we requested,
    the extension of these authorities does allow us to maintain our
    momentum. We will continue to aggressively pursue housing privatization
    and, when appropriate, work with Congress to make the housing
    privatization authorities permanent.

                          TECHNOLOGY TRANSITION ISSUES

        24. Senator Landrieu. Secretary Rumsfeld, the Comptroller General
    has found that private industry fields new products faster and more
    successfully than the Department of Defense because they are able to
    spend more time in research and development before incorporating them.
    Do you agree that problems with immature technologies contribute to
    slowing down the entire acquisition cycle?
        Secretary Rumsfeld. We believe that using mature technologies
    contributes to cycle time reductions. The revised DOD 5000-series
    documents that govern the DOD acquisition system now require that key
    technologies be demonstrated in a relevant environment before a program
    begins system development and demonstration, unless there is an
    overriding reason to move forward with less mature technologies.

        25. Senator Landrieu. Secretary Rumsfeld, do you believe ``spiral
    development'' or sequential integration of new technologies as they
    mature is an appropriate response to this problem?
        Secretary Rumsfeld. Yes. Spiral development calls for using
    available, more mature technologies to produce weapon systems that meet
    each time-phased increment of required capability. The first increment
    of capability (or block) will meet many, but not necessarily all, of
    the system's operational requirements when the system is first
    deployed. Each additional increment or block will incorporate newer
    technologies that have matured after the first increment or block was
    developed and fielded. The series of blocks represent the ``spirals''
    that provide for increasing capabilities over time.

                                     LPD-17

        26. Senator Landrieu. General Myers, our Navy faces the same
    challenge as our other services, and that is the age of the fleet. The
    LPD-17 which would provide some needed relief to aging amphibious lift
    vehicles has short-sightedly, in my opinion, been reduced to one per
    production year. Why was this cut made, and isn't replacing aging
    vessels a number one concern in the overarching theme of
    transformation?
        General Myers. The Navy decided to reduce shipbuilding procurement
    in fiscal year 2003 because the average age of surface ships is
    relatively low, and that they were better off making choices to fund
    higher priorities. Given the Global War on Terrorism, the Department's
    first priority is funding readiness accounts. The Navy could better
    answer the broader question of exactly why the cut was made and the
    effect it will have on transformation.

                         SCIENCE AND TECHNOLOGY FUNDING

        27. Senator Landrieu. Secretary Rumsfeld, the Department's science
    and technology programs play a key role in our efforts to transform our
    military to meet the emerging threats of the 21st century. These
    programs fund scientific research at our Nation's universities, defense
    laboratories, and in industry--developing the technologies that will
    protect our warfighters and citizens at home in the future. Past
    investments by the Department of Defense have yielded the biological
    sensors, precision weapons, and unmanned vehicles that are playing such
    an important part in fighting our enemies in Afghanistan and defending
    our people at home. The Quadrennial Defense Review highlighted the need
    for science and technology investments, calling for ``funding for
    science and technology programs to a level of 3 percent of the
    Department of Defense's spending per year.'' Unfortunately, the
    President's budget request is nearly $1.4 billion short of this goal.
    The request cuts funding for the Department of Defense's science and
    technology programs by nearly $200 million from fiscal year 2002
    appropriated levels. It also cuts funding for Army and Navy science and
    technology programs, as well as for basic research performed at small
    companies and universities around the country. How are these cuts
    consistent with the target and transformation vision set by the
    Quadrennial Defense Review?
        Secretary Rumsfeld. The President's fiscal year 2003 budget Request
    seeks $9.9 billion for science and technology (S&T) programs, including
    $213 million in disaster relief funds for combating terrorism
    technology, a $1.1 billion increase over the Fiscal Year 2002 Amended
    President's Budget Request of $8.8 billion. It remains our goal to
    increase funding for science and technology (S&T) programs to a level
    of 3 percent of the Department's total budget. Current efforts within
    the Department are focused upon aligning S&T investment with the
    capabilities outlined in the QDR, with increased emphasis on joint,
    transformational, and counter-terrorism technologies.

        28. Senator Landrieu. Secretary Rumsfeld, how will these cuts
    affect our efforts at transforming the military to meet the new terror,
    weapons of mass destruction, cyber, and other threats in the next
    century?
        Secretary Rumsfeld. Current efforts within the Department are
    focused upon aligning S&T investment with the capabilities outlined in
    the QDR, with increased emphasis on joint, transformational, and
    counter-terrorism technologies. This reflects a shift to capabilities
    based planning to address a broad range of potential challenges in the
    future.

        29. Senator Landrieu. Secretary Rumsfeld, when do you expect the
    Department to achieve the 3 percent goal established by the Quadrennial
    Defense Review?
        Secretary Rumsfeld. It remains our goal to increase funding for
    science and technology programs to a level of 3 percent of the
    Department's total budget. Providing a precise time line for achieving
    that goal is very difficult at this time because of the needs to fight
    the war against terrorism. Our current budget request achieves a
    balanced and affordable defense program which includes a substantial
    increase for science and technology over the fiscal year 2002 request.

      ROLE OF THE DEPARTMENT OF DEFENSE IN HOMELAND DEFENSE AND HOMELAND
                                    SECURITY

        30. Senator Landrieu. Secretary Rumsfeld and General Myers, last
    year the Defense Department was considering reorganization initiatives
    to improve the Department's ability to contribute to the homeland
    security mission. I gather we still have not seen a final proposal on
    such reorganization. As I see it, the Department has two roles in this
    regard. First, it has the primary responsibility for defending the
    United States against attack from outside threats. That is the primary
    mission of our military forces. I understand that there has been some
    thought to revising the division of responsibilities among our
    commands, the Unified Command Plan, to improve our capabilities to
    defend against external attacks. Second, the Department plays a
    supporting role to the rest of the Federal Government for homeland
    security. This is a more complicated area because of the different
    missions of civilian agencies that have law enforcement roles and
    responsibilities here at home. In this second case, the Department
    would play a supporting role, rather than a leading role. Can you share
    with me your views on the appropriate roles for the Department of
    Defense in each of these missions, and what changes you believe would
    be useful in helping the Department play the appropriate role?
        Secretary Rumsfeld. In Public Law 107-107, the National Defense
    Authorization Act for Fiscal Year 2002, Congress directed me to
    ``conduct a study on the appropriate role of the Department of Defense
    with respect to homeland security.'' The Department of Defense is
    currently conducting this study, examining roles and missions in light
    of the Global War on Terrorism and the evolving National Homeland
    Security Strategy, and will report the results this summer.
        General Myers. Certainly, Senator. While the primary mission of our
    Armed Forces will continue to be the defense of our homeland against
    external attacks, our defense policy must evolve to meet new threats.
    For this reason, a new homeland CINC is being studied. But I want to
    emphasize that our best defense is still a good offense. We intend to
    strike the enemy on their soil and on our terms, and this is what our
    combatant commanders are doing around the world right now.
        In terms of how we support civil authorities, we are currently
    reviewing how best the Armed Forces can assist these authorities. I
    believe the current role of the Armed Forces is appropriate, but, given
    the new threat environment, we may need to reexamine the Armed Forces'
    relationship with local, State, Federal, and civilian agencies in terms
    of prevention, preemption, and consequence management. If a
    determination is made that non-DOD agencies lack a specific capability,
    the Armed Forces may be called upon to help on an interim basis to fill
    a specific voids. One example in which the Armed Forces would provide
    an appropriate supporting role is in response to an attack of weapons
    of mass destruction. In any situation, the Armed Forces would be in a
    supporting role to Federal or State lead agencies. I do not believe
    that we should engage in law enforcement or domestic intelligence-
    gathering activities. Not only are we generally precluded from engaging
    in these sorts of activities as a matter of long-standing law and
    policy, but also these are activities for which non-Department of
    Defense agencies are clearly and appropriately responsible. Any
    capability shortfalls in these areas should, therefore, be addressed by
    the appropriate agency.

                    CHEMICAL AND BIOLOGICAL DEFENSE EFFORTS

        31. Senator Landrieu. Secretary Rumsfeld, last October, somebody
    sent highly concentrated spores of deadly anthrax in the mail to a
    number of Senate offices, including those of Majority Leader Tom
    Daschle and Senator Pat Leahy. After these terrorist attacks, we found
    that there was much we did not know about anthrax, which is considered
    the most likely biological weapon threat our military faces. It was
    only about a week ago that the Hart Senate Office Building reopened
    after months of efforts to decontaminate the anthrax and make the
    building safe again. What lessons have you learned as a result of the
    anthrax attacks, and what is the Department doing to improve its
    ability to defend and protect against biological and chemical attacks?
        Secretary Rumsfeld. For operational responses to biological
    terrorism, the Department of Defense is working closely with the lead
    Federal agencies as defined in the Federal Response Plan to ensure a
    well coordinated response. For clean up of the Hart Senate Office
    Building, the Department of Defense supported the Environmental
    Protection Agency (EPA), which will issue its report on lessons learned
    from that cleanup effort.
        The anthrax attacks late last year pointed out the real dangers of
    biological weapons. While these attacks have increased the priority of
    our efforts, the Department has been drawing upon our Nation's
    scientific expertise to develop and field an effective defense
    capability to protect our forces and nation from adversaries at home
    and overseas. Continuing advances in genetic engineering,
    biotechnology, and related scientific areas will require our continued
    vigilance to ensure that we are prepared for the threat and not caught
    by technological surprise.
        An integrated approach, which incorporates capabilities for
    detection, identification, warning, protection, medical
    countermeasures, and decontamination, provides the basis for the
    Department's defenses against chemical and biological weapons threats.
    A detailed description of accomplishments and planned research,
    development, and acquisition programs is provided in the ``DOD Chemical
    and Biological Defense Program Annual Report to Congress,'' last
    submitted in April 2002.

        32. Senator Landrieu. General Myers, I gather that the FDA just
    approved the license to produce anthrax vaccine last week. I understand
    that the Joint Chiefs believe it is important that our troops are
    protected against anthrax. What is the Department's plan to protect our
    forces against anthrax and other biological warfare threats?
        General Myers. The Joint Chiefs and I are concerned about the
    health and safety of all service members, especially those assigned or
    deployed to high threat areas. The Department of Defense is currently
    reviewing the Anthrax Vaccine Immunization Program to determine the
    best courses of action to provide protection to our service members. In
    addition to the anthrax vaccine, commanders have and will continue to
    employ other pillars of our Force Health Protection program to include
    the use of protective gear, biological agent detectors, ongoing medical
    surveillance, intelligence gathering, and stockpiling antibiotics for
    use in treatment should it be necessary.
                                     ______

                 Questions Submitted by Senator Daniel K. Akaka

                                    OPTEMPO

        33. Senator Akaka. General Myers, as you pointed out in your
    written statement, while our forces are bravely securing our homeland
    and conducting offensive operations on the war on terrorism, they also
    remain engaged in a number of other important missions. Could you
    please comment on the impact that maintaining the OPTEMPO has on
    military readiness for both the short-term and long-term?
        General Myers. While the current operations tempo from the war on
    terror is manageable, we should remember that this is wartime and it
    will cause us to necessarily push our forces harder. Sacrifices are
    being made and will have to continue to be made. This is particularly
    true for some of our specialized assets, called ``low density/high
    demand'' assets, which are being deployed at high operational levels.
        That said, we continue to do everything we can to alleviate the
    stresses on these forces by ensuring balanced force rotations and
    providing appropriate rest, refit, and training periods. For the long-
    term, we will strive to address the fundamental causes of deployment
    stress. The fiscal year 2002 and 2003 budgets help fix some of our
    ``low density/high demand'' intelligence, surveillance, and
    reconnaissance assets. We've also made tremendous strides in recent
    years providing our people a comprehensive set of quality life
    improvements, especially in the areas of pay, housing, and health care.
    We have stocked our spare parts shelves, funded our maintenance depots,
    and enabled our training pipelines. We have established a system to
    track and compensate individuals who are frequently deployed, and are
    working to address all the issues involved in sustaining our military
    capabilities. These actions will help ensure America's military is
    ready to respond to the demands the war on terrorism puts on us.

                               RESERVE PERSONNEL

        34. Senator Akaka. General Myers, you mentioned the substantial
    contributions our Reserve personnel are making to current operations.
    How long does the Department expect to sustain this level of Reserve
    commitment? Will we be able to sustain an additional activation of
    Reserve personnel in similar numbers?
        General Myers. While the current operations are certainly
    demanding, our Reserve component forces are ready, willing, and more
    than able to answer the call. Our Reserve components (RC) are
    completely integrated into our war against terrorism. Under the current
    partial mobilization authority, we should be able to sustain our
    current level for several years. Only a small percentage of our RC
    forces have been mobilized and we can use members not currently
    mobilized to satisfy future requirements. Because we do have a large
    pool to draw from we are able to support an additional mobilization of
    similar numbers. We also plan to reduce our Reserve component forces as
    quickly as possible where they are used as an interim capability, such
    as airport security. We'll need the continued support of employers and
    families so our Reservists and Guardsmen can continue to serve their
    country.
                                     ______

                   Questions Submitted by Senator Bill Nelson

                               CONCURRENT RECEIPT

        35. Senator Bill Nelson. Secretary Rumsfeld, the budget request
    does not include funding necessary to allow concurrent payment of
    retired pay and disability compensation (estimated to cost $3 billion
    annually). Do you believe that offsetting military retired pay by
    Veterans Administration disability compensation is a just and fair
    treatment of our retirees and their families?
        Secretary Rumsfeld. We are concerned about this important issue and
    are currently reviewing the matter as requested by Congress. We will
    provide any recommendations after that review is complete.

        36. Senator Bill Nelson. Secretary Rumsfeld, why did President
    decide not to include this funding in his request this year?
        Secretary Rumsfeld. The matter was under review, but the review is
    still pending. Once the review is complete, we will provide appropriate
    recommendations, if any.

        37. Senator Bill Nelson. Secretary Rumsfeld, how did you advise the
    President with regard to this funding?
        Secretary Rumsfeld. Once the review is complete, we will provide
    appropriate recommendations, if any.

                     JOINT PRIMARY AIRCRAFT TRAINING SYSTEM

        38. Senator Bill Nelson. Secretary Rumsfeld, in your fiscal year
    2003 budget request the Air Force buys 35 T-6A (Texan) aircraft for
    their Joint Primary Aircraft Training System (JPATS) program. In fiscal
    year 2002 they bought 45. The Navy has again failed to fund their share
    of this important modernization program in this request. Congress has
    urged the Navy to get this program back on track as a matter of pilot
    safety, quality training, and reduced operating costs. The older Navy
    trainers are much less safe and a 4-year delay in procurement is not
    trivial. Please explain the apparent contradiction in Department of
    Defense's position that accelerates the retirement of legacy aircraft
    such as Huey Helicopters and Navy F-14 Tomcats, but specifically allows
    the Navy to ignore the benefits of accelerating its own training
    aircraft modernization program.
        Secretary Rumsfeld. As part of the fiscal year 2003 submission
    process, a prioritized review of Navy programs was conducted similar to
    that conducted in fiscal year 2002 when JPATS procurement was initially
    deferred. The Navy remains committed to the decision to maximize the
    remaining service life of the T-34C with a ``just in time'' procurement
    strategy for transitioning to JPATS. The T-34C aircraft has an
    excellent safety record; it is reliable and economical to operate and
    has service life remaining to meet current and future training
    commitments. The Air Force has a legacy trainer, the T-37 that is at
    the end of its useful service life and it needs to procure JPATS now.
    The Air Force bought 40 T-6s in fiscal year 2002, and recently
    accelerated its planned buys for fiscal year 2004-2007.

                             MILITARY CONSTRUCTION

        39. Senator Bill Nelson. Secretary Rumsfeld, the budget request
    reduces funding for ``low priority'' new construction that was planned
    in previous years. It also attempts to reduce some of the backlog of
    facilities maintenance and repairs. New construction has been slowed
    obviously in anticipation of BRAC authority in fiscal year 2005. What
    specific guidance have you provided the services and CINCs with regard
    to planning, programming, and budgeting for new military construction
    and what kinds of projects are acceptable or not?
        Secretary Rumsfeld. BRAC was not a consideration when determining
    construction projects. The military construction projects in our fiscal
    year 2003 request were based on mission criticality without regard to
    specific installations.
        Our guidance to the components was to plan, program, and budget in
    such as way as to: improve, over time, the recapitalization rate to
    meet relevant life expectancy benchmarks with our goal being 67 years
    on average; restore the readiness of facilities to minimum C-2 status;
    and constrain ``new footprint'' facilities while eliminating any
    remaining excess capacity so we can achieve a net reduction in
    capacity.

                         MILITARY CONSTRUCTION PLANNING

        40. Senator Bill Nelson. Secretary Rumsfeld, how long a view is
    reflected in this MILCON request--that is, are you trying to avoid
    committing to construction at installations that may change after 2005,
    or are you looking well into the future, carefully considering how to
    station the force into the century? For example, all Atlantic Fleet
    nuclear aircraft carriers are crowded into Naval Station Norfolk. Is it
    wise to allow this concentration of valuable, somewhat vulnerable ships
    to continue, or would it be more prudent to have the flexibility to
    station our nuclear aircraft carriers at other locations?
        Secretary Rumsfeld. The services assessed both short- and long-term
    factors in developing their fiscal year 2003 military construction
    requests. All the military services are continually assessing the risk
    of attacks on our forces and continually planning to optimize
    protection for our people, our ships, and the other components of our
    defense force. The advantages of concentration include economics, the
    efficient and effective use of available infrastructure, and improving
    the effectiveness and efficiency of antiterrorism protection. As you
    infer, however, there are certainly some potential disadvantages as
    well.
        Thus, the services will continue to consider facility investments
    in light of operational requirements as well as many other factors. We
    must ensure that our infrastructure appropriately supports those
    requirements. Specifically, the fiscal year 2003 military construction
    request is focused on resolving critical readiness shortfalls as
    determined by the services.

                                NORTHERN COMMAND

        41. Senator Bill Nelson. Secretary Rumsfeld, Gen. Peter Pace, Vice
    Chairman of the Joint Chiefs of Staff, disclosed plans at the National
    Defense University last week to create a new ``Northern Command'' that
    would be responsible for defending the borders, coasts, and airspace of
    the United States. We understand that you plan to present to President
    Bush a new unified command structure for just such a headquarters. Do
    you envision that this command will be a regional combatant command
    like Central Command, a functional command like Transportation Command,
    or both, like our Special Operations Command?
        Secretary Rumsfeld. I envision that Northern Command (NORTHCOM)
    will be a regional combatant command.

        42. Senator Bill Nelson. Secretary Rumsfeld, what will be the role
    of the National Guard in this concept?
        Secretary Rumsfeld. DOD is studying the missions and associated
    force requirements for NORTHCOM, including the appropriate relationship
    between NORTHCOM and National Guard forces.

        43. Senator Bill Nelson. Secretary Rumsfeld, do you contemplate
    recommending change to National Guard structure?
        Secretary Rumsfeld. DOD is studying the missions and associated
    force requirements for NORTHCOM including any proposed changes in
    National Guard structure.

        44. Senator Bill Nelson. Secretary Rumsfeld, will their relative
    priority for resources increase as a function of this increased
    allocation to CINC operational plans?
        Secretary Rumsfeld. As the defense strategy makes clear, the
    highest priority for the U.S. military is to fulfill its specified
    responsibilities to defend the U.S. homeland. Having appropriate Active
    and Reserve component forces ready for homeland defense missions is
    therefore a first concern for the Department. Once the Combatant
    Commander for Northern Command is in place, he or she will develop
    plans within the Command's area of responsibility for my review and
    consideration. All Active and Reserve component units apportioned to
    those plans must be adequately resourced for their assigned missions.

        45. Senator Bill Nelson. Secretary Rumsfeld, over the years, our
    National Guard's support for state counterdrug efforts has paid huge
    dividends in reducing drug traffic and terrorist threats along our
    borders. The counterterror benefits of these programs are apparent;
    however, the Department of Defense consistently under funds this effort
    in annual budget requests. Will this new command also take on
    responsibility for the Department of Defense's support for counterdrug
    operations?
        Secretary Rumsfeld. The Department is currently reviewing the
    missions that U.S. Northern Command will undertake with regards to
    homeland defense and civil support. The Department provides
    considerable support to civil authorities in the area of
    counternarcotics. We are also currently reviewing DOD counternarcotics
    policy. Therefore, it would be premature to commit to any future role
    the new command may have in the counterdrug program.

        46. Senator Bill Nelson. Secretary Rumsfeld, what is your
    commitment to the National Guard's participation in counterdrug/
    counterterror operations in support of state law enforcement agencies?
        Secretary Rumsfeld. The Department is currently reviewing our
    counternarcotics policy. Therefore, it is premature for me to commit to
    any future level of National Guard participation in counterdrug
    operations in support of state law enforcement agencies.

        47. Senator Bill Nelson. Secretary Rumsfeld, how will this command
    be funded and have you considered giving this command the same somewhat
    independent budget authority as held by Special Operations Command?
        Secretary Rumsfeld. The Department is examining various funding
    mechanisms for U.S. Northern Command as part of its ongoing planning
    process for the Command's establishment.

                                     SPACE

        48. Senator Bill Nelson. Secretary Rumsfeld, the Department of
    Defense budget request indicates a range of support for increased or
    improved capabilities in space to support military operations-
    particularly in intelligence, geo-location, and communications. The
    budget request also reflects significant disappointment that some
    important space programs have failed to progress adequately--such as
    reduced funding for Evolved Expendable Launch Vehicle. The Department
    of Defense's emphasis appears to be on the payload, but there is
    significant risk to our national capacity to reliably get our critical
    defense systems into space without support for the launch programs,
    such as NASA's Space Launch Initiative, and our human space programs.
    Sen. Mikulski recently (January 28, 2002, Aviation Week) ``cautioned''
    NASA to maintain the ``firewall'' between military and civil space
    activities. This cautious approach to NASA-Department of Defense
    cooperation ignores the reality of urgent requirements for greater
    inter-agency integration to save money, and denies NASA a critical and
    appropriate role in supporting public safety and global security. I
    have argued that a national space policy that limits the Department of
    Defense's role in reusable launch vehicle development may need to be
    revisited to allow significant Department of Defense contribution to
    NASA's Space Launch Initiative. What is your position on the future of
    cooperation with NASA for critical common space functions such as space
    lift?
        Secretary Rumsfeld. The Department of Defense is currently working
    directly with NASA in developing a long-term investment strategy for
    next-generation reusable launch vehicles. This strategy identifies
    opportunities for investment by the Department of Defense to develop
    critical technologies to support military unique requirements as well
    as partner with NASA's Space Launch Initiative to develop technologies
    that would address both agencies requirements for a next-generation
    space launch system.

        49. Senator Bill Nelson. Secretary Rumsfeld, because of the
    decision to reduce funding for Evolved Expendable Launch Vehicle
    (EELV), are you planning to use future space shuttle missions for
    military payloads?
        Secretary Rumsfeld. The reduction in the request for the Evolved
    Expendable Launch Vehicle program in our fiscal year 2003 budget was a
    result of satellite schedules for Department of Defense satellites
    moving to the right. Given the recent success of the heritage launch
    programs and the progress of the Evolved Expendable Launch Vehicle
    (Atlas V, Delta IV) development, the shuttle option is not being
    considered for primary military payloads. However, DOD will continue to
    use the shuttle for a variety of space experiments and small payloads.
    As you are aware, the EELV strategy is predicated on dual compatibility
    of the two vehicle systems, providing back up for each other. At this
    time, none of the DOD primary payloads are configured for space shuttle
    flight and no funding identified for requisite shuttle-based upper
    stages.

        50. Senator Bill Nelson. Secretary Rumsfeld, how does this budget
    request specifically reflect progress toward accomplishing the
    recommendations of the Space Commission you chaired recently?
        Secretary Rumsfeld. The Department of Defense is currently working
    to implement the recommendations of the Space Commission. With respect
    to this budget, the Department has established a ``virtual'' Major
    Force Program for Space to increase the visibility into the resources
    allocated for space. This ``virtual'' Major Force Program is identified
    in this budget and in the Future Years Defense Plan by specific and
    exclusive program elements.

        51. Senator Bill Nelson. Secretary Rumsfeld, what significant
    organizational changes and program priorities are captured in this
    request?
        Secretary Rumsfeld. The Department of Defense, in response to the
    recommendations of the Space Commission, has made several
    organizational changes. The Department has nominated a four-star
    general officer to be the Commander of Air Force Space Command and has
    assigned responsibility for the Command of Air Force Space Command
    separately from CINCSPACE. The newly confirmed Under Secretary of the
    Air Force has been appointed as the Director, National Reconnaissance
    Office. The Secretary of the Air Force has been delegated milestone
    decision authority for all Space Major Defense Programs with the
    authority to redelegate to the Under Secretary of the Air Force. The
    Secretary of the Air Force has been delegated authority, in
    coordination with the Secretaries of the Army and the Navy, to
    implement actions with regard to space acquisition streamlining. The
    Air Force has reassigned Space and Missile Systems Center from Air
    Force Materiel Command to Air Force Space Command. Upon confirmation of
    the Under Secretary of the Air Force, the Air Force disestablished the
    position of the Assistant Secretary of the Air Force. The Air Force has
    assigned the Space and Missile Systems Center Commander as the Program
    Executive Officer for Space and has assigned the Program Executive
    Officer directly to the Under Secretary of the Air Force. The
    Department of Defense is currently working to implement the additional
    recommendations of the Space Commission which will result in further
    organizational changes.
        With respect to this budget, the Department's space program
    priorities consist of military satellite communications (MILSATCOM)
    satellites and terminals including the Mobile User Objective System,
    laser communication capability, Global Positioning System
    modernization, and Space Based Radar.
                                     ______

                  Questions Submitted by Senator Jeff Bingaman

                                NUCLEAR WEAPONS

        52. Senator Bingaman. Secretary Rumsfeld, the Nuclear Posture
    Review reduces the count of nuclear weapons to about 1,700, but
    essentially keeps intact the number of warhead systems that will be
    deployed. Will the Department of Defense work to ensure that through
    the Nuclear Weapons Council that a reduction in the number of warheads
    as called out by the Nuclear Posture Review does not necessarily
    translate into a reduction of the stockpile stewardship program whose
    purpose is to maintain the warhead systems without resorting to
    testing?
        Secretary Rumsfeld. The reduction in the number of operationally
    deployed strategic nuclear warheads to 1,700-2,200 does not in any way
    reduce the requirement that the U.S. nuclear stockpile remain safe and
    secure. Indeed, reductions in operationally deployed warheads increase
    the need to assure reliability of remaining forces since a technical
    problem could have greater significance than at current levels.
        The Defense Department relies on the Department of Energy (DOE) to
    ensure that U.S. nuclear weapons are safe and reliable, thereby
    maintaining the credibility of our nuclear forces. DOEs stockpile
    stewardship program monitors the status of existing warheads to verify
    their safety and reliability. DOD participates in this activity through
    the Nuclear Weapons Council.

        53. Senator Bingaman. Secretary Rumsfeld, the ongoing Afghanistan
    situation has shown that the conflicts of the future will involve a
    close merger between Special Forces, our ``5th uniformed service,'' and
    our civilian intelligence agencies. What is the Department doing to
    understand and institutionalize the organizational relationship that
    has evolved between the civilian intelligence agencies and Special
    Forces so that it becomes more mainstream?
        Secretary Rumsfeld. The relationship between the Special Operations
    Force's community and civilian intelligence agencies has always been a
    strong one. This has been reinforced and strengthened by our efforts in
    Afghanistan and through better interagency cooperation. DOD is
    providing senior Special Operations Forces officers on rotation to key
    positions in civilian agencies to bridge the cultural gap and enhance
    support relationships. DOD, with the help of the interagency, is
    resourcing Joint Interagency Task Forces on the staff of the combatant
    commanders to better plan and prioritize the application of DOD and
    interagency resources. DOD is also actively studying ways to enhance
    Special Operations Force's organic capability to plan and operate with
    civilian intelligence agencies in a more effective manner.

        54. Senator Bingaman. Secretary Rumsfeld, would the Department be
    adverse to establishing a Service Secretary equivalent (in rank) for
    Special Forces?
        Secretary Rumsfeld. Consideration of such a proposal for Special
    Operations Forces would have to be based upon a comprehensive analysis
    of all aspects-resource, policy, legal, and organizational efficiency.
    Without such a foundation on which to base an evaluation, the
    Department has not established a definitive position.
                                     ______

                 Questions Submitted by Senator Strom Thurmond

                     ROLE OF THE QUADRENNIAL DEFENSE REVIEW

        55. Senator Thurmond. Secretary Rumsfeld, at the conclusion of last
    year's Quadrennial Defense Review, you and your staff suggested that
    the fiscal year 2003 budget request would reflect the recommendations
    of the QDR. How does this budget request support the recommendations of
    the QDR?
        Secretary Rumsfeld. The answer to this question is detailed in the
    middle half of my statement for the record on the fiscal year 2003
    budget request. To summarize, this request supports the QDR's
    recommendations by funding the priorities and changes reflected in the
    new defense strategy developed by the QDR and by emphasizing
    transformation and the six objectives detailed in my statement.

                          PRECISION GUIDED AMMUNITION

        56. Senator Thurmond. Secretary Rumsfeld, the strikes against
    targets in Afghanistan have again demonstrated the value of precision-
    guided ammunition. Unfortunately, we have not learned from experiences
    in that we are expending ammunition faster than we can replace it and
    must rely on war reserves. I am also informed that the industrial base
    for this type of ammunition is limited and having a hard time keeping
    up with the demand. What is the Department doing to ensure we have and
    will continue to have a readily available stock of precision
    ammunition?
        Secretary Rumsfeld. Success in the War on Terrorism can be
    partially attributed to the accuracy of precision guided munitions,
    both laser guided and GPS guided. The fiscal year 2003 budget request
    and emergency funding have enabled facilitization of the contractors,
    and accelerated procurement of greater quantities of these munitions to
    replace depleted stocks.
        The Under Secretary of Defense for Acquisition, Technology, and
    Logistics directed an increase in production rates of both the Joint
    Direct Attack Munition (JDAM) and the Laser Guided Bomb (LGB) kits. The
    JDAM contractor was facilitized to a production rate of 2,800 units per
    month, tripling the existing contract rate. The two LGB contractors
    were facilitized to a production rate of 1,450 units per month, more
    than doubling existing production rates.

                             MILITARY CONSTRUCTION

        57. Senator Thurmond. Secretary Rumsfeld, you have testified
    several times that we need to improve our infrastructure and make
    sufficient investments to reduce the recapitalization rate of our
    infrastructure from the current more than 100 years to a goal of 67 by
    fiscal year 2006. I am especially interested in our depot system and
    materiel readiness. After reviewing the military construction program,
    I found that construction funding for ``Maintenance and Production
    Facilities'' was slashed by 59 percent. Does this funding level support
    your recapitalization goal and improve the working conditions of our
    men and women in uniform?
        Secretary Rumsfeld. Our fiscal year 2003 military construction
    request focuses investments on critical military requirements and
    resolving readiness shortfalls, as determined by the services, without
    regard to specific installations or types of facilities.
        Funding for maintenance and production facilities in fiscal year
    2002 was higher than the historical average. We have invested about
    $338 million (or 3.8 percent) of the military construction budget in
    maintenance and production facilities, over the past 6 years. For
    fiscal year 2003, we have requested $430 million, or 4.8 percent of the
    military construction request.

                      DEFER PROJECTS DUE TO DELAY IN BRAC

        58. Senator Thurmond. Secretary Rumsfeld, according to the budget
    presentation documents, a justification for the reduction in military
    construction funding is a reflection of the ``delay in an additional
    round of base closures.'' Based on this statement, one could assume
    that you are deferring construction at installations that could be
    closed by another round of BRAC. We have been assured repeatedly that
    the Department does not have a list of bases that will be considered
    for closure. Yet, the briefing documents could lead to such a
    conclusion. Why have you reduced construction funding due to the delay
    in BRAC?
        Secretary Rumsfeld. We did not reduce construction funding due to
    BRAC, and there is no list of bases to be closed or realigned. The
    fiscal year 2003 military construction request reflects our priority to
    improve quality of life and resolve critical readiness shortfalls, as
    determined by the services. Military construction projects were based
    on mission criticality without regard to potential BRAC actions or
    specific installations.

                        OVERARCHING SET OF CAPABILITIES

        59. Senator Thurmond. General Myers, your statement for the record
    states that the blueprint for the transformation of our Armed Forces
    will include five considerations. The first consideration is that we
    must base the process of change on an overarching set of capabilities
    we believe our forces must possess to support the National Security
    Strategy now and in the future. What do you consider these overarching
    capabilities?
        General Myers. Our discussion of an overarching set of capabilities
    is designed to focus DOD's transformation efforts on the primary
    purpose of our Armed Forces--to fight and win our Nation's wars.
    Transformation is about keeping our Armed Forces superior to any other
    nation's in a complex and ever changing environment.
        To provide focus to DOD's transformation agenda, the Department has
    identified the following six critical overarching capabilities or
    operational goals that it must secure:

             Protecting critical bases of operations (U.S.
            homeland, forces abroad, allies, and friends) and defeating
            weapons of mass destruction and their means of delivery;
             Projecting and sustaining U.S. forces in distant anti-
            access or area denial environments and defeating anti-access
            and area-denial threats;
             Denying sanctuary to enemies by providing persistent
            surveillance, tracking, and rapid engagement with high-volume
            precision strike, through a combination of complementary air
            and ground capabilities, against critical mobile and fixed
            targets at various ranges and in all weather terrains;
             Assuring information systems in the face of attack and
            conducting effective information operations;
             Enhancing the capability and survivability of space
            systems and supporting infrastructure; and
             Leveraging information technology and innovative
            concepts to develop an interoperable, joint command, control,
            communications, computers, intelligence, surveillance, and
            reconnaissance (C\4\ISR) architecture and capability that
            includes a tailorable joint operational picture.

              INTELLIGENCE, SURVEILLANCE, AND RECONNAISSANCE (ISR)

        60. Senator Thurmond. General Myers, at a January 24, 2002 air and
    space power seminar, General Martin, the Commander of U.S. Air Forces
    in Europe, stated: ``Our ISR posture as a Nation is woefully short of
    the needs, from space to HUMINT, [in] every bit of intelligence,
    reconnaissance, and surveillance capabilities.'' The shortfall in IRS
    has been one of the more persistent issues, yet we always seem to have
    higher priorities when it comes to funding this area. How does the
    budget request address the problem?
        General Myers. This budget provides significant increases in both
    national and defense intelligence, surveillance, and reconnaissance
    (ISR) capabilities. National programs raised in your question are found
    in the National Foreign Intelligence Program (NFIP) submission. In the
    DOD request are significant investments in manned and unmanned airborne
    programs, space reconnaissance, and space control systems and
    processing, exploitation, and dissemination capabilities.
        Following the tragic events of September 11, the Department's
    supplemental request to support Operation Enduring Freedom included
    both additional ISR aircraft, e.g., EP-3, additional sensors for the U-
    2, and replacement Predator air vehicles, as well as modifications to
    existing manned platforms to support operations in the Global War on
    Terrorism.
        The fiscal year 2003 budget includes the most significant increases
    in ISR capabilities in years. Priorities for investment in this budget
    are counterterrorism and transformation. For example, the request
    accelerates investment in the high altitude UAV system, Global Hawk,
    and sustains an accelerated acquisition program across the FYDP. It
    accelerates acquisition of the Army short range UAV, continues
    acquisition of our workhorse Predator systems and replacement air
    vehicles, invests in an advanced air vehicle testbed, and continues
    preacquisition activities for a space based radar surveillance system.
    The budget sustains development and deployment of the Distributed
    Common Ground Station (DCGS), the multi-source deployed and shipboard
    systems that process and disseminate fused intelligence to forward
    forces and fleets. Imagery processing, exploitation, and dissemination
    received a substantial increase.
        Investments included in this budget establish a solid foundation
    for critical improvements in ISR capabilities that provide our eyes and
    ears on the battlefield now and in the future.

                                CARRIER SUPPORT

        61. Senator Thurmond. General Myers, I understand that at the
    height of our operations over Afghanistan, we had to pull the Kitty
    Hawk from its station in support of Korea to provide support for United
    States Central Command (USCENTCOM). Although they deployed appropriate
    aviation assets to Korea, there were some shortfalls in specific types
    of aviation support for the Korean operation plan. Was this change in
    mission for the Kitty Hawk due to a shortage of carriers in the number
    of carriers or due to the unique capabilities of the Kitty Hawk?
        General Myers. The U.S.S. Kitty Hawk and a portion of her Aircraft
    Carrier Battle Group (CVBG) deployed to the USCENTCOM Areas of
    Responsibility (AOR) from 10 Oct-10 Dec 01 as an Afloat Forward Staging
    Base (AFSB) for Special Operations Forces. All Aircraft Carriers and
    CVBGs have similar capabilities; however Kitty Hawk is home ported in
    Japan and the transit times from Japan to USCENTCOM AOR is appreciably
    quicker than from either the east or west coast of the United States.

                               OPERATIONAL TEMPO

        62. Senator Thurmond. General Myers, Title 10 of the United States
    Code directs that effective October 1, 2002, the number of major
    headquarter activities personnel in the Department of Defense may not
    exceed 85 percent of the number in such positions as of October 1,
    1999. Considering the current operational requirements, what is the
    impact of a 15 percent reduction in such headquarters as CINCPAC or
    CENTCOM?
        General Myers. Whether in peacetime or wartime, a 15 percent
    reduction will certainly impact the operational capability of the
    combatant commanders. However, the Department is committed to making
    further efficiencies within the management structure. All combatant
    command headquarters are impacted to some degree by the Global War on
    Terrorism, but the greatest impact is on USCENTCOM headquarters.
    Additional operational headquarters support for Operation Enduring
    Freedom has driven increased augmentation requirements at USCENTCOM
    headquarters. At this time, USCENTCOM is exempted from the 15 percent
    major headquarters reduction to minimize the impact on the warfighting
    efforts. The other combatant headquarters are moving forward to execute
    the 15 percent reduction.

        63. Senator Thurmond. General Myers, would you favor a waiver in
    this requirement beyond the current 7.5 percent authority?
        General Myers. No. However, congressional approval to defer
    reductions for a year or two would help us stand up USNORTHCOM while we
    focus on current operations and streamline our major headquarters.

                           CHANGE IN FORCE STRUCTURE

        64. Senator Thurmond. General Myers, based on the current operation
    in Afghanistan and the needs of any further operations in our Nation's
    war on terrorism, what changes would you recommend to the force
    structure of our military services?
        General Myers. Although we have several on-going studies examining
    the impact of our forward presence and engagement levels, I do not
    believe it is necessary to make any major changes to the force
    structure at this time. During development of the Quadrennial Defense
    Review (QDR), we spent a significant portion of our effort reconciling
    the mismatch between strategy and resources. The new strategy calls
    for, among other things, the ability to defeat the efforts of one
    adversary while decisively defeating another. The War on Terrorism,
    including our operations in Afghanistan, approaches a level of effort
    and commitment from our force along the lines of the forces QDR would
    call ``defeat the efforts.'' As the war's requirement for military
    forces matures, and our on going studies near completion, we may have
    more insight into any emerging requirements in terms of additional
    force structure.
                                     ______

                  Questions Submitted by Senator Rick Santorum

                              ARMY LEGACY PROGRAMS

       65. Senator Santorum. General Myers, the Army has terminated 18
    programs and/or systems as part of the fiscal year 2003 request. Among
    the terminations are: TOW Fire-and-Forget, M113 recapitalization,
    Armored Combat Earthmover, Wolverine, Hydra Rocket, Improved Recovery
    Vehicle, and Bradley Fire Support Team. Is the Army or the Office of
    the Secretary of Defense expecting Congress to ``buy back'' these
    terminations? Put another way, should Congress expect to see these
    programs and/or systems on the Army's unfunded requirements list? While
    18 programs and/or systems have been terminated, have the requirements
    that supported these programs gone away?
        General Myers. The full promise of transformation will be realized
    over time as we divest some legacy systems and transfer those resources
    toward new concepts, capabilities, and organizational arranagements
    that maximize the warfighting effectiveness and lethality of our men
    and women in uniform. Any discussion pertaining to termination of
    legacy systems can best be articulated by the services.

                                  EFFICIENCIES

        66. Senator Santorum. Secretary Rumsfeld, a recent report indicated
    that the Department of Defense is in the final stages of crafting an
    incentive plan that would allow defense contractors to keep some of the
    savings they achieve when they cut costs, reduce overhead, and
    consolidate operations. In other industries, companies slash costs and
    benefit when profits jump. But when a military contractor consolidates
    facilities, implements cost-savings technologies, or adopts other
    efficiencies, the government reaps the benefits by deducting the amount
    saved from what it pays the contractor for the product. Military
    contractors have argued that such a system gives them little incentive
    to make the hard, and sometimes costly, decisions to boost
    efficiencies. Can you elaborate on the plan and when you hope to
    implement these changes? Will these changes require legislative changes
    to current statute?
        Secretary Rumsfeld. We agree that the Department needs a policy to
    encourage contractors to undertake aggressive cost reduction programs
    at business segments that contain a large proportion of DOD cost-based
    contracts. Our plan is to publish a proposed policy by the end of April
    for public comment. The policy will be structured to permit the sharing
    of savings over a 5-year period when DOD will achieve savings of at
    least $2 for every $1 in costs it pays to generate cost efficiencies.
    We do not need legislative changes to implement a policy to share
    savings.

                          INTERIM BRIGADE COMBAT TEAMS

        67. Senator Santorum. General Myers, the Army is already forming
    two Interim Brigade Combat Teams (IBCT), the 3rd Brigade of the 2nd
    Infantry Division (Medium) and the 1st Brigade of the 25th Infantry
    Division (Light), at Fort Lewis, Washington. Yet when it came time this
    past November to insert ground forces into Afghanistan, it was the
    Marines that were tasked the responsibility of taking control of a base
    near Kandahar. Some have commented that these Marine forces combine
    more tactical maneuver capability and more firepower to sustain
    themselves than the Army's comparable rapid-deployment forces. Why were
    the two Interim Brigade Combat Teams--currently using surrogate
    equipment similar to the Marine Corps' equipment--not deployed to
    Afghanistan? Wouldn't a deployment to Afghanistan offer the perfect
    opportunity to demonstrate the training, tactics, and doctrine that are
    inherent to the Interim Brigade Combat Teams?
        General Myers. The two IBCTs at Fort Lewis have not yet reached
    their initial operating capability. The first IBCT has received a
    limited number of surrogate vehicles, but there are not enough for the
    entire brigade, thus limiting combined arms training at the battalion
    and brigade level. The focus thus far has been on small unit training,
    battle drills, and developing the new capabilities. The second IBCT has
    just initiated its transformation process in January 2002. If the
    brigades had attained initial operational capability, they would have
    been candidates for deployment to Afghanistan and this certainly would
    have demonstrated their capabilities.

        [Whereupon, at 1:12 p.m., the committee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2003

                                  ----------

                           TUESDAY, FEBRUARY 12, 2002

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

                              SERVICE SECRETARIES

        The committee met, pursuant to notice, at 9:38 a.m. in room
    SH-216, Hart Senate Office Building, Senator Carl Levin
    (chairman) presiding.
        Committee members present: Senators Levin, Lieberman,
    Landrieu, E. Benjamin Nelson, Carnahan, Dayton, Warner, McCain,
    Inhofe, Santorum, Allard, Sessions, Collins, and Bunning.
        Committee staff member present: David S. Lyles, staff
    director.
        Majority staff members present: Daniel J. Cox, Jr.,
    professional staff member; Kenneth M. Crosswait, professional
    staff member; Richard D. DeBobes, counsel; Creighton Greene,
    professional staff member; Jeremy Hekhuis, professional staff
    member; Maren Leed, professional staff member; Gerald J.
    Leeling, counsel; and Peter K. Levine, general counsel.
        Minority staff members present: Judith A. Ansley,
    Republican staff director; Charles W. Alsup, professional staff
    member; L. David Cherington, minority counsel; Ambrose R. Hock,
    professional staff member; George W. Lauffer, professional
    staff member; Patricia L. Lewis, professional staff member;
    Thomas L. MacKenzie, professional staff member; Ann M.
    Mittermeyer, minority counsel; Joseph T. Sixeas, professional
    staff member; Scott W. Stucky, minority counsel; and Richard F.
    Walsh, minority counsel.
        Staff assistants present: Daniel K. Goldsmith, Thomas C.
    Moore, and Nicholas W. West.
        Committee members' assistants present: Frederick M. Downey,
    assistant to Senator Lieberman; Andrew Vanlandingham, assistant
    to Senator Cleland; Jeffrey S. Wiener, assistant to Senator
    Landrieu; William K. Sutey, assistant to Senator Bill Nelson;
    Eric Pierce, assistant to Senator Ben Nelson; Neal Orringer,
    assistant to Senator Carnahan; Brady King, assistant to Senator
    Dayton; Benjamin L. Cassidy, assistant to Senator Warner;
    Christopher J. Paul and Mark Salter, assistants to Senator
    McCain; John A. Bonsell, assistant to Senator Inhofe; George M.
    Bernier III, assistant to Senator Santorum; Robert Alan
    McCurry, assistant to Senator Roberts; Douglas Flanders,
    assistant to Senator Allard; James P. Dohoney, Jr., assistant
    to Senator Hutchinson; Arch Galloway II, assistant to Senator
    Sessions; Kristine Fauser, assistant to Senator Collins; and
    Derek Maurer, assistant to Senator Bunning.

           OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

        Chairman Levin. Good morning, everybody. The committee
    meets this morning to receive testimony from the Secretary of
    the Army, Secretary of the Navy, and Secretary of the Air Force
    on the fiscal year 2003 budget request and on management and
    organizational issues facing the military departments.
    Secretary White, Secretary England, Secretary Roche, we welcome
    you back to the committee and look forward to your testimony.
        Secretary White. Thank you.
        Secretary England. Thank you.
        Chairman Levin. As we meet today, the new administration
    has been in office for just over a year and our three service
    secretaries have been in office for slightly less time than
    that. Much of their tenure in office has necessarily been taken
    up by the pressing issues of the war in Afghanistan and the
    effort to respond to terrorism here at home. The performance of
    our men and women in uniform has been exemplary and is a
    tribute to the entire leadership of the Department of Defense,
    including our three witnesses here today.
        The three service secretaries have played a central role in
    the formulation of the administration's budget request for
    fiscal year 2003, which includes the largest proposed increase
    in military spending in 2 decades. This increase comes without
    a comprehensive strategy or a detailed plan to guide that
    spending. A year into office, the administration has not yet
    issued a national security strategy, a national military
    strategy, or detailed plans for the size and structure, shape,
    or transformation of our military.
        As Secretary Rumsfeld testified last week, few of the
    investments that this administration will ask Congress for will
    benefit our national defense during this presidential term.
    These are long-term investments. The investments that we make
    today are needed to ensure that our military is as prepared for
    future wars as it has proven to be for Operation Enduring
    Freedom.
        So we are going to be particularly interested in the
    tradeoffs that our witnesses have made between investments in
    our legacy forces and investments in the military
    transformation and the basis upon which they have made these
    tradeoffs.
        Last summer Secretary Rumsfeld designated the three service
    secretaries to serve on two new committees, a Senior Executive
    Council and a Business Initiative Council, with broad
    responsibility for planning and implementing improved
    management practices across the entire Department of Defense.
    The Secretary has set a goal of achieving savings of 5 percent
    or more by bringing improved management practices from the
    private sector to the Department of Defense.
        Longstanding problems in areas such as financial
    management, acquisition management, management of information
    technology, and personnel management have not disappeared just
    because we are fighting a war. If anything, heightened concerns
    about national security and increased levels of defense
    spending give us an even greater obligation to ensure that the
    taxpayers' money is well spent. For this reason, the committee
    will be interested in hearing what steps our three service
    secretaries have taken to improve the management of the
    Pentagon and how much progress we have made toward achieving
    the 5 percent savings goal.
        America's Armed Forces are performing superbly in their
    fight against terrorism. This committee will do all in its
    power to ensure that our forces have the resources, tools, and
    technologies to prevail in this fight. We are determined to
    preserve a high quality of life for our forces, for their
    families, to sustain their readiness, and to transform the
    Armed Forces to meet the threats and challenges of tomorrow,
    and we will continue to work with our service secretaries in
    seeking to achieve those goals.
        Senator Warner.

                    STATEMENT OF SENATOR JOHN WARNER

        Senator Warner. Thank you, Mr. Chairman.
        I welcome our witnesses this morning. I always look forward
    to this particular hearing with the service secretaries. I
    think you have the best jobs anybody can possibly have, in this
    administration or any other.
        As the Chairman said, the President's budget request for
    fiscal year 2003 represents the largest increase, $48 billion,
    for the Department of Defense in two decades. In light of the
    attacks our Nation suffered on September 11, this increase is
    urgently needed. These attacks were a defining moment for our
    Nation. They engendered a new sense of unity and purpose in the
    country. Speaking for myself, I have had an opportunity to
    observe this Nation, and over the years I cannot recall a
    period in our history since World War II when the Nation was
    more united behind the President and the men and women of the
    Armed Forces.
        The President has brilliantly rallied this Nation, and
    indeed the world, to fight this global war against terrorists
    and those who harbor them. It is a war unlike any we have ever
    fought before. As Senator Levin and I visited our service men
    and women in the Afghan region in November, I was indeed struck
    by a recurring thought: They and we are writing a new chapter
    in military history with this operation, and we have to learn
    from it and plan for the future.
        The war has truly been a joint operation--all services
    operating together as one and many coalition nations operating
    with our U.S. forces. Soldiers on horseback and afoot are
    directing twenty first century weapons with extraordinary
    precision. Maritime forces are operating hundreds of miles
    inland in a landlocked country. Old bombers are delivering new
    weapons with devastating accuracy. Decisions made in Washington
    or down at the headquarters in Tampa are received and executed
    instantly, 7,000 miles away. Agility, precision, lethality, and
    interoperability are the measures of success for our systems
    and organizations.
        Last Tuesday Secretary Rumsfeld and General Myers appeared
    before this committee to outline the budget request in broad
    terms. The overriding themes of winning the war against
    terrorism, defending our homeland, improving quality of life
    for our service personnel, and transforming our forces to
    better counter new threats are right on target. We now look to
    you to fill in the details about how you will prepare your
    respective departments, not only to defend America and win this
    war against terrorism, but also to be ready for what lies
    ahead.
        I am supportive of this budget request, but I do have some
    concerns. Although the operation in Afghanistan highlighted the
    critical role of Navy platforms and aircraft, the budget
    request before us cuts both shipbuilding and naval aircraft.
    This is a matter you and I have discussed extensively in
    private in the last 30 days, Mr. Secretary, and we will discuss
    it in open session here today in some detail. At the current
    rate of shipbuilding, we will be well below a 300-ship Navy if
    we do not begin to take steps to reverse this decline. I wrote
    you to that effect about 3 weeks ago.
        Mr. Secretary of the Army, Army plans to transform to a
    lighter, more deployable, more lethal force are complicated by
    the need to maintain costly and aging legacy forces. That poses
    quite a challenge to you.
        In the Air Force, investment in new tactical aircraft is, I
    regret to say, somewhat overdue, but recent experiences demand
    increased investment in long-range, unmanned and space
    capabilities.
        As we discuss and debate this budget request in the days
    and the weeks ahead, as is the duty of this committee and
    Congress, on one thing we can all agree: the commitment, the
    dedication, and the performance of the soldiers, sailors,
    airmen, marines, and their families, in service to this Nation
    has been remarkable. We are mindful of how well they have
    served in the spirit of generations that have rallied to their
    Nation's call before them. We are forever grateful for their
    willingness and readiness to serve and to accept the risks and
    sacrifices.
        They exemplify the spirit of service our President has
    called for, as he reminded us recently, ``The cost of freedom
    and security is high, but never too high.''
        The Nation is united in purpose and determination as seldom
    before in our history--united behind our President and united
    behind these selfless men and women and their families who
    proudly serve our Nation. We in Congress will do everything we
    can to provide the resources and capabilities they need to
    succeed.
        Thank you.
        Chairman Levin. Thank you, Senator Warner, very much.
    Senator Inhofe has requested that he be recognized for an
    opening statement.
        Senator Inhofe. Thank you, Mr. Chairman, very much. I do
    have a special introduction to make this morning. Yesterday I
    had the honor of seeing someone I have gotten to know over the
    past 3 years quite well. She is a State Senator, a Puerto Rican
    State Senator, Miriam Ramirez. We have worked together for
    quite some time. She has always been a supporter of the Navy.
        She brought two perspectives that I think certainly,
    Secretary England, I would hope that you would have a chance to
    visit with her and get directly from her. One is that since
    September 11 the tide has changed in terms of the attitude
    toward our Navy on the island of Puerto Rico; second, an
    awareness that if something should happen to the presence of
    the Navy on Puerto Rico it would not happen in a vacuum, that
    things would happen that are written into the law. Roosevelt
    Roads would close, Fort Buchanan would close, other benefits
    enjoyed historically by Puerto Rico would cease to be.
        The other is a recognition that those people who are still
    anti-Navy on the island of Puerto Rico, many of them are
    terrorists. Here we are in a war on terrorism. One of the
    leaders who is respected in the anti-Navy movement--they are a
    minority movement--is Lolita LeBrone, who is a terrorist who
    led a group of terrorists into the House of Representatives
    here on Capitol Hill and opened fire, wounding five of our
    Congressmen. So that is the type of thing that is taking place
    there.
        I would like to ask that Senator Ramirez, who is with us
    here today, would stand and be recognized. Thank you, Senator.
        Chairman Levin. We welcome you, Senator. (Applause.)
        Secretary White, let us start with you.

        STATEMENT OF HON. THOMAS E. WHITE, SECRETARY OF THE ARMY

        Secretary White. Thank you, Mr. Chairman, Senator Warner,
    members of the committee.
        There are moments in history when events suddenly allow us
    to see the challenges ahead with a degree of clarity previously
    unimaginable. The events of 11 September created one of those
    rare moments. Now we see clearly the challenges facing our
    Nation and we are confronting them.
        To succeed, the Army must accomplish three critical tasks
    at the same time: 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. We have
    seen remarkable progress in Afghanistan, where Army Special
    Forces have led the way, followed by elements of the 10th
    Mountain Division, the 101st Airborne Division, and other Army
    units. Today more than 14,000 soldiers are deployed in the U.S.
    Central Command's area of responsibility supporting Operation
    Enduring Freedom, from Egypt to Pakistan, from Kenya to
    Kazakhstan.
        Together with our joint and coalition partners, we have
    defeated the Taliban, significantly disrupted the al Qaeda
    terrorist network, liberated the people of Afghanistan, and
    installed an interim government in Kabul, all within a few
    short months, in lousy terrain, in the depth of winter, over
    7,000 miles away, in the graveyard of empires.
        I know that Secretary Roche and Secretary England join me
    when I say our service men and women are nothing short of
    inspirational. They are accomplishing a complex and dangerous
    mission with extraordinary courage, skill, and determination.
    Some have been injured, others have given their lives. 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. At the same time, the Army continues
    to deter potential adversaries in Southwest Asia and Korea,
    while upholding U.S. security commitments in Bosnia, Kosovo,
    Macedonia, the Sinai, and elsewhere. In fact, the Army Active,
    Reserve, and National Guard has over 179,000 soldiers and
    38,000 civilians deployed or forward-stationed in 120 different
    countries.
        At home, the Army continues its long tradition of support
    to homeland security. We have mobilized over 24,000 Army
    National Guard and Reserve soldiers, the rough equivalent of
    two Army divisions, for Federal service here and overseas.
    Another 11,000 Army National Guard soldiers are deployed on
    State-controlled missions securing critical infrastructure such
    as airports, seaports, reservoirs, and powerplants. We have
    also deployed 5,000 soldiers to help ensure the security of the
    2002 Winter Olympic Games in Salt Lake City, Utah.
        Our soldiers are answering the call of duty, but we must
    ensure that the force remains appropriately manned for the
    challenges ahead. As Secretary Rumsfeld testified last week, it
    is clear now in the midst of the war on terror, the final
    dimensions of which are unknown, that it is not the time to cut
    manpower.
        Our second task is to transform to meet the challenges of
    the next conflict. Although Army transformation was well under
    way before the 11th of September, the attacks on our homeland
    and subsequent operations validated the Army's strategic
    direction and provided new urgency to our efforts.
    Consequently, we are accelerating development of the Objective
    Force, a capabilities-based, full spectrum force that will
    extend our advantage in dominant maneuver well into the future.
        Next month we will designate a lead systems integrator for
    the Future Combat Systems (FCS). FCS is designed to be a system
    of systems that harnesses a variety of technologies to produce
    a new ground combat system of unparalleled power and mobility.
    While the actual form of FCS is still being defined, it will
    undoubtedly combine the best elements of existing manned
    systems with the promise of the new generation of unmanned and
    robotic combat capabilities. We anticipate equipping our first
    Objective Force units with FCS in 2008 and intend to achieve an
    initial operational capability (IOC) by 2010.
        We are presently fielding an Interim Force to close the
    capabilities gap between our heavy and light forces. Organized
    into interim brigade combat teams, it will train, alert, and
    deploy as a self-contained combined arms force optimized for
    combat upon arrival in theater. The Interim Force will also
    provide a bridge to the Objective Force through leader
    development and experimentation.
        For example, digital concepts tested and provided with the
    legacy force are being refined in the Interim Force and will be
    applied to the Objective Force. We are on schedule to fully
    equip the first interim brigade with the interim armored
    vehicle by February 2003. That brigade will achieve its IOC by
    May 2003 and we intend to field five more interim brigades by
    2007.
        As our hedge against near-term risk, we are selectively
    modernizing and recapitalizing the legacy force to guarantee
    war-fighting readiness and to support the Objective Force as we
    transform. The challenge, of course, is to effectively manage
    risk without sacrificing readiness.
        Our third task is to secure the resources needed to pursue
    both the war on terrorism and Army transformation. This
    requires the continued support of Congress and the
    administration, a commitment to sustained investment over many
    years to offset the shortfalls of the past. The Army's 2003
    budget request is fully consistent with our 2002 budget. It
    goes a long way toward funding the Army vision, taking care of
    people, assuring warfighting readiness, and sustaining the
    momentum of transformation to the Objective Force.
        However, we are still assuming risk in the legacy force and
    longstanding shortfalls remain in installations and
    sustainment, restoration, and modernization. As good stewards,
    we are doing our part to free up resources for reinvestment in
    high priority programs. We have made tough tradeoffs,
    terminated 29 programs in the last 3 years, restructured 12
    more, reduced recapitalization from 21 to 17 systems, and we
    will accelerate the retirement of 1,000 Vietnam-era
    helicopters.
        We have also expedited our efforts to manage the Army more
    efficiently, starting at the top by restructuring the Army
    secretariat and Army staff into a more integrated headquarters
    that will streamline the flow of information and speed
    decisionmaking. The next phase of our headquarters realignment
    includes our field operating agencies and major commands. These
    initiatives will allow us to exceed the congressionally-
    mandated 15 percent reduction in headquarters staffs and
    reinvest manpower saved into other priorities. We will need
    your support to achieve similar efficiencies in the future.
        Let me conclude by assuring the members of this committee
    that the Army is trained and ready to serve in its
    indispensable role as the decisive land component of America's
    joint warfighting team.
        Thank you, Mr. Chairman, and I look forward to the
    committee's questions.
        [The prepared statement of Secretary White follows:]

                 Prepared Statement by the Hon. Thomas E. White

        Mr. Chairman and distinguished members of the committee, I thank
    you for this opportunity to report to you today on the United States
    Army's readiness to provide for our Nation's security today and in the
    future.
        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.

                           THE STRATEGIC ENVIRONMENT

        The attacks of 11 September 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.

                            THE 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, whether it is full-scale conventional conflict, fighting
    terrorists, or 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 10 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 2 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 11 September 2001 and our
    subsequent operations overseas validated the Army's transformation. If
    anything, 11 September 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. 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 was extensive. These highly trained soldiers worked
    with local forces to forge a powerful alliance. They 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 provide security to joint
    forces, critical facilities, and supply lines, and they receive and
    prepare 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. 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 11 September 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 United States (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. 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. It is easy to forget that our soldiers have been on the
    ground conducting peacekeeping missions in the Balkans for 6 years, in
    Saudi Arabia and Kuwait for 11 years, and in the Sinai for 19 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.

             THE ARMY VISION: PEOPLE, READINESS, AND TRANSFORMATION

        On 12 October 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.
    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. 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. To ensure that we recruit and retain
    sufficient quality personnel, we continue to examine innovative
    recruiting and retention programs.

             Well-Being

        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. 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.

             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.

             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. 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.

             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 major investment in Sustainment, Restoration, and
    Modernization (SRM) in fiscal year 2002 will help improve only the most
    critical conditions in our crumbling infrastructure. Over the next 5
    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. 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. 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. The
    Army will field the Objective Force this decade. 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. 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.
        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. 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 2 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, Washington, 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. 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.

             Legacy 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. 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.

             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.

                           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, I thank
    you once again for this opportunity to report to you today on the state
    of your Army. I look forward to discussing these issues with you.

        Chairman Levin. Thank you very much, Secretary White.
        Secretary England.

       STATEMENT OF HON. GORDON R. ENGLAND, SECRETARY OF THE NAVY

        Secretary England. Good morning, Mr. Chairman, Senator
    Warner, and members of this distinguished committee. Thank you
    for the opportunity to be with you today and thank you
    especially for this committee's continued strong support for
    our sailors and marines and their families. Recognizing that
    you are all anxious to move on to the questions, I will keep my
    remarks brief and ask that my written statement be entered into
    the record.
        Chairman Levin. All the statements will be made part of the
    record.
        Secretary England. Thank you.
        It is indeed a privilege to appear before this committee
    representing the finest Navy and Marine Corps the world has
    ever known. All of you have witnessed either first-hand or in
    compelling news reports the superb performance of America's
    Naval forces in the global war on terrorism. Never in my adult
    life have I seen a time in which the combat capabilities and
    mobility of the Navy-Marine Corps team have been more important
    to our joint warfighting effort. In my view, not since World
    War II has the inherent mobility of combat power at sea been so
    central to our ability to take the fight to the enemy and
    sustain that effort over time.
        Naval forces of the 21st century will continue to offer
    secure sea bases from which our sailors and marines will be
    able to operate both in peacetime and wartime alike. Such bases
    will offset the restrictions caused by sovereignty issues which
    increasingly limit or impede our national strategies,
    especially during crises.
        Naval carrier battle groups were on station in the Arabian
    Sea when our Nation was viciously attacked on September 11.
    These ships, manned by truly great sailors and marines who have
    volunteered to serve their country, were ready when the order
    was given to strike back at the terrorists and those that
    harbor them, and they remain on station today in support of our
    troops on the ground in Afghanistan and elsewhere in the region
    and in the world.
        This is not to say the Navy will do it alone, not by a long
    shot. All of us here before you today can be justifiably proud,
    not only of how well our individual services have performed,
    but, more importantly, how seamlessly the operational
    capabilities of all the great branches of our military have
    been woven together to great effect on the battlefield.
        We also know that this would not have been possible without
    the wisdom and the support of this committee over prior years.
    So I thank you again, Mr. Chairman and members of this
    committee, for all your prior efforts in supporting our forces.
        I can also say without hesitation that the President's
    budget for fiscal year 2003 accurately reflects the priorities
    set by the Navy leadership. The Chief of Naval Operations, the
    Commandant of the Marine Corps, and I all agree that we must
    continue to 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 missions
    in the war on terrorism.
        To this end, we have prioritized spending on critical
    readiness elements, such as adequate flying hours and steaming
    days, spare parts, preventative maintenance, and replenishing
    our inadequate stockpiles of precision munitions. We have added
    more than $3 billion to our operations and maintenance account
    and an additional $1 billion to buy munitions.
        On the personnel side of the equation, we increased the
    military personnel account by a little over $4 billion. Now,
    that is real money and we have put the emphasis where we
    believe it will do the most good.
        There have been many reports recently that the Navy is
    underfunding the shipbuilding and aviation procurement
    accounts. I am here to tell you those reports are accurate. We
    do need to increase funding in these accounts and we are
    increasing them across the FYDP. The good news is that we did
    fund the conversion of the first two of four Trident submarines
    to cruise missile shooters, or SSGNs. That was about a billion
    dollars. We added another billion dollars to pay off old debts
    in the prior year shipbuilding account and to fund more
    realistic program cost estimates to reduce such bills in the
    future. Although we increased spending on aviation procurement
    by more than $300 million, we will actually build fewer new
    planes because of the types of aircraft being procured.
        The bad news is, as this committee is well aware, we need
    to build 8 to 10 ships every year on a long-term basis and
    nearly 200 aircraft on a long-term basis if we are to
    recapitalize the force and ensure that my successors will
    inherit the ready Navy and Marine Corps that I am proud to
    lead.
        Mr. Chairman, these have been difficult choices to make,
    but I firmly believe that the CNO, the Commandant, and myself
    made the right choices for fiscal year 2003. We cannot fix
    every problem in 1 year, so we prioritized our funding. We can
    never afford to break faith with our people on adequate pay and
    benefits. Frankly, it makes no sense to shortchange current
    readiness and munitions at a time when the Nation is at war.
        The CNO, the Commandant, and I also agree that efficiency
    in our business practices is now more important than ever
    before and we are dedicated to that objective.
        I look forward to the opportunity to elaborate in response
    to your questions. Thank you very much.
        [The prepared statement of Secretary England follows:]

                Prepared Statement by the Hon. Gordon R. England

                    NAVY-MARINE CORPS: THE POWER OF TEAMWORK

                                I. 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, 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.

    II. FISCAL YEAR 2003--A DRAMATIC IMPROVEMENT FOR THE DEPARTMENT OF THE
                                      NAVY

        After years of under funding, 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 (O&M) 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 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.

    III. LEADING THE WAY: NAVY-MARINE CORPS OPERATIONS IN THE GLOBAL WAR ON
                                   TERRORISM

    Sea-based Forces in a Post-September 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 U.S.N.S. Comfort joined U.S.N.S. 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, DC. 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 11, 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 UN 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-3s 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!

          IV. 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 (E-4 through E-9)
    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, which have been below the 90 percent
    manning levels required for the tempo and variety of our full spectrum
    capabilities, 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 2 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.

           V. 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.
        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 DDGs ($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)
             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 DDGs, 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-AKEs 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.
        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 SRM funding has been significantly
    below the private industry average. In fiscal year 2003 the Department
    is making significant increases in (USN $221M, USMC $81.6M) SRM. With
    this effort, our recapitalization rate will be driven down to 83 years
    by the end of the FYDP, and the lowest readiness (C3/C4) 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 1000 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 (C3/C4). 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.

                  VI. 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.
    A. 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
    12 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.
    B. 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 (EC5G)
               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 antisubmarine 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.
    C. 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 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.

                                  VII. 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.

        Chairman Levin. Thank you, Secretary England.
        Secretary Roche.

      STATEMENT OF HON. JAMES G. ROCHE, SECRETARY OF THE AIR FORCE

        Secretary Roche. Mr. Chairman, Senator Warner, members of
    the committee: It is an honor to come before you today
    representing the Air Force team and accompanying my esteemed
    colleagues from the Army and the Navy. We are committed to
    succeed together in our task to provide for this Nation's
    security now and in the foreseeable future. You have our full
    attention and we are ready to get down to the important
    business at hand.
        Like my colleagues and with your permission, Mr. Chairman,
    I would like to make a short opening statement and request that
    my written statement of the Air Force 2002 posture statement be
    included in the record. Thank you, sir.
        Mr. Chairman, America's Air Force has recently been
    afforded numerous opportunities to implement and validate
    significant changes in the concepts of military operations and
    indeed the conduct of war. With the support of the Secretary of
    Defense, we have encouraged and exploited the rapid advancement
    and deployment of innovative technologies. We have already
    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's executive agent for space. I am
    especially grateful to have on board now Mr. Peter Teets, our
    Under Secretary and Director of the National Reconnaissance
    Office, whose experience, wisdom, and leadership will be
    invaluable as we take this mission on.
        We proceed, however, hungry rather than complacent,
    recognizing that much work and many 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. Operations Northern Watch and
    Southern Watch, Mr. Chairman, have quietly amassed a total of
    almost 200,000 sorties in combat missions that have continued
    now for over a decade. Operation Enduring Freedom has demanded
    over 14,000 sorties, some of which have broken records in
    mission range, hours flown, and combat reconnaissance. Tanker
    support to joint operations, close to 6,000 tanker sorties to
    date just in Operation Enduring Freedom, plus another 4,200 in
    Operation Noble Eagle. Mobility demands and humanitarian
    tonnage delivered have all been unprecedented.
        For the first time in the history of warfare, the entire
    ground operation in landlocked Afghanistan--infiltration,
    exfiltration, sustainment of supplies and support equipment--
    has been accomplished by air. In Operation Noble Eagle over the
    skies of America, over 11,000 airmen, 265 aircraft, and 350
    crews from the Air National Guard, Air Force Reserve, and
    Active Air Force have flown over 13,000 tanker, fighter, and
    airborne early warning sorties. Mr. Chairman, we have NATO
    AWACS over the United States at this time, five aircraft, and
    we expect possibly two more. I will be going down to Tinker Air
    Force Base to personally thank them in a week and a half.
        As we work to complete our transformation, Mr. Chairman,
    support our people, and inspire the military-industrial base to
    become an even more efficient team, our vision remains a total
    air and space force, providing global reconnaissance in strike,
    including troops and their support, across the full spectrum of
    operations. Our more pressing and significant challenges
    include:
        Providing persistent intelligence, surveillance, and
    reconnaissance across a critical section of a distant country
    in all weather scenarios, 24 hours a day, 7 days a week, for up
    to a year; and
        Developing the ability to provide near-instantaneous ground
    attack from the air, precisely, with a wide variety of strike
    systems, including naval, marine, as well as Air Force, by
    working closely with troops on the ground equipped with
    powerful sensors and communication links, as well as with a
    portfolio of off-board sensors and platforms, including UAVs.
        Mr. Chairman, it was Secretary White and myself in the
    company of Secretary Wolfowitz who worked hard on the idea of
    linking sergeants on the ground by virtue of GPS, computer, and
    certain types of binoculars with laser range finders to our
    aircraft in the air, and that has proven so dramatically
    successful. It is an example of our Air Force working with the
    Army as the Army develops an Objective Force to be able to
    provide instant power to those troops on the ground.
        We need to define and pursue the optimum space architecture
    to fully integrate space assets into global strike operations
    from the air, land, and sea. We are developing our role in
    homeland defense and trying to arrive at a steady state of
    roles and responsibilities among our Active Air Force, Air
    National Guard, and Air Force Reserve. Our question is how long
    do we have to maintain the Operation Noble Eagle status as it
    is now? What is the steady state in those circumstances?
        We must complete and implement our long-term strategy for
    our air logistics centers and we must modernize the tanker and
    the intelligence, surveillance, and reconnaissance capabilities
    we will need in the years ahead. Here I am particularly
    concerned that we have been demanding so much for so long of
    our aged 707 airframes, that we are soon to find ourselves in
    the same predicament as the proverbial king of medieval
    England. For want of a horseshoe, the horse lost a shoe, lost
    the horse, lost the king, lost the kingdom.
        I note, sir, that 55 percent of our tankers in the area of
    operations, area of responsibility, have been for our Navy
    brethren. The KC-10, which was purchased a number of years ago,
    has been just a stalwart of being able to support our Navy
    brethren.
        We are also developing concepts and strategies to
    seamlessly integrate our manned and unmanned systems, something
    brand new for us. We remain particularly focused on retaining
    our people, especially those in mid-career, who will benefit
    from the provisions of this budget for improved family housing,
    pay, and facilities. I wish to pass on the thanks of many of
    the troops I met overseas who wanted to say thank you to the
    committee for its leadership in their pay circumstances.
        Mr. Chairman, America's Air Force is able to perform the
    extraordinary feats asked of us because we are blessed with the
    full support of the American people, 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 commitments and our
    capabilities, as well as the wisdom, vigilance, and patriotic
    sense of duty that join us in our journey to provide our great
    Nation with superiority in air and space throughout the
    century.
        As you go to the area of responsibility as I have, you will
    be proud of the airmen you meet and the Air Force you and your
    colleagues in Congress have raised and maintained. Thank you
    very much, sir.
        [The prepared statement of Secretary Roche follows:]

                 Prepared Statement by the Hon. James G. Roche

        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. 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, 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 11, 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 3 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 DC. 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-130s 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 a 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 affecting affected the future of the new
    Afghan government.
    ``Let's Roll!''
        As it has throughout its history, America will champion the cause
    of freedom and defeat those who would attempt to deny us this most
    basic tenet. Guaranteeing our success is . . . ``the strength of our
    country--the skill of our people and the superiority of our
    technology.''

                                  INTRODUCTION

        The world's premier Air Force begins 2002 under new leadership. The
    Secretary and Chief of Staff bring unique and complementary experiences
    to bear upon the dynamic promise of American air and space power in the
    21st century. The Air Force is in the business of global reconnaissance
    and strike, including the full application of unparalleled mobility
    forces. Our efforts are fuelled by a vision of Global Vigilance, Reach,
    and Power to help the Nation assure our allies and friends, while
    dissuading, deterring or decisively defeating any adversary. The
    specific concept of ``core competencies'' \1\ well known among
    successful organizations has been adapted by Air Force leaders to
    characterize the capabilities that are central to our mission: air and
    space superiority, information superiority, global attack, precision
    engagement, rapid global mobility, and agile combat support.
    ---------------------------------------------------------------------------
        \1\ According to two leading scholars, successful enterprises
    ``consolidate corporate-wide technologies and production skills into
    competencies that empower individual organizations to adapt quickly to
    changing opportunities.'' The three identifying characteristics of core
    competencies are: (1) They transcend a single product or service and
    provide potential access to a wide variety of markets; (2) they are
    perceived by customers to deliver significant benefit; and (3) they
    should be hard to imitate. See C.K. Prahalad and Gary Hamel, ``The Core
    Competence of the Corporation,'' Harvard Business Review, May-June
    1990.
    ---------------------------------------------------------------------------
        The Air Force, and the Nation, entered 2001 aware of the challenges
    and opportunities of a new administration. The Department of Defense
    was to undergo significant evaluation, with the expectation of dramatic
    changes to follow. President Bush brought an eminently qualified team
    to Defense and National Security, and the Air Force welcomed the
    injection of energy and attention the Nation's defense was to receive.
    Long a force for innovation, airmen continued their leadership
    throughout the months of military reinvention. Capabilities-based
    planning was emerging as the Quadrennial Defense Review (QDR) focal
    point, and the Air Force strove to maximize the assessment of new
    technologies, revolutionary concepts of operation and visionary
    organizational changes. However, amidst this important task, terror
    struck the United States. The Air Force, and the Nation, exited 2001 at
    war.
        This new adversary, and those of the future, will pose a formidable
    challenge to American interests at home and abroad. They will attempt
    to intimidate, deter or defeat our Nation through a variety of means,
    to exploit our asymmetrical vulnerabilities and avoid confronting U.S.
    military power directly. These strategies will include the use or
    threatened use of weapons of mass destruction, and the use of terrorism
    on U.S. soil. They will also attempt to counter the tremendous
    asymmetric advantages of U.S. air and space power.
        To meet these challenges, Air Force strategy calls for a
    capabilities-based approach to defense planning. This enables the
    Service to answer a broad range of challenges posed by potential
    adversaries, while also developing the capabilities it needs for the
    future. This capabilities-based planning must remain tied to ongoing
    Air Force transformation that continues to develop new technologies,
    concepts of employment and organizational adaptations.
    The Road Ahead
        The transformation of the military now runs parallel to the
    transformation of our Nation. Just as the military is exploring new
    capabilities and concepts of operation (CONOPs) to engage threats,
    America as a whole is experiencing new appreciation for the cost of
    freedom. The Air Force, the Department of Defense and the American
    people are up to the challenge.
        Though a shock, the events of September 11 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 inspired 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
    (F2T2EA) 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 11, 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 Under Secretary 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 U.S. 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 U.S. 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 (including everything within the ball above) 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 in Chapter 4).
        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 3 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 10 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 (1 Dec 00--28 Feb 02). 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 3-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
    U.S. 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 11, 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 11, 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 additional funding to upgrade its
    infrastructure and physical plant, which include sustainment,
    restoration, modernization, transportation, support equipment, and
    communications accounts 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 (discussed in Chapter 5) 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 F2T2EA 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-130s 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-calendar
    year 2002.
                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 three
    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 F2T2EA 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. As part of the
    SECDEF's transformation program, Global Hawk is poised to accelerate
    its production schedule. 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 during OEF 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 provides five to ten times the air to ground
    surveillance capability of current JSTARS, reduces target revisit
    times, improves moving-target track capability, and enhances 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 in
    Chapter 4.
        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 10 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 US 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 11 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 2000-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 calendar year 2002. 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 is currently undergoing flight
    test 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)
    (discussed in Chapter Four). 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
    miniature 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 U.S.
    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 seeks to will award a follow-on multiyear
    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 this vital system operatingthese 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, forcing 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 multiyear 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
    near 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. and Additionally, major upgrades to the communications
    suite (to be leased) to 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. Unfortunately, in fiscal year 2002, operations and
    maintenance (O&M) sustainment funding shortfall precludeds 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 2003-2007 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 $415 million 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 2 to 4 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 the
    following chapter.
        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 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.
    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 provides
    military strength by ensuring we possess an organic ``core'' capability
    sized to support all potential military operations. It is 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 11 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 11 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 other 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, and 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 August 14, 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
    calendar year 2001. In calendar year 2002, 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 acquired 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 denied
    areas in a manner unaffected by terrain masking and political
    sensitivities--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 C4ISR 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 UCAVs. The range and loiter time of the
    ``hunter-killer UCAV'' 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 UCAV 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 2 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 11, 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. Between the active, Reserve, and Guard,
    we have identified the need for and end strength increase of over
    45,000 above fiscal year 2002 levels. Such an increase in the force
    introduces significant challenges, however we believe we have the
    initiatives and plans in place to achieve the larger force.
        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, and honing retention programs, and examining
    closely tasks that might better be performed by civilians, or 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 5 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 2 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 2002-2003. 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. Retention is half the
    equation of an increase in end strength. 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 pilots
    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 (6 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 8 years until we fully realize the
    effects of the 10-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 3 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 2 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. We support lengthening the Montgomery GI Bill
    contribution period from 1 to 2 years in order to ease the financial
    burdens of new Airmen. 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 5
    years of service. In the next 5 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 percent-10 percent) to improve pay based on
    their education and experience levels. Junior enlisted members received
    a 6 percent-6.7 percent pay raise and captains and majors received a 6
    percent-6.5 percent raise while all other personnel received a 5
    percent raise. Basic Allowance for Housing rates effective 1 Jan. 2002
    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 2001-2004 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 2000-2005 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.

        Chairman Levin. Thank you, Mr. Secretary.
        We will have a 6-minute round on an early bird basis. I
    think we are going to be interrupted by perhaps a series of
    votes. We will have to figure out what to do when that
    information comes to us.
        Let me ask this of each of you. Eight months ago there was
    an announcement made that two new committees were going to be
    formed, a Senior Executive Committee (SEC) and a Business
    Initiative Council (BIC) at the Department of Defense. Both of
    those committees would have responsibility for planning and
    implementing improved management practices across the entire
    Department of Defense. This was an effort made to improve
    business practices of the Department and to roll those savings
    into the warfighting end of the Department.
        Can you each tell us very briefly what specific reforms
    have been initiated through these two new entities? Secretary
    White, let me start with you.
        Secretary White. On the BIC side, we are accelerating and
    pushing hard utilities privatization, which was a program that
    actually started before this administration. We are realigning
    headquarters to meet the goals that the Secretary has
    established for us. I have talked about the reductions that we
    have made as we have realigned the secretariat and the Army
    staff.
        On the SEC side, we are looking at all the defense agencies
    and the roles that they play within the Department and
    streamlining their operations as well.
        Chairman Levin. Are these Department-wide, what you have
    just announced?
        Secretary White. Yes, they are generally being followed by
    all of the services.
        Chairman Levin. Do you have anything to add to that,
    Secretary England?
        Secretary England. I was only going to comment that in both
    the SEC and BIC, the three of us serve together on those
    committees along with the Under Secretary, Paul Wolfowitz, and
    occasionally with Secretary Rumsfeld. So we all work this
    jointly.
        I was going to add that, in addition to the things that the
    Secretary of the Army commented on, we are also looking at
    supply chain management throughout the whole Department,
    because that is where a lot of the money is in this Department,
    it is in the whole support infrastructure. So we are looking at
    that and how we might do it better. We also, with Pete
    Aldridge, who is the Under Secretary for Acquisition,
    Technology, and Logisitics, have a wide range of initiatives in
    that area, and some of those have been implemented.
        So we have been implementing changes. Some of those have
    already taken place and there is a whole agenda of issues we
    are working on.
        Chairman Levin. Will you identify for us the specific
    changes which have occurred and the savings which have
    resulted?
        Secretary England. Yes, sir. We have done a number of
    issues dealing with personnel, I guess what I would call low-
    hanging fruit. We identified in the very first series of
    meetings we had, as I recall, the number was about $250
    million. We had 11 issues brought before the board and we
    approved 10 of those. One is still being studied. Those 10
    saved, I believe the number was $250 million, Senator, but I
    have to get back with you on that.
        Chairman Levin. Would each of you provide for the record
    the specific savings which have resulted from these
    initiatives, and would you tell us where in the budget we can
    find those savings? Will you each do that for us?
        Secretary England. Yes, sir.
        Secretary White. We will do that.
        Secretary Roche. Absolutely, sir.
        [The information referred to follows:]

     DOD Business Initiative Council (BIC) Estimated Savings in the Fiscal
                                Year 2003 Budget

        Secretary White. Our BIC objectives are to improve the Department's
    business processes and to make resources available for higher priority
    programs, most significantly the transformation of the Department and
    the support of our uniformed and civilian personnel. A key feature of
    the program is that the Services are allowed to retain the savings and
    apply them to other priorities. We solicit the support of Congress in
    allowing us to retain the savings that we are now beginning to
    generate. The assurance that we will be able to retain the savings is
    an essential motivator that will keep the flow of good ideas coming to
    us from throughout the Department.
        The BIC has approved eight initiatives to date. The benefits from
    these initiatives include reduced cycle time for business processes,
    improved freedom to manage our financial and personnel resources, and
    increased efficiency. Seven of the initiatives are projected to
    generate savings in the fiscal year 2003 budget. I am providing details
    for these initiatives in the following table.
        In all cases, the savings are estimates. Because most of these
    initiatives involve innovative approaches to improving our business
    operations, we cannot be certain of the dollar values. We have not yet
    realigned our budgets by moving the savings from one program to
    another. The savings estimates shown in the table are for all three
    military departments combined.
        Two initiatives--contracting of security guards and raising Davis-
    Bacon Act thresholds--require congressional approval of proposed
    legislative changes. These proposals will be included in our Omnibus
    package.
        One initiative--exempting DOD from paying the Federal Retail Excise
    Tax on tactical vehicles--requires agreement by the Secretary of the
    Treasury, who is reviewing the DOD proposal.
        The Senior Executive Committee (SEC) has begun several analyses
    that will enable us to streamline DOD's operations in the future. We
    are not projecting fiscal year 2003 savings from these analyses.

                                     ______

        Secretary England. The mission of the BIC is to improve the
    efficiency of DOD business operations by identifying and implementing
    business reform actions, which allow savings to be reallocated to
    higher priority efforts. Such savings will be retained by the Services
    for their reallocation. As we transform America's military capability
    to meet the threats of the 21st century, we must also transform the way
    the Department works and what it works on. To date, the BIC has
    approved 28 initiatives; seven offer potential savings in fiscal year
    2003, while four others appear to have savings, but are too premature
    in implementation to quantify. The remaining 17 will provide cost
    avoidance and/or unquantifiable savings, in terms of reduced cycle
    time, improved freedom to manage, streamlined procedures, accelerated
    information sharing/decision-making, etc. Potential savings have not
    progressed to the point of having actual, verifiable figures and have
    not been broken out by Service nor realigned within the budget; rules
    of engagement to break out and reflect the savings are in work. Some of
    these initiatives can be approved within the Department while others
    will require Congressional help.
        The following are examples of initiatives offering potential
    savings that are within DOD's purview:

             Recovery Auditing: Use contingency fee auditing
            services contracts to identify and recover overpayments to
            providers of goods and services. This initiative will initially
            focus on contract overpayments made in the Department's working
            capital fund business areas. Cost recoveries will be factored
            into the funds' rates for subsequent years, and potential
            savings will be indirectly passed on to warfighters and other
            customers. Recoveries of general fund overpayments will begin
            when OMB regulations implementing PL 107-107 are received.
             Web-Based Invoice Receipt Process: Reduce occurrence
            of incorrectly prepared or missing receiving reports and move
            toward paperless process; will allow Defense Finance and
            Accounting Service (DFAS) to pay vendors more quickly and
            accurately. Savings will be realized in the cost of support
            services provided by the DFAS, as manual processes are reduced.
             Local/Regional Cell Phone Pooling: Negotiate new local
            or regional cell phone contracts to consolidate cell phone
            users into appropriate pools. Savings will be realized in the
            Services' operating appropriations at all organizational
            levels. The Services intend to allow local commanders to retain
            these potential savings.

        The following are examples of initiatives offering potential
    savings that require Congressional or other Departmental assistance:

             Allow for Contracting of Security Guards: Allows
            Services to contract security guards in CONUS at small
            locations, to provide increased flexibility as Department
            continues to enhance anti-terrorism/force protection measures;
            will be included in the fiscal year 2003 Omnibus package. If
            Congress approves the requested legislative proposal, savings
            will be realized in the operating appropriations of selected
            installations throughout DOD. The Services intend to allow
            local commanders to retain these potential savings.
             Revise Davis-Bacon Thresholds: Raise the current
            threshold subject to Davis-Bacon Act from $2,000 to the
            simplified acquisition threshold currently at $100,000; will be
            included in our fiscal year 2003 Omnibus package. If Congress
            approves the requested legislative proposal, potential savings
            will be realized in the Services' construction appropriations.
             Eliminate Excise Tax on DOD Tactical Vehicles: Request
            authorization of exemption from Treasury Department from paying
            Federal Retail Excise Tax. If the Secretary of the Treasury
            approves the request submitted by the Secretary of Defense,
            potential savings will be realized in the Services' procurement
            appropriations.

        In summary, BIC is an ongoing effort, which is ``action-focused,''
    aimed at identifying and implementing good business practices and
    creating an environment that encourages innovation and cood ideas.
        Secretary Roche. The mission of the Business Initiative Counil
    (BIC) is to improve the efficiency of DOD business operations by
    identifying and implementing business reforn actions, which allow
    savings to be reallocated to higher priority efforts. Such savings will
    be retained by the Services for their reallocation. As we transform
    America's military capability to meet the threats of the 21st century,
    we must also transform the way the Department works and what it works
    on. To date, the BIC has approved 32 initiatives; 7 offer potential
    savings in fiscal year 2003, while 8 others appear to have savings, but
    are too premature in implementation to quantify. The remaining 17 will
    provide cost avoidance and/or unquantifiable savings, in terms of
    reduced cycle time, improved freedom to manage, streamlined procedures,
    accelerated information sharing/decision-making, etc. Savings are
    estimates only and have not progressed to the point of having actual,
    verifiable figures. These savings have not been broken out by Service
    nor realigned within the budget; rules of engagement to break out and
    reflect the savings are in work. Some of these initiatives can be
    approved within the Department while others will require congressional
    help.
        The following are examples of initiatives offering savings that are
    within DOD's purview:
             Recovery Auditing: Use contingency fee auditing
            services contract to identify and recover overpayments in
            Working Capital Funds to providers of goods and services.
            Estimated savings: $93 million (fiscal year 2003)
             Web-Based Invoice/Receipt Processing: Reduce
            occurrence of incorrectly prepared or missing receiving report
            and move toward paperless process; will allow DFAS to pay
            vendors more quickly and accurately. Estimated savings: $7-$11
            million (fiscal year 2003)
             Cell Phone Minute Pooling: Negotiate new local or
            regional cell phone contracts to consolidate cell phone users
            into appropriate pools. Estimated savings: $3-$10 million
            (fiscal year 2003)
             Enterprise Software Initiative (ESI): Streamline the
            acquisition process by providing best-priced, standards-
            compliant software products and expanding the use of ESI
            process as the benchmark acquisition shategy. Estimated
            savings: $7 million (fiscal year 2003)

        The following are examples of initiatives offering savings that
    require congressional or other Departmental assistance:

             Allow for Contracting of Security Guards: Allows
            Services to contract security guards in CONUS at small
            locations, to provide increased flexibility as Department
            continues to enhance anti-terrorism force protection measures;
            will be included in the fiscal year 2003 Omnibus package.
            Estimated savings: $3.5 million (fiscal year 2003)
             Revise Davis-Bacon Thresholds: Raise the current
            threshold subject to Davis-Bacon Act from $2,000 to the
            simplified acquisition threshold currently at $100,000; will be
            included in our fiscal year 2003 Omnibus package. Estimated
            savings: $6.5 million (fiscal year 2003)
             Eliminate Excise Tax on DOD Tactical Vehicles: Request
            authorization of exemption from Treasury Department from paying
            Federal Retail Excise Tax. Estimated savings: $66 million
            (fiscal year 2003)

        In summary, BIC is an ongoing effort, which is ``action-focused,''
    aimed at identifying and implementing good business practices and
    creating an environment that encourages innovation and good ideas. The
    total estimated savings (attached) for fiscal year 2003 anticipated for
    all of these BIC initiatives is approximately $190 million with
    anticipated DOD savings across the FYDP (fiscal year 2004-2009) ranging
    from $750 million to $1 billion.

        Chairman Levin. Secretary Roche, do you have anything to
    add on that?
        Secretary Roche. Yes, sir. I just wanted to make a point,
    that a number of these are cost avoidance. In other words, it
    is not taking something that is now in place and doing away
    with it, but avoiding a cost in the future. So it is a
    combination of savings and cost avoidance.
        The two groups are very different. In terms of the SEC, it
    is with Under Secretary Aldridge, who is part of it. We have
    been able to move very, very quickly over things. We have been
    able to support price-based acquisition instead of the more
    torturous forms. We have been able to work with Mr. Aldridge in
    getting a lot of savings out of DLA, DFAS, et cetera, conscious
    goals for those agencies to lower their costs to us.
        With the BIC, we have done such simple things as asking the
    Treasury to not charge us a tax on our vehicles that we use off
    road, that do not ever get on the highway. Why are we paying a
    highway tax? We are looking at how long it takes for something
    to happen because so much money is involved and people are just
    reviewing and reviewing and we are trying to streamline the
    processes.
        Probably over the period of the Future Years Defense Plan
    (FYDP), between what we have done and what we would like to do,
    we are looking at something like a billion dollars so far. But
    they are very different. The reason it has been working, Mr.
    Chairman, is that the Secretary has allowed us to take any
    savings and plow it back into the services, into personnel
    accounts or into other accounts.
        Chairman Levin. We will expect, then, from each of you for
    the record the list of those savings, how much for each one,
    and where in the budget we can find them.
        Secretary Rumsfeld established a goal of investing 3
    percent of the Department's budget in the science and
    technology programs, which would help drive the transformation
    of our services. But the budget request contains no measurable
    increase in science and technology funding over last year's
    appropriated levels, despite the large increase in the budget
    request.
        Last week the Department's Deputy Director of Defense
    Research and Engineering was quoted as saying the following:
    ``Science and technology makes up less than 2 percent of each
    of the military departments' budgets. They really did not care
    about the technology. It is all about this budget. The only
    thing I can say to them is you cannot solve your problems with
    that amount of money.''
        Would you react to that quote? Let us start with you,
    Secretary Roche.
        Secretary Roche. Yes, sir. I think the Air Force came out
    around 2.6 to 2.7 and part of it is our denominator moved up on
    us, gratefully. We also have to include the moneys that are in
    the Defense Advanced Research Projects Agency (DARPA)
    associated with Air Force programs and the number of programs
    we transferred over to what was the Ballistic Missile Defense
    Office (BMDO), now the Missile Defense Agency.
        Science and technology is at the front end. You can throw
    money at it. We would rather work this up to 3 percent and take
    a year or 2 to get there, so we can tailor what we are
    investing in. Clearly we are heavily dependent on science and
    technology investments for long-term results and we are trying
    to make sure each of those investments has some prospect of
    paying off, although we are also interested in some
    wildcatting.
        Chairman Levin. Do either of the two of you have a reaction
    to that quote? Secretary White?
        Secretary White. Our principal investment in S&T is the
    Future Combat Systems (FCS) associated with the Objective
    Force. About 98 percent of it is focused on that. I think we
    are spending about as much money as can be productively used in
    S&T at this stage of maturity of FCS. DARPA is kicking in an
    extra $122 million on their own front. So my opinion is the S&T
    of the Army is in good order compared to the other priorities
    that we have.
        Chairman Levin. You are at what percentage?
        Secretary White. We are probably a little over 2 percent.
        Chairman Levin. Despite Secretary Rumsfeld's statement that
    the DOD had a goal of investing 3 percent?
        Secretary White. Right. We agonized over the 3 percent
    level and whether it was appropriate in each service.
        Chairman Levin. Got you.
        Secretary England, you want to just finish this question?
        Secretary England. Yes. First of all, the 3 percent--I
    would suggest that absolute numbers are more meaningful because
    as we increase pay and benefits, et cetera, the denominator
    gets very, very large, so you would have to dramatically raise
    S&T as a part of the whole budget, particularly the personnel
    accounts. Our S&T is down somewhat from last year.
        Chairman Levin. Absolute or percentage?
        Secretary England. No, absolute it is down. We are down
    absolute, but our research and development (R&D) is up about
    $1.1 billion. So we made the conscious decision that there were
    R&D accounts we needed to fund and we funded those accounts,
    because at some point you do need to bring the S&T to
    realization. Otherwise you just have aninteresting S&T program.
    So we decided that we would instead emphasize the R&D this
    year.
        Now, if you go across the FYDP our S&T does definitely go
    up.
        Chairman Levin. Thank you.
        Senator Warner.
        Senator Warner. Thank you.
        Gentlemen, the 2003 DOD budget includes a substantial
    increase in funding for combatting terrorism. Nearly all the
    proposed increase is for this purpose. Would each of you
    outline what your respective departments are doing to augment
    our effort to deter first and if necessary to combat terrorism?
    Secretary White?
        Secretary White. Senator, we have, first of all, an
    enormous manpower commitment, as I talked about in my opening
    statement, supporting homeland security in a variety of ways,
    everything from the Salt Lake City games to airport security
    with the National Guard to enhance force protection at our
    installations, both here in the United States and overseas. So
    we have a large chunk of our operating budget that right now is
    focusing on homeland security and force protection, enhanced
    force protection against counterterrorism.
        Senator Warner. What is the status of the programs that
    were initiated some several years ago and received very strong
    support in this committee? We used to refer to them as the RAID
    teams. Those are the groups that go out to work with the local
    communities should they be hit by a problem. This committee
    repeatedly in the past 3 or 4 years has authorized increases in
    the number of those teams, because of our firm belief they
    would directly help the citizenry if they were faced with a
    problem of a weapon of mass destruction, be it chemical,
    biological, or other.
        Secretary White. Senator, we have pushed that hard. We call
    those Weapons of Mass Destruction Civil Support Teams. There
    are 22 of them fully up and certified. They are manned by
    National Guard full-time people. We will have 32 total by the
    end of 2002, which is what is currently authorized, and those
    32 will give us coverage of about 96 percent of the population
    of the United States in a 3-hour period. So they are very
    impressive teams and we pushed it as a matter of great urgency.
        Senator Warner. Secretary England, the question to you as
    to how you are redirecting portions of your budget to combat
    terrorism.
        Secretary England. Well, Senator, we have two carrier
    battle groups right now in the Arabian Sea actively engaged in
    the war against terrorism. As part of those battle groups,
    there are also our Amphibious Ready Groups with our marines on
    board. Of course, they have just now left Afghanistan, some
    still in country, but back on their ARG. We also, of course,
    have forward-deployed forces around the world.
        Senator Warner. We are aware of those. That is pretty much
    standard operation. But for example, the SEALs have had a
    remarkable role in this conflict. Are you looking to increase
    the size of the SEAL force and provide newer or more modern
    equipment?
        Secretary England. At this point I do not believe we have
    active interest in increasing the size of the SEAL force. We
    are actually undermanned in our SEAL force, so we would like
    very much to increase the manning to its authorized level.
        We do, by the way, have 13 patrolcraft boats that we are
    manning for the Coast Guard, for example, outside of our
    traditional role, that we are providing to the Coast Guard for
    sea and harbor security. So we have taken a number of measures
    with the Coast Guard and of course with the military around the
    world, our intel, et cetera, all being directed on the war on
    terrorism. Frankly, the entire force is directed against this
    war on terrorism around the world.
        Senator Warner. Secretary Roche.
        Secretary Roche. Senator Warner, obviously in Operation
    Noble Eagle we have put a huge number of forces in place, as I
    described. Also, to complement Secretary White's teams, we have
    35 C-130s that are on alert every day and backup airplanes to
    move the emergency action teams so they can get where they are.
    That is over and above all the cap and everything else we fly,
    and we have tankers ready for them as well.
        Our force protection has been a major investment. We have
    called up all the Reserves, all the Guard folks, in force
    protection, and we are still shy of people. We never planned to
    be able to defend our forces overseas, because we have to do a
    lot of force protection there, and our home bases at the same
    time, and that has been a heck of a strain on us and we have
    had to invest more and part of our new recruits. We are trying
    to direct more of them in that direction.
        In Operation Enduring Freedom, the things that you will see
    are this persistent ISR, looking at something for a period of
    up to a year; also our use of UAVs, and the fusion, fusing of
    intelligence from very many sources.
        Lastly, this equipment that the young troopers have been
    using on the ground to work with the aircraft. We now know what
    the next generation of those should look like and we have
    started to design to get those different pieces in something
    that is a smaller package. When they break off to get on their
    horses, they have to take apart about four different things,
    get on their horses, and go to the next spot.
        Senator Warner. Thank you.
        Secretary England, just going through the morning news,
    there are nine pages of stories on the shipbuilding program. It
    goes from the extreme, that for example Newport News
    Shipbuilding, which is building a carrier, cannot hire enough
    people to do the work they have in place, to some individuals
    saying we are going to be faced with imminent layoffs of large
    numbers.
        Now, this is all very unsettling, and it is clear from this
    conflict in the Afghan operating area that the Navy is
    integral, that those platforms to which you referred earlier
    were the foundation from which so many of the strikes were
    launched. I think that it is incumbent upon you, working with
    Congress, to try and put to rest this problem. I asked the
    Secretary of Defense the other day specifically about the
    carrier program and he said the slippage of 1 year was not in
    any way to be construed as a lessening of the importance of
    that program to our overall defense.
        Nevertheless, we have a lot of instability. We have a new
    contractor that has taken over the management of that shipyard
    down there and works on both the carriers as well as the
    Virginia-class submarines. So I would hope this morning that
    you could refer to some of the conversations that we have had
    in which you have given me the reassurance that you feel this
    thing will be worked out, that the slippage of 1 year in the
    carrier program was predicated on clear justifications for
    technology.
        Would you kindly clarify some of this this morning for us?
        Secretary England. Senator, I would be pleased to. Thanks
    for the opportunity to discuss this. First, we did move the
    carrier out. We actually have it moved out, I believe, to 2007
    and 2008. That is half the funding in each year, in 2007 and
    2008. We did that partially to hurry up some dollars in 2007,
    because you know when a ship is appropriated that is a very
    large amount in 1 year and it crowds out everything else. So it
    was more prudent from our point of view to spread this over 2
    years.
        But the other side of this is, we have had a continuing
    problem of prior year shipbuilding bills. Last year in the
    fiscal year 2002 budget, we had $800 million of prior years
    bills. In the fiscal year 2003 budget we have $645 million. We
    still have $1.6 billion of prior year shipbuilding bills that
    we still have to pay. So out of last year and this year that is
    $1.4 billion, $1.6 billion to go. We are basically spending a
    lot of money each year and we are not buying ships with that
    money because of prior year bills.
        So we are trying very hard to bring this to a stop and have
    some better business practices applied. So this year we have
    increased the funding for our current shipbuilding, our current
    ships, by another $400 million. So we have increased the
    funding of our current ships, in hopes that that is a
    meaningful step so we will not have this continual overrunning
    of prior year shipbuilding.
        Now, also part of this is the maturity of the technology.
    It was certainly my concern, with all the technology going in
    that ship, that if we had more----
        Senator Warner. You are talking about the CVNX-1 now?
        Secretary England. Yes, sir.
        Senator Warner. The first new carrier.
        Secretary England. That is correct. We would certainly like
    to mature those technologies as much as possible so we can
    predict the cost and know the costs and not have this problem
    on future ships when we do this the next time.
        So this decision was partially financial, but in my mind
    moreso on the technology, so that we would be able to bring to
    an end this practice of always having bills flowing into the
    out years. That is what has been happening for the last several
    years.
        Senator Warner. Would you want Congress to take it upon
    itself to try and reallocate the funding in these shipbuilding
    budgets, such as to restore the carrier to its previous
    schedule? Do you think that would be a prudent action?
        Secretary England. No, sir, I don't. Frankly, I believe we
    made the right decisions. I think we went through a lot of work
    on this and decided that was the best decision that we could
    make, was to move this out 1 year, split the funding, mature
    the technologies.
        I will also comment, while I have an opportunity, Senator,
    that in the past whenever in the FYDP we had shipbuilding in
    the future years it never came to pass. That is, if we had a
    large number of ships in the out years, that did not come to
    pass. It did not come to pass because we had prior year
    shipbuilding accounts to pay or we had other aspects of the
    Navy that had been underfunded and we used that money to fund
    other accounts.
        This year we took a very straightforward approach. That is,
    we funded all the accounts that were needed to be funded. We
    robustly funded everything we could across the Navy in terms of
    spares, flying hours, training, et cetera. So we have ``filled
    those buckets.'' So as we go forward we now have a solid
    foundation. We have also fully funded our accounts. So
    therefore there is high confidence in the future that those
    moneys that are allocated to shipbuilding and to aviation will
    indeed be spent for those purposes.
        So I feel like we have put the foundation in place.
        Chairman Levin. Thank you.
        Senator Nelson.
        Senator Ben Nelson. Thank you, Mr. Chairman.
        Secretaries England, White, and Roche, certainly I want to
    thank you for being here to address the concerns we have about
    the defense of our Nation. Obviously, it is very important to
    critically focus on what these expenditures in the budget
    represent both as to the present situation and as to the
    future.
        The critics will do their work on the budget and already
    have, and they will write the 10 stories that Senator Warner
    had reference to, and others will challenge, whether it is on
    shipbuilding or will challenge that much of the expenditure
    request deals with current assets and replacing the assets that
    have been used. Obviously, replacement is part of what needs to
    be done.
        The criticism of the military always seems to be that we
    are ready to fight the last war. The fact that we were able to
    react as quickly as we did to this Operation Enduring Freedom
    is some indication that we were prepared to deal with the
    current situation far more than people might have suggested and
    some of the partisan attacks might have also suggested.
        What I would like to have you do is tell me in this budget,
    not simply what we are replacing--obviously that is part of
    it--but what are the priorities in this budget for fighting
    phase two as the technology increases and knowledge increases
    during our expansion of these activities of war, but also what
    is in this budget for the next war? In other words, what are
    the preparations that are reflected in this budget for the
    future? Is it the Predator or are there other activities that
    you see, force development, as well as assets that really
    represent the future, not just simply the present or the past?
        I guess I would start with you, Secretary Roche, and move
    down the other way for a change, to change your luck just a
    little bit.
        Secretary Roche. Thank you, Senator. I probably cannot give
    you line item by line item, but I can give you----
        Senator Ben Nelson. No, just generally.
        Secretary Roche. The overview would be that as we look to
    the future we clearly need to keep our bomber force modernized
    and we are putting the equipment in place to do that, the
    modernization of the B-2, et cetera. By reducing the B-1 fleet,
    we are plowing the money back to make the B-1s quite useful,
    and in fact that by giving them standoff weapons they can fly
    at an economical altitude and get much more range.
        So the bomber force, we have worried about the weapons and
    the weapons being so accurate and standoff that that force
    should be good over a period of time. It has been years since
    we have introduced a new fighter bomber. In fact, we have done
    two classes of bombers, the 117, the C-17, the C-130J, Joint
    STARS, a whole bunch of aircraft, and we still have the F-16s,
    et cetera. Those wings are about as loaded as they are going to
    get.
        So the F-22 program, which is now fully funded, and the
    starting of the Joint Strike Fighter program will give us the
    fighter bomber aircraft that we need, although we are
    reorienting part of the F-22 to be air-to-air than air-to-
    ground. Now it will be roughly half air-to-air, air-to-ground,
    developing special weapons for it. So the fighter force is in
    good shape.
        Lift, with the multiyear on C-17 and our request to you for
    a multiyear on C-130Js, our taking and fixing up the old C-130s
    in avionics and then taking a look at the C-5s, which one of
    those can be overhauled and kept, I see lift in good shape.
        Where we still have a problem is our reliance on the old
    707s in the intelligence, surveillance, and reconnaissance
    area. There we are trying to augment, besides moving forward
    potentially to a new platform, with UAVs and also space-based
    things, like space-based radar. But the UAVs are still
    experimental. There are still issues that we have to work
    through with those.
        In the ISR field we are trying to do some new things plus
    change the platforms. In the case of things like helicopters
    for the Special Forces or for our combat search and rescue,
    they are old. When I find helicopters from Vietnam still being
    used, they are old. In the case of tankers, we find ourselves
    just with tankers aging to 43 years and we have to worry about
    those.
        Senator Ben Nelson. Secretary England.
        Secretary England. Senator, a few of the things we are
    doing on investing in the future: First of all, we have started
    work on the EA-6B replacement. That is the only jamming
    aircraft we have in the U.S. military. It is getting long in
    the tooth. We are starting that replacement program. We have
    started a multi-mission airplane. We put money in to start
    looking at that airplane. That is a replacement for our P-3
    maritime patrol and also our E-P3 signal intelligence aircraft.
        We have a new program, DDX, which is a new family of ships
    for the Navy; and the Joint Strike Fighter, as Secretary Roche
    mentioned. We are also now buying the Advanced FLIRs that we do
    not have yet on our F-18Es and Fs, so we have invested more
    this year to bring those into inventory. We are investing in
    unmanned vehicles and networking, a lot of money in networking,
    because networking gives us the leverage to maximize the total
    forces that we have; rather than add just a platform, to get
    real leverage. So we are investing more in that. Our E-2, we
    are upgrading our electronics in our E-2 airplanes, our
    airborne early warning airplanes.
        New and dramatically upgraded munitions. We have some
    magnificent precision weapons, but there is a next generation
    now that is being developed to give us better capability in
    terms of targeting, and we are investing in those.
        So we are investing in a wide, wide area in addition to the
    way we are doing things like SSGN, the conversion of the two
    boomer subs. So we have a lot of investments going forward for
    our Navy and our Marines.
        Senator Ben Nelson. What percentage would you estimate that
    this is of your budget? Is it 1 percent or 2 percent? Is it
    some significant percent above that?
        Secretary England. Well, certainly all of our R&D is in
    these areas.
        Senator Ben Nelson. It is more than research and
    development. That is out there on the cutting edge, but you are
    also now applying some of that, I would assume, to new
    weaponry.
        Secretary England. Absolutely. Like SSGNs, this year we are
    putting a billion dollars alone just in that account. So I do
    not know--I will be happy to get back with you. We are way into
    the billions. These are a lot of programs we are funding,
    Senator.
        [The information follows:]

        Secretary England. Approximately 36 percent of the Department of
    the Navy's R&D account finances transformational capabilities being
    fielded in new weapons systems. This accounts for 4 percent of the
    total Department of the Navy budget.

        Secretary Roche. I think, Senator, across the board our
    goal of 1 to 2 percent for transformational things, we are
    above that. It is much larger than people realize. In many
    cases we are using some old things, but in very new ways.
        Senator Ben Nelson. We do not have to be absolutely
    creative on new projects. We can take old material and make it
    better, and I commend you for doing that.
        I think my time may have expired, but would it be okay for
    Secretary White to respond?
        Chairman Levin. Sure, just to finish the question,
    absolutely.
        Secretary White. Thank you. As I said in my opening
    statement, we are taking a near-term risk by limiting the
    degree of modernization and recapitalization we are doing on
    the existing legacy force in order to bring along what we
    consider to be transformational systems. That includes
    Crusader, Comanche, which will revitalize our helicopter fleet,
    the information technology that we are working on at Fort Hood,
    the interim brigade combat teams, one of which is funded in the
    fiscal year 2003 budget, and then finally, as we talked about
    earlier, the Future Combat Systems.
        In the Future Combat Systems, what we are looking for is
    something that is more lethal than Abrams, more survivable than
    Abrams, with a two-man crew, 10 percent of the logistics tail,
    fits in the C-130. That will truly be a transformational
    capability. We have put our money very definitely in the mid to
    long-term to achieve this transformation.
        Thank you.
        Senator Ben Nelson. Thank you.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you very much, Senator Nelson.
        Senator Inhofe.
        Senator Inhofe. Thank you, Mr. Chairman.
        Let me first comment to Secretary White and Secretary
    Roche. The comments you made about our troops over there are
    certainly appropriate. I had occasion to be at the hospital at
    Lansduhl last week and talking to some of the troops that had
    been injured, all of them that were there, as a matter of fact,
    who were injured. Without exception, they said they, number 1,
    wanted to get back to their unit; and number 2, they want to
    make a career out of it. These are the ones that were hurt, so
    I just cannot say enough good things about these guys.
        Secretary England, let me just take my entire 6 minutes to
    ask two questions that I hope will clear up the most
    misunderstood issue that is out there and will also provide for
    a dramatic increase in our readiness of our deployed troops.
    First of all, I thank you for your letter of the 6th of
    February, when you tried to clear up a couple of articles
    published in the newspaper that suggest you denied a request by
    the CNO, Admiral Clark, and the Marine Commandant, General
    Jones, on the use of Vieques for live fire training.
        However, your letter did not address live fire training. It
    merely said that is the decision the military would make, and
    that is the statement you made in my office and that you have
    made several times. Now, what I am really confused about that
    can be cleared up today once and for all is this. Two weeks ago
    I went up to the ships that were involved in training for the
    east coast deployment. That was the JFK, the U.S.S. Whitney,
    and the U.S.S. Wasp. I talked with Admiral Natter, the Atlantic
    fleet commander, and Vice Admiral Dawson, the Second fleet
    commander. I also spoke to the commander of the Marine
    Expeditionary Unit, the commodore of the Wasp, as well as the
    commander of the JFK battle group.
        They echoed your response that, because of an accelerated
    deployment schedule, they did not use Vieques during their
    final exercise, but that it had been used before for naval
    gunfire qualifications in the fall. In other words, they got
    the naval qualification taken care of there, but they also said
    that it would have been better if they could have had this in
    the final exercises right before deploying. This is where the
    football team gets together and scrimmages and says, this is
    how we work together. They believe that their orders were not
    to use their range for live fire, and all of them commented
    about a Presidential directive that would have forbidden them
    to do that.
        Now, I looked up and I checked with the Navy, as well as
    the counsel of the committee, and found that the Presidential
    directive that they are talking about was one that was directed
    by President Clinton on January 31, 2000. However, that
    particular directive is one that referred to the referendum
    that was going to be taking place and when they cancelled the
    referendum that automatically cancelled the Presidential
    directive.
        In addition to this, we actually put language in the law
    that is there today that says they cannot do that anyway
    because we would continue to use that range until certification
    came from both the CNO and the Commandant that it was not
    needed.
        Well, I relearned three things on this trip: number 1, that
    Vieques is the only range on the east coast where naval gunfire
    qualification can take place; number 2, Vieques is the only
    location where the entire amphibious assault team can train
    together; and number 3, the commanders believe that live fire
    training is better than inert training. As one commander put
    it--and I asked him this question--he said, ``If live fire
    training is a 10, my unit would be at a 5.''
        The President, in his State of the Union message, talked
    about our military men and women and said they deserve the best
    training. He was not talking about 5 out of 10. He was talking
    about the best. Secretary Rumsfeld said in his testimony before
    this committee just last week that our men and women should
    train as if they are going to fight. In my recent conversation
    with both Admiral Clark and General Jones, I find their desire
    to train at Vieques both live and inert as not wavering.
        So I have these two questions. They are yes or no
    questions. Believe me, there is not a person up here at this
    table who has not been misquoted in the press. This has
    happened to everyone at your table, too, I am sure. But I want
    to read something that was a press release from the Puerto
    Rican governor's office and ask you if this is accurate or
    inaccurate, is it true or is it not true: ``Secretary of the
    Navy Gordon England ordered the cancellation of the exercises
    and he overruled two high military officers, the Chief of Naval
    Operations Vernon Clark and the Commandant of the Marine Corps
    James Jones, who had asked to train in the island with real
    ammunition.'' Is that true or false?
        Secretary England. False.
        Senator Inhofe. Thank you very much. I do appreciate that.
        The second question is this. Last week when we had both
    General Myers and Secretary Rumsfeld at that table, I asked
    them a question about the training and they were all very
    interested in the training, but they said this is a Navy
    decision, this is not their decision--so that is going to be
    you. That is a Navy decision.
        You have said in a letter that I have here that you will
    let the military make that decision. The military has made that
    decision. In the letter that came signed by both Clark and
    Jones--I will read out of this letter: ``The shift of wartime
    operations following 11 September's tragic events has led your
    uniformed leadership to review the current prohibition on live
    ordnance training at Vieques with an eye toward accomplishing
    vital Naval training while continuing to limit our impact upon
    the island and the people of Vieques. We respectfully request
    support of a wartime modification of current practice to
    sanction the use of live ordnance during combined arms training
    exercises prior to deployment.''
        So the second question is: Will you make Vieques available
    for live fire training by making it clear to the commanders
    within the Navy that they may train there with live ordnance of
    their desire?
        Secretary England. Senator, the request was really overcome
    by events, because the fleet commander decided not to do live
    fire. I understand, and I believe he discussed that with you,
    it was also decided not to do it with the George Washington----
        Senator Inhofe. Let me interrupt your response because I am
    running out of time. Yes, I talked to the fleet commander and I
    talked to the Second Fleet commander. they said they were under
    the understanding that they could not have live fire training.
    Now, my question is this: Will you make Vieques available for
    live fire training by making it clear to the commanders of the
    Navy that they may train there with live ordnance if they
    desire?
        Secretary England. Senator, I do not believe the decision
    is quite that simple, because there are other factors in this
    in terms of our ability to do live fire. We have not had any
    live fire training on Vieques for some time. The last time we
    did, it was very traumatic. That is how we got into all the
    security issues and all the problems on Vieques. That is what
    led to the Presidential directive.
        So this is a situation that is not as clear as just
    deciding what I would like to do. The people in Vieques
    actually have a say about this and there are security issues
    associated with this. So I do not believe it is quite that easy
    to just decide. There are environmental issues, a lot of other
    issues that we have to deal with.
        Senator Inhofe. Well, we are aware of all those issues. We
    are also aware that the judiciary can get in there and start
    talking about restraining orders and all these things. Yes, we
    understand that can happen. But the military wants to use live
    fire and train these guys so that they are able to go into
    battle with the very best training that they can have, which
    they cannot yet today. My question is would you allow your
    military to make that decision and to train with live fire?
        Secretary England. Senator, the military has not made that
    decision. I told you before I did not overrule them. They
    decided not to do that for Kennedy and they decided not to do
    it for George Washington. So they have already made that
    decision.
        Senator Inhofe. Mr. Secretary, I cannot relinquish this
    line of questioning without rereading what they said. Now, you
    remember what they said. They said that ``We respectfully
    request support of a wartime modification of current practice
    to sanction the use of live ordnance in training.'' This is
    what they are asking for. These are the top guys. These are the
    bosses. They are the bosses of the fleet commanders, as you
    well know.
        Secretary England. Senator, the fleet commander makes that
    decision. The fleet commander made the decision not to do it.
    He makes the decision. The fleet commander makes that decision.
        Senator Inhofe. The fleet commander only made the decision
    not to do live ordnance in the final analysis because of the
    rapid schedule that they are under, which I understood. But
    they also said, the fleet commander as well as the Second Fleet
    commander, that they would have had better training if they had
    been able to have in the final training unified live fire
    training, and they so requested this.
        Secretary England. Senator, we do live fire in lots of
    venues. In lots of places we do live fire, and we train our
    people very effectively, as evidenced by the magnificent
    performance we have had over in the Gulf.
        Senator Inhofe. So is the answer to the question no, then?
        Secretary England. They did not do live. They did not do
    live fire.
        Senator Inhofe. Is the answer to the question no?
        Secretary England. I have lost track of the question.
        Senator Inhofe. Let me read it again.
        Chairman Levin. I am afraid that----
        Senator Inhofe. Well, no. He has lost track of it.
        Chairman Levin. Excuse me, though. I am afraid you are way
    over time on this. Just try it one more time.
        Senator Inhofe. All right, one more time.
        Chairman Levin. Try to duck it one more time and then let
    us go on.
        Senator Inhofe. I think we need it. This is a very serious
    question.
        Chairman Levin. I agree, but----
        Senator Inhofe. Let me just ask it one more time. Will you
    make Vieques available for live fire training by making it
    clear to the commanders within the Navy that they may train
    there with live ordnance if they desire?
        Secretary England. Senator, I am telling you again, that is
    not solely my decision. There are events that you have to think
    about in this decision. If you do that without considering the
    people in Vieques, without considering the environmental
    issues, we could end up in a worse situation.
        Senator Inhofe. Thank you, Mr. Chairman.
        Secretary England. We will look at that when we get to it.
        Senator Inhofe. We have already considered all those things
    for 2 years now and this comes down to your decision, and I
    think you have answered the question.
        Thank you, Mr. Chairman. I apologize for going over in my
    time.
        Chairman Levin. Thank you.
        Senator Landrieu.
        Senator Landrieu. Thank you. I have an opening statement
    for the record.
        [The prepared statement of Senator Landrieu follows:]
                 Prepared Statement by Senator Mary L. Landrieu
        Thank you Mr. Chairman. I would like to welcome our three
    distinguished service secretaries: Secretary England, Secretary Roche,
    and Secretary White. I'm very pleased that you are with us today to
    offer testimony on the budgets you have submitted. Having reviewed your
    statements, I find several areas of concern.
        As chairperson of such a currently issue-centered subcommittee as
    the Emerging Threats and Capabilities Subcommittee, I am struck by the
    under-investment in research and development and science and technology
    across the Services and Special Operations for new cutting edge
    weaponry and information technology.
        I support the increase in the Defense budget 100 percent, but I
    have pause with the seemingly ``Cold War Era'' approach to military
    procurement which permeates this budget. I see lackluster
    prioritization based on the current world threat of non-state
    terrorists.
        We live in a time where the right technology in the battlespace
    means the difference between superiority of decision-making and being
    overwhelmed by the fog of war--where the wrong intelligence can send a
    team of special operators to their death--and where unmanned aerial
    vehicles should be able to do as many tasks as we can imagine they
    should, to spare the threat to human life.
        My concern lies in the details of unfunded military programs such
    as cutting edge shipbuilding, new airframes to forward our JSTARS
    intelligence platforms, and needed technological upgrades to older
    aircraft such as the B-52, which are more cost-effective.
        We can no longer afford to take the ``same old'' approach to war
    fighting by buying large numbers of weapon systems which may have no
    future security among the new threats of unstable nation-states,
    asymmetric war, or seeking out the networks of terror which left to
    grow, will certainly cause more innocent civilian deaths.
        I ask you to be the visionaries of your services. You must look
    ahead farther than ever before and request appropriate levels of
    research and development and science and technology dollars to stay
    ahead of the threat. This is a trying time for all in the United
    States, our allies around the world, and especially our men and women
    in uniform, who deserve to know they have every advantage imaginable
    when they proceed into unknown air, sea, and land areas to seek out and
    rid the world of terror.
        Mr Chairman, thank you for this opportunity to formally discuss the
    proposed budget with our distinguished guests--I have a couple of
    questions for them.

        Moving on from Vieques, Mr. Secretary.
        Secretary England. Thank you.
        Senator Landrieu. I do have two specific questions, Mr.
    Chairman, but I would first like to just read briefly from the
    President's State of the Union speech because it leads me into
    the first point I would like to make about the job before us.
    He said in the State of the Union: ``Our discoveries in
    Afghanistan confirmed our worst fears and showed us the true
    scope of the task ahead. . .  We have found diagrams of
    American nuclear power plants, public water facilities,
    detailed instructions for making chemical weapons, surveillance
    maps of American cities, and thorough descriptions of landmarks
    in America and throughout the world. . . Thousands of dangerous
    killers, schooled in the methods of murder, often supported by
    outlaw regimes, are now spread throughout the world like
    ticking time bombs, set to go off without warning. Thanks to
    the work of our law enforcement officials and coalition
    partners, hundreds of terrorists have been arrested. Yet, tens
    of thousands of trained terrorists are still at large. These
    enemies view the entire world as a battlefield. We must pursue
    them wherever they are.''
        He goes on to say: ``First, we will shut down terrorist
    camps, disrupt terrorist plans, and bring terrorists to
    justice. And second, we must prevent the terrorists and regimes
    who seek chemical, biological, or nuclear weapons from
    threatening the United States and the world. Our military has
    put the terror training camps of Afghanistan out of business,
    yet, camps still exist in at least a dozen countries. A
    terrorist underworld--including groups like Hamas, Hezbollah,
    Islamic Jihad, Jaish-i-Mohammed--operates in remote jungles and
    deserts, and hides in the centers of very large cities.'' ``Our
    second goal,'' he says, ``is to prevent regimes that sponsor
    terror from threatening America or our friends and allies with
    weapons of mass destruction.'' Finally he says, ``We will work
    closely with our coalition to deny terrorists and their state
    sponsors''--and I insert, when they have such sponsors--``the
    materials, technology, and expertise to make and deliver
    weapons of mass destruction.''
        My point this morning would be and my question will
    continue to be: What in this $375 billion budget for defense
    are we doing to answer our President and our country's call to
    focus on this exact threat, which is very different than the
    threats we have focused on in the past? Finding thousands of
    terrorists, not necessarily like the ones we just destroyed,
    identified in caves, but hiding in the center of jungles and
    cities, in large cities, in deserts, scattered throughout the
    world? What in this budget is helping us to prevent an attack
    of a weapon of mass destruction?
        While I support missile defense, I would admit as a
    proponent of missile defense it is unlikely that the weapon
    will be delivered by a missile launcher, but much more likely
    that the weapon will be delivered by a crop duster, a ship
    cruising into one of our hundreds of ports, a briefcase carried
    through any number of a hundred entry points to the United
    States, or an aerosol can in one of the thousands of malls in
    the United States.
        I think it is very serious as we talk about this budget to
    keep focused on the President's words about what the new threat
    is and what in this budget is going to help protect Americans
    who are depending on us to do that kind of protection. My
    question is this, more specifically. We are setting up these
    new interim brigades and, Secretary White, you mentioned the
    urgency of doing this, and I could not agree with you more,
    getting these new brigades that can move more quickly, getting
    better intelligence, moving where the terrorists may be or
    where the conflicts may be, while we are uncertain as to where
    they will be in the future.
        What have we invested in their training and preparation,
    particularly our two premier training centers in the United
    States, one in California, one in Louisiana? What have we
    invested in the standing up of these training facilities for
    these specific brigades?
        Secretary White. First of all, we have changed the
    scenarios and the way we have run the training facilities to
    move away from what I would describe as Cold War scenarios to
    the more complicated counterterrorist scenarios that you are
    talking about, so that the method of training in both of the
    national training centers is significantly different.
        Second, as you pointed out, we are standing up the interim
    brigades as we go along. We will have one finished by the end
    of this year and there is one funded every year on to its
    completion in 2007. But I think we also have to realize that
    the military contribution is a part of a broad national effort.
    As Secretary Rumsfeld and Governor Ridge have talked about, it
    includes intelligence, economic initiatives, and political
    initiatives. It is the sum total of that that will enhance the
    security of the country, and we are certainly making our
    contribution to it in the Army budget.
        Chairman Levin. If you would yield just for 10 seconds,
    Senator Landrieu. The first of three votes has begun and this
    is going to be a little more complicated than usual. If a few
    of us will go vote early in this first vote, come back, and
    then vote at the end of the second vote, we will be able to
    continue here without interruption. The next four Senators, if
    they are here, would be Allard, Dayton, Sessions, and
    Lieberman.
        Sorry for the interruption, Senator.
        Senator Landrieu. Just to follow up, and I am sure there is
    excellent training that is conducted throughout the United
    States and, perhaps because of these new battles that we are
    going to fight, more offensive than defensive, finding the
    terrorists before they find us and routing them out and finding
    them, I know that the training that goes on in Louisiana,
    because I have participated in these exercises, and the
    generals on the battlefield have called this training
    invaluable to carrying out the task that is before us.
        My time has just about expired, but any investments that we
    can make in the training at these bases and creating additional
    training opportunities I think is crucial.
        Finally, could you, for the record, provide the committee
    with more information on the ISR, the intelligence,
    surveillance, and reconnaissance, the role of the JSTAR, the
    new platforms that are necessary, I want to say, Mr. Secretary,
    I will always remember your quote: ``We lost the horse, we lost
    the king, and then we lost the kingdom. So let us not lose the
    horse when we are talking about our intelligence assets.''
        Thank you.
        Secretary Roche. Thank you, Senator, for your support.
        [The information referred to follows:]

                               New ISR Platforms

        Secretary Roche. The Air Force is quite pleased with the role that
    Joint STARS and other ISR aircraft have played in Enduring Freedom.
    Last week during a CSPAN interview with General Jumper and I, I think
    the Chief called it ``a magnificent aircraft.'' I couldn't agree with
    him more.
        We are planning to continue to equip the E-8 with new technologies.
    One key upgrade will be to increase its ability to get data off board
    to our F-15E strike aircraft with a new Link-16 upgrade. That's a great
    example of the horizontal integration of platforms vision for the Air
    Force. We also plan to enhance connectivity with the Air Operations
    Center and other ground elements with a new DAMA SATCOM radio.
        However, even with these and other modifications, the Joint STARS
    is not sufficient to meet our future needs. It's built out of an old
    707 airframe that's going to cost more and more to maintain. We have a
    new AESA based radar technology that needs a lot of more power from the
    engines. The fiscal year 2004 budget will continue a major ramp-up of
    our activity to transition off the 707 airframe and onto a brand new
    767-400. The new radar capabilities will be revolutionary. In fact,
    they will go far beyond what we can accomplish today, especially for
    combat identification of friend and foe on the ground and in the air,
    and for cruise missile defense.
        The combination of longer range, heavier payload, higher altitude,
    and a truly extraordinary radar capability will eventually allow us to
    find and target threats with a very high degree of confidence and with
    much less risk to our manned platforms. This multi-sensor command and
    control aircraft, or MC\2\A, will be the hub of a constellation of
    manned and unmanned ground, air and space assets. We plan to buy the
    testbed in fiscal year 2003, and field the first aircraft in fiscal
    year 2010.
        Joint STARS is the current workhorse for our GMTI capability and
    will remain so through the middle of the next decade. The future is the
    767 based MC\2\A, and we will be focusing our priorities on spiraling
    far greater capability onto a brand new platform.

        Senator Landrieu [presiding]. Senator Sessions.
        Senator Sessions. Thank you.
        Secretary England, we have spent a lot of time in this
    committee on the Vieques live fire question. It is not an itty-
    bitty matter. It is a matter that needs to be decided. I think
    the United States needs to be able to have a live fire range.
    This apparently is the only appropriate one. That issue, I
    agree with Senator Inhofe, needs to be decided by you. It needs
    to be decided in favor of the best possible training for the
    ships that we are deploying.
        We are already reducing the number of those ships. They
    need the very best training possible, and I do not think this
    issue is going away. If you want to comment you can. I just
    want to share my view about it.
        Secretary England. Let me comment on this, Senator. First
    of all, we do have a study--one reason last year we decided to
    leave Vieques in 2003 was to get the emotion out so we could
    stay there and do nonexplosive ordnance. The whole objective
    last year was to be able to stay and do nonexplosive ordnance.
    By the way, we spent $11 million in security and all that last
    year to be able to use the island of Vieques even for inert
    type of activity.
        So we authorized last year a study by CNA to decide on the
    best kind of training we could do for our men and women in
    uniform. In my mind this is not an issue of Vieques, never has
    been. The issue is how do we best train our men and women in
    uniform.
        While Vieques has some attributes, it has a lot of
    attributes that are missing. So we do not do a comprehensive
    training menu at Vieques. So we have a study under way to look
    at that and the study will be out in about the late April time
    period.
        In the meantime, however, again I will tell you, the fleet
    commanders have decided not to do this at Vieques, not the
    Secretary of the Navy, but the fleet commanders have decided
    not to do the live fire there for various reasons. We are on
    the path that we set out to be on. We have the studies under
    way and I am convinced we will end up with the best answer to
    train our men and women in uniform. That is what this is all
    about.
        Senator Sessions. Well, that has been looked at for some
    time and I wish you good luck if you find an alternative. We
    have had testimony here from the best minds on the subject that
    there are no alternatives available.
        Secretary Roche, I know you and Secretary White were proud
    of the coordination between soldiers on the ground and pilots
    in the air. Secretary White, would you tell us what it was like
    for the soldiers on the ground to have the kind of air power
    that became available during the Afghan war?
        Secretary White. I think it made all the difference in the
    world. There have been some well-documented cases of Special
    Operating Forces on horseback who are tied in with space age
    technology to air assets, who could immediately bring precision
    munitions to bear in support of Northern Alliance forces. That
    really swung the battle in favor of our allies.
        It is something that all of us who have been around in the
    business for a long time have always sought. We have the
    technology today to do it. We have the people that are capable
    of doing it, and it made all the difference in the world in
    Afghanistan.
        Senator Sessions. Secretary Roche, this ground positioning
    system, tell me how that worked and precisely how your people
    were able to meet the needs of the soldier on the ground?
        Secretary Roche. Senator, we have had a goal as we looked
    at the future to try to return to an era of General Arnold of
    the Army Air Corps supporting General Patton in the
    breakthrough after Normandy. This was one of the first things,
    in fact inspired by Secretary Wolfowitz chiding both Secretary
    White and myself to do better in this era.
        What we were able to do is, these young people will use
    various and sundry things, basically a commercial GPS system
    and a set of binoculars that will give them a laser beam where
    they can get a range. Some have had to use paper maps, others
    have been able to just use a computer, convert these into GPS
    coordinates of the target, and then relay those by voice to the
    airplane.
        Now, you can see how we can make a bunch of improvements in
    that over time. We are quite proud that our pilots can work for
    sergeants. It is perfectly fine. It has worked very, very well.
    GPS has allowed this. In other cases it has been a matter of
    putting a laser beam on a target and then certain systems both
    in the Navy--the AT-FLIR--and in the Air Force--the Lightning 2
    pod has laser spot trackers--can pick up those spots, convert
    them to their own lasers, and bring down laser-guided weapons
    on them.
        It is the very close coordination and the dedication to
    doing that which gives us a sense that we can transform how we
    work together.
        Senator Sessions. I think it is cutting edge stuff, and I
    hope that you can keep that up and be able to broaden the
    capabilities there. The main weapon that was called down on the
    enemy was the JDAMs, is that correct, the GPS weapon?
        Secretary Roche. JDAMs we used extensively. There are also
    laser-guided weapons as well. I can tell you that,
    interestingly enough, this was not just Air Force planes. It
    would also work with naval aircraft that had JDAMs. We for the
    first time had marine aircraft, naval aircraft, Air Force,
    coalition, all being centrally coordinated. So whoever had the
    weapon and was nearby was able to serve the sergeants.
        Senator Sessions. It strikes me that this is a major
    breakthrough in warfare or at least a major transformation
    point in our warfare. If we are in a war that has more targets
    even than Afghanistan--and most enemies would have more targets
    than Afghanistan--we will need large supplies of these kind of
    weaponry. Can you tell us what this budget does in terms of
    increasing funding for JDAMs and whether it is sufficient?
        Secretary Roche. Sir, I get a little confused between
    supplementals and other budgets, but the cumulation of what you
    have done for us will allow us to basically double the JDAM
    production and we will do it in stages. It is roughly 1,500 a
    month now. We will get it up in the first stage to the early
    2000s, but we will have the facilities in place that we are
    investing in that if we need to we can move to 3000. Plus we
    have been working on a 1,000-pound weapon. We will now move to
    a 500-pound weapon for the targets where that is more
    appropriate.
        Senator Sessions. You say you could move up even faster?
        Secretary Roche. For a while there, I was tracking the
    number of JDAMs used per day as compared to the number we were
    producing per day and we got a little worried. At this stage of
    this particular conflict, we are not using very many and in
    fact we are able to build inventories up again.
        Senator Sessions. It just strikes me that we ought not to
    have just a sufficiency of these weapons, but a surplus of
    these weapons.
        Secretary Roche. I agree, sir.
        Senator Sessions. Are you confident that the budget as
    outlined will provide us the sufficient surplus extra numbers
    that we need to provide potential military capability in other
    areas other than the one just in conflict?
        Secretary Roche. We believe that is correct, sir, because
    the Navy is also investing money in increasing production. So
    it is both services are putting money in their budgets to
    increase JDAM production.
        Senator Sessions. We will be looking at that closely. I do
    not think we ought to make a mistake on this issue. I think if
    the mistake is made it ought to be more rather than too few.
        Secretary England. Senator, we increased ours from
    approximately 1,400 in our 2002 budget to 9,880 in the 2003
    budget. So we had a dramatic increase in JDAMs in the Navy
    budget.
        Senator Sessions. Senator McCain.
        Senator McCain. I would like to apologize. I only have a
    few minutes because there are only a couple minutes left in the
    vote. I may have to come back and get in the queue again.
        I want to discuss, Secretary Roche, the 767 tankers issue
    with you. When you wrote the letters to Congressman Dicks and
    Senator Murray and others, did you consult with the Secretary
    of Defense as to your position on the lease-purchase of these
    aircraft?
        Secretary Roche. Sir, I did not consult with the Secretary
    of Defense personally, but with members of his staff, sir.
        Senator McCain. Which ones?
        Secretary Roche. I believe we worked both with the
    Comptroller and with the Under Secretary for Acquisition.
        Senator McCain. So that was sufficient authority for you to
    proceed?
        Secretary Roche. Well, it was sufficient authority, we
    believed, for us to ask for permission to go and negotiate,
    recognizing that if we ever had a financial lease we would
    bring it back to the Secretary.
        Senator McCain. Put in words in legislation, were you
    seeking legislation through the appropriations process which
    would authorize you?
        Secretary Roche. We were seeking permission to attempt to
    negotiate a lease.
        Senator McCain. Through the appropriations bill. Did you
    consult with Senator Levin?
        Secretary Roche. No, sir, I did not.
        Senator McCain. Or Senator Warner?
        Secretary Roche. No, sir, I did not.
        Senator McCain. No member of the authorizing committee?
        Secretary Roche. No, sir, I did not.
        Senator McCain. Why are you wasting your time here?
        Mr. Secretary, do you believe in competition?
        Secretary Roche. Yes, sir, I do.
        Senator McCain. Are you discussing this lease with, say,
    Airbus?
        Secretary Roche. Yes, sir. Back as far as October, I made
    the point that if Airbus could come in and do something we
    would be delighted to have that.
        Senator McCain. Are you discussing this with Airbus?
        Secretary Roche. Yes. I have met with Philippe Delmas and
    have opened up the door for him if he wished to do something.
        Senator McCain. But does not the legislation say the loan
    can only be Boeing 767s?
        Secretary Roche. Yes, sir, but if Airbus did something that
    was particularly good I would come back to Congress, sir.
        Senator McCain. Oh, you would come back to get the
    legislation changed again on an appropriations bill?
        Mr. Secretary, you do believe in competition, you said. In
    your letters both to Representative Dicks and to Senator
    Murray, which you did not share with any of the members of the
    authorizing committee, in both of them you said: ``Beginning in
    fiscal year 2002, it would be in the best interest of the Air
    Force to implement this transition. We intend to work with USD
    AT&L and the OSD Comptroller to amend the fiscal year 2003
    budget currently being vetted through the Department. This
    lease approach will allow more rapid retirement and
    replacement. If Congress determines this approach is not
    advisable, completing the upgrade through the purchase of new
    767 aircraft beginning in fiscal year 2002 would be in the best
    interest of the Air Force.''
        Is there anything in the Air Force budget that calls for
    acquisition of 767s?
        Secretary Roche. Yes, sir. They are for a new tanker, but
    it would not show up until 2008.
        Senator McCain. No, I am talking about in the fiscal 2003
    budget which was just submitted to Congress, is there anything
    for a new tanker?
        Secretary Roche. No, sir. In the POM we have it, not in the
    2003 budget, because----
        Senator McCain. But you said in your letter that you would
    intend to work with the Under Secretary of Defense for AT&L and
    the OSD Comptroller to amend the fiscal year 2003 budget
    currently being vetted through the Department.
        Secretary Roche. Because if we could start the lease
    earlier, sir, we would need some O&M moneys to go for the
    initial part of the lease.
        Senator McCain. So you did not seek authorization or
    appropriation in the fiscal year 2003 budget?
        Secretary Roche. Sir, we did not seek authorization for any
    money.
        Senator McCain. Which is in direct contradiction to your
    letter to Congressman Dicks.
        Secretary Roche. No, sir. If I may, Senator----
        Senator McCain. Yes.
        Secretary Roche. It was a matter that plan A right now is
    to have a stream of money that would build to a KC-X that would
    be available in 2008. If in fact the lease would be available
    sooner, we would not be spending money certainly on the old
    planes and we would ask for a redirection of moneys. That is
    what that meant, sir.
        Senator McCain. It is plain English: ``We intend to work
    with USD AT&L and the OSD Comptroller to amend the fiscal year
    2003 budget currently being vetted.'' Words have meanings,
    different meanings, obviously, to you and me. But I think that
    the casual observer would say that when you intend to work to
    amend the fiscal year 2003 budget and the money is not in the
    budget, that you did not amend the 2003 budget, which is what
    was stated in your letter.
        So you are now seeking some relief from regulations
    concerning leasing arrangements. I just want to cite a quote
    for you on Mr. Daniels, the head of OMB: ``Daniels was so cool
    to the Boeing proposal that many Capitol Hill observers
    believed the leasing deal would never be made. During last
    year's debate, Daniels not only warned against scrapping the
    rules designed to curb leasing abuses, but wrote to Senator
    Kent Conrad: `The Budget Enforcement Act's scoring rules were
    specifically designed to encourage the use of financing
    mechanisms that minimize taxpayers' costs by eliminating unfair
    advantage provided to lease-purchases by the previous scoring
    rules. Prior to BEA, agencies only needed budget authority for
    the first year's lease payment even though the agreement was a
    legally enforceable commitment. In the late 1980s, General
    Services Administration (GSA) used this loophole to enter into
    lease-purchase agreements with a total long-term cost of 1.7,''
    et cetera.
        He is opposed to changes, according to this letter.
        Secretary Roche. Yes, sir. Then by the time that bill was
    finished, the changes we had asked for were denied. If we can
    do a lease, it has to be under the conditions specified in the
    bill. It has happened in the past, sir, where we have been
    asked to try to lease 737s, were not able to come to a good
    deal, and could not bring something back to Congress. It will
    be the same way in this case, Senator. If we cannot get a lease
    that we can feel proud to show you, we will not do it.
        Senator McCain. Well, I have to go to vote or I will miss
    it, but I intend to pursue this line of questioning. You never
    consulted the chairman of the authorizing committee or the
    ranking member or any member of the committee. You did not get
    or consult directly with the Secretary of Defense over a $26
    billion deal.
        I have only been around here since 1983. This is one of the
    more remarkable things that I have seen in the time that I have
    been a member of this committee. I intend to do everything I
    can to see that the taxpayers of America are taken care of in
    this situation, which clearly is a serious, serious issue here.
        I have to go to vote. My time has expired.
        Secretary Roche. May I answer that later when you come
    back, sir?
        Senator McCain. Please.
        Senator Inhofe. I want to start the second round here and I
    want to spend just a couple minutes on the previous subject,
    Secretary England. Anticipating that there might be an effort--
    this is some time ago--to close this arrangement--Mr. Chairman,
    is it all right if I go ahead and pursue my second round, since
    no one else is here?
        Chairman Levin. Yes. I was going to go and have my round
    first. Have you voted?
        Senator Inhofe. That is fine.
        Chairman Levin. Have you voted?
        Senator Inhofe. I have.
        Chairman Levin. You go ahead. You have started.
        Senator Inhofe. Anticipating what could be a problem, Mr.
    Secretary, I want to just read last year's defense
    authorization bill that we passed, a paragraph of it. ``The
    Secretary of the Navy may close the Vieques Navy training range
    on the island of Vieques, Puerto Rico, and discontinue training
    at that range only if the Secretary certifies to the President
    and Congress that both the following conditions''--you are very
    familiar with this law.
        I guess what I am saying here is you brought up a lot of
    concerns, the people there and what their reaction is going to
    be. These are things that are never brought up in consideration
    at other ranges. So it gets down to a very serious thing. I
    just wanted to see if you had thought it over and might have a
    different answer to the last question.
        I do appreciate your very straightforward first response,
    but on this, in that the law is very clear that they should be
    able to do it if the military wants to do it, if the military
    wants to continue to train, would you preclude them from doing
    so?
        Secretary England. Senator, I am always going to obey the
    law. The law says that if I have an alternative before I leave
    I have to identify that alternative and do that in consultation
    with the CNO and the Commandant, and I will certainly do that,
    sir. I am definitely going to do what the law that was passed
    last year says. I thought it was excellent. I have no issue
    with the law and I will proceed according to the law.
        Senator Inhofe. Would you preclude them from doing so if
    they wanted to continue live fire training?
        Secretary England. The law does not address live fire
    training, Senator. It addresses training on Vieques, and at the
    moment we are not doing live fire training on Vieques. We are
    doing inert training. We have been doing that since I believe
    some time in the year 2000.
        Senator Inhofe. That is not the issue, though. The issue is
    live fire training.
        Secretary England. I do not think that is the issue,
    Senator.
        Senator Inhofe. I do not think we are going to get anywhere
    at this hearing, but I have tried. I want to get everything in
    the record, to give you the opportunity to tell us whether or
    not you are going to allow it should the military request it.
    The law is specific when it says that we will continue to train
    there until such time as the CNO and the Commandant certify
    that there is an alternative that they are satisfied with.
        Secretary England. Senator, at this point I have not had a
    request in terms of a specific. The early request was overcome
    by events. We will look at the situation at the time it occurs.
    It is hard to put yourself in a situation when you do not know
    what that environment is, so I am not going to answer that
    question, as you well know. I am not going to answer that
    question because I am not going to put myself in the
    hypothetical situation.
        Senator Inhofe. I realize you are not going to answer the
    question. You have not answered the question.
        Secretary England. Right. I am not about to put myself in a
    hypothetical situation.
        Senator Inhofe. Secretary White and Secretary Roche, let me
    ask you a question. In May 2001 Sea Power magazine interviewed
    Vice Admiral Amerault, the Deputy Chief of Naval Operations,
    Fleet Readiness and Logistics, whose statement suggests that
    this may not be an achievable goal, encroachment is a serious
    problem, and they go on to talk about the problem and say there
    is the potential to lose the range at Vieques in Puerto Rico
    and that could have a very serious readiness impact. It's a
    bell-ringer for us.
        He concludes: ``Vieques is just the beginning. We could
    lose any number of ranges based on encroachment.'' Have you
    seen encroachment as an issue on the ranges in the Air Force
    and in the Army, both Secretaries?
        Secretary White. Yes, we have.
        Secretary Roche. Yes, we have. You have been very helpful
    in the case of one of them, sir, as have a number of your
    colleagues, and I thank you very much. This is a serious
    problem and I see--I agree with Admiral Amerault that this
    could have bad effect on all other ranges that are out there.
        Senator Inhofe. I would like to, just real quickly in the
    remainder of my time, talk about two things that were left out
    of the budget. I recognize that everything cannot be in the
    budget, but in my opinion the two things that we needed the
    most that were left out are military construction and force
    structure.
        On force structure, I have been concerned for quite some
    time about the new deployments that we have had over the last
    few years, places like the Balkans. I just got back from the
    Balkans last week. It seems like we are going to be there for a
    long period of time.
        We are able to do some of these things because of the Guard
    and Reserve, but we have strained our Guard and Reserve, as you
    and I talked about, Secretary Roche, when we were going down to
    Oklahoma that time, and you and I also have talked about,
    Secretary White, to the point where a lot of the critical MOSs
    are not there.
        When are we going to have to try to address the force
    structure, if you agree that that is a problem? Yes?
        Secretary Roche. Yes, sir. Among other things, I went down
    and met with the recruiters for the Guard and Reserve and we
    are trying to do things like, if someone leaves the Active
    Force and they can fit a Guard position, giving them a waiver
    allowing them to do it. We are also trying to expand the roles
    of the Guard in things like Joint STARS, which is going very,
    very successfully in Georgia, and we will probably do more of
    that, or bringing the Guard into more of the information
    technology sorts of things.
        So we have seen a Guard that right now has performed
    magnificently and is carrying an awful lot of the burden, and
    that is part of why we need to have a sense of what the long-
    term steady state requirements of Operation Noble Eagle as well
    as Enduring Force are in order to get some of these folks back
    to their jobs.
        Senator Inhofe. Do you see, though, in addition to that,
    that 2 or 3 years out we are going to have to look at our force
    structure in terms of the regular services?
        Secretary Roche. Our sense is that right now the services
    are working with the Under Secretary for Personnel and
    Readiness to see what ought to be expanded, the Guard, Reserve,
    or Active Force, in order to maintain the capabilities we
    currently have deployed if we need to keep those deployed.
        Senator Inhofe. Secretary White.
        Secretary White. I think there is a general realization,
    with 35,000 Guard and reservists mobilized right now and the
    Guard picking up rotations in Bosnia, rotations in the Sinai,
    and so forth, that if we stay at this level of mobilization for
    an extended period of time, we are quite concerned about
    retention.
        Right now we are at full strength basically in the Guard
    and Reserve. That is one of the reasons why the Secretary
    brought in the business of homeland security, the business of
    making sure when we take these obligations on to make sure that
    there are end dates to those obligations, like the commitment
    of 6,000 Guardsmen in the airports of the country. But it is a
    challenge that we are looking at very, very seriously, because
    the current level of deployment is stressing the force clearly.
        Senator Inhofe. Thank you.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you very much, Senator Inhofe.
        Secretary White, National Guard personnel, while they are
    in a State status are permitted under the law to perform
    domestic law enforcement functions, such as airport security
    and protecting the U.S. Capitol. However, under the doctrine of
    posse comitatus they may not in a Federal status perform such
    functions, nor may active duty personnel perform such
    functions.
        Last week Secretary Rumsfeld testified that the Department
    opposes efforts to revise the posse comitatus law at this time.
    At the same time, I understand that the Department is preparing
    to detail National Guard troops to other Federal agencies to
    perform law enforcement functions, and in the past the
    Department has opposed such efforts to get around the posse
    comitatus law.
        Do you believe that such change should be made and that our
    troops, active duty or Reserve, should be assigned to Federal
    agencies to perform domestic law enforcement functions?
        Secretary White. I think in general, no, that the doctrine
    of posse comitatus has served the country very well and it is
    culturally a part of our heritage. We have, however, agreed on
    a short-term basis of limited duration, because of the
    significant challenge of border security to our overall
    homeland security posture. We have agreed to detail Federalized
    National Guardsmen under Title 10 to the three border
    agencies--Customs, INS, and the Border Patrol--for a limited
    duration.
        We were very, very careful in this process to ensure it was
    of limited duration and only under that basis did we agree to
    do it.
        Chairman Levin. There has been a great deal of concern and
    debate about the status of detainees that have been captured,
    as to whether or not they are prisoners of war or not. You are
    as the Secretary of the Army the executive agent for the
    Department of Defense for administration of the enemy prisoners
    of war-detainees program. As the executive agent, you have a
    number of responsibilities, including providing appropriate
    reports to the Office of the Secretary of Defense, Chairman of
    the Joint Chiefs, and to Congress relative to that program. I
    do not believe we have gotten any reports from you. Have we?
        Secretary White. No.
        Chairman Levin. We should, under the law, and I hope you
    will attend to that. But I want to specifically ask you about
    Army Regulation No. 190-8, which implements that directive, and
    I want to read it to you: ``If any doubt arises as to whether a
    person having committed a belligerent act who has been taken
    into custody by U.S. Armed Forces belongs to any of the
    categories enumerated in Article 4 of the Geneva Convention
    relative to the treatment of prisoners of war, such person
    shall enjoy the protection of the present convention until such
    time as their status has been determined by a competent
    tribunal.''
        That competent tribunal under your Army regulation is a
    three-officer tribunal that is to determine the status of those
    people. I am not talking here now about a tribunal that is
    going to look at war crimes. That is a totally different thing.
        Secretary White. Right.
        Chairman Levin. This is a three-officer tribunal which
    under our law, under our regulations, is supposed to determine
    the status of persons who have been taken into custody by the
    Armed Forces who have committed belligerent acts against us. I
    am wondering whether or not those tribunals have been appointed
    and, if not, why not?
        Secretary White. Well, I know that you had a discussion
    with the Secretary on this very subject the other day in his
    hearing. The view is that the Geneva Convention applies to the
    Taliban detainees, not to the al Qaida detainees, but in
    neither case do they enjoy POW status.
        We have not been directed to conduct tribunals to be more
    definitive in terms of sorting out their status. So that is
    where it stands today.
        Chairman Levin. Yes, but that does not quite answer the
    question. There obviously was doubt, I think in any reasonable
    judgment there was doubt as to whether or not those persons
    should be treated as prisoners of war, whether or not you are
    then required as executive agency to appoint the tribunal to
    determine their status. Is that not your obligation under your
    own regulation. It is not the President's determination. It is
    your determination under your regulations. It is not the White
    House counsel's determination. It is your determination.
        First of all, did you participate in the decision that was
    made?
        Secretary White. No, I did not.
        Chairman Levin. I think that the Army regulation reading as
    clearly as it does, where there is any doubt about the status
    of a person who is taken into custody who has committed a
    belligerent act, he is considered to be a prisoner of war and
    should be treated that way. Since you are responsible for that,
    I think that you should give the committee, at least for the
    record, an analysis with your own counsel--and I would ask that
    the Army counsel be advised of this--as to why your regulation
    was not implemented.
        Secretary White. I will do that.
        [The information referred to follows:]

                      Disposition of Guantanamo Detainees

        Article 4 of the 1949 Geneva Convention Relative to the Treatment
    of Prisoners of War specifies the categories of people who fall into
    the hands of the enemy who are entitled to be treated as prisoners of
    war (POWs). If a detainee falls within one of the Article 4 categories
    of persons entitled to POW status, then he is a POW. If a detainee
    clearly does not fall within one of the Article 4 categories, then the
    detainee does not receive POW status. When there is doubt, then a
    tribunal under Article 5 of the Convention is appropriate to determine
    the status of the detainee.
        The President has determined that the conflict with the al Qaeda is
    not covered by the Geneva Convention. The President has further
    determined that although the conflict with the Taliban is covered by
    the Geneva Convention, the Taliban detainees are not entitled to POW
    status under the terms of Article 4. Based on the President's
    determinations, there is no doubt regarding whether al Qaeda or Taliban
    detainees are entitled to POW status.
        The joint Services regulation, Enemy Prisoners of War, Retained
    Personnel, Civilian Internees and Other Detainees (AR 190-8) (1 Oct.
    1997), provides procedures for Article 5 tribunals should they be
    required. For example, the AR 190-8 procedures calls for a three-
    officer panel. As noted, an Article 5 tribunal is only required
    ``should any doubt arise'' regarding a detained individual's
    entitlement to POW status. No doubt has arisen regarding the POW status
    of al Qaeda and Taliban detainees.
        Despite the fact that al Qaeda and Taliban detainees are not
    entitled to POW status, we continue to treat them humanely and in a
    manner consistent with the principles of the 1949 Geneva Convention
    Relative to the Treatment of Prisoners of War.

        Chairman Levin. Thank you.
        Senator Dayton.
        Senator Dayton. Thank you, Mr. Chairman. I am sorry I had
    to depart to be with a group from Minnesota and then go vote. I
    apologize, gentlemen.
        One of the realities of our round of questioning is that it
    also for those of us at the far end of the table constitutes an
    opportunity to make an opening statement, so bear with my
    preamble, please. I want to do so because I think that the
    deliberations this committee is going to be making this year,
    Mr. Chairman, are really among the very most important that
    Congress faces this year.
        The President's request, $48 billion for 2003 and $451
    billion for the 5 years, is an enormous increase in military
    spending, so much so that, for that and other reasons, OMB
    dropped the customary practice of extending the figures for 10
    years. Last week General Myers and General Franks made clear to
    all of us that those increases are not enough to do everything
    that they believe needs to be done. They talked about the
    desire to have a procurement budget for fiscal year 2003 of
    $110 billion, which would be more than $40 billion beyond what
    the President has proposed, which itself is a sizable increase.
        I believe in a House hearing last week one of the
    Congressmen opined that the request falls 40,000 troops short
    of what the Army says it needs, that their aircraft procurement
    is only 100 versus the 400 that the three services combined
    would like, and the Navy shipbuilding is seriously inadequate
    to meet that scope of commitment.
        So the military leadership it seems to me has done what
    they should properly do, which is to inform us civilians,
    yourselves, the Secretary, the President, and Congress, this is
    what it would cost to do what you have outlined you want and
    believe we need to do. Yet, if you look at the consequences of
    that spending over the next decade, the paradox it seems to me
    is that, while it would significantly strengthen our national
    security, our national defense, our military strength, it also
    seriously weakens the financial security of this country.
        That is where I think out of that context it is going to be
    very difficult to both assess your budget proposals and,
    frankly, to deny any of it. Fiscal year 1999 and 2000 were the
    first 2 fiscal years in the last 30 years in this country where
    the Federal Government's operating budget, the budget that
    excludes social security and Medicare expenditures, was in
    balance.
        That fall I promised in my campaign, the President promised
    in his campaign, I think just about everybody who was running
    for Federal office that year promised that they would preserve
    that balance and put the social security and Medicare trust
    fund surpluses in what we called lockboxes, that the money
    would not be used for the operating funds, it would be used for
    paying off the national debt, so that in 10 to 12 years when
    the numbers of retirees increased we would have the ability to
    do so, so we could use some of the Medicare surplus some of us
    envisioned for prescription drug coverage for seniors.
        Now, rather than keeping that balance for the next 10
    years, the budget as proposed would run a 10-year combined
    deficit of almost $1.5 trillion. That deficit would have to be
    paid for by wiping out all of the Medicare fund surpluses for
    those 10 years and 60 percent of the social security trust fund
    surpluses for those 10 years, which means that every additional
    dollar we spend on our military preparedness is a dollar that
    comes out of the Medicare trust fund or the social security
    trust fund and at the conclusion of those 10 years we are still
    in seriously high national debt and we have, I believe,
    seriously weakened this country's ability to meet its current
    and future needs for this society.
        So in that light, I think your budget proposals are
    deficient in two respects. One is I think that the
    administration has failed to redefine what the threats are that
    we face in the world and are expected to face over the next 10
    years, because, as the chairman said, these are long-term,
    long-range commitments and investments that we are making.
        I understand that Secretary Rumsfeld has modified the two-
    war measure for preparedness. But as I understand it, those are
    essentially two wars against the former Soviet Union or against
    the former regimes in Germany and Japan. Where are those
    threats in the world today? Where are the nations that have
    anything approaching the equivalent military strength of the
    United States, that would be able to conduct or engage in that
    kind of protracted and highly costly war?
        When our defense budget now equals the defense budgets of
    the next nine countries in the world combined, where is even
    the emerging possibility, the prospect of somebody who could
    engage us at that level?
        Second--and I think these are entirely proper--the
    President has said we must include as part of national defense
    homeland defense. I believe your budgets combined include $12
    billion of the $37 billion the President has proposed for that.
    $25 billion that is being spent in other categories really in
    my view should be considered part of our national defense
    spending.
        Third, the President believes and you believe that we need
    to commit about $8 billion, $8.5 billion, in 2003 and
    increasing amounts thereafter to build the national missile
    defense system so that we are protected if a rogue nation
    shoots missiles at us.
        But that it seems to me is implicitly the totality of
    threats that we are preparing to contend with over the next 10
    years. First of all, I do not know that that is even
    appropriate. Second, I know that it is not affordable. So in
    that context as well, I think the other deficiency in these
    presentations is any real reduction in any of the ongoing
    expenditures to meet these new commitments. The ones that are
    referenced here, the programmed adjustment for fiscal year
    2003, the $9.3 billion, I think as others have asked, and I
    would be interested in further elaboration, too, are really
    minimal compared to what was stated by the Secretary a year ago
    of the need to seriously shift from older systems which are
    either outdated or not necessary for these threats of the
    future.
        So this budget basically is one that in my view avoids any
    of the really tough decisions of what do you not do in order to
    be able to do what everybody wants to do. I guess I would ask
    you if you would respond to that. Yes, sir.
        Secretary Roche. I would just make the following points,
    Senator. One, I think the Secretary has reiterated that we are
    trying in this new era in our programs to not worry about
    specific threats and try and predict them, but in fact to have
    a portfolio of capabilities that can adapt when we are
    surprised. That was the logic during the summer as we were
    preparing the budget and it turns out in September it was
    really brought home, that having a portfolio of forces really
    did things.
        A good example is those what thought big-deck aircraft
    carriers were not useful. They were very useful this time. They
    are very useful also because of those long-range Air Force
    tankers.
        Second, I think in terms of the amount of moneys we need, I
    understand how the services can say that there is a gap. From
    my own point of view, if we just had steadiness, if we could
    have steady budgets and steady growth, we can manage better, we
    can do better, and we can get well. We will take a little risk
    on not having everything fixed at once, but we do not have to
    go and fix everything now and then at some other point create
    another situation where everything obsolesces at the same time.
    So steadiness is probably more important to us than anything
    else, sir.
        Third, when trying to get cost savings, as we were really
    working on early in the summer before Congress was able to help
    us, I can tell you when you try and do something like adjust
    the size of the B-1 force it is a very, very painful
    experience, Senator.
        Senator Dayton. You made that effort.
        Secretary Roche. Yes, sir.
        Senator Dayton. Were rebuffed by the very forces----
        Secretary Roche. In a very brutish fashion, we were
    reducing the B-1 force from 93 down to 60, plowing the money
    back in the remaining 60, realigning a number of bases, doing a
    number of other things. It is working now, but it was sure a
    tough, tough thing to do. An enormous consumption of my time
    and the time of the members, who had to explain to their
    communities what this all meant.
        Senator Dayton. I thank you for pointing that out and I
    recognize that. I think that caused the Secretary last week to
    make the analogy to Gulliver who is being tied down by 2001
    earmarks and the like.
        Secretary England. Senator, a comment about national
    missile defense. You mentioned $8.5 billion. I know Senator
    Landrieu mentioned it also. The fact of the matter is there are
    people out there developing systems that will hit the United
    States. It is hard to ignore that fact. If they are developing
    them, you have to think they are probably doing it for a
    reason, and therefore certainly in my mind it is very prudent
    for this administration and the American people to defend
    themselves against a threat that is being developed.
        Senator Dayton. I do not disagree with you, Mr. Secretary.
    I guess my point is that, in addition to the homeland defense
    against terrorist attacks, in addition to this prevailing
    measure of preparedness to fight two major wars in two theaters
    simultaneously, that, as Secretary Roche said, if that is the
    portfolio we believe that we need to address, I guess we just
    need to recognize as a Nation that at our present structure for
    financing our government expenditures we are seriously in
    arrears.
        Secretary England. Well, we are spending this year, I
    believe, 3.3 percent of our gross national product on defense.
    The other day we mentioned when Secretary Rumsfeld was here the
    last time it was 10 percent. So we are at the lowest the Nation
    has ever been, I believe, at 3.3 percent. The question is what
    percent of the Nation's wealth is the Nation willing to invest
    in defense of the people, and it is really a pretty low number
    for that insurance policy.
        Senator Dayton. That may well be the case, sir. I am just
    saying I am not talking about percentages, I am talking about
    dollars, and I am talking about real dollars based on the
    economic projections that OMB has made. The numbers--and again,
    I think this is not your problem so much as it is ours--but the
    fact is they do not add up.
        I need to go vote and I want to call on Senator Allard. I
    just want to leave also one query. Maybe you could respond in
    writing or subsequently. We spent a lot of time last year, your
    time as well, on a domestic BRAC. What consideration is being
    given to an overseas BRAC, closing down or consolidating these
    myriad bases, not even pulling out of countries. But I
    understand we have 52 bases in Korea, different sites in Korea,
    Japan, and the like. Is there some way we can achieve some real
    savings in the years ahead just by consolidating some of those
    operations? We do not have any Congressional members
    representing any of those.
        Secretary Roche. Senator, that has happened. We have
    actually reduced the number of air bases in Europe, I can
    assure you, dramatically.
        Senator Dayton. Thank you.
        Secretary England. I am working on one, Senator.
        [The information follows:]

                            Overseas Consolidations

        Secretary White. The Army is working to reduce overseas sites and
    thus reduce costs by consolidating operations. Since 1990, the
    Department of Defense announced 28 rounds of overseas infrastructure
    reductions. The U.S. Army Europe has gone from 858 installations down
    to 241--this is equivalent to closing all of Aberdeen Proving Ground,
    Forts Hood, Lewis, Benning, Knox, Bliss, Drum, Sill, and Riley
    combined.
        Currently, we have a couple of initiatives underway. We are
    relocating a heavy brigade combat team in Germany from 13 smaller
    installations to a single installation to improve training at less
    cost. This initiative is called Efficient Basing East. The United
    States Forces Korea is working with the Republic of Korea (ROK), under
    a proposed land partnership program, to reduce our use of ROK granted
    installation and training lands by consolidating onto larger
    installations and eliminating small costly installations. The benefits
    include reducing overhead and operating costs, enhancing force
    protection, improving command and control, and providing soldiers with
    modern living and working conditions. We will continue to look for ways
    to improve efficiencies overseas.

        Senator Dayton. Thank you.
        Senator Allard.
        Senator Allard. Thank you very much.
        I want to address my first few questions to you, Secretary
    Roche. They have to do with the space-based radar. This is a
    high priority for me and I believe it is key to the Air Force's
    transformation. I have been encouraged to see the strong
    support for space-based radar, your support in accelerating
    that program.
        What I am curious about is can you talk about what aspects
    of the program you will be focusing on with the increased
    funding that you have in the budget?
        Secretary Roche. Yes, sir. The issue I have with the space-
    based radar is to make sure that this is done right and I do
    not have to come back and discuss a situation as I do on SBIRS-
    High, where the program is having difficulties. So first and
    foremost is to understand what is the concept of operations
    that we want the space-based radar for. We believe in the Air
    Force especially, Pete Teets and General Jumper and I, that
    what we are talking about is something that can do ground
    target moving indicators first and foremost, and therefore the
    issues for technology are how few in number, how slow are they
    moving, and how persistent can this system be.
        So we are trying first and foremost to develop an
    architecture that will answer the question as to why we want
    this and therefore limit people adding onto it additional
    requirements which may cause its cost to go up very
    precipitously or cause us a situation where we are trying to
    solve something that is too difficult to solve. This system has
    to work and it has to serve commanders, and then have an
    ancillary role in terms of intelligence, surveillance,
    reconnaissance for other people.
        To this end, the three of us are devoting our own time. We
    are the initial configuration control board. We will be going
    up to Lincoln Labs in Hanscom within the next 2 weeks to spend
    time on the concept of operations, what needs to be there, so
    as to start this program correctly before we get into a feeding
    frenzy as to who is going to build it, what are the appropriate
    sensors, how are those sensors going to integrate with other
    systems, to what degree should this satellite system serve as
    the only or should it be part of a portfolio. We will think
    that through so we have a success on our hands and not
    something that just gets an appetite far ahead of our ability
    to satisfy.
        Senator Allard. You mentioned some of the problems with
    SBIRS-High. We did some restructuring on SBIRS-Low and, like
    you mentioned, I understand there are some problems with SBIRS-
    High now. I understand that is in the acquisition process.
    Could you go into a little bit of an explanation of what kind
    of changes need to be happening with that acquisition process
    or maybe what you are doing to try to improve the acquisition
    process?
        Secretary Roche. The first order of business, Senator, is
    to understand why we are suddenly having difficulties in a
    couple of space acquisition programs. Is it a matter that we
    have allowed the requirements just to build without discipline?
    Is there a matter that there is an expertise in the industrial
    base that has retired or is retiring and has not passed on the
    knowledge? Is it that we relied, I think foolishly, on total
    systems procurement responsibility where everything was
    devolved down to a contractor in the past years? I think that
    was a mistake, a big mistake.
        Is it because we can only get 56 of our scientist and
    engineer billets in the space acquisition community filled,
    that we are missing the other, the remainders? We are trying to
    study that now. We are using the SBIRS-High as the most
    immediate case in point: What is there, what is wrong?
        In each case, Senator, what we come upon is it is not the
    magic of the system, it is the basic management things. It is
    the basic technology things that are not working. It is sort
    of, well, why not? what is wrong here?
        So we have challenged the entire space acquisition
    community to the point of saying that we are worried about
    continued confidence in them in terms of making sure these
    things start right and they stay on track, that we get early
    indications of difficulties rather than allowing something to
    go to such a point where it will cost an enormous amount of
    money to fix it. Then we have to discipline ourselves back in
    Washington to not add capabilities in the middle of the
    program, not change things, to be able to have something that
    is more steady.
        So this field, besides having more attention to it in terms
    of trying to get some of our brighter people, trying to re-
    recruit scientists and engineers, we are taking a look at the
    fundamentals, because it appears it is in the fundamentals that
    we have had difficulty.
        Senator Allard. Now, Mr. Secretary, I am also pleased that
    you are moving forward in your recent efforts to implement some
    of the recommendations on the Space Commission report, and also
    to see that the organizational changes you made are trying to
    integrate better between military space and the NRO, and I
    compliment you on that.
        Are you planning to follow up on some of the other
    recommendations from the Space Committee, such as
    recommendations to develop a cadre of professionals that we
    need to reduce our space systems' vulnerability to attack?
        Secretary Roche. Sir, I missed part of the question, but--
    --
        Senator Allard. Well, part of it is, I appreciate what you
    have done so far as far as following through with the Space
    Commission report. There are other areas specifically that were
    in the report that I want to know whether you are going to
    follow up with. One of them is to develop a cadre of space
    professionals.
        Secretary Roche. Oh, yes, absolutely.
        Senator Allard. The other one, which I wonder if you would
    address, is the need to reduce our space systems' vulnerability
    to attack.
        Secretary Roche. Yes, in both cases we are going to spend
    the time. By the way, one helps solve the other. If you have a
    professional cadre who really worries about this business, they
    will worry about how to red team it as well. I think you will
    find that we will be spending a good bit of time on making this
    an equal to our pilot community in our Air Force.
        We believe in global reconnaissance and strike and that
    reconnaissance is key, our space community is key to what we
    do. In terms of our vision, it is global vigilance and the
    reach and power, and again space--I think you will find the
    commanders of the space units will start to come from the space
    community more. We will worry about their education, we will
    worry about their roles in command and how they feel about
    command.
        So we are taking it very seriously by elevating things up
    to the Under Secretary, by making both General Jumper and
    myself and Pete Teets, as well as the Vice Chiefs of Staff,
    General Fogelsong, responsible as the executive agents for
    space. This community is probably going to get more attention
    than it may want for a while.
        Senator Allard. I would like to wrap up with just one
    question to all of you and if you would respond, please. The
    President's budget reflects a savings of about $200 million by
    decreasing headquarters staff and I am interested in how you
    are planning to accomplish this reduction in each of your
    areas. Will the reductions be in military or government
    civilian, or both, or will those reductions be in contract? If
    you can kind of give the committee some feel about how these
    reductions are going to occur at that particular level I would
    appreciate it. Thank you.
        Secretary White. We are looking at a reduction of both
    civilian spaces and military spaces. We have already completed
    the review of the Army's headquarters. As I said in my opening
    statement, we are at the field operating agency level now and
    we will achieve our 15 percent reduction. We should exceed it,
    as a matter of fact.
        Senator Allard. Secretary England.
        Secretary England. Senator, we are not at the 15 percent
    yet. I believe we are at about 7.0 percent. Frankly, we would
    like to hold that for just a while because of the intensity of
    our conflict at the moment. However, we are working this whole
    issue of headquarters. We are really working well beyond that
    because the real savings are not just at headquarters; it is
    across the entire enterprise. So we are looking at every single
    thing we do. We get together regularly to look at this and we
    hope we are going to save far more than $200 million. We are
    talking billions of dollars as our objective. So we have really
    set our sights well beyond just the headquarters staff.
        Senator Allard. Mr. Secretary, one of the concerns I have
    is when they make cuts they always go down to the lower guys on
    the totem pole and you ought to be perhaps looking at the
    higher level and they protect their own jobs. So I just would
    hope that does not happen.
        Secretary England. No. As a matter of fact, that is really
    what happened, I guess, the last time. Whenever the work force
    was cut, it was all cut at the lower end. As a result we have
    no young people in the business at the moment. We are very top-
    heavy, and in fact it is very expensive because it costs more
    to have longer-term employees than younger ones. You really
    would like to have a mix. It is good for the health of your
    organization.
        So you are absolutely right, we do have to be smart in
    terms of how we do this.
        Senator Allard. Secretary Roche.
        Secretary Roche. Senator, in the past the Air Force has
    combined operating commands. In fact, they have done it at the
    top. SAC and TAC became the ACC, and in terms of our
    acquisition they blended units together. We have probably made
    in the headquarters now 7.5 percent, with about 7.5 to go.
        We have a definitional problem that technology is causing
    us that we are trying to work out. The folks who are overseas
    who are in fact coordinating all of this air attack over
    Afghanistan are considered staff, whereas in the Navy they are
    on board an aircraft carrier and they are not considered staff.
    So we are working with OSD to say, can you--we do not mind the
    Pentagon part. That is not a problem. It is down in our
    component commands where the people who are really manning
    these combined air operating centers and directing all of this
    are considered staff, even though they are performing in an
    absolute warfighting role.
        Technology is causing us difficulties. We can do things at
    a distance rather than having to be there, and yet we tend to
    think that is a staff function. So we are trying to work
    through these definitions.
        Senator Allard. Thank you. I see that my time has expired.
    I think, Senator Lieberman, you are to resume.
        Senator Lieberman [presiding]. Thanks, Senator Allard.
        Thanks, gentlemen, for your service and for your very
    interesting testimony. The theme of my questions has in some
    ways been echoed earlier, which is that, though the $48 billion
    increase in the President's proposed budget for the Pentagon is
    obviously substantial and the highest in a number of years, we
    are faced with a multitude of demands that require choices. My
    concern is whether we have made enough of the choices to really
    drive transformation or whether we are still supporting with
    too much of the budget the programs that are serving us well,
    but whose utility is going to begin to run out.
        Obviously, notwithstanding the $48 billion, which is a very
    substantial sum, the actual buying power rises only modestly
    because of inflation, because of the increases in pay and
    benefits, which we all support, and because of current
    operations.
        So with that preface, let me ask just a few questions,
    beginning with you, Secretary Roche, for the Air Force. The
    budget shows a large increase in F-22 procurement, but what I
    would call only a modest increase and in fact some drop in
    funding for so-called high demand, low density programs, which
    I always want to call high demand, low supply programs. For
    example, C-17 production drops from 15 to 12 next year as
    compared to this year, despite General Franks telling us that
    we need more strategic airlift. The JSTARS acquisition stays at
    one per year, despite what seems to be very substantial
    interest from the CINCs who think that we have an inadequate--
    well, we do have an inadequate number of JSTARS to provide for
    full-time coverage.
        Although bombers have increasingly demonstrated their
    importance, certainly over Afghanistan, I do not see that
    reflected in this budget, though I did note with some interest,
    Mr. Secretary, that the F-22 is now described as a ``fighter
    bomber'' whereas----
        Secretary Roche. Yes, sir. The Navy always says ``F and A''
    and we were saying ``F'', but these things have been fighter
    bombers for some time, the F-16. Just think of the attack on
    SIRIC. It was all done by fighter bombers.
        Senator Lieberman. So let me ask that question. Why has the
    Air Force chosen to place such a priority on procuring the
    short-range tac air, which one could argue we have a lot of,
    rather than placing more emphasis on the other high demand, low
    density capabilities that I have talked about? It seems to me
    the CINCs are telling us they want more of these.
        Secretary Roche. We are in violent agreement. If I can, the
    C-17, because it is multiyear, a lot of what would normally go
    in the beginning is being put in for long lead. It is to have
    an equal 15 a year come out at the line and in fact it exceeds
    15 for a couple of years and at the very end is 13. So you
    cannot just look at the moneys funded in this particular thing
    for number of airplanes. It is a cumulative effect.
        So the C-17 is not going down. In fact, it is 15 a year,
    which is a steady economic way to be able to do this at the
    Boeing line. I know we will be looking at whether we need more
    of the C-17s, given how we are working them to death in this
    situation over and above the normal war planning. This is the
    kind of example in the real world, as Secretary Rumsfeld has
    pointed out, that is a surprise and you have to be able to do
    things. So the C-17 is one of those high demand, low density
    things that is getting addressed.
        The others, including the Ground Moving Target Indicator
    (GMTI), we are pressing on trying to put GMTI on drones, and so
    the NPRTIP will be doing that. In the case of Joint STARS, we
    are moving unfortunately one more 707. We want to then go
    beyond to make a GMTI-specific version of a different aircraft
    which is larger but can still take the radar gondola and then
    make the back end more battle management. This is an area we
    are addressing dramatically and it is a problem that we have
    been hooked to the old 707, which is just getting older and
    older and older and older as we go on.
        So in fact we are doing that. With respect to the F-22, the
    program is 20 years old this year, Senator. This is the first
    time that we are finally going into production. But since the
    introduction of the last fighter bomber we have introduced the
    B-1, the B-2, the F-117, the C-17, the C-130J, the Joint STARS,
    et cetera, et cetera. This is an area that has to get addressed
    and so we are doing it, and its time has come.
        Senator Lieberman. Let me ask you one more question briefly
    and I want to turn this same focus to Secretary England. What
    about the bomber force? What about the upgrading of the bomber
    force, particularly considering the remarkable performance in
    the last couple of conflicts we have been involved in of the B-
    2?
        Secretary Roche. We are putting all the mods in the B-2 we
    ought to put in. What has changed in this over history is that
    each weapon has such an effectiveness because of precision that
    in fact you do not have the situation which created bombers,
    where you had to drop 1,100 weapons to get a .9 probability of
    hitting a certain part of a factory in Europe.
        Each of these is so precise that you do not have that
    problem. So they perform beautifully, but we have used 18
    bombers for the most part. We had four of the B-2s that we used
    initially when we were not sure of the air defenses. Post
    knowing about the air defenses, 10 B-52s and 8 B-1s have just
    done a remarkable job, a very, very small proportion of the
    overall force because the effectiveness of each weapon has been
    changed.
        Senator Lieberman. So you do not think we need to be
    thinking about procuring more bombers?
        Secretary Roche. No, sir. I think procuring more of the
    weapons that make the bombers effective and upgrading the
    systems on the bombers is the appropriate thing. That is why
    JASSM will take the 60 B-1s and make them dramatically useful.
        Senator Lieberman. Secretary England, let me just ask you
    briefly--my time is running out. If I am not mistaken, at the
    current rate of acquisition, as you have suggested, in the
    next, what, couple of years, we are going to go under the 300-
    ship Navy.
        Secretary England. No, sir. We do not go under 300 ships.
    Even with our retirements, I believe the lowest we drop to is
    about 304 ships, sir. So we maintain our level through the
    FYDP.
        Senator Lieberman. Even though we have to do the 8 to 10 a
    year, that is the number I have heard, and we are at about 5
    now?
        Secretary England. That also includes our submarines, sir,
    and we are adding two of those this year.
        Senator Lieberman. OK. I do not actually want to argue the
    numbers. I want to offer you a chance to make the case for why
    we need a 300-ship Navy. In other words, it was not so long ago
    that folks were arguing for a 600-ship Navy, and I believe in
    the standard, but I want to take you back to the fundamentals,
    because some might say in some ways just as Secretary Roche
    just said, high technology is allowing us to get so much more
    out of every platform that we can do it with less than 300.
        So tell us why we need to keep it at that standard?
        Secretary England. The last study, which was last fall,
    conducted by OSD concluded we needed about 340 ships, Senator.
    That is because of theater missile defense and also another
    class of ship called the littorals, and that is one reason we
    went to DDX. We put a new program in this year, DDX, dealing
    with theater missile defense, also ship to shore in terms of
    fire support, and also for the littorals.
        The Navy has a recent study. It concludes that we need
    about 375 ships. Now, I am not sure what the answer is, but the
    answer is more than where we are today, which is at about 310
    ships. Over a long period of time, we do have to capitalize at
    about 8 to 10 ships a year. Ships last about 30 years. It turns
    out the average age of our ships today is 16 years. Optimum
    would be 15 years. So we do not have an old fleet today. We do
    have some older ships, some of them very old, that we do
    desperately have to get rid of.
        I believe this year we have built the base with DDX and
    with our other ships now in development, it turns out at this
    period in time most of our ships are still in some form of
    design. We need to get through this point so we can actually
    get some rate production and move into DDX.
        The FYDP represents that. That is the way that we have this
    structured as we go into our out years. So this is still
    building the base so we can build more into the future. I
    believe it is the right decision at this point, Senator, but we
    do have to accelerate shipbuilding. There is no question about
    that.
        Senator Lieberman. I agree.
        My time is up. Thank you.
        Secretary England. You are welcome, sir.
        Senator Lieberman. Senator Warner.
        Senator Warner. Thank you very much.
        Let's turn to service end strengths. With the exception of
    the Marine Corps, the President's budget request for fiscal
    year 2003 includes no increases in end strength. Secretary
    Roche, I understand you have been quoted as urging an increase
    of 7,000 to 10,000 airmen. It is also my understanding the Army
    feels it might need upwards of 40,000 troops.
        Now, to what extent in the course of the budget
    deliberations did this subject come up and how do you gentlemen
    feel about the reasons that were given by the Secretary of
    Defense that we would not try it this year?
        Secretary Roche. Senator, I think the Secretary has asked
    the right question like any businessman would do. We know we
    need certain skills to increase; are there other skills that we
    do not need as much, or are there things we can move to the
    Reserve or move to the Guard or contract out? So I think the
    first order of business, and we are engaged in this, is a
    parallel track. One is to try to coordinate together in the
    services what our end strength situations are, and to do that
    we are going to have to find some answers to questions like the
    degree to which we have to maintain the capital of the United
    States.
        At the same time he has asked us, quite rightfully I
    believe, to take a look at what things we can do without and
    what skills we have a very deep bench in and we do not need as
    many of. So you would do both of those in parallel, and that is
    being looked at at this time.
        Senator Warner. I understand while I was voting you talked,
    Secretary White, about the important role of the National Guard
    and where there are some stress points, particularly with
    regard to employers, the ancient problem that we have always
    had. Did you have a piece of that equation that you wanted to
    put in this record about the Air Guard? The Air Guard has
    performed brilliantly. Way back in the early days of the
    campaign in the Balkans, I took Air Guard planes in to Sarajevo
    in 1991, as far back as that. I have always been impressed with
    the way they responded.
        Secretary Roche. They responded magnificently, sir. In this
    case, we would normally be using them to help rotate forces in
    Operation Enduring Freedom, but we are tieing up an enormous
    number of them here over the skies of the United States. There
    is a strain on them.
        The Guard has been quite imaginative in almost having just
    in time Guardsmen. If they need to get someone back to a job
    for a day or two, they substitute someone for that person. They
    have been very, very imaginative in doing this.
        But in the very long run we have to understand what it is
    we are asking of them and what ought to be done by Active
    Forces as compared to the Guard and Reserve Forces.
        Senator Warner. So their senior officers have a strong
    voice in the decisionmaking in your judgment?
        Secretary Roche. Oh, yes. They are very close--in the case
    of the Air Force, both of them are very much involved in my
    deliberations.
        Senator Warner. Now let us go back to the original
    question, Secretary White.
        Secretary White. Well, the Secretary of Defense's position
    has been that the way we ought to unburden our structure is to
    start cutting back on deployments, that some of these
    deployments we have been in for years and years, the Sinai for
    example, and at least in that particular commitment he has come
    forward to say we ought to terminate it. So one way to do this
    is to cut back on the deployments that have such a high
    operating tempo and I think his direction is that we start at
    that point rather than immediately looking at plus-ups in end
    strength.
        Senator Warner. So you feel you can survive this period
    without any consequences on family structure, which in turn
    would affect your retention?
        Secretary White. I think we are hard-pressed right now,
    Senator. We talked about being hard-pressed before 9-11 a year
    ago. There are 35,000 Guard and reservists mobilized right now.
    It is a fairly unpredictable mobilization as to a rotation in
    Bosnia with the 29th Division from your home state, and that is
    causing a rising concern with employers and with families. The
    number one question is how long do we have to sustain this?
        Senator Warner. Thank you.
        On the question of unmanned systems, several years ago this
    committee set a goal that by 2010 one-third of the U.S.
    military operational deep strike aircraft would be unmanned and
    by 2015 one-third of all U.S. military ground combat vehicles
    would be unmanned. Do you feel this budget enables sufficient
    funding to keep those goals on track? Secretary White.
        Secretary White. Well, yes. For the unmanned activities
    that we support in our interim brigades going forward, we think
    we have put the money to resource that from our perspective.
    Our commitment, obviously, is much smaller than the Air Force
    and the Navy in this regard.
        Senator Warner. One of the great chapters of this conflict
    in Afghanistan has been the unmanned aircraft.
        Secretary White. Yes.
        Senator Warner. Secretary Roche.
        Secretary Roche. Yes, sir. I do not know about those
    specific goals. I can tell you that we have used these enough,
    as Secretary Rumsfeld pointed out, to see how efficacious they
    can be, but to also understand the difficulties of operating
    with them. There is only so much bandwidth in the world and you
    cannot take the bandwidth of the brain and bring it back to a
    ground station. So exactly how to use them or not to use them
    is one of the conditions that we are trying to work on. The
    judgment of a pilot is still something that can be very
    important, although we have pilots who are manning these.
        The new tactics and doctrine we are developing from them
    has been very important, but there are issues of when something
    goes wrong how to fix it in the air, how to change to a
    different system. So the issues of working with them are being
    understood.
        Senator Warner. I have to catch this last vote. Did you
    have anything to add to this question, Secretary England?
        Secretary England. Senator, I do not think we are going to
    hit those percentages by 2010, but I can tell you we have
    active programs both in the air and underwater, very active
    underwater, and we are working with the Air Force on the UCAV.
    So we are working. It is in our budget this year, sir.
        Senator Warner. Thank you, Mr. Chairman.
        Chairman Levin. Thank you.
        Senator Carnahan.
        Senator Carnahan. Thank you, Mr. Chairman.
        I would like to direct my comments to Secretary Roche. I
    would like to discuss one particular provision of the 2002
    Defense Authorization Act. According to the 2002 conference
    report, the Defense Department has been directed to report on
    how it intends to encourage teaming arrangements between Boeing
    and Lockheed on the Joint Strike Fighter. This report was due
    when the 2003 defense budget was submitted to Congress.
        I recently wrote a letter to Secretary Rumsfeld requesting
    his cooperation in developing this report, but to date I have
    not seen any sign of the report. I would like, Secretary Roche,
    for you to consult with Secretaries Rumsfeld and Aldridge and
    get back to me some time this week with a certain date when
    this report would be completed and ready for our committee
    review.
        Secretary Roche. Senator, I would be glad to, except, the
    way the Joint Strike Fighter works, I have now shifted the helm
    to the Secretary of the Navy. So if you could substitute his
    name for mine, he currently has the lead.
        Senator Carnahan. Very good. Well, I thank you and would
    appreciate your help in this matter.
        I have one more question that I would like to direct to
    both Secretaries Roche and England. Recent operations in Iraq
    and in Kosovo have shown that we cannot simply rely on stealth
    technology to avoid detection from enemy radar. Future air
    campaigns will bear little resemblance to the war in
    Afghanistan. Countries that President Bush identified as the
    axis of evil have far more advanced anti-aircraft capabilities.
        Unfortunately, our only electronic jamming aircraft, the
    Navy's EA-6B, is over a decade old. Would you please explain
    the importance of honing our electronic warfare capabilities?
        Secretary Roche. Yes, Senator. Electronic warfare or in
    fact trying to provide for the survival of aircraft in the air
    is a combination of things. Stealth is one area, electronic
    warfare is another. With some of the new, modern electronically
    scanned--AESE, active electronically scanned antenna, radars,
    you have the notion of electronic attack. You can reverse the
    radar and jam.
        So all of these have to be put together in a portfolio.
    There have been a number of programs to upgrade the types of
    pods and also the jammers on things like the F-15s. Secretary
    England has talked about a follow-on aircraft to the EA-6B or a
    follow-on program to the EA-6B. We look to it as well. But it
    is a combination of things. It is not just electronic jammers.
    But the jammers have been looked at both in terms of off-board
    jammers, towed decoys, upgrades to internal systems, electronic
    attack, stealth.
        There is more to it than just jamming.
        Senator Carnahan. Could you discuss also any plans you
    might have to develop new electronic attack technologies, such
    as the EA-18?
        Secretary England. First of all, the EA-6B, the Prowler, we
    have had cracking problems with the airplane and recently we
    had engine problems because of oil contamination. So we have
    had a difficult time with our EA-6Bs. As you observe, it is the
    only jammer we have left in the inventory. It performs jamming
    for all missions. So that is of concern, although we do have
    sufficient numbers today even with those problems.
        But we are looking at a replacement. One of the
    possibilities is what is called a Growler, which would be an F-
    18E and F version. We have what is called an AOA, an analysis
    of alternatives, under way at the present time. That will be
    completed here in several months, and at that time we will have
    a preferred configuration to replace the EA-6B. We will be able
    to give you a definitive answer in terms of what is the best
    approach to do that.
        One of the considerations is an EA-6B version. It would
    keep us from having another unique airplane, but, like I say,
    that analysis is still in work.
        Senator Carnahan. Thank you very much.
        Senator McCain. Senator Bunning.
        Senator Bunning. Thank you, Mr. Chairman.
        I would like to talk to the Secretary of the Navy for just
    a few minutes. In listening to your responses to Senator Inhofe
    about Vieques, Mr. Secretary, if you would have testified
    before this committee as you have testified in response to
    Senator Inhofe during your confirmation hearings you would not
    have received my vote, at least.
        I thought when we confirmed secretaries of the Army, Navy,
    and Air Force they were supposed to be forthright in their
    answers and not try to evade questions. So today you have done
    just that. So I am embarrassed for Senator Inhofe and I am also
    embarrassed for you.
        I also would like to ask you about the V-22 Osprey. Have we
    made any progress in making that airworthy?
        Secretary England. Senator, I believe we have. We will know
    very shortly. In April we start the flight test program, so we
    have incorporated into the airplane for flight test a lot of
    the fixes that came out of all the studies and analysis of the
    airplane that led up to the last crash that stopped the
    program. We have a much better organization, I believe, both in
    our facility and also at our contractor facility in terms of
    how these problems are being worked.
        My judgment at this point is that it is now up to the
    airplane to prove itself. The flight tests will start in April.
    It will run until some time later in 2003 and there will be
    several different configurations. Frankly, I believe the
    program will demonstrate that it can perform the mission for
    the United States Marines and also Special Forces. But that is
    what the flight test program is set to prove.
        In the meantime, we are buying a minimum sustaining rate of
    airplanes, 11 airplanes this year.
        Senator Bunning. At $1.5 billion in cost?
        Secretary England. I believe my number is $1.32 billion,
    plus approximately $600 million that we is budgeted for
    engineering development efforts.
        Senator Bunning. OK, you have requested $1.5 billion for 11
    of the aircraft in 2003, 2 more in the current year; or is that
    incorrect?
        Secretary England. Sir, I believe it is 11 this year. The
    number I recall is $1.32 billion, but there may be spares or
    something with that. So we are in the same----
        Senator Bunning. So we are continuing to maintain the line.
        Secretary England. Yes, sir.
        Senator Bunning. On the aircraft that we are not sure we
    can make airworthy.
        Secretary England. Well, I believe it will prove its worth,
    Senator.
        Senator Bunning. Well, it may do just that.
        Secretary England. The issue we have, if we do not maintain
    the line and we prove the airplane, then it will be extremely
    expensive to get the program back on track.
        Senator Bunning. I can get to the DD-21 destroyer if we
    want to talk about startup again, because we have an additional
    $961 million to do that again for the Navy, start up from
    scratch.
        Secretary England. No, we did not start up from scratch,
    Senator. We took the DD-21 program and we continued all the R&D
    that was going on. We did not stop the program. We did not have
    a line. We continued the program with all the development, but
    we expanded the program from just one version to three
    versions.
        Senator Bunning. An additional $961 million.
        Secretary England. I believe that was programmed for DD-21
    and we continued that for DDX. There is a whole range of
    technology. It is the R&D.
        Senator Bunning. It is R&D?
        Secretary England. It is R&D, yes, sir.
        Senator Bunning. But your testimony today is that the V-22
    is going to succeed and be airworthy?
        Secretary England. Yes, sir, that is my judgment.
        Senator Bunning. A question on the EA-6B Navy
    reconnaissance and radar jamming aircraft. Is it true or is it
    not true that that was a joint decision with the Army to
    discontinue the EF-111 that did the same program the EA-6B does
    now?
        Secretary England. That was an Air Force airplane, the EF-
    111.
        Senator Bunning. Yes, I am familiar with it.
        Secretary England. Some years ago--I cannot remember the
    exact time--the decision was to have one jamming airplane and
    it would be the EA-6B.
        Senator Bunning. Now you are having problems with it.
        Secretary England. Well, we are having cracks with it. We
    just had an engine problem and we had contaminated oil, so we
    lost some engines. So they are recoverable. But the airplane is
    just getting old and we are having some problems with them. We
    are looking to replacement downstream.
        Senator Bunning. Would that be an upgrade of that aircraft
    or would that be as new aircraft?
        Secretary England. There is an analysis of alternatives
    being conducted right now, Senator, and I believe in a few
    months we will have the recommendation as to how to proceed.
        Senator Bunning. When you finally make that decision, will
    you inform this committee?
        Secretary England. Absolutely.
        Senator Bunning. Thank you.
        Senator McCain. Thank you.
        Secretary Roche, you wanted to respond to my comment, and
    please proceed.
        Secretary Roche. Thank you very much, Senator. I appreciate
    it. The point I hoped to make, sir, is that at this stage no
    moneys have been asked for. We do not know what the price of a
    lease would be. The second point is I am required to come back
    to the authorizing and appropriating committees once an amount
    of money and the conditions of a lease are put together.
    Therefore, based on the historic precedent of the 737, 757, and
    G-5 leasing experience that the Air Force was asked to attempt
    a few years ago, we were following that procedure.
        I think the basic point, sir, that I would hope I could get
    an agreement with you on, is that the 707s are old airplanes.
    Granted, their age means that we probably are not going to find
    a class problem, but we might find a class problem, and we are
    heavily reliant on those almost exclusively in our tanker
    force. Therefore, introducing a new plane is one that is of
    great concern to me after I went to Tinker and saw catalytic
    corrosion, saw delaminating aluminum, and then checked on what
    happened when we refurbished the planes for Joint STARS, which
    takes them back to class A condition. Do these come in the
    force as brand new airplanes or do they behave for repairs like
    10-year-old airplanes?
        It turns out our data shows that they act like planes that
    are 15 to 20 years old. There is only so much you can redo when
    you take them back. So therefore the concern to replace tankers
    has been most on my mind. Trying to do that more quickly and
    save some money was also a point, sir.
        Senator McCain. Well, I guess we could continue this
    discussion for quite a while, but I have to tell you, my office
    is in the Russell Senate Office Building, which is named after
    the former chairman of the Armed Services Committee. I was
    privileged to serve when Senator Stennis was chairman. My great
    hero and mentor, Senator Tower, was also a chairman of the
    Armed Services Committee.
        Here you orchestrated a deal without a hearing, without
    even informing the chairman and ranking member of the
    authorizing committee. I think I know where Senator Tower is
    today. He would not stand for it. He would not stand for it. It
    is not only an indictment of your behavior, but it is an
    indictment of the system we have here, where the appropriators
    have basically taken over the process. The authorizing
    committees are now very pleasant debating organizations, but we
    all know that the authorizing bill comes at the very end and
    all the money--and in a case like yours authorizing--is put
    into an appropriations bill.
        Now we have reached the point where the Secretary of the
    Air Force with a 126-plane deal does not go directly to the
    Secretary of Defense, who might be interested. When I talked to
    him and said something about it, I thought it was outrageous,
    he did not know anything about it. Secretary Roche corresponds
    with members of the Appropriations Committees and lobbies with
    the Boeing lobbyists to get a deal which ``authorizes'' $26
    billion in a deal that is noncompetitive, because it names
    Boeing. It does not name Airbus, it does not name United
    Airlines, who has a lot of excess airplanes. It names Boeing.
        Campaign finance reform is on the floor of the House today.
    Maybe this will cure some of this, because I know that Boeing
    has contributed millions in campaign contributions to both
    parties. So here we have a situation that is really kind of the
    ultimate of a process we have been on for a long time. In a
    way, I do not blame you for playing the game, Mr. Secretary.
    But the fact is that the chairman and the ranking member of
    this committee were not consulted by you. You did not even pick
    up the phone and say: Hey, we would like to lease these, we
    would like to get it put into an appropriations bill, where
    there is no place for it--appropriations are to give money for
    previously authorized programs. We are going to put into, we
    are going to try to get into the appropriations bill an
    authorization which will then allow eventually the purchase of
    $26 billion worth of airplanes.
        Now, my other question to you is--and you are free to
    respond--have you solicited any other offers? Have you
    solicited? Have you said, hey, anybody else want to offer up
    airplanes that we could use as Air Force tankers? Have you
    solicited anybody?
        Secretary Roche. Again, Senator, if I could go back, and I
    am sorry if I am not communicating well to you, sir. No moneys
    were asked for. It was just the authority.
        Senator McCain. Why did you go to the appropriators and ask
    for it to be authorized?
        Secretary Roche. Senator, what I understood, and it could
    be my mistake, what has happened in the past when the Senate
    asked the Air Force to try to lease 737s, which happened a
    number of years ago, it happened the same way. The Air Force
    could not come to a good deal for a lease and therefore did not
    do it.
        So we were asking for the authority to try to do something,
    which then has to come back to the authorizing committee and to
    the appropriation committees in order to go into effect. But no
    moneys were involved.
        The second point----
        Senator McCain. But it authorized the use of moneys,
    Secretary Roche. It authorized the use of moneys.
        Secretary Roche. As best as I can read the language, sir,
    it gives me authority to attempt to negotiate a lease. I, or
    the Air Force cannot do anything unless we come back to the
    defense committees. We cannot move unless the defense
    committees approve. So effectively you have to, then, once
    there is a dollar amount and once there are terms and
    conditions, come to the authorizing committees and the
    appropriating committees as I understand it, sir. I could be
    mistaken.
        Senator McCain. Why did you go to the appropriations
    committee, Secretary Roche?
        Secretary Roche. Again, sir, it was based on the historic
    precedent set by the 737s. There are again four 737s in the
    current bill, to ask me to go and try to do a lease on 737s for
    VIP travel.
        Senator McCain. Wow. That is remarkable, 100 airplanes
    based on the precedent that some VIP aircraft were requested.
        Would you answer my question about----
        Secretary Roche. The second part, about soliciting others.
        Senator McCain. Have you solicited any offers from any
    other entities besides Boeing and does the language that you
    orchestrated to be put into the bill allow for you to solicit
    any other company or corporation to make an offer, since it
    specifically states only Boeing aircraft?
        Secretary Roche. First and foremost, I do not believe I
    orchestrated the language.
        Senator McCain. Well, I have your letters.
        Secretary Roche. You have the letters, but the specific
    language----
        Senator McCain. I ask that they be made part of the record.
        Chairman Levin. They will be.
        [The information referred to follows:]

        Secretary Roche. I do not believe I orchestrated this. I
    asked for something because I felt----
        Senator McCain. You advocated it.
        Secretary Roche. I advocated it, yes, because I feel that
    the tanker situation is sufficiently worrisome to me that the
    sooner we can fix it the better, which is one of the reasons
    you do leases, like Her Majesty's Air Force is leasing C-17s to
    get a capability much, much more quickly.
        With regard to asking others at the time there had been
    competitions both in Italy and in France and in both cases the
    Airbus candidate lost. But I was open to it, and I stated so
    publicly.
        Senator McCain. I ask my question again: have you solicited
    any other offers from any other entity that may be able to
    compete, number 1, like we do usually, to compete for bids and
    things like that? Number 2 is, does the language prohibit any
    other, since it says only Boeing aircraft?
        Secretary Roche. The language as it currently stands would
    prohibit it, but if I were to come back and say that X has a
    much better deal for the country, can in fact help Navy and Air
    Force planes be tanked, and it requires some change, I would
    assume that language could be changed.
        Senator McCain. Which is why your letters ask specifically
    for Boeing aircraft?
        Secretary Roche. If I can on that point, sir, if I may. At
    the 11th of September, after the attack, there was a drop in
    commercial airlines. There were a number of cancelled orders.
    Very much like the situation a predecessor of mine a number of
    years ago faced when he found a number of DC-10s that were not
    usable, brought them into the Air Force, and converted them
    into KC-10s. I looked to see if there could be a deal that
    would be good for the American people, good for the Air Force,
    by picking up excess aircraft that were made excess because of
    cancelled orders with Boeing. That is what started it, sir.
        Senator McCain. I would again like an answer to the
    question: Have you solicited any group or organization or
    entity to make a proposal?
        Secretary Roche. Sure. I said I have spoken with Philippe
    Delmas.
        Senator McCain. Have you solicited? I would like an answer.
    Have you solicited----
        Secretary Roche. I said yes.
        Senator McCain.--anyone to propose, to make a proposal, in
    writing said, we would like to have proposals? Was it published
    anywhere, we would like to have proposals by different
    corporations, companies, anybody who thinks that they can
    fulfil this requirement?
        Secretary Roche. In writing, no, sir. But I think I have
    solicited--I have not solicited Boeing in writing, either.
        Senator McCain. Boeing is in the law, Mr. Secretary. Why
    would you have to solicit them?
        Secretary Roche. Senator, I have spoken to Philippe Delmas,
    who is the chief executive of Airbus.
        Senator McCain. But you have not solicited any. Now it is
    past December and here we are in February.
        Secretary Roche. If he has a proposal I would be more than
    willing to look at it.
        Senator McCain. I thank you very much, Mr. Chairman. Again,
    I strongly urge that we have a full committee hearing on this
    issue. It is $26 billion, which is on track to go to Boeing
    Aircraft in violation of what the head of the Office of
    Management and Budget deems inappropriate lease-purchase
    contracts. I strongly urge a hearing. I thank you, Mr.
    Chairman.
        Chairman Levin. Senator Collins.
        Senator Collins. Thank you, Mr. Chairman.
        Secretary England, as you well know from our numerous
    conversations, I am very concerned about the low current
    procurement rates of ships and aircraft. The Navy has over and
    over stated that its goals are to procure 8 to 10 ships per
    year and 180 to 210 aircraft per year. Yet the Navy's budget
    does not reach these goals until very late in the Future Year
    Defense Program. That is also of great concern to me because I
    have seen too often the pattern where the Navy or the other
    services sincerely intend in those out years to reach the
    goals, but then events intervene or budget constraints
    interfere and we never get to where we need to go.
        The fact is that we are seeing a continual increase in the
    operational tempo. We are seeing increases in the average age
    per platform. Ship depot maintenance availabilities are more
    often than not exceeding the notational costs. Aircraft are
    requiring more maintenance per hour and are experiencing
    increasing failure rates on major components, resulting in
    significantly increased costs per flight hour.
        My concern is that we need to start rectifying these
    deficiencies now and that we are fast sliding down a
    procurement hole that is going to be very difficult for us to
    climb out of and to meet our goals and current requirements. I
    was struck in my visit to Central Asia and talking to the
    service men and women, the sailors and the admirals on the
    U.S.S. Theodore Roosevelt, the operational tempo is incredible.
    I do not know what we would have done if we did not have our
    aircraft carriers and our carrier battle groups in this war,
    since so many of the strikes have originated from our aircraft
    carriers. I think it is in the neighborhood of 75 percent,
    according to your testimony.
        So what are your thoughts on our current force structure
    and our budget plans and whether or not we have a match here
    for our mission requirements?
        Secretary England. Well, first of all, as Secretary Roche
    just said, I violently agree with you. I will use the same
    expression. Obviously, we do need more ships, we need more
    airplanes. We made some hard decisions this year and I believe
    we made the right decisions in 2003, just like the Kennedy that
    had trouble getting out to sea because the maintenance had not
    been done in the past and we had a lot of delays. It is no
    value to our Navy to have assets that do not operate.
        So this year we put a lot of money, we put $3 billion, into
    our operations and maintenance (O&M) accounts. So $3 billion
    went into O&M accounts. By the way, the Navy had an increase
    this year of $9.5 billion. $4 billion went to the personnel
    account, $3 billion went to O&M accounts, a little over $1
    billion went into R&D, and a billion dollars went into
    procurement.
        But the billion dollars that went into procurement went
    into munitions because in the past years it had been way
    underfunded and we had to fund the munitions. So we put a lot
    of money into munitions this year, $1 billion over last year.
        Now, also we are doing two SSGNs. That is another billion
    dollars we invested, and they count. They are real assets of
    the United States Navy.
        We had prior year shipbuilding accounts. Last year it was
    $800 million, this year it is $645 million. That is money we
    spend for prior year contracts. We do not get anything for
    that. That is for bills from prior years, prior year accounts.
    We still have, by the way, $1.6 billion to work off in that
    account, so we will be back here every year working that off.
        We put $400 million into our current shipbuilding account
    so we would forestall these problems in the future. So just our
    prior year shipbuilding and our $400 million where we increased
    our funding level, that is another whole ship, frankly. But it
    will help protect the future and pay bills that we had run up
    in the past.
        Now, this year we're doing what I call filling all the
    buckets. To the best of my knowledge, we filled all the buckets
    across the Navy and the Marines. So in the out years, we should
    not have to take money out of shipbuilding or airplanes. We
    should actually see the benefits of that money to buy airplanes
    and ships. I would certainly like to buy more this year, but we
    made priority decisions and I believe they were the right
    decisions, Senator.
        Senator Collins. I do not dispute the need for more funding
    in each of the accounts. I guess maybe the question for this
    committee is whether the Navy's share of the $48 billion
    increase overall is sufficient, given the shortfall in
    procurement accounts.
        One other quick question before I go on to a question for
    Secretary Roche and for you as well. Is the down-select for the
    DDX still on track for April?
        Secretary England. Yes, it is.
        Senator Collins. Thank you.
        Secretary Roche, as you are well aware, the Mobility
    Requirements Study 2005 identified a sea and airlift shortfall,
    and this obviously applies, I guess, across the board. Could
    both you and Secretary England tell us more specifically how
    the current operations of Enduring Freedom and Noble Eagle have
    exacerbated the lift shortfall?
        Secretary Roche. Yes, Senator. A couple of things come to
    mind. One, the older aircraft like the C-141s, a number of our
    C-5s, are breaking. They are old, they are just old. C-141s
    have to be retired. We are using them now until we get enough
    C-17s in place.
        Second, we are using the C-17 more than we ever intended to
    and I am concerned that its maintenance is not getting enough
    attention because it is not being pulled off the line enough.
    We are looking for the future to say--there was the study
    having to do with expected scenarios of conflict, but then
    there are the realities of what we are doing in this long-term
    war on terrorism, and mobility is key since Afghanistan is
    totally landlocked. Everything that goes in, everything that
    comes out, has to go in by air, including the water our troops
    drink.
        Therefore, we will look over the next couple of years at
    the C-17 situation to see if we should extend that line. At the
    same time, we are in this year's budget requesting the
    permission of the committee to have a multiyear funding for the
    C-130J, which is a longer haul, more retailing airplane
    compared to C-17, which is wholesale.
        Senator Collins. Secretary England, would you like to add
    any comments?
        Secretary England. Senator, I really do not have much to
    add here. I believe we have been able to deal with the
    requirements for Operation Enduring Freedom. Our deployed
    forces have 30 days of supply with them, so when our marines go
    into Afghanistan they have 30 days of everything with them. So
    to the best of my knowledge, we have not had an issue during
    Enduring Freedom. We have been able to supply our ships and our
    people. Fortunately, we have two countries that are very
    important to us, Bahrain and United Arab Emirates, and they
    have been very helpful to us. So my judgment is we have done
    quite well in that regard.
        Senator Collins. My time has expired. Thank you, Mr.
    Chairman.
        Chairman Levin. Thank you very much, Senator Collins.
        Senator Sessions.
        Senator Sessions. Thank you, Mr. Chairman.
        Secretary England, you were talking about this prior year
    funding debt you had to pay, obligated money that has fallen to
    you to pay so that you can not get to spend it. Is that what
    Secretary Rumsfeld felt is bad management and said he is going
    to try to end, or is that something we have to live with year
    after year?
        Secretary England. Well, I certainly hope we do not have to
    live with it. Like I said, this year we have added the funding
    of current contracts by about $400 million. That is, we have
    brought the estimate to completion up by $400 million, to
    hopefully forestall this problem in the future. When we look at
    this issue, it is for lots of reasons. Rates have gone up,
    perhaps changes that we imposed. Keep in mind, these ships are
    built over a long period of time, so obviously we introduce
    technology, et cetera. There are some costs associated with
    that, but that is really a valid cost because it improves our
    product.
        But a lot of this, frankly, has to do with, I guess I would
    say, the imposed inefficiency of the yards. That is, we buy at
    very, very low rates, so we buy at very low rates and we pay
    top dollars. Therefore it is important for us to get the rate
    up so that we get the cost down and get better control of our
    ship costs.
        I certainly hope this is not something we have to live
    with. We are working very, very hard to end these prior year
    shipbuilding accounts. Our Assistant Secretary, John Young, and
    I work this regularly and I believe we will be successful with
    this.
        Senator Sessions. Well, I think it is important for us. It
    is difficult enough to manage and oversee a budget and approve
    a budget that has numbers shifting from 1 year to the next, and
    I appreciate your working on that.
        Let me just make a point and ask a couple of questions.
    Today's Navy I understand includes about 315 ships, although I
    saw an article the other day that said 310. Do you have a hard
    number on that, Mr. Secretary?
        Secretary England. Let me see if I have an exact number
    here. I believe the number of ships today is 310.
        Senator Sessions. Which is lower than we have been
    complaining about at 315, and we do have escalating operations
    and maintenance and personnel costs that have gone up and we
    want to pay our sailors and our personnel more, and it has kept
    us from recapitalizing the Navy at the rate we would like to.
    It has kept us below the 2001 QDR, the Quadrennial Defense
    Review, statement of what is necessary.
        The fiscal year 2003 budget accompanying the Future Years
    Defense Program does not allocate future years investments
    sufficient to build the number of ships required to
    recapitalize the fleet. The request for years 2003 through 2007
    as I read it is 18 ships less than was required in the QDR
    plans. So this is a result of retiring ships earlier than their
    projected service life, not building the required Virginia-
    class submarines called for by the Joint Chiefs attack
    submarine study, and low procurement rates for other ships.
        So I am not criticizing you. It is not your fault that we
    are in this predicament, and I salute you for making some tough
    calls. You had to make some tough decisions looking at the
    numbers you were allocated.
        Let me ask you about some potential ways that we could
    improve our ship effectiveness, the actual number deployed in a
    wartime environment, and see if you have thought about these
    and what ideas you might have about it. There are four areas
    that I think the Navy should examine, and Senator Kennedy is
    chairman of the Seapower Subcommittee and I am the ranking
    member and I will be seeking information on some of these
    issues this year in some hearings.
        We could assign additional ships and submarines to home
    ports closer to their areas of operation. This is sometimes
    referred to as forward home porting. We could assign a ship to
    remain in a permanent forward area of operations and rotate
    crews back and forth, which is not historic Navy policy, but we
    do it on submarines, and that has some real potential, I think.
        We could retain ships to the end of their full service life
    rather than retiring them early, and we are doing that. I was
    on the O'Brien, a Spruance class destroyer, a few weeks ago in
    Japan. It performed well in Afghanistan and it is now set to be
    decommissioned rapidly.
        We could preposition additional ships in forward operating
    areas that would be maintained by very small crews during
    normal circumstances and that could be beefed up in times of
    emergency. This would be analogous to the manner in which the
    Ready Reserve Force ships have been kept ready to begin
    operations in a few days.
        Are those some ideas that you are considering? If we did
    those, is it possible to get more ships in fighting areas where
    we need them? Recognizing, Mr. Chairman, that most Americans
    might not know that it takes three ships to maintain one ship
    in forward deployment the way we operate today.
        Secretary England. Senator, I believe you are right on. The
    fact is I think the CNO would also agree with you. We have
    initiated across the Navy, with the CNO in a leadership role,
    to look at a wide range of options as to how we get greater
    deployment out of our existing fleet.
        Also, by the way, the faster we get them through the
    depots, the faster we get them through the maintenance cycles,
    that effectively increases the size of our Navy. So you are
    right, anything that effectively increases the size of the Navy
    is certainly worth looking at, and we are looking at all those
    ideas and other ones also.
        Senator Sessions. So even if the number of ships were low,
    if you could maintain more ships in war-fighting areas, the
    impact would not be as great.
        Secretary England. You are absolutely right. It effectively
    increases the size of the Navy if we can do that. Like I said,
    we are looking at all those alternatives. It is the most
    efficient way to go, it is the most effective way to go, and we
    would be happy to come brief your committee on all these
    initiatives, Senator.
        Senator Sessions. We will be submitting some follow-up
    questions on that subject, and know that we are still going to
    need some new ships, but if we can maximize those old ones I
    think that would be helpful.
        Thank you, Mr. Chairman.
        Secretary England. Thank you, Senator.
        Chairman Levin. Thank you, Senator Sessions.
        I want to go back to the tanker leasing question and ask
    you, Secretary Roche, a few questions on this point. You were
    quoted in the press as saying that the language implementing
    any such lease would need to be changed. In other words,
    legislative language would be necessary in order for you to
    enter into such a lease, and I am wondering if that is
    accurate.
        Secretary Roche. No, sir. I do not know the contents of
    that. What I am saying is that we are now--the facts are as
    follows, sir. We are now taking the language from the bill and
    seeing what the conditions are and if a lease can be done under
    those circumstances. If we can, then we would move forward and
    we would try to put one together. But it is a function of cost
    of money, it is a function of residual values. There are no
    dollars involved.
        I have to come back to you once there is something that
    involves dollars. But it is the constraints, the guidelines.
    Originally, I had asked if there was a chance to waive the
    provisions of a capital lease for scoring purposes in order to
    have these aircraft get here sooner, but that is not my
    position, that we would have to change. We are trying to work
    with it as it is.
        Chairman Levin. So you are saying there are no legislative
    changes or guidelines that would have to be amended in order
    for you to enter into such a lease?
        Secretary Roche. Only if somebody like Airbus came along
    and made a deal that was so good, an offer that was so good,
    that we felt we would prefer it, and then we would come
    forward, yes, sir.
        Chairman Levin. Other than that, changes in guidelines?
        Secretary Roche. As best as we can tell now, sir, we are
    examining it because there are also policies on the floor that
    were done to explain what some of these provisions meant, like
    what is a new aircraft? Is it one with a tanker boom or is it
    one without a tanker boom?
        Chairman Levin. Is there any funding in the fiscal year
    2003 budget request to begin these leases if you decided to go
    forward?
        Secretary Roche. No, sir, there is not, because I was
    trying to see if I had permission to go forward. In fact, there
    is no money at all in the budget for leasing. There is a plan
    B. If we can do something faster, fine, but we would stay on
    track with plan A, which was to develop the KC-X.
        Chairman Levin. Is it possible you can enter into a lease
    without funding?
        Secretary Roche. No, sir. I would have to come back and
    either amend the budget--as I understand it, Senator, have to
    amend a request or reprogram money to make the first payment or
    not make the first payment until next year and get permission
    to do so. So as far as I know, I cannot do anything unless I
    come back to an authorizing committee and an appropriations
    committee with something in hand, as compared to the authority
    to try and get the thing.
        I face the same problems, Senator, on the four 737s that
    are there.
        Chairman Levin. Just so that we are real clear, for one of
    two reasons, either of two reasons, you could not proceed
    without coming back to the authorizing committees?
        Secretary Roche. Yes, sir.
        Chairman Levin. The Appropriations Committee.
        Secretary Roche. Yes, sir. As I read the bill, which I
    always thought was the case, once I got the money, I would have
    to have the money authorized and the money appropriated. It was
    a matter--
        Chairman Levin. Once you got the--
        Secretary Roche. The deal. Once I have a construct, so I
    had an ``it,'' to bring the ``it'' forward. I would require
    authorization for the ``it'' and I would require appropriations
    for the ``it,'' but I could not do anything with the companies
    if it was totally out of the question, which is the reason I
    was asking if we could go forward.
        Chairman Levin. But not do something with the companies if
    it was----
        Secretary Roche. Could not negotiate.
        Chairman Levin. Let me just finish.
        If it was totally out of the question. I asked you a direct
    question. Is there any potential lease agreement that you
    believe you could enter into without coming back to the
    authorizing and appropriating committees?
        Secretary Roche. No, sir.
        Chairman Levin. OK, let us leave it at that. You can
    qualify it if you want to. I do not want to cut you off.
        Secretary Roche. No, you are absolutely right. The only
    reason I am pausing is the language says that I must come back
    before the Armed Services Committees, which is exactly what I
    would have thought in the first place. But again, the only
    qualifier was to start negotiations if something would never
    even have a chance would not have been sensible. Also, I was
    truly seeing to what degree could the scoring rules be amended,
    given the situation with the old tankers. They cannot be
    amended and, as Mr. Daniels has said, some leases are good
    leases, some leases are bad leases. I am not going to bring
    back a bad lease proposal.
        Chairman Levin. Both civilian and military witnesses from
    the Defense Department and the services have stressed the
    importance of quality of life and the impact that substandard
    living and working facilities have on the ability to accomplish
    the mission. Last year the Readiness and Management Support
    Subcommittee received testimony that 69 percent of the
    Department's facilities have serious deficiencies, rated C-3,
    or do not support mission requirements, rated C-4, and it was
    stated that the administration is committed to restoring the
    installations and facilities. That was just last year.
        This year, despite a $48 billion increase in the overall
    defense budget, the administration is proposing to reduce
    funding for military construction by a billion dollars below
    what the Department requested last year and a billion and a
    half dollars below the level that was appropriated for 2002.
        How do you explain this? I must tell you I am a little bit
    at sea. I guess maybe I should say also in the air or
    underground. But anyway, I am at sea as to try to figure what
    was meant last year. The Army was said to have underfunded
    long-term facilities. This is your testimony this year
    actually, Secretary White: ``For too many years, the Army has
    underfunded long-term facilities maintenance.''
        So you come in with a budget request a billion dollars
    below last year's request and a billion and a half dollars
    below what we appropriated. So I do not get it. What is going
    on?
        Secretary White. Well, Senator, in the MILCON area if you
    add the normal MILCON with what we are putting into Army family
    housing and then you add the private capital that we are
    attracting to support RCI, the Residential Communities
    Initiative, if you put all those pieces together we are
    basically flat between the 2 years. They total up to about $3.9
    billion in each year.
        Chairman Levin. If you want to put the three pieces
    together, what is the Navy's position?
        Secretary England. Similar. We are slightly down in the
    budget. We did increase housing allowance, however, by $255
    million and we improved our housing construction accounts, and
    in this year, in fiscal year 2003, we will have public-private
    venture, that is private money supporting the military, to the
    tune of $700 million. I do not know what it was last year, but
    we worked very hard this year to bring private money into the
    mechanism.
        So I do not know how that compares at the end of the day,
    Senator.
        Chairman Levin. Well, let us try to compare them. Let us
    compare apples and apples. When you gave us your three pieces,
    Secretary White, did you include the same three pieces last
    year for your comparison?
        Secretary White. I do not know whether we included the RCI
    private capital. In fact, I do not think there was any RCI
    private capital in last year. The two that we had----
        Chairman Levin. What about the third piece?
        Secretary White. Well, we have the normal military
    construction. We have the Army family housing. There are small
    amounts of money for base realignment and closure. Then there
    is the private capital, which is the third piece.
        Chairman Levin. I just want to make sure you are adding all
    the same pieces for both years.
        Secretary White. Right.
        Chairman Levin. Do you know whether you are or not?
        Secretary White. I think so, yes. I think it is a valid
    comparison.
        Chairman Levin. On that basis you think it is level
    funding?
        Secretary White. Yes.
        Chairman Levin. Now, in the Navy you do not know?
        Secretary England. I do not know what we had last year in
    terms of private venture funding.
        Chairman Levin. Is your MILCON lower this year than last
    year?
        Secretary England. Yes, MILCON has decreased somewhat from
    fiscal year 2002, but I do not know what the total amount of
    investment dollars are, Senator. We will get back with you on
    that.
        Chairman Levin. The reason for the reduction?
        Secretary England. Just hard choices we made. We had
    private companies investing, so that obviated the need somewhat
    for MILCON. We would obviously rather have private companies
    investing along with us. As the BAH goes up, you can attract
    more and more private venture capital.
        Chairman Levin. Get us the figures, if you would, for the
    record.
        Secretary England. Yes, I will.
        [The information referred to follows:]

        Almost $470 million in private capital will be invested in Navy and
    Marine Corps family housing as a result of housing privatization
    projects awarded in fiscal years 2001 and 2002.

        Secretary Roche. Sir, I am prepared. We had three
    categories of investment: family housing, military
    construction, and sustainment. If you take all three, we are
    $45 million less this year than we were the year before, and I
    think that is going to be a little bit lower. We specifically
    made the decision to increase money for family housing and to
    fix things, to fix runways, fix hangars, put new roofs on,
    refurbish, et cetera, which comes out of the sustainment
    account, which we plussed up by $362 million.
        The military construction of brand new buildings, we
    focused on only that which would be needed for new systems that
    are coming in, so for instance construction at Langley Air
    Force Base to accompany the F-22 teams that are starting to
    form. In total, we are very close to what was in the 2002
    budget, sir.
        Chairman Levin. But what do we do then with last year's
    testimony that the administration is committed to restoring
    installations and facilities if 69 percent of the Department's
    facilities have serious deficiencies? Where does that get fixed
    in this year's budget?
        Secretary Roche. I believe in the sustainment we do a good
    bit of that, sir. We make a big dent in that through
    sustainment, which is to fix things. MILCON is to build brand
    new.
        Chairman Levin. On that you are down?
        Secretary Roche. No, sir. In sustainment we are way up.
        Chairman Levin. On MILCON you are down.
        Secretary Roche. On brand new buildings we are down because
    we are restricting it to new systems. But in sustainment we are
    trying to fix things as much as we can, and in family housing
    we are moving up. That is our moneys for family housing, not
    including privatization.
        Chairman Levin. Well, in the materials that were given to
    us, the briefing materials, the Comptroller said that ``the
    reduction was a conscious decision to defer military
    construction projects to reflect delay in an additional round
    of base closures in 2005.'' I am glad to hear none of you used
    that as an excuse, since there was no delay. For the first
    time, we got a round of base closings. There was no delay we
    finally got one. I thought that was a pretty feeble excuse when
    I read it and I am happy to hear you fellows, you secretaries,
    have not used it today.
        What we will need to do is review the reasons you did give,
    however. So we are going to need to see those figures for the
    record. Secretary White, if you would also provide those for
    the record.
        Secretary White. Yes, we will.
        [The information referred to follows:]

                                 MILCON Funding

        The Army's military construction budget request is $3.2 billion and
    will fund our highest priority facilities and family housing
    requirements. In fiscal year 2002, we presented a budget that was a
    down payment on our goal to better support our infrastructure. When we
    developed this year's budget in light of the events that took place
    last year, we had some very difficult decisions to make. The need to
    fund our military pay raises, Army transformation, OPTEMPO, the war on
    terrorism, increases in health care, and other key programs were all
    included in the decision leading to our request. Thus, the Army budget
    provides the best balance between all our programs, including military
    construction.
        Below is a side-by-side comparison of Army Military Construction
    (MILCON), Sustainment-Restoration-Modernization (SRM), and Army Family
    Housing (AFH) funding in the fiscal year 2001, fiscal year 2002, and
    fiscal year 2003 President's budget submissions. The comparison shows
    that, although fiscal year 2003 is lower than the fiscal year 2002
    level, it is much higher than fiscal year 2001. The Residential
    Communities Initiative housing privatization program is another
    important element of facilities improvement, adding private capital to
    the program, and leveling the comparison of fiscal year 2002 and fiscal
    year 2003.

    ------------------------------------------------------------------------
                                                      Fiscal Year
               Funding ($000)            -----------------------------------
                                             2001        2002        2003
    ------------------------------------------------------------------------
    Military Construction...............       1,039       2,139       1,637
    Family Housing......................       1,140       1,401       1,406
    Base Realignment and Closure........         303         164         150
    Sustainment Restoration and                1,899       2,387       2,364
     Modernization......................
    Private Capital.....................           0         260         720
                                         -----------------------------------
      Total.............................       4,381       6,351       6,277
    ------------------------------------------------------------------------

        Chairman Levin. On the question of Army transformation, the
    budget request of the Army terminates 18 existing programs,
    including some that were restored by Congress at the Army's
    request over the last couple years. I am wondering whether or
    not the 18 programs that were terminated by the Army were your
    initiative or was that a direction of the Office of the
    Secretary of Defense?
        Secretary White. That was not a direction of the Office of
    the Secretary of Defense, Senator. It was our initiative. We
    had to make some tough choices and those were the programs we
    chose to kill.
        Chairman Levin. I am going to ask each of you for a list of
    unfunded requirements. Do you have such requirements that are
    unfunded? I am not going to ask you for them right now. I will
    ask you those for the record. But before we get them in the
    record, are there unfunded requirements in the Army?
        Secretary White. Yes, there are. Again, what we have tried
    to build in this budget was a budget that would sustain us
    through an expected level of effort with the current war where
    a supplemental would not be required. But there are areas of
    the budget that we did not fully fund against requirements
    because we had to make tough choices.
        Chairman Levin. Would you provide that for the record
    promptly?
        Secretary White. Yes, I will.
        Chairman Levin. Secretary England, would you do that as
    well?
        Secretary England. Ships and airplanes, Senator. Obviously,
    we need funding for those capitalization accounts.
        Chairman Levin. Even though you have them in the FYDP?
        Secretary England. We do build up to ten ships at the end
    of the FYDP, that is correct.
        Chairman Levin. But you have unfunded requirements this
    year?
        Secretary England. Correct. We are not at the level we
    would like to be this year, yes.
        Chairman Levin. Will you give us those, please?
        Secretary England. Yes, sir.
        Secretary Roche. Yes, sir. I would like to make the point
    that a steady budget with steady increases will take care of
    things in time. We have unfunded requirements which will be met
    in later years. It is really an issue of bringing them into the
    near term.
        Chairman Levin. But as of this year you have unfunded
    requirements?
        Secretary Roche. Sir, we have had to make trades, sure.
        Chairman Levin. Would you give us a list?
        Secretary Roche. I would like to have bought tankers.
    [Laughter.]
        Chairman Levin. Pardon?
        Secretary Roche. For instance, I would like to have
    purchased tankers and not gone through the grief I am going
    through.
        Chairman Levin. I can understand why, actually.
        But you will give us the list of unfunded requirements?
        Secretary Roche. Sure.
        [The information referred to follows:]

                           Unfunded Requirements List

        Secretary White. The budget request contains the Army's top
    priorities, but at this point we have not prepared an unfunded
    requirements list. We will provide the committee the list as soon as
    possible.
        Secretary England. The Chief of Naval Operations and Commandant of
    the Marine Corps have both provided detailed listings of program
    requirements not funded in the fiscal year 2003 budget. I believe they
    have ably identified additional specific needs of our Naval Services,
    and their correspondence is included for the record below. I would only
    add that our biggest budgetary challenge for the long-term health of
    the Department of the Navy is to ensure that we improve the pace of
    recapitalization, especially for major platforms like aircraft and
    ships, and for amphibious and littoral warfare capabilities. These are
    well represented in the details provided by the CNO and Commandant, but
    each must be evaluated in the context of all requirements. The global
    war on terrorism, other continuing demands on Naval forces and our
    people, and our desire to achieve transformational capabilities to
    better the posture of our forces against potential adversaries,
    represent additional challenges we have addressed in our overall
    request. The budget proposed by the Secretary of Defense and the
    President achieves the best balance among our highest priorities for
    national defense, and for the Nation as a whole.

                            Unfunded Priorities List

        Secretary Roche. The Department's proposed fiscal year 2003 budget
    is a vital step forward, reflecting our priorities as we prepare for
    the challenges of the 21st century. It supports the war against
    terrorism, invests in Air Force people, and funds a broad-based
    transformation that, if sustained, will enable us to remain the world's
    most capable air and space force. The unfunded programs you have asked
    us to identify must be understood in context. We first need your
    support for the priorities of the President's budget, and the attached
    unfunded list complements rather than substitutes for the requirements
    presented in the President's budget request. Looking ahead, we also
    need to work together to assure this fiscal year 2003 budget begins a
    process of sustained investment over time to advance Air Force
    transformation.
        With this understanding, I am forwarding the following list
    totaling $3.8 Billion, consistent in large part of programs already
    planned for the outyears that may be brought forward. We've excluded
    any variable ONE/OEF cost of war, such as the unbudgeted Reserve/Guard
    call-up, because these should be covered by the $10 billion variable
    cost of war dollars already requested by the Department. Should the
    cost of war funds be redirected, the Air Force requirement of $4.2
    billion for Reserve/Guard call-up would have to be our number one
    unfunded request. Our list emphasizes capabilities highlighted by
    current operations and our continuing evaluation of war-related
    requirements. It also captures a number of requirements of critical
    importance that have emerged since the budget was prepared. We've
    included the costs to purchase aircraft that would permit us to
    accelerate the replacement of the aging KC-135E fleet, and procure four
    C-40-passenger jets. Nevertheless, we continue to explore whether there
    is a viable business case for leasing these aircraft. If neither of
    these options turn out to be feasible, we would revert to our previous
    modernization tanker plan, which would deliver our first new tanker in
    fiscal year 2008, and consider the requirement for the C-40s as we
    develop the fiscal year 2004 budget.
        Our facilities strategy in the fiscal year 2003 budget emphasized
    the importance of ``fixing the Air Force we have now first'' then
    building new as appropriate. Under this strategy, investment is focused
    on sustainment of current facilities, upgrades to family housing, and
    construction related to new missions. With the MILCON entry on the
    list, we could further extend our infrastructure improvements.

        Chairman Levin. Senator Sessions has a question.
        Senator Sessions. Briefly. Secretary White, we had a nice
    tour in Korea the first week of January and I heard reports
    about inadequate housing, the inadequate compensation for
    family split-ups for tours there, really causing some problems
    in getting people to accept an assignment. They enjoy doing the
    work but they do not enjoy the matters that go with it.
        Does this budget provide any relief and improvement in
    housing? We simply in my view need to do some consolidation of
    bases and improvement of housing in Korea.
        Secretary White. We have allocated resources to Korea, but
    I will have to get back to you for the record with the
    specifics of where the money will be spent.
        [The information referred to follows:]

                                Housing in Korea

        For family housing, the Army first looks for host nation funding
    whenever possible. In Korea, Republic of Korea funded construction
    (ROKFC) funds can be used for construction of Army family housing. The
    ROKFC program provides the funds to the Army for design and
    construction. In addition, this budget provides for 2 fiscal year 2003
    family housing construction projects at Yongsan. One project provides
    $3.1 million for replacement of 10 senior officer quarters, and the
    second provides $1.9 million for renovation of 8 general officer
    quarters.
        For barracks, we also look for host nation funding whenever
    possible; however, host nation funds are typically used for operational
    projects. Therefore, the Army has programmed substantial Military
    Construction Army (MCA) and Operation & Maintenance Army (OMA)
    resources to fund all required barracks projects in Korea by fiscal
    year 2009. The fiscal year 2003 President's Budget Request includes
    $131.2 million of MCA funds for new barracks projects in Korea, and
    $24.4 million of OMA funds for renovating existing barracks in Korea.

        Senator Sessions. I will just repeat that I do not believe
    that is an exaggerated problem. I know you hear it probably
    everywhere you go.
        Secretary White. Oh, I do not think it is either.
        Senator Sessions. I think we have a real problem there that
    is undermining some of the good things that are happening in
    the Army and if we can fix it it would be great.
        Secretary White. We have been there 50 years, 1 year at a
    time.
        Senator Sessions. Exactly right. The facilities are 50
    years old, many of them, and are just not adequate.
        Just to get the numbers down on the Joint Direct Attack
    Munitions (JDAMs), I believe, Secretary England, you indicated
    the Navy has 18,000 in for 2003?
        Secretary England. No, sir, I believe the number is 9,880
    for fiscal year 2003.
        Senator Sessions. For fiscal year 2003 it would be 9,800.
    What about the Air Force?
        Secretary Roche. Sorry, I will have to get the exact
    numbers. I was worried more about the production capacity. We
    are producing 1,500 a month right now for both services. We
    want to get that to 3,000 a month. We will be facilitating for
    3,000 a month.
        Senator Sessions. When do you think you would be getting to
    3,000 a month?
        Secretary Roche. We can get to about 2,000 at the end of
    2003 and I think by the end of fiscal year 2004 we would be
    able to go to 3,000 a month. That is roughly, sir. We will get
    the exact details to you.
        [The information referred to follows:]

                                  JDAM Numbers

        Secretary Roche. The current program will delivery 2,000 per month
    by March 2004 and 2,800 per month by July 2004. JDAM will have the
    capability to produce up to 3,000 per month by summer 2003.

        Senator Sessions. Well, Mr. Chairman, I think that is
    probably not enough to meet our needs and maybe we ought to
    think about bringing on more production lines. Is that
    possible?
        Secretary Roche. Sir, the way things are going now we are
    building up inventory. Remember, we are still producing JDAMs.
    We are starting to catch up very quickly because we are not
    using that many. We were using about 80 a day and that has now
    dropped down. So we are building up the inventory again. It is
    the capacity to be able to do it, which is effectively like
    opening up a second line.
        Senator Sessions. But you would not want to be in a
    position of having to tell the President we are not prepared to
    undertake a military operation because we have to wait 6 more
    months to get our munitions?
        Secretary Roche. No, sir, and we feel very sure that this
    is not a big risk. When you get to the point where you can do
    3,000 a month, you are talking 36,000 a year. That is a heck of
    a lot of weapons.
        Senator Sessions. But that is 2 years away.
        Secretary Roche. But we can do 15 now and within a year we
    will be at about 2,000, plus there are other precise weapons.
    It is not just that JDAMs are the only weapon.
        Senator Sessions. It turned out to be the weapon of choice
    right now.
        Secretary Roche. Absolutely.
        Senator Sessions. It is a magnificent thing. I just will
    probably ask some more questions in writing and we can talk
    about that maybe in confidential hearings. But I do believe we
    have to confront that question.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Sessions.
        Just one more question for me, and it relates to your
    active duty strengths. Did any of you propose increases in your
    service's active duty strength for this year's budget?
        Secretary White. No, we did not, Senator.
        Chairman Levin. Secretary England?
        Secretary England. Sir, we have an increase of 2,400
    marines this year.
        Chairman Levin. In the Navy?
        Secretary England. No, sir.
        Chairman Levin. Did you request it?
        Secretary England. No, sir.
        Chairman Levin. Secretary Roche.
        Secretary Roche. I do not think so, although we are talking
    about an end strength increase, but I cannot remember which we
    have focused it to, sir. We talked about an increase of roughly
    7,000. The Secretary has made the reasonable request that we go
    back to see if there are offsets, what skill areas are really
    needed, are there other skill areas that we can put in the
    Guard and the Reserve, et cetera, before he makes decisions on
    those. So that is probably now part of the fiscal year 2004
    process.
        I lose track of, are we executing----
        Chairman Levin. I lose track of your answer.
        Secretary Roche. The answer to the question is yes, we
    asked for 7,000. I do not know whether we did it in the fiscal
    year 2003 process or we are doing it as part of the fiscal year
    2004 process. That is what I cannot remember.
        Chairman Levin. Let us know for the record which one it
    was.
        [The information referred to follows:]

        Secretary Roche. As a result of increased demands after September
    11, the Air Force approached OSD with a request for an additional 7,000
    total force end strength (5,300 active duty) for fiscal year 2003. OSD
    advised us to look for alternative methods to meet additional manpower
    requirements without growing end strength. Since that time, we have
    been involved in internal Air Force studies to consider innovative
    approaches that will help us to operate within OSD guidance.

        Chairman Levin. Recent press reports indicated that the
    Army had asked for 40,000 additional troops, the Air Force for
    8,000 additional airmen, the Navy for 3,000 more, and
    apparently that is not accurate; that is what you are telling
    us?
        Secretary White. I think the 40,000 came from a hearing
    last year of the House Armed Services Committee where we
    discussed with Congressman Skelton whether the 480,000 was
    adequate or not and if it was not adequate what the plus-up
    should look like.
        Chairman Levin. But then you had a press report that
    indicates that you requested it and that is not accurate?
        Secretary White. No, it is not accurate, no.
        Chairman Levin. Is that correct also for the Navy?
        Secretary England. Correct.
        Secretary Roche. We did ask for the 7,000, but I cannot
    remember which part it was, if it was the fiscal year 2003 or
    the fiscal year 2004.
        Chairman Levin. You will let us know that for the record.
        Thank you very, very much. I think we have concluded our
    hearing. We appreciate your presence, your answers, and we will
    stand adjourned.
        [The prepared statement of Senator Thurmond follows:]

                  Prepared Statement by Senator Strom Thurmond

        Thank you, Mr. Chairman.
        Secretary White, Secretary England, and Secretary Roche, welcome to
    this, your first of many annual posture hearings on the budget request
    and state of your service. The past year has been filled with
    challenges to both the Nation and your services. Although other
    challenges are still ahead, your personal response during these trying
    months has reinforced my belief that our services and the men and women
    who wear the uniform of your service are in good hands.
        Although the Nation's immediate objective is to win the war against
    terrorism, your long term challenge will be to transform our military
    services to fight the battles of the future. The traditional manner of
    preparing for the next battle by re-fighting the last war cannot be the
    way of the future. The lesson of September 11 is that we will fight
    future battles not only in the lair of the terrorist but also here at
    home. They will be won as much by technology as by the ingenuity of our
    soldiers, sailors, airmen, and marines. The operation in Afghanistan is
    merely a glimpse of future warfare. We need to exploit the good, but
    not make it the focus of the transformation.
        Concurrent with transformation, you must continue your focus on the
    quality of life of our military personnel and their families. Last
    year's military construction budget raised expectations of future
    budgets. I find it ironic that despite an almost $50 billion increase
    in the defense budget request, the military construction budget was cut
    by almost 10 percent at a time when the Department is striving to lower
    the facility recapitalization rate from more than 100 years to 67
    years.
        I hope each of you will review your future year defense program
    regarding the military construction program. It must be improved both
    for the active components and for the reserves. We cannot expect our
    military or civilian personnel to work or live in facilities that are
    deteriorating around them.
        Best wishes to each of you as you enter the second year as the
    leaders of the best men and women to ever wear the uniforms of our
    Nation.
        Thank you, Mr. Chairman.

        [Questions for the record with answers supplied follow:]

                   Questions Submitted by Senator Carl Levin

                     EXTENDED RANGE CRUISE MISSILE FUNDING

        1. Senator Levin. Secretary Roche, the Air Force had been
    investigating what will be needed to replace the limited numbers of
    conventional air-launched cruise missiles, or CALCMs, that were in
    short supply after the Kosovo operations. This program has been called
    the extended range cruise missile, or ERCM, program. Based on a
    preliminary review of the budget documentation, it appears that the Air
    Force has dropped the ERCM line from the research and development
    budget. What has happened to the ERCM program?
        What is the Air Force intending to do to fill the mission?
        Secretary Roche. The purpose of the Extended Range Cruise Missile
    (ERCM) program is to explore conventional cruise missile capabilities
    to include variations of the Conventional Air Launched Cruise Missile
    (CALCM), and Joint Air to Surface Standoff Missile (JASSM). The program
    is currently unfunded since the fiscal year 2001 funds were rescinded,
    the fiscal year 2002 funds were not appropriated, and the program was
    not included in the fiscal year 2003 President's Budget request.
    However, in Feb. 2002, I reviewed the options to meet cruise missile
    requirements, but did not commit the Air Force to a solution. We will
    further assess this requirement as we develop our fiscal year 2004
    Budget and review the success of the current Low Rate Initial
    Production of JASSM and its initial operational test and evaluation
    program. We expect to include a cruise missile initiative in our fiscal
    year 2004 budget.
        The ERCM program was intended to be an interim solution to the
    long-range cruise missile program. However, with the increased CALCM
    inventory, JASSM to be fielded in fiscal year 2003, and the lack of
    additional ALCMs to convert to CALCMs, the Air Force will accept the
    risk to and continue to program CALCM and JASSM to fill its
    requirements. The Air Force still needs a conventional cruise missile
    with an extended range capability and is investigating JASSM-ER missile
    to fill that requirement.

                            PRECISION GUIDED WEAPONS

        2. Senator Levin. Secretary Roche, the Air Force has announced big
    investments in precision guided weapons in fiscal year 2003. I know
    that the Air Force intends to buy many more Joint Direct Attack
    Munitions, or JDAMs. It would appear however, that while the Navy is
    buying more laser-guided bombs this year, the Air Force is not. Is that
    really the situation, and if so, can you explain why?
        Secretary Roche. As a result of inventory shortages and high
    expenditure rates in Operation Enduring Freedom (OEF), the Navy had a
    greater need for laser guided bombs (LGB) than the Air Force in fiscal
    year 2002. To alleviate the issue, the Air Force loaned the Navy 3,500
    LGB kits through 1 January 2002, along with up-front production from
    the latest LGB production contract. The Air Force is planning to
    receive a share of the Navy fiscal year 2002 production LGBs to replace
    the Air Force weapons given to them for OEF. Additionally, the Air
    Force will be placing a contract for $58 million worth of LGBs this
    year.
                                     ______

                   Questions Submitted by Senator Max Cleland

                          AIR FORCE LOGISTICS CENTERS

        3. Senator Cleland. Secretary Roche, I was encouraged that the Air
    Force had expressed support for the three Air Logistics Centers (ALCs).
    However, after reviewing the military construction budget for fiscal
    year 2003, I notice that there are no new military construction
    projects for any of the ALCs. If the ALCs are indeed vital--one of the
    needs that was outlined in the preliminary briefing is the need for
    investing in infrastructure--why is there no funding for military
    construction projects?
        Secretary Roche. The Air Force prioritizes total force
    requirements, using Air Force and MAJCOM priorities, and the impacts to
    mission, readiness, and quality of life into one total force integrated
    priority list. ALCs remain vital to the Air Force, but in fiscal year
    2003 we are faced with more urgent expenditures for operational
    capabilities.

        4. Senator Cleland. Secretary Roche, getting back to the long-term
    strategy, when can Congress expect a detailed long-term plan, in
    writing, for the ALCs? Why has it taken this long to get only a
    ``preliminary briefing'' that provides no details?
        Secretary Roche. Although still in draft, the strategy reflects:

             The requirement for the Air Force to maintain a ready
            and controlled source of organic technical competence to ensure
            an effective response to national defense contingencies and
            emergency requirements.
             A commitment to creating ``world class'' maintenance,
            repair, and overhaul operations in the Air Logistics Centers
            through infrastructure recapitalization, workforce
            improvements, and corporate Air Force process improvements.
             Increased commercial partnering to leverage the core
            competencies of both the public and private industrial and
            technology sectors.

        Before the Air Force can complete the strategy, it must ensure that
    sufficient resources required to implement the plan are integrated into
    future plans. The Air Force will accomplish this task as part of the
    fiscal year 2004-2009 planning development, and then provide Congress
    with a completed strategy in the Summer of 2002.

                                C-130J PURCHASE

        5. Senator Cleland. Secretary Roche, I want to thank the Air Force
    for their request for $186 million to begin a 3-year procurement of 40
    C-130Js. As a long-time supporter of this program, I am pleased with
    the Air Force's recognition of this reliable aircraft. In the opening
    statement you provided to the committee, I was hoping you could provide
    information on the 168 C-130Js that you referred to. Do you have a time
    frame for the purchase of these aircraft?
        Secretary Roche. The Air Force requires a total of 168 C-130Js (150
    C/CC-130J, 10 WC-130J, and 8 EC-130J) to modernize our C-130 fleet.
    Through fiscal year 2002, the Air Force has procured 37 of these 168
    aircraft (12 C-130J, 10 CC-130J (C-130J-30), 10 WC-130J, and 5 EC-
    130J). The C-130J multiyear procurement effort described in the fiscal
    year 2003 President's budget request will procure 40 CC-130J aircraft
    from fiscal year 2004 through and including fiscal year 2008, resulting
    in a total USAF inventory of 77 aircraft. The Air Force plans to
    procure the remaining 91 aircraft from fiscal year 2009 through fiscal
    year 2015.

                          THE ARMY'S THREE COMPONENTS

        6. Senator Cleland. Secretary White, at your confirmation hearing
    you discussed your vision for creating one true Army out of the three
    components--the active Army, the Army National Guard, and the Army
    Reserve. In light of the attacks of September 11, it is quite evident
    that the Army was up to and continues to be up to the challenge in
    responding to the war on terrorism. Could you comment on the
    effectiveness of all three components as they have worked together to
    meet requirements that were unforeseen just 5 months ago?
        Secretary White. I am pleased to report that the performance of the
    Army in meeting the challenges of the last 5 months has been
    magnificent. I would especially like to comment on the critical role in
    safeguarding our Nation's airports, critical infrastructure protection,
    and the security of the Salt Lake City Olympics, in which soldiers from
    the active and Reserve Components were key participants.
        In missions around the world, all three Army components--Active,
    Army Reserve, and Army National Guard--work tirelessly on a daily basis
    to execute the war on terrorism. Today, the 29th Infantry Division of
    the Virginia Army National Guard is the commanding headquarters
    providing stability in Bosnia; the Army Reserve's 344 Combat Support
    Hospital is completing a training rotation in support of the 101st
    Infantry Division at the Joint Readiness Training Center; and Guard and
    Reserve units are providing critical combat support and combat service
    support enablers necessary for the Army to execute its global missions.
        We plan to fully integrate the Reserve Components into the
    Objective Force. Presently, the Army is transforming the 56th Brigade
    of the 28 Infantry Division, Pennsylvania National Guard, to Interim
    Force capability. This will bring cutting edge technology and
    capability to the Reserve components and will form the body of lessons
    learned to guide the Army in the procedures to transform the Reserve
    components to the Objective Force. I look forward to bringing to you
    the good news of Transformation and the continued success of our
    execution of the Nation's missions by the Army of the 21st century.

                               ARMY END STRENGTH

        7. Senator Cleland. Secretary White, the Army will have a
    significant long-term role to play in homeland security and I applaud
    Secretary Rumsfeld for designating you as the executive agent for
    planning how we will protect America from future attacks. The challenge
    for the Army is great. The National Guard has been providing security
    to over 400 airports, both the Guard and Reserve have mobilized over
    24,000 soldiers, and the active Army has over 125,000 soldiers forward
    deployed in more than 100 countries. General Myers, in his testimony
    last week stated, ``the domestic and overseas commitments of the war on
    terrorism, when coupled with other ongoing commitments, have stretched
    our active forces.'' Yet, the Defense budget request offers no remedies
    and requests that we maintain personnel levels at the fiscal year 2002
    (fiscal year 2002) numbers despite the increasing requirements from the
    continuing war on terrorism. It is somewhat surprising that there is no
    request for an increase in end-strength. What are your thoughts on the
    end-strength of the Army and did the Army request an increase in their
    active duty strengths as part of their fiscal year 2003 budget request?
        Secretary White. To date, we have not completed our analysis of the
    requirements for the new defense strategy emerging from the recently
    completed Quadrennial Defense Review or assessed the pending
    modifications to the geographic commander's in chief war plans. The
    current operational environment places additional demands on the Army
    that were previously unrealized. Post September 11 events have only
    increased demands placed on the force, and the Army will likely require
    an end strength increase to fully meet these demands.
        The Total Army Analysis (TAA) process will determine the size and
    composition of the Army within a constrained budget. The current
    effort, TAA 2009, is not complete but will account for the additional
    emerging requirements in the area of homeland security and the global
    war on terrorism.
        In the meantime, the fiscal year 2002 Defense Authorization Act
    permits the Department of Defense to allow the Services to exceed their
    end strength by 2 percent in any fiscal year in which there is a war or
    national emergency. Full allowance of this provision would allow the
    Army to increase its Active component end strength to 489,600. To
    achieve this increase, the Army would move forward with a ramp of 4,000
    in fiscal year 2003 and 4,000 in fiscal year 2004 to address the most
    immediate needs of the war on terrorism.
        Achieving increased end strength does not happen quickly--there
    must be a ramp to ensure the recruiting increase is achievable, the
    training base can meet additional requirements, and high standards are
    maintained.

                                 SPECIAL FORCES

        8. Senator Cleland. Secretary White, as each service continues to
    examine lessons learned from Operation Enduring Freedom, we
    traditionally focus on weapons systems and the performance of our
    soldiers; both of which have been magnificent. We have all been
    particularly impressed by the use of precision munitions and the
    personnel on the ground that have guided them onto the target. Special
    forces soldiers have for many years been the silent heroes--now we have
    seen the key role they play despite their small numbers. I am not sure
    the Army has a better combat multiplier than the special forces
    soldier. As you continue with your transformation planning, can we
    expect structure to change to increase the number of troops of this
    nature? What specific requests in the budget further support the impact
    special forces bring to the battlefield?
        Secretary White. The Department of the Army has taken several steps
    toward ensuring Army Special Operations Forces (ARSOF) are manned and
    equipped to continue the global war on terrorism with the same success
    witnessed in Afghanistan. With respect to the Army's budget, ARSOF
    requirements and funding remain among the very top in priorities in the
    Program Objective Memorandum along with support for Army Transformation
    and the Interim Brigade Combat Teams.
        During the current fiscal year, we have re-programmed funding to
    support fielding of the combat survivor evader locator radio for ARSOF
    soldiers. Initial requirements were one radio per Special Forces (SF)
    soldier, and we have already procured over 800 units. Additionally
    during fiscal year 2002, the Army has fielded 72 additional High
    Mobility Multi-purpose Wheeled Vehicles for SF units, and we are
    working to provide even more over the program years. We have also
    reprioritized the fielding of the Land Warrior system during fiscal
    year 2003-2009 placing the 75th Ranger Regiment ahead of all other Army
    units. Special Forces units have been added to the fielding plan and
    will receive Land Warrior in fiscal year 2008-2009 just after the
    Interim Brigade Combat Team. In October 2001, the United States Army
    Special Operations Command (USASOC) provided its estimate of ARSOF
    requirements to conduct the war on terrorism. This list included 123
    initiatives generally aligned along the issues of personnel, materiel,
    sustainment, training, force structure, and facilities. The Army
    quickly approved 29 specific issues and another 79 are in various
    stages of staffing and coordination. The Department of the Army
    continues to work aggressively to satisfy these and future issues.
        A number of the USASOC issues are under review by Total Army
    Analysis for out-year funding and support. Some of these issues include
    force structure, facilities improvement, and equipment fielding and
    upgrades. In the area of force structure, the Army is examining
    substantial ARSOF force structure increases to insure they are
    optimally manned, equipped, trained, and sustained for the war on
    terrorism. These programmatic increases and increased resources are
    intended to ensure that Army Special Forces remain the world's best
    special operations forces in the future.
        We are currently reviewing potential increases in SOF aviation.
    USASOC initially requested capabilities through the addition of a MH-47
    battalion and a MH-60 battalion. These critical aviation assets, which
    are ARSOF variants to the standard Chinook and Black Hawk helicopter,
    will substantially increase the combat capabilities of SOF units
    supporting combatant commanders in chief and the United States Special
    Operations Command.
        Additionally, we have undertaken a careful review of the sustaining
    forces necessary to project ARSOF in support of the war on terrorism.
    The Army is working resource enhancements to the combat support (CS)
    and combat service support (CSS) capabilities of our SOF units through
    increases in SOF signal and support battalions and civil affairs and
    psychological operations forces. These increases are critical to the
    overall success of Army and Joint SOF units, as well as those of our
    coalition partners. These unique CS and CSS capabilities are essential
    to the prosecution and success of all of our SOF operations and
    complement our capability in post-conflict stability operations.
        To reach increased ARSOF force structure goals, the Army has
    resourced a number of recruitment, training, and retention incentives.
    The Army has programmed additional resources for the SOF training and
    sustaining base through increases in SOF-specific training centers and
    schools. While increasing the training base for special operations is
    important, retaining these soldiers after training is imperative. The
    Army is working a number of financial incentives to retain ARSOF
    personnel. We are reviewing a critical skills reenlistment bonus
    initiative to retain retirement eligible SF noncommissioned officers
    (NCO) whose retention would ease recruiting pressures and reduce the
    demands for training new personnel. As with our SF NCOs, our SF warrant
    officer population is faced by a large retirement bubble whose
    retention is vital to maintaining readiness in SF units. These
    technicians serve as assistant SF detachment commanders and are the
    Army's only warrant officers with direct ground combat roles.
        Finally, we need aviation continuation pay for our Special
    Operations Air Regiment warrant officer pilots or, as a minimum, a
    critical skills re-enlistment bonus for those who are retirement
    eligible. This is necessary to retain the Army's finest aviators who
    are conducting real world combat missions under extraordinary
    conditions on a daily basis. These initiatives and those joined to the
    Army Transformation will provide the Nation with ARSOF soldiers in the
    right force structure with the right mix of equipment to win the war on
    terrorism.

                 PRIVATE SECTOR EFFICIENCIES/MANAGEMENT REFORM

        9. Senator Cleland. Secretary White, Secretary England, and
    Secretary Roche, each of you bring key industry expertise to your
    service. During your confirmation hearings you alluded to the need to
    pursue better business practices and organizational efficiencies within
    your respective service. With the largest increase in defense spending
    in two decades, we are reminded of the awesome responsibility we all
    share in ensuring every dime of defense spending is done so in a
    responsible manner. In addition to responsible budget expenditures, I
    welcome your comments on improved business practices, efficiencies, and
    organizational changes you have implemented that will ensure cost
    savings within your service.
        Secretary White. The Army has several initiatives underway to
    improve the efficiency and effectiveness of our operations. These are
    in addition to the initiatives that have been approved by the Defense
    Business Initiative Council. We have mentioned several times our effort
    to privatize our utilities purchases. This initiative can take several
    different forms. Industry can purchase and run the facility on an Army
    installation and sell the Army utilities at a reduced rate. In other
    cases the Army facility can be shut down and the utilities simply
    purchased from a local company.
        In a similar area, we are looking at expanding the successful civic
    military partnership that was tested between the Presidio of Monterey
    and the City of Monterey, California. This demonstration involves the
    purchase of fire, police, security, public works, and utilities
    services from the local government. We feel this type of partnership
    will yield savings in other communities.
        Our Army Knowledge Management strategy to transform the Army into a
    network-centric knowledge based organization is progressing.
    Substantial progress has been made within the Military District of
    Washington's ``test bed'' Army Knowledge Management implementation.
    Initial server consolidations have netted manpower and dollar savings.
    In addition, best business practices are being adopted for numerous
    command and control capabilities and collaborative tools are being used
    to improve communications and planning. We are especially proud of the
    national level of recognition that the Army Knowledge Office has
    recently received. The Army was ranked number 10 out of 100 by
    Infoworld magazine for the use of the Army Knowledge Office as an
    innovative e-business technology and also received an award from Chief
    Information Officer magazine for one of the Nation's top 50 web sites.
        We are continuing to improve the management of our business
    processes through the application of earned value and performance
    measurement techniques. The Army Workload and Performance System (AWPS)
    has led to improvements in the scheduling and execution of work in our
    maintenance depots. We believe this tool can be applied across the
    Army. In addition to other maintenance applications, we are starting to
    apply AWPS in medical activities and in the base operations mission.
        Finally, the new organization of the Army headquarters will align
    the Secretariat and Army staff for more efficient operations. There are
    clearer lines of authority, elimination of duplication, and a
    streamlining of how we operate. Some specific examples include:
        1. The phased integration of the Reserve components into the
    headquarters staff to enhance integration and reduce combined staff
    levels. We will have ``multi-compo staffs'' just like we have ``multi-
    compo units.''
        2. The Centralized Installation Management initiative will
    centralize the management of installation support in the continental
    United States into four regions thereby consolidating several Army
    Staff elements and enhancing services to local installations.
        3. Changes to the Program Executive Office/Program Management
    structure provide direct lines of command to the Army Acquisition
    Executive to enhance the authority of the Acquisition Executive and
    improve Army acquisition practices.
        Secretary England. Within the Navy, we are taking steps to
    streamline cycle times through the use of evolutionary acquisition and
    spiral development. We are using these approaches in many programs. For
    example, both Cooperative Engagement Capability and Joint Strike
    Fighter are using spiral development to bring enhanced capability to
    the fleet sooner. The Standard Missile program and DD(X) are using
    evolutionary acquisition to allow insertion of new technologies and
    capabilities over time. In the case of the DD(X) program, this means
    bringing enhanced capabilities into an entire family of ships. These
    approaches enable the Navy to field mature technologies while providing
    for follow-on improvements in capabilities, resulting in affordable,
    more capable weapon systems delivered earlier to our warfighters.
        Another way we are executing this responsibility is through the
    Office of the Secretary of Defense's Business Initiative Council (BIC).
    The purpose of the BIC is to recommend good business practices and find
    and implement cost avoidances and savings that can be used to offset
    funding requirements for personnel programs, infrastructure,
    revitalization, re-capitalization, equipment modernization, and efforts
    dealing with transformation. Just as we are transforming America's
    military capability to meet the threats of the 21st century, so must we
    also transform the way the Department works and what it works on.
        Secretary Roche. Under the direction of Secretary Rumsfeld, we
    chartered the Business Initiative Council (BIC) to ``improve the
    efficiency of DOD business operations by identifying and implementing
    business reform actions which allow savings to be reallocated to higher
    priority efforts . . .'' (excerpt from BIC charter). BIC is an ongoing
    effort, which is ``action-focused,'' aimed at identifying and
    implementing good business practices and creating an environment that
    encourages innovation and good ideas. Twenty-eight initiatives have
    been approved to date; many of these offer potential savings, while
    others provide cost avoidance and/or unquantifiable savings, in terms
    of reduced cycle time, improved freedom to manage, streamlined
    procedures, accelerated information sharing/decision-making, etc. Some
    initiatives can be approved and implemented by the Department; others
    require congressional help. Some examples of the approved initiatives
    include:

             Recovery Auditing: Use contingency fee auditing
            services contract to identify and recover overpayments in
            Working Capital Funds to providers of goods and services.
             Web-Based Invoice/Receipt Process: Reduce occurrence
            of incorrectly prepared or missing receiving report and move
            toward paperless process; will allow DFAS to pay vendors more
            quickly and accurately.
             Enterprise Software Initiative (ESI): Streamline the
            acquisition process by providing best-priced, standards-
            compliant software products and expanding the use of ESI
            process as the benchmark acquisition strategy.

        In addition to fully participating in the BIC effort, the Air Force
    is leading the way in reducing our headquarters staff. Our plan calls
    for fully complying with Fiscal Year 2000 National Defense
    Authorization Act (NDAA). We completed nearly half of our required
    reductions by the end of the last fiscal year and are aggressively
    working options for the remaining reduction. We have redirected people
    from headquarters duties to war fighting support and are continuing the
    SecAF/CSAF announced ``Headquarters Air Force (HAF) Transformation.''
                                     ______

                Questions Submitted by Senator Mary L. Landrieu

        10. Senator Landrieu. Secretary White, following the aftermath of
    September 11, you were named, in the interim, to serve as the
    coordinator of homeland security efforts within the Department. Given
    the increased funding for combating terrorism, what efforts and
    strategies have you undertaken to ensure the right strategy is in place
    and that the budget addresses the right priorities?
        Secretary White. In addition to my role as the interim DOD
    Executive Agent for Homeland Security, the President directed me to
    serve as the acting Assistant Secretary of Defense for Special
    Operations/Low Intensity Conflict. The Office of the Assistant
    Secretary of Defense for Special Operations/Low Intensity Conflict
    oversaw the compilation of the combating terrorism inputs for the
    fiscal year 2003 budget. Following September 11, 2001 and the initial
    prosecution of the Global War on Terrorism, the Department began a
    process of reviewing its strategy, analyzing its missions, and
    identifying its resource priorities. The Department is using this
    analysis in preparation for our fiscal year 2004 budget input for
    combating terrorism.

        11. Senator Landrieu. Secretary White, did you provide input on
    combating terrorism to the budget and will you coordinate the
    implementation of the policies driving spending on procurement,
    research and development, and training?
        Secretary White. Until the new staff for homeland defense and civil
    support is established, and consistent with the limitations established
    by the Federal Vacancies Reform Act of 1988, I will continue in both
    capacities to coordinate with the appropriate Office of the Secretary
    of Defense offices to ensure combating terrorism resources are sourced
    and proper procurement, research and development, and training
    strategies are pursued and implemented.

        12. Senator Landrieu. Secretary White, would you describe how the
    establishment of Northern Command, which will be a combatant command
    for homeland defense, will affect your role as coordinator of homeland
    security within DOD?
        Secretary White. I am the interim DOD Executive Agent for Homeland
    Security. On March 8, 2002, the Secretary of Defense signed a
    memorandum directing 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
    Secretary of Defense expects a plan to establish this new staff by late
    spring and hopes to stand it up this summer, subject to any legislative
    actions that may be required. The Principal Deputy Under Secretary of
    Defense for Policy was designated by the Deputy Secretary of Defense to
    lead the transition team. It is likely that the new OSD staff will be
    responsible for providing policy and oversight for the new Northern
    command.

                         SCIENCE AND TECHNOLOGY FUNDING

        13. Senator Landrieu. Secretary England, the Navy's budget request
    calls for $1.6 billion for science and technology programs. This is a
    reduction of 23 percent from last year's congressionally appropriated
    levels. It also represents an 8 percent reduction from last year's Navy
    original budget request. This is the largest cut of any of the
    services.
        How is the large cut in Navy science and technology programs
    consistent with efforts to transform the Navy into a force better
    suited to meet the emerging threats of the future?
        Secretary England. While the Navy's Science and Technology (S&T)
    fiscal year 2003 budget has decreased from the fiscal year 2002 Amended
    President's Budget request, it has actually grown by 7 percent, in real
    terms, since the fiscal year 2000 President's budget, in consonance
    with Congress' desire for real program growth. Within existing
    resources, DON has already rearranged its S&T investment portfolio to
    support transformation efforts. Examples of such efforts include:
        Electric Power for Naval Platforms: Efforts in this arena include
    development and at-sea demonstration of cutting edge technologies such
    as superconducting and permanent magnet motors for podded propulsors;
    developing advanced prime power, including high speed superconducting
    generators and fuel cells. Efforts are also focused on developing,
    demonstrating and transitioning electrical auxiliaries such as the
    Electromagnetic Launch and Recovery System (EMALS) for carriers. When
    integrated onboard carriers, electric-based systems such as EMALS, will
    serve as leap-ahead technologies, offering vast improvements in terms
    of operations, maintenance and safety over existing hydraulic, steam
    and pneumatic systems.
        Littoral Support Craft (Experimental) (LSC(X)): As part of the
    LSC(X) program the Navy will be developing and demonstrating--advanced
    hull forms, cutting edge propulsion, material and modular payload
    technologies. Once proven via LSC(X), many these concepts and
    technologies are likely to feed into the future Littoral Combat Ship
    and other existing and future platforms.
        Revolution in Training: Sailors and marines stand as DON's biggest
    asset. As such, it is essential that we improve the training process.
    Along these lines, DoN is developing compact, reconfigurable and
    deployable training systems that significantly improve the
    effectiveness of existing simulation-based training. Other efforts
    include developing adaptive architectures that support efficient and
    effective Command and Control applications, such as Command Center of
    the Future and Knowledge Wall (a prototype which has successfully been
    deployed aboard the U.S.S. Coronado).
        Autonomous Vehicles: Autonomous vehicles stand to significantly
    enhance DON's operational capabilities, while greatly reducing the risk
    faced by the warfighter. The Department is investing substantial
    resources in developing and demonstrating a wide array of advanced
    autonomous vehicles including Unmanned Combat Vehicles--Navy (UCAV-N)
    and Tactical Unmanned Ground Vehicles (UGVs). Other efforts focus on
    enhancing existing systems through the development of intelligent
    navigators, remote docking stations, and enabling collaborative
    behavior among unmanned underwater vehicles.

        14. Senator Landrieu. Secretary England, how is it consistent with
    the Secretary's goal of investing 3 percent of the Department's funds
    in transformational science and technology programs?
        Secretary England. Science and technology serves as an ``enabler''
    for the Service's larger transformational objectives. Within existing
    resources, DON has already rearranged its S&T investment portfolio to
    support transformation efforts. The Department has made a concerted
    effort to increase the S&T budget. The Department of the Navy's Science
    and Technology funding request has exceeded 2 percent per year average
    real growth since fiscal year 2000, and is approximately 2.7 percent.
    For example, during fiscal year 2003 budget development the DON
    increased its S&T Future Years Defense Program (Fiscal Year 2003-2007)
    by +$355 million, with specifically targeted increases in areas
    including:

            - Marine Corps S&T +$156 million;
            - Radio Frequency Systems Advanced Technology +$83 million;
            - Joint Experimentation +$71 million;
            - Force Protection +$45 million; and
            - High Speed Sealift Vessel +$25 million.

        However, in determining whether we are making progress towards a 3
    percent goal, using the prior year appropriated level is not an
    accurate reflection of the Department's priorities because it includes
    significant increases for specific efforts that are not in consonance
    with Department core priorities, often including many items not
    requested by the Department with respect to necessity or timing. Such
    increases in the appropriated level create marginal returns against our
    key priorities and distort the baseline from which we hope to move
    towards the 3 percent goal as we try to include more transformational
    S&T technologies.

        15. Senator Landrieu. Secretary England, how will these cuts affect
    the Navy's in-house scientific, engineering, and technical
    capabilities? How does the Navy plan to make up for these cuts in
    future years?
        Secretary England. Funding stability is one of the keys to ensuring
    stability and viability of the Navy's in-house technical workforce.
    While there have been adjustments in year to year funding, the overall
    trend in Navy S&T through fiscal year 2003 is upwards. Therefore, any
    particular year's decrease should not adversely impact our outstanding
    in-house workforce as long as the overall funding trend remains steady.

                        SCIENCE AND TECHNICAL WORKFORCE

        16. Senator Landrieu. Secretary White, Secretary England, and
    Secretary Roche, in the fiscal year 1999, fiscal year 2000, and fiscal
    year 2001 authorization bills, the Senate Armed Services Committee
    (SASC) has provided the Department with regulatory relief and new
    hiring authorities so that the DOD can waive regulations and establish
    new programs that will enable them to attract and retain the finest
    technical talent in their laboratories. These are difficult issues for
    the government, since most technical workers receive lucrative offers
    from the private sector that leads them to forsake government jobs.
    Although legislation has been passed to help the Department in this
    area, the DOD has made very limited progress in implementing the new
    hiring programs. Over the past few years, Congress has authorized a
    number of pilot programs in defense laboratories to streamline
    procedures and waive unnecessary regulations in order to establish
    innovative hiring programs for technical staff and establish innovative
    cooperative programs with the private sector. Unfortunately, a number
    of these programs have been delayed due to legal and regulatory
    hurdles.
        How are you working to remove those barriers so that these programs
    can continue and expand in order to improve the quality of defense labs
    and test centers, and improve the quality of technical talent that can
    be attracted to these important facilities?
        Secretary England. Some legislative provisions have helped the
    Service laboratories, especially Section 342 of the Defense
    Authorization Act for fiscal year 1995 and Section 1107 of the Defense
    Authorization Act for fiscal year 2000. However, constraints, in terms
    of coverage, duration, and scope, imposed by the Office of Personnel
    Management on the Section 342 personnel demonstrations have greatly
    limited the degree to which participating laboratories could experiment
    with innovative ways to hire, retain, and shape their workforce.
    Section 1107 eliminated controls on high-grade scientific and
    engineering positions, a move that has helped with retention of high-
    quality personnel scientific and technical personnel.
        Of all the recent legislative provisions provided to help the
    Service laboratories with workforce problems, Section 1114 appears to
    offer the greatest possibility of relief. Its coverage is, however,
    limited to Science and Technology Reinvention Laboratories
    participating in the fiscal year 1995 Section 342 personnel
    demonstrations. Whether this potential will be realized will depend on
    OSD's ultimate interpretation and emphasis of this provision.
        The Office of Naval Research initiated a Naval Research Enterprise
    Internship Program for graduates and undergraduates via Navy ROTC. The
    scholarship provides $3,000 to $5,000 to spend 10 weeks in the summer
    working with government scientists and engineers in the labs and
    warfare centers. Over 800 students applied for the 180 positions.
        Currently, a joint Naval Research Advisory Committee study, with
    panel representation from the Army Science Board and the Air Force
    Scientific Advisory Board, and sponsored by the Director Defense
    Research and Engineering, is examining the difficulty of the Service
    laboratories in recruiting and retaining top-quality scientists and
    engineers, as well as other issues related to their ability to remain
    world-class research institutions. The panel is currently examining
    recommendations from past studies of the laboratories, recent
    legislative reforms, including those mentioned above, and input from
    other experts, to develop a set of recommendations for improving the
    ability of these laboratories to attract and retain the best and
    brightest technical talent. The panel has just completed its visits to
    labs and is currently developing its findings and recommendations. It
    plans to submit a preliminary summary of its conclusions to the
    Services and OSD in April or May 2002. A formal report will likely not
    be completed until late Summer 2002.
        Secretary Roche. The Air Force has implemented Laboratory
    Demonstration (LabDemo) for all civilian science and technology
    positions in the Air Force Research Laboratory and is pleased with the
    results of the past 5 years under the trial system. This is a
    demonstration project authorized under the 1995 legislation permitting
    reinvention laboratory demonstration projects. During this time, we
    have implemented additional changes from the original construct, such
    as permitting a rollover of contribution-based salary adjustments to
    annual cash bonuses when there is a cap on giving the individual what
    they have earned. We are currently working plans and procedures to
    distribute and hire 40 scientists and engineers (S&Es) under authority
    of Section 1113 of the 2001 National Defense Authorization Act.
        On the military side we plan to use Critical Skills Retention
    Bonuses on a limited basis and are seeking to identify the funds to do
    so for targeting the retention of S&Es at the mid-career level, where
    we are currently experiencing a retention problem. We have also
    initiated a ``re-recruiting'' campaign focused on the S&E career field,
    where we are individually recruiting current S&E personnel to continue
    their Air Force careers.
        Our entire Air Force Flight Test Center at Edwards AFB, CA, is
    participating in the Department of Defense Civilian Acquisition
    Workforce Personnel Demonstration (AcDemo), authorized by the 1996
    National Defense Authorization Act. We are particularly gratified to
    see an improvement in their ability to recruit high-quality recent-
    engineering graduates as the result of using the new AcDemo pay-setting
    and current recruiting bonus flexibilities. We have also significantly
    reduced our hiring time.
        We recommend authorizing implementation of a DOD alternative
    personnel system as described in the Managerial Flexibility Act that
    will allow expansion of successful demonstration authorities to the
    rest of the workforce. This would allow us to take full advantage of
    all the various initiatives pursued in demonstration projects across
    the Federal Government, and craft a system that will facilitate
    personnel management across the Department, not just among the
    acquisition community and research laboratories. The Managerial
    Flexibility Act contains provisions like streamlined and expedited
    hiring and recruiting, retention, and relocation bonuses that will go a
    long way towards breaking down the barriers that prevent us from
    attracting and retaining the workforce needed for the 21st century. We
    are now working with OSD and OMB on fiscal year 2003 Omnibus proposals
    that also support streamlined hiring and a modern pay and compensation
    system (broad pay banding).
        Secretary White. The Department of the Army has made significant
    progress in developing new hiring programs to take advantage of new
    legislation addressing the scientific and technical workforce.
        Section 245 of the National Defense Authorization Act (NDAA) for
    fiscal year 2000 allows DOD to explore ways to improve operational
    efficiency. DOD directed the implementation of section 245 in June 2001
    and waived certain requirements of the DOD Priority Placement Program
    (PPP) for our pilot labs and test centers, allowing for a shorter, one-
    time clearance process for vacancies.
        Each of the pilot labs is participating in personnel demonstration
    projects and has been testing various hiring flexibilities for at least
    3 years. The labs have also provided additional recommendations to
    expedite hiring engineers and scientists, and we are supporting several
    initiatives such as geographically targeted recruitment and direct
    appointment into competitive service.
        Within the personnel demonstration projects, managers view their
    broad-banded systems as more flexible and effective than the General
    Schedule system. We, therefore, also are working towards achieving a
    broad-banded system Army-wide to capitalize on the best features of
    these projects.
        As a direct result of the program for labs and test centers, we
    anticipate an expansion of the one-time PPP clearance procedure for
    scientific and engineering positions, which will also cover non-pilot
    organizations with research, development, test, and evaluation
    responsibilities. This will further streamline the fill time and hiring
    process. Additionally, the Army has chartered an executive group to
    identify steps to further improve the quality and staffing of our
    scientific and engineering workforce.
        Section 1113 of the fiscal year 2001 NDAA provides the authority to
    appoint scientists and engineers from outside civil service and the
    uniformed services. We surveyed our laboratory community in December
    2001 to determine the greatest need regarding the number and types of
    scientific and engineering positions required at specific locations,
    and we are currently determining the final distributions. To gain
    efficiencies in the implementation of the new authority, we are
    collaborating with the other Services to facilitate recruitment and
    expect to begin hiring later this fiscal year.

        17. Senator Landrieu. Secretary White, Secretary England, and
    Secretary Roche, do you have recommendations for this committee as it
    works to revitalize the defense laboratories and improve the quality of
    the Department's technical workforce?
        Secretary White. The Army laboratories have been active
    participants in multiple approaches to improvement of the technical
    workforce over the years, but more needs to be done. Not only will we
    be exploring other improvements to the scientific and engineering
    personnel systems, but improvements to the work environment and
    infrastructure are just as important. Attracting and retaining top
    quality scientists and engineers not only depends on pay, but also on
    the opportunity and mechanisms to put those talents to work in
    stimulating environments. During the previous series of base closings,
    two new laboratories were constructed at Adelphi and Aberdeen,
    Maryland, while other installations were closed. However, all
    facilities and equipment need to be constantly modernized for
    scientists to maintain their competitive edge. This is an area that we
    would ask you to join us in ensuring that our scientists and engineers
    have the best equipment and facilities in the world to support the best
    fighting force in the world.
        Secretary England. In light of the systemic problems facing the
    Service laboratories, and the urgent need to address them, it appears
    that incremental approaches and piecemeal legislative efforts may no
    longer be sufficient and timely. Moreover, we are approaching the point
    of diminishing returns on trying to make Title 5 practices responsive
    to the needs of a serious research laboratory. Perhaps a more sensible
    approach would be to tailor the governance to the research mission
    rather than the reverse.
        Establishing one or more of the military research laboratories as
    special government corporations may have some merit. The customers for
    the corporations would be the government itself. The corporations would
    survive only to the extent that government-funding agencies were
    prepared to purchase the products/services of the corporations. Such a
    plan would appear to have several advantages over the partial or total
    privatization of a lab: (1) It almost certainly would be less expensive
    in the long run; (2) The staff of such an organization would remain
    Federal employees, and thus able to make decisions or render advice
    without conflicts of interest; and (3) It would be more executable.
        Secretary Roche. The quality of our Scientist and Engineer (S&E)
    workforce is superb. Air Force scientists and engineers guide, produce,
    and sustain the concepts, technologies, and systems that are and have
    been key to successful Air Force operations. Our problem is not the
    quality of our workforce, but its shrinking quantity. The S&E workforce
    of today and tomorrow requires that we recruit, retain, and develop
    sufficient numbers of highly skilled and knowledgeable technical
    professionals; however, current trends could threaten the Air Force's
    ability to recruit and retain a viable civilian and military S&E
    workforce. For example, over the next 5 years, a quarter of the Air
    Force S&E civilian workforce is eligible to retire.
        The Air Force is aggressively addressing the worsening S&E
    retention and recruiting problem and has constituted an S&E Functional
    Management Team to drive a number of initiatives designed to fix the
    recruiting and retention shortfalls of the civilian and military S&E
    workforce, such as Critical Skills Accession and Retention Bonuses to
    obtain and retain members, and re-recruiting key year groups of
    engineers (3-13) by highlighting the benefits of continued service.
    Additional initiatives for which we thank Congress include Direct Hire
    Authority and the authority to hire 40 S&Es for the Air Force Research
    Laboratory from outside the civil service--both of which were granted
    in the Fiscal Year 2001 National Defense Authorization Act.
        I also believe that a strong research program and modern research
    facilities contribute to the recruitment and retention of a top-notch
    technical workforce. Towards this end, I ask for your support of our
    President's Budget request for the Air Force Science and Technology
    (S&T) Program. We have submitted a balanced budget that includes S&T at
    a funding level that meets our projected needs for future warfighting
    capabilities, while sustaining our current forces.

                             TECHNOLOGY TRANSITION

        18. Senator Landrieu. Secretary White, Secretary England, and
    Secretary Roche, the Department continues to have a problem getting
    good return-on-investment on its science and technology dollars, as
    well as a problem getting successful technologies pushed out of
    laboratories and into the hands of warfighters. This is due to a number
    of problems--including lack of funding, regulatory barriers, the
    slowness of the government's funding mechanisms, and others. Last year,
    the Senate Armed Services Committee proposed a new program to promote
    technology transition within the Department. This provision was lost in
    conference. Both the committee and the Department are anxious to
    continue trying to address this issue in the current year.
        One of my priorities this year is to try to help the Department
    address the issue of the transition of good technologies from research
    programs into the hands of warfighters in the field. This is a complex
    issue, but we are working with the Department to address the important
    funding and coordination issues that occur when trying to move
    technologies through the system.
        How are the services trying to accelerate the transition of
    technologies from their science and technologies programs into the
    hands of the warfighters?
        Secretary White. First, allow me to thank you and the committee for
    the tremendously helpful support and leadership you have provided in
    the past in trying to solve this challenge. We must ensure that
    technology has been matured sufficiently in our science and technology
    (S&T) program so it can transition quickly into systems development and
    demonstration (SDD), then to production. We can take time out of the
    transition process by maturing technology in the S&T phase to
    Technology Readiness Level 7--system prototype demonstration in an
    operational environment. By doing this, we spend more in S&T, but save
    time and money in SDD, then proceed faster to production.
        Secretary England. Although I believe the Navy is doing a good job
    of transferring Science and Technology products into the Fleet/Force,
    there is no question that we could do better. We have seen great
    success with the transfer out of the laboratory and into combat of
    items such as the thermobaric weapon, which has been used in
    Afghanistan.
        One way we try to duplicate this kind of discovery to deployment
    transition within the Navy is by strengthening the partnership between
    the Office of Naval Research (ONR) and the schools, universities,
    government laboratories and industry, as well as nonprofit and for-
    profit organizations. We intend to take full advantage of the creative
    genius present in the schools and private sector to meet Navy and
    Marine Corps requirements.
        The ONR Commercial Technology Transition Officer is designated as
    the senior Naval advocate for moving promising technology out of
    commercial research and into systems procured for the Navy/Marine
    Corps. Additionally, ONR established a ``Swamp Works'' office, similar
    in concept to the Lockheed-Martin ``Skunk Works,'' but dedicated to
    addressing critical blue/green, Navy/Marine Corps problems with out-of-
    the-box solutions. ONR also established a Naval Fleet/Force Technology
    Office to strengthen communications between the Fleet/Force and the
    Naval S&T community by assigning Naval Research Science Advisors to
    serve with Fleet/Force commands. ONR also established the Naval
    Research Science and Technology Action Team (NR-STAT) in July 2001 to
    provide technology solutions (from all sources: government, military,
    industry, academic, etc.) to problems identified by warfighters. Since
    the events of September 11, NR-STAT has been a principal conduit for
    technology proposals/solutions in the war against terrorism.
        Secretary Roche. I think the Air Force has done a remarkable job
    getting advanced technologies into the hands of our operational forces.
    Our track record of success in Afghanistan is outstanding. As you point
    out, technology transition is a very complex issue. One must trade off
    the technical maturity of the technology with the potential added
    capability that could be brought to the battlefield. There are, for
    example, severe supportability issues for fielding immature
    technologies.
        In the last year or so, we have started a new process in the Air
    Force that brings the operational user, the Product Centers, and the
    Air Force Research Laboratory together early in the development process
    to identify those technologies that are most important to warfighter
    capabilities. These new Applied Technology Councils (ATCs) offer great
    potential for improving our ability to rapidly and effectively
    transition technologies into advanced capabilities. Additionally, the
    Air Force has begun to use our four-star Science and Technology (S&T)
    Summits to increase the awareness of senior leadership of the
    technologies in development that could provide new capabilities.
        The Air Force continually looks for ways to improve technology
    transition and focus our S&T programs on those capabilities most dear
    to the warfighters and also tries to streamline ways to get these
    capabilities to them as fast as possible. Our S&T Program budget is
    approximately 75 to 80 percent outsourced with the remaining 20 percent
    supporting our scientists, engineers, support personnel, and other
    infrastructure costs. This high level of outsourcing promotes
    relationships between the scientists and engineers conducting the
    research and lays the foundation for technology transition. This
    continuous long-term investment, both in-house and on contracts,
    steadily advances state-of-the-art technologies. Most of the technology
    developed under Air Force lab sponsorship resides in the expertise of
    industry personnel and products. This expertise is applied to proposals
    for advanced systems acquisitions and transitions technology into the
    hands of the warfighter.

        19. Senator Landrieu. Secretary White, Secretary England, and
    Secretary Roche, what guidance and recommendations do you have for the
    committee as we attempt to address this issue that is critical to both
    our military and many of our industrial constituents?
        Secretary White. We believe the key to speeding technology to the
    warfighter is in allowing the S&T community to mature technology
    sufficiently before it goes into production. The Department has
    implemented a metric for technology readiness (Technology Readiness
    Levels, or TRLs) that has helped us transition technology while
    minimizing risk to the acquisition program.
        The committee could help the Services by pursuing an overall
    increase in Service Total Obligation Authority that would be directed
    toward the 6.3 budget activity for the purpose of performing the
    development and tests required to sufficiently mature technology as
    quickly as possible before it goes into production. The committee can
    also help by continuing to support manufacturing technologies efforts
    that work to transition emerging technologies into producible and
    affordable products to support the Army, and by helping provide
    realistic, high fidelity modeling and simulation capabilities to reduce
    both technical and operational testing costs during SDD.
        Secretary England. The successes we have achieved in transferring
    Science and Technology from the laboratory to the Fleet/Force depends
    on sustained long-term investment in S&T. Congress has been very
    supportive in terms of sustained investment, and we are grateful for
    your support.
        Furthermore, the Navy is working to strengthen the partnership
    between the Office of Naval Research (ONR) and schools, universities,
    government laboratories and industry, as well as nonprofit and for-
    profit organizations. Continued robust government sponsorship of
    technology and basic research being conducted by these institutions
    will remain necessary to mature S&T requirements unique to the Defense
    Department.
        Secretary Roche. I believe the most help Congress can provide the
    Air Force to accelerate the transition of technology into acquisition
    programs and to the field is to support adequate and stable funding.
    Science and Technology (S&T) funding that is stable or shows growth,
    promotes project stability to bring new technology to fruition in
    integrated demonstrations. Additionally, Congressional support of Air
    Force transformation to a spiral development acquisition model would be
    highly beneficial. This would allow us to move from a ``be-all-end-
    all'' system solution to incremental steps of increasing capability
    with the possibility to add technology and field interim systems to the
    warfighter sooner.

                             COMMITMENT TO THE B-52

        20. Senator Landrieu. Secretary Roche, it seems to me that we can
    effectively fight the war on terrorism and make strides toward
    transformation. One aim need not suffer at the hands of the other. As
    an example, an old and venerable lady of war--the B-52--has transformed
    itself into an aircraft that can deliver the most modern and
    sophisticated weapons to target terrorist hideouts and destroy
    terrorist training camps. No longer is the B-52 a dumb bomber or a
    carpet bomber; rather, she has established herself as a preeminent
    bomber capable of meeting any mission. Can you please expound upon the
    role of the B-52 in Operation Enduring Freedom and how this 44-year-old
    lady has transformed herself into an airframe that can perform expertly
    for another 40 years?
        Secretary Roche. Together the B-52 and the B-1 have flown 10
    percent of all combat sorties in Operation Enduring Freedom, dropping
    60 percent of the total bomb tonnage. Modifications to the aircraft
    have increased its survivability and lethality. The Situational
    Awareness Defensive Improvement (SADI) and the Electronic
    Countermeasures Improvement (ECMI) have improved survivability through
    enhanced situational awareness and aircraft protection. The Advanced
    Weapons Integration (AWI) and Avionics Midlife Improvement (AMI) have
    increased lethality by allowing the B-52 to carry both modern guided
    weapons and standoff weapons. These improvements are the first in a
    series of time-phased modernization programs that will ensure the B-52
    remains a viable weapons systems through 2040.

                        MODERNIZATION OF THE B-52 FLEET

        21. Senator Landrieu. Secretary Roche, do the plans for increasing
    military expenditures to $451.4 million by fiscal year 2007 call for
    the full modernization of the B-52 fleet, including the Ready Reserve
    B-52s at Minot Air Force Base? After all, the B-52 has been a stalwart
    in Operation Enduring Freedom and is expected to remain in service
    until fiscal year 2040.
        Secretary Roche. The Air Force has initiated a time phased B-52
    modernization program. The modernization program will increase B-52
    lethality, survivability, flexibility, and responsiveness. The Air
    Force has a total of 94 B-52 aircraft. The B-52 force structure
    requirement is 76 aircraft. The additional aircraft are excess to need;
    therefore, the Air Force is not funding the modernization of the 18
    excess aircraft.

             INADEQUACY OF NAVY SHIPBUILDING IN PRESIDENT'S BUDGET

        22. Senator Landrieu. Secretary England, the President's budget
    calls for the construction of five new ships and the conversion of two
    submarines. The President proposed a $48 billion increase in defense
    spending for fiscal year 2003. I will support whatever amount is deemed
    necessary for the protection of this country. But, the President's
    budget, especially in light of the increase in expenditures, woefully
    shortchanges necessary shipbuilding that will both transform our
    military and protect our forces and our people. As you have said, the
    Navy must procure ``8-10 ships each year to sustain current force
    levels over the long term,'' yet this budget calls for only five new
    ships. To paraphrase your submitted statement, you say the Navy plans
    to procure more ships in the out-years, but fiscal year 2003 is not the
    best time to accelerate ship procurement. Frankly, I can think of no
    better time. However, if the President and the Department of Defense
    deem the allocation of funds to the war on terrorism as the better
    recipient of funds than shipbuilding and procurement, and the war on
    terrorism is expected to last years, won't we simply always hear that
    this year, and the next year, and the year after, is not the right year
    to procure additional ships?
        Can't the Department see that shipbuilding and procurement are
    essential to the war on terrorism?
        Secretary England. We are constantly assessing requirements and
    reevaluating our priorities due to changes in the threats and the
    President's budget represents the best balance of resources to
    requirements for those threats.

                         LPD 17 PRODUCTION ACCELERATION

        23. Senator Landrieu. Secretary England, in your prepared
    statement, you specifically state that procurement of a second LPD 17
    should not occur this year because ``the LPD 17 design is still not
    complete. . . Although we need to replace our older amphibious ships,
    LPD 17 is not yet ready for rate acceleration.'' Generally, the Navy
    seeks 40 percent design completion before funding a new ship, yet the
    LPD 17 is anywhere from 91 percent to 95 percent design complete.
        How can you say the LPD 17 is not ready for rate acceleration and
    has not completed its design, especially since as many as eight DDGs
    were under contract well before that ship was 95 percent complete.
        Secretary England. A key tenet of the LPD 17 program is to have a
    mature, stable design before proceeding with production. This will lead
    to more efficient and less costly ship production effort than has
    traditionally been experienced in Navy shipbuilding. The detailed
    design effort is now about 95 percent complete and the production
    design is currently 79 percent complete. During production design, the
    3-D Computer Aided Design models are translated into actual work
    instructions for the production floor. At this time, less than 20
    percent of the lead ship production has been completed. While
    production progress to date using the production design package has
    been satisfactory, production has not progressed to the point where I
    am confident that technical, cost and schedule risks have been
    sufficiently mitigated.
        The comparison to the DDG program is interesting. With this year's
    budget request, we will have almost half of the 12 ships in the LPD 17
    class authorized. The DDG program had three of the 64 ships of the
    class under construction, and 13 ships under contract at similar point
    in detailed design completion. However, the lead ship production was
    much further along than LPD 17, with DDG 51 already in the water
    undergoing system light-off and testing.

                                     JSTARS

        24. Senator Landrieu. Secretary Roche, this war has proved that
    intelligence, surveillance, and reconnaissance (ISR) are at a premium.
    In fact in this week's Business Week you discuss the achievements of
    ISR in Afghanistan and how it was your goal to paraphrase Business Week
    that ``the Landscape below [be] so well-mapped by infrared and video
    cameras lasers, and radar sensors that the enemy couldn't hide even at
    night.'' Our ISR capabilities have allowed us to achieve that goal. The
    men and women involved in ISR in the air and on the ground should be
    praised for their excellence in execution of their jobs. In particular,
    I want to laud the JSTAR for its intelligence, surveillance, and
    reconnaissance capabilities. Could you please comment on the JSTAR's
    role in Operation Enduring Freedom?
        Secretary Roche. Joint STARS has been a key asset during Operation
    Enduring Freedom and is particularly significant in our continuing
    effort to target both the leadership and ground forces of the Taliban
    and al Qaida. Joint STARS has not only provided invaluable ground
    surveillance and threat warning to our forces in Afghanistan, but has
    also been pivotal during the targeting and execution battle management
    of attack operations.
        The aircraft's synthetic aperture radar serves as the only system
    capable of providing wide-area ground movement surveillance, allowing
    us to monitor suspect Taliban and al Qaida vehicle traffic over a broad
    coverage area. The Joint STARS crew has also been able to screen the
    convoy routes of friendly forces, as well as the ingress routes of our
    own helicopter missions. Due to Joint STARS' robust communications
    capabilities, the mission crew can rapidly correlate information with
    other sensors, such as Rivet Joint, U2, Predator, and Global Hawk, to
    enable responsive identification, exploitation, and if appropriate,
    targeting of enemy forces. Joint STARS air battle managers, operating
    within the rules of engagement, direct on-station strike aircraft to
    engage enemy ground forces.
        These dynamic capabilities have contributed extensively to our
    present success supporting the on-going Operation Anaconda Joint STARS
    surveys the area of operation for enemy movement and provides
    information on traffic of interest either through data-links or voice
    reports. Based on the developing situation, the Joint STARS crew works
    directly with ground and airborne controllers to rapidly process air
    support requests from our ground forces and assign strike assets to
    engage Taliban and al Qaida forces. Operating in conjunction with
    strike assets, such as the A-10, Joint STARS has provided highly
    effective and lethal support for our ground forces.
        The contributions of Joint STARS in this operation demonstrate the
    versatility of this system and its ability to perform a spectrum of
    missions that support Operation Enduring Freedom.

                              NEWER ISR AIRFRAMES

        25. Senator Landrieu. Secretary Roche, as a result, can we expect
    to see more technological growth and more or newer airframes for this
    particular weapon system in the fiscal year 2004 budget and beyond?
        Secretary Roche. The Air Force is quite pleased with the role that
    Joint STARS and other ISR aircraft have played in Operation Enduring
    Freedom. Last week during a CSPAN interview with General Jumper and I,
    I think the Chief called it ``a magnificent aircraft.'' I couldn't
    agree with him more.
        We are planning to continue to equip the E-8 with new technologies.
    One key upgrade will be to increase its ability to get data off board
    to our F-15E strike aircraft with a new Link-16 upgrade. That's a great
    example of the horizontal integration of platforms vision for the Air
    Force. We also plan to enhance connectivity with the Air Operations
    Center and other ground elements with a new DALIA SATCOM radio.
        However, even with these and other modifications, the Joint STARS
    is not sufficient to meet our future needs. It's built out of an old
    707 airframe that's going to cost more and more to maintain. We have a
    new AESA based radar technology that needs a lot of more power from the
    engines. The fiscal year 2004 budget will continue a major ramp-up of
    our activity to transition off the 707 airframe and onto a brand new
    767-400. The new radar capabilities will be revolutionary. In fact,
    they will go far beyond what we can accomplish today, especially for
    combat identification of friend and foe on the ground and in the air,
    and for cruise missile defense.
        The combination of longer range, heavier payload, higher altitude,
    and a truly extraordinary radar capability will eventually allow us to
    find and target threats with a very high degree of confidence and with
    much less risk to our manned platforms. This multi-sensor command and
    control aircraft, or MC\2\A, will be the hub of a constellation of
    manned and unmanned ground, air and space assets. We plan to buy the
    testbed in fiscal year 2003, and field the first aircraft in fiscal
    year 2010.
        Joint STARS is the current workhorse for our GMTI capability and
    will remain so through the middle of the next decade. The future is the
    767 based MC\2\A, and we will be focusing our priorities on spiraling
    far greater capability onto a brand new platform.
                                     ______

                   Questions Submitted by Senator Bill Nelson

                               CONCURRENT RECEIPT

        26. Senator Bill Nelson. Secretary White, Secretary England, and
    Secretary Roche, the budget request does not include funding necessary
    to allow concurrent payment of retired pay and disability compensation
    (est. $3 billion annually). How did you advise the Secretary of Defense
    on funding for concurrent receipt?
        Secretary White. Since the Army did not budget for this item, we
    did not advise the Secretary of Defense on this issue.
        Secretary England. Throughout the course of last year, the
    Department of the Navy has replied to numerous bills, within both the
    House and the Senate, which, in various forms, proposed concurrent
    receipt of military retirement and Veterans disability. In each case
    our replies have been staffed through both the Chief of Naval
    Operations and the Commandant of the Marine Corps. The Office of the
    Assistant Secretary of the Navy (Manpower and Reserve Affairs)
    coordinated consolidated Departmental replies that were staffed through
    the Office of Legislative Affairs and, when appropriate, the Office of
    Program Appraisal, to my office. As none of the numerous House and
    Senate concurrent receipt bills proposed have provided, or even
    proposed to provide additional funding to cover the increased cost to
    the services, I have advised against concurrent receipt.
        Secretary Roche. The Air Force has not budgeted for this item in
    the fiscal year 2003 President's Budget and cannot absorb the
    significant costs without additional funding. Before any implementation
    decision, the department should thoroughly assess this benefit weighing
    the impact on the beneficiary and the department.

        27. Senator Bill Nelson. Secretary White, Secretary England, and
    Secretary Roche, what is your personal opinion of the justifiability of
    eligible retirees receiving their full retired pay and disability
    compensation?
        Secretary White. My decision to support concurrent receipt is based
    on my belief that it is equitable to allow all entitled groups of
    retirees to receive full retirement and full disability compensation.
    Military retirees should not be singled out as the one group whose
    retired pay is offset because of compensation paid due to a service-
    connected disability. Those who make a career of military service are
    as deserving of full compensation as those who make a career of
    civilian service. Recently, the Army Family Action Plan Conference
    voted the issue of concurrent receipt as the most important of their
    top five issues affecting Army families.
        Secretary England. I would like to go on record as saying that I
    recognize the importance of properly compensating veterans for injuries
    sustained during military service. This is an emotional issue with
    retirees, veterans' groups as well as our sailors and marines. We are
    working with OSD and the rest of the DOD in providing input to the SAG
    Corp., who are independently analyzing whether or not we provide
    adequate benefits to our military retirees. That report should be
    complete next month.
        Secretary Roche. We certainly recognize the importance of properly
    compensating veterans for injuries sustained during military service.
    We also recognize that there are two competing viewpoints on whether
    concurrent receipt is justified. Last year's Budget Resolution directed
    DOD to study this issue and report their findings. We understand that
    they have undertaken this study, beginning with an independent review
    of the matter. We anticipate that they will share the results with the
    Services in late spring.

        28. Senator Bill Nelson. Secretary White, Secretary England, and
    Secretary Roche, if Congress provides funding to pay for concurrent
    receipt as authorized last year, would you recommend that the President
    veto the appropriation?
        Secretary White. I am not able to provide a sound recommendation to
    the President without first analyzing the impact of concurrent receipt
    on the Army. No such analysis has been conducted at this time.
        Secretary England. Concurrent receipt would cost DOD roughly $3
    billion per year. Compounded over time, the current estimates are that
    the cost for 10 years would be $40-$50 billion. With numerous programs
    competing for each budget dollar, the Department of the Navy cannot
    afford to bear its share of that burden without significant additional
    funding from Congress. In addition, the Navy and Marine Corps have
    current bills to pay and future requirements which need funding. At
    this juncture, I certainly would not recommend a Presidential veto of
    any proposal offering additional funding to DOD and the Department of
    the Navy. I will caveat that remark by saying that I await the result
    of the SAG study and a determination by the Services that concurrent
    receipt with additional congressional funding will not jeopardize
    current obligations or future requirements.
        Secretary Roche. Realizing the substantial commitment involved with
    funding concurrent receipt, we would review and assess the entire
    bill's impact and make an appropriate recommendation.

                         MILITARY CONSTRUCTION AND BRAC

        29. Senator Bill Nelson. Secretary White, the budget request
    reduces funding for ``low priority'' new construction that was planned
    in previous years. Construction is slowed obviously in anticipation of
    BRAC authority in fiscal year 2005, yet this budget request does
    include new construction that will, in some cases, just be starting in
    fiscal year 2005. What specific guidance from the Department of Defense
    have you been given with regard to military construction?
        Secretary White. Department of Defense guidance to the Army was to
    fund the President's objective of transforming the military for the
    21st century while continuing to improve the quality of life,
    readiness, and infrastructure. Specifically, the guidance directed the
    Services to fully sustain the planned inventory of facilities; then,
    commensurate with BRAC, fund restoration and modernization and
    replacement at a 67-year recapitalization rate for approximately 80
    percent of the current infrastructure by fiscal year 2010 while
    concentrating funding on C-3 and C-4 facilities; and meet new footprint
    construction to meet force structure changes in the year needed.
    Guidance is also to eliminate substandard family housing by 2007.
        Secretary England. The Department of the Navy did not reduce the
    Military Construction account in anticipation of BRAC 2005. The
    Secretary of Defense provided broad guidance to:

             Seek to provide modern, ready and effective
            installations infrastructure to support the operations and
            maintenance of U.S. forces and provide a quality working
            environment for U.S. military and civilian personnel;
             Fund facility restoration, modernization and
            replacement at a 67-year Recapitalization rate by fiscal year
            2010;
             Concentrate funding on C-3 (have serious deficiencies)
            and C-4 (do not support mission requirements) facilities most
            critical to an installation's mission; and
             Fund the cost of new footprint construction in time to
            accommodate new system acquisitions and force structure
            changes.

        Secretary Roche. DOD Fiscal Guidance, provided to Service
    Secretaries in Aug. 2001, told us to ``fund to support a trajectory
    that moves infrastructure to best practices (funding that sustains a
    rate of recapitalization at approximately 67 years) by fiscal year 2010
    for required base structure, which should be set at approximately 80
    percent of current infrastructure.'' Similarly, according to Defense
    planning that is commensurate with appropriate BRAC, components shall
    fund facility restoration, modernization, and replacement at a 67-year
    recapitalization rate for approximately 80 percent of the current
    infrastructure by fiscal year 2010.

        30. Senator Bill Nelson. Secretary White, how did you use that
    guidance to determine what kinds of projects are acceptable and which
    are not?
        Secretary White. Our military construction budget request will fund
    our highest priority facilities. Transformation, barracks, strategic
    mobility, Army National Guard division redesign, and chemical
    demilitarization programs are funded in this budget request.
    Substandard family housing is on track to be eliminated by 2007. The
    remainder of this budget request supports the restoration and
    modernization projects at a recapitalization rate of 123 years.
        Secretary England. The Navy convenes a Shore Installations
    Programming Board and the Marine Corps convenes a MILCON Program
    Evaluation Group each year to consider, evaluate, and prioritize
    military construction projects. Projects are selected based on a number
    of different criteria, including Department of Defense/Department of
    the Navy guidance, Service criteria, fleet priorities and the most
    critical readiness, quality of life, and compliance needs.
        Secretary Roche. We developed our program in accordance with
    Defense plans that are within budget constraints.

        31. Senator Bill Nelson. Secretary White, Secretary England, and
    Secretary Roche, in your estimation, what kind of a military
    construction backlog could be created under this strategy, and how do
    you plan to fund the ``bow-wave'' of projects that were delayed after
    BRAC is decided?
        Secretary White. There will be no additional backlog in the Army's
    military construction program. The Army currently has a backlog of
    military construction projects that is reflected in the condition of
    our facilities which are rated C-3 as reported in our installation
    status report. The backlog, or bow-wave, is large and will require a
    program of focused investments and higher funding to improve our
    facilities. Our plan is to follow Office of the Secretary of Defense
    guidance to increase funding for sustainment of our existing inventory
    to 100 percent of our annual requirement; to increase our rate of
    recapitalization of facilities to a 67-year rate by 2010; and to reduce
    facility deficits in 20 years.
        Secretary England. Since the Department of the Navy did not delay
    projects in anticipation of future base closure, there is no MILCON
    backlog ``bow-wave.''
        Secretary Roche. The Air Force did not consider BRAC when
    prioritizing the fiscal year 2003 President's budget. We developed our
    fiscal year 2003 Presidents' budget submittal based on the prioritized
    needs of the Total Air Force, within available funding.

        32. Senator Bill Nelson. Secretary White, Secretary England, and
    Secretary Roche, what criteria, in your opinion, are most important in
    BRAC assessment?
        Secretary White. The Fiscal Year 2002 Defense Authorization Act
    includes the authority to conduct an additional round of base closure
    and realignment actions beginning in 2005. In April 1998, the
    Department of Defense delivered a report to Congress reaffirming the
    Army's need for additional BRAC rounds. The report named no
    installations and provided only rough estimates of excess Army base
    capacity. A much more thorough analysis of all Army installations will
    be necessary to implement the fiscal year 2005 authority. There are no
    installations currently under future BRAC analysis.
        The criteria for assessment of new BRAC have not been determined.
    According to the 2002 National Defense Authorization Act, Congress has
    required the Secretary of Defense to publish the proposed criteria in
    the Federal Register by December 31, 2003. The selection criteria
    ensures that military value is the primary consideration in making
    recommendations for closure or realignment of military installations.
        Secretary England. Per section 2913 of the amended Base Closure and
    Realignment Act, ``military value'' must be the primary consideration
    in making of recommendations for the closure or realignment of military
    installations in 2005. The amendment further provides that ``military
    value'' shall include at a minimum:

             Preservation of training areas suitable for maneuver
            by ground, naval, or air forces to guarantee future
            availability of such areas to ensure the readiness of the Armed
            Forces;
             Preservation of military installations in the United
            States as staging areas for the use of the Armed Forces in
            homeland defense missions;
             Preservation of installations throughout a diversity
            of climate and terrain areas in the United States for training
            purposes;
             The impact on joint war fighting, training, and
            readiness; and
             Contingency, mobilization, and future total force
            requirements at both existing and potential receiving locations
            to support operations and training.

        Secretary Roche. New construction is prioritized by the Air Force
    according to need. Construction is also evaluated in relation to all
    mission requirements of the Air Force including readiness,
    modernization and quality of life. The MILCON budget for the Air Force
    does not take into account future BRAC rounds. MILCON in the past has
    not been predicated on BRAC and will not be as we approach BRAC in
    fiscal year 2005.
        For fiscal year 2003, the Air Force's facility and infrastructure
    priorities are to sustain existing facilities, improve quality of life
    by investing in housing for both married and single members, ensure
    compliance with existing environmental statutes, and support
    requirements for new missions and weapon systems.
        The current legislation states military value will be the primary
    consideration in making our recommendation for closure or realignment.
    Our review will be based on mission and force-structure first, and then
    the final OSD selection criteria transmitted to Congress. Emphasis will
    be placed on installations that maximize operational and training
    capability today and in the future.

        33. Senator Bill Nelson. Secretary White, Secretary England, and
    Secretary Roche, what assessment problems of the past rounds are you
    eager to avoid?
        Secretary White. Based on the results of the assessment criteria
    used in past rounds of BRAC, there were no significant problems
    identified.
        Secretary England. Prior rounds of base closure followed the law in
    effect at that time in assessing military value as the paramount
    consideration. The specific elements of ``military value'' to support
    BRAC 2005 will be developed by OSD, in conjunction with the military
    departments. We would expect consideration for and greater sensitivity
    to sustainable readiness (i.e., contend with ``encroachment'' issues in
    and around military bases and training ranges) to support future
    national defense needs.
        Secretary Roche. New construction is prioritized by the Air Force
    according to need. Construction is also evaluated in relation to all
    mission requirements of the Air Force including readiness,
    modernization and quality of life. The MILCON budget for the Air Force
    does not take into account future BRAC rounds. MILCON in the past has
    not been predicated on BRAC and will not be as we approach BRAC in
    fiscal year 2005.
        For fiscal year 2003, the Air Force's facility and infrastructure
    priorities are to sustain existing facilities, improve quality of life
    by investing in housing for both married and single members, ensure
    compliance with existing environmental statutes, and support
    requirements for new missions and weapon systems.
        Throughout the first four BRAC rounds, the Air Force identified and
    resolved a variety of assessment issues. Solutions were incorporated in
    each successive round to where the Air Force is now comfortable with
    its assessment process.

        34. Senator Bill Nelson. Secretary White, Secretary England, and
    Secretary Roche, arguably, National Guard and Reserve facilities
    modernization and maintenance backlog reduction should be BRAC neutral
    and the pause in active military construction that you apparently have
    decided upon could be an opportunity to reduce deferred new and
    improved facilities work. Why then are there no National Guard or
    Reserve military construction projects in your fiscal year 2003 request
    for units or activities in Florida?
        Secretary White. The Army Reserve is currently designing and
    constructing four projects with a total programmed amount of $80
    million in Florida. In fiscal year 2001, the Army Reserve awarded a
    Joint Armed Forces Reserve Center project in Orlando, an Aviation
    Support Facility in Clearwater, and Phase I of a multiphase Armed
    Forces Reserve Center in St. Petersburg. In fiscal year 2002, the Army
    Reserve will award the remainder of the multiphase project to construct
    an Armed Forces Reserve Center in St. Petersburg. These recent projects
    took care of our most pressing construction needs for Florida. The
    facility requirements for our other Florida construction needs are
    still in the early stages of development.
        The Army National Guard (ARNG) military construction budget request
    for fiscal year 2003 is $101.595 million for 13 projects. The ARNG
    selection process is determined by prioritizing construction projects
    based on state priority; condition of existing facility regarding
    health, safety, and environmental issues; age and condition of existing
    facility; equitable distribution of project funding to each state; new
    mission/force modernization; and joint use.
        Additionally, Florida's number one priority for this year, a
    Combined Support Maintenance Shop at Camp Blanding, is funded in the
    ARNG Future Years Defense Plan in 2007 at $14.1 million.
        Secretary England. There were no requirements for Naval Reserve
    military construction projects in Florida that merited consideration in
    developing the fiscal year 2003 budget request. Reserve military
    construction requirements in Florida have largely been met from
    construction projects funded in recent years.
        Secretary Roche. We developed our total force facility program in
    accordance with Defense planning that is within budget constraints. The
    Air Force Reserve and Air National Guard fiscal year 2003 MILCON covers
    new military construction projects at Portland, OR (AFR), and at
    Jackson MS (ANG) and Sioux City IA (ANG).

                        STATIONING OF THE ATLANTIC FLEET

        35. Senator Bill Nelson. Secretary England, for example, all
    Atlantic Fleet nuclear aircraft carriers are now crowded into one Naval
    Station in Norfolk. Is it wise to allow this vulnerable concentration
    of valuable ships to continue or would it be more prudent to station
    one or more of our nuclear aircraft carriers at other locations? This
    should obviously impact on stationing and construction decisions. What
    approach is the Navy taking in this particular case?
        Secretary England. The Department is in the process of validating
    our force protection requirements and implementing the necessary
    improvements to ensure the protection of our assets. The stationing of
    carrier assets on the east coast will consider all factors associated
    with home porting, including operational, security, economic and
    quality of life issues.

                          FUTURE MILITARY CONSTRUCTION

        36. Senator Bill Nelson. Secretary England and Secretary Roche, how
    long a view is reflected in this MILCON request--that is, are you
    merely trying to avoid committing to construction at installations that
    may change after 2005, or are you looking well into the future,
    carefully considering how to station your forces well into this
    century?
        Secretary England. The Fiscal Year 2003 MILCON 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 and resulting infrastructure requirement and
    BRAC 2005 recommendations is just now beginning. Once the
    infrastructure rationalization is complete the MILCON program will
    reflect the identified priorities.
        Secretary Roche. We did take a long-term view when developing our
    fiscal year 2003 military construction budget request. Our program was
    developed using a facility investment strategy that includes the
    following objectives: accommodate new missions; invest in quality of
    life improvements; and sustain, restore, and modernize our
    infrastructure. Because we cannot predict the outcome of future BRAC
    rounds, we did not consider BRAC when making our prioritization
    decisions.
        This year's military construction request includes $339 million for
    projects that target new mission beddown and force realignment
    requirements with need dates in 2004 and 2005.

        37. Senator Bill Nelson. Secretary England and Secretary Roche,
    what principles or criteria are guiding your deeper view future of Navy
    and Air Force infrastructure requirements?
        Secretary England. Quality of life and quality of the work
    environment are important factors in retaining sailors, marines, and
    their families. We must continue to invest to support our number one
    resource--people.
        As the Naval Team transforms to capabilities that support Naval
    Operational Concepts we will rationalize the infrastructure to minimize
    our footprint ashore while providing the required support to the fleet
    and fleet Marine force. The streamlined infrastructure will address all
    antiterrorism force protection issues.
        We will collaborate with OSD, Army, Air Force, and defense agencies
    to eliminate unneeded support facilities. We will implement better
    business practices to delivery quality, cost-effective services that
    support the warfighter.
        Secretary Roche. Our $677 million family housing replacement and
    improvement request is consistent with the Air Force Family Housing
    Master Plan and has us on a glide slope to eliminate housing unit
    deficits and recapitalize our inadequate units by 2010.
        Our $150 million dormitory investment request was built from the
    Air Force Dormitory Master Plan and keeps us on target to eliminate our
    dorm room deficit and convert or replace our worst dormitories by 2009.
        Finally, we have included funding necessary to fully sustain our
    physical plant and to start to buy down the backlog of restoration and
    modernization requirements associated with our existing physical plant.
    If we are able to sustain our programmed level of restoration and
    modernization investment beyond 2007, we expect to eliminate that
    backlog by 2010.

                    THE NATIONAL GUARD AND THE WAR ON DRUGS

        38. Senator Bill Nelson. Secretary White and Secretary Roche, over
    the years, our National Guard support for State counterdrug efforts
    have paid huge dividends in reducing drug traffic and terrorist threats
    along our borders. The counterterror benefits of these programs are
    apparent; however, DOD consistently underfunds this effort in annual
    budget requests. Even now, underfunding the fiscal year 2002 Guard
    support for State counterdrug activities will result in the loss of
    800-1,000 Guard members supporting counterdrug efforts around the
    Nation. In Florida, we will lose 70 of our 160 Guardsmen and women
    support of State and Federal efforts to stop the flow of drugs.
        Will the new homeland security command contemplated by DOD have the
    mission to support Federal and State counterdrug operations?
        Secretary White. The Department is currently reviewing the missions
    the Northern Command will undertake with regards to homeland defense
    and civil support. The Department provides considerable support to
    civil authorities in the area of counternarcotics. We are also
    reviewing our counternarcotics policy. Therefore, it is premature for
    me to commit to any future role the new command will have in the
    counterdrug program.
        Secretary Roche. The Chairman of the Joint Chiefs of Staff directed
    that Joint Forces Command assemble an implementation staff to determine
    the area of responsibility, inter-relations and mission for the
    designated Commander in Chief (CINC). These implementation
    deliberations will define the regional influence for the contemplated
    Command. The interface for the new CINC with the various standing,
    functional entities operating within the region will be documented. The
    list of considerations includes counterdrug, counterterrorism,
    counterproliferation and all other principal DOD mission areas. Once
    the implementation staff formulates a concept that receives CJCS and
    SECDEF approval, an affirmed plan of action will detail the
    subordination, supporting and supported functions for all impacted
    organizations within the area of responsibility.

        39. Senator Bill Nelson. Secretary White and Secretary Roche, what
    is your commitment to the National Guard's participation in
    counterdrug/counterterror operations in support of State law
    enforcement agencies?
        Secretary White and Secretary Roche. The Department is currently
    reviewing our counternarcotics policy. Therefore, it is premature to
    commit to any future level of National Guard participation in
    counterdrug operations in support of State law enforcement agencies.

        40. Senator Bill Nelson. Secretary White and Secretary Roche, a
    number of my colleagues--in the Senate, on this committee, in the
    House--and I recently wrote to the President asking him to try to find
    the funds necessary to keep the Guard's counterdrug support operating
    at its current levels. Are you aware of this shortfall and are you
    engaged in the effort to try to identify funds that could be used to
    cover the immediate requirement? Will you request funds for this effort
    as part of the fiscal year 2002 supplemental appropriations request
    that we understand is currently under consideration?
        Secretary White and Secretary Roche. Staff is working at finding a
    funding solution for a reasonable level of National Guard support to
    the States.
        Since we are currently reviewing our counternarcotics program, it
    is premature to commit to a future request for counternarcotics
    funding.

                                SPACE OPERATIONS

        41. Senator Bill Nelson. Secretary Roche, the Department of Defense
    budget request indicates a range of support for increased or improved
    capabilities in space to support military operations--particularly in
    intelligence, geo-location, and communications. The budget request also
    reduces funding for important space programs that have failed to
    progress adequately--such as the Expendable Launch Vehicle (ELV). The
    Department's emphasis appears to be on the payload, but there is
    significant risk to our national capacity to reliably get our critical
    defense systems into space without support for the launch programs,
    such as the Space Launch Initiative.
        Some in the space community caution NASA to maintain the
    ``firewall'' between military and civil space activities. This cautious
    approach to NASA-DOD cooperation ignores the reality of greater inter-
    agency integration with common objectives to save money and denies NASA
    a critical and appropriate role in supporting public safety and global
    security. I have argued that a national space policy that limits DOD's
    role in reusable launch vehicle (RLV) development may need to be
    revisited to allow significant DOD contribution to the Space Launch
    Initiative. What is your position on the future of cooperation with
    NASA for critical, common space functions such as space lift? Will you
    use the Shuttle to meet DOD space delivery requirements?
        Secretary Roche. The USAF fully supports cooperative efforts with
    NASA to maximize synergy on common space functions such as spacelift.
    Due to national policy restrictions and overall costs, DOD has no plans
    to use the Shuttle for major DOD payloads. However, the DOD does use
    the shuttle for a variety of space experiments and small payloads. We
    are fully engaged with NASA planning for future launch and range
    capabilities. The USAF and NASA have conducted a joint review to
    harmonize future RLV technology efforts. Although our organizations
    have differing launch requirements, we see benefit in working closely
    with NASA in a building block approach to achieve affordable, routine,
    and responsive access to space. Additionally, NASA and the Air Force
    have formulated a Memorandum of Agreement that establishes policies,
    roles, and responsibilities in pursuit of advanced launch and test
    range technologies that are applicable to expendable & reusable launch
    vehicles and ballistic missile testing. In meeting the goal of a
    coordinated national focus on next-generation technologies, NASA and
    the Air Force have established the Advanced Range Technology Working
    Group to serve as a forum of U.S. parties who have an interest in space
    launch support technologies.

        42. Senator Bill Nelson. Secretary Roche, the Air Force reduces
    funding for and is restructuring the Evolved Expendable Launch Vehicle
    (EELV) program. A reduction of $400 million from fiscal year 2001
    funding projections. What exactly is the problem? How will the Air
    Force reduce risk in this program from this point on? [NOTE: Boeing has
    expressed concern over use of Russian engines in Lockheed Martin's
    Atlas V version of an EELV.]
        Secretary Roche. EELV development program is on track and we expect
    first launches of the Atlas V and Delta IV this year. EELV funding was
    adjusted as necessary to meet requirements of delayed launch dates of
    Satellite customers. The EELV Program has extensive and detailed
    mission assurance processes. In 1999, the White House directed a Space
    Launch Broad Area Review and the AF has implemented additional mission
    assurance efforts, to further reduce risk.

        43. Senator Bill Nelson. Secretary Roche, in a briefing provided by
    the Air Force to the Armed Services Committee, the Air Force request
    provides $1.6 billion in this request for Space Operations funding
    including 50 launches (33 DOD, 4 Commercial and 13 Civil), and sustains
    2 ranges and 45 facilities. Is this number of planned launches correct?
        Secretary Roche. The number of planned launches is correct, however
    the breakout is as follows: 16 Civil launches (3 shuttle launches and
    13 expendable launch systems); 31 DOD launches (13 space launch and 18
    ballistic missile tests); and 3 commercial launches. These figures are
    subject to change due to satellite program requirements and Air Force
    priorities.

        44. Senator Bill Nelson. Secretary Roche, does the fiscal year 2003
    budget request fully-fund DOD and Air Force requirements for launch
    support and range sustainment/improvement? Where have you accepted the
    greatest risks in this funding level?
        Secretary Roche. The fiscal year 2003 budget request fully funds
    launch and test support operations, sustainment, and modernization. The
    greatest risk we face is the challenge of keeping the modernization of
    range systems on track while concurrently supporting ongoing launch and
    test operations.
                                     ______

                   Questions Submitted by Senator Ben Nelson

                        CHEMICAL AND BIOLOGICAL WEAPONS

        45. Senator Ben Nelson. Secretary White, Secretary England, and
    Secretary Roche, I am concerned that a desperate regime making
    desperate decisions about its survivability, will not hesitate to use
    chemical and biological weapons on our service men and women. Have you
    addressed this in your service budgets and more importantly have you
    addressed this with our commanders as a very viable threat, more so
    than in the past?
        Secretary White. Congress established a Joint Service Chemical and
    Biological Defense Program (CBDP) to provide world-class chemical and
    biological defense capabilities to allow our military forces to survive
    and complete their operational missions in battlespace environments
    contaminated with chemical or biological warfare agents. The program is
    under the oversight of Deputy Assistant to the Secretary of Defense for
    Chemical and Biological Defense, and all funding is centralized in a
    Department of Defense account. Funding requests may not be included in
    the budget accounts of the military departments.
        Currently the individual Services, working within the framework of
    a Joint Service Agreement, have planned and supported a robust
    coordinated program. This program is coordinated with the Joint Staff
    and the CINCs each year during development. The fiscal year 2003 budget
    request for the CBDP is approximately $1.374 billion, which is
    significantly larger than any previous year's budget. The budget
    request focuses on research, development, and acquisition programs
    supporting contamination avoidance (to include detection and
    identification) and NBC battle management (to include reconnaissance
    and early warning), force protection (to include individual protection,
    collective protection, and medical support), and decontamination
    supporting our warfighters.
        In addition to the primary focus on warfighter requirements, this
    year's budget invests a significant amount towards chemical/biological
    defense homeland security initiatives. This includes the procurement of
    CB installation protection and emergency first response equipment, as
    well as CB defense equipment to support the Weapons of Mass Destruction
    Civil Support Teams (WMD-CST). In addition, research funding is
    provided to support a biological counter-terrorism research and a
    biological defense homeland security support program to develop and
    deploy a multi-component, multi-organizational defense capability
    targeted to urban areas, other high-value assets, and special events.
    Collectively, the past and future efforts of the CBDP will ensure that
    our military forces have the full dimensional protection required to
    succeed in the presence of chemical and biological warfare threats.
        With respect to the our instructions to our Major Commands
    regarding the viability of this threat, and more importantly our
    response to the increased concern over chemical and biological
    defenses, we have included in our draft strategic campaign plan
    specific instructions addressing the chemical biological elements.
    These instructions direct a review and update of contingency plans for
    response to consequence management missions both at home and abroad,
    increased production of trained personnel for military occupational
    specialties with critical shortages and the associated equipment,
    establishment of the chemical/biological elements of force protection
    planning and response, and training inherent to achieving a C-1
    readiness rating for selected units that provide needed consequence
    management and nuclear, biological, and chemical defense capabilities.
        Secretary England. Yes. Our fiscal year 2003 budget includes a
    total of $14.2 million for chemical, biological, and radiological
    defense/response. Assessments of these threats are conducted on an
    ongoing basis and the results are passed to our commanders continually.
        Secretary Roche. Yes, I have. Clearly, the Air Force must be
    prepared to fight and win in nuclear/biological/chemical (NBC) warfare
    environments. We have always dedicated resources to protecting our
    troops in this difficult warfighting environment. The wartime use of
    NBC weapons has been addressed through several programs in the Air
    Force budget.
        The goal of the Air Force Counterproliferation Program is to
    improve and maintain a credible and effective deterrent--to the threat
    or use of NBC weapons--an approach that integrates counterforce and
    defensive capabilities, particularly as it pertains to first surviving,
    then transitioning immediately to operating in this environment. The
    Counter-NBC Operations Readiness Initiative is an ongoing effort that
    will establish Air Force-wide standards for readiness and capabilities
    to counter NBC attacks by developing and implementing new doctrine and
    policy guidance, concepts of operations, standards, reporting, and
    training.
        The Air Force has programmed $345 million from fiscal year 2003-
    2007 to fund the Air Force Chemical Biological Defense (CBD) program,
    which provides protection, detection, and decontamination capabilities
    to USAF forces. We have also programmed $22 million from fiscal year
    2003-2007 for the Weapons of Mass Destruction (WMD) Program which
    improves our first responder capabilities.
        For our commanders, the counter-chemical warfare (C-CW) concept of
    operations (CONOPS), is leveraging the emerging airbase hazard
    environment knowledge to improve sortie generation while reducing the
    risk to personnel. Each major command is being trained on
    implementation procedures, so airbases can adjust tactics. techniques,
    and procedures for responding to CW attacks. Also, we recently
    completed a number of related documents (The Commanders' Guidelines on
    Force Protection and Operations in a Biological Warfare Environment,
    the Biological Warfare Doctrine Senior Leader's Guide, and the USAF WMD
    Threat Planning and Response Handbook) that provide our leadership with
    procedures for responding to chemical/biological warfare events.
    Further, we are standing up the Agent Fate Working Group to better
    understand the environment and action commanders can take to protect
    forces and carry out the mission. Finally, we have developed a Seniors
    Leaders Course that will be available for presentation to commanders at
    all levels beginning this year.

        46. Senator Ben Nelson. Secretary White and Secretary Roche, it has
    often been reported to this committee that our strategic airlift is
    inadequate. I would like you to comment on how this occurred and if the
    fiscal year 2002 purchases of C-17s along with the proposed purchases
    in fiscal year 2003 will adequately fill this vulnerability.
        Secretary White. Several congressionally-mandated mobility studies
    since the Gulf War have highlighted the shortfall in strategic airlift.
    The Mobility Requirements Study (1992), Mobility Requirements Study:
    Bottom Up Review Update (1995), and the Mobility Requirements Study--
    2005 (2001) each concluded that strategic airlift was inadequate. At a
    production rate of 15 C-17s per year, the Air Force will have a total
    of 90 C-17s in fiscal year 2002 and 105 C-17s in fiscal year 2003.
    These will not adequately fill the strategic airlift requirements
    identified in Mobility Requirements Study--2005.
        Secretary Roche. The most significant contributor to our airlift
    shortfall is a less than planned C-5 mission capable rate. C-5
    shortfalls are being addressed in ongoing modernization efforts and
    congressional support for 100 percent spares funding. The proposed
    follow-on C-17 multiyear procurement brings the fleet total to 180
    aircraft. This continued C-17 procurement combined with C-5
    modernization will allow the Air Force to meet airlift requirements and
    provide options to continue growth if new demands are identified as a
    result of the Global War on Terrorism.

        47. Senator Ben Nelson. Secretary White, the Army is close to
    having the first of several new and operational Interim Brigade Combat
    Teams in order to allow the Army to become more responsive. Do our
    future purchases of strategic airlift coincide with the fielding of
    these brigades?
        Secretary White. Decisions for currently programmed future
    purchases of strategic airlift were made as a result of requirements
    identified in Mobility Requirements Study--2005. This study was begun
    in 1998, before Army Transformation was announced. It modeled an Army
    of Excellence force structure and did not include Interim Brigade
    Combat Teams. Regardless, every C-17 produced increases our capability
    to rapidly deploy Interim Brigade Combat Teams.

                           BUILD-UP/POSITIONING PHASE

        48. Senator Ben Nelson. Secretary England, before the United States
    began Operation Desert Storm there was a build-up/positioning phase of
    more than 5 months.
        If we were to launch a similar operation now, can we expect that it
    would take the same amount of time?
        Secretary England. This is an operational and joint issue, so
    providing a definitive answer is difficult; however, there are
    substantial improvements in our strike, logistic, support, and mobility
    capabilities that should be addressed. Reflecting back to the period of
    preparation leading to Operation Desert Storm, we can be proud of our
    Nation's maritime services. At the time of the Iraqi invasion of
    Kuwait, the U.S. had substantial forces already at sea--most in
    adjacent theaters of operation. These forces demonstrated flexibility
    and readiness by responding quickly to provide timely combat response.
        Desert Storm was a great success. Upon its completion, all of your
    Armed Forces--to include the Army and Air Force as well as the Navy and
    Marine Corps--conducted thorough self-examinations of operational
    procedures. We learned a number of valuable lessons that we since have
    applied to our operations in several theaters.
        All services now preposition large stocks of combat and combat
    service support equipment forward--a good portion of this being aboard
    ships at sea already in theater.
        Prior to Desert Storm, the Marine Corps already had three
    Prepositioned Squadrons located in the Mediterranean, at Diego Garcia,
    and at Guam and Saipan. The ships can support a Marine Expeditionary
    Brigade (approximately 17,500 marines) for up to 30 days with combat
    and combat sustainment equipment and supplies. Since the Gulf War, Navy
    has deployed two of three new Maritime Prepositioning Force (Enhanced)
    or ``MPF-E'' ships, one each to the squadrons in the Mediterranean and
    Diego Garcia. These ships add critical new capacity to the Maritime
    Prepositioning Squadron (MPSRON), including some cargo loads added as a
    result of lessons learned from the Gulf War.
        Since Desert Storm, the Air Force has prepositioned munitions at
    sea in three ships operated through the Navy's Military Sealift Command
    (MSC). The Army Prepositioned Afloat Program, whose ships also are
    managed by MSC, includes Army Prepositioned Stock Three (APS-3)
    equipment and sustaining supplies sufficient to equip a heavy combat
    brigade with combat support and combat service elements. This equipment
    is embarked in a fleet of special and general-purpose ships, located at
    Diego Garcia and Guam, and ready to get underway within 24 hours of
    notification.
        An example of the many ships operated by MSC is the Large-Medium
    Speed Roll-on/Roll-off ship (LMSR), built to preposition Army stock
    forward and at sea. These ships were built to meet shortfalls
    identified by a Mobility Requirements Study. The Navy has 18 converted
    and new construction LMSRs in commission, meeting both surge and
    prepositioning requirements. The LMSR is capable of carrying
    approximately 1000 vehicles ranging from HMMWVs to Heavy Equipment
    Trucks (HETs) to M-1A2s, plus carry containers of ammunition, Meals
    Ready to Eat, and other consumables and needed equipment. Although
    called a ``medium speed'' ship, it is capable of 24 knots. In addition,
    we've added 14 new Ready Reserve Force (RRF) program Roll-on/Roll-off
    (Ro/Ro) ships and established the VISA (Voluntary Intermodal Sealift
    Agreement) a contract with merchant shipping, both U.S. and foreign
    flag, giving us the option of utilizing them during emergencies.
        An important advantage of having prepositioned stock at sea is that
    there are no sovereignty issues, and the ships are able to ``swing''
    between theaters, having the agility to respond to contingency
    operations in either the Persian Gulf or the Korean Peninsula, to give
    just two examples.
        To complement our greater logistics capability, the Navy and Marine
    Corps have transitioned into a more combat capable striking force. The
    Desert Storm-era carrier air wing was able to strike a maximum of 162
    aim points per day; today's air wing can strike 693 aim points in the
    same period. The Marine Corps extended its ability to strike with
    ground forces far inland, as it demonstrated recently when it
    established Camp Rhino near Kandahar, Afghanistan. We continue to
    increase our ability to project power ashore as we bring on line such
    programs as the distributed Naval Fires Network, Super Hornet, and the
    MV-22. Starting in fiscal year 2005, Navy will put Theater Ballistic
    Missile Defense (TBMD) to sea on AEGIS ships. This is an example of a
    capability being developed in our naval forces that should shorten the
    logistics time needed to be ready for regional conflict. TMBD at sea
    can provide a protective umbrella for forces moving into theater,
    meaning that capability won't have to be moved by air transport, thus
    allowing more initial lift to be used for offensive capabilities.
        As an example of our enhanced capability to respond, I offer our
    response to Operation Enduring Freedom--Afghanistan. Following the
    attacks of September 11, the Navy and Marine Corps were positioned, in
    theater, ready to conduct offensive operations against Afghanistan
    within 24 hours, and we commenced full scale joint operations on
    October 7, less than 1 month afterwards.
        Even with the improvements of the past several years, issues remain
    requiring our constant attention. The VISA program and Ready Reserve
    Fleet maintenance and readiness funding levels come under regular
    scrutiny and need to be preserved. We also must work to ensure we
    continue to have sufficient Merchant Marine manpower to meet our
    requirements in today's economic environment. This is the main issue:
    we can build the ships, but we also must be certain we can man them.
    It's important to remember that our enhanced capabilities come at a
    price, and we commit ourselves to provide the essential financial
    resources if our Maritime Prepositioning Force is to continue to be
    ready to respond when tasked.
        Overall, your Navy has made a lot of progress since Desert Storm.
    We were very good then, but we're better now. It is difficult to
    predict exactly what our requirements or the operational timelines may
    be in any given theater, and I defer to the regional Commander in Chief
    in determining them, and addressing specifics for any given operation.
                                     ______

                 Questions Submitted by Senator Strom Thurmond

                                OBJECTIVE FORCE

        49. Senator Thurmond. Secretary White, the Army's budget briefing
    suggests the ``need to accelerate development of critical enabling
    technologies from the 2020 timeframe into near-term so that is possible
    to begin fielding the Objective Force in 2010.'' What do you consider
    the critical enabling technologies? What are the funding requirements
    to meet the 2010 fielding date?
        Secretary White. Before making the deciding to accelerate the
    fielding of the Objective Force this decade, the Army assessed the
    availability of potential key technologies both from within and
    external to the Army. As the core building block for the Objective
    Force, the Future Combat Systems (FCS) will further define the list of
    required key technologies for the Objective Force. Once the FCS Lead
    Systems Integrator (LSI) is selected, the list of key technologies will
    be refined against the LSI's proposed concept to develop the list of
    critical enabling technologies. The Army will continue to conduct
    periodic assessments of these technologies to ensure they are on
    schedule. Potential technologies for FCS include 105 millimeter range
    cannon munitions; command, control, and communications for networked
    fires; hybrid electric power systems; active protection systems; multi-
    role armament and ammunition suite; standoff sensors; and robotics. The
    fiscal year 2003 Army science and technology budget submission of $1.62
    billion supports our current technology efforts. Total bunding
    requirements to meet the acceleration of the Objective Force this
    decade are being refined for development of the Army budget.

                     MAINTENANCE AND PRODUCTION FACILITIES

        50. Senator Thurmond. Secretary White, although the Army faired
    better than the other Services in the fiscal year 2003 military
    construction request, the request is approximately $285 million less
    than the fiscal year 2002 request. More disturbing is the 40 percent
    reduction in the funding request for maintenance and production
    facilities. Since the Army relies heavily on maintaining its aging
    equipment, how do you justify such a significant reduction in the
    construction of maintenance and production facilities?
        Secretary White. Our military construction budget request is $3.2
    billion and will fund our highest priority facilities and family
    housing requirements. In fiscal year 2002, we presented a budget that
    was a down payment on our goal to better support our infrastructure.
    When we developed this year's budget in light of the events that took
    place last year, we had some very difficult decisions to make. The need
    to fund military pay raises, transformation, operations tempo, the war
    on terrorism, increases in health care, and other key programs were all
    included in the decision leading to our request. Thus, the Army budget
    provides the best balance between all our programs, including military
    construction.

                       CHEMICAL DEMILITARIZATION PROGRAM

        51. Senator Thurmond. Secretary White, the Army is the executive
    agent for the destruction of chemical munitions. The program has been
    criticized because of an estimated 60 percent cost and delays. Based on
    this assessment, will the Army meet the destruction deadline? What
    actions will the Army be taking to get the program back on track?
        Secretary White. The current schedule for destruction of the U.S.
    stockpile of chemical agents and munitions extends past the April 29,
    2007 completion date required by the Chemical Weapons Convention (CWC).
    The CWC provides for a one-time, up to 5-year, extension to this
    deadline. If granted, this would extend the time available for disposal
    to April 29, 2012.
        The revised schedule, approved by the Defense Acquisition Executive
    in September 2001, reflects completion of disposal operations at six
    chemical stockpile sites between 2007 and 2011. Schedules for the
    Pueblo, Colorado and Blue Grass, Kentucky sites will be published once
    the technology decisions are made. These technology decisions are
    expected for Pueblo in the third quarter of fiscal year 2002 and at
    Blue Grass in the first quarter of fiscal year 2003. The largest
    contributor to schedule changes was the incorporation of our chemical
    agent destruction experience at Johnston Island and Tooele, Utah into
    realistic forecasts for other incinerator sites. Even with the
    acknowledged delays, the Army has destroyed 20 percent of the U.S.
    Category 1 chemical weapons nearly 10 months earlier than the April
    2002 destruction milestone.
        The Army is accelerating the effort to neutralize the bulk chemical
    agent stockpile at Aberdeen Proving Ground, Maryland as much as 3 years
    ahead of the original schedule. The Army is studying the feasibility of
    a similar effort to accelerate disposal of the bulk VX nerve agent
    stockpile at Newport, Indiana and will continue to evaluate options at
    other storage sites. In addition, the Army has consolidated the
    management of the Chemical Demilitarization Program under the Assistant
    Secretary of the Army (Installations and Environment), who has
    extensive experience in managing environmentally sensitive and complex
    government facilities and programs.
        The revised milestones and associated costs are being incorporated
    into a new set of requirements by which the Office of the Secretary of
    Defense and the Army will track the program's schedule, cost, and
    performance.
        The non-stockpile portion of the program recently met two major CWC
    deadlines, the deadline for destruction of 40 percent of former
    production capacity and the deadline for the destruction of all
    Category 3 items (unfilled munitions and devices and equipment
    specifically designed for use directly in connection with the
    employment of chemical weapons). The non-stockpile product remains on
    track to meet all schedule requirements.

                               FORWARD DEPLOYMENT

        52. Senator Thurmond. Secretary England, the Navy is planning to
    forward base three submarines in Guam. I find that ironic since we
    closed Navy facilities on Guam during the mid-1990s as part of the
    post-Cold War reductions.
        What is the basis of this stationing decision? Do we have the
    facilities on Guam to support this deployment?
        Secretary England. From 1964 to 1981, the Navy did homeport SSBNs
    in Guam as we did in Scotland and Spain. The need to forward base SSBNs
    ceased before the end of the Cold War due to increased range of the
    later sea-based ballistic missiles.
        We have never homeported SSNs in Guam. With the end of the Cold War
    and following the directions of Quadrennial Defense Reviews, the Navy
    reduced its presence in Guam to only that needed to support its forward
    deployed forces. Additionally, the SSN force in the Pacific was reduced
    from 40 in 1939 to 26 in 2000. Unfortunately, the CINC's demands on the
    SSN force to meet immediate real-world needs remained high, and some of
    the more pressing national and fleet requirements could not be met.
        In November of 2000, CINCPACFLT proposed homeporting three SSNs in
    Guam to improve the ability to meet national fleet requirements. This
    proposal was facilitated by:

              (1) Refueled first flight Los Angeles class submarines with
            more reactor core life than ship's hull life are available
            through 2015. Their excess core life will allow the ships to be
            operated at a maximum rate within OPTEMPO and PERSTEMPO limits.
              (2) Existing infrastructure, including the submarine tender
            (U.S.S. Frank Cable) in the western Pacific and government
            housing and facilities, is available.
              (3) Forward basing the SSNs will reduce transit time to/from
            station, equating to greater time ``in theater'' and additional
            mission days to fulfill previously unmet national and fleet
            requirements.

        The Navy concurred with CINCPACFLT's request. The facilities in
    Guam are adequate to support this decision. The current infrastructure,
    however, will only support three SSNs.

                           THE ROLE OF THE SUBMARINE

        53. Senator Thurmond. Secretary England, with the demise of
    Russia's submarine fleet, the submarines' principal role of submarine-
    hunting has been diminished.
        What role does the Navy now consider the most significant for the
    submarine fleet?
        Secretary England. The world has changed significantly since the
    cold war, making the full spectrum of capabilities that our submarine
    fleet possesses more important than ever. Where before the greatest
    threats to our security were easily defined through the foreseeable
    future, the specific threats to our Nation and our allies today are
    not, but the capabilities that we must counter are. Therefore, no one
    role can be prioritized above another at a given point in time because
    the threat is widely variable. The answer to the question of which role
    is the most significant for the submarine force is a broad one, as
    broad as the range of capabilities that U.S. submarines possess.
        The submarine mission areas of intelligence, surveillance and
    reconnaissance (ISR), strike warfare, antisubmarine and anti-surface
    warfare, mine warfare, special warfare and strategic deterrence are
    well known, but this question is best answered with a discussion of the
    capabilities provided by U.S. submarines, encompassed by the Submarine
    Force Joint Strategic Concepts.
        U.S. submarines assure access for joint forces: stealth, endurance,
    payload, and agility enable our submarines to operate ``out front'' and
    prepare the battlespace in denied, hostile, or sensitive areas. Because
    they can operate where other platforms cannot, submarines can
    neutralize enemy anti-access systems or operate in spite of them, often
    enabling attacks against time-sensitive targets. This is a valuable
    expeditionary capability for assuring access for joint forces.
        U.S. submarines exploit their unique access to develop and share
    knowledge: Using their long dwell time (i.e. endurance) and undetected,
    close-in presence, our submarines collect information about adversaries
    and their capabilities that other assets cannot collect, thereby
    improving U.S. national and theater-level situational awareness.
    Offboard vehicles and sensors will expand the reach of our submarines,
    and fully-netted systems will enable them to share knowledge of a
    battlespace in real time.
        Because of their stealth, access, knowledge, and firepower, U.S.
    submarines are a potent deterrent: In addition to strategic deterrence,
    our submarines provide the Secretary of Defense and Combatant
    Commanders with unlocatable, close-in, presence in support of
    diplomatic and military objectives. Accurate and timely knowledge
    combined with early and unpredictable conventional attack capabilities
    from our submarines strengthen our leaders' deterrent options against
    aggression.
        Undetected presence and access enable U.S. submarines to project
    power with surprise from close-in. Stealthy and survivable, our
    submarines provide an early and rapid precision strike capability
    against time-sensitive targets, as well as attack capabilities within
    contested or sensitive areas.
        In summary, the same fundamental characteristics that made the U.S.
    submarine force the world's preeminent force against the threat of
    Russia's submarine fleet--stealth, endurance, payload, and agility--are
    what make us equally relevant against the vast array of threats before
    us today.

                         FORWARD DEPLOYED STAGING BASE

        54. Senator Thurmond. Secretary England, I understand that based on
    the successful deployment of Special Forces from the Kitty Hawk during
    the operation of Afghanistan, the Navy is looking at the notion of an
    Afloat Forward Staging Base designed to meet the Special Forces
    requirement without straining the carrier fleet. What can you tell us
    about this concept?
        Secretary England. The CNO has directed a study on the feasibility
    of acquiring a naval platform dedicated to providing, among other
    things, an operational capability similar to that provided by U.S.S.
    Kitty Hawk last year. Teams from Naval Sea Systems Command and Military
    Sealift Command are exploring many sea-borne platforms to assess their
    ability to provide this capability.

                                F-22 PROCUREMENT

        55. Senator Thurmond. Secretary Roche, last Fall Secretary Aldridge
    said that the number of F-22s to be built will fall somewhere between
    295 and 331 aircraft. He attributed this limitation on a cost overrun
    estimated to be $9 billion. According to a recent Inside The Air Force
    article, the Air Force is considering the ``prospect of procuring 420
    extra F-22 Raptors.'' If the article is correct, how will the Air Force
    fund this additional buy? What is the threat that requires this
    significant increase in the number of aircraft?
        Secretary Roche. The Nation needs an adequate fighter force for the
    new defense strategy. The need for new fighter aircraft, particularly
    the F-22 is driven by three major factors:
        (1) We need new combat aircraft--recapitalization of our aging
    fighter/extended range strike fleet is urgently required. The maximum
    desired average age of this fleet is 12.5 years--the current average
    age of our fighter inventory is about 15 years, and will be in almost
    18 years by the year 2020, even with the proposed buy of new fighter/
    extended range strike aircraft. This aging fleet is causing both
    technological and operational obsolescence as evidenced by our growing
    O&M costs and deteriorating mission capable rates.
        (2) We need transformational combat aircraft not just to meet the
    threat today, but to meet the threat 10, 20, and 30 years into the
    future. The greatest future threat to our fighter force is the
    proliferation of advanced (``double-digit'') surface-to-air missile
    systems (SAMs) to threat countries. The F-22's capabilities in the
    areas of stealth/supercruise/data integration will be crucial for
    gaining access against the anti-access threat environment-not just for
    air forces, but for the entire joint force.
        (3) We need sufficient numbers of new combat aircraft, not just for
    meeting warfighting requirements, but also for the rotational base for
    sustained engagement around the world. We must buy enough new fighters
    to fill out 10 equally-capable aerospace expeditionary forces (AEFs).
    Without sufficient aircraft to fill out our AEFs, our defense strategy
    deployment demands will be to great for people and their equipment.

        At the present time we are implementing the Defense Acquisition
    Board's unanimously-approved plan for low-rate production as announced
    by Under Secretary Pete Aldridge on 15 August 2001. The board accepted
    the Air Force program cost estimates, but used the independent Cost
    Analysis Improvement Group estimate on the number of aircraft that
    money would buy (an estimated 295 F-22s). Mr. Aldridge stated that ``If
    the Air Force can, in fact, get the cost estimate at their level, they
    can buy more airplanes.'' Given this, the Air Force has programmed to
    procure a total of 339 F-22 Raptors, if production goals are achieved
    as forecasted. There is no programmed plan by the Air Force to procure
    any additional F-22s at the present time. However, as I've stated in
    previous testimony the need for the airplane is very clear, it is long
    overdue, and the numbers remain a question as we go through reviews.
        The F-22 is a key program for Air Force recapitalization needs. The
    previous Chief of Staff of the United States Air Force stated in
    Congressional testimony that the 339 number falls short of
    recapitalizing all of our F-15 fleet. Also, as stated in the 1997 QDR
    Report, ``in the future, the Department will consider replacements for
    the F-15E and the F-117 long-range interdiction aircraft when they
    reach the end of their service lives. To make that decision, the
    Department will consider a range of alternatives, including the
    possible acquisition of variants of the F-22 for these roles.'' This
    need to recapitalize the F-15E and F-117 fleets was included in the
    1997 QDR report as part of the F-22 three-plus-two option. At the 19
    May 1997 press conference (held by then Secretary of Defense William S.
    Cohen) to announce the QDR 1997 release, an explanation of this three-
    plus-two option was given as follows:

            ``The QDR also will task a COEA, or a cost and operational
            effectiveness analysis, to look and see what should be the
            right replacement for the half a wing of F-117s and the two
            wings of F-15Es as they get older. It's quite possible that a
            deriative of the F-22 may be the solution for that.''

        The policy of DOD has been to consider the fact that at some point
    the Air Force will need to recapitalize beyond the capabilities of just
    the F-15 fleet. For this reason alone, it is prudent that the Air Force
    continue to examine the number of F-22s needed to meet future needs.
        However, the cost of recapitalization is important also. I have
    made it clear to the chief executives of the firms involved in
    producing the F-22 that if they allow the unit costs to go out of
    control that there are not going to be very many F-22s because I will
    not be able to justify them to Congress. Also, though, I'm sure that if
    we get that cost down that Congress will let the Air Force buy more.
        Cost is relative, though, as General Jumper, our current Chief of
    Staff of the United States, Air Force has stated before: ``if we
    committed the same percentage of national resources for the F-22 that
    we did for the F-15, we would be buying an inventory of 1,000 F-22s.''
    It's also relative in that the cost of the F-22 is one part of the
    equation. The other part of the equation is the cost of not having the
    capability provided by the F-22. This aircraft has the capacity to
    change war for the joint team. The F-22's introduction will maintain
    America's technological advantage and ensure our ability to defeat next
    generation threats. The cost of not providing the Nation air
    superiority must be considered as well in any review of the F-22.
        Finding additional money for transformation and modernization is a
    challenge that faces all of DOD, not just the Air Force. Excess
    infrastructure continues to waste precious dollars that could be better
    used elsewhere. I applaud the Congress for approving a round of base
    closings in 2005. More effective business practices need to be
    implemented. I applaud Secretary of Defense Rumsfeld's creation of the
    Business Initiative Council (BIC) to identify better ways to do
    business and reduce cost. The incentive of the BIC is that any savings
    a Service identifies are then retained by that Service. I support
    Secretary Rumsfeld's efforts to identify non-essential missions for
    military personnel. Hopefully, efforts in these types of areas will
    help the Air Force find additional money for transformation and
    modernization.
        I agree wholeheartedly with Secretary Rumsfeld's statement on
    transformation made at the National Defense University that, ``while
    transformation requires building new capabilities and expanding our
    arsenals, it also means reducing stocks of weapons that are no longer
    necessary for the defense of our country.'' In other words,
    transformation needs to be rewarded, but in some cases trade-space
    needs to be created. Legacy systems operating with outdated concepts of
    operation and led with industrial age organizational structures should
    be considered as candidates for divestiture. However, those elements
    within the military that develop and apply new concepts of operation,
    are organized to meet new demands, and are making the best use of
    cutting edge technology warrant additional investment to continue their
    transformation journey.
        Clearly, more F-22s would require additional investment. A strategy
    for increasing investment in this or any other transformational
    capability will involve consideration of other priorities, the
    potential to achieve savings elsewhere, the overall availability of DOD
    resources, and most importantly approval by senior leadership.

                                CRITICAL SKILLS

        56. Senator Thurmond. Secretary Roche, the Air Force, as well as
    the other services, is feeling the demands of the increased force
    protection requirements. In the Air Force the impact is especially felt
    by the security forces who are constantly on the go. What are your
    plans to increase the number of personnel in this high demand
    specialty, as well as other demand occupations?
        Secretary Roche. We have reviewed our new tasking from Operations
    Enduring Freedom and Noble Eagle in detail, and verified additional new
    requirements for Security Forces and other specialties, such as OSI and
    Intel. As an immediate fix, we implemented Stop Loss and partially
    mobilized a significant number of personnel from the Reserve and Guard
    Forces to help us in this area. We are increasing recruiting and
    training of Security Forces personnel this year. In addition, we are
    examining multiple options to increase manning and capability in all
    stressed career fields in the future. Realizing the resource
    constraints we are facing, we are taking steps to help offset our
    increased requirement in the years ahead through the exploration of new
    technology, reducing overseas taskings, etc.

                        THE ROLE OF THE MILITARY OFFICER

        57. Senator Thurmond. Secretary White, Secretary England, and
    Secretary Roche, Charles Moskos, a leading military sociologist, wrote
    that over the past 50 years the ideal officer has shifted from the
    combat leader to the manager or technician to, most recently, the
    soldier-statesman/scholar. This has led to the rise of military
    officers more capable in the political-military realm than in troop
    leading. According to Mr. Moskos, elevating such leaders at the expense
    of combat leaders can only hurt the military's ability to carry out
    decisive actions. What are your views on this finding?
        Secretary White. Officers are expected to be combat leaders,
    managers, and statesmen/scholars. The Army develops officers to
    function at three different levels: tactical, operational, and
    strategic. Tactical level operations generally occur at platoon through
    division and involve primarily a direct leadership style. Operational
    level actions require direct and indirect leadership styles and include
    actions that occur from corps to theater to joint task force. Operating
    in the political-military realm normally only occurs when officers are
    functioning at the strategic level, and sometimes at the operational
    level. Officers functioning as strategic leaders are not only experts
    in their own domain--warfighting and leading large military
    organizations--but are also expected to be astute in the departmental
    and political environments of the Nation's decision-making process.
    They are expected to deal competently with the public sector, the
    executive branch, and the legislature.
        The complex national security environment requires an in-depth
    knowledge of the political, economic, informational, and military
    elements of national power as well as the interrelationship among them.
    It is incorrect to assume that officers must be exclusively combat
    leaders, managers or statesmen/scholars. The role of the officer is
    determined by span of control, the level of the assigned headquarters
    and the extent of influence the assigned position exerts. We train and
    develop our officers' interpersonal, conceptual, technical and tactical
    skills across all of our training domains. Additionally, the focus of
    these skills changes based on rank and position of the officer. In our
    troop leaders, the focus is clearly on warfighting and the warrior
    ethos.
        Secretary England. While the Navy and Marine Corps certainly
    require their officers in command to have a broad understanding of the
    geopolitical environments in which they operate, this is not
    accomplished at the expense of being a combat leader first and
    foremost. The Navy and Marine Corps team continues to build and train
    officers who can decisively operate in any situation over the entire
    spectrum of warfare, using all levels of technology, from hand-to-hand
    combat to complex long-distance, standoff weaponry.
        However, the past 50 years have seen a complete shift in emphasis
    from preparing for Major Theater Wars to involvement in numerous Small-
    Scale Contingencies across the globe. DoN officers now routinely
    operate in what could be called a ``Three Block War'': one block may
    require diplomacy and tact while executing humanitarian operations; the
    next block may require statesmanlike skills while executing
    peacekeeping operations; and the third block may require execution of
    violent, full-scale combat operations. Today's missions require Navy
    and Marine officers who can effectively operate in all three
    environments--separately or in combination--with ease, and that is what
    the Department of the Navy trains them to do.
        Rather than resulting in an inability to respond decisively, as Mr.
    Moskos suggests, this provides the Navy and Marine Corps with a cadre
    of leaders who have a broader scope of options from which to
    appropriately respond. Today's naval leaders are every bit as
    operationally focused, combat-tempered and tested as those of the past.
    They lead from the field, the bridge and the cockpit with a lethality
    that is unmatched. They also have the education and geo-political savvy
    to know when not to attack and destroy. These officers have kept pace
    not only with the rapid growth of technology, but with the even more
    rapid changes in the geopolitical landscapes they now face. In a very
    real sense, they are a combination of all ideals, past and present.
        Secretary Roche. I understand your concern and in fact, our current
    development strategy is designed to ensure our leaders are credible and
    effective in not only our combatant duties, but our statesman/scholar
    role and our airman leadership responsibilities as well. We recognize
    today's Expeditionary Aerospace Force calls for a more diversified
    leader and have designed a development strategy based on requirements
    and competency-attainment that effectively balances the depth of
    expertise in one's mission area with the breadth required to produce
    members better prepared to serve and lead in that environment. We have
    identified four major categories of leaders, and the skills and
    attributes required in those positions, that enable our ]eaders to
    synthesize and integrate Air Force systems across the full range of
    aerospace capabilities, resulting in the exact military effects the
    Nation needs.
        As part of the continuing development of our Operations Leader
    (defined as a transformational leader credible in the competencies
    necessary to employ and sustain forces and command combat operations to
    achieve military effects through the air, space, and information
    mediums . . .) Gen. James P. McCarthy (Ret.) is leading an effort to
    increase Air Force integration in joint leadership. Within that dialog,
    we acknowledge the need for developing our political/military skills.
    Keep in mind, this is not a separate requirement absent the combatant
    focus, it is additive to the skill set of our well-prepared
    transformational leader. By building more experienced AF leadership in
    the joint arena, we enhance the application of aerospace power in all
    joint operations.
        We have also identified what we call universal competencies--
    attributes we expect to find in all our members. A key component in
    this construct is a focused training on leading airmen. Today, our
    squadron, group and wing commanders receive detailed education and
    training highlighting successful Air Force leader and follower
    behaviors . . . ones that can be adapted and emulated in ways that
    enhance and improve a leader's success in creating strong Air Force
    units.
        I believe our deliberate focus on developing our people and
    improving their sense of belonging to the institution strengthens the
    heart of our organization and ensures our success in growing Air Force
    members able to, first and foremost, fulfill our vital responsibilities
    to national defense through aerospace capabilities, but also
    effectively perform in the necessary statesman/scholar role.

                                 FAMILY HOUSING

        58. Senator Thurmond. The quality of life for our military
    personnel and families is high on the committee's watch list. I have
    supported the Department's goal of eliminating inadequate housing by
    2008 and had been assured that it was a reasonable and achievable goal.
    I understand the Office of the Secretary of Defense has now accelerated
    that goal to 2007. What additional funds have you received to support
    this goal? If none, what adjustments do you have to make to your
    program to fund this one-year shift, and what is the impact on the rest
    of your programs?
        Secretary White. The Army was initially funded to eliminate
    inadequate family housing by 2010. In response to Department of Defense
    guidance to accelerate that goal to 2007, family housing construction
    projects originally planned for fiscal years 2008 to 2010, and
    approximately $1.1 billion of associated funding, were rescheduled for
    fiscal years 2005 through 2007.
        Secretary England. The Navy and Marine Corps will meet the OSD's
    accelerated goal of eliminating our inadequate family housing by 2007.
    The Marine Corps will meet this goal by 2005. This effort was achieved
    by adding funds and increasing privatization:

             The Department of the Navy added $654 million into
            family housing construction accounts over the FYDP during the
            development of the fiscal year 2003 budget.
             The Department of the Navy's fiscal year 2001 family
            housing master plan eliminates through privatization an
            additional 10,400 inadequate homes, or a 79 percent increase,
            over the fiscal year 2000 master plan.

        Secretary Roche. The Air Force has increased funding in fiscal year
    2003 to $1.5B as the first step in fully funding our Family Housing
    Master Plan--an increase of over $130 million over last year's funding
    level. Our plan outlines base-by-base details to meet a 2010 goal--an
    improvement by 3 years over our previous plan. We can meet a 2007
    revitalization goal at all but 20 bases where the total revitalization
    requirement drives a need for a project nearly every year until 2010.
    Accelerating housing revitalization to 2007 at the 20 bases will
    displace an additional 9,100 families from military family housing over
    fiscal year 2003 to fiscal year 2007. Typically, there is not
    sufficient, adequate housing in local communities to temporarily
    support the displaced families. The result is some families either live
    in substandard housing, commute longer distances to reach the base, or
    pay more for rental housing.
                                     ______

                   Questions Submitted by Senator John McCain

                       ALTERATIONS IN LAST YEAR'S BUDGET

        59. Senator McCain. Secretary England, in a January 28, 2002
    article ``Responding to Lott, DOD Starts Funding LHD-9 and One More
    DDG-51'' by Chris Castelli in the publication Inside the Navy, states:

            ``At the urging of Senate Minority Leader Trent Lott (R-
            Mississippi), the Pentagon has made last minute adjustments to
            the Navy's shipbuilding plan in the Bush administration's
            fiscal year 2003 budget. The Pentagon put $74 million more
            toward a third DDG-51 destroyer and allocated $10 million in
            advance procurement for a ninth amphibious ship that was not
            previously in the Navy's budget.''

        Is this true, yes or no?
        Secretary England. Yes, $74 million was added in advance
    procurement funding for a third DDG-51 destroyer in fiscal year 2004,
    and $10 million was added in advance procurement funding for a LHD-9 to
    be procured in fiscal year 2008.

                        AMPHIBIOUS ASSAULT SHIP FUNDING

        60. Senator McCain. Secretary England, isn't there an effort going
    on by your department to look at an Analysis of Alternatives (AoA) to
    replace the current general purpose amphibious assault ship (LHA) with
    an LHA(R) and doesn't this action by officials in the Office of the
    Secretary of Defense Comptroller's office predetermine the AOA which is
    due later this year? Likewise, what happened to planned research and
    development funding for LHA(R)?
        Secretary England. The LHA Replacement (LHA(R)) AoA is scheduled to
    complete in Summer 2002. The AoA is evaluating several alternatives
    including a repeat LHD 8, a modified LHD 8, and entirely new ship
    designs that are not based on the current LHD. The results of the
    LHA(R) AoA are not predetermined and the preferred alternative may or
    may not be based on the LHD 8.
        During the review of the Navy's Fiscal Year 2003 Budget request,
    OSD concluded that the requested funding was insufficient to support
    any LHA design other than a repeat LHD-8. At the same time, the funding
    requested was determined by OSD to be ahead of need to execute a repeat
    LHD-8. Thus, OSD removed LHA(R) R&D funding in fiscal year 2003 ($13
    million) and fiscal year 2004 ($21 million).
        While it is true that the budget finances the lowest cost
    alternative, a LHD-8 repeat, it is premature to determine the outcome
    of the LHA(R) AoA. The LHA(R) program initiation is planned for fiscal
    year 2003. At that time, the DON will determine the extent of any
    additional research and development funding requirements and
    appropriately program and budget for them.

        61. Senator McCain. Secretary England, you know that I recently
    traveled to Afghanistan with other members of this committee. While
    there, I heard from several Navy and Marine Corps officers that the
    number one concern for replacing the LHA is safety because of a
    stability problem or high center of gravity issue, especially with
    deployed aircraft. Their concern was that even with some minor fixes
    with fuel compensation systems, the problem will be exacerbated when
    the Service deploys larger aircraft, such as the Osprey (MV-22) and
    Joint Strike Fighter (JSF) which are replacements for the CH-46 and AV-
    8B respectively. I am told that the MV-22 is twice the weight of the
    CH-46 and that the JSF is believed to be about twice the weight of the
    AV-8B.
        Does the multi-purpose amphibious assault ship (LHD) class have
    similar stability problems as the LHA class, and would you agree that
    the problem could be exacerbated with the planned future aircraft and
    vehicles envisioned for the Marine Corps?
        Secretary England. The Navy's five LHAs need to be replaced as soon
    as possible, as they are rapidly reaching the end of an already
    extended service life. The LHA(R) AoA was initiated to ensure that both
    Marine Corps and Navy 21st century requirements are addressed,
    including the issues you raise regarding the impact of heavier
    aircraft/vehicles and overall amphibious force vehicle storage area.
        The seven ships of the LHD class have improved stability
    characteristics over the LHA class. LHDs do not experience the same
    weight and center of gravity issues as the LHA.
        LHDs have the growth allowance available from a stability
    standpoint to accommodate MV-22 and JSF. With aggressive weight control
    measures and the fuel oil compensation ship alteration, LHDs can
    integrate MV-22 and JSF. However, LHDs have less vehicle storage space
    (square footage) than LHAs. Vehicle storage space is an example of a
    requirement that is being addressed by the LHA(R) AoA.

        62. Senator McCain. Secretary England, what growth percentages are
    currently planned for the LHD class of ships?
        Secretary England. The CNO-specified minimum Service Life Allowance
    for the LHD class at delivery from the shipyard is 1/2 foot for
    vertical center of gravity reserve and 1000 long tons (about 2.5
    percent) of displacement service life reserve. The requirement is
    documented in the LHD Class Top Level Requirements document.

        63. Senator McCain. Secretary England, is the LHD a good
    replacement for the LHA class of ships, considering that the ship does
    not meet the requirement in planned future vehicles and aircraft for
    the Marine Corps or our special operations community and considering
    the amphibious lift requirement of 2.5/3.0 Marine Expeditionary Brigade
    (MEB)? Because of the well deck inside the LHD, isn't the LHD available
    square footage less than the LHA (LHD is about 5,000 square feet
    smaller than the LHA)?
        Secretary England. The ongoing LHA(R) Analysis of Alternatives is
    addressing whether the LHD is a good replacement for the LHA class.
    Continuing to build LHDs, as well as ship design modifications to
    enhance the capability to operate the larger and heavier new generation
    amphibious systems is currently being examined as an option. The
    Analysis of Alternatives is also investigating the optimum way to reach
    the fiscally constrained amphibious lift requirement of 2.5 Marine
    Expeditionary Brigades. The Analysis of Alternatives is expected to
    report out later this year and will present its conclusions at that
    time.

        64. Senator McCain. Secretary England, it seems to me that the LHD
    is not a very transformational program especially considering that it
    is the exact same hull of the current LHA class that is based on a
    1950s design. It seems to me that if the LHA(R) class ship is built to
    have a lifespan of 50 years with no further research and development
    invested, then LHD 9 will be a 100-year old design when it is
    decommissioned in the 2050 timeframe. Would the Navy develop an
    aircraft carrier (CVN), destroyer (DD), or submarine (SSN) without a
    robust research and development effort? Where is the research and
    development funding for a major amphibious ship like LHA(R)? Are you
    not relegating the amphibious Navy to no transformation?
        Secretary England. The Navy is currently conducting an Analysis of
    Alternatives (AoA) for LHA(R). Numerous alternatives are under
    consideration, including a LHD-8 repeat design. If the results of the
    AoA support a mod repeat LHD or new ship design, additional RDT&E funds
    will be required. At that time, it may be necessary to revisit the
    current plan to use the $10 million in fiscal year 2003 SCN AP for a
    LHD-9.
        While the LHA(R) hull shape may be close to the original, its
    combat systems suite, communications gear and information technology
    set up will be state of the art.

                             PURCHASING T-5 TANKERS

        65. Senator McCain. Secretary England, on February 8, RADM Church,
    USN, delivered to Congress the Department of the Navy's ``Fiscal Year
    2003 Budget Overview.'' On page 18 of the Navy's budget brief is a
    slide called ``Promote Better Business Practices, Managing the
    Department in a Business-like Manner.'' I noticed a bullet that states
    ``T-5 Tanker Buyout.''
        Will you please tell the committee why the Navy has decided in its
    fiscal year 2003 budget to buy the T-5 Tankers rather than to continue
    to lease them as was the plan several years ago?
        Secretary England. The T-5 Tankers were leased in the early
    eighties rather than purchased because of the budgetary circumstances
    that existed at the time. When the ships were leased, the Navy
    negotiated for favorable purchase options that, conditions permitting,
    could be exercised at the appropriate time. Those conditions exist and
    that time is now. We have a continuing need for these vessels beyond
    their lease terms, which end in 2005 and 2006. If we let our options
    expire, we will end up chartering (leasing) higher cost replacement
    tankers.

        66. Senator McCain. Secretary England, so let me understand you--
    ``it is cheaper to buy the tankers and MPS (maritime pre-positioning
    ships) outright than it is to continue to pay the lease''--is that
    correct? I think I agree with the Secretary of the Navy and OMB
    Director Mitch Daniels who blames free-wheeling for outlandish cost
    overruns in government programs in past.
        Secretary England. Yes. Exercising our lease options to purchase
    will provide significant cost savings. It is cheaper to purchase these
    ships than to continue leasing, however, purchase requires a large
    expenditure in the year that the ships are purchased. Due to the nature
    of the Navy's T-5 purchase options, we get the greatest overall savings
    if we buy the ships and end their leases 2 years before the conclusion
    of the present 20 year terms--when that is coupled with a continued use
    of the ships. The same is true for the MPS, but their lease terms are
    25 years and we estimate that their optimum buyout point will be in
    fiscal year 2007. The key is to purchase the ships when they are most
    affordable during the lease cycle in order realize the optimal future
    stream of savings .

                         FUNDING THE U.S. NAVAL ACADEMY

        67. Senator McCain. Secretary England, I have been a member of the
    U.S. Naval Academy Board of Visitors since 1989. I have served on
    several committees within the structure of the Board of Visitors,
    including committees on Academics, Athletics, Finance and Property, and
    I currently serve on the Committee on Midshipmen. It has come to my
    attention that during the markup of the Department of Defense
    Appropriations Act for Fiscal Year 2002, the Senate Appropriations
    Committee cut $5.5 million from the President's budget request for
    training vessels at the U.S. Naval Academy. Having served on key Board
    of Visitors Committees, I am appalled at the tremendously damaging
    budget cut by the Senate Appropriators and I am concerned that such a
    cut not only delays, but also threatens replacement of these critical
    at-sea training programs for the midshipman in seamanship, navigation,
    and leadership. As a long-time member of the Board of Visitors, we have
    been thoroughly briefed by the Superintendent and Academic Dean on the
    Professional Development studies at the Naval Academy, as well as the
    requirement for at-sea training on the sailing boats, yard patrol craft
    (YPs), and U.S. Navy warships. For obvious reasons, I have more than a
    passing interest in the Naval Academy. However, every member of
    Congress also has a large stake in the Service Academies and the safety
    of the young men and women we appoint each year to become midshipmen
    and cadet candidates--I know of no other military program where there
    is such a direct and personal tie with Members of Congress.
    Furthermore, I was privileged to serve on the 1993 Armitage Committee,
    which reviewed Honor at the Naval Academy. One of the critical
    recommendations stated that the Secretary of the Navy and the Chief of
    Naval Operations should ``personally'' take a greater stake in the
    Academy.
        Would you please let me know what your views are with respect to
    this $5.5 million cut by the Senate Appropriations Committee?
        Secretary England. The Chief of Naval Operations and I were both
    disappointed and concerned when we learned of the $5.5 million cut by
    the Senate Appropriations Committee. These funds represent the initial
    step of a 3-year replacement program for craft that are critical to
    Professional Core Competencies taught at the Naval Academy, including
    seamanship, navigation, damage control, ship handling, relative motion,
    nautical rules of the road and the law of the sea.
        The downsizing of our Navy fleet from nearly 600 ships to nearly
    300 ships significantly impacted the at-sea training program at the
    Naval Academy. With half the number of warships of just 15 years ago,
    we now have only half the number of days available for midshipmen at-
    sea training in the fleet. To address this critical training shortfall,
    the Naval Academy has augmented fleet summer cruises with open-ocean
    training in both sail training craft and diesel driven Yard Patrol (YP)
    craft. The open-ocean sail training has proven to be the most effective
    platform to allow midshipmen to transform classroom knowledge into
    actual experience in the skills essential to every naval officer. This
    platform has also proven to be the best leadership laboratory of the
    entire 4-year Annapolis experience.
        The current generation of sail training craft, which were funded by
    Congress 16 years ago, is more critical at the Naval Academy today than
    in the past 50 years. These craft are reaching the end of their useful
    life, and they must be replaced. Critical at-sea training is at risk.

        68. Senator McCain. Secretary England, what will you do to ensure
    that these funds are fully restored in fiscal year 2002 so that it does
    not delay or put the replacement of these boats in jeopardy?
        Secretary England. I have directed Navy staff to determine the best
    course of action to address member concerns and get replacement sail
    training craft funded. Beginning replacement in fiscal year 2003 will
    have minimal impact on the at-sea training program. A delay past fiscal
    year 2003 could impact the ability of the Naval Academy to continue
    this vital program without interruption.

        69. Senator McCain. Secretary England, will you commit to me that
    you and the CNO will get ``personally'' involved in restoring these
    critical funds per the spirit of the Armitage Committee recommendation?
        Secretary England. In light of competing priorities for resources,
    the President's budget represents the best balance of resources to
    requirements. The CNO and I recognize the importance of the open-ocean
    sail training program at the Naval Academy to provide future naval
    officers with critical skills in seamanship, navigation, damage
    control, ship handling, relative motion, nautical rules of the road and
    the law of the sea.

                                  737 AIRCRAFT

        70. Senator McCain. Secretary Roche, are you beginning to negotiate
    the lease of the 100 767 tankers, as well as the four 737 VIP aircraft
    that were added by the Senate Appropriations Committee and enacted in
    the fiscal year 2002 Department of Defense Appropriations bill last
    December?
        Secretary Roche. The Air Force has had preliminary discussions with
    Boeing on the air refueling tanker and on the 737 aircraft. We are
    following two paths. We are currently evaluating the responses to the
    RFIs (EADs and Boeing) and will decide from that evaluation whether to
    proceed with a sole source contract or open it up to competition. For
    the tanker, we will continue discussions with Boeing, but will not
    begin negotiations until we have completed the coordination of our
    Operational Requirements Document through the Joint Staff. For the 737
    lease, the Air Force is looking to compete this effort. We will begin
    surveying the market to determine availability of aircraft that will
    meet our operational requirements. For both programs, the AF will
    report to the four congressional defense committees before we enter
    into any lease.

                                  COMPETITION

        71. Senator McCain. Secretary Roche, do you believe in competition?
        Secretary Roche. The Competition in Contracting Act requires that
    the Government promote full and open competition in soliciting offers
    and awarding Government contracts in all but a limited number of
    exceptions. The Air Force fully supports this statute. In fact, there
    is a Competition Advocate at each of our procuring activities and at
    the Secretary of the Air Force level to promote competition and to
    challenge barriers to competition.

                          TERMS OF LEASE ARRANGEMENTS

        72. Senator McCain. Secretary Roche, if you believe in competition,
    then why are you not negotiating the terms of any leasing arrangement
    with other potential competitor/lessees?
        Secretary Roche. We are currently evaluating responses to the
    requests for information (RFIs) and will decide from that evaluation
    whether to proceed with a sole source competition or open it up to
    competition.

                                  TANKER LEASE

        73. Senator McCain. Secretary Roche, if it is because the Defense
    Appropriations bill states that Boeing 767 tankers are to be leased, I
    do not believe that the law restricts you from discussing the details
    of the lease to include requesting similar bids in such a leasing
    agreement from Airbus, the airlines, or any other possible competitors.
    Is that your understanding as well?
        Secretary Roche. The law does not prohibit the Air Force from
    requesting similar bids from Airbus, the airlines or any other
    competitor. Only Boeing 767 and 737 aircraft may be leased under
    section 8159 of the Defense Appropriations Act.

                       TANKERS IN FISCAL YEAR 2003 BUDGET

        74. Senator McCain. Secretary Roche, I read in the Air Force Times
    article of January 21, 2002, that you said that Plan A is to buy the
    Boeing 767 tankers and that Plan B is to lease the tankers. If that is
    correct than how come you have not included a single tanker in the
    fiscal year 2003 Air Force budget request recently submitted to
    Congress?
        Secretary Roche. The objectives for Plan A and Plan B are the
    same--address the severe challenge of tanker recapitalization. The
    fiscal year 2002 USAF budget began funding the process to replace the
    KC-135s with a follow-on tanker we call KC-X. The events of the past
    year have accelerated the age and corrosion issues of our KC-135 fleet
    to a degree that warrants exploring acquisition alternatives.
    Opportunities may now exist to avoid replacing the entire aircraft
    fleet simultaneously. That is why our fiscal year 2003 budget includes
    seed money to begin the acquisition effort for new aeriel refuelers in
    the out years of the FYDP.

                     767 TANKERS IN FISCAL YEAR 2003 BUDGET

        75. Senator McCain. Secretary Roche, in a letter dated December 7,
    2001, from you to Senator Patty Murray, you wrote: ``The most important
    and critical factor is that this replacement program starts as soon as
    possible. To this end we will work with the ASD (AT&L) and the OSD
    Comptroller to amend the fiscal year 2003 budget currently being vetted
    through the Department.'' Again let me pose the same question: if Plan
    A is to buy the Boeing 767 tankers, then why haven't you included a
    single tanker in the fiscal year 2003 Air Force budget request recently
    submitted to Congress?
        Secretary Roche. Our Tanker ``Plan A'' is to begin acquiring new
    air refueling tankers in the out years of the FYDP. The fiscal year
    2002 USAF budget began funding the process to replace the KC-135s with
    a follow-on tanker we call KC-X. The events of the past year have
    accelerated the age and corrosion issues of our KC-135 fleet to a
    degree that warrants exploring acquisition alternatives. Opportunities
    may now exist to avoid replacing the entire aircraft fleet
    simultaneously. That is why our fiscal year 2003 budget includes seed
    money to begin the acquisition effort for new aeriel refuelers in the
    out years of the FYDP.

                           TANKER MODERNIZATION PLAN

        76. Senator McCain. Secretary Roche, what events caused you to
    circumvent the normal disciplines of the budget process by not
    ventilating a tanker modernization plan in the Office of the Secretary
    of Defense, at the Office of Management and Budget (OMB), or through
    the authorizing committees and approach the Appropriations Committee
    about leasing Boeing 767 tankers? We all know that leasing Boeing 767
    tankers was not in the fiscal year 2002 Air Force budget, the Air Force
    long range 6-year procurement plan, and the Air Force's ``Unfunded
    Priority List.''
        Secretary Roche. Sir, you are right. Leasing tankers was not in the
    Unfunded Priority list the AF recently submitted. The USAF budget
    already had funds in fiscal year 2002 to begin the process that would
    start replacing KC-135s with a follow-on tanker we call KC-X. We are
    pursuing this plan because the tanker age and corrosion situation has
    become increasingly worrisome to the USAF. The KC-135 tankers are 40-
    year-old-plus aircraft that are wearing out. The KC-136E models, our
    oldest and least capable, are spending over 400 days in depot being
    rebuilt every 5 years, and they require significant communications
    upgrades to allow them access to airspace worldwide. The remaining 545
    KC-136 aircraft were purchased between 1957 and 1965. They will all age
    out at approximately the same time. It has become increasingly
    expensive for the Air Force to operate and maintain these aircraft. In
    May 2001, we sent letters to the chairmen and ranking members of all
    the defense committees requesting approval for accelerating our effort.
        This fall, while we were well into the process of submitting the
    President's Budget, we had a significant series of three events occur
    that focused USAF attention on reevaluating our tanker
    recapitalization, and thus potentially avoid having to replace the
    entire 545 aircraft fleet simultaneously. The first event came after
    the attacks on September 11; we started to fly our tanker aircraft at
    approximately twice their annual rate to support Operations Noble Eagle
    and Enduring Freedom. Simultaneously, the second event occurred, and
    that was the softening of the commercial aircraft market, and
    announcements from the US aviation industry that they were starting to
    shut production lines, and lay off US aviation workers. Lastly, the
    Boeing Company had expended their own capital and research &
    development to commercially offer Air Refueling Tankers, for delivery
    in 2005, based on their 767-200ER platform. The Japanese and Italian
    Governments have both recently concluded a competition and selected
    this aircraft as their new air refueling tanker. The combination of
    these three events made us closely examine the possibility of
    jumpstarting the replacement of the oldest tankers in our fleet.
        Given the apparently weak market demand for wide-body aircraft, we
    thought there existed a chance for a smart business opportunity to
    replace the KC-135Es with the commercially developed 767 tanker
    aircraft while maintaining a strong bargaining position for the USAF.
    Boeing provided the Air Force a briefing proposing a lease of 100
    aircraft for 10 years with the option to buy at the end of the lease
    for the final payment. Leasing appeared to be a viable option since the
    aircraft were: (1) commercially derived; (2) commercially developed;
    and (3) quickly available in larger numbers through a lease to augment
    the aging fleet of tankers. In addition, the Air Force expects savings
    to result from operating and maintaining modern commercial aircraft
    rather than 40-year old KC-135 aircraft.
        The USAF was then asked by members of the House and Senate to
    provide informational briefings on this proposal. The briefing provided
    to members of Congress, including members of the SAC, SASC, HAC, and
    HASC, who requested it from the AF. It was also provided to members of
    the OSD staff, CBO, and OMB. CBO and OMB had concerns with scoring
    Boeing's lease proposal. They recommended an ``operating lease''
    compliant with the existing provisions of OMB Circular A-11. CBO's and
    OMB's recommendations are reflected in section 8159 which permits the
    USAF to attempt to negotiate a lease arrangement, for up to 100
    aircraft, for up to 10 years, for not more than 90 percent net present
    value of the fair market value of the aircraft. The lease type
    specified ultimately returns the aircraft to private industry.
        The AF cannot enter into any lease deal without the permission of
    the four defense committees, and no funds can be expended. This, Sir,
    is the genesis of this lease possibility. It was generated out of our
    perceived need to accelerate existing replacement plans and to assure
    that we can meet our mission in the future.

                             UNFUNDED PRIORITY LIST

        77. Senator McCain. Secretary Roche so let me understand you that
    it was the amount of tanker missions flown in support of 16,000
    Operation Enduring Freedom sorties since October. Is that correct? I
    have examined your ``Unfunded Priority List'' totaling 60 programs at a
    total cost of nearly $10 billion which was prepared by Air Force Chief
    General Jumper, 1\1/2\ months after September 11 and 3 weeks after the
    air war started. [Refer to the UPL dated October 22, 2001]
        Secretary Roche. As of the middle of February 2002, the Air Force
    had flown over 14,500 sorties in support of Operation Enduring Freedom.
    Of the 14,500 sorties, approximately 6,000 were tanker sorties. The
    fiscal year 2002 Air Force Unfunded Priority List, prepared on 6 July
    2001, was provided again on 22 October 2001 at the request of
    Congressman Duncan Hunter.

                              KC-135 TANKER FLEET

        78. Senator McCain. Secretary Roche, by the chronology briefed by
    Defense Secretary Rumsfeld, Joint Chiefs of Staff Chairman General
    Myers and Commander in Chief of U.S. Central Command General Franks,
    the air war did not start until October 7, 2001. Can you try to explain
    to me why Major General Paul W. ``Bill'' Essex, Assistant Secretary for
    Air Force Acquisition, briefed Senator Murray's staff on October 3,
    2001, 4 days before the air war started, on the need to replace the KC-
    135 tanker fleet with Boeing 767 tankers?
        Secretary Roche. By 1 Oct 01, the USAF had already flown a
    significant number of missions in support of Operation Noble Eagle and
    in preparation for Operation Enduring Freedom. Starting on 11
    September, the Air Caps provided over the USA's major cities by
    Operation Noble Eagle were made possible by the KC-135 air refuelers
    that kept the fighters in the air doing their job protecting us. The
    missions supporting Enduring Freedom required the AF to establish
    extensive Air-Bridges composed of pre-positioned KC-135s and KC-10s.
    Without the Air-Bridges, our strike aircraft could not have
    accomplished the missions CENTCOM had in store for them. All of these
    actions were occurring well before the first strikes were made in
    Afghanistan. All of these actions were beginning to stress our oldest
    and least capable tankers.

                           BOEING 767 TANKER LEASING

        79. Senator McCain. Secretary Roche, according to your recent
    statements to the Defense Writers Group, you say that you may need
    additional legislation to conclude the Boeing 767 tanker leasing deal.
    What do you mean by this?
        Secretary Roche. The legislation on the tanker lease requires the
    Air Force to obtain separate authorization and appropriations if there
    are modifications required beyond the aircraft configurations currently
    offered. The JROC will be reviewing the Air Force's recommended
    Operational Requirements Document, and there may be changes that
    require us to seek that separate authorization and appropriation to
    assure military capability.

                               LEGISLATIVE WAIVER

        80. Senator McCain. Secretary Roche, according to a January 7, 2002
    article in Defense News, I understand that Boeing's Seattle plant work
    force is not licensed to work on military aircraft, as required by the
    U.S. International Trafficking in Arms Regulations (ITAR), which
    governs most arms exports. At least one State Department official has
    advised that since some workers at the Seattle plant are not citizens
    of the United States and if such a foreign national is working there on
    ITAR-controlled equipment, it does require a license. Would you also
    request a legislative waiver to build or modify the 767 tankers at the
    Seattle plant?
        Secretary Roche. No, we would not request a legislative waiver for
    ITAR issues. It is our understanding that the Boeing Company would
    build the aircraft at their Everett, WA facility, and install the ITAR-
    controlled equipment at an ITAR-approved facility elsewhere. This is
    the same process used to produce the commercially derived VC-25, C-32,
    and C-40 aircraft.

                                  TANKER STUDY

        81. Senator McCain. Secretary Roche, Air Force Brigadier General
    Ted Bowlds, program executive officer for airlift, tankers, and
    trainers, is reported by Defense Week Daily on February 1, 2002 as
    saying: ``The Air Force does not have the luxury of doing a study to
    determine whether another Boeing aircraft, such as the 777 or an Airbus
    airplane would suit its needs better than the Boeing 767.'' Is General
    Bowlds predetermining the outcome of the fiscal year 2001
    congressionally-mandated tanker study that is ongoing and whose results
    are due later this year?
        Secretary Roche. The Air Force had planned to begin an Air
    Refueling Tanker Analysis of Alternatives (AOA) for replacing the KC-
    135 fleet. In May 2001, we sent letters to the Chairman and ranking
    members of all the Defense Committees requesting permission to
    accelerate the previously planned 24 month-long AOA into fiscal year
    2001. This request was not approved. This AOA would have served as the
    basis of our ``Plan A''--a traditional acquisition program. In the
    fiscal year 2002 Appropriations Bill, Congress asked the Air Force to
    begin discussions with Boeing on the viability of a 767 tanker
    replacement. Our approach is to issue a Request for Information to
    conduct a market survey to help us identify the state of technology and
    to determine if we are able to make a sound business case. If we can
    make a business case and negotiate a satisfactory lease deal compliant
    with the law, we will come back to the four Congressional defense
    committees for permission to proceed. This would allow replacement
    tankers to begin delivery in 2005. If we cannot negotiate a
    satisfactory lease deal we will revert back to Plan A, a traditional
    acquisition program. This would delay the introduction of a replacement
    tanker by at least 3 years.

        82. Senator McCain. Secretary Roche, is he also predetermining the
    Leasing Review Panel that Department of Defense Comptroller Zakheim and
    Assistant Secretary of Defense Aldridge are establishing to examine
    multiyear leases for major weapon systems, aircraft, and ships?
        Secretary Roche. I am certain that General Bowlds would not
    predetermine the outcome of any study or the DOD Lease Review Panel. We
    have been actively engaged with the Leasing Review Panel since December
    2001.
                                     ______

                    Questions Submitted by Senator Bob Smith

                     SPECIAL OPERATIONS TANKING CAPABILITY

        83. Senator Smith. Secretary Roche, the Special Operations
    community has made a heroic account of themselves in the war in
    Afghanistan. The innovation, daring, and bravery of these troops played
    a major role in our successes in the conflict. We must give these
    people on the tip of the spear our utmost support. Lt. Gen. Paul
    Hester, commander of Air Force Special Operations Command said recently
    that there has been an acute shortage of tanking capability for our
    special operation forces. He said that only about 35 percent of tanking
    requests are being met. What is being done in the fiscal year 2003
    budget to correct this, given it is very much conceivable that the war
    on terrorism will continue to place demands on these troops?
        Secretary Roche. SOF unique requirements are funded by USSOCOM
    using MFP-11 dollars. In the USSOCOM fiscal year 2003 APOM, an AFSOC
    initiative to outfit 24 MC-130H Talon II aircraft as tankers was funded
    through MFP-11. This initiative will increase AFSOC's C-130 refueling
    capable fleet from 41 aircraft to 65 aircraft. The tanker requests
    referenced in this statement are for refueling both USA and USAF SOF
    helicopters. We understand the referenced tanker shortage is calculated
    using Active-Duty Forces only, however, when USMC and Reserve Forces
    are used for augmentation, support increases to 67 percent.

                        COMMANDER MICHAEL SCOTT SPEICHER

        84. Senator Smith. Secretary England, as you recall, last year we
    discussed the case of Commander (soon to be Captain) Michael Scott
    Speicher, and I appreciate the personal interest you have taken in
    resolving this tragic case. As you will agree, we owe it to him and to
    his family to establish his fate. I would like to get your personal
    assurance that you will continue to dedicate the necessary resources
    and attention to this matter.
        Secretary England. Yes, I agree. We owe it to both Commander
    Speicher and his family to unequivocally resolve his fate. Let me
    assure you, Senator, that I am personally committed and dedicated to
    doing just that. The Intelligence Community has kept me aware of
    developments in this case as we continue to pursue diplomatic,
    intelligence and operational efforts to obtain the fullest possible
    accounting of Commander Speicher.
                                     ______

                  Questions Submitted by Senator Rick Santorum

                        TERMINATED PROGRAMS AND SYSTEMS

        85. Senator Santorum. Secretary White, the Army has terminated 18
    programs and/or systems as part of the fiscal year 2003 request. Among
    the terminations are: TOW Fire-and-Forget, M113 recapitalization,
    Armored Combat Earthmover, Wolverine, Hydra Rocket, Improved Recovery
    Vehicle, and Bradley Fire Support Team. Is the Army or the Office of
    the Secretary of Defense (OSD) expecting Congress to ``buy back'' these
    terminations? Put another way, should Congress expect to see these
    programs/systems on the Army's unfunded requirements list? While 18
    programs/systems have been terminated, have the requirements that
    supported these programs gone away?
        Secretary White. To ensure that we maintain a capability that
    guarantees warfighting readiness in support of the National Military
    Strategy, we have had to make hard choices regarding modernization of
    our Legacy Force. Last year, the Army terminated 18 of its programs
    that are not planned for the Objective Force. Eleven of those programs
    will be terminated in fiscal year 2003, while the remaining seven will
    be terminated between fiscal year 2004 and 2007. The funding associated
    with these 18 systems has been reprogrammed to support higher
    priorities. The Army will not buy back any of the terminated systems
    through the unfunded requirements process. Rather, we will fund
    research, development, and acquisition for the next generation solution
    for the requirements to support the Objective Force design.

                                NUNN-MCCURDY LAW

        86. Senator Santorum. Secretary Roche, one of the items to receive
    press this year has been OSD's desire to enforce ``realistic costing.''
    Year after year, the military services have underestimated the cost of
    weapons development and buying programs to make them more attractive to
    the Pentagon and Congress.
        When unit cost growth of a program is 25 percent or more, the Nunn-
    McCurdy law requires the Secretary of Defense to certify to Congress
    that the program is essential to national security, that no less costly
    alternatives exist to provide equal or greater capability, that new
    cost estimates are reasonable, and that management can control cost.
    Such a certification is to be provided within 30 days. If that does not
    happen, the Department must stop funding for the program.
        Recent documentation from Defense Acquisition Chief Pete Aldridge
    indicates that the unit cost growth for the F-22 Raptor is 28.5
    percent. Does the Department of the Air Force believe that OSD must
    provide certification of the merits of the F-22 despite its breach of
    the Nunn-McCurdy law?
        Secretary Roche. Yes. OSD provided the certifications required by
    the Nunn-McCurdy law to the Congressional Defense Committees on 13
    September 2001.
        ``. . . As a result of the significant adjustments to the F-22
    program, the procurement unit cost for the program has increased by
    28.5 percent. Since the revised cost estimate for production exceeds
    the current Congressional cost cap, I request Congress remove the
    current production cost cap for the F-22 program. The revised plan
    maintains the F-22 Initial Operational Capability in December 2005.
        In addition to requiring notification of a breach in unit cost
    reporting, section 2433 of Title 10, United States Code, requires a
    certification to Congress before funds may be obligated for a major
    contract under a program that has experienced a unit cost increase that
    exceeds 25 percent. In accordance with 10 U.S.C. Section 2433, I
    certify:

            a. That the F-22 Program is essential to national security.
            b. There are no alternatives to the F-22 program which will
            provide equal or greater military capability at less cost.
            c. The new estimates of the procurement unit cost are
            reasonable.
            d. The management structure for the F-22 program is adequate to
            manage and control the procurement unit cost.''

                                F-22 PROCUREMENT

        87. Senator Santorum. Secretary Roche, the current Air Force
    procurement goal is 339 F-22s, well short of the initial 750 F-22s the
    service intended to purchase. Estimates are that the Air Force will
    need to procure 381 F-22 Raptors to fill out 10 squadrons for its
    aerospace expeditionary forces. Currently, the Air Force estimates that
    the F-22 program is $2.0 billion above the congressional cost cap for
    production, while the Office of the Secretary of Defense's Cost
    Analysis Improvement Group (CAIG) estimates the program to be $9.0
    billion over the production cost cap. Secretary Aldridge approved the
    F-22 limited/low-rate initial production (LRIP) under an arrangement
    that will allow the Air Force to procure as many aircraft as possible
    given budget constraints. Is the Air Force going to request relief from
    the congressionally mandated cost cap? If so, why should Congress grant
    this request when the program is in breach of the Nunn-McCurdy law?
        Secretary Roche. OSD requested, ``Congress remove the current
    production cost cap for the F-22 program'' in a 13 Sep 01 letter to the
    Defense Committees. OSD also intends to submit a legislative initiative
    on this subject.
        The F-22 cost caps have been an effective tool for managing F-22
    program costs; however, at this stage of program maturity the
    production cost cap could constrain the Department's ability to make
    optimum force structure decisions resulting from the QDR and Defense
    Strategic Review. At this point, over 90 percent of the aircraft
    development is complete with the remaining EMD work being primarily
    testing. In addition, the program has entered into low rate initial
    production (LRIP) with approval for full award of Lot 1 (10 a/c), Lot 2
    (13 a/c) and advance buy of Lot 3 (23 a/c). The baseline aircraft
    design has been finalized and near-term production costs are well
    understood. Accumulated cost data during development and the initial
    low rate production lots has served to build confidence in the Air
    Force's proposed cost reduction initiatives and the ability to continue
    to reduce future aircraft costs. Retention of the production cost cap
    at this stage no longer serves the original intent of controlling
    future costs, but instead serves as a fiscal constraint that simply
    caps the number of F-22s the Department can procure. This limitation
    significantly reduces the Departments flexibility when evaluating
    future force structure requirements and modernization alternatives.

                              PRODUCTION COST CAP

        88. Senator Santorum. Secretary Roche, if the Air Force does not
    receive relief from the production cost cap, how many F-22s does the
    service estimate that it can purchase?
        Secretary Roche. This does not include six Production
    Representative Test Vehicles (PRTVs) procured with RDT&E funds. The
    maximum production rate in this scenario would be 36 aircraft per year.
    The current Air Force plan to increase the production rate to 56
    aircraft per year would not be economically feasible if funding is
    constrained to the existing production cost cap.

                     RESEARCH AND DEVELOPMENT IN TECHNOLOGY

        89. Senator Santorum. Secretary White and Secretary England, last
    year Congress was told to wait for the fiscal year 2003 budget
    submission to judge the merits of the Bush administration's desire to
    transform the military. However, it seems that instead of radical
    reforms, additional budgetary authority (topline) has been requested to
    allow the pursuit of both legacy and new systems.
        For the Army, the fiscal year 2003 request seeks $268 million less
    for applied research versus the fiscal year 2002 request and $174
    million less in advanced technology development than the fiscal year
    2002 request. How is the Army expected to transform when it is
    experiencing -3 percent real ``growth'' in its research, development,
    test and evaluation accounts and less in requested funds for 6.2 and
    6.3 funding?
        Secretary White. In fiscal year 2003 the Army is actually seeking
    to increase its advanced technology development program (6.3) by $19.5
    million or 3 percent compared to the fiscal year 2002 request. This
    reflects the strategy to accelerate Future Combat Systems and Objective
    Force warrior technology development to field these capabilities by the
    end of this decade. Consistent with this strategy to rapidly field more
    mature technology, the less mature, applied research funding declined
    by $47 million in the fiscal year 2003 request compared to fiscal year
    2002. However, the Army remains committed to achieve transformational
    capabilities through advancements in science and technology (S&T), as
    evidenced by the overall 2.3 percent increase in total S&T for fiscal
    year 2003 compared to the fiscal year 2002 request. Despite heavy
    resource demands for current readiness, the Army's total research,
    development, test, and evaluation funding in fiscal year 2003 ($6.92
    billion) achieved 2 percent ($224 million) real growth compared to
    fiscal year 2002 ($6.69 billion).
        Secretary England. Using the fiscal year 2002 Amended President's
    Budget request as a basis for comparison, the actual fiscal year 2002-
    2003 reductions are far smaller:

                            [In millions of dollars]
    ------------------------------------------------------------------------
                                           6.2 Applied       6.3 Adv. Tech
                                             Research         Development
    ------------------------------------------------------------------------
    Fiscal year 2002 Amended                          617                670
     President's Budget...............
    Fiscal year 2003 Present's Budget                 580                617
     Request..........................
                                       -------------------------------------
      Difference:.....................                -37                -53
    ------------------------------------------------------------------------

        Within existing resources the Navy's S&T budget has been refocused
    with an emphasis on identifying, developing and demonstrating
    transformational capabilities. Examples of ongoing transformational
    include initiatives in the areas of Electric Power, Revolution in
    Training, and development of ever more capable Autonomous Vehicles.
    However, in determining whether we are making progress towards a 3
    percent goal, using the prior year appropriated level is not an
    accurate reflection of the Department's priorities because it includes
    significant increases for specific efforts that are not in consonance
    with Department core priorities, often including many items not
    requested by the Department with respect to necessity or timing. Such
    increases in the appropriated level create marginal returns against our
    key priorities and distort the baseline from which we hope to move
    towards the 3 percent goal as we try to include more transformational
    S&T technologies.

        90. Senator Santorum. Secretary White and Secretary England, does
    the fiscal year 2003 budget request contain enough science and
    technology and research and development funding to support a robust
    transformation initiative where we can skip a generation of weaponry?
    Put another way, is transformation of our military to meet 21st century
    threats still a goal of this administration? How can the Navy and the
    Army transform with the level of funding requested for 6.2 and 6.3
    research?
        Secretary White. Army Transformation to the Objective Force remains
    our highest priority. The Army is firmly committed to achieve
    transformational capabilities through advancements in science and
    technology (S&T) as evidenced by the overall 2.3 percent increase in
    total S&T for fiscal year 2003 compared to the fiscal year 2002
    request. In fiscal year 2003, the Army is seeking to increase its
    advanced technology development program (6.3) by $68.4 million or 10
    percent compared to the fiscal year 2002 request, reflecting our
    strategy to accelerate Future Combat Systems and Objective Force
    warrior technology development to field these capabilities by the end
    of this decade.
        Regarding a concept to skip a generation of weaponry, we should
    recognize that these investments in S&T are risk programs. They are
    pressing the limits of knowledge and technology. It would be premature
    to skip a generation of systems until we know if the technology can be
    proven and successfully transitioned to production for actual
    warfighting capability. However, despite heavy resource demands for
    current readiness and Legacy Force recapitalization, the Army's total
    research, development, test, and evaluation funding in fiscal year 2003
    ($6.92 billion) achieved 2 percent ($224 million) real growth compared
    to fiscal year 2002 ($6.69 billion).
        Secretary England. In keeping with the administration's goals, the
    Navy's existing S&T budget does include funding for dynamic
    transformational efforts in a wide array of areas including development
    of Electric Power for Naval Platforms, Littoral Support Craft
    (Experimental) (LSC(X)), Revolution in Training, and Autonomous
    Vehicles. These efforts do hold the potential for revolutionary ``jump
    ahead'' advances. The Electric Power effort stands to revolutionize the
    way the Navy builds and operates surface, subsurface, air and ground
    vehicles. Through the use of innovative hull forms, cutting edge
    propulsion systems, materials and modular systems, the LSC(X) stands to
    provide similar revolutionary advances that will feed into existing and
    future platforms. Revolution in Training stands to radically change the
    way we teach and train warfighters. Similarly, ongoing work in
    Autonomous Vehicles stands to have major impacts on a wide array of
    operations, including manned flight, ASW and mine warfare.
        All of these initiatives hold significant promise in terms of
    improved and expanded warfighting capabilities, coupled with improving
    operations and maintenance and reducing costs, that will transform the
    way we fight.

                              MUNITIONS SHORTFALLS

        91. Senator Santorum. Secretary White, Secretary England, and
    Secretary Roche, during his confirmation hearing in August to be Chief
    of Staff of the Air Force, General John Jumper said that the service
    has a $2 billion shortfall in its munitions accounts. The Department of
    Defense spent about $6 billion on munitions in fiscal year 2001,
    compared to $16 billion in 1991. Recently, Colonel James Naughton,
    Deputy Chief of Staff for Ammunition at the Army Materiel Command, said
    that there is not enough money to remanufacture obsolete ammunition
    stockpiles. While the budget increases funding for the procurement of
    ``smart munitions,'' the portion of the industrial base that
    manufactures bullets and projectiles, propellants, fuses, and
    pyrotechnics is not thriving. In addition, many of the subcomponents in
    the ammunition sector are military-unique items, with limited or no
    commercial market. An industry association, the Munitions Industrial
    Base Task Force, believes that our munitions accounts are underfunded
    by $400 million. What actions can the services take to strengthen the
    entire ammunition industrial base, not just the precision or preferred
    munitions base?
        Secretary White. The Army shares your concern about the health of
    the munitions industrial base. This concern is one of the major reasons
    the Army has established the Program Executive Office (PEO) for
    Ammunition. The new PEO is responsible for life-cycle acquisition
    management of conventional ammunition, which includes integrating
    budgets, acquisition strategies, research and development, and life-
    cycle management across all ammunition families. Included in this
    mission will be the responsibility of ensuring the continued viability
    of the munitions industrial base. The Army has included two ammunition
    remanufacturing programs, one for 105mm artillery and one for 155mm
    artillery, in its fiscal year 2003 submission. These programs will help
    parts of the artillery base. In addition, increases to programs to
    support requirements needed in responding to the post September 11
    environment will help the small arms ammunition base. In the long run,
    however, the only way to fully revitalize to ammunition industrial base
    is to add additional funding for currently unresourced war reserve
    requirements for other than smart munitions.
        However, we know that the benefit of precision munitions is a
    greatly reduced requirement for large stockpiles of non-precision
    munitions. For example, the Hydra 70 Rocket was originally designed as
    an area suppression weapon and is not very accurate. Up to 60 rockets
    are required to take out a specific target. Collateral damage and
    fratricide potential are significant detractors in the use of the Hydra
    70. In comparison, we estimate the Advanced Precision Kill Weapon
    System (APKWS), a Hydra 70 Rocket with a laser guidance package
    attached, will require one to two rockets per specific target.
    Collateral damage and fratricide issues are greatly reduced.
    Unfortunately, we do not project availability of the APKWS until fiscal
    year 2006. In this case, we need to carefully manage the transition of
    current Hydra 70 production to the proper size to support future APKWS
    requirements.
        The bottom line is we need to continually assess the state of our
    munitions programs from those in the technology base to those already
    produced and in our stockpiles. While it is clear additional resources
    are needed for munitions, specifics depend on risk assessments we are
    currently conducting.
        The Army uses hardware procurements and competition to provide the
    private sector and the organic base the resources needed to maintain
    the industrial base. The Army needs an industrial base that is sized
    for our high-priority requirements. A long-term stable ammunition
    program funded at higher levels enables PEO Ammunition to develop an
    acquisition strategy that will incentivize contractors to modernize for
    what the Army needs and dispose of the capacity that is not needed. The
    Army can execute its fiscal year 2003 unfunded requirement within the
    existing industrial capacity. The Army has done what it can within the
    available resources, but this effort does fall below the total
    requirements. Further, the Armaments Retooling and Manufacturing
    Support program enables the commercialization efforts of the operating
    contractors in this competitive market.
        Secretary England. The Department of the Navy (DON) supports the
    strategies developed by the United States Army, which acts as the
    Single Manager for Conventional Ammunition (SMCA). The Secretary of the
    Army was designated the single manager because the Army controls the
    majority of the industrial base. One of the more important functions of
    the SMCA is management of the Defense ammunition industrial base. To
    that end, Assistant Secretary of the Navy for Research, Development and
    Acquisition has recently coordinated a memorandum that reminds and
    emphasizes the intent and importance of Section 806 of the Fiscal Year
    1999 Defense Authorization Act for Fiscal Year 1999. The Act tasks the
    SMCA to examine the industrial base and make procurement decisions,
    which help to underpin the vitality of the ammunition industrial base.
    The DON is encouraged by the SMCA's implementation of multiyear
    procurements and long-term requirements contracts.
        The DON will continue to investigate management architectures and
    SYSCOM relationships that satisfy warfighter needs, stabilize
    requirements and inventories, and yet still allow the industrial base
    flexibility enough to respond to inevitable wartime surge demands. The
    Navy has also commissioned studies by Department of Commerce to examine
    the health of those portions of the industrial base where there is
    concern about the strength of the enterprise (e.g., high performance
    explosives).
        The ammunition industrial base has suffered in the past, and the
    DON is working closely with our partners on the Munitions Industrial
    Base Task Force to help ensure that this important element of our
    industrial capacity is preserved.
        Secretary Roche. The Air Force shares your concern about the health
    of the ammunition industrial base. Since the end of the Cold War, the
    Air Force has shifted its emphasis more towards precision-guided
    munitions, reducing the need for non-precision munitions. However,
    there are niches in the ammunition industrial base that warrant
    continual attention. In addition to funds already provided for the
    munitions and ammunition industrial base since September 11, a number
    of acquisition excellence strategies, such as multiyear procurement,
    contractor incentives, and lean enterprise practices, could be
    incorporated to support and strengthen the entire ammunition industrial
    base.
        Successful application of these strategies could enhance corporate
    financial health and stockholder value by increasing a contractor's
    ability to capture corporate profits and realize sufficient returns on
    investment. This, in turn, could lead to expanded growth for both
    contractors and their supply chain plus a greater potential for
    attracting investors, recruiting fresh talent, and retaining valuable
    expertise. In addition, the Government could realize improved schedule
    performance, reduced cycle times, and reduced acquisition costs
    throughout the industrial enterprise as a result of these strategies.
        Since the Army is the Department of Defense's Single Manager for
    Ammunition, responsible for consolidating Army, Navy, and Air Force
    ammunition procurements, we believe they would be in the best position
    to implement these strategies. Similar strategies were successfully
    incorporated in the Air Force's recent procurement of precision-guided
    munitions (e.g., Joint Direct Attack Munitions), and the Air Force
    would support the Army's efforts to implement these strategies.

        92. Senator Santorum. Secretary England, it appears that the Marine
    Corps has a shortfall in fire support. The DD-21, which was slated to
    provide off-shore fire support, was restructured last year. The Land-
    Attack Standard Missile, fitted with advanced navigation system and
    guided by a global positioning system (GPS), which was to provide the
    required range and accuracy needed to support Marine Corps power
    projection from the shore, has been canceled with this budget. The
    lightweight 155 field artillery system has slipped, impacting
    modernization of the on-shore field artillery.
        How do you plan to address this apparent shortfall in Marine Corps
    fire support requirements?
        Secretary England. The combined arms concept of employing Naval
    Surface Fire Support (NSFS), Land Based Fires, and Close Air Support
    (CAS) together produce synergistic effects throughout the depth of the
    battlespace. Combined arms synergy is essential to produce the desired
    effects on enemy targets. In the near-term, Marine Air-Ground Task
    Forces (MAGTF) will depend on combined effects of fire support systems
    on land, at sea, and in the air. To address our shortages in attack
    resources, surface delivered extended range projectiles and cruise
    missiles, land based artillery and mortar systems, augmented by
    existing TACAIR capabilities, will be employed together to gain
    complementary effects.
        Our near-term NSFS initiatives include improving sea-based 5''
    guns, developing an extended range guided munition, introduction of the
    Tactical Tomahawk cruise missile, and integration of C\4\I systems to
    support NSFS. The current 5'' 54 gun, used to fire conventional
    ammunition to 13nm, has been improved to accommodate higher energies
    associated with extended range munitions. The Extended Range Guided
    Munition (ERGM) has an objective range requirement of 63nm from the
    improved gun. The improved gun Initial Operational Capability (IOC) is
    scheduled for 2003 with conventional munitions, and 2005 with extended
    range munitions. ERGM will IOC in 2005. The Marine Corps' requirement
    to engage targets to 222nm can be partially met with the introduction
    of Tactical Tomahawk (TACTOM) in 2004. TACTOM's loiter and enroute re-
    targeting capabilities provide support over extensive maneuver areas.
    Naval Fires Network (NFN) and Naval Fires Control System (NFCS) are two
    near term C\4\I systems that provide the capability to support Carrier
    Strike, Surface Strike, Expeditionary, and Fire Support missions in
    support of Joint, Allied, and Coalition forces. NFN is being rapidly
    deployed now in support of operation Enduring Freedom. NFCS is
    scheduled to IOC in 2004.
        The Lightweight 155 Howitzer is one of three new land based fire
    support systems. We will introduce the High Mobility Artillery Rocket
    System (HIMARS) and an Expeditionary Fire Support System (EFSS) to
    provide improved land based fire support. The Lightweight 155, along
    with Towed Artillery Digitization (TAD), will provide increased
    mobility, improved accuracy and responsiveness, and greater durability
    over current field artillery system. HIMARS promises to be rapidly
    deployable and provide both precision and area munitions under all
    weather conditions, extending our ground-based fire support umbrella to
    60 kilometers. HIMARS will provide a robust capability for counterfire
    and battlespace shaping. EFSS will be a lightweight fire support system
    that can be transported inside the MV-22, providing a significantly
    enhanced fire support capability for a vertically lifted maneuver
    force.
        The MAGTF relies heavily on CAS to offset limited artillery and
    NSFS. The V/STOL capability of the remanufactured AV-8B Harrier allows
    forward basing to facilitate timely CAS to Marine ground forces.
    Improvements include enhanced night warfighting capabilities, improved
    engine, and multimode radar. Further, the multi-mission capable F/A-18C
    Hornet provides powerful and flexible offensive air support that can
    meet air to ground mission requirements. The F/A-18D provides the MAGTF
    with a platform capable of tactical air control and reconnaissance
    while retaining the offensive warfighting capabilities of the F/A-18C.
        The Navy's far-term approach is to develop a more robust set of
    NSFS weapon systems for installation in DD(X). These weapon systems
    include the Advanced Gun System (AGS), with its associated Long Range
    Land Attack Projectile (LRLAP) (objective range of 100 nm), and the
    Advanced Land Attack Missile (ALAM) (objective range of 300 nm).
        An integrated system of aviation, ground and sea-based fire support
    systems is required to support expeditionary ``combined arms''
    operations. These current and planned programs will provide
    complementary capabilities that meet the Naval services' requirements
    for long-range, responsive, all weather fire support.
                                     ______

                 Questions Submitted by Senator Tim Hutchinson

                                 C-130J PROGRAM

        93. Senator Hutchinson. Secretary Roche, I want to compliment you
    on the tremendous job you did on getting the C-130J program on track.
    Prior to last year, this was a program riddled with problems ranging
    from an erratic procurement strategy to problematic fielding schedules.
    It was your leadership, along with other senior uniformed members of
    the Air Force, that finally brought some order to this program that is
    so important to the Air Force's mission.
        In particular, the Air Force has made a significant step in
    recommending funding in this year's budget submission for a multiyear
    procurement of C-130Js. As you go forward with this procurement
    strategy, I would only want to remind you of the importance of ensuring
    that our pilots receive the high quality training they require. I was
    heartened that the budget submission also includes significant
    investment to establish the C-130J formal training unit at Little Rock
    Air Force Base. As the Air Force updates its C-130J fielding plan, are
    you committed to ensuring that an adequate number of aircraft are
    designated for training purposes?
        Secretary Roche. The Air Force is committed to making sure the
    right numbers of aircraft are available to meet C-130J training
    requirements. A solid training program is paramount to integration of
    the C-130J into the Total Force and we are building a beddown plan that
    reflects the need for trained crews being available as aircraft
    deliver. The specific number of aircraft required to perform this
    training mission is still under study. Little Rock AFB is, and will
    continue to be, the C-130 center of excellence, and is the planned
    location for future C-130J training.

            PROTECTING SOLDIERS FROM CHEMICAL AND BIOLOGICAL WEAPONS

        94. Senator Hutchinson. Secretary White, when U.S. military forces
    were conducting clearing operations in the Tora Bora region (caves) of
    Afghanistan previously occupied by al Qaida, there was concern that our
    forces could be exposed--either accidentally or intentionally--to
    chemical or biological agents. What methods did the soldiers and
    marines use to defend themselves against exposure? What role did the
    anthrax vaccine play in their defense?
        Secretary White. Generally speaking, the troops in Afghanistan are
    equipped with protective masks and other gear to defend against
    exposure to chemical or biological agents. The U.S. Central Command can
    provide specific information on which units were involved, how they
    were equipped, and what tactics they used to avoid exposure.
        On June 5, 2001, the Deputy Secretary of Defense amended the scope
    of the Anthrax Vaccine Immunization Program's (AVIP) implementation to
    include only designated special mission units, manufacturing, and
    Department of Defense research personnel and Congressionally mandated
    anthrax vaccine research. At present, the anthrax vaccine is only
    provided to personnel meeting these criteria until the AVIP resumes
    full implementation. Since the information is currently classified, I
    am not able to provide in an open forum which units in Afghanistan
    received the anthrax vaccine.
                                     ______

                  Questions Submitted by Senator Jeff Sessions

                             UTILITY OF OLDER SHIPS

        95. Senator Sessions. Secretary England, I visited Japan in January
    2002 and received briefs on the U.S.S. Kitty Hawk and one of her
    escorts, U.S.S. O'Brien, shortly after they returned to Japan from
    Operation Enduring Freedom. Both of these ships performed superbly, and
    General Franks testified before this committee last week that the key
    capabilities a carrier battle group brings to the battle are its
    firepower and staying power. Kitty Hawk's use as an Afloat Forward
    Staging Base was a superb example of transformation, and O'Brien fired
    Tomahawks and conducted Maritime Intercept Operations searching for al
    Qaida operatives in support of Operation Enduring Freedom. In fact, the
    Kitty Hawk battle group is scheduled to deploy again in support of
    Operation Enduring Freedom later this spring with her full air wing.
        Would you explain your view on the General Franks' statement
    regarding the key capabilities the Kitty Hawk battle group provided
    during Operation Enduring Freedom, and your assessment of their future
    utility for missions against asymmetric threats?
        Secretary England. Kitty Hawk, on short notice, transitioned to the
    AFSB mission, and was highly effective in that mission. While on
    station in the North Arabian Sea, the Kitty Hawk AFSB provided
    significant support to our Special Operations Forces (SOF):

            (1) Significantly cut the flying distances to the FARP (Forward
            Area Refueling Position) in Pakistan and the targets in
            Afghanistan.
            (2) Large flight deck facilitated/expedited launch and
            recovery, maximizing range and on-station time of helicopters.
            (3) Robust, organic C\4\I infrastructure available for mission
            planning, situational awareness, and intelligence collection
            and distribution.
            (4) Increased operational security. Hostile elements could not
            observe and report on AFSB operations as they could have done
            had the SOF been located ashore. Since foreign nationals were
            not needed to provide contractor services on board ship, the
            assault force was certain mission planning rehearsals and
            preparations were unobserved. This level of security was vital
            to maintaining the important element of surprise.
            (5) Secure environment; force protection concerns were greatly
            reduced.
            (6) Outstanding medical capabilities greatly reduced the
            distance (time) needed to transport wounded to trauma care and
            offered superb routine medical care.
            (7) Extensive maintenance infrastructure, useful for intense
            helicopter maintenance requirements.
            (8) Significant ammunition and fuel stowage capability.
            (9) Excellent habitability features for SOF operators. Some
            specific examples:

                    - Nutritious, sufficient food: forces did not have to
                    acclimate to an unfamiliar cuisine.
                    - No contaminated water issues.
                    - Beds vs. cots, air-conditioning vs. no air
                    conditioning, plus extensive physical fitness
                    facilities.

        Given the inherent mission flexibility of Navy ships, any of our
    carriers or ``big deck'' (LHAs/LHDs) amphibious ships, as well as
    smaller amphibious ships and surface combatants in smaller scenarios,
    could successfully perform this function depending on the specific
    mission--Sea-based combat strike capability is expected to continue, at
    a minimum, if not increase, as we prosecute terrorists and their
    networks. The Chief of Naval Operations has directed a study of the
    feasibility of acquiring a platform dedicated to providing, among other
    things, an operational capability similar to that provided by Kitty
    Hawk. Independent teams from Naval Sea Systems Command (NAVSEA) and the
    Military Sealift Command (MSC) have explored naval and commercial
    platform options to assess their abilities to meet this requirement.
    NAVSEA's and MSC's combined analysis and their recommendations are
    expected to be briefed in the near future.
        The AFSB mission in support of our Special Operations Forces
    certainly is important, as access to bases ashore become less certain.
    Kitty Hawk did her mission, and did it superbly. Embarked SOF aboard
    ships have the advantages of sovereignty, flexibility, operational
    security, and force protection. It is a potent and proven tactic.
    However, if we continue, the Nation will ultimately need a dedicated
    platform to maintain force integrity and offensive punch.
        The question also recognized the importance of Kitty Hawk's escorts
    to the war effort, and I want to expand on their pivotal contributions.
    In the past two decades, Navy ships and operational concepts have
    evolved to incorporate new capabilities. Tomahawk is distributed
    throughout the force, increasing the number of strike platforms from 14
    in 1982 to over 140 today. While the strike capabilities of our Navy
    forces certainly are important, Kitty Hawk's two surface escorts also
    performed other vital Global War on Terrorism missions, such as
    Maritime Interception Operations (MIO). Specifically, there are two
    types of MIOs: standard interception operations in which suspect ships
    are boarded and inspected for contraband or illegal cargo, and
    Leadership Interception Operations (LIO)--a focused MIO--specifically
    directed against terrorist leadership, in this case the al Qaida and
    Taliban regime, attempting to escape by sea.

        96. Senator Sessions. Secretary England, it would also be helpful
    to hear your comments on lessons learned as we assess the future
    utility of some of the Navy's aging ships. I would like to point out
    that this is an issue that Senator Kennedy and I are focusing on and
    will have a letter to you and the CNO asking you to look into four
    focus areas for getting the most out of the ships we do have.
        Secretary England. The primary lesson learned is that significant
    investment in modernization is required to keep ships serviceable and
    retain them to the end of their full service life. In a fiscally
    constrained environment, Navy must balance between transforming and
    building the future Navy to meet emergent warfighting requirements, and
    operating the current force to meet existing missions, while remaining
    within the President's budget.
    Force Structure:
        New ship procurement decisions dominate force structure
    recapitalization, yet the retention or decommissioning of ships has the
    greatest near-term impact on force structure size and composition. The
    key element in decisions to extend or contract the service life of a
    ship class is affordability versus capability.
    Service Life Considerations:
        The service life of our warships has a significant impact on force
    structure. Extending service life by delaying decommissionings can
    maintain or increase force structure and, correspondingly, accelerating
    decommissioning can reduce force structure. The decision to extend or
    accelerate decommissioning of a ship class is based on a cost/benefit
    analysis focusing on the affordability of the platform and what
    warfighting capabilities it brings to the Joint Commander's tool box.
    In some cases, such as Ticonderoga (CG 47) class cruisers and Perry
    (FFG 7) class frigates, it is considered prudent to invest in
    conversion and modernization of ships to extend their service life. In
    other cases, such as Spruance (DD 963) Class destroyers, it is more
    economical to decommission the ships.
    Historical Service Life vs. Estimated Service Life:
        Sophisticated combat systems must keep pace with advancing threat
    technology. As the combat systems and the hull, mechanical and
    electrical (HM&E) systems of a platform age both must be maintained and
    upgraded, but the combat systems upgrades tend to be more extensive and
    expensive. Additionally, as ships age, the cost of operating and
    maintaining the ships may increase as a function of the overall
    material condition of the vessel. For example, if a ship has deferred a
    number of maintenance actions over the course of its operating life,
    and has had a high operational tempo, the cumulative effects on the
    ship can lead to higher operating and maintenance costs. This must be
    considered in investment decisions. In making service life decisions,
    warfighting capability gained from an upgrade is balanced against the
    cost of the upgrade and the operations and maintenance cost of the
    ship. Unless modernized, a surface combatant's Historical Service Life
    (HSL) is shorter than the Estimated Service Life (ESL) established via
    current Navy policy and design specification requirements provided to
    shipbuilders. For destroyers, HSL is 20 years compared to an ESL of 35
    years. In the case of frigates, HSL is 20-22 years compared to an ESL
    of 30 years.
    Cruiser Conversion:
        The Navy has made the commitment to extend the service of our
    primary air defense platforms through the conversion program for CG 47
    Class cruisers. The program will upgrade the AEGIS combat systems and
    install warfighting improvements including Area Air Defense Commander
    (AADC) capability, upgrades to the AEGIS Baseline to accept Sea Based
    Ballistic Missile Defense capability (pending Missile Defense Agency
    (MDA) approval and funding of development), land attack, and force
    protection. Additionally, service life extension features include Smart
    Ship upgrades, the all electric alteration, weight and moment
    adjustments, and other distributive systems improvements. Modernizing
    these ships will make them more capable to project theater-wide offense
    and defense while providing up to an additional 20 years of service
    life beyond the HSL of 17 years.
    Frigate HM&E and Self Defense Upgrades:
        In the fiscal year 2003 budget submission, FFG 7 Class frigates
    will receive HM&E upgrades to reduce their operating costs and extend
    their service life. Additionally, the combat systems will be upgraded
    with selected ship self defense technology. These ships with their
    relatively small crew size and low operating costs provide affordable
    warfighting capability for the investment required.
    Amphibious Assault Ship Sustainment:
        The requirement for amphibious ships is driven by two factors, the
    Amphibious Ready Group (ARG) deployment cycle and Marine Corps lift
    requirements. Today's 12 ARGs are the minimum required to meet presence
    requirements and each ARG consists of an LHA/LHD, LPD, and LSD. Overall
    lift is currently below the 2.5 Marine Expeditionary Brigade (MEB) lift
    programmatic goal and the full requirement of 3.0 MEB lift. Austin (LPD
    4) Class ships will be required to serve an average of 41.5 years, well
    beyond their original ESL of 30 years, in order to meet amphibious
    requirements until the LPD 17 class ships are delivered to the fleet.
    We are funding the LPD 4 Class Extended Sustainment program, which is
    designed to improve the dependability of HM&E systems and living
    conditions for the Sailors and embarked Marines. Additionally, it is
    expected that LHAs with their mid-life upgrade will be required to
    serve a median 42 years, significantly beyond their ESL of 35 years,
    before being replaced by the LHA(R) ships currently being studied.
    Destroyer Decommissionings:
        DD 963 Class destroyers are expensive to maintain because of their
    large crew size and age while providing only limited warfighting
    capability. These ships received an earlier modernization with the
    introduction of the Vertical Launch System (VLS), which extended the
    combat system relevant life beyond the historical 20 years. However,
    while the ships still provide some warfighting capability with two 5''
    54 cal. guns and an Antisubmarine Warfare (ASW) suite, the higher
    manning requirements and operational costs do not justify additional
    funds for further modification or extended service life. New BURKE (DDG
    51) Class destroyers being introduced to the fleet provide
    substantially more combat capability and an ample number of VLS tubes
    to support current Tomahawk inventory. It is not cost-effective to keep
    the DD 963 Class in the inventory. The currently structured
    decommissioning schedule will save the Navy about $1.25 billion over
    the Future Years Defense Program (FYDP) that can be applied to
    transformational efforts such as electric drive, advanced networks and
    stealth technology bringing new warfighting capabilities to the fleet.

                          ADEQUACY OF FORCE STRUCTURE

        97. Senator Sessions. Secretary White, Secretary England, and
    Secretary Roche, the Quadrennial Defense Review (QDR) described the
    force structure required to carry out the defense policy goals of: 1)
    assuring allies and friends; 2) dissuading future military competition;
    3) deterring threats and coercion against U.S. interests; and 4) if
    deterrence fails, decisively defeating any adversary. The QDR further
    stated that as the ``transformation effort matures . . . DOD will
    explore additional opportunities to restructure and reorganize the
    Armed Forces.'' Does your service's budget request support the QDR
    force structure? If not, what transformation efforts will enable you to
    go below the QDR force levels?
        Secretary White. The QDR-directed force structure did not change
    the current Army end strength of 1,035,000 with 480,000 in the active
    Component (417,000 Force Structure Allowance (FSA) and 63,000
    transients, trainees, holdees, and students), 350,000 in the Army
    National Guard (384,000 FSA); and 205,000 in the Army Reserve (212,000
    FSA). The FSA provides for 18 combat divisions in the Army today--10
    Active and 8 National Guard. Our budget submission provides for this
    force and fully supports the levels outlined in the QDR Report.
        The fiscal year 2003 budget adequately funds all of the Army's
    known Interim and Objective Force Transformation requirements. First,
    the budget and its associated Future Years Defense Program (FYDP) funds
    the procurement of six Interim Brigade Combat Teams and its equipment.
    Next, the Army is funding over $8.5 billion in the FYDP for science and
    technology, more than 97 percent of which is focused on Objective Force
    technologies. In order to fund these requirements, the Army has
    accepted risk by underfunding the modernization requirements of the
    current Legacy Force. Over the past 3 years, we have terminated 29
    programs to garner over $8.2 billion in savings. As the Army moves
    forward with Transformation, it will have to make more tough funding
    decisions, and where possible, seek additional funding from Office of
    the Secretary of Defense and Congress.
        Secretary England. The Quadrennial Defense Review Report listed the
    current force structure of the Navy and Marine Corps as a baseline from
    which the Department will develop a transformed force. The fiscal year
    2003 Budget Request supports maintaining this force structure with the
    following exceptions:
        Active Surface Combatants fall below the baseline level of 108
    across the FYDP:

    ----------------------------------------------------------------------------------------------------------------
                                                                               Fiscal Years
                                                    ----------------------------------------------------------------
                                                         2003         2004         2005         2006         2007
    ----------------------------------------------------------------------------------------------------------------
    Active Surface Combatants......................         101           99           96           99          103
    ----------------------------------------------------------------------------------------------------------------

        Attack Submarines fall below the baseline level of 55 from fiscal
    year 2003 to fiscal year 2006:

    ----------------------------------------------------------------------------------------------------------------
                                                                               Fiscal Years
                                                    ----------------------------------------------------------------
                                                         2003         2004         2005         2006         2007
    ----------------------------------------------------------------------------------------------------------------
    Attack Submarines..............................          54           54           54           54           55
    ----------------------------------------------------------------------------------------------------------------

        Navy's fiscal year 2003 budget request focuses on funding
    requirements in personnel and operational accounts to support our
    current readiness to conduct a full spectrum of joint military
    activities. Top priority on funding current readiness was a matter of
    choice justified by the ongoing war effort. Even so, high on the list
    of unaffordable requirements is an attack submarine refueling overhaul
    that would increase the inventory to 55 from fiscal year 2004 out, and
    additional DDG-51 procurement that would bolster the surface combatant
    force structure.
        We have also decided to divest ourselves of older, less capable
    ships by retiring them in order to free resources that can be used to
    fund transformational capabilities on the remaining ships and
    submarines of the fleet. The impact on force structure requirements of
    the improved capabilities brought by, for example, programs funded in
    the fiscal year 2003 President's Budget such as Cooperative Engagement
    Capability (CEC) and Trident SSGN conversion is still being studied.
    CEC provides a revolutionary new capability, allowing surface and air
    platforms to share and fuse sensor information. This will allow Aegis
    ships to engage contacts beyond the sight of onboard sensors resulting
    in a dramatic enhancement in the total force capability to track in a
    jamming environment. The Trident SSGN program converts four Ohio class
    SSBNs to SSGNs. Available for operational use starting in 2007, these
    SSGNs provide unique Special Forces capabilities, including hosting the
    Advanced SEAL Delivery System (ASDS), and large-scale strike
    capabilities in one clandestine, survivable platform. SSGNs will also
    serve as a transformation ``bridge'' for submarine encapsulation of
    joint payloads and will provide the volume for experimentation and
    development of offboard sensors and vehicles.
        Secretary Roche. In the last decade, DOD has undergone three major
    reviews beginning with the Bottom Up Review. During these reviews, Air
    Force reduced its force structure to a little more than half of what it
    was in aircraft, people and units. But, the Nation's leaders asked the
    Air Force to do more, much more, nearly four times more than our
    assessments predicted. The Air Force responded with the Expeditionary
    Aerospace Force (EAF) concept remaking itself and becoming more
    flexible and stable in the process. The EAF has at its core an entirely
    new way of doing business using 10 separate Aerospace Expeditionary
    Forces (AEFs) in a rotational concept. The past decade demonstrated
    that air and space power's inherent characteristics of speed, range,
    and flexibility made it the force of demand in the new security
    environment. The Air Force continues its transformation journey to meet
    the requirements of the new defense strategy.
        This strategy also provided a new approach in assessing force
    structure and shifted the force sizing paradigm. As part of the change,
    Secretary Rumsfeld asked the services to create and implement a
    capabilities based plan and as part of that plan, decide how to
    recapitalize themselves. These plans are extremely important as we make
    decisions about organization, concepts and system procurement. Cost per
    unit was often used as a measure of merit in making such decisions. But
    a more accurate measure of merit that captures the real value or
    capability of a particular system is cost per target engaged or, better
    yet, cost per effect desired. We are building a recapitalization plan
    which will be a balanced sustainable portfolio of platforms and ages.
    But we are not thinking just in terms of platforms. We are thinking in
    terms of overall capability provided by each platform, not simply what
    it was originally designed for. As an example we are looking at our
    tanker fleet, now as a smart tanker fleet by incorporating C\2\ISR
    capabilities on the platforms with refueling capabilities. Another
    example would be the development UAVs in the C\2\ISR/Hunter Killer
    mode, thus allowing us to radically shorten the kill chain. We think
    these are examples of incorporating the transformational character of
    air and space power to radically redefine our Nation's strategic and
    operational alternatives for military success in this dangerous world.

                        OVERDUE ATTACK SUBMARINE REPORT

        98. Senator Sessions. Secretary England, Sections 123 and 124 of
    the fiscal year 2001 Authorization bill require the Secretary of
    Defense to submit two reports on attack submarines. The first report is
    a plan to maintain at least 55 attack submarines and the second is on
    production rates for Virginia-class submarines. Both reports are
    overdue by more than a year and are key for our deliberations regarding
    the Navy's new construction request.
        Has the Navy completed their portion of these reports and do you
    know when they will be submitted to the congressional defense
    committees?
        Secretary England. The Secretary of the Navy is continuing to work
    with the Office of the Secretary of Defense (OSD) to complete these
    reports for submission in support of the Congressional review of the
    PB03 budget. The reports were initially drafted by the Navy during
    Congress, PB02 deliberations and the Department of Defenses'
    preparation of the PB03 budget. The reports were revised to accurately
    reflect PB03 decisions. The reports are currently being reviewed by the
    Department of the Navy and will be forwarded to OSD for final approval
    and submittal to the congressional defense committees.

                      DEPLOYABLE JOINT COMMAND AND CONTROL

        99. Senator Sessions. Secretary England, the QDR stated the
    pressing need for a Deployable Joint Command and Control center. The
    Secretary of Defense's testimony before this committee last week
    indicated that this budget request included $40 million for a program
    for new land- and sea-based joint command and control centers.''
        What is the Navy's share of that $40 million fund and what is your
    vision on the future of Navy command and control ships?
        Secretary England. The $40 million in question (actually $39.8
    million as submitted in the President's Budget) represents RDT&E
    funding specifically added to the Navy's TOA to initiate the effort
    known as the Deployable Joint Command and Control (DJC\2\) system.
    DJC\2\ will be a joint program with the Department of the Navy as the
    Executive Agent, and is presently in the definition stage. The Joint
    Requirements Oversight Council approved the DJC\2\ Mission Needs
    Statement in February 2002. DJC\2\ is envisioned to provide Joint Force
    Commanders with a deployable joint Command and Control (C\2\) system to
    fully command, control and direct CINC and Joint Task Force (JTF)
    operations. DJC\2\ will provide this capability for the envisioned
    Standing JTF headquarters staffs (about 250 personnel) in a set of
    collapsible shelters or transportable vans. The communications
    infrastructure, capability and support functions are to be provided
    separately by the respective service component(s). DJC\2\ is envisioned
    to provide the land- and sea-based joint C\2\ functionality that can be
    easily relocated as tactical situations require, and provide this
    functionality when component commanders transition ashore from afloat.
    DJC\2\ functionality is intended to be present in the Joint Command and
    Control [JCC(X)] Mission System core.
        Navy command ships currently provide worldwide, forward deployed,
    and robust joint C\4\I capability without the limitations inherent with
    fixed shore sites. This capability is consistent with the QDR and its
    emphasis on forward deployed, robust command and control. The Navy's
    new JCC(X) program will provide up to four ships to replace today's
    command ship capability which will reach their ship service life by the
    end of the decade. The JCC(X) ship with its integrated Mission System,
    provides the C\4\I, collaborative workspaces, information
    infrastructure, communications capability as well as habitability
    spaces to support the Joint Forces Commander, complementary Component
    Commanders, coalition as well as providing for the numbered fleet
    commander and staffs. The Navy leadership is currently assessing
    alternative platform approaches to meet the JCC(X) Mission Needs
    Statement.
        The JCC(X) and DJC\2\ programs are separate, yet complementary
    efforts. While they both must be interoperable and support the CJTF HQ
    function, the JCC(X) Mission System also supports the operational and
    tactical functions associated with Naval Forces afloat and the Numbered
    Fleet Commander and staff. DJC\2\ plans to have its first variant
    available to support PACOM operations by 2005, while JCC(X) initial
    ship delivery will not be until 2011. JCC(X) will leverage on the
    DJC\2\ development and support its functionality within the JCC(X)
    Mission System to provide the very necessary capability for the CJTF
    and the Component Commands and Staffs around the world, regardless of
    on land, at sea, or in the air.

                           AVIATION FLIGHT SIMULATORS

        100. Senator Sessions. Secretary White, in your opening statement
    you said that the Army must ``fully modernize training ranges, combat
    training centers, and training aids, devices, simulators, and
    simulations to provide adequate and challenging training.'' I have been
    thoroughly impressed with the performance of Army aviation during
    Operation Enduring Freedom and can offer well-deserved praise to the
    professionals at the home of Army aviation in Fort Rucker, Alabama. One
    item I observed during a recent visit to Fort Rucker was an urgent
    requirement for advanced simulators and advanced simulator technology.
    Do you feel that the requirement for more advanced simulators is
    adequately addressed in this budget?
        Secretary White. In short, no. Under the Army's Transformation
    guidance, Fort Rucker redesigned flight school to produce a more
    combat-ready aviator for the field. The analysis of simulation
    requirements indicates an immediate need for an estimated 24 TH-67 High
    Fidelity Flight Simulators for initial entry students and 24
    reconfigurable Advanced Aviation Institutional Training Simulators
    (AAITS) for advanced aircraft training. AAITS will also support virtual
    and constructive training for officer professional development courses
    as well as collective training for Active, National Guard, and Army
    Reserve aviation task forces preparing for operational deployments.
    Funding for this requirement is not addressed in the current budget.
        The high cost of these technologically advanced devices, combined
    with their immediate need, creates procurement obstacles under the
    Federal Acquisition Regulation. Statutory changes to procurement laws
    are required to execute the preferred strategy of a Privately Funded
    Initiative or Public Private Partnership. The most advantageous
    business solutions to the government and the taxpayer leverage
    commercial, up-front capital investment offset by long-term contract
    agreements greater than 5 years.

                          DOMESTIC SPACE LAUNCH POLICY

        101. Senator Sessions. Secretary Roche, the Air Force was
    designated by the Secretary of Defense as the executive agent for space
    in 2001. In your opening statement, you said that this means that the
    Air Force is responsible for Department of Defense-wide ``planning,
    programming, and acquisition of space systems.'' One of the fundamental
    goals of the national space policy is assuring reliable and affordable
    access to space through U.S. space transportation capabilities. The
    policy directs that U.S. government payloads be launched on space
    launch vehicles manufactured in the United States unless exempted by
    the President or his designated representative. One of the programs you
    identified in your opening statement that is designed to meet the
    future launch demands of national security, civil, and commercial
    payloads is the Evolved Expendable Launch Vehicle (EELV). The Atlas V
    program that is being proposed for the EELV utilizes a Russian-designed
    and Russian-built RD-180 engine for propulsion.
        It is my understanding that the EELV engineering and manufacturing
    contract was awarded in October 1998 and that the Department agreed to
    allow a Russian engine to be used in the development only if a U.S.
    manufacturing capability was developed within 4 years of the contract
    being awarded. That 4 years is up in October of this year. Can you tell
    me what progress has been made with developing a U.S. production
    capability?
        Secretary Roche. The license agreement necessary to begin the
    transfer of the manufacturing data from the Russian company (NPO
    Energomash) to the U.S. company (United Technologies, Pratt & Whitney)
    took 18 months to get through the U.S. Government approval cycle. The
    license agreement is currently awaiting approval by the Government of
    Russia. We anticipate approval in late March, after which the data will
    begin to flow. The revised U.S. co-production schedule will provide the
    capability to produce U.S. built engines by 2008. AF has requested an
    extension from the DOD. We are managing the risk of relying on Russian
    built engines by stockpiling enough engines to launch all U.S.
    Government Atlas V missions on contract.

                                 ATLAS V LAUNCH

        102. Senator Sessions. Secretary Roche, I also understand that the
    first Atlas V launch is scheduled for fiscal year 2004 with a
    classified payload. Is it still U.S. policy to assure our access to
    space through space launch vehicles manufactured in the United States?
        Secretary Roche. The first Atlas V will fly this summer with a
    commercial payload. The first U.S. Government payload on an Atlas V,
    Wideband Gapfiller Satellite #2, will fly in November 2004 (fiscal year
    2005). A May 1995 DOD policy directive requires national security
    payloads to be launched on space launch vehicles manufactured in the
    United States. The same policy allows the use of engines manufactured
    in nations of the Former Soviet Union if we have sufficient quality and
    quantity of stocks to preclude a launch stand-down during transition to
    U.S. sources. The Atlas V RD-180 main engine is built in Khimky,
    Russia. Therefore, the Air Force requires Lockheed Martin to stockpile
    engines as an interim risk mitigation measure during the conversion to
    U.S. production.

                     DEPARTMENT OF THE ARMY REORGANIZATION

        103. Senator Sessions. Secretary White, I am greatly concerned
    about one aspect of the Department's reorganization: the Army Review
    Boards Agency and the Army Board for Correction of Military Records.
    Over the last 5 years I have relied on the Department's assistance many
    times. This includes the work and assistance of the men and women
    assigned to the Office of Congressional Liaison, the Army staff for
    program information, field commanders, and specifically the Army Review
    Boards Agency (ARBA) and the Army Board for Correction of Military
    Records. The ARBA has, on multiple occasions, assisted my constituents
    to the point that I am stunned the Department would consider action
    resulting in the elimination of 31 spaces. Such action I think is not
    only in violation of the 1999 National Defense Authorization Act
    (NDAA), but sets you up for Congressional criticism when you fail, as
    you will, to meet Congressional suspenses. Will you reconsider planned
    action and take heed of the language that the committee expects you to
    ``provide the manpower, equipment and fiscal resources necessary to
    ensure that the boards are able to meet the timeliness standards?''
        Secretary White. I agree with you that the agencies you mentioned
    do a tremendous job for our soldiers and families. However, I would
    like to clarify I have not yet directed a reduction of the manpower in
    ARBA. I did request that the Assistant Secretary of the Army (Manpower
    and Reserve Affairs) analyze a reduction from 132 people to 100 to
    determine if ARBA can maintain the congressionally-mandated standards
    for responding to requests for review of military records at decreased
    manpower levels. This analysis should include investment costs in
    technological equipment and other available means for ensuring
    compliance with the 1999 NDAA and congressionally-mandated suspenses.
    Reductions of this nature are required in activities of the Army to
    meet the congressionally-mandated Headquarters management account
    reduction of 15 percent, also mandated in the 1999 NDAA. I will not
    approve any reductions that would cause the Army to break the 300-day
    processing threshold.
                                     ______

                  Questions Submitted by Senator Susan Collins

                        NAVY INTELLIGENCE IN THE FUTURE

        104. Senator Collins. Secretary England, you state the importance
    of operations in the intelligence domain and cite an example of Navy P-
    3 aircraft guiding Special Operations Forces and Marine units on the
    ground in your testimony.
        What manned Navy Intelligence, Surveillance and Reconnaissance
    (ISR) capabilities do you plan for the future? With the increased
    OPTEMPO of the P-3 rapidly diminishing its service life, do you see any
    advancement in the procurement of its replacement?
        Secretary England. The Multi-Mission Maritime Aircraft (MMA) is
    planned to be the permanent solution addressing the Intelligence,
    Surveillance and Reconnaissance (ISR), Antisubmarine Warfare (ASW), and
    Anti-Surface Warfare (ASUW) missions while sustaining the Maritime
    Patrol and Reconnaissance (MPE) inventory through the middle of the
    21st century. MMA achieved a successful acquisition Milestone 0 (MS 0)
    March 22, 2000 and subsequently entered the Concept Exploration phase
    in July 2000. In January 2002 the MMA Acquisition Strategy Plan and
    Analysis of Alternatives received approval from USD AT&L, which allowed
    the MMA program to proceed into the Concept, Advanced Development
    Phase. Attaining these milestones continues MMA on a schedule to meet a
    2012-2014 IOC.
        The MMA Initial Operational Capability (IOC) has been accelerated
    from the original IOC of 2015 to the current 2012-2014 timeframe.
    Beginning in fiscal year 1999, a Service Life Assessment Program (SLAP)
    was undertaken, which will provide the analytical and empirical
    information required to accurately determine P-3/EP-3 fatigue life.
    Special Structural Inspections (SSIs), based on SLAP results, will be
    conducted on applicable airframes once they reach 100 percent fatigue
    life expended (FLE). Aircraft under this inspection and repair plan
    should be able to attain 130 percent FLE, thereby sustaining the
    operational MPR force until MMA is fully operational. The Global War on
    Terrorism will have an impact of P-3 and EP-3 fatigue life. We are
    monitoring this situation closely and factoring any impact into our
    decisions regarding the required timeline for replacing these aircraft.

                           FORCE STRUCTURE REDUCTION

        105. Senator Collins. Secretary England, the fiscal year 2003
    proposed budget will reduce our force structure by 2 amphibious warfare
    ships, 1 combat logistics ship, 1 mine warfare ship, and 42 active
    aircraft. What impact do you anticipate that this force structure
    reduction will have on the Operations TEMPO (OPSTEMPO) and the
    Personnel TEMPO (PERSTEMPO) of our fleet?
        Secretary England. The proposed fiscal year 2003 budget will reduce
    the force structure by two amphibious warfare ships, one combat
    logistics ship, one mine warfare ship, and 42 active aircraft. This
    reduction in the number of ships and aircraft will have minor impact on
    Personnel TEMPO (PERSTEMPO) and Operations TEMPO (OPSTEMPO) for the
    remaining force. Planned and on-going operations are the primary
    drivers for PERSTEMPO and OPSTEMPO changes. The global war on terrorism
    is currently the primary worldwide operation causing increases in the
    PERSTEMPO and OPSTEMPO of Naval forces.

        106. Senator Collins. Secretary England, further, what impact will
    these reductions have, specifically on our lift capability?
        Secretary England. The current active amphibious fleet exceeds the
    2.5 MEB AE lift threshold in all areas except that of vehicle square--
    currently at 2.07 MEB AE. Vehicle square will be reduced to 2.01 MEB AE
    with the planned reductions in force structure.

        107. Senator Collins. Secretary England, a former CNO has testified
    before this committee that the Marine Expeditionary Brigade (MEB) lift
    capability would not fall below 2.5 MEBs.
        Will the proposed reductions in force structure take that MEB lift
    capability below 2.5?
        Secretary England. The current active amphibious fleet exceeds the
    2.5 MEB AE lift threshold in all areas except that of vehicle square--
    currently at 2.07 MEB AE. Vehicle square will be reduced to 2.01 MEB AE
    with the planned reductions in force structure.

                       INVESTMENTS IN BATTLING TERRORISM

        108. Senator Collins. Secretary White, given the high utilization
    of special forces in Operation Enduring Freedom, and based on the
    lessons that we have learned thus far in fighting this global war on
    terrorism, do you see the need to accelerate investments in monitoring
    and detection of chemical and biological agents, the protective gear
    for our service men and women?
        Secretary White. U.S. forces, including special forces operating in
    support of Enduring Freedom, are equipped with the finest chemical/
    biological (CB) defense equipment available. Research and development
    is ongoing within the President's budget to address outstanding need
    for lighter weight, hand-held, and stand-off detectors capable of
    providing real-time indications of the presence of CB agents, as well
    as specific type and concentration levels.
        Early lessons learned from the war on terrorism indicate that
    special forces in particular require detection equipment with greater
    sensitivity and better interferent rejection than available in current
    systems. Investment in improved chemical defense equipment remains
    critical; however, investments in vaccines, biological agent detectors,
    and systems that combine biological and chemical detection require
    greater emphasis. The President's budget also funds research and
    development of new protective masks and garments. These are more
    durable and logistically supportable across today's global battlefield
    and more suited to modern threats and threat environments. CB defense
    command, control, and communication equipment and technologies to
    safely decontaminate buildings, large areas, and sensitive equipment
    are being pursued. The Defense Department's ability to accelerate work
    and/or procurement in any of these mission areas could be dependent on
    a number of factors, such as availability of technology, adequate
    funding, or industrial base/manufacturing capability.

                       INVESTMENTS IN BATTLING TERRORISM

        109. Senator Collins. Secretary White, what other areas of
    investments do you see as necessary to operate in the asymmetric
    environment?
        Secretary White. The Army continues to identify specific emerging
    requirements for homeland defense and the global war on terrorism, to
    include operations in asymmetric environments. Our analysis has taken
    on increasing importance and immediacy. It is already clear that we
    must continue to fund elements for enhanced force protection such as
    Weapons of Mass Destruction-Civil Support Teams for crisis response,
    equipment for installation physical security, as well as other anti-
    terrorism, physical security, and counter-terrorism programs. We need
    continued investment in improved information assurance and critical
    infrastructure protection programs. These programs also invest in
    securing the homeland, improve situational awareness, improve command
    and control, and increase our worldwide posture against terrorism.

                             MULTIYEAR PROCUREMENT

        110. Senator Collins. Secretary White, in your advance questions,
    you address the issue of delays in the acquisition process and the
    impact of those delays on stability in acquisition programs. As you may
    know, this committee took the lead last year to authorize a follow-on
    DDG-51 shipbuilding multiyear procurement for the period fiscal year
    2002 through fiscal year 2005 at the sustained rate of three ships per
    year. Could you comment on the benefits of utilizing multiyear
    procurement in mature programs, such as DDG-51, and the importance once
    a multiyear process has been initiated to sustain it for further
    requirements in order to continue to gain maximum cost efficiencies and
    other industrial base benefits that result from program stability?
        Secretary White. The Army has used multiyear procurements for
    several of our mature programs, such as the UH-60 Black Hawk and the
    AH-64 Longbow Apache helicopter programs. Multiyear contracting is
    important to the Army because it leverages our available procurement
    funds and provides the government significant cost savings over the
    best prices available by contracting in annual increments. Multiyear
    related cost avoidance provides funds that will be used to bolster
    other critical modernization efforts.
        The multiyear process stabilizes the contractor workforce and
    provides increased incentives to contractors to improve productivity
    through investment in capital, facilities, equipment, and advanced
    technology. In addition, it provides a broader competitive base with
    opportunity for participation by firms not otherwise willing or able to
    compete for lesser quantities, particularly in cases involving high
    startup costs. Typically, suppliers will provide price discounts to
    lock in business. Given a 5-year contract, suppliers can develop
    innovative processes and justify capital investments necessary to
    reduce costs.
        Multiyear contracts provide a stable environment in which the
    industrial base can grow stronger. As a result, the major and critical
    subcontractors are able to build components at, or near, commercial
    prices. Through multiyear contracting, it becomes affordable to qualify
    dual sources for critical lower-tier suppliers, increasing competition
    and reducing risk. The long-term commitment permits better planning for
    capital investments, and more efficient production of economic lot
    quantities. This helps the many small suppliers by allowing them to
    make cost-effective decisions on a longer-term basis.
                                     ______

                   Questions Submitted by Senator Jim Bunning

                              ARMY TRANSFORMATION

        111. Senator Bunning. Secretary White, the Army has forcefully
    argued for the need for transformation. You are in the process of doing
    that now. How can you begin to make resource requests and procurement
    decisions about transformation programs in the absence of an updated
    national security strategy and national military strategy that formally
    outlines the missions and tasks that your services will be responsible
    to resource?
        Secretary White. There is general consensus on the dangerous and
    complex nature of the evolving international security environment, and
    by implication, the types of missions the Nation will assign to its
    Armed Forces. This consensus is grounded on and confirmed by a variety
    of detailed analyses of the threats and challenges likely to require
    the decisive application of full-spectrum landpower, as part of a
    joint, interagency and multinational team.
        The 2001 Joint Strategy Review, the 2001 Quadrennial Defense Review
    (QDR) and ongoing deliberations for the development of the new National
    Military Strategy all point to a complex strategic environment
    populated by a diverse set of hostile actors. These actors range from
    rogue states to violent transnational terrorists and criminal
    organizations--groups whose interests, values, capabilities, and
    methods will perpetually threaten the Nation's interests, as well as
    those of our friends and allies.
        Further, the QDR is explicit in outlining the urgency for
    Transformation, including six critical operational goals. The QDR
    report supports the fielding of Interim Brigade Combat Teams and
    accelerating development of the Objective Force. DOD's commitment to
    Transformation necessitates prioritizing funding for both Objective
    Force research and development and Interim Force procurement--an
    essential step in our Transformation strategy. One need only look at
    the ongoing operations in the war on terrorism to understand the
    increasing and persistent demand for robust, decisive land forces.
        While no planning document will encompass all the demands of an
    unpredictable and evolving environment, all underscore the requirement
    to transform to more responsive, deployable, agile, versatile, lethal,
    survivable, and sustainable land forces capable of dominating the full-
    spectrum of threats and challenges from peace to war.

                              ARMY TRANSFORMATION

        112. Senator Bunning. Secretary White, you are asking for a lot of
    money this year. What are you asking for that will help us do a better
    job fighting the war against terrorism?
        Secretary White. The budget we submitted is a balance of programs
    that will enable the Army to fight and win across the spectrum of
    conflict without undue risk at any point. In that context, the totality
    of the budget enables us to do a better job of fighting and winning
    this and future wars. But more to your point, we have placed a renewed
    emphasis on improving situational awareness, force protection, command
    and control, worldwide posture, and our ability for crisis response,
    which are reflected in this budget. An early result of our post-
    September 11 resource evaluations was to immediately adjust these Army
    programs in the budget.

        113. Senator Bunning. Secretary White, how much of your total
    budget request is that?
        Secretary White. We and the other Services are actively engaged
    with the Department of Defense in defining requirements for anti-
    terrorism that include force protection at home and abroad, as well as
    measures that directly support the warfight. The Department is
    compiling a separate budget exhibit to document the requirements, and
    it should be submitted shortly. Our portion of the fiscal year 2003
    budget that directly supports the war on terrorism will be included in
    that exhibit. Our preliminary estimate for funding the war totals less
    than $2 billion in preparation costs, plus the cost of deployment and
    mobilization operations.

        114. Senator Bunning. Secretary White, most of the talk about Army
    Transformation has focused on replacing heavy equipment such as tanks
    and infantry fighting vehicles. What role will lighter units such as
    the airborne and air assault divisions have in the Army's
    Transformation plan?
        Secretary White. The first phase of Transformation has been an
    interim step to fill a capabilities gap between our light and heavy
    forces. This is proceeding well, and the first interim capable task
    forces will be available to the Army within the next year. In addition
    to filling the capabilities gap, this interim transformation is
    designed to capture the lessons learned on processes to enable the Army
    to transform to the Objective Force. The Army is on an aggressive
    science and technology development schedule designed to bring this
    capability into the force as early as possible.
        The U.S. Army Training and Doctrine Command is currently refining
    the conceptual basis for the Objective Force. In examining requirements
    for Airborne and Air Assault capability, we have validated that the
    need for forced entry capability and battlefield tactical mobility, in
    order to defeat enemy anti-access forces, will remain as core
    requirements. The exact composition of the force that will execute
    those missions is still under both doctrinal examination and subject to
    the results our science and technology program. The Army will keep
    Congress informed at the critical stages of doctrinal and force
    structure development as we transform to the Objective Force.

        115. Senator Bunning. Secretary White, how do you view your new
    role in the mission with homeland security?
        Secretary White. The Department's role in homeland security
    consists of three missions: homeland defense combat operations, such as
    the air sovereignty mission being flown by our fighter aircraft;
    emergency and temporary support to civilian authorities, such as
    augmentation of airport or border security; and emergency preparedness-
    preparation to respond in the event of a catastrophic event such as a
    terrorist use of a weapon of mass destruction.

        116. Senator Bunning. Secretary White, has this role disrupted your
    duties as Secretary of the Army?
        Secretary White. Due to the excellent support of my Special
    Assistant and his team in the Department of Defense's Homeland Security
    Office, my Army staff, and numerous OSD offices I have managed to
    balance effectively my expanded responsibilities. However, I look
    forward to seeing ``homeland security'' normalized under a permanent
    office in the Office of the Secretary of Defense.

        117. Senator Bunning. Secretary White, what do you see as your role
    once a homeland security command is formally established?
        Secretary White. I am the interim DOD Executive Agent for Homeland
    Security. On March 8, 2002, the Secretary of Defense signed a
    memorandum directing 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. It is
    likely that the new OSD staff will be responsible for providing policy
    and oversight for the new Northern command. The future role of the
    Secretary of the Army in homeland defense and civil support has not yet
    been determined.

                        DESTRUCTION OF CHEMICAL WEAPONS

        118. Senator Bunning. Secretary White, given the increased threat
    of terrorism, is the Army doing anything to speed up the destruction of
    chemical weapons?
        Secretary White. The Army is constantly evaluating various
    alternatives to safely accelerate the disposal schedule. Recently, the
    Army revised its approach at Aberdeen Proving Ground, Maryland, in a
    manner that promises to eliminate that bulk stockpile up to 3 years
    earlier than previously planned and is currently studying the
    feasibility of a similar effort at Newport, Indiana.
        As other alternatives are developed and approved for other sites,
    they will be implemented.

        119. Senator Bunning. Secretary White, the 2002 Defense
    Appropriations bill requires a report from the Army on how it plans to
    speed up destruction of chemical weapons. That report is due to
    Congress next month. Last month the Army announced that, at least at
    Aberdeen, it was speeding up its destruction of mustard gas. The
    chemical weapons destruction program is years behind schedule and
    billions of dollars over budget. When are we going to get these
    dangerous weapons disposed of?
        Secretary White. The Army is also studying the feasibility of
    accelerating disposal of the bulk VX nerve agent stockpile at Newport,
    Indiana. You may be assured that the Army is working with its
    contractors, responsible government agencies, and all stakeholders to
    identify, approve, and implement technically sound, safe, and
    environmentally compliant solutions to accelerating stockpile
    destruction.
        The currently approved schedule reflects completion of disposal
    operations at six chemical stockpile sites between 2007 and 2011.
    Schedules for the Pueblo, Colorado and Blue Grass, Kentucky sites will
    be provided once the technology decisions for these sites are made. As
    additional measures are developed and approved, the disposal schedule
    will be revised accordingly.

                                  SHIPBUILDING

        120. Senator Bunning. Secretary England, we have all seen the
    utility of forward deployed naval forces during the conflict in
    Afghanistan. We also know how thinly stretched all of our military
    forces were, even before September 11. It requires building eight to
    ten ships per year to maintain our fleet at its current size. We have
    not been doing that, so our fleet has been steadily shrinking. In this
    year's budget, we are only building five ships. Same with next year.
    According to the current budget plan, we are supposed to build seven
    ships in 2005 and 2006, and then, finally jump to ten ships in 2007.
    You are asking for a lot of money, but not increasing the number of
    ships we are buying.
        Why not?
        Secretary England. 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. Priority
    is given to stabilizing the force (to include people) and with that
    done, our attention may then be focused on building the number of ships
    we need to sustain the battle force. 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), DD(X) family of ships, and SSBN
    conversions to cruise missile carrying submarines (SSGN) providing
    enhanced combat capabilities to the transformed Naval Forces of the
    future.

        121. Senator Bunning. Secretary England, how can we be sure that we
    will actually get to ten ships in 2007 and it won't slip to another
    year or even farther out?
        Secretary England. The most significant way to ensure that we can
    afford the number of ships we need to sustain the force is to control
    the costs of our existing programs and ensure that the budget requests
    for future programs are adequately resourced for the risks presented in
    a low rate procurement shipbuilding environment. To prevent further
    increases to the cost of the Navy's future shipbuilding needs and
    mitigate the impact of the various cost drivers, the Navy is pursuing
    the following corrective actions:

             Remedy the systemic issues within our control and
            incentivize industry partners to do the same.
             Ensure that estimating and budgetary processes more
            closely reflect the cost of risk factors beyond our control.

                               MARINE CORPS NEEDS

        122. Senator Bunning. Secretary England, given that last year's
    restructuring of the DD 21 program into the DD(X) program pushed the
    first scheduled ship back another year, what are your plans to meet the
    Marine Corps' fire support needs in the near term?
        Secretary England. The Navy, in coordination with the Department of
    Defense, restructured the DD 21 program to the DD(X) program on 13
    November 2001 as part of a new future surface combatant integrated
    strategy. This approach will better manage the risk of technology
    maturation and provide transformational capability to a family of
    surface combatants including the DD(X), a future cruiser and a littoral
    combatant. In the newly restructured DD(X) program, ship construction
    of the first ship remains on track for a fiscal year 2005 start and
    fiscal year 2011 delivery.
        Our near term initiatives to meet Naval Surface Fire Support (NSFS)
    requirements include improving existing 5,, guns, developing an
    Extended Range Guided Munition (ERGM), introduction of the Tactical
    Tomahawk (TACTOM) cruise missile, and integration of C\4\I systems to
    support NSFS. The current 5,, 54 gun, used to fire conventional
    ammunition to 13nm, has been improved to accommodate higher energies
    associated with the Extended Range Guided Munition (ERGM). The improved
    gun will achieve Initial Operational Capability (IOC) in fiscal year
    2003 for conventional munitions and fiscal year 2005 for the ERGM. The
    Extended Range Guided Munition will achieve IOC in fiscal year 2005 and
    has an objective range requirement of 63nm. Surface Fire Support to
    ground combat operations takes a significant step forward with
    introduction of the ERGM with its accuracy and range. The Marine Corps'
    long-term requirement to engage targets to 222nm can be met in the near
    term with the introduction of Tactical Tomahawk. TACTOM's loiter and
    enroute re-targeting capabilities provide support over extensive
    maneuver areas. Naval Fires Control System (NFCS) is being installed on
    DDG 81 and following. NFCS reduces NSFS team composition from 13 to 5
    and provides command and control for long-range naval fires. Extended
    range projectiles and TACTOM, coupled with Navy/USMC existing TACAIR
    capabilities, provide near term fire support.

                                    VIEQUES

        123. Senator Bunning. Secretary England, yes or no, will you
    authorize live fire training on Vieques if the CNO and Commandant of
    the Marine Corps request it?
        Secretary England. If I was asked by the CNO and Commandant to
    authorize live fire training in Vieques I would consider the request,
    but the answer is not a simple yes/no. There are other issues/factors
    that need to be considered, such as the extent of statutory and
    regulatory environmental compliance that may be required, required
    agency notifications, and the impact on security forces. All of these
    issues must be weighed and addressed in determining how to make the
    most of available resources in support of training that will ensure the
    readiness of our forces to deploy and meet the real world challenges.

                                AC-130 GUNSHIPS

        124. Senator Bunning. Secretary Roche, is it correct that all of
    our AC-130 gunships are over in Afghanistan right now and there are
    none left back here for training?
        Secretary Roche. No, that is not correct. The Air Force has a total
    inventory of 21 AC-130 gunships: 13 AC-130U belonging to the 4th
    Special Operations Squadron, and 8 AC-130H belonging to the 16th
    Special Operations Squadron. Both of these squadrons are assigned to
    the 16th Special Operations Wing, Hurlburt Field, FL. Of the 21, no
    more than 9 were deployed at one time to Operation Enduring Freedom.
    There are 2 AC-130U and 1 AC-130H designated for training.

                                AC-130 PURCHASES

        125. Senator Bunning. Secretary Roche, do you plan to buy more AC-
    130 gunships?
        Secretary Roche. Yes I do. Program Decision Memorandum (PDM) IV
    provides funds to convert four C-130H2 to the AC-130U configuration,
    O&M, and personnel. Two of the gunships will be funded from ``cost of
    war'' monies. Because the only C-130H2 aircraft available belong to the
    Air Force Reserve Command and Air National Guard the PDM funds C-130J
    aircraft to replace the four aircraft taken for conversion. This is a
    wise decision because developing an AC-130J would take much longer and
    cost considerably more in RDT&E, and require a new logistics trail that
    would also have to be developed at considerable expense.

                                   NATO AWACS

        126. Senator Bunning. Secretary Roche, there are currently NATO
    AWACS aircraft flying over this country to assist in our homeland
    defense, while ours are prosecuting the war against terrorism. If
    another war came up right now, would we have enough of these types of
    aircraft?
        Secretary Roche. If the United States were confronted with another
    war or contingency, we would have to reprioritize the existing missions
    performed by our fleet of AWACS aircraft. Depending on where we are
    confronted with a conflict, the requirement for airborne surveillance
    and command and control could be filled by the most appropriate air or
    ground based system.

                                AWACS PURCHASES

        127. Senator Bunning. Secretary Roche, if not, do you plan to buy
    more AWACS aircraft?
        Secretary Roche. We do not have any plans to procure any additional
    legacy systems. The current fleet of AWACS aircraft is slated for
    continued upgrades to its surveillance and battle management
    capabilities until replaced by a future Multi-Sensor Command and
    Control Constellation. This will allow us to take advantage of air and
    space transformational technologies to meet emerging threats and future
    requirements.

                            HIGH DEMAND, LOW DENSITY

        128. Senator Bunning. Secretary Roche, what other high demand, low-
    density items do you plan to address in this year's budget?
        Secretary Roche. The Air Force has requested almost $400 million
    for Special Operations/Combat Search & Rescue Operations, MILCON, and
    Aircraft modifications for the HH-60, HC-130, and C-130.

                               LEASE NEGOTIATION

        129. Senator Bunning. Secretary Roche, why were the authorizing
    committees not consulted when you secured permission from the
    Appropriations Committees to negotiate a lease for 767 tanker aircraft
    from Boeing?
        Secretary Roche. After the events of September 11, both
    Appropriations Committees asked the AF what programs could be
    accelerated. Tanker re-capitalization was one such program that we
    evaluated. Members of the House and Senate asked the USAF to provide
    informational briefings on this re-capitalization option. The briefings
    were based on the notional lease proposal from Boeing. SAF/AQ provided
    it to Members and professional staffers on the SAC, SASC, HAC, and HASC
    during the months of October through Dececember 2001. SAF/AQ also
    briefed the OSD staff, CBO, and OMB.

        [Whereupon, at 1:00 p.m., the committee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2003

                                  ----------

                          THURSDAY, FEBRUARY 14, 2002

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

                     RESULTS OF THE NUCLEAR POSTURE REVIEW

        The committee met, pursuant to notice, at 9:34 a.m., room
    SH-216, Hart Senate Office Building, Senator Carl Levin
    (chairman) presiding.
        Committee members present: Senators Levin, Landrieu, Reed,
    Akaka, E. Benjamin Nelson, Bingaman, Warner, Inhofe, Allard,
    and Sessions.
        Committee staff members present: David S. Lyles, staff
    director; Cindy Pearson, assistant chief clerk and security
    manager; and Gabriella Eisen, nominations clerk.
        Majority staff members present: Madelyn R. Creedon,
    counsel; Richard D. DeBobes, counsel; Richard W. Fieldhouse,
    professional staff member; and Peter K. Levine, general
    counsel.
        Minority staff members present: Judith A. Ansley,
    Republican staff director; L. David Cherington, minority
    counsel; Edward H. Edens IV, professional staff member; Brian
    R. Green, professional staff member; Mary Alice A. Hayward,
    professional staff member; and George W. Lauffer, professional
    staff member.
        Staff assistants present: Dara R. Alpert, Daniel K.
    Goldsmith, and Thomas C. Moore.
        Committee members' assistants present: Erik Raven,
    assistant to Senator Byrd; Frederick M. Downey, assistant to
    Senator Lieberman; Marshall A. Hevron and Jeffrey S. Wiener,
    assistants to Senator Landrieu; Davelyn Noelani Kalipi,
    assistant to Senator Akaka; Peter A. Contostavlos, assistant to
    Senator Bill Nelson; Eric Pierce, assistant to Senator Ben
    Nelson; Benjamin L. Cassidy, assistant to Senator Warner; J.
    Mark Powers and John A. Bonsell, assistants to Senator Inhofe;
    George M. Bernier III, assistant to Senator Santorum; Robert
    Alan McCurry, assistant to Senator Roberts; Douglas Flanders,
    assistant to Senator Allard; James P. Dohoney, Jr., assistant
    to Senator Hutchinson; Arch Galloway II, assistant to Senator
    Sessions; Kristine Fauser, assistant to Senator Collins; and
    Derek Maurer, assistant to Senator Bunning.

           OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

        Chairman Levin. Good morning, everybody. The committee
    meets this morning to receive testimony on the results of the
    congressionally-mandated 2001 Nuclear Posture Review (NPR). We
    have the Under Secretary of Defense for Policy, Douglas Feith;
    the Administrator of the National Nuclear Security
    Administration, General John Gordon, USAF (Ret.); and the
    Commander in Chief of the United States Strategic Command,
    Admiral James Ellis, USN. We welcome all three of our
    witnesses.
        After the Cold War, the United States forged a new
    relationship with Russia, including the first strategic arms
    control agreement, the 1991 START I Treaty, a treaty that
    significantly reduced U.S. and Russian nuclear forces. At
    Helsinki in 1997, President Clinton and Russian President Boris
    Yeltsin pledged that following the entry into force of START
    II, with its additional reductions, our two nations would work
    towards a START III agreement, with a deep reduction in the
    number of nuclear warheads to between 2,000 and 2,500 by the
    end of 2007. Presidents Clinton and Yeltsin specifically said
    that ``START III will be the first strategic arms control
    agreement to include measures relating to the transparency of
    strategic nuclear warhead inventories and the destruction of
    strategic nuclear warheads.''
        President George W. Bush pledged to seize the historic
    opportunity afforded by our new relationship with Russia.
    Declaring that Russia is ``no longer our enemy,'' then Governor
    Bush stated in a May 23, 2000, speech that ``it should be
    possible to reduce the number of American nuclear weapons
    significantly further than what has already been agreed to
    under START II.''
        Secretary of Defense Donald Rumsfeld said in a speech at
    the National Defense University just 2 weeks ago that ``through
    our Nuclear Posture Review, we adopted a new approach to
    strategic deterrence that increases our security while,'' in
    his words, ``reducing the numbers of strategic nuclear
    weapons.''
        But the recommendations of the Nuclear Posture Review may
    not, in fact, reduce the actual number of nuclear warheads in
    the U.S. arsenal because instead of destroying warheads, as
    Presidents Clinton and Yeltsin envisioned under a START III
    agreement, the Nuclear Posture Review proposes to shift some or
    all of the warheads removed from missiles, bombers, and
    submarines to a responsive force, in other words, a back-up
    force. Instead of being irreversibly destroyed, those warheads
    could be redeployed in a matter of weeks or months.
        The Nuclear Posture Review proposes simply to move those
    warheads from one location to another. This approach will make
    it unlikely that Russia will destroy its nuclear warheads. If
    we store our nuclear weapons, Russia is likely to follow suit.
    If there are more warheads retained by Russia, the threat of
    proliferation of nuclear weapons will increase. That was the
    danger cited in last year's bipartisan task force led by former
    U.S. Senate Majority Leader Howard Baker and former White House
    Counsel Lloyd Cutler. Their task force concluded the following:
    ``The most urgent unmet national security threat to the United
    States is the danger that weapons of mass destruction or
    weapons-usable material in Russia could be stolen and sold to
    terrorists or hostile nation-states and used against American
    troops abroad or citizens at home.''
        By failing to destroy nuclear warheads, the Nuclear Posture
    Review would increase the threat of proliferation at the very
    time when the al Qaeda terrorist network is known to be
    pursuing nuclear weapons. In addition to compounding the
    proliferation threat, this new approach to nuclear weapons
    appears to compound the military threat to our Nation. One of
    the significant achievements of START II was that it would have
    eliminated Russia's land-based multiwarhead (MIRVed) missiles.
    By essentially abandoning efforts to bring START II into force,
    the administration leaves open the possibility that Russia may
    retain these missiles that it was prepared just recently to
    destroy.
        Secretary Rumsfeld says that the new approach ``increases
    our security.'' My fear is that the opposite may be true, and
    that over time, America would be less secure with this
    approach.
        Senator Allard.
        Senator Allard. Thank you, Mr. Chairman. The ranking
    Republican member, Senator Warner, will be here later, so he
    has asked me to fill in for him until he arrives. I looked over
    his statement, and instead of simply putting it into the
    record, I would like to go ahead and read it on his behalf. I
    will put my statement in the record, Mr. Chairman.
        I want to thank all of you for being here this morning. I
    think this is a very important hearing. We do want to hear from
    you, and on behalf of Senator Warner, I want to offer his
    welcome to the distinguished witnesses that we have here today.
        The Nuclear Posture Review on which we will receive
    testimony today relates to the most destructive weapons ever
    devised by mankind. I applaud the chairman for focusing the
    committee's attention on this important issue.
        I think the NPR represents a breakthrough in how we think
    of our strategic forces and how we respond to strategic
    challenges, and we all look forward to hearing our witnesses
    describe the new strategy in more detail.
        The Nuclear Posture Review, which was required by this
    committee in the Fiscal Year 2001 National Defense
    Authorization Act and forwarded by the Department of Defense to
    Congress early last month, is an extraordinarily timely
    document. The last such review was completed in 1994, in the
    early years of a previous administration. At that time, the
    world was a vastly different place. The mutual hostility
    between the Soviet Union and the United States that had
    characterized the Cold War and had shaped our thinking about
    nuclear forces as strategic deterrents had faded, but not
    vanished. We were still trying to understand the implications
    of the fall of the Soviet Union and the emergence of new
    threats.
        Today, our relationship with Russia has dramatically
    improved. Presidents Bush and Putin continue to work on a new
    strategic framework based on common responsibilities and common
    interests. But new challenges continue to emerge. More nations
    now have nuclear weapons, still more seek nuclear, biological,
    and chemical capabilities, and the means to deliver these
    powerful weapons. More nations now possess ballistic missiles,
    and still more seek such capabilities. Proliferation of these
    weapons of mass destruction and associated delivery systems is
    one of the greatest threats to our national security and indeed
    to global security.
        The Nuclear Posture Review provides an innovative way to
    address these new security challenges by proposing dramatic
    reductions in deployed nuclear weapons combined with a new
    triad, which includes defensive systems and a robust
    infrastructure. The NPR provides our Nation a much more
    complete set of tools to deal with the wide range of threats
    and contingencies we will face in the future. Indeed, new
    defenses, precision conventional munition capabilities, and
    improved intelligence will help improve our picture of threats
    beyond those considered strategic. These improved capabilities,
    combined with our improved relationship with Russia, will allow
    us to move forward with dramatic reductions in nuclear weapons.
        I believe that this document represents a fundamental, some
    might even say radical, departure from how we thought about
    strategic forces in the past and how we should respond to
    strategic challenges in the future. As was noted earlier, this
    Nuclear Posture Review relates to the most powerful weapons on
    the face of the Earth. We in Congress are obligated to
    carefully study the issues raised in this review. This hearing
    is the beginning of a debate and a forum in which we can gain a
    clearer understanding of the policy and programmatic
    implications embodied in the Nuclear Posture Review.
        In May of last year, President Bush laid out his vision of
    the future. Cold War deterrence is no longer enough to maintain
    peace. To protect our citizens, allies, and friends, we must
    seek security based on more than the grim premise that we can
    destroy those who seek to destroy us. This is an important
    opportunity to rethink the unthinkable and find new ways to
    keep the peace.
        Clearly, Cold War deterrence is no longer enough in this
    new, less certain world. As we debate our nuclear posture and
    nuclear security needs in the months and years ahead, we must
    be forward-thinking. This review is a welcome step in the right
    direction, and we all look forward to hearing your testimony.
    Thank you, Mr. Chairman.
        [The prepared statement of Senator Allard follows:]

                   Prepared Statement by Senator Wayne Allard

        Mr. Chairman and Senator Warner, thank you for holding this
    important hearing on the Nuclear Posture Review.
        I truly believe that this document is a step forward to show that
    the United States is committed to reducing our nuclear arsenal. I do
    not believe there will be any debate about whether we should reduce our
    nuclear arsenal, but whether this is the right approach to doing that.
    I believe it is.
        I agree with many here today that this is far different from the
    classic arms-control approach. However, we are in a different arms-
    control environment.
        While negotiating START III, the Clinton administration and Russia
    agreed on a framework in 1997 that stated that the two countries would
    work towards the irreversibility of weapons reductions. However, there
    were no definitive decisions regarding dismantlement, plus START III
    was never finished. Today, we have new leadership in Russia and in the
    United States. Our relationship also no longer reflects 50 years of
    conflict, but more than a decade of efforts aimed at cooperation.
        Presidents Bush and Putin have pledged themselves toward a new
    cooperative framework. This new framework can help to strengthen U.S.-
    Russian relations even further. It will show that the United States and
    Russia can make national security decisions based on trust, not on the
    mistrust that treaties can imply.
        I also believe that this new framework can show the world that the
    United States is moving away from a specified threat environment to a
    new capabilities-based approach that allows the United States
    flexibility to address new threats and contingencies as they arise.
    This new framework also moves the United States away from an offensive
    triad based on mutually-assured destruction to a more stable triad
    based on offensive and defensive capabilities.
        To conclude, I want to thank the witnesses for joining us here
    today. I look forward to hearing their comments and appreciate their
    willingness to take questions.

        Chairman Levin. Thank you. Do any of our colleagues have
    opening statements?
        Senator Reed.
        Senator Reed. Thank you very much, Mr. Chairman. I want to
    welcome the witnesses. We all recognize that there are new
    strategic realities, and the question is whether this Nuclear
    Posture Review adequately reflects those realities. This will
    be the beginning of several discussions about the Nuclear
    Posture Review and our policy going forward. Another way to
    express this is to question whether or not we are simply
    rearranging the furniture with this Nuclear Posture Review, or
    have we taken a new look and come up with a strategy which fits
    this new reality.
        The test of the Nuclear Posture Review is not simply what's
    contained within the pages of the report, but whether those
    pages translate into the budget, not just this year, but going
    forward through the next several years, and whether it
    complements the diplomatic initiatives which the President has
    announced, which would mean significant reductions in nuclear
    warheads. This is something that seems to be on the minds of
    the Russians as well. We had 8,000 warheads going into the
    Nuclear Posture Review, and we still have 8,000 warheads after
    it. They are just in different categories.
        So I think as we go forward, we have to again question
    whether or not this is really a new look at a new strategic
    situation, whether this report will affect budgets in a
    meaningful way, and not just the high profile items, but the
    mundane items like the status of our laboratories, the status
    of our efforts to ensure the safety and security of the
    stockpile, and also to complement the expressed desire by
    President Bush and by others to reduce significantly our
    reliance upon nuclear weapons. That dialogue will go over many
    days. I thank the Chairman.
        Chairman Levin. Thank you very much.
        Senator Akaka has an opening statement. We will then hear
    from Senator Sessions followed by Senator Ben Nelson.
        Senator Akaka. Thank you very much, Mr. Chairman. I want to
    add my welcome to the witnesses this morning. The future of our
    nuclear forces is one of the most important subjects before
    this committee. There are two critical points that need to be
    emphasized and then re-emphasized about the administration's
    Nuclear Posture Review. First, no substantial reductions in
    nuclear weapons are being proposed in this review.
        Second, it is not clear why we insist on maintaining such
    large stockpiles of available weapons given the threat against
    which our military is prepared to defend us.
        To begin with the number of nuclear weapons, the
    administration sets up two categories of nuclear warheads. The
    first category is for 1,700 to 2,200 nuclear warheads that will
    be operationally deployed by 2012. By operationally deployed,
    does the administration mean warheads actually mounted on
    platforms? I hope that can be clarified today.
        The administration sets up a second category of warheads
    that is part of a responsive capability. These weapons, as
    Secretary Crouch stated in his press briefing on January 9,
    2002, would be maintained with their critical components. It
    appears as if the only difference between operationally-
    deployed warheads and responsive warheads is that the
    responsive warheads would not be mounted on platforms. This is
    a distinction without much of a difference. The number of
    warheads in this responsive capability might number in the
    thousands according to present estimates, with the total number
    between 3,500 and 4,000 warheads.
        What would our Nuclear Posture Review have looked like
    before this if arms control agreements had entered into force?
    START II would have brought the number of warheads down to
    3,500 by 2003.
        Why do we need a substantial number of nuclear warheads
    when we are reducing our force structure to cope with only one
    major war at a time and restructuring our forces to deal with
    the new threat of global terrorism and homeland defense? The
    administration argues that we need to go back to the nuclear
    weapons reductions envisioned in the first Bush administration,
    and early in the Clinton administration, because we need to
    deal with multiple contingencies and new threats. It is unclear
    which new threat requires maintaining such a large stockpile of
    nuclear weapons.
        For example, the Russians, who for so long were the
    justification for us maintaining a large retaliatory
    capability, are no longer our enemy, and they are reducing more
    substantially than we their nuclear weapons. The Chinese are
    building up their warhead inventory, but will still be far
    below the thousands that we have. I hope, Mr. Chairman, the
    administration will clarify these issues in today's hearing.
        Our Nation's resources are being strained as we work to
    improve homeland security, fight the war against terrorism, and
    maintain programs which ensure our country's continued economic
    prosperity. The burden is on the administration to justify
    maintaining a large and costly nuclear weapons arsenal, an
    arsenal which is not commensurate with the threats our military
    faces and the mission they are designed to perform. Thank you
    very much, Mr. Chairman.
        Chairman Levin. Senator Sessions, then Senator Ben Nelson.
        Senator Sessions. Thank you, Mr. Chairman. It is an
    interesting and important issue that we are dealing with here
    today. The United States remains the world's preeminent
    military power, and I hope that we will be able to maintain
    that. All of us would like to see reductions in our nuclear
    weaponry, and it will be accomplished under the President's
    plan. But I think we have to realize that we are not testing
    nuclear weapons now. We have no manufacturing capability in
    this country to make new nuclear weapons, whereas other
    countries in the world do. To freeze ourselves into a situation
    in which we could, by such low numbers, encourage other nations
    to believe they can reach parity with us in nuclear weaponry
    would be a mistake. I think we ought not to agree to limits
    that would provide a goal for competitors around the world who
    believe they could reach it and therefore be at parity with the
    United States, militarily.
        I am concerned that if we totally destroy these weapons
    instead of just decommissioning them, we could end up in a
    situation without a manufacturing capability; a situation in
    which we could not properly defend ourselves and would not have
    a clear superiority that deters war. We have that, we are able
    to maintain that, and why we would give it away unilaterally I
    do not know. So my questions will deal with the subject of
    whether or not we are sure that we are not going too fast and
    if we are sure that we have a long-term vision to maintain
    superiority for the United States. Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Sessions.
        Senator Nelson.
        Senator Ben Nelson. Thank you, Mr. Chairman, and thank you
    all for being here today. General Gordon and Secretary Feith,
    we appreciate and are anxious to follow your statements, and it
    is good to welcome Admiral Ellis, fresh from Nebraska, back to
    our Nation's capital. I appreciated your kind treatment of my
    staff when they were there visiting STRATCOM headquarters and
    our office visit a week ago. I appreciate very much the
    opportunity to exchange ideas with you here today.
        I have two comments I would like to make. One is about the
    new direction that we are concerned about, about whether or not
    the NPR is a step in the right direction. My colleague, Senator
    Sessions, questions whether we should go to the next step of
    destruction of the weapons. Others feel that perhaps what we
    are doing is a step in the right direction, but maybe not a
    giant step because of the capacity to reactivate those weapons
    we are withdrawing from the active stockpile.
        The concern I have about decommissioning and
    recommissioning, is that as I understand it the Russians have
    the capacity to recommission maybe three times faster than we
    do, and so the question is really whether we are achieving
    parity by that interim step, if it is an interim step. The
    second important concern I have is the nuclear club, other
    countries, those that are about to make nuclear weapons, those
    who have already done so, and the security of the stockpiles
    not in the United States, but in the former Soviet Union, and
    whether those can be secure enough, or whether that represents
    targets for other individuals.
        I appreciate and look forward to your written comments as
    well as the oral testimony that I can hear today.
        Chairman Levin. Senator Inhofe.
        Senator Inhofe. I have observed a head-in-the-sand
    mentality for quite a long period of time now about where the
    threats are in the world, and as we proceed today, I am
    primarily talking about Russia and the United States, and yet
    my concern has always been not so much Russia, but these
    countries that are trading technologies and systems with
    countries like China, Russia, and North Korea. The threat is
    there, and I hope that during your opening statements you might
    address the fact that as recently as August 1998 when we asked
    General Shelton, as I did in a letter, to give us in writing
    when he felt that North Korea could be a threat to the United
    States in terms of their ability to reach us with a long-range
    ballistic missile. His response was dated August 24, 1998, and
    it said that our best intelligence says that we have adequate
    time, that is 3 years or so, to prepare for the time when they
    would have a system. Seven days later they fired a multistage
    rocket from North Korea.
        It is disturbing to me when we have evidence that is not
    even classified suggesting that China, Russia, and North Korea
    are trading systems and technology with countries like Iran,
    Iraq, Syria, and Libya, and yet we seem to think we are safe in
    going back to the old Cold War mentality that has the U.S.S.R.
    versus us.
        My concern is what is out there now, where these threats
    are, and with a little more accuracy than we can reveal in this
    meeting, just what we have in our nuclear stockpile and what
    they have. It is disturbing to me. I remember so well, I am
    sure you remember at the end of the Gulf War, Saddam Hussein
    said if we had just waited 10 years to go into Kuwait, we would
    not have come because Hussein would have had a missile that
    could reach the United States. Here it is 10 years later. Just
    keep that in mind as part of your thinking on this subject.
    Thank you, Mr. Chairman.
        Chairman Levin. Senator Warner has just joined us.
        Senator Warner. Mr. Chairman, I had another matter to
    attend to. I thank my colleague here, Senator Allard, the
    former Chairman and now ranking member of the Strategic
    Subcommittee, for reading my statement. I listened very
    carefully to Mr. Nelson's observation about the difference in
    time between our ability to reconstitute our inventory in a
    significant way as compared with Russia. I am sure Admiral
    Ellis will give you a little clearer insight and another
    statistic as to the timing of that. I had a very extensive
    consultation with my old friend and colleague, Admiral Ellis,
    last night, and that was one of the subjects we covered. Thank
    you, Mr. Chairman. I welcome our witnesses this morning.
    General Gordon, we continue to get the best reports about your
    performance.
        Chairman Levin. Thank you.
        Secretary Feith.

    STATEMENT OF HON. DOUGLAS J. FEITH, UNDER SECRETARY OF DEFENSE
                               FOR POLICY

        Secretary Feith. Thank you, Mr. Chairman. Members of the
    committee, good morning. I would appreciate it if I could put
    my written statement in the record and start with a few brief
    remarks.
        Chairman Levin. It will be made part of the record.
        Secretary Feith. The Nuclear Posture Review is an ambitious
    document. It aims to transform U.S. nuclear forces and our
    thinking about strategic forces policy. No thorough
    transformation of that kind has occurred since the end of the
    Cold War. As was noted, the last Nuclear Posture Review was
    completed in 1994, when the full significance of the demise of
    the Soviet Union couldn't be appreciated. In any event, the
    1994 Nuclear Posture Review was done for the purpose of
    analyzing what our nuclear force posture would look like under
    START II.
        When he took office, President George W. Bush wanted to
    ensure that in planning for the future of U.S. nuclear forces
    and policy, the Defense Department did a number of things.
    First, that we recognized the radical changes in the world that
    resulted from the West's victory in the Cold War--chief among
    them is the new relationship between the United States and
    Russia, and the potential for better relations between us in
    the future.
        Second, that we abandon the morally and strategically
    unappealing theory of mutually-assured destruction, which we
    all know appropriately as MAD.
        Third, that we give the United States missile defense
    options so that we have more tools in our strategic kit than
    simply the threat of offensive retaliation. If, for example, a
    nuclear weapon were launched accidentally against the United
    States, we would want to have a nonoffensive response option.
        Fourth, that we take advantage of the opportunities to make
    drastic reductions in U.S. offensive nuclear force levels.
        Fifth, that we give proper attention to the key strategic
    reality of our era, and I would say arguably the key reality of
    any era, which is uncertainty. I think this goes to the point
    that Senator Inhofe was making about the surprise of the 1998
    launch by North Korea of the Taepo Dong missile. In performing
    the Nuclear Posture Review, the Defense Department operated
    with due respect for the unpredictability of the future and the
    role of error in human affairs. Accordingly, we assigned high
    priority to flexibility and adaptability.
        The NPR contains serious new thinking. It was not produced
    on autopilot. It is a rich mix of creative ideas on how the
    United States can make the world safer and more secure, shape
    the strategic environment in Europe, in Asia, and globally, and
    ensure that the United States has the means to keep ourselves,
    our allies, our friends, and interests safe from the emerging
    or altogether new threats that may materialize in many coming
    decades. I am proud of the work that my colleagues have done on
    the NPR. I am pleased that the Senate Armed Services Committee
    is holding this hearing to spotlight this work and the
    strategic questions related to it.
        Now, as all students of strategic policy know, the key
    image of our force posture in the past was a triad of land-,
    air-, and sea-based nuclear weapons. The organizing mental
    picture of our Nuclear Posture Review is what we call a new
    strategic triad. The new strategic triad envisions a nuclear
    posture that moves beyond mutually-assured destruction and
    reduces long-term U.S. dependence on nuclear weapons and
    purposeful vulnerability as the guarantor of our security. The
    new triad removes roadblocks to developing a cooperative
    strategic framework with Russia. If there is a headline for the
    Nuclear Posture Review, it is that the days of MAD are over,
    and unlamented. Instead, we plan to develop a new suite of
    capabilities that will first, assure our allies of our
    commitment to global peace and the steadfastness of that
    commitment; second, dissuade potential adversaries from
    contemplating military competition with the civilized world;
    third, deter aggressors; and fourth, defeat aggression when and
    where we have to while defending the United States, our
    friends, and allies. Offensive nuclear weapons remain a
    component of our new triad but they cannot themselves achieve
    all four of our national security goals. We have to develop new
    capabilities, new legs of the new triad.
        First, we plan to develop a non-nuclear strategic strike
    capability to give future presidents more options for
    responding to aggression than simply pushing the button. The
    success we have enjoyed with precision guided munitions over
    the last decade will give us a head start in developing these
    capabilities.
        Second, we plan to develop and deploy missile defenses. Our
    investment in homeland security and the ability to defeat
    unconventional attacks is an important element of this.
    Fortunately, we already possess such defensive capabilities and
    are improving them every day, but missile defense is another
    issue. To this date, ballistic missiles remain the only means
    of attacking the United States, our friends, and our allies
    against which we have no effective defense. Deploying such
    defenses is essential to the defensive leg of our new triad and
    will help reduce a serious vulnerability.
        Third, we plan to develop a responsive infrastructure. For
    too long, the United States has let atrophy its ability to
    develop new military capabilities that respond to changes in
    the world. It is difficult to change the Cold War force
    structure that we inherited, and why is this? Because we lack
    the physical plant and trained personnel necessary to develop
    and produce replacements that are more flexible or otherwise
    better suited to today's world. We want to invest in defense
    infrastructure, to transform our military for the 21st century.
        Finally, we plan to integrate the legs of the triad through
    improved command and control, what we call exquisite
    intelligence and adaptive planning. During the Cold War, the
    United States poured immense resources and much time into
    planning for war with the Soviet Union. So revisions in the
    plans could take months, a year, or longer.
        Instead of the ponderous and detailed product we prepared
    during the Cold War, we intend to develop the capability and
    flexibility to quickly identify the strengths and weaknesses of
    multiple enemies that might emerge suddenly. Thus, with the
    exception of nuclear strike, all of the concepts of the new
    triad are, in fact, new. Strategic defense, responsive
    infrastructure, non-nuclear strike, global command and control,
    exquisite intelligence, and adaptive planning are all
    capabilities to transform our strategic forces. For this
    reason, the review marks the beginning of a process, not the
    end.
        We will start with forces we currently have on hand and
    improve them as we develop a range of new capabilities. Because
    the Cold War is over, we no longer need to size our deployed
    nuclear forces against the threat posed by Russia and therefore
    we won't. For the first time in our history, U.S. nuclear
    forces will not be deployed for the purpose of waging a
    thermonuclear war against Moscow. The President decided that
    the United States would take the initiative and begin reducing
    its operationally deployed strategic nuclear forces over the
    next decade.
        Based on the NPR's analysis, the President announced his
    decision to begin removing around two-thirds of U.S. nuclear
    weapons from operational deployment. We will begin making cuts
    now that some commentators argued we should do only in the
    future, after extensive formal negotiations with the Russians.
        Finally, Mr. Chairman, some have referred to the reductions
    we are making in the Nuclear Posture Review as an accounting
    sleight of hand. But, I think there is great importance in the
    distinction between warheads deployed on delivery vehicles
    ready for launch within minutes or hours and warheads that are
    not available for use immediately or in the near term.
        Arms control agreements in the past, such as SALT I, SALT
    II, the IMF Treaty, START I, and START II, all of which were
    widely praised for reducing nuclear force levels, and all of
    them dealt not with the destruction of warheads, but rather
    delivery vehicles. So the notion that the failure to destroy
    warheads means that one does not have the right to say one is
    reducing nuclear force levels is a brand-new notion that was
    never applied over the decades of the Cold War when arms
    control agreements were praised, notwithstanding their complete
    failure to address the question of destruction of warheads.
        On the issue of irreversibility of force reductions, I
    think it is important that we recognize that as a practical
    matter, there is no such thing as irreversibility. I mean,
    chasing it would be chasing a will of the wisp.
        Any reductions, even if they entail the destruction of
    warheads, are reversible. A state that destroys warheads could
    manufacture new warheads. There is no such thing as
    irreversibility. The issue of reversibility is a matter of time
    and money, and in that regard, it is worth pointing out that
    the United States and Russia stand on completely different
    footings with regard to their ability to manufacture new
    nuclear weapons. Russia has a large infrastructure. They have a
    warm production base capable of producing large numbers of new
    nuclear weapons annually.
        The United States has not produced a new nuclear weapon in
    a decade. It will take nearly a decade and a large investment
    of money before we would be in a position to produce a new
    nuclear warhead. So the issue of storing our weapons, of
    whether we choose to build up a large infrastructure that would
    put us in a position to create new nuclear weapons if
    circumstances in the world changed and warranted it, versus
    taking weapons and rendering them unavailable for use in the
    near term by putting them in storage, is an issue that I
    believe needs to be examined in light of this important
    difference between the capability that the United States has in
    its ability to produce new nuclear weapons and the capabilities
    of other nations.
        In short, it is highly significant for the United States to
    reduce its offensive nuclear forces by rendering large numbers,
    two-thirds of our weapons, unavailable for use immediately or
    in the near term. I trust this committee will see the big
    picture. We are closing the history books on the Cold War
    balance of terror. We are reducing our dependence on nuclear
    weapons and replacing mutually-assured destruction with a
    strategic triad more suited to the security requirements of
    this century. We are cutting our deployed nuclear forces by
    roughly two-thirds and developing a new qualitative approach to
    arms control based on transparency and confidence building
    measures.
        We are indeed transforming our strategic posture, and the
    Nuclear Posture Review tells us where we need to go. We hope
    that Congress will join us in boldly stepping forward into the
    post-Cold War strategic environment by fully funding the
    programs envisioned in the Nuclear Posture Review. Thank you,
    Mr. Chairman.
        [The prepared statement of Secretary Feith follows:]

                  Prepared Statement by Hon. Douglas J. Feith

                                  INTRODUCTION

        The National Defense Authorization Act for Fiscal Year 2001
    required the Secretary of Defense, in consultation with the Secretary
    of Energy, to conduct a comprehensive review of U.S. nuclear forces and
    to develop a long-range plan for the sustainment and modernization of
    United States strategic nuclear forces. The Nuclear Posture Review
    (NPR) constitutes the Department of Defense's response to this
    requirement.
        We submitted the NPR to Congress on January 8, 2002. It is the
    first comprehensive review of nuclear forces since 1994, when the first
    Nuclear Posture Review was completed. The primary purpose of the 1994
    review was to determine the strategic nuclear force structure to be
    deployed under the second Strategic Arms Reduction Treaty (START II).
        The current review of the U.S. nuclear posture differs from the
    1994 review. The 1994 review assumed that the central strategic U.S.
    concern was managing a potentially hostile relationship between the two
    largest nuclear powers. The current review recognizes that the United
    States and Russia have a new relationship, and that the proliferation
    of nuclear weapons and ballistic missiles has created new challenges
    for deterrence. It defines the capabilities required of nuclear forces
    in the new strategic environment and in relation to other U.S. defense
    capabilities. Most especially, it recognizes that Russia, unlike the
    Soviet Union, is not an enemy. There is ground for mutual cooperation,
    and the United States is seeking to move beyond the outdated Cold War
    nuclear confrontation to develop a new strategic framework with Russia.

                                   A NEW ERA

        The basic features of the Cold War shaped our approach to security,
    including the role and size of our nuclear forces and deterrence
    policies. Our current nuclear triad of ICBMs, bombers, and ballistic
    missile submarines, and the ways we have pursued deterrence and arms
    control negotiations, reflect the conditions of Cold War. The new
    features of the international system, particularly the types of threats
    we face, are dramatically different. Consequently, President Bush
    charged the Department of Defense with transforming our approach to
    defense, including nuclear weapons and missile defenses, to meet the
    new challenges of the post-Cold War era. During the Cold War we faced a
    single, ideologically hostile nuclear superpower. We prepared for a
    relatively limited number of very threatening conflicts with the Soviet
    Union. Much of the world was part of two competing alliances and the
    stakes involved in this competition amounted to survival for both
    sides. We must never lose sight of just how dangerous the situation
    was.
        There was, however, considerable continuity and predictability in
    this competition of two global alliance systems. For decades, U.S.
    nuclear forces were organized and sized primarily to deter the Soviet
    Union, and there were few sharp turns in U.S.-Soviet relations. Based
    on the continuities of the international system at the time, the
    successful functioning of nuclear deterrence came to be viewed as
    predictable, ensured by a sturdy ``balance of terror.'' Many argued
    that defenses which might lessen that terror by offering protection
    against Soviet nuclear attack would instead undermine the predictable
    ``stability'' of the balance of terror.
        The Cold War system of two competing blocs has been replaced by a
    new system, one with a broad spectrum of potential opponents and
    threatening contingencies. The continuities of the past U.S.-Soviet
    relationship have been replaced by the unpredictability of potential
    opponents who are motivated by goals and values we often do not share
    nor well understand, and who move in directions we may not anticipate.
    We no longer confront the severe but relatively predictable threats of
    the Cold War; instead we have entered an era of uncertainty and
    surprise. As the attacks of September 11th demonstrated, we must now
    expect the unexpected. What we can predict today is that we will face
    unanticipated challenges, a range of opponents--some familiar, some
    not--with varying goals and military capabilities, and a spectrum of
    potential contingencies involving very different stakes for the United
    States and its foes. These conditions do not permit confident
    predictions about the specific threats against which we must prepare or
    the ``stability'' of deterrence.
        Of particular concern in this era of uncertainty is the emergence
    of hostile, regional powers armed with missiles and nuclear,
    biological, or chemical weapons of mass destruction. When the United
    States failed to deter or promptly defeat a challenge in the past, two
    great oceans generally provided protection to American civil life.
    Nuclear, biological, and chemical weapons technologies, however,
    increasingly are in the hands of brutal leaders who have few
    institutional or moral constraints and are motivated by an extreme
    hatred of the United States and the personal freedoms and liberties we
    hold dear. This emerging feature of the international landscape has
    rendered the failure to deter or promptly defeat a threat much more
    dangerous for all Americans. We can no longer take comfort in the
    belief that the conflict will be ``over there,'' or that opponents will
    be deterred in predictable ways. As was illustrated by September 11, we
    now confront enemies who are eager to inflict mass destruction on
    innocent civilians here and abroad, without regard for the possible
    cost.

                              TRANSFORMING DEFENSE

        What are the implications of these changes in the international
    system for how we think about security? Most basically, we must
    transform our forces and planning to meet the dramatically different
    conditions of the new security environment. Rather than focusing on a
    single peer opponent, and preparing for a few threatening
    contingencies, we now need the flexibility to tailor military
    capabilities to a wide spectrum of contingencies, to address the
    unexpected, and to prepare for the uncertainties of deterrence. We can
    no longer approach our military requirements by conveniently defining
    one or a few countries as the specified ``threat,'' and then sizing our
    military capabilities against that defined threat. U.S. planning can no
    longer be so ``threat-based'' because, in an era of uncertainty, the
    precise source of ``the threat'' is unpredictable.
        Our defense preparations must now focus on, and be responsive to, a
    wide spectrum of potential opponents, contingencies, and threatening
    capabilities, some of which will be surprising. A capabilities-based
    approach to defense planning will look more at the broad range of
    capabilities and contingencies that the United States may confront in
    the future, as opposed to planning against a fixed set of opponents
    identified as the threat.
        Nuclear weapons will continue to be essential, particularly for
    assuring allies and friends of U.S. security commitments, dissuading
    arms competition, deterring hostile leaders who are willing to accept
    great risk and cost to further their evil ends, and for holding at risk
    highly threatening targets that cannot be addressed by other means.
        Instead of our past, primary reliance on nuclear forces for
    deterrence, we will need a broad array of nuclear, non-nuclear, and
    defensive capabilities for an era of uncertainty and surprise. The
    United States will transform its strategic planning from an approach
    that has been based almost exclusively on offensive nuclear weapons, to
    one that also includes a range of non-nuclear and defensive
    capabilities. In particular, because deterrence will function less
    predictably in the future, the United States will need options to
    defend itself, its allies, and friends against attacks that cannot be
    deterred.

                           A NEW TRIAD FOR A NEW ERA

        The current nuclear triad is a legacy of the Cold War. It is
    exclusively nuclear and offensive. As part of the defense
    transformation, we will move to a new triad. The new triad comprises a
    more diverse set of nuclear and non-nuclear, offensive and defensive
    capabilities. These capabilities encompass nuclear forces and non-
    nuclear strike means (including information warfare), passive and
    active defenses (notably missile defense), and the defense-industrial
    infrastructure needed to build and sustain the offensive and defensive
    elements of the new triad. Command, control, and intelligence systems
    are also critical to deterrence. They form an integral part of the new
    triad.
        This new triad will provide the United States with the broad range
    of capabilities suitable for an era of uncertainty and a wide variety
    of potential opponents and contingencies. In some cases, where nuclear
    weapons may have been necessary for deterrence and defense in the past,
    the use of advanced non-nuclear strike capabilities or defensive
    systems may now be sufficient militarily, involve less risk for the
    U.S. and our allies, and be more credible to foes. In some cases,
    nuclear weapons may remain necessary to deter or defeat a particularly
    severe threat. The new triad will provide the spectrum of offensive and
    defensive military capabilities, and the flexibility in planning
    necessary to address the new range of contingencies, including the
    unexpected and the undeterrable.
        The new triad differs in a number of important ways from the
    current triad. In addition to the difference in its overall
    composition, the strategic nuclear forces of the new triad are divided
    into two new categories: the operationally deployed force and the
    responsive force.
        The operationally deployed force includes bomber and missile
    warheads that are available immediately or within a matter of days.
    These forces will be available to address immediate or unexpected
    contingencies. Thus, our stated nuclear forces will correspond to our
    actual nuclear deployments, which did not occur during the Cold War. By
    using such ``truth in advertising,'' we will no longer count ``phantom
    warheads'' that could be deployed, but are not. To address potential
    contingencies and more severe dangers that could emerge over a longer
    period of time, the responsive force augments the operationally
    deployed force, largely through the loading of additional warheads on
    bombers and ballistic missiles. Such a process would take weeks to
    years. The capability for force reconstitution provided by the
    responsive force allows significant reduction in the current number of
    operationally deployed nuclear warheads. This reduction can be achieved
    prudently and without the need for drawn out and difficult
    negotiations.
        In addition, the new triad expressly serves multiple defense policy
    goals. Deterrence of nuclear or large-scale conventional aggression was
    viewed as the main objective of the Cold War triad. The deterrence of
    aggression, although still an essential aim, is just one of four
    defense policy goals for the new triad. The capabilities of the new
    triad, like other U.S. military forces, not only must deter coercion or
    attack, but also must assure allies and friends of U.S. security
    commitments, dissuade adversaries from competing militarily with the
    United States, and, if deterrence fails, decisively defeat an enemy
    while defending against its attacks on the United States, our friends,
    and our allies. Linking nuclear forces to multiple defense policy
    goals, and not simply to deterrence, recognizes that these forces, and
    the other parts of the new triad, perform key missions in peacetime as
    well as in crisis or conflict. How well the new triad serves these
    multiple goals--thereby enabling us to cope effectively with the
    uncertainty and unpredictability of the security environment--is the
    standard for judging its value.
        The new triad offers several advantages in this regard. Its more
    varied portfolio of capabilities, for example, makes it a more flexible
    military instrument. This greater flexibility offers the President more
    options for deterring or defeating aggression. Within the new triad,
    nuclear forces will be integrated with, rather than treated in
    isolation from, other military capabilities. This creates opportunities
    for substituting non-nuclear strike capabilities for nuclear forces and
    defensive systems for offensive means. This does not blur the line
    between nuclear and non-nuclear weapons, but it will reduce the
    pressures to resort to nuclear weapons by giving U.S. Presidents non-
    nuclear options to ensure U.S. security.
        The new triad reflects a capabilities-based approach to nuclear
    force planning and the type of defense transformation required in a new
    era. It deserves wide support. It gives the United States greater
    strategic flexibility needed in an era characterized by surprise. It
    provides the basis for shifting some of the strategic requirements for
    dissuading, deterring, and defeating aggression from nuclear forces to
    non-nuclear strike capabilities, defensive systems, and a responsive
    infrastructure. As we reduce our nuclear forces to bring them into line
    with the security environment, the new triad will mitigate the risks
    inherent in an increasingly fluid and dynamic security environment.
    Getting to the new triad will require us to sustain a smaller strategic
    nuclear force, reinvigorate our defense infrastructure, and develop new
    non-nuclear strike, command and control, intelligence, and planning
    capabilities so that we possess the ability to respond to the kinds of
    surprises the new security environment holds. By taking these steps, we
    will reduce our dependence on nuclear weapons and build a new triad
    that serves a broader range of American national security goals.

                   STRATEGIC NUCLEAR FORCES IN THE NEW TRIAD

        The positive shift in the U.S. relationship with Russia is of great
    significance in considering today's nuclear force requirements. Russia
    is not the Soviet Union, nor is it an enemy. We no longer have to focus
    our energies on preparing for a massive Soviet nuclear first strike.
    Rather, we now seek a new strategic framework with Russia to replace
    the Cold War's balance of terror.
        President Bush has announced his decision to reduce our
    operationally deployed strategic nuclear force to between 1,700 and
    2,200 warheads over the next decade, a level informed by the analysis
    of the NPR. While roughly one-third the number of our currently
    operationally deployed warheads, this range is adequate to support our
    new defense policy goals, including the deterrence of immediate
    contingencies. It also preserves the flexibility and capability for
    reconstitution necessary to adapt to any adverse changes in the new
    security environment.
        These reductions, and other adjustments in our offensive and
    defensive capabilities, will be achieved outside the Cold War's
    adversarial and endless negotiating process that was centered on the
    balance of nuclear terror. Today, that competitive and legalistic
    process would be counterproductive. It would impede or derail the
    significant reductions both sides now want; it would lock both sides
    into fixed nuclear arsenals that could be excessive or inadequate in
    the future; and, by perpetuating the Cold War strategic relationship,
    it would inhibit movement to a far better strategic framework for
    relations.
        I would like to highlight five key findings of the NPR. Each needs
    to be well understood:
        1. A New Relationship With Russia: Away From MAD. The planned
    reductions to between 1,700 and 2,200 operationally deployed nuclear
    warheads are possible and prudent given the new relationship with
    Russia. We can reduce the number of operationally deployed warheads to
    this level because, in the NPR, we excluded from our calculation of
    nuclear requirements for immediate contingencies the previous, long-
    standing requirements centered on the Soviet Union and, more recently,
    Russia. This is a dramatic departure from the Cold War approach to
    nuclear force sizing, which focused first and foremost on sustaining
    our side of the balance of terror and mutually-assured destruction
    (MAD). In the NPR, we moved away from this MAD policy framework.
        This, of course, is not to imply that we will not retain
    significant nuclear capabilities, or that we can ignore developments in
    Russia's (or any other nation's) nuclear arsenal. Nuclear capabilities
    will continue to be essential to our security, and that of our friends
    and allies.
        Nevertheless, we no longer consider a MAD relationship with Russia
    the appropriate basis for calculating our nuclear requirements. MAD is
    a strategic relationship appropriate to enemies, to deep-seated
    hostility, and distrust. Russia is not our enemy, and we look forward
    to a new strategic framework for our relations.
        2. Reductions Plus Security. The President's plan for nuclear
    reductions permits us to cut the number of operationally deployed
    nuclear weapons by about 65 percent, to levels far below current
    levels, without taking great risks with America's safety. The new
    relationship with Russia makes such cuts possible, and the President's
    plan prudently preserves our option to respond to the possible
    emergence of new threats. Some commentators say we should continue to
    reduce our forces without preserving our capacity to adapt to changing
    circumstances, but doing so would require an ability to predict the
    future with enough accuracy to ensure we will not be surprised or face
    new threats.
        Because the future almost certainly will, in fact, bring new
    dangers, we do not believe it is prudent to set in stone the level and
    type of U.S. nuclear capabilities. We have embarked on a program to
    deploy a new triad that may allow increasingly us to rely on non-
    nuclear capabilities, and under the President's plan we have the option
    to adjust our nuclear forces down even further than now planned if
    appropriate. If severe new threats emerge, however, we must also retain
    the capacity to respond as necessary. The President's plan is a
    reasonable way to both reduce nuclear forces and prudently preserve our
    capability to adjust to the shifting requirements of a dynamic security
    environment. In the NPR we have recognized that force requirements are
    driven fundamentally by the realities of a changing threat environment,
    and we have adopted, in the capabilities-based approach, the
    commonsense standard that we must retain the flexibility necessary to
    adjust to and shape that environment.
        3. New Emphasis on Non-nuclear and Defensive Capabilities. The
    President's plan, for the first time, emphasizes the potential for
    substituting non-nuclear and defensive capabilities for nuclear
    capabilities. In many likely cases involving an attack against us, our
    allies, or friends, it will be far better to have non-nuclear and
    defensive responses available. For example, during the Cold War, one of
    the President's only options to limit damage to the United States was
    to strike the enemy's offensive weapons, raising the stakes in any
    confrontation. Defenses will offer the ability to limit damage to the
    United States without requiring America to ``fire the first shot.'' In
    the case of an accidental launch of nuclear-armed missiles, defenses
    will give us the opportunity to destroy such weapons before they
    inflict any damage on the United States, its friends, or allies.
        The NPR, for the first time, explicitly calls for the integration
    of non-nuclear and defensive capabilities as part of our strategic
    triad. This is another reason we can move forward with deep nuclear
    reductions while being careful to preserve our security. The new non-
    nuclear and defensive capabilities that are emphasized in the NPR may
    also provide the basis for further nuclear reductions in the future,
    depending on their effectiveness.
        4. A New Diverse Portfolio of Military Capabilities for a New
    World. The NPR's call for a new triad begins the transformation of our
    strategic capabilities to suit a world that is very different from that
    of the Cold War. In the past we focused on the Soviet Union and a few
    severely threatening contingencies. We prepared our military to address
    this relatively narrow Cold War threat.
        Today the sources of the threats that face us are much more diverse
    and even unpredictable, as the September 11 attacks showed. The spread
    of missiles and weapons of mass destruction makes the current spectrum
    of potential opponents significant. Whereas in the past, only the
    Soviet Union posed a serious threat to American cities, in the
    foreseeable future, several countries--and perhaps some non-state
    actors--will present such a risk. Our defensive capabilities must take
    these new post-Cold War realities into account.
        The President's plan will transform our military to provide us with
    a new portfolio of capabilities to meet these new threats, even while
    reducing our reliance on nuclear weapons. This portfolio will enable us
    not only to tailor our force options to the range of potential
    contingencies and types of opponents, it will help us to shape the
    threat environment in the most benign directions possible.
        5. The Rejection of Adversarial Negotiations. The rejection of the
    Cold War's adversarial-style of arms control negotiations represents a
    key change introduced in the NPR. The NPR moves us beyond the
    essentially hostile and competitive negotiations of the Cold War
    because such negotiations no longer reflect the reality of U.S.-Russian
    relations. We do not negotiate with Britain or France with regard to
    the permitted features of our respective nuclear capabilities. Although
    our relations with Russia are not yet comparable to our relations with
    our allies, they are not based on Cold War hostilities.
        Were we to have put nuclear reductions on hold until we could have
    hammered out a Cold War-style arms control agreement with Russia, we
    would not be making the reductions we plan to make over the next
    decade. We would be under pressure to hold on to the weapons we no
    longer require as bargaining chips because that is the logic of
    adversarial arms control. Russia would be pressed by the same logic.
        We see no reason to try to dictate the size and composition of
    Russia's strategic nuclear forces by legal means. Russian forces, like
    our forces, will decline about two-thirds over the next decade. In
    truth, if the Russian government considers the security environment
    threatening enough to require an adjustment in its nuclear
    capabilities, it would pursue that adjustment irrespective of its
    obligations under a Cold War-style treaty. In fact, the Russian
    government did just that in 1995 with regard to the Conventional Forces
    in Europe (CFE) Treaty. Because the security situation had changed,
    Russia did not meet its obligations to reduce its conventional forces
    to the proscribed levels. The Russian Defense Minister at the time
    stated that Moscow would not fulfill legal obligations that ``bind us
    hand and foot.''
        A highly dynamic security environment such as we now confront
    ultimately cannot be tamed by rigid, legal constructs, however
    sincerely entered into. It would be highly imprudent now to rigidly fix
    our capacity to respond to and shape such an environment by extending
    the negotiating practices of the Cold War into the future. We seek a
    new strategic framework in our relationship with Russia, not a
    perpetuation of the old.

                    REDUCING THE NUMBER OF NUCLEAR WARHEADS

        Some now argue that the nuclear weapons removed from our strategic
    forces must be destroyed or the announced reductions would be ``a
    subterfuge.'' The NPR, of course, calls for the destruction of some,
    but not all, of the U.S. warheads removed from the operationally
    deployed force. We must retain these weapons to give the United States
    a responsive capability to adjust the number of operationally deployed
    nuclear weapons should the international security environment change
    and warrant such action. Presidents from both parties have long
    recognized the need for such a capability. For example, the previous
    administration adopted a ``lead and hedge'' policy with regard to
    reductions below the levels required by the START II Treaty in the 1994
    NPR. The last administration planned to retain the U.S. ability to
    regenerate capabilities reduced by the START II Treaty as a ``hedge''
    against the possibility that Russia might reverse its course toward
    democracy. The previous administration continued that policy through
    its last day in office.
        The current Nuclear Posture Review makes a similarly prudent
    decision to maintain the ability to restore capabilities we now plan to
    reduce. The difference, however, is that the NPR's responsive force is
    not being sized according to the dictates of a possible resurgence in
    the threat from Russia. Instead, our new responsive capability is being
    defined according to how it contributes to the four goals of dissuading
    potential adversaries, assuring allies, deterring aggression, and
    defeating enemies.
        At this time, the appropriate size of our responsive force has not
    been determined. However, the analysis that helped determine the size
    of the operationally deployed force and the decision to pursue non-
    nuclear capabilities in the new triad suggests that our responsive
    capability will not need to be as large as the ``hedge'' force
    maintained by the previous administration. Moreover, our responsibility
    to ensure U.S. security virtually dictated the maintenance of a
    significant number of stored warheads. First, both the United States
    and the Soviet Union recognized during the Cold War that the number and
    nature of their operationally deployed nuclear forces ready to go at a
    moment's notice were the key determinants of their respective
    capabilities. That is why both sides pursued arms control agreements
    that sought to affect the nature and number of deployed nuclear
    delivery vehicles and why existing arms control treaties never
    addressed the issue of warhead dismantlement. In that context,
    implementing the NPR will significantly reduce the number of U.S.
    deployed warheads and change the nature of our nuclear arsenal by
    downloading the delivery vehicles. In short, the NPR addresses the most
    important aspects of the U.S. nuclear arsenal. Given the era of
    uncertainty we now face, maintaining a responsive force is only prudent
    and consistent with the capabilities-based approach to our defense
    planning.
        Finally, the pace with which we reduce the nuclear stockpile will
    be determined in part by the state of our infrastructure and the very
    real limits of our physical plant and workforce, which has deteriorated
    significantly. For example, the United States today is the only nuclear
    weapon state that cannot remanufacture replacements or produce new
    nuclear weapons. Consequently, we are dependent on stored weapons to
    maintain the reliability, safety, and credibility of our stockpile and
    to guard against the possibility of a technical or catastrophic failure
    in an entire class of nuclear weapons. Other nuclear states are not
    bound by this limitation of their infrastructure. Repairing the U.S.
    nuclear infrastructure and building the responsive infrastructure
    component of our new triad may well permit us to reduce the size of the
    nuclear stockpile needed to support the responsive force.
        In sum, the NPR develops an approach to reductions that provides an
    accounting of reductions that reflects ``truth in advertising,''
    protects conventional capabilities from efforts to limit nuclear arms,
    and preserves the flexibility necessary in an era of uncertainty and
    WMD proliferation. This is the only prudent path to deep reductions
    given the realities of the threat environment we face.

                                    PROGRAMS

        Developing and fielding the capabilities for the new triad will
    require a dedicated effort over the next decade. Program development
    activities must be paced and completed in a manner such that the
    integration of capabilities results in the synergistic payoff
    envisioned for the new triad. The Department has identified an initial
    slate of program activities that we propose to fund beginning in fiscal
    year 2003.
        DOD Infrastructure. Funding for the sustainment of strategic
    systems will be increased. This effort will support surveillance and
    testing of weapon systems slated for life extension programs such as
    the Air-Launched Cruise Missile (ALCM) and the Advanced Cruise Missile
    (ACM). We propose to conduct additional test flights for solid rocket
    motors and to increase our efforts for unique technologies for
    strategic systems, such as missile electronics and navigation. In
    addition, the Department will fund the development and qualification of
    radiation-hardened parts for strategic systems.
        Offensive Strike. Funding has been programmed for two specific
    advanced conventional weapon applications and one concept development
    program to explore options for advanced strike systems. The two
    advanced conventional strike applications include a fast-response,
    precision-impact, conventional penetrator for hard and deeply buried
    targets and the modification of a strategic ballistic missile system to
    enable the deployment of a non-nuclear payload.
        Missile Defense. The Department will conduct an aggressive R&D
    program for ballistic missile defense and we are evaluating a spectrum
    of technologies and deployment options.
        Strike Support. Advancements in offensive and defensive
    capabilities alone will be inadequate without enhancements in sensors
    and technology to provide detailed information on adversary plans,
    force deployments, and vulnerabilities. Such systems are critical in
    developing the advanced command and control, intelligence, and adaptive
    planning capabilities required to integrate all three legs of our new
    triad. Therefore, the Department has proposed additional funding for
    the development of advanced sensors and imagery for improved
    intelligence and assessment and for modernization of communications and
    targeting capabilities in support of evolving strike concepts.

                                   CONCLUSION

        A half a century ago, in the midst of the Cold War, Prime Minister
    Winston Churchill noted in the House of Commons the ``sublime irony''
    that in the nuclear age, ``safety will be the sturdy child of terror
    and survival the twin brother of annihilation.'' The Cold War is long
    over and new approaches to defense are overdue. As President Bush has
    stated, ``We are no longer divided into armed camps, locked in a
    careful balance of terror. Our times call for new thinking.'' The new
    triad, outlined in the Nuclear Posture Review, responds to the
    President's charge.

        Chairman Levin. Thank you, Secretary Feith.
        General Gordon.

     STATEMENT OF GEN. JOHN A. GORDON, USAF (RET.), ADMINISTRATOR,
                NATIONAL NUCLEAR SECURITY ADMINISTRATION

        General Gordon. Thank you, Mr. Chairman. I have a longer
    prepared statement that I would offer for the record.
        Chairman Levin. It will remain part of the record.
        General Gordon. National Nuclear Security Administration
    (NNSA) participated in the Nuclear Posture Review, and while
    the nuclear requirements are largely within the providence of
    the Department of Defense and the White House, we were able to
    participate fully throughout the study to ensure that the
    choices, plans, and requirements that were developed were well
    within the realm of the possible from the technical and
    production standpoints of the NNSA. So I would like to make a
    few points.
        The first key conclusion out of the NPR is the concept of a
    new triad that focuses on and supports the importance of a
    robust and responsive R&D and industrial base, of which the
    nuclear weapon enterprise is a key element. It is not only in-
    being forces, but the demonstrable capabilities of the defense,
    science, technical, and manufacturing infrastructure that began
    the nuclear weapon enterprise that provide us with a means to
    respond to new and unexpected emerging threats in a timely
    manner and dissuade a potential future competitor from seeking
    a nuclear advantage.
        A second fundamental conclusion, at least from NNSA's
    perspective, is that for the foreseeable future, nuclear
    weapons will remain, if not a critical, but at least a key
    element of U.S. strategy. A basic point, but it tells us that
    the NNSA must continue to ensure the safety and reliability of
    the stockpile, and our Stockpile Stewardship Program (SSP) is
    designed to do just that and to do it in the absence of nuclear
    testing. From basic surveillance of weapons to refurbishment of
    the systems, to studying the chemistry and the metallurgy of
    long-term materials aging, to understanding weapons physics in
    a new and very different way, in much more detail, and
    developing the tools for really long-term stewardship, the NNSA
    is focused on its mission.
        An important point is that the NPR essentially revalidated
    the basic structure of the warhead refurbishment program that
    had earlier jointly been developed with DOD and the NNSA under
    the Nuclear Weapons Council structure. The precise weapons that
    fall into each category are the W80, W76, and B61, which will
    be central to the stockpile, and we know they will require life
    extension and refurbishment. The NNSA's requirements remain,
    and we need to press ahead, to restore past production
    capabilities, modernize others, and be able to begin these
    refurbishments on schedule.
        This, in turn, then raises a key point. The results of the
    NPR do not in the near term reduce the NNSA's costs. Our near
    term costs are driven by the need to restore and revitalize the
    infrastructure, and they are driven not by the number of
    warheads in the stockpile and by the number to be refurbished.
        Cost savings from refurbishing a smaller number of warheads
    will not be realized until perhaps 2010. So this then puts me
    in a bit of a difficult position, I think, in trying to explain
    what or what is not intuitively obvious as to why the weapons'
    cost is not going down, why costs are not going down, but the
    point is at the core of the enterprise, and the stockpile needs
    to be refurbished regardless of the numbers of weapons we deem
    necessary to retain. Even at that level, the enterprise will be
    stretched, and we will see something approaching maximum
    capacity when these systems are all in the process line.
        So under current planning scenarios, we will be at or near
    capacity, limiting our ability to dismantle significant numbers
    of weapons over the next 10 years or so. Under current plans,
    weapons identified for dismantlement would use low-level
    capacity at the plants, but it would be difficult to undertake
    major scheduled dismantlements without slipping some of the
    schedules or adding new capacity.
        Mr. Chairman, I would point to some of the less obvious but
    very important results of the NPR, at least to me. The conduct
    of this review has done much to review the cooperation and
    coordination among the Department of Energy, NNSA, and the
    Department of Defense on these issues. The Nuclear Weapons
    Council is working effectively and efficiently. Policy levels
    are working together. The DOD has offered strong support for
    needed programs and from my perspective, that is a most welcome
    development.
        Mr. Chairman, I might take a moment to make a few comments
    on NNSA as an organization, about how it fits into this. First,
    we are particularly grateful for the support of the Senate for
    a budget that actually begins to make our requirements
    achievable. The fiscal year 2003 budget request also makes
    another important step, and we look forward to sustained
    support from the administration and from Congress for our
    ambitious programs. I am confident that we will be able soon to
    submit a 5-year plan with meaningful consent.
        Second, I want to report that I am fundamentally satisfied
    with the progress we are making on stewardship. With improved
    surveillance tools, we are finding problems and we know how to
    fix them, but none of them, none of these problems that we
    found and other fixes we proposed suggest a need any time soon.
    The National Ignition Facility (NIF) seems to be on track and
    the pit program is coming into line. We see the infrastructure
    and improvements.
        Third, I see real improvements with the labs and the plants
    and morale is up, retention is up, recruitment is up. Mr.
    Chairman, I wouldn't go so far as so suggest all is perfect. It
    is hardly that. We run programs with considerable inherent risk
    as we push the limits of technology. We struggle with complex
    and large programs, and NNSA, a large organization, has a ways
    to go. With the recent confirmation of Dr. Everett Beckner to
    the position of Deputy Administrator for Defense Programs, we
    will have a leadership team in place. The vectors are good.
        Mr. Chairman, two more points if I may. While movement of
    our work is focused almost exclusively on maintaining today's
    stockpile and developing the tools to certify our weapons far
    into the future, without testing, I have directed and the NPR
    has endorsed three specific initiatives for our weapons
    programs.
        First, we need to begin thinking seriously about a modern
    pit production facility (MPF) and I want to begin in earnest
    the very early work on the alternatives that would be available
    to us. I do not foresee a need for such a facility for at least
    15 years, but I want to accelerate and make more rigorous our
    planning processes toward that.
        Second, while I see no near-term need for nuclear tests, my
    judgment is that our current test readiness posture is a bit
    too relaxed and perhaps 30 to 36 months for a fully diagnosed
    all up test. I believe we should be on a more ready footing,
    not because I see the need for the test but out of simple
    prudence.
        Third, we are doing almost nothing now, almost no rigorous
    thinking about the future nuclear concepts. We are not
    challenging our designers or adequately training new designers.
    So I have asked the labs to put together a small group at each
    location that allows new designers to work with old hands to
    think about and explore what might be possible. I hasten to say
    that this work is not done with a specific military requirement
    in mind, but rather a way to help ensure long-term design
    competence, and we do this with an appreciation of the
    restrictions on pursuing new weapons.
        Finally, Mr. Chairman, you asked in your letter of
    invitation to this hearing that I address the questions raised
    in a couple of recent DOE Inspector General reports related to
    stockpile surveillance. In its report on surveillance testing,
    the IG noticed a continuing backlog in certain tests that could
    result in a lack of critical information needed to make valid
    assessments of weaponry on which we rely. It contributes to the
    backlog of testing, to delays in completing the studies to
    minimize hazards and ensure safe operations and difficulties in
    coordinating tests with the Department of Defense. These
    reports pointed out a deteriorating structure that had
    contributed to delays in surveillance and other programs.
        The second report called to attention the lengthy period of
    time required to complete the significant findings
    investigations (SFIs). The reports were correct in identifying
    significant backlogs of surveillance testing and a likely
    process for solving problems. But even before the report, we
    applied funds in 2000, 2001, and 2002 to address these
    problems. The inspection backlogs were limited last year and
    others will be done this year. To address delays in completing
    SFIs, we are taking the actions to assure that the most
    critical ones are resolved promptly and with high confidence.
    We are developing a comprehensive SFI database to track the
    progress and institute accountability. I'm not satisfied with
    our past handling of this issue, and I have directed Dr.
    Beckner, our new Deputy Administrator for Defense Programs, to
    take this on as a top priority.
        Mr. Chairman, today our nuclear weapons stockpile is safe,
    it is secure, it is reliable. We are working hard to assess the
    implications of the NPR for NNSA and to work closely with
    Department of Defense partners in its implementation and more
    importantly the flexibility to sustain our nuclear weapons
    stockpile to adopt current weapons to new missions, potentially
    to field new weapons depends on healthy plan for stockpile
    stewardship, peer review and base certification as well as a
    robust infrastructure for nuclear weapons. As numbers of
    nuclear forces are reducing, it becomes even more important to
    retain high confidence in the reliability of the remaining
    forces. We must also have the capacity to respond to changes in
    the strategic environment, if need be.
        Achieving these goals will require a strong commitment to
    the recapitalization of our nuclear weapons infrastructure, now
    a smaller infrastructure to be sure, but one that is
    sufficiently modern and capable to fully support the NPR and
    more broadly, our defense strategy. Mr. Chairman, thank you.
        [The prepared statement of General Gordon follows:]

             Prepared Statement by Gen. John A. Gordon, USAF (Ret.)

                                  INTRODUCTION

        Mr. Chairman and members of the committee, thank you for the
    opportunity to meet with you today on the Nuclear Posture Review and
    the National Nuclear Security Administration's (NNSA) role in working
    with the Department of Defense to implement it.
        The NPR reviews future national security needs, and the nuclear
    weapons stockpile and infrastructure required to support it. The review
    was carried out by DOD in close consultation and cooperation with the
    NNSA. Secretary of Energy Spencer Abraham and I fully endorse Secretary
    Rumsfeld's December 2001 Report to Congress on the NPR.
        The central question that I want to address today is: What are the
    implications of the NPR for nuclear weapons programs? More broadly,
    what does NNSA need to do to implement the findings and recommendations
    of the NPR? Let me first give the ``short answer,'' which I will then
    develop more fully.
        First, the NPR reaffirms that nuclear weapons, for the foreseeable
    future, will remain a key element of U.S. national security strategy.
    As a result, NNSA must continue to assure the safety and reliability of
    the U.S. nuclear stockpile. Our stockpile stewardship program is
    designed to do just that, and to do so in the absence of nuclear
    testing.
        Second, the NPR reaffirms the stockpile refurbishment plan agreed
    previously between DOD and NNSA, which calls for three warhead
    refurbishment programs--the W80, the W76 and the B61--to begin later
    this decade. As a result, NNSA must press ahead with its efforts to
    reverse the deterioration of its nuclear weapons infrastructure,
    restore lost production capabilities, and modernize others in order to
    be ready to begin those refurbishments on schedule.
        This raises a key point--the NPR will not reduce NNSA's costs or
    workload anytime soon. Regardless of the eventual size of the future
    stockpile, we will need to meet the agreed timelines, established with
    DOD well before the NPR, to begin refurbishments later in this decade
    on the three warhead types. In this regard, near-term costs are driven
    not by the total number of warheads to be refurbished, but by the need
    to restore production capabilities in time to carry out the first
    refurbishment of each type. Possible cost savings from having to
    refurbish fewer warheads for a smaller stockpile would not be realized
    until well into the next decade.
        Third, several NNSA initiatives have been endorsed by the NPR
    including efforts to:

             Enhance nuclear test readiness;
             Reestablish nuclear warhead advanced concepts teams at
            the national labs and headquarters; and
             Accelerate preliminary design work on a modern pit
            facility (MPF).

        Given our multi-year plan to reintroduce program stability to the
    enterprise, we believe we are on track to complete acquisition of the
    tools and capabilities needed to assure future stockpile safety and
    reliability, achieve the needed restoration and modernization of the
    production complex, and implement the NPR initiatives.

      ROLE OF THE NUCLEAR WEAPONS ENTERPRISE IN ACHIEVING DEFENSE POLICY
                                     GOALS

        Let me elaborate more on these matters starting from first
    principles. Four key defense policy goals were articulated in the
    Quadrennial Defense Review and later reaffirmed in the NPR. Briefly,
    the goals are to:

             assure allies and friends by demonstrating the United
            States' steadiness of purpose and capability to fulfill its
            military commitments;
             dissuade adversaries from undertaking military
            programs or operations that could threaten U.S. interests or
            those of allies and friends;
             deter threats and counter coercion against the United
            States, its forces, and allies; and
             defeat any adversary decisively and defend against
            attack if deterrence fails.

        In seeking to meet these goals, the NPR has established as its
    centerpiece the ``new triad'' of flexible response capabilities
    consisting of the following elements:

             non-nuclear and nuclear strike capabilities including
            systems for command and control;
             active and passive defenses including ballistic
            missile defenses; and
             R&D and industrial infrastructure needed to develop,
            build, and maintain nuclear offensive forces and defensive
            systems.

        Perhaps more so than in any previous defense review this concept of
    a new triad reflects a broad recognition of the importance of a robust
    and responsive defense R&D and industrial base in achieving our overall
    defense strategy.
        The ability of our modern defense industrial base to bring advanced
    defense technology rapidly into the field is well respected
    internationally among both friends and foes. The breadth and scope of
    the U.S. strategic modernization program of the early 1980s, including
    the potential of a Strategic Defense Initiative (SDI) then in the very
    early stages of R&D, was key to causing President Gorbachev in the late
    1980s to seek an end to strategic competition with the West and an end
    to the Cold War. The U.S. defense R&D and industrial base, including
    the nuclear weapons complex of the national laboratories, production
    plants, and test sites that supported development of sophisticated
    warheads with build rates exceeding 1,000 weapons per year, permitted
    that modernization program to take place and was a major factor in
    reassuring allies (who depend on the U.S. nuclear umbrella), in
    dissuading, that is, convincing the Soviet Union that arms competition
    with the United States was futile and in deterring aggression.
        Many modern military capabilities evolved from the legacy of the
    Manhattan Project, characterized by the massive application of science
    and technology to the problem of developing and producing the atomic
    bomb and leading to later efforts across a range of military systems.
    It was not only nuclear and conventional forces that provided
    deterrence during the Cold War, but the latent potential--reflected in
    our defense scientific, technical, and manufacturing base--to design
    and develop ever more advanced and capable military systems, and the
    ability to produce them in great quantities if need be.
        Now that the Cold War is over, how can the nuclear weapons
    enterprise act both to reassure allies, and to dissuade or deter future
    adversaries? An enterprise focused on sustainment and sized to meet the
    needs of a smaller nuclear deterrent can provide capabilities to
    respond to future strategic challenges. A future competitor seeking to
    gain some nuclear advantage would be forced to conclude that its
    buildup could not occur more quickly than the U.S. could respond.
    Alternatively, an ability to innovate and produce small builds of
    special purpose weapons, characteristic of a smaller but still vital
    nuclear infrastructure, would act to convince an adversary that it
    could not expect to negate U.S. nuclear weapons capabilities. The
    development and subsequent modification of the B61-7 bomb--converting a
    few of them into the B61-11 earth penetrator weapons--is a case in
    point.
        Thus it is not only in-being forces, but the demonstrable
    capabilities of the defense scientific, technical and manufacturing
    infrastructure, of which a responsive nuclear weapons infrastructure is
    a key part, including its ability to sustain and adapt, that provides
    the United States with the means to respond to new, unexpected, or
    emerging threats in a timely manner. This has served to reassure allies
    and friends, dissuade adversaries from strategic competition with the
    United States, and underpin credible deterrence in a changing security
    environment.

       SUPPORTING THE NPR--CAPABILITIES FOR A RESPONSIVE NUCLEAR WEAPONS
                                   ENTERPRISE

        How far along are we in creating a ``responsive nuclear weapons
    enterprise?'' The answer is: ``We're making progress, but we have a
    ways to go.''
        Over the past decade, our focus has been to develop means to assess
    and ensure the safety and reliability of the aging stockpile absent
    underground nuclear testing. We have also sought to reduce the size of
    the production infrastructure, consistent with post-Cold War force
    levels, with the goal of modernizing that smaller infrastructure to
    assure that the Nation has the capabilities it will need in the
    future.\1\ The results of these efforts have been mixed. To date we
    have been able to certify stockpile safety and reliability without
    underground nuclear testing, but the capability to do so in the future
    as the stockpile continues to age remains uncertain. No advanced
    warhead concept development is underway. Past under investment in the
    enterprise--in particular, the production complex--has increased risks
    and will limit future options. Currently, we cannot build and certify
    plutonium ``pits'' and certain secondary components, much less complete
    warheads (although we are working hard to re-establish these
    capabilities). Many facilities are in poor condition--some are
    unusable--and we have a rapidly aging workforce. Restoring lost nuclear
    weapons capabilities, and modernizing others, will require substantial
    investment over the next several years both to recapitalize laboratory
    and production infrastructure, and to strengthen our most important
    asset, our people.
    ---------------------------------------------------------------------------
        \1\ Among other things, over the past decade we have closed three
    facilities--Rocky Flats (pit production and reservoirs), the Mound
    Plant (non-nuclear components), and the Pinellas Plant (neutron
    generators), and reduced floor space by over 50 percent in the
    manufacturing facilities at Y-12.
    ---------------------------------------------------------------------------
        The nuclear weapons enterprise that we seek must: (1) continue to
    assure stockpile safety, reliability, and performance; and (2) respond
    rapidly and decisively to stockpile ``surprise'' or to changes in the
    international security environment. Let me address each in turn.
    Assure stockpile safety, reliability, and performance
        Since 1995, there has been a Presidential requirement for an annual
    assessment of the safety and reliability of the nuclear stockpile and a
    determination of whether a nuclear test is required to resolve any
    safety or reliability problem. This is an extensive technical effort
    supported by data from non-nuclear experiments, computer simulations,
    the nuclear test database, aggressive and ever-improving surveillance,
    extensive peer review by other lab design teams, and independent
    assessments by others.
        To strengthen weapons assessment and certification, we are seeking
    fundamental improvement of our understanding of the physics of nuclear
    explosions, including the effects of aging or remanufacture on weapons'
    system performance. This requires development of new simulation
    capabilities that use large, high-speed computers and new experimental
    facilities in areas such as hydrodynamics testing, materials science,
    and high-energy density physics. Campaign goals for reducing
    uncertainties in our understanding of weapons' behavior have been
    established, and schedules and milestones have been set to meet these
    goals as soon as practicable. Because of the implications for stockpile
    certification, and the need to meet warhead refurbishment milestones,
    it is important to keep these campaigns on schedule.
        Elements of our program to meet annual certification requirements
    are well along and include:

             Aggressive surveillance to predict and find problems
            so that warheads can be refurbished well before aging degrades
            safety and reliability;
             Conduct planned warhead refurbishments on agreed
            schedules;
             Seek to anticipate stockpile problems and fix them, if
            possible, before they arise; and
             Maintain the required numbers of warheads in ready
            state.

    Respond rapidly and decisively to stockpile ``surprise'' or to changes
            in the international security environment
        The NPR highlighted the importance of a robust and responsive
    defense R&D and industrial base as a key element of the new triad. Here
    we refer to the ability of the enterprise to anticipate innovations by
    an adversary and to counter them before our deterrent is degraded, and
    its resilience to unanticipated events or emerging threats--all the
    while continuing to carry out the day-to-day activities in support of
    the enduring stockpile. Unanticipated events could include the
    catastrophic failure of a deployed warhead type. Emerging threats could
    call for new warhead development, or support to DOD in uploading the
    responsive force. In any case, there are a number of capabilities and
    activities that will help us to hedge an uncertain future including our
    ability to:

             Ensure sufficient reserve or surge capacity for both
            the R&D and production;
             Secure sufficient assets/capabilities (e.g.,
            transportation, tritium, etc.) to support the responsive force;
             Retain appropriate numbers and types of weapons at
            appropriate states of readiness, to ensure a variety of
            replacement options;
             Revitalize nuclear weapons advanced concepts efforts
            at the labs and headquarters;
             Develop and assess strategies for transitioning the
            stockpile toward weapons that are intrinsically easier to
            maintain and certify, conceivably without nuclear testing; and
             Enhance readiness to resume underground nuclear
            testing, if required.

        A key measure of ``responsiveness'' is how long it would take to
    carry out certain activities to address stockpile ``surprise'' or deal
    with new or emerging threats. Specific goals are being established for
    the following four activities:
        Fix stockpile problems: The ability to assess a stockpile problem,
    once one has been identified, and then design, develop, implement, and
    certify a fix will of course depend on the nature and scope of the
    problem. For a relatively major problem, we seek to be able to assess
    the problem and establish an implementation plan--Phases 6.2-6.2A for
    the ``fix'' within 1 year, and then to conduct development and
    production engineering activities leading to initial production--Phases
    6.3-6.5--within approximately 3 years.
        New warhead design, development, and initial production: New or
    emerging WMD threats from rogue states make it difficult to predict
    future deterrence requirements. If the U.S. is to have a flexible
    deterrent, it must be able to adapt its nuclear forces to changing
    strategic conditions. Adaptation and modernization of forces, including
    implementation of new technologies, will enable us to continue to
    achieve deterrence objectives more efficiently as we move to
    significantly lower force levels. Our goal is to maintain a sufficient
    R&D and production capability to be able to design, develop, and begin
    production on the order of 5 years from a decision to enter full-scale
    development of a new warhead.\2\ To achieve this goal, we must work
    with DOD to determine and prioritize potential weapons needs over the
    long term. In certain cases, it may be appropriate to design, develop,
    and produce a small number of prototype weapons both to exercise key
    capabilities and to serve as a ``hedge,'' to be produced in quantity
    when deemed necessary.
    ---------------------------------------------------------------------------
        \2\ During the era in which the current stockpile was designed,
    developed, tested, and manufactured, the Phase 6.3-6.5 timeframe
    (design, development, initial production) was roughly 5 years. At that
    time, continuing new requirements provided a ``pipeline'' capability so
    that weapons were regularly entering the stockpile.
    ---------------------------------------------------------------------------
        Quantity production of new warheads: While there are no plans to
    increase the size of the stockpile, we must have flexibility to respond
    to various scenarios. Our goal is to maintain sufficient production
    capacity to be able to produce new warheads in sufficient quantities to
    meet defense requirements without disrupting ongoing refurbishments. In
    this connection, refurbishment demands starting later in this decade,
    and continuing until about 2014, are expected to dominate production
    capacity. If necessary, we would work with DOD to adjust production
    priorities.
        Support to DOD in uploading the responsive force: We must assure
    that NNSA's tasks, such as warhead transportation, tritium support,
    etc., are not the ``long poles in the tent'' for uploading the
    responsive force. That is they must be carried out on a time scale
    consonant with DOD's ability to upload these weapons. Sufficient
    numbers of responsive warheads must be maintained in the active
    stockpile to ensure that ready warheads are available to meet upload
    timelines.

    HOW DO WE GET TO WHERE WE WANT TO BE?--NATIONAL COMMITMENT AND A MULTI-
                                   YEAR PLAN

        What do we need to do in order to achieve the capabilities of a
    modern and flexible nuclear weapons design and production enterprise?
    In short, we need to revitalize and sustain our production
    capabilities, our R&D and technology base, and our world-class
    workforce. Critical to this is a national commitment to safe and
    reliable nuclear forces, which the NPR has reaffirmed, and
    implementation of a stable, multi-year fiscal plan. Such a plan would
    provide the long-term commitment and stability to restore or modernize
    critical infrastructure and capabilities so that we can meet future
    workload requirements under a more rigorous regulatory regime. It would
    also allow us to redress the deferred maintenance backlogs, assure
    world-class science and engineering capabilities and workforce, and
    carry out the initiatives of the NPR. Let me elaborate further.
    Modernize nuclear weapons production capabilities
        The production complex which has seen site closures and
    considerable downsizing since the end of the Cold War, consists of the
    following ``one of a kind'' facilities: the Y-12 Plant (uranium and
    other components); the Pantex Plant (warhead assembly, disassembly,
    disposal, high explosive components); the Kansas City Plant (non-
    nuclear components); and the Savannah River Plant (tritium extraction
    and handling). In addition, production activities for specific
    components occur at two national labs: Sandia National Laboratories
    (neutron generators), and Los Alamos National Laboratory (plutonium/
    beryllium parts, detonators, and tritium targets for neutron
    generators).
        The current production complex is limited in the number of weapons
    that can be processed at the Pantex Plant, with the work split among
    units undergoing surveillance, refurbishment, or dismantlement. Planned
    renovations of existing facilities will expand capacity sufficient to
    meet the anticipated NPR workload and include a small reserve that
    would be available to fix unanticipated problems in the stockpile,
    respond to new warhead production requirements, or handle a potentially
    increased dismantlement workload (resulting from force reductions)
    without disrupting planned refurbishments.
        Qualified processes for some uranium manufacturing and processing
    are not currently in place, but plans are underway to expand the
    capacity and capability of the Y-12 Plant to meet the planned workload
    for replacing warhead secondaries and other uranium components.
        Regardless of the size of the future nuclear weapons stockpile,
    substantial work must be completed to get the production complex to the
    point where it is ready to begin refurbishment work on key systems
    later this decade. Additionally, new construction projects, including
    that for a modern pit production facility discussed below, are needed
    to ensure sufficient capacity for planned future-decades stockpile
    refurbishments.
    Modernize the R&D and technology base
        Stockpile stewardship requires strong R&D capabilities to predict,
    discover, and evaluate problems in the current stockpile (especially
    those associated with component aging or defects), in order to design,
    develop, and certify new warheads in the absence of testing, and to
    attract and retain a world-class technical staff. Thus, in addition to
    modernizing production capabilities, efforts are underway to restore
    and improve the technical base of the nuclear weapons enterprise and to
    develop advanced capabilities to meet future requirements. Key needs
    include:

             Continue to upgrade modeling and simulation
            capabilities;
             Improve hydrodynamic and sub-critical testing
            capabilities for warhead assessments;
             Complete high-energy density physics projects to
            improve understanding of the physics of nuclear explosions;
             Create modern microelectronics capabilities for DOE
            and DOD components; and
             Deploy modern production processes.
    Secure and sustain a world-class work force
        Recruitment and retention of an expert workforce is a major
    challenge. The aging of the technical staff at the national
    laboratories, the production plants and the Nevada Test Site (NTS) is a
    concern highlighted by a variety of review groups, including the
    congressionally-appointed Commission on Nuclear Weapons Expertise
    (Chiles Commission) and the Foster Panel. In its 1999 report, the
    Chiles Commission observed that the average age of those supplying
    critical skills to the weapons program is 48 years--a population
    considerably older than that for the average U.S. high-tech industry. A
    major factor in this demography was the low hiring rates in the early-
    to-mid-1990s as budgets for the weapons program were in decline.
    Recruiting rates have gone up modestly, but are still much lower than
    required to support planned programs. More recently, morale problems at
    the laboratories in the wake of security problems have raised concerns
    for retention, and recruiting has been more difficult than in the past
    because of competition from the private sector of the U.S. job market,
    limited knowledge about the program among the general population, and
    adverse publicity, among other factors.
        But the tide is turning. Morale is improving. Both the laboratories
    and the plants are working closely with the Federal staff to attract
    and retain the future workforce. Maintaining a strong science component
    of the stockpile stewardship program, coupled with real opportunities
    for working on advanced warhead concepts, developing a strong intern
    program to integrate new scientists and engineers into the weapons
    program, improving ties with universities, fixing the deteriorating
    manufacturing infrastructure, and developing new R&D facilities such as
    NIF, DARHT, and MESA where the most advanced research in the world is
    taking place, are all examples of these efforts. The loss of knowledge
    resulting from retirement and attrition, and the need to transfer
    critical knowledge heighten the urgency of this effort.

                 IMPLICATIONS OF THE NPR FOR KEY NNSA MISSIONS

        Next, I describe how specific NNSA missions will be affected by the
    NPR, and address the ``game plan'' for implementation of the NPR
    initiatives.
    Stockpile levels and readiness requirements
        The NPR stated a goal to reduce the operationally-deployed
    strategic stockpile to 3,800 nuclear warheads by 2007 and 1,700-2,200
    nuclear warheads by 2012. The force would be based on 14 Trident SSBNs
    (with 2 SSBNs in overhaul at any time), 500 Minuteman III ICBMs, 76 B-
    52H bombers, and 21 B-2 bombers. There would also be a non-strategic
    stockpile whose exact quantities and readiness requirements are still
    to be determined.
        Although the NPR did not determine specific stockpile quantities or
    readiness requirements, it did introduce to the stockpile lexicon the
    categories ``operationally-deployed'' and ``responsive.''
    Operationally-deployed warheads are warheads fully ready for use and
    either mated on or allocated to operational delivery systems; these
    warheads are part of the active stockpile.\3\ Responsive warheads are
    warheads available to be uploaded to delivery systems in the event that
    world events require a more robust deterrence posture; most or all of
    these warheads would also be part of the active stockpile.
    ---------------------------------------------------------------------------
        \3\ Active weapons are fully maintained with all Limited Life
    Components (LLCs e.g. tritium bottles) installed. Inactive weapons have
    the LLCs removed upon expiration.
    ---------------------------------------------------------------------------
        Remaining warheads not slated for retirement or dismantlement would
    be retained in the inactive stockpile, available for use in stockpile
    evaluation support or as one-for-one reliability replacements for
    warheads in the operationally deployed or responsive forces. Several
    factors would determine the nature, size, and scope of warheads in this
    ``other'' category including: (1) progress in reestablishing lost
    production capabilities and infrastructure; (2) response times to fix
    problems in the stockpile, carry out other required refurbishments to
    sustain the stockpile, and develop and produce new or modified
    warheads; and (3) the desire to retain a sub-population of non-
    refurbished warheads to hedge against potential common mode failures.
    Some warheads in this category would, based on future decisions, be
    retired and eliminated. NNSA and DOD will work together to clarify the
    NPR ``drawdown'' in terms of the numbers and types of warheads, by
    year, to be maintained in the active and inactive stockpiles at various
    states of readiness.
    Stockpile surveillance
        In the past, if a stockpile problem occurred, there was the
    flexibility, with larger warhead numbers, to maintain deterrence
    requirements by reallocating warheads to targets. With the force
    reductions planned under the NPR, these options diminish. As a result,
    as we go to lower numbers, we need increased levels of confidence in
    the safety and reliability of remaining deployed forces. This drives
    the need for an increasingly robust surveillance program to not only
    strengthen our ability to detect existing stockpile problems but also
    to predict and respond to stockpile problems (including problems
    associated with aging) before they occur. Key efforts planned over the
    next few years will greatly increase our knowledge of component aging.
    A study to strengthen surveillance efforts has recently been completed.
    A detailed plan to implement its recommendations will be developed
    during this fiscal year.
    Stockpile refurbishments--meeting our commitments to DOD
        The NPR reaffirmed the current stockpile refurbishment plan jointly
    agreed by NNSA and DOD, including the ``block upgrade'' concept which
    provides flexibility to adjust the plan to evolving weapons numbers.\4\
    The plan calls for all eight warhead types in the enduring stockpile to
    be refurbished over the next 25 years. Near-term efforts focus on four
    warheads: the W87 (ICBM) the B61-7/11 (gravity bomb), the W80 (ALCM),
    Advanced Cruise Missile (ACM) and Tomahawk Land Attack Missile (TLAM-
    N), and the W76 (Trident SLBM).

        \4\ The ``block upgrade'' approach breaks up our major planned
    refurbishments into 5-year ``blocks,'' with the option to either
    continue refurbishments with the current design, switch to a different
    design based on new information provided by surveillance efforts or as
    a result of new mission requirements, or simply stop refurbishments
    based on reduced weapons requirements.

             W87 (ICBM): The W87 is currently being refurbished in
            order to enhance the structural integrity of the warhead. This
            includes small modifications to the primary, replacement of
            some non-nuclear components in the warhead, and refurbishment
            of some secondary components.
             B61-7/11 (Bomb): Some secondary components in the B61-
            7/11 show signs of aging that could affect warhead reliability,
            if left unchecked. B61-7/11 refurbishment, scheduled to begin
            in fiscal year 2006, will include secondary refurbishment and
            replacement of some foam support, cables, and connectors.
             W80 (ALCM): The W80 will need replacement of its
            neutron generators. This provides an opportunity to improve
            surety features and introduce a new gas transfer system. W80
            refurbishment is scheduled to begin in fiscal year 2006.
             W76 (SLBM): W76 refurbishment, scheduled to begin in
            fiscal year 2007, will include re-qualifying the pit, replacing
            the primary high-explosive, secondary refurbishment, a new
            arming, fuzing, and firing (AF&F) system, and a new gas
            transfer system.

        Efforts to sustain and modernize our R&D infrastructure, restore
    our production capabilities, and recruit and retain a work force
    ``second to none'' are absolutely essential for the effective execution
    of stockpile refurbishment programs. Our ability to meet refurbishment
    timelines is a critical measure of merit for stockpile stewardship.
    Revitalization of nuclear weapons advanced concepts efforts
        The NPR recognized the need to revitalize nuclear weapons advanced
    concepts activity, which could include extending concepts that have
    been developed and tested but not yet deployed, as well as new
    concepts. To assess further nuclear weapons modernization options in
    connection with meeting new or emerging military requirements, NNSA has
    taken an initiative, endorsed by the NPR, to reestablish small advanced
    warhead concepts teams at each of the national laboratories and at
    headquarters in Washington, DC. DOD and NNSA will jointly review
    potential requirements for new or modified warheads, and identify
    opportunities for further study.
        The vision is for small, focused teams (involving both lab and
    headquarters personnel), in coordination with DOD and the services, to
    assess evolving military requirements, investigate options, and ensure
    our DOD partners understand what is and is not possible. The teams will
    carry out theoretical and engineering design work on one or more
    concepts, including options to modify existing designs or develop new
    ones. In some instances, these activities would proceed beyond the
    ``paper'' stage and include a combination of component and subassembly
    tests and simulations to introduce an appropriate level of rigor to
    challenge our designers.
        Importantly, this effort will provide opportunities to train the
    next generation of nuclear weapons scientists and engineers. Part of
    this effort will be to demonstrate capabilities to assess options and
    associated timelines for new warhead design, development, and
    production (e.g., to replace a failed warhead or to field a new system
    to meet new military requirements) and to assist efforts to assess cost
    and other implications of any adjustments in production readiness
    needed in response.
    Warhead retirements and dismantlements
        Although no new retirements or eliminations of warheads were
    announced in the NPR, DOD and NNSA will jointly address the broad
    question of the size and character of the active stockpile and inactive
    stockpile. It will be prudent for NNSA to maintain a reserve capacity
    in addition to that planned for the near-term refurbishment workload,
    for warhead eliminations, addressing unforeseen problems in the
    stockpile, and for possible new production. Under current planning
    assumptions, NNSA would not define a firm schedule for dismantlements;
    rather NNSA would ``load level'' Pantex operations by scheduling
    dismantlements in a way that does not interfere with ongoing
    refurbishment or other production efforts.
    Warhead transportation needs
        NNSA is responsible for the ground transportation of nuclear
    warheads and nuclear material within the U.S. including transport of
    warheads between DOD sites. We will need to assess the NPR's
    implications for NNSA's transportation workload. Decisions to retire or
    dismantle additional warheads as part of the drawdown, or warhead
    upload requirements, could drive increased transportation needs. The
    future transportation workload should be manageable given current plans
    to ramp up transportation assets and associated personnel. That said,
    NNSA will work with DOD to assure that longer-term warhead
    transportation needs deriving from the NPR can be met.
    Enhanced test readiness
        President Bush supports a continued moratorium on underground
    nuclear testing; nothing in the NPR changes that. Over time, we believe
    that the stewardship program will provide the tools to ensure stockpile
    safety and reliability without nuclear testing. But there are no
    guarantees. It is only prudent to continue to hedge for the possibility
    that we may in the future uncover a safety or reliability problem in a
    warhead critical to the U.S. nuclear deterrent that could not be fixed
    without nuclear testing.
        Based on a 1993 Presidential directive, NNSA currently maintains a
    capability to conduct an underground nuclear test within 24 to 36
    months of a Presidential decision to do so. Test readiness is
    maintained principally by the participation of nuclear test program
    personnel in an active program of stockpile stewardship experiments,
    especially the subcritical experiments carried out underground at the
    Nevada Test Site (NTS).
        During the NPR, two concerns were raised about our test readiness
    program. First, a 2- to 3-year readiness posture may not be sustainable
    as more and more experienced test personnel retire. Not all techniques
    and processes required to carry out underground nuclear tests are
    exercised with the work carried out at the NTS. As experienced
    personnel retire, it will become more difficult to train new people in
    these techniques, further degrading test readiness. This argued for an
    approach in which key capabilities required to conduct nuclear tests
    are identified and exercised regularly on projects making use of a
    variety of nuclear test-related skills.
        Second, the current 2- to 3-year posture may be too long. If we
    believed that a defect uncovered in the stockpile surveillance program,
    or through new insight gained in R&D efforts, had degraded our
    confidence in the safety and/or reliability of the W76 warhead--the
    warhead deployed on Trident submarines and comprising the most
    substantial part of our strategic deterrent--the ability to conduct a
    test more quickly might be critically important.
        To address these concerns, the NPR endorsed the NNSA proposal to
    enhance test readiness by reducing the lead-time to prepare for and
    conduct an underground nuclear test. To support this, NNSA has
    allocated $15 million in fiscal year 2003 to begin the transition to an
    enhanced test readiness posture. Funds will be used among other things
    to:

             augment key personnel and increase their operational
            proficiency,
             begin the mentoring of the next generation of testing
            personnel,
             conduct additional subcritical experiments and test-
            related exercises,
             replace key underground-test-unique components,
             modernize certain test diagnostic capabilities, and
             decrease the time required to show regulatory and
            safety compliance.

        NNSA will work with DOD over coming months to refine test scenarios
    and evaluate cost/benefit tradeoffs in order to determine, implement,
    and sustain the optimum test readiness time.
    Accelerate planning for a Modern Pit Facility (MPF)
        Our inability to produce and certify plutonium pits is a shortfall
    in our stockpile stewardship program. Pit production was terminated at
    Rocky Flats in 1989 and is now being re-established on a limited scale
    at Los Alamos National Laboratory. Only engineering test units of a
    single warhead type have been produced to date, however, and no ``war
    reserve'' units are expected to enter the stockpile for about 7 years.
    Current plans envision Los Alamos producing about 20 pits per year with
    a surge capacity to perhaps 50.
        The current pit production strategy is first to carry out an
    assessment of pit lifetime, through our enhanced surveillance campaign,
    to yield initial results by fiscal year 2003 with completion by fiscal
    year 2006. Once that is completed, our policy is to reestablish pit
    production capability in a time frame and with a capacity sufficient to
    meet national needs. Implementing that policy means fielding a
    capability that is:

             available in time to replace pits that exceed minimum
            projected lifetime;
             sized to support the planned workload, with ready
            reserve to address ``surprise'' requirements for force
            augmentation, and potential new warhead production; and
             modular (i.e., expandable further) if further needs
            dictate.

        One thing is now certain--the Los Alamos production capacity will
    be insufficient to meet future requirements for pits. As a result of
    the NPR, we seek to accelerate planning and initial design work to
    establish an MPF. Relevant activities about to begin include
    preliminary MPF design, associated technology development, and
    initiation of the National Environmental Policy Act process.
    Tritium
        While the NPR will result in a smaller active stockpile of both
    operationally deployed and responsive forces, the nuclear stockpile--by
    warhead type, by year, and by readiness state--has not yet been
    determined. This will be done in detail as part of the NWC process and
    will enable NNSA to plan for the delivery of sufficient tritium to meet
    all military requirements. Because stockpile reductions will not be
    accomplished for several years, we do know that there will be no near-
    term reduction in the immediate demand for tritium. NNSA plans to begin
    tritium production in commercial reactors in fall 2003, and to complete
    construction and begin operations of a new Tritium Extraction Facility
    (TEF) at the Savannah River Site so that tritium can be delivered to
    the stockpile in advance of need.
        It will be important for NNSA to assess future tritium needs in
    light of a number of factors in addition to NPR reductions in the
    active stockpile. These include potential changes to the tritium
    loadings of several warhead types and potentially increased ``pipe
    line'' needs at the Savannah River tritium facilities (in connection
    with the new extraction facility).

                                   CONCLUSION

        Mr. Chairman, today, our nuclear stockpile is safe, secure, and
    reliable. We are working hard to assess the inplications of the NPR for
    NNSA and to work closely with our DOD partners in implementation. Most
    importantly, the flexibility to sustain our nuclear weapons stockpile,
    to adapt current weapons to new missions, or to field new weapons, if
    required, depends on a healthy program for stockpile stewardship and
    peer-review-based certification as well as a robust infrastructure for
    nuclear weapons production. As numbers of nuclear forces are reduced,
    it becomes even more important to maintain high confidence in the
    safety and reliability of remaining forces. We must also have the
    capability to respond to changes in the strategic environment, if need
    be, by being able to reconstitute larger force levels with safe and
    reliable warheads and develop, produce, and certify new or modified
    nuclear warheads to meet new military requirements. Achieving these
    goals will require a strong commitment to the recapitalization of the
    nuclear weapons infrastructure--a smaller infrastructure, to be sure,
    but one that is sufficiently modern and capable to fully support the
    NPR and, more broadly, our Nation's defense strategy.

        Chairman Levin. General Gordon, thank you.
        Admiral Ellis.

    STATEMENT OF ADM. JAMES O. ELLIS, JR., USN, COMMANDER IN CHIEF,
                    UNITED STATES STRATEGIC COMMAND

        Admiral Ellis. Thank you, Mr. Chairman, and distinguished
    members of the committee. I, too, have a brief written
    statement I would offer for the record and a few comments
    before we begin the rounds of questioning. It is an honor again
    to appear before you, particularly as today we address the
    changes and opportunities represented in the recently completed
    Nuclear Posture Review.
        In so doing, as Senator Ben Nelson noted, I represent the
    men and women of all of our strategic forces, and in the short
    time that I have had command, I have deepened my already
    enormous respect for the United States Strategic Command's
    (STRATCOM) exceptional professionals, both civilian and
    military, who provide, as they always have, a priceless service
    to our Nation. While sustaining the rigor and professionalism
    required to support our nuclear forces, they are fully engaged
    in reflecting tremendous change and challenges ahead as we work
    to transform fundamentally the strategic landscape.
        We welcome the results of the Nuclear Posture Review. More
    than a much-needed capabilities assessment, it fundamentally
    addresses more broadly the entire concept of deterrence. It
    brings increased focus to ensure all our strategic forces,
    including delivery systems, weapons, infrastructure,
    communications, and planning receive the resources required to
    enhance their capabilities and in many cases extend their lives
    well beyond their original design lives. The attention to
    infrastructure is particularly welcome as it recognizes the
    contribution to deterrence of what has been a linchpin of
    America's military might, and that is our industrial and
    technological superiority.
        I appreciate, echo, and acknowledge the yeoman effort John
    Gordon and his team at NNSA have expended in bringing the
    nuclear weapons complex back to health.
        A recurring theme from the past decade, repeated by the
    Nuclear Posture Review, is the importance of our people. From
    the civilian and military personnel at our headquarters, to the
    scientists and engineers in the laboratories, and the sailors
    and airmen operating our strategic forces, they continue a
    legacy and culture of which we, as Americans, can all be proud.
    The rigor and exactness appropriate to their awesome
    responsibilities, which is exemplified by the culture of the
    earlier Strategic Air Command, continue to this day in the
    United States Strategic Command and indeed in all of our
    nuclear infrastructure. This hallmark of excellence is the
    standard by which we will measure ourselves as we boldly move
    into a dynamic future.
        As a military team, I and the other unified commanders in
    chief are fully engaged in supporting the disparate elements
    contributing to the success of the Nation's global war on
    terrorism. That is a team effort, but I also very clearly
    understand that there is only one military commander in chief
    who directly oversees our strategic forces. That task is
    assigned to me. My shipmates and I at the United States
    Strategic Command are mindful of this uniquely important
    responsibility and are committed to continuing that history of
    service to this great Nation. Thank you. I welcome your
    questions.
        [The prepared statement of Admiral Ellis follows:]

              Prepared Statement by Adm. James O. Ellis, Jr., USN

        Mr. Chairman, Senator Warner, and distinguished members of the
    committee.
        I appreciate the opportunity to appear before you today to testify
    on the Nuclear Posture Review. This is my first appearance before this
    committee since my confirmation hearing last September. I am honored to
    be invited to participate in this hearing on a major report, the
    conclusions of which will reshape and revitalize, respectively, our
    strategic policy and capabilities.
        As Congress recognized in the Fiscal Year 2001 National Defense
    Authorization Act, a periodic comprehensive review of our Nation's
    strategic posture is appropriate as the national security environment
    changes. The last Nuclear Posture Review was conducted 8 years ago to
    address how to effectively draw down our strategic forces in the post-
    Cold War world. For a number of reasons, including a rapidly changing
    international environment and complex new national security challenges,
    the time is right to again assess our strategic direction. This Nuclear
    Posture Review provides that assessment and, indeed, moves beyond
    assessment to provide the initial details of a new direction, proposing
    a comprehensive approach that builds on the Quadrennial Defense
    Review's strategic foundation of assure, dissuade, deter, defend, and
    defeat.
        The Nuclear Posture Review was conducted by the Office of the
    Secretary of Defense. U.S. Strategic Command participated in the review
    as did the Joint Staff and the Services, particularly the Air Force and
    the Navy. We were consulted on many issues and provided our expertise
    as well as our frank opinions on the report's findings as they were
    developed. I am pleased with the Nuclear Posture Review's balance and
    focus and look forward to working with Congress, the Office of the
    Secretary of Defense, the Joint Staff, and the Services as we work to
    implement these findings in the months ahead.
        Many of the details and key issues involving the Nuclear Posture
    Review are familiar to you and have been addressed by others, but I
    would, however, like to discuss some of the key findings from my
    perspective as the combatant commander of our Nation's strategic
    forces.

                         MODERNIZATION AND SUSTAINMENT

        The first finding I'd like to highlight is the recognition of a
    pressing need for investment across the full range of our strategic
    capabilities. As we work to reduce deployed strategic nuclear warheads,
    this investment is needed to sustain and improve our aging operating
    forces, to recapitalize our infrastructure which has atrophied over the
    last 10 years, and to refine and enhance current systems. Reductions of
    operationally deployed nuclear warheads to the lowest numbers
    consistent with national security, as the President directed, will
    require that remaining systems be reliable, sustainable, and,
    therefore, fully credible.
        Our current operating forces, our intercontinental ballistic
    missiles, our bombers, and our strategic ballistic missile submarines,
    and their weapons, will remain the backbone of our strategic strike
    forces for at least the next 20 years. These platforms and their weapon
    systems are projected to remain in service well beyond their original
    design lives and require significant sustained investment to monitor
    and, if necessary, to replace aging and obsolete components in addition
    to more comprehensive overhauls or life extension programs. The NPR
    fully recognizes this.
        Our operating forces could not be effective without robust
    complementary capabilities including command, control, and
    communications systems as well as effective intelligence and planning
    support. Increased strategic flexibility and adaptability will require
    an equally robust but much more capable nuclear command and control
    system. The Nuclear Posture Review identifies advances in speed and
    capabilities in these areas as critical to improving the capabilities
    of our strike forces. General Myers, the Chairman of the Joint Chiefs
    of Staff, has similarly identified improvement in command and control
    capabilities as a vital component of our military's transformation. I
    fully support this renewed focus on improving these military
    capabilities. Investments in these areas are critical enablers to not
    only strategic forces but our overall military capability.
        As the Secretary of Defense stated in his testimony last June, our
    military has been forced to make increasingly difficult choices between
    equally necessary procurement, readiness, and research and development
    needs over the last 10 years. Strategic forces have not been excluded
    from this trend. The Nuclear Posture Review recognizes this and
    recommends renewed investment in existing and future operating forces,
    supporting capabilities, and strategic infrastructure. I fully support
    those recommendations. Thank you for the positive steps you've already
    taken in this committee to provide much needed funding to improve these
    capabilities and for your continued support in this vital area.

                           NUCLEAR WARHEAD REDUCTIONS

        A second key finding of the Nuclear Posture Review is the need for
    a measured approach to operationally deployed nuclear warhead
    reductions. This approach meets the President's direction and
    establishes as a goal the lowest number of deployed strategic nuclear
    warheads consistent with the Nation's national security needs. I fully
    support it.
        The Nuclear Posture Review directs periodic assessments to evaluate
    the strategic environment and our progress in developing new
    capabilities for our strategic forces. These assessments allow us to
    respond appropriately to any emerging threat, dissuade any potential
    adversary, and provide assurance to our allies of our resolve.

                     BROADER DEFINITION OF STRATEGIC FORCES

        The third key finding of the Nuclear Posture Review is the
    recognition that our strategic capabilities should not be limited to
    nuclear weapons alone. The inclusion of non-nuclear, and, potentially,
    non-kinetic capabilities into our strategic options provides a number
    of benefits. First, it helps to raise the nuclear threshold by
    providing the President with strategic options in a crisis or conflict
    that do not rely solely on nuclear weapons, yet still convey the
    Nation's resolve and determination. Second, integrating non-nuclear
    capabilities into strategic forces strengthens our joint approach to
    developing and operating military forces. In the past, there have often
    been unique requirements for nuclear forces beyond those of
    conventional forces. Now, with technological advances, we have the
    potential to seamlessly integrate existing or projected enhancements to
    non-nuclear capabilities such as communications, intelligence flow, and
    precision strike to improve our strategic capabilities. The integration
    of what had previously been considered conventional capabilities into
    national strategic plans allows for the development of responsive,
    adaptive, and interoperable joint forces that can be employed in a
    wider range of contingencies. There are certainly challenges associated
    with incorporating non-nuclear capabilities into our strategic forces,
    however, the benefits far outweigh the concerns.

                            OPERATIONAL FLEXIBILITY

        The final finding of the Nuclear Posture Review is the need for
    more flexible and adaptive planning in support of our strategic forces.
    U.S. Strategic Command is in the process of developing a more flexible
    and adaptive planning system that retains the rigor and expertise
    developed over the last 40 years, yet employs modern computing
    techniques and streamlined processes to significantly improve our
    planning capability for rapid, flexible crisis response in the face of
    new national security challenges. This new approach to planning will
    require significantly more collaboration with the regional combatant
    commanders as we continue to better integrate our military capabilities
    across the spectrum of conflict.

                                   CONCLUSION

        There are many positive results that will accrue from the Nuclear
    Posture Review. A comprehensive and focused assessment of our strategic
    posture has provided new concepts that can both allow us to reduce our
    deployed nuclear weapons inventory and strengthen our national security
    to meet this era's new challenges. This bold change in direction will
    allow us to begin shifting our focus from the number of launchers and
    weapon platforms stipulated by previous treaties and based on latent
    mistrust of former adversaries. Instead, we will move toward
    significantly lower numbers of operationally deployed nuclear weapons
    reflecting our new relationship with Russia and technologically
    transform our strategic posture from a purely nuclear focus to the
    broader capabilities of the new triad.
        The new triad, when development is complete, will include improved
    strategic strike forces, active and passive defenses, and a responsive
    infrastructure all supported by improved command and control as well as
    robust intelligence and planning capabilities. Over the next decade two
    of the legs of the NPR's new triad, defenses and a responsive
    infrastructure, will be combined with a modernized strategic strike
    force including nuclear and non-nuclear options. This new triad can
    broaden the definition of strategic forces, enhance deterrence concepts
    against a wider range of threats, and offer dramatic improvements in
    the speed, accuracy, and agility of the full range of our Nation's
    military response.
        I look forward to reporting in the future on our progress in
    implementing the findings of the Nuclear Posture Review as we,
    together, reshape our strategic capabilities to meet the challenges of
    this new era.
        Thank you very much. I welcome your questions.

                basic terminology of the nuclear posture review

        Strategic Nuclear Forces (Strategic Weapon Systems): Strategic
    nuclear platforms with their associated strategic nuclear weapons.

             Strategic nuclear platforms:  (retained in the NPR)

                     14 SSBNs
                     500 MMIII
                     76 B-52s & 21 B-2s

             Strategic nuclear platform reductions:

                     50 Peacekeeper missiles
                     4 Trident submarines
                     All B-1s (nuclear re-role requirement
                    eliminated)

        Strategic Nuclear Weapon: A nuclear warhead and its necessary
    arming, fuzing, and firing components necessary to produce a nuclear
    yield that can be loaded on a strategic platform.
        Nuclear Warhead: A device that contains the nuclear or
    thermonuclear system.
        Strategic Active Stockpile: Operationally deployed weapons, the
    responsive force and logistic spares.

             Operationally Deployed Weapons: Strategic nuclear
            weapons that are on operational ballistic missiles or on
            bombers or in bomber base weapon storage areas (logistic spares
            in bomber weapon storage areas would not be counted).
            Operationally Deployed Weapons are for immediate and unexpected
            threats.
             Responsive Force: Strategic nuclear weapons available
            for uploading on existing strategic nuclear platforms. (Note:
            Some weapons may be in inactive stockpile.)
             Logistic Spares: Strategic nuclear weapons required to
            meet Operationally Deployed Strategic Nuclear Weapons
            maintenance requirements.

        Strategic Inactive Stockpile: Strategic nuclear warheads reserved
    for DOE's Quality Assurance and Reliability Testing (QART) and
    Reliability Replacement requirements. These warheads have certain
    limited life components removed, but are otherwise maintained to the
    same standards as weapons in the active stockpile.

             Quality Assurance and Reliability Testing (QART):
            Nuclear warheads retained in the inactive stockpile to replace
            weapons in the active stockpile withdrawn for DOE's
            surveillance program.
             Reliability Replacement: Nuclear warheads retained in
            the inactive stockpile to replace similar weapons in the
            stockpile that suffer a catastrophic failure.

        Total Strategic Stockpile: The summation of the strategic active
    stockpile and strategic inactive stockpile.

        The following are not part of the stockpile.

        Retired Warheads: Warheads no longer required for military use and
    are not part of the active and inactive stockpiles. These warheads are
    awaiting dismantlement by DOE.
        Dismantlement: The physical separation of high explosives from
    special nuclear material. Usually critical nuclear components are
    retained and non-nuclear components are placed in a demilitarization
    program.

        Chairman Levin. Thank you very much, Admiral Ellis. Let us
    try a first round of 8 minutes today. Secretary Feith, your
    prepared statement indicates that the Nuclear Posture Review
    ``calls for the destruction of some, but not all of the U.S.
    warheads removed from the operationally deployed force.'' Can
    you tell us how many warheads will be destroyed?
        Secretary Feith. Mr. Chairman, I can't tell you that now.
    That decision has not yet been made.
        Chairman Levin. Has the decision been made to destroy some
    of the warheads removed?
        Secretary Feith. Yes.
        Chairman Levin. That is very different from the briefing we
    got at the Pentagon, which says that the downloaded warheads
    will be preserved for the responsive force, that is the slide
    that I am reading from.
        [The information referred to follows:]

        Secretary Feith. Mr. Chairman, my understanding is we are
    going to be preserving some of the warheads, but they will not
    be available for near-term use. But some of the warheads that
    will be reduced from the arsenal will be destroyed.
        Chairman Levin. I just want to alert you that what you say
    is different from what the Pentagon slide says. It says that
    the downloaded warheads are going to be preserved for the
    responsive force. You are saying the NPR says some will, some
    won't?
        Secretary Feith. Correct.
        Chairman Levin. You don't know how many?
        Secretary Feith. The decision hasn't been made yet.
        Chairman Levin. Where in the Nuclear Posture Review does it
    say some would be destroyed? Can you quote that for us?
        Secretary Feith. I don't have it memorized.
        Chairman Levin. Perhaps your staff can help you. Go on to
    identify where in the Nuclear Posture Review that says that
    some of the warheads that are going to be removed from the
    weapons, from the planes and the missiles will be destroyed. We
    cannot find that in the Nuclear Posture Review, by the way.
        What do you expect the Russian response will be if the
    decision is made to retain those warheads instead of destroy
    them, will it be positive or negative? Do they care whether we
    retain nuclear warheads? Have they indicated to you or to
    anyone else in the administration if that matters to them as to
    whether to destroy warheads, that is if they would be affected
    by our decision not to destroy warheads?
        Secretary Feith. Mr. Chairman, we have been engaged in
    conversations with the Russians for months now on the concept
    of strategic stability in the world today. I think the same
    phenomenon is true on their side that is true on ours, which is
    that there are some people who are very open to the idea of a
    completely new concept of strategic stability, and a completely
    new relationship between the United States and Russia, one in
    which we are not focused on the threats that the United States
    poses to Russia or Russia poses to the United States, but
    rather recognizes the lack of hostility in our relationship. We
    are focused on developing cooperation with Russia to deal with
    threats we face in common.
        Chairman Levin. You are making no assumptions relative to
    Russia's nuclear weapons delivery systems and warheads in
    reaching your own conclusion? Is it irrelevant to you as to
    what their inventory is?
        Secretary Feith. We are not sizing our nuclear force
    against the Russian threat as was done during the Cold War.
    That is a very significant change in the way we are approaching
    this issue.
        Chairman Levin. Is it fair to say that it is irrelevant
    what the size of their inventory is?
        Secretary Feith. No. It would not be fair to say that it is
    irrelevant. We are doing a capabilities-based approach to
    sizing our nuclear forces rather than the old threat-based
    approach. That does not mean that the relationship with Russia
    is irrelevant. It doesn't mean that their capabilities are
    irrelevant, but it does mean that the approach that we have
    taken to crafting our nuclear force posture is fundamentally
    different from the one we took in the Cold War, where we were
    focused on a specific threat from a specific country and doing
    our own calculations based on adding up targets in the Soviet
    Union.
        Chairman Levin. Looking at the number of nuclear delivery
    systems, bombers, submarines, and ICBMs under the 1994 Nuclear
    Posture Review and looking at it under the new Nuclear Posture
    Review, the numbers remain almost exactly the same, is that
    correct?
        Secretary Feith. The numbers of delivery platforms remain
    largely the same, but the number of operationally deployed
    warheads comes down by approximately 65 percent.
        Chairman Levin. Correct. That is depending on whether or
    not you destroy any of those that would be available. If you do
    not destroy any, they would be available to be placed on those
    delivery platforms, is that not correct?
        Secretary Feith. Not in the near term.
        Chairman Levin. What do you mean near term, how many
    months?
        Secretary Feith. It varies from system to system.
        Chairman Levin. How many months? Two months to 6 months?
    Give us the range, depending on the system.
        Secretary Feith. Actually, out of concern for exactly where
    the line is between what's public and what's classified, I
    think I'd like to ask Admiral Ellis.
        Chairman Levin. Assuming that there is no destruction, they
    would be available? Is that correct?
        Secretary Feith. As I said in my opening remarks, I think
    this issue of availability, which is another way of referring
    to the issue of reversibility, really bears some special
    attention.
        Chairman Levin. Are you not keeping them for a certain
    reason, so that they can be placed on systems?
        Secretary Feith. We are keeping them for the purpose of
    having flexibility.
        Chairman Levin. So that they can be placed on systems? Is
    that not the point?
        Secretary Feith. Mr. Chairman, there is an important point
    here that I am trying to make. Because we do not have the
    capability to produce new nuclear weapons now, and will not for
    many years, if we want to preserve some flexibility, even
    though we are going to substantially reduce the weapons that we
    have available for use, if we want to preserve some flexibility
    we are going to take warheads that are available right now for
    immediate use, and we are going to render them unavailable for
    immediate use, but we are not going to go all the way to
    destroying them.
        Chairman Levin. That's true. You are just repeating what
    you have said already. But are they going to be available for
    short-term use, or for near-term use, or for long-term use?
    They are going to be available because you are keeping them and
    you are not destroying them. Let me just get to the point.
        We have a 1994 NPR. We have how many B52s, 66, under yours
    76. How many B2s? -- 20 in 1994, how many under yours, 21. How
    many Trident subs? -- 14 in 1994, how many under yours, 14. The
    totals are exactly the same in terms of delivery systems, and
    if you maintain the warheads in storage so that they can be
    placed back on those platforms, then there is no difference
    between your Nuclear Posture Review and the one in 1994, except
    that you are moving lots of warheads into storage away from
    their delivery systems. That is the difference.
        That is your purpose. You want that flexibility. Why hide
    it? You want to have it both ways. You say on the one hand you
    want the flexibility to reinsert it. On the other hand, it is,
    as you put it, ``exquisitely different,'' dramatically
    different from what it was. How is this dramatically different?
    It looks to me exactly the same, except you moved some
    thousands of warheads off from the delivery systems into a
    warehouse where they are available for reinsertion into the
    delivery system should you need them. That is the purpose of
    your flexibility.
        Secretary Feith. They are not available in the near term.
        Chairman Levin. I understand near term.
        Secretary Feith. In some cases it could be years before
    they could be available for use, and the issue of what
    constitutes a reduction is really what we are talking about. I
    do think it is noteworthy that agreements over recent decades
    that were praised as nuclear reductions did not do with
    warheads any more than we are proposing to do with warheads. I
    think it is also significant that the last administration
    talked about making reductions and hedging by putting weapons
    into storage, just as we are suggesting moving weapons into a
    responsive force. The idea that one renders weapons that are
    now available for immediate use not available for immediate use
    is highly significant. It does constitute a reduction.
        The reason that delivery vehicles, which as you point out,
    we are not proposing to reduce, the reason that delivery
    vehicles were focused on in past arms control agreements was
    because the United States and the Soviet Union did not feel
    comfortable focusing on warheads--on the real issue. Because
    you couldn't count warheads, and since the key concept in force
    reduction was maintaining a balance of terror between the
    United States and the Soviet Union, we were focused on Soviet
    systems that we could verify, and so we looked not at the
    business end of the weapon, but at the delivery vehicle.
        Now, we are not focused on maintaining a balance of terror
    with Russia, and we are focused on the warheads, and we are
    reducing them by rendering them unavailable for immediate use.
        Chairman Levin. It's warehousing terror instead of
    immediate terror.
        Senator Warner.
        Senator Warner. Mr. Chairman, I will yield back to our
    distinguished ranking member on the Strategic Subcommittee,
    Senator Allard, to take the balance of my time, but I want to
    make a little clarification on this important issue that the
    Chairman raises. Let us try and simplify this so that those who
    have not spent a lifetime in this business might get a better
    grasp of the problem. My understanding is that removal of a
    certain number of warheads to put them in storage, as the
    Chairman has said, is in the spirit of the agreement with
    Russia. It does not in any way deviate from the spirit of the
    agreement.
        But since we have no ability to build a new weapon, if in
    the current inventory which is agreed upon, so to speak, with
    Russia, we discover through periodic testing that one of those
    weapons comes up with some negative result in a test, we could
    simply then go to the warehouse and replace it with one of the
    other weapons. We cannot suddenly start up a whole line to
    manufacture a replacement. Let us go and get one out of the
    warehouse and we will cannibalize those weapons in the
    warehouse from time to time, maybe to replenish spare parts on
    the ones that are maintained in the active stockpile. To me,
    that makes sense given the reality that we have no capability
    to build a new weapon.
        Is that basically one of the reasons in your judgment,
    Admiral?
        Admiral Ellis. Yes, sir. That is an important
    consideration. We look at the active and inactive stockpile
    size, which are the issues you addressed. In addition to the
    operationally deployed levels would be those warheads in the
    responsive force drawn down from launchers or platforms to give
    us the flexibility to respond to future outcomes in the
    international environment. There are challenges that may be
    different from those which we expect. There are additional
    categories that also contribute to that overall stockpile size,
    logistic spares as you point out, that would be able to be
    inserted in place of those that had to be removed for
    refurbishment or maintenance. We have robust quality assurance
    programs with these very precise devices under John Gordon's
    stewardship that oversee their reliability and he uses them.
        Senator Warner. I think you have answered my question. I
    want to go back to my colleague here. When my time comes
    towards the end of this round of questions, I will go into it
    further. Thank you.
        Senator Allard. Thank you, Senator Warner. I just wanted to
    re-emphasize what my colleague from Hawaii, Senator Akaka, has
    said. This is no longer a bilateral environment. It is a
    multilateral environment where we have threats coming from more
    than two superpowers. So you are talking about something in
    this NPR that is far different from classic arms control. It is
    a different world. I think we need to recognize this. I do want
    to compliment the administration in trying to create an
    environment of trust instead of mistrust, which we have relied
    on in the past, and I think that is the key to where we are
    going policy wise. I also compliment the administration on the
    flexibility of going from a very inflexible offensive triad to
    a triad that is more encompassing, that gives more flexibility
    and incorporates missile defense.
        Now, my colleagues have talked about dismantling the
    warheads and you, I noted in your comments, you said we have
    never had a provision in any of our strategic arms control
    agreements with the Soviet Union or Russia that required the
    dismantling of warheads. Why was a decision made in the Nuclear
    Posture Review to defer such dismantling at this time?
        Secretary Feith. Senator, I think a large part of the
    answer is the need for flexibility in light of U.S. inability
    to produce new weapons.
        Senator Allard. I want to make this clear for the record.
    We cannot produce new nuclear warheads. We do not have that
    capability. We have not done it for a decade, but today the
    Russian Federation, as I understood from your remarks, has that
    capability to produce a nuclear warhead today, is that correct?
        General Gordon. Senator Allard, we do not today have the
    ability to construct and build a new warhead, if you will, from
    scratch in that primarily we do not have a production facility
    up and running to produce a plutonium pit. To be strictly
    technical, it would be possible as least theoretically to put
    together a weapon from older components in some sort of mix-
    and-match fashion, but that would be difficult, time-consuming,
    and take away significant capacity.
        Senator Allard. Does Russia today have the capability to
    make a new weapon?
        General Gordon. To the best of my understanding, Russia is
    producing new nuclear warheads.
        Senator Allard. So there is an imbalance today in our
    agreements with Russia. That is something we really need to
    recognize. I would also like to address this question to you,
    Secretary Feith. The Nuclear Posture Review includes some
    things that we have reason to believe the Russian government
    likes. For example, a deep reduction in offensive weapons, and
    in the administration's continuing dialogue with Russian
    officials, how have they reacted to our NPR?
        Secretary Feith. Senator, I think there are, as you say,
    aspects that they like and there are aspects that they do not
    like.
        Senator Allard. Have they indicated that they will pursue a
    military buildup in response to the recommendations in the NPR?
        Secretary Feith. Senator, they have said that they are also
    beginning to reduce substantially their offensive nuclear force
    levels. We hope both the United States and Russia are making
    reductions. Each is doing so unilaterally. That is what was
    announced when President Putin and President Bush met in
    November in Texas. They each announced unilateral decisions to
    reduce substantially offensive nuclear forces.
        Senator Allard. Do you think with the current environment
    that even though we do not have provisions in that agreement
    where we require the dismantling of warheads it is likely we
    will have dismantling of warheads in the future?
        Secretary Feith. One of the issues on our side is just
    that, and I would ask General Gordon to address this in detail
    if you are interested. I don't believe we have the capability
    to dismantle all of the warheads that we are planning to
    reduce.
        Senator Allard. That is a good point. General Gordon?
        General Gordon. Senator, as I suggested in my opening
    statement, the capacity that exists at our facilities now, and
    that in fact is now increasing, is sized to handle the
    stockpile extension programs as we know them today. During a
    period of time later in this particular decade, when we have
    three weapons going through refurbishment at one time, we would
    have, I would say, very limited capacity to be able to handle a
    number of dismantlements. Of course, we could handle some
    through that period of time because there is a small reserve of
    capacity that is kept. As we work through that period of time
    in 2010, with the numbers as we understand them today, then the
    capacity for dismantlements would come back into play in some
    significant manner.
        Admiral Ellis. As General Gordon has stated, we have a
    capacity issue, and the life extension programs are currently
    the bulk of the plan we are working with for his facilities.
    The life extension programs are intended to ensure our
    stockpile remains reliable and credible and are essential to
    the health of the current capability. From a military
    perspective, if forced to make the trade between that assurance
    and increased dismantlement, clearly we would come down on the
    side of preserving capabilities in our current systems while
    deferring dismantlements until the capacity became available
    either through completion of those programs or infrastructure
    expansion to meet those longer-term needs.
        Senator Allard. I'd like to talk a little bit about the
    budget. Are the programs required for warhead levels with the
    modest reductions in ICBMs, bombers, and submarine launched
    ballistic missiles fully funded? They are old and require
    steady modernization to keep them viable. Are the programs that
    are required for maintenance and modernization fully funded in
    the fiscal year 2003 budget and throughout the Future Years
    Defense Program (FYDP)?
        Admiral Ellis. General Gordon actually is responsible for
    that, but my sense is that those are precisely the issues that
    have been addressed in the Nuclear Posture Review to ensure
    that we retain that capability given the course that we have
    chosen, which is to keep the older systems on line with an
    average age approaching 20 years and now perhaps for an
    additional 20 years or longer, that has been the appropriate
    focus and the resources have begun to flow to NNSA to affect
    that outcome.
        Senator Allard. In the fiscal year 2003 budget, that is
    being proposed?
        General Gordon. Senator, was your question on warheads or
    delivery systems?
        Senator Allard. Let me restate it. Are the programs
    required to maintain and modernize our deterrent nuclear forces
    fully funded in the fiscal year 2003 budget and throughout the
    FYDP?
        General Gordon. Let me speak to the nuclear warhead portion
    of that. The short answer is yes. The increases that the Senate
    supported for the ongoing budget, coupled with the President's
    request for fiscal year 2003, and the commitment to be able to
    have program growth, and to give you a 5-year plan are all
    designed to modernize and make the necessary improvements to
    the core elements of the nuclear stockpile. So, the short
    answer is yes.
        The long answer would give you lots of things that say our
    program is still wound tight, and I get nervous about lots of
    parts of it, but the short answer is yes.
        Admiral Ellis. I would echo the short answer that General
    Gordon provided in general terms, yes. The resources and
    appropriate attention to things such as the D5 life extension
    programs, the upgrade proposals, the enhancements to the
    communications and systems capabilities of our bomber force are
    in general on track and even more importantly perhaps less
    visible, but absolutely essential command and control linkages
    and enhancements to our planning capabilities to continue that
    level of rigor also have been properly addressed. As with all
    programs, there will be line item issues of concern, but in
    general we are very pleased, as I said in my opening remarks,
    with the attention that is being paid to those delivery systems
    and the capabilities that have to come along with them to
    assure their capabilities are sustained and improved for the
    future.
        Senator Allard. Thank you, Mr. Chairman.
        Chairman Levin. Senator Reed.
        Senator Reed. Secretary Feith, you said that the headline
    for this Nuclear Posture Review would be ``mutually-assured
    destruction is dead.'' I am wondering why we have 8,000 total
    warheads in our inventory. If you are reclassifying some
    warheads as active and some as inactive, why do we have a
    triad? I think the essence of creating the triad and the number
    of warheads in it was driven by the fact that we had to survive
    a first strike and deliver a second strike, and yet you claim
    we have a revolutionary change in thinking, but still we have
    the same total number of or roughly the same total number of
    warheads in inventory and the same sort of basic platforms in
    sea, air, and land. It seems that it might be dead but that is
    still the governing principle.
        Secretary Feith. Senator, I think that what we have done
    with the Nuclear Posture Review is create a new way of looking
    at the problem that goes beyond simply offensive nuclear
    forces, and the old offensive triad. We are on a glide path to
    reducing by two-thirds the operationally deployed warheads in
    our arsenal. Now, part of the reason that we are on this glide
    path is that in order to achieve what we need to achieve
    strategically, and handle these goals that were set out in the
    Quadrennial Defense Review (QDR) of assuring our allies and
    dissuading potential competitors, deterring and, if necessary,
    defeating aggression, in order to achieve those goals, we are
    looking at developing a set of capabilities, not just offensive
    nuclear weapons.
        The set of capabilities that we are talking about we do not
    now have. They will include missile defenses. They will include
    other types of long-range precision strike. They will include
    more highly developed intelligence, and command and control
    capabilities. As those capabilities develop, our ability to
    perform our strategic missions and secure the country using
    offensive weapons, our ability increases to fulfill those
    strategic response responsibilities through means other than
    offensive nuclear forces so those forces can come down. That is
    the concept.
        We are dramatically reducing our dependence on offensive
    nuclear weapons as the basis for our strategic security. I mean
    this is something that takes some time, and while we are doing
    this, we are doing this based on a real assessment of what the
    international security environment is, which is the reason that
    in the Nuclear Posture Review there are continual reassessments
    so that we do not lock ourselves in to a concept based on the
    assumption that we can predict the future. We are building the
    concept of flexibility and adaptability into our force posture.
        Senator Reed. Well, you seem to be saying, Mr. Secretary,
    that for at least the indefinite future, mutually-assured
    destruction is still a part of our strategic policy, so let me
    ask you, is it still the policy of the United States to be
    prepared to respond to a nuclear attack with a second attack?
        Secretary Feith. Sir, I do not want to let any
    misimpression stand on that point. Mutually-assured destruction
    is not our policy. We want a strategic force posture that is
    not premised on the incineration of Russia. That is not the way
    we are thinking about strategic stability. We do not have that
    kind of relationship with Russia. The relationship that we had
    with the Soviet Union in the Cold War is not the relationship
    that we have with Russia, so I hope I did not create any
    misimpression on this point about mutually-assured destruction.
        Senator Reed. It just goes back to the consequences of your
    review. Can we still maintain a triad? We still maintain air-,
    sea- and land-based systems presumably to survive an attack by
    someone as a deterrent factor. We maintain 8,000 warheads in
    our inventory. In your questioning by the Chairman, you
    continually maintained that we are going to keep them there
    because we do not know what the future is like and because of
    the fact that Russia can quickly reload their systems. We have
    this relationship with Russia that has completely changed the
    strategic balance, but looking forward we cannot guarantee that
    the relationship will be maintained. It just seems to me that
    the reality is we still have to maintain a strategic force for
    the indefinite future. Maybe it is months, maybe it is years,
    depending on the world situation, which has to recognize the
    fact that we need to have survivable systems and warheads to
    make that strategy work. That seems to be what the bottom line
    of your review concludes.
        Secretary Feith. Senator, I respectfully disagree. Our
    review is not focused on Russia, as I believe your remarks
    were.
        Senator Reed. Mr. Secretary, can you tell me who you are
    focused on if we are not focused on Russia and why we need
    8,000 total warheads, some active, some inactive? Why we need
    strategic missiles and land-based systems if we are not
    focusing on Russia? What are we focusing on?
        Secretary Feith. We are focused on the capabilities that we
    might need to deal with the kinds of threats that could emerge
    in the future.
        Senator Reed. Can you illustrate the types of specific
    threats that will emerge in the future that require the force
    structure you are proposing with a degree of certainty or
    uncertainty? What are these threats?
        Secretary Feith. There are certain types of threats that
    one can imagine. I understand that it is for many people a
    novel concept to do a force posture review on the basis of
    what's called the capabilities-based analysis rather than a
    threat-based analysis. For many years, we focused on specific
    threats, based on the reasonable assumption that we had an idea
    of what the threats we faced were and what the threats were
    going to be in the future. During the Cold War, we had a clear
    set of threats from the Soviet Union that we were focused on.
        Now, what we recognize is that there are a number of
    countries pursuing nuclear weapons. There are a number of
    countries pursuing other weapons of mass destruction and
    missile capabilities. There are possibilities of new coalitions
    in the world of countries that might threaten us. There is the
    danger of significant changes in the current, relatively happy
    international strategic environment. There could be changes in
    Russia. There could be changes in China. There could be changes
    in other parts of the world. There could be combinations of
    countries, as I said, that we have to concern ourselves with.
        When we looked at what we need to maintain a nuclear force,
    on the offensive side and defensive side, we listed the kinds
    of missions that we need to accomplish. We looked at the kinds
    of capabilities we may face, the kinds of capabilities we may
    need to counter, and the threats and we came up with in this
    new set of ideas that I just outlined and that we referred to
    in shorthand as the new strategic triad.
        Senator Reed. Mr. Secretary, this seems to be a very
    ambiguous, imprecise, and notional view of a strategy.
    Ultimately, maybe I do not grasp the vision. All of this leads
    to targeting specific installations, specific targets. I mean,
    that is where you end up at. You seem to have this big
    disconnect between specific threats to the United States, and
    there are many of them, and the numbers and the systems and the
    whole review that you are proposing. One could joke that, in
    assuming that changes in the political situation in
    Liechtenstein will lead to a potential threat to the United
    States, we must be prepared for that. That is hypothetically
    possible but at some point you have to narrow the issues down
    to credible believable threats. That is not coming out of your
    discussion.
        Chairman Levin. Thank you very much, Senator Reed.
        Senator Inhofe.
        Senator Inhofe. Thank you, Mr. Chairman. Secretary Feith,
    would you say that things were a lot simpler back in the Cold
    War? And predictable?
        Secretary Feith. In a number of respects they were.
        Senator Inhofe. I was listening to your opening statement
    and I am glad you brought up the whole idea of MAD and how
    things have changed now. I know it is very difficult to answer
    questions, specifically questions like Senator Reed is asking,
    but turning it around and responding in a different way, it has
    been a few years now since Saddam Hussein kicked our weapons
    inspectors out of Iraq. Do we have any assurance, I don't mean
    to get into anything classified, I don't think this is, that
    they are not into development of a long-range missile? Do we
    really know?
        Secretary Feith. Senator, there is much that we do not
    know. We do believe it is clear that the Hussein regime remains
    interested in working on weapons of mass destruction
    capabilities, nuclear, biological, and chemical, and missile
    delivery systems.
        Senator Inhofe. Mr. Secretary, I could have asked the same
    question using Iran, as I said in my opening statement, we do
    know there is an exchange of technology and systems between the
    countries that I mentioned and that immediate uncertainty is
    the concern. Now, you mentioned accidental launch in your
    opening statement. I'd like to pursue that a little bit.
        I know some countries have a fail-safe system. This has
    always been a great concern. As I understand it, the fail-safe
    system is just used by the United States, China, and Russia.
    But an accidental launch assumes two things. Number one, that
    they are complying with a fail-safe system. We have no way of
    knowing that. There is no indication of that. Number two, we do
    not know what country could accidentally launch one. You want
    to pursue this idea of an accidental launch system of that
    force?
        Admiral Ellis. The concept that you describe, Senator,
    certainly is part of the consideration as we work forward on
    missile defense concepts and the like both regionally-specific
    and on the national side. While we have assurances as we work
    through the relationships with Russia, specifically, of which
    you are well aware, we have no near-term concerns in that
    regard. This also falls under the category, as you pointed out,
    of uncertainties with which we have to deal. So it is certainly
    a possibility and it is something against which we need to
    consider how we would best be positioned to respond.
        Senator Inhofe. I think you probably agree that a policy of
    deterrence would not protect us in case of an accidental
    launch?
        Admiral Ellis. You made the point earlier about the whole
    concept of what is deterred by what and the types of people who
    might be involved in that. Clearly we are not talking about a
    rogue state here.
        Senator Inhofe. I think that is very significant. I am
    going to emphasize the fact that we do not know. I used the
    example of August 1998. That wasn't even classified. People
    were talking about that and yet we misjudged that by at least 3
    years, and so who's next? Who would have thought at that time
    that North Korea would have the capability and now we have
    other countries that we know are pursuing it.
        Let me ask you something, General Gordon. During the last
    administration, I was distressed that there were compromises of
    our nuclear secrets. A lot of the things that happened caused
    these security failures, such as a policy of the then-
    administration on color-coded badges, doing away with those,
    doing away with background checks, doing away with wiretaps,
    all these things that were in place prior to that. What have
    you done specifically in these areas now to strengthen that
    security? I am talking about the labs and elsewhere.
        General Gordon. Senator, we have taken a pretty aggressive
    approach to working security across the laboratories and the
    plant environments, everywhere from the personnel security to
    the physical security of the facilities, we have strengthened
    significantly, especially after September 11. We have a lot of
    people working really hard, very high visibility to in fact
    deter a terrorist from attempting to make a run at these plants
    or at these laboratories.
        Within the labs themselves, we tried to get back to a
    blocking and tackling strategy, getting right down to the
    individual level on security. We began a program which we call
    integrated safety, safeguard, and security management where the
    purpose again is to get the laboratory director involved and
    reach down to get the individual involved. We couple that with
    improvements in how we do the access limitations, how we do the
    badging, and I think across the board we strengthen it. But the
    core of what we are trying to do is to try to bring individual
    responsibility back into that with appropriate oversight and
    appropriate understanding of the responsibilities involved.
        Senator Inhofe. Secretary Feith, as part of your
    confirmation hearing testimony, you focused primarily on ending
    North Korea's nuclear and ballistic missile programs. Even if
    we are successful in negotiating into these programs, they
    still remain a military threat to South Korea. Do you believe
    that there is in place in South Korea now an adequate military
    deterrent to North Korean aggression? They have artillery that
    is better than anything we have. Our Paladin is inferior in
    both range and rapid fire to North Korea's artillery system.
    What do you consider to be our state of readiness, if you will,
    or our ability to defend against North Korean aggression?
        Secretary Feith. Senator, I think you are right to
    highlight the special dangers that are posed by North Korea
    both at the conventional level and the threat of nuclear
    weapons and missiles. But, I believe that we have the forces in
    place and the general capabilities to defend South Korea.
    Nobody in North Korea should make any miscalculations about
    that.
        Senator Inhofe. Well, there is a fine line between
    discussion here today and what can come in terms of the threats
    that are out there. I am sure that you take all these things
    into consideration, too. One last question. In terms of the
    reduction down to the range of 1,700 to 2,200 operationally
    deployed weapons, the administration first of all said that
    they proposed a new lower number of nuclear weapons around
    1,500. Where are we right now on that? I think the review is
    suggesting 1,700 to 2,200.
        Secretary Feith. Correct. I think that the 1,500 number
    came from the Russians, who talked about making a reduction to
    the level of 1,500 to 2,200.
        Senator Inhofe. 1,500 is kind of a starting point and I
    just wanted to see where we think we are going to end up.
        Secretary Feith. As of now we think we are going to end up
    from 1,700 to 2,200 by 2012.
        Chairman Levin. Thank you, Senator. Senator Bingaman.
        Senator Bingaman. Thank you very much, Mr. Chairman.
    Secretary Feith, in your statement you say that we are
    developing a diverse portfolio of military capabilities for a
    new world. As part of that, do you support the design of a low-
    yield nuclear earth-penetrating weapon?
        Secretary Feith. The special difficulty posed by deeply
    buried and hard targets is something that is very much at the
    core of our minds. On the specific question you asked, I think
    I prefer to defer to General Gordon.
        General Gordon. With respect to what is required, we will
    again go back to the military on these issues. The emphasis
    that is in the Nuclear Weapons Council consideration now is
    actually for a more standard delivery system called an enhanced
    penetrator which would go in and basically make use of the
    existing warheads. We will be talking about that over the next
    few years.
        Senator Bingaman. I guess the more general question is are
    we pursuing design, as you plan your activities here?
        General Gordon. I know of no such work, planning or
    working, directly on such a system.
        Senator Bingaman. There is no design work on any low-yield
    nuclear weapons at this point?
        General Gordon. There is no design work at all going on in
    nuclear weapons. Now people sit around and talk about things
    and think about things and look at what's been done in the
    past, but there is nothing that you can define as a program
    that constitutes that. There are efforts thought about, talked
    about, considered towards the possibility of low-yield systems.
    Many people who consider these issues with respect to hard
    targets find that a system may not be effective.
        Senator Bingaman. So, Secretary Feith, is it fair to say
    that when you talk about a new diverse portfolio of military
    capabilities, you are not talking about low-yield nuclear
    weapons? That should not be part of what we are pursuing in
    that portfolio?
        Secretary Feith. I had various other things in mind, and
    particular things that I mentioned to Senator Reed a few
    minutes ago.
        Admiral Ellis. If I might, Senator, to build on General
    Gordon's statement, there is no intent, there is no process of
    which I am aware or we are aware, as members of the Nuclear
    Weapons Council, to produce a new design. There are some
    concepts that have been discussed as he mentioned,
    modifications of existing systems to support the targeting of
    deeply buried targets. But no new design elements have begun.
        Senator Bingaman. So the item on page 20 of the NNSA budget
    that came to us the other day that says ``support an advanced
    concept initiative, a phase 6.2/6.2A study for the robust
    nuclear earth penetrator (RNEP),'' which will also maintain
    weapons design capability, is false?
        General Gordon. As I just suggested, we are coming to talk
    to you in a couple of weeks on that. That is considered a
    modification of existing systems.
        Senator Bingaman. That is a modification, but there is no
    design work going on at the present time. That is not a design
    of a new system?
        General Gordon. When we start this program called 6.2/6.2A
    it leads to what we formally call design. We are coming up and
    chatting with you about that. To get to that point, one
    considers where we are on this issue, and there is significant
    discussion about developing an RNEP for the military. We are
    pursuing through the Nuclear Weapons Council a program that
    does that, modifying a system that does that.
        Senator Bingaman. Let me just state for the record, Mr.
    Chairman, I just think we should concern ourselves if there is
    going to be a new nuclear weapons design pursued. That is
    contrary to the policy of previous administrations, and if
    there is a change in that policy, I think we need to have a
    discussion about it and a chance to express our views.
        General Gordon. Without question. We will be coming in
    consultation on that point, but I would again say with respect
    to the nuclear weapon portion of it, we envision it as a
    straight modification of an existing system that is out there
    now, packaged in a way that could penetrate.
        Senator Bingaman. Secretary Feith, in response to Senator
    Reed's questions, you were talking about how there could be
    changes in Russia, changes in China. There could be new
    threats. I agree with all of that, and I am certainly not
    arguing that we should eliminate our nuclear deterrent. But I
    do not know if any of what you said, changes in China, in
    Russia, in other parts of the world, any of that justifies
    maintaining 8,000 warheads in our inventory. I mean, we have
    the capability even if we get to the 1,700 or the 2,200 level,
    whatever it winds up being, that is certainly an adequate
    deterrent against any of our potential adversaries for the
    indefinite future. Wouldn't you agree with that?
        Secretary Feith. I do agree that if we get to the 1,700 to
    2,200 level that we envision, and we get there developing the
    other capabilities that are part of the concept of the Nuclear
    Posture Review, that that will be adequate.
        Senator Bingaman. But even if we do not develop the other
    capabilities, 1,700 nuclear weapons aimed at you is a pretty
    good deterrent, is not it?
        Secretary Feith. We think, as I said, we have tried to
    broaden the analysis of what we need as the deterrent beyond
    the issue of offensive weapons only. So it is the package. If
    we have the right package, then that number of offensive
    systems is adequate.
        Senator Bingaman. Let me just be clear that I have trouble
    with this shift from threat-based to capabilities-based
    assessments. I have been here on the Armed Services Committee
    20 years now, and always before the defense budget was
    justified on the basis of potential threats. Now it seems like
    since the threats have substantially diminished, the military
    threats I am talking about, not the threats of terrorist
    activity, but military threats of the traditional type, since
    those have substantially diminished, we are getting an
    explanation that we still need what we had before, but now it
    is because it is going to be capabilities-based.
        I just wonder what the reaction would have been had
    President Truman come out with that concept at the end of the
    second world war and said okay, we know our adversaries have
    lost their capability of threat but we are going to maintain
    our military expenditures at the same level because we have
    shifted to a capabilities-based approach rather than a threat-
    based approach.
        Secretary Feith. Senator, we do not believe that we should
    retain everything that we have had. I have been calling
    attention to the fact that we are talking about very
    substantial reductions in our nuclear forces.
        Senator Bingaman. Deployed?
        Secretary Feith. In our operationally deployed warheads,
    absolutely. It is quite clear that a large part of the
    discussion that we have had this morning is a debate over what
    one is willing to credit as a reduction. We can be completely
    open on that point.
        In the traditional Cold War arms control debate, nobody
    debated that nuclear forces were reduced, even though warheads
    were not destroyed. We are talking about substantial reductions
    even though the warheads by and large are not going to be
    destroyed, and we call what we are doing a reduction because we
    think it is highly significant that we are going to be reducing
    the number of weapons available for use.
        I think that the difficulties that you have said that you
    have in dealing with a capabilities-based approach versus a
    threat-based approach, I can sympathize with. This is quite a
    different concept on how to assess our requirements, and I
    don't mean to suggest that it is obvious and that anybody
    should immediately be able to see what it means. It has taken a
    lot of work within the Pentagon to develop this type of
    assessment.
        The reason that we have decided to shift to this
    capabilities-based approach, though, is something that I think
    we all can understand, at least the motivations for it I think
    we can all understand. We are dealing with a world now where
    the threats, and this is something that this committee and
    Chairman Levin in particular have been in the forefront of
    highlighting, the whole issue of emerging threats, new threats
    coming in, new forums from new quarters.
        The United States needs capabilities to deal with that. We
    cannot know, and if you look at where we have used military
    power over the last decade, let us say, in none of the places
    where we have used military power over the last 10 or 12 years
    did we expect to be fighting the kinds of wars we fought. We
    have been surprised continually.
        At some point, it became clear that we should plan to be
    surprised. We should plan to deal with threats that we cannot
    now identify as specific types of threats from specific parties
    from specific geographical locations. So what we have done is
    we have said we cannot predict precisely where the threat is
    going to come from, but we can because we know something about
    technology and we know something about capabilities of
    potential adversaries we are certain we are going to confront
    certain capabilities. We need to respond to the capabilities
    that our enemies might have. The alternative to the approach
    that we have actually adopted is to go back to the guessing
    game of trying to guess which threats we are going to have to
    deal with, but I think recent history should have made us all
    modest about--I mean, humble, I think, is the proper word--
    about our ability to guess what specific types of threats we
    are going to have to deal with and so we are grappling with
    this issue. It is a very hard problem, and I certainly
    understand that it is not a comfortable concept. But it is an
    attempt to deal with the very real strategic problems that
    arise from unpredictable events.
        Chairman Levin. Thank you. Before I call on Senator Warner,
    let me just acknowledge that when Senator Warner was Chairman
    of this committee, he had enough foresight to create the
    Emerging Threats and Capabilities Subcommittee, and it was that
    vision which has put us on that track and I wanted to
    compliment him for it and also compliment Senators Landrieu and
    Roberts. Senator Roberts was Chairman of the subcommittee. Now
    Senator Landrieu is Chairman of that subcommittee, and she has
    put in an extraordinary amount of work in addressing the
    emerging threats that you just referred to, Secretary Feith.
    Senator Warner, let me call on you now.
        Senator Warner. Thank you, Mr. Chairman. Yes, we did create
    it, but we created it with bipartisan support in which you were
    an integral member who with me got that done, Mr. Chairman.
        I am going to stay for some period of time with this
    hearing. If Senator Landrieu would like to go ahead, I'd be
    glad to follow.
        Senator Landrieu. Thank you, Senator Warner, I do
    appreciate that because I do want to ask a few questions and I
    do have to leave. Let me just make a couple of points that are
    somewhat troubling. I want to follow up on what Senator Reed
    and Senator Bingaman said about the difficulties posed to us
    when we move from a threat-based assessment which gives us at
    least some rationale for the crafting and designing of the
    defense systems necessary to give Americans the security that
    they deserve and move to a capabilities-based system. I think
    it is something that really needs a lot of discussion because
    what we need is a rationale that makes sure that we are
    crafting the kind of defenses that in fact deliver security and
    that we are not spending our money developing weapons against a
    threat that won't come, meanwhile, underfunding other defenses
    against threats that really might come. I think the American
    people are very concerned about that.
        The second point I would like to make is that there is an
    alternative to being surprised. That alternative is to be
    informed, and perhaps we have been surprised too many times in
    the past, and frankly, September 11 was in my opinion an
    unnecessary and tragic surprise. I would suggest that one way
    to avoid that is to be better informed and to spend some money
    on better intelligence, better information, and get clearer
    information about what the real threats are so we can prevent
    the deaths of thousands of innocent lives and the pain that has
    ensued.
        The third point is that, you said on the record that in the
    past we reduced our warheads, but we did not really eliminate
    them. The truth is that we eliminated the platforms, and thus
    really eliminated the warheads. In the Nuclear Posture Review,
    we are neither eliminating platforms nor warheads. We are
    simply storing them, which brings me to my question. I know you
    are familiar with the Baker-Cutler report, which is a
    bipartisan report led by former Senate Majority Leader Howard
    Baker and former White House Counsel Lloyd Cutler, which said:
    ``the most urgent unmet national security threat to the United
    States today is the danger that weapons of mass destruction or
    weapons-usable material in Russia could be stolen and sold to
    terrorists or hostile nation states and used against American
    troops abroad or citizens at home.''
        So my question to you, Mr. Secretary, is do you believe if
    Russia follows the example of the United States and doesn't
    eliminate but stores these warheads, then those warheads and
    their materials will remain a significant proliferation risk,
    exactly the problem that this report warned of? As I recall,
    the President referred to this in his state of the union
    speech, so do you agree that it is in our national security
    interests to reduce the risk of nuclear theft, and that Russia
    should eliminate its excess warheads rather than store them?
        Secretary Feith. Senator, first of all, I think that you
    make an important point with which I agree completely when you
    emphasize the role of enhanced intelligence and better
    information in being able to deal with threats. There is no
    question that not only do you avoid surprise by having better
    information, but if your intelligence is better and you can
    target more precisely the opportunity to deal with a particular
    target using non-nuclear weapons, for example, your security is
    enhanced. So there are lots of benefits that flow from better
    intelligence and it is an important part of our concept in the
    Nuclear Posture Review, i.e. that we should enhance our
    intelligence.
        The point that you make about Russian weapons of mass
    destruction material I think is also an important point. I also
    agree with your emphasis on that as something that we need to
    attend to. I do want to stress that I do not think we need to
    attend to it in the way that we looked at U.S.-Russian military
    balances during the Cold War. I don't think that is the issue.
    I think that the issue is the kind of problem that we have been
    addressing not in a hostile or adversarial way with the
    Russians since the end the Cold War, but rather through
    cooperative programs such as the cooperative threat reduction
    (CTR) program.
        The Russians have a lot of WMD material. Chemical
    munitions, nuclear material, and the like. There are serious
    concerns about the security of that material, and we have
    programs, the CTR program being the umbrella, to reduce the
    danger that those items will be stolen or sold. It is a very
    important issue. I am not concerned about the complete
    symmetries between the United States and Russia on this point
    in the way we were when we were talking about maintaining a
    nuclear balance between us. I would point out that when you say
    if we do not destroy our warheads, then the Russians might not,
    and why if we do not should they, that we have a different set
    of calculations about whether we could destroy our warheads
    than the Russians have precisely because the Russians have a
    warm production capability.
        In other words, if the Russians in making the reductions
    that they have announced that they will make did destroy their
    warheads, they could produce new warheads. They are in fact
    producing new warheads on an ongoing basis in large numbers. I
    don't think I can get into the numbers in this forum, but it is
    no big deal for the Russians to destroy a warhead because they
    could replace it immediately with a new production item.
        We, on the other hand, have not produced a new warhead in a
    decade, and can and will not have the ability to produce one
    for almost another decade.
        Senator Landrieu. I think this is an important issue, a
    very important issue that the President himself raised. I want
    to review the question that if we are not destroying our
    warheads, why do we think Russia will, and preventing these
    materials from the possibility of distribution to terrorists I
    think is just essential, and it should build on CTR, which by
    the way received a slight increase in the budget, but not
    really in any significant way.
        Let me ask you this, and could you answer it very briefly.
    Secretary Powell testified just a few weeks ago that he expects
    the United States will enter into a legally-binding agreement
    with Russia on this issue. He wasn't sure at the time he
    testified what form this legally-binding agreement would take,
    whether it would be a treaty or some other sort of document.
        What kind of binding document are you looking for, what
    kind are you envisioning? Will this document cover mutual
    reductions in warheads, and what is a legally-binding document
    that is not a treaty?
        Secretary Feith. To take the last question first. In
    international law, there are the agreements that we refer to as
    either executive or executive-legislative agreements that are
    not treaties but nevertheless are considered legally binding.
    Now, as for what we are talking with the Russians about, we are
    discussing the offensive force reductions. We are talking about
    transparency and predictability measures that we could adopt in
    common. We are talking about cooperation in what we refer to as
    military technical fields, including missile defense. We have a
    wide range of discussions. I am heading off to Moscow next
    week, Under Secretary of State John Bolton is also heading out
    next week.
        Senator Landrieu. This document that you are envisioning,
    some sort of executive agreement, would that ever come before
    the Senate?
        Secretary Feith. No. I was simply answering your question
    on what could be a legally binding document that is not a
    treaty. I wasn't saying that is what we are pursuing
    necessarily. We are pursuing agreements, multiple agreements
    with the Russians on all of those topics that I mentioned. When
    we achieve the agreements, and we are confident we will achieve
    agreements with the Russians in this whole area of strategic
    forces, depending on what it is we can agree on, we would
    decide what is the appropriate form for the agreement. We are
    perfectly open if we can achieve an agreement that warrants it
    to have it be a treaty, but depending on the nature of the
    agreement we will decide what the appropriate vehicle is.
        Senator Landrieu. It hasn't been decided yet?
        Secretary Feith. We certainly recognize the important role
    of Congress in general and the Senate in particular in these
    matters.
        Senator Landrieu. Thank you. Thank you, Mr. Chairman. Thank
    you, Senator Warner.
        Chairman Levin. You are quite welcome, Senator.
        Senator Warner.
        Senator Warner. Before the Senator leaves, I think she made
    a good point, that it would be very wise to involve Congress in
    a momentous decision like this. Do not get lost in all the
    little technicalities of this thing. Just go back and brush off
    some of the very fine guidance the Senate receives periodically
    from Senator Byrd on how we are a co-equal partner when it
    comes to matters of national security, the executive and
    legislative branches. I think that is a tradition that has to
    be carried through from administration to administration.
        I thought, Secretary Feith, in response to Senator
    Bingaman's inquiries, that you spoke very clearly on our
    strategic posture and I believe this document, the NPR, is an
    excellent one. It presents a very creative approach to this
    exceedingly important subject, and I agree we have to plan for
    the uncertainties in the world. I look back to when I was
    privileged to be at the Pentagon sitting there at the table
    many years ago and coming before Congress and seeking the
    authorization to sell F-14s and cruisers to the Shah of Iran.
    Indeed the F-14s did go. That was the top-of-the-line system
    that we had in this Nation at that time. Indeed the cruisers
    were contracted and under manufacture, and then overnight that
    government collapsed. The government that replaced it poses
    threats to us, as our President pointed out here just recently
    to Congress and the whole free world.
        I can also remember that a congressional delegation of
    distinguished senators went to Iraq, very shortly before Iraq
    invaded Kuwait, and they came home and extolled the virtues of
    Saddam Hussein and Iraq. Within months, war broke out. We have
    to be ever-vigilant, and there is no category of weapons that
    requires greater scrutiny or more careful review. I think as a
    Nation we are very fortunate to have two experts, one current
    active duty, one distinguished retired military witness, who
    are assisting you, Secretary Feith, the Secretary of Defense,
    the Secretary of Energy, and the President as we formulate
    these important decisions.
        This brings me to the subject that I am always concerned
    about. When I was Chairman, we had the Comprehensive Test Ban
    Treaty come before the Senate. We had at that time a series of
    hearings to fully inform the Senate and the American public
    about the status of our nuclear weapons stockpile. So we,
    together with Senator Levin, put together three hearings on
    this committee, and if I may say, those hearings provided the
    foundation for the debates in the Senate and in the Senate's
    eventual decision not to approve the treaty.
        In those hearings, the directors of all the national labs
    came forward. These are scientists and persons that are not
    involved in politics and so forth. Their purity was in the
    science of the day. So my first question is for you, General
    Gordon. In that debate, the lab directors said that we simply
    were not moving as quickly as we should with regard to
    replacing actual testing of nuclear weapons to determine their
    viability and readiness with the SSP, and the projections for
    putting in place SSP varied from several years to even one
    decade or more into the future.
        Our inventory is aging, and the scientists determined at
    what point our stockpile may not be perceived as actually
    credible. Now, there are two aspects to maintaining the
    stockpile which are equally important: One, any adversary has
    to believe that the stockpile is ready to retaliate and should
    be able to deter and then retaliate, if necessary, the good
    Lord forbid. But they have to perceive that we have that
    ability.
        Often we forget that those weapons, by and large right here
    at home in the United States of America and its various
    installations, are protected by the men and women of the Armed
    Forces and the civilians who are entrusted with handling them,
    and they are owed a certification that those weapons are safe.
    The communities that embrace these installations are owed a
    certification that those weapons are safe to handle. So General
    Gordon, bring us up-to-date on the Stockpile Stewardship
    Program, the progress being made in your judgment on it, and
    what sort of timeline you see in that vast system of computers
    that basically can replace the actual testing which again in
    earlier years was I think safely done underground to verify the
    reliability, safety, and security of our stockpile.
        General Gordon. Thank you, Senator. I would report that the
    Stockpile Stewardship Program is really going well. But, on the
    other hand, I cannot tell you for certain that we would ever
    not need to test. I just simply cannot do that.
        Senator Warner. Let us be careful when we use the word
    test.
        General Gordon. Underground nuclear test.
        Senator Warner. Yes. Let us talk about actual testing
    versus evaluation with the equipment that is being used in the
    Stockpile Stewardship Program.
        General Gordon. In fact, I would suggest that the Stockpile
    Stewardship Program is really an experimental program more than
    it is a computer program because what we are doing is testing
    pieces and parts, and there is plutonium that is tested in sub-
    critical underground tests today, and we have learned more
    about plutonium. There are tests of every component that is
    inside the system. There is surveillance of every component
    that makes up a weapon. So that portion of it is going, I would
    say, quite well.
        We continue as we look at our stockpile to find problems
    with it. Some of it is aging. Some of it has what we tend to
    call birth-defects. We are finding things we never knew about
    before because of improved tools that we have been able to
    develop over the last several years. We know how to fix those
    problems and I suggested in my opening statement we know how to
    fix those well enough that we do not foresee, at this hour, at
    this day, a need for a test. I can't predict when there would
    be one.
        On the other hand, I wouldn't be so bold as to sit here and
    tell you that we would never be in that position or that the
    Stockpile Stewardship Program would somehow be a failure if we
    had to test. It might be a very successful program if we found
    out that we had to do a test. So, broadly speaking, we are
    making progress in all the areas we want to for the long term,
    with our computer capabilities, with the sub-critical
    underground test programs that we have continued to conduct,
    and with the large machines that we are building that will
    enhance our ability to understand the physics in even greater
    detail. But it is a bit of a risk to then say that SSP can keep
    us from ever reaching a testing situation.
        Annually, we take a rigorous process that is open, and take
    a hard look at where we are on the system, on each and every
    weapons inspection. We look at it on a rigorous basis in which
    we render results in a report to the President on whether or
    not there is any indication that we need to test. That looks at
    each weapon and each system. That involves not only the lab
    directors, the NNSA, and the Secretary of Energy, but also the
    Department of Defense and the CINCSTRAT.
        I am broadly satisfied with the progress we are making in
    SSP, I think we are doing about all we can. There remain
    issues. There remain questions and frankly, every day, to state
    the obvious, the 20-year-old weapons are a day older. The
    plutonium is getting old.
        Senator Warner. The lab directors were very gracious,
    forthright, and honest with their views. It is important for
    you to state today that the stockpile as you understand it is
    safe, that it is credible, and that it meets the goals of this
    country in terms of our strategic posture.
        General Gordon. I agree. I stated that in my opening
    statement. The stockpile as we know it today is safe. It is
    reliable, and we are aggressively pursuing the aging defects
    that we know are there. But they do not affect the safety of
    the systems.
        Senator Warner. What number of years do you feel are left
    before all these components of the Stockpile Stewardship
    Program come together to constitute an effective substitute for
    actual testing?
        General Gordon. I do not want to be cute with you, sir. The
    idea that you could in 5 years or 10 years from now say I would
    never have to go back to testing, I don't think I can do that.
        Senator Warner. To achieve scientifically the best
    substitute attainable for an actual test?
        General Gordon. We are on a 7- to 10-year cycle for the
    complex, the long-term science programs that come in as we know
    them today, the computing, the large programs, and the
    refurbishment of the complex so that we could handle materials,
    that is the time frame we are talking about.
        Senator Warner. That will happen maybe a decade hence?
        General Gordon. Yes.
        Senator Warner. Admiral Ellis, I would ask you the same
    question about the stockpile because you have to, as our
    strategic commander, tell the world that the stockpile is safe
    and effective and it can be deployed first as a deterrent, but,
    if necessary, if it has to be used, it will work.
        Admiral Ellis. I can state unequivocally, sir, just those
    thoughts as echoed by General Gordon. It is a safe, effective
    stockpile, and we have great confidence in its integrity and
    surety over the near-term. As he mentioned, the Stockpile
    Stewardship Program that you just described is intended to
    highlight deficiencies and we are learning things every day
    about these weapons as we develop these tools, and General
    Gordon's labs and facilities are able to better discern the
    issues that will affect this stockpile as it ages over the next
    10, 20, or even more years into the future.
        It is also, I am sure, known to you that I am directed by
    the Secretary of Defense to do an independent assessment of the
    process that General Gordon just described so that we have a
    check and balance in that process. Even though we are both
    involved, each of us has a contribution that we need to make to
    each of those processes. Mine is identified and specified as an
    independent assessment. I make that assessment annually,
    formally, and in writing, and just as I have committed to you
    during my confirmation hearing, I am committed to being open
    and candid in that review.
        Senator Warner. He has given an assessment that it may be
    10 years before SSP reaches a goal, which was to say that we
    can learn as much through a computer system, or we can learn
    sufficiently through a computer analysis of existing weapons,
    as we can from the actual test, and therefore, it is now the
    fullest possible substitute for the actual test that man can
    achieve through science. How do you feel about the schedule?
    When is that going to come?
        Admiral Ellis. Well, I agree that the timelines that
    General Gordon postulated for delivery of that full Stockpile
    Stewardship Program, a set of tools and capabilities and
    facilities approximates that timeline. It is also important to
    reinforce the point that General Gordon also made. This gives
    us the ability to know in much more detail and clarity what
    emerging problems might confront us in the stockpile.
        Those problems themselves, in order to be rectified and
    corrected, could have the potential in a scenario to mandate
    that we need a test to validate the fixes and corrective
    actions. So the existence of a fully capable and intensive
    Stockpile Stewardship Program, in and of itself, as General
    Gordon has noted, does not guarantee that we may not find a
    problem that needs correction and that it is of such magnitude
    that it will require testing to validate the essential elements
    of the stockpile that we discussed earlier.
        Senator Warner. On the assumption that Russia is likewise
    complying, and not testing, what is the status of their system
    similar to our Stockpile Stewardship Program?
        Admiral Ellis. I am not aware that they have begun a
    program that approximates the level of rigor and scientific
    advances that are embodied in the program under NNSA. But
    General Gordon might have a comment.
        General Gordon. They may not have the same set of aging
    problems as we do if they can keep building and replacing the
    units.
        Senator Warner. Do you wish to add anything, Secretary
    Feith?
        Secretary Feith. No, sir.
        Senator Warner. Thank you, Mr. Chairman.
        Chairman Levin. Senator Sessions.
        Senator Sessions. I think we need to try to get our
    thinking clear on this very important subject. Some media
    commentators always think in terms of negotiations. We reach
    agreements on all these issues, but I think we have to
    recognize that we are a great Nation. We have saved liberties
    in the Middle East by stopping Iraq's activities. We have
    preserved freedom in Kosovo. We have liberated Afghanistan from
    an oppressive regime.
        The question is are we preserving a nuclear capability for
    our Nation that will allow us to project our military power,
    deter attacks on the United States, and defend us, if need be.
    I think that is what we need to be wrestling with. I notice in
    the open version of the NPR that 12 nations now have nuclear
    weapons, 28 have ballistic missiles, 13 have biological
    weapons, and 16 have chemical weapons, so we have, despite our
    best efforts, a history there that would indicate to us that we
    are not going to be able to stop those activities and that the
    rest of the world is not going to stop.
        We are talking about a two-thirds reduction in our
    operational nuclear capability. I think that is significant,
    Secretary Feith. I think you are exactly right. I am troubled
    by your testimony that clearly states that we do not have
    manufacturing capabilities, whereas the Russians do. Let me ask
    this: Are there other nations that have a production capability
    for nuclear weapons?
        Secretary Feith. I believe that of the countries that have
    nuclear weapons, we are the only one that does not have the
    capability to manufacture new nuclear weapons now.
        Senator Sessions. So the 12 that have it are all in
    production capability, all have a capability to produce. I
    think that is a very important factor. I notice here in The
    Washington Post this article that we are talking about a
    binding deal with the Russians on this.
        [The information referred to follows:]

        Senator Sessions. I have the same concern about this issue
    that I did about the ABM Treaty with Russia.
        Hopefully, we will continue our friendship with Russia.
    Hopefully, it will grow and we will be friends and have a
    degree of harmony we have not had in many years with the
    Russians. But is there not a danger that if we reach an
    agreement with Russia, an agreement not to test, an agreement
    not to develop new weapons, that this does not stop any of the
    other nations who may not be a party to that agreement from
    increasing their capability, Secretary Feith? Would it bind any
    of the nuclear-weapons countries if we reached an agreement
    with Russia to stop them from producing more?
        Secretary Feith. An agreement between Russia and the United
    States would bind only Russia and the United States.
        Senator Sessions. All right.
        Secretary Feith. What I wanted to say, though, is that if
    we can, over the coming years, transform our relationship with
    Russia into a cooperative one where we are not focused on
    threatening each other but dealing in common with them against
    threats that both of us face that will be a major strategic
    accomplishment. When we look at what we can talk about with
    Russians now and what we want to achieve in the way of an
    agreement, there are a number of things that I think make a lot
    of sense for us to pursue, and at the top of the list are
    measures for what we call transparency and predictability
    because we want to make sure that when we make our nuclear
    policies and when the Russians make their's that we are not
    proceeding on the basis of misinformation or error.
        It is in our interest to be transparent in these areas with
    them, and there are things that we are proposing to the
    Russians that I think would make for a useful new bilateral
    agreement that would promote greater visibility into each
    other's plans.
        Senator Sessions. I agree. I am very desirous that we
    proceed to improve our relationship with Russia and reach such
    agreements as we can. But we are no longer in a bilateral
    nuclear world, are we? We have China, India, Pakistan, all in
    the news recently, and all of them are improving their nuclear
    capabilities. Other nations are moving in that direction and
    others would like to get in the game. If we were to take our
    numbers down to 1,700, or even lower, as some have suggested,
    would that not set a goal for some of our competitors? Wouldn't
    they be able to think that if we could just get a thousand
    nuclear weapons when we sit down at the bargaining table with
    the United States, then we would be a peer competitor, we would
    have a different relationship with them? Should we not be
    thinking about making sure that our adversaries realize that
    through technology and numbers they are not going to be able to
    catch up with us?
        Secretary Feith. This consideration, Senator, is part of
    our Nuclear Posture Review. When we talked about our strategic
    goals, including assuring our allies and dissuading potential
    competitors, I think we had in mind very much what you have
    just referred to, which is the danger that if we were to come
    down too far in our nuclear force levels, that we could be
    encouraging, inducing other countries to build up nuclear
    weapons to try to become a competitor of ours.
        So one of the numerous factors that we balanced in our
    Nuclear Posture Review is precisely this concern. I do believe,
    though, that we struck a sensible balance. I do not mean to
    sound like a broken record, but when questions get asked about
    aspects of our Nuclear Posture Review either from the side that
    we have done too much or that we have done too little, the
    answer inevitably is that all of the considerations that have
    been raised here by all of the serious members of this
    committee are valid considerations. But they need to be netted
    out against each other and against numerous other factors that
    we have not really dealt with in detail here. So, I think that
    the whole package that we have put together in the Nuclear
    Posture Review addressed your concern. I would just say it is a
    valid concern and it is something that we want to guard
    against.
        Senator Sessions. My time is up. I am not questioning the
    numbers that you are talking about going to because you have
    maintained some flexibility in that process allowing us, even
    though we do not have manufacturing capability, to get our
    numbers back up, if need be.
        The delicacy of reaching an agreement with Russia that
    could put us in a bind that we are not now in is that it could
    create an opportunity for other nations to move in and try to
    attempt to be a peer competitor. Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Sessions.
        Senator Warner. Mr. Chairman, could you advise the
    committee with regard to arrangements for a closed session? My
    understanding is we will have one.
        Chairman Levin. We are going to have one, if needed. I was
    going to ask after the next round of questions whether anyone
    here felt we should have one or needed one and whether any one
    here felt they needed one.
        Senator Warner. I would like to register my desire to have
    one.
        Chairman Levin. That is fine. If anybody wants one, we will
    have one. Anybody could either participate in the second round
    or ask additional questions for the record and we will go into
    closed session.
        Secretary Feith, I was surprised that you did not respond
    to Senator Bingaman's question about requirements for new
    weapons, including a weapon for hardened and deeply buried
    targets. General Gordon does work to meet the military
    requirements. They, the NNSA, are not supposed to be setting
    those requirements. So let me ask you this question. Does the
    Department of Defense have a requirement for a low-yield
    nuclear weapon for hardened and deeply buried targets?
        Secretary Feith. I do not believe that we have a
    requirement for a low-yield nuclear weapon.
        Chairman Levin. Did you want more time?
        Senator Warner. Mr. Chairman, they want to consult among
    themselves. It could be we could ask that question in closed
    session in greater detail. I suggest that we could explore that
    question in closed session, if you want.
        Chairman Levin. Apparently they submitted a study to us
    last August saying that there was no such requirement. That was
    not a classified study. Is there a change from that?
        Secretary Feith. I don't believe so.
        Chairman Levin. On the capabilities approach, I assume you
    are looking at capabilities against something. There must be
    some threats you are considering, as Senator Sessions very
    properly points out there are different threats that could come
    up. It is not in the abstract to question what capabilities we
    want to have against what potential threats. Is that not fair?
        Secretary Feith. It is fair. I think you are right. You are
    looking at the kinds of capabilities that you think you might
    have to counter in the future.
        Chairman Levin. The capabilities that you are countering?
        Secretary Feith. The capabilities you need to counter the
    capability that adversaries may develop and direct at you in
    the future.
        Chairman Levin. Do those capabilities that adversaries
    might create and direct against you look any different from the
    threats that you might face? Are you not looking at potential
    threats when you look at what capabilities we need?
        Secretary Feith. Yes. You are of course looking at
    potential threats. The terminology, the shorthand expression,
    threat-based analysis versus capabilities-based analysis, those
    categories are intended to capture an important difference in
    emphasis. Obviously we have to anticipate certain types of
    threats. In the Cold War we had a much higher degree of
    confidence that the kinds of threats we were going to have to
    deal with were going to be threats coming from very specific
    geographical borders, very specific people, of a much more
    specific nature. Now we are trying to do our planning based on
    the recognition that the kinds of difficulties we are going to
    have to deal with in the future are much less definite. One
    could argue we are still taking threats into account but we are
    not taking the kinds of definite projections about who is going
    to pose which threats from which quarters.
        This capabilities-based approach is an attempt to deal with
    uncertainty. It is an attempt to deal with the unpredictability
    of the future. It is a very difficult problem that many people
    as I said, this committee in particular, have highlighted for
    years.
        Chairman Levin. We call them new threats. Those would be
    highlighted potential threats that are new. I do not see that
    that is any different from what you are talking about. You have
    relabelled it capabilities, but in effect we have to look at
    potential threats and be prepared to deal with all potential
    threats. You can put a new label on it, call it capabilities.
    Strangely enough, your nuclear posture review ends up exactly
    the same, except you are going to park a lot of the weapons in
    a warehouse instead of having them in missiles, ships, and on
    planes. It comes to the same number of planes, missiles, ships,
    and the 8,000 is the same except the significant part of the
    8,000 is going to be removed to storage. That is the
    difference.
        That is not what I call revolutionary. It is different, for
    better or worse. So I do not see any difference, in effect, in
    the real world between your capabilities-based approach and the
    threat-based approach in terms of our nuclear posture except
    you propose to shift some of the nuclear weapons from the
    missiles and ships and so forth to storage.
        Secretary Feith. I think, Mr. Chairman, the shift to
    storage is a much more significant move than I think you are
    giving it credit for being, and I would also say that the kind
    of analysis that was done by STRATCOM in developing a
    capabilities-based approach really is qualitatively different
    from the kind of analysis that was focused on a specific target
    set in the Soviet Union, and I would invite with your
    permission, Admiral Ellis to comment.
        Chairman Levin. I would be interested to hear from Admiral
    Ellis.
        Admiral Ellis. As the Secretary has noted, the assumption
    and the aggregation of those disperate potential threats, and
    the precision and knowing all of the alternatives that confront
    us is unknowable. As we have looked at the capabilities-based
    approach, we have looked at aggregations, we have looked at
    combinations and permutations. We have looked, to the extent
    that we can, at new threats that have not been envisioned yet
    and that do not exist at the current time. The references to
    the recent experiences of this Nation indicate the types of
    things that need to be considered. Not all of those are related
    to strategic nuclear response and that is what is reflected in
    the NPR. We have broadened the concept of what is strategic, to
    include not just non-nuclear, but also nonkinetic weapons. As
    we broaden the concepts and the awareness of what is
    deterrence, it is very clear to us that as Strategic Command
    and the strategic concept shift from the classic all nuclear
    MAD focus to confront the challenges of this new age, we have
    to be able to think and plan in those terms. We have to be able
    to respond more quickly than we now can in current doctrine and
    in current techniques. That is the wholesale new approach.
        But I want to emphasize, in all fairness, that this is just
    beginning. The triad that is being discussed brings together
    these enhanced intelligence capabilities Senator Landrieu
    focused on and all of the other pieces, absent those that exist
    now, which of course, are strategic forces and some of the new
    and advanced conventional capabilities, have yet to be
    developed or fully developed. So this is a process, too, that
    will deliver, we anticipate, over the next decade. Clearly, we
    are going to make assessments on the appropriate levels of
    strategic forces, as this journey continues.
        Chairman Levin. In the past the Strategic Command has been
    given guidance from the President and Secretary of Defense and
    then you based the numbers of weapons that might be needed on
    the guidance that you have received. Is that what has happened
    previous to now?
        Admiral Ellis. Yes, sir. That is certainly the case.
        Chairman Levin. Has there been any new guidance in the past
    year or 2?
        Admiral Ellis. I can talk about that in more detail in the
    classified session. The guidance is now under development to
    reflect the new directions and philosophies of the Nuclear
    Posture Review and will be delivered in the appropriate phasing
    from both the President and the Secretary of Defense as the
    events unfold through the spring and we begin this
    incorporation process as we translate the Nuclear Posture
    Review into the operational reality.
        Chairman Levin. Specifically, has there been guidance
    delivered to you previously?
        Admiral Ellis. That is correct, sir.
        Chairman Levin. Upon which you have based a recommendation
    relative to numbers?
        Admiral Ellis. That is correct, sir.
        Chairman Levin. When was that previous guidance issued?
        Admiral Ellis. That is an annual process. It was 2000, last
    time.
        Chairman Levin. The year before last or 2000?
        Admiral Ellis. Yes. I am going to check on this, sir, and
    respond to that in the closed session.
        Chairman Levin. My time is up. I have some additional
    questions. I yield to Senator Allard.
        Senator Allard. I was reviewing that last Nuclear Posture
    Review, done in 1994. At that point Secretary of Defense
    William Perry made a presentation to the committee, and I just
    read with some interest his main recommendations, and there
    were a number of them. He stated that at that time the key
    thing that was then pertinent and is to this discussion today
    is that you must preserve options for uploading, for
    reconstituting U.S. nuclear forces should political relations
    with Russia change for the worse. So, even then, under the
    Clinton administration, there was a recognition that you need
    to have some degree of readiness.
        Are we not telling Russia and the world that we are ready
    to take a new approach to try to assure peace worldwide, that
    we want to do it in a responsible manner, in a way that will
    make a difference in trying to change our readiness so that we
    can promote peace and have some new working relationship with
    Russia. Do you feel that this document accomplishes that goal?
        Secretary Feith. Senator, I think you have stated the goal
    correctly from our point of view, and I think that we do have a
    reasonable chance of achieving that goal.
        Senator Allard. I think we are splitting hairs when we talk
    about threats or capabilities. I respect what you are trying to
    say about capabilities. But the fact is we are dealing with a
    different world. I have to think we are splitting hairs because
    I see a terrorist threat out there not any different than many
    of our potential threats that we have from rogue nations, for
    example. I wondered if you wanted to comment on that?
        Secretary Feith. Senator, I am not sure I would call it
    hair splitting. I think that there are honest issues,
    disagreements about terminology. There are honest disagreements
    about the right emphasis, the different factors in this
    analysis. These are very difficult subjects. We tend to talk
    about them using shorthand and the shorthand strikes some
    people as misleading and it is useful to have a discussion like
    this so that you have an opportunity to elaborate.
        For example, the fact that the Chairman highlighted what we
    call capabilities-based analysis and the need to take into
    account threats. Of course that is correct, and I am glad to
    have the chance to clarify that. The difference is that in the
    Cold War we were looking at a very specific set of capabilities
    in a particular country's hands and we were sizing our force by
    counting up targets in the Soviet Union. We have moved away
    from that.
        The shorthand we use for that is to refer to capabilities-
    based analysis, but if you do not have a discussion like this,
    it is easy for people to perhaps to not fully understand what
    you mean by some of the terminology. So I think it is a useful
    exercise to explore a lot of these issues and, as I said, I
    also think that there is utility in enriching the whole public
    understanding of what we are doing, to have people stressing
    the different aspects of what we are doing and that are in
    their view more or less important, I mean the issue of how
    important is it to destroy warheads versus render them not
    useful in the near term is something that is worth bringing to
    the surface.
        Senator Allard. I listened to some of the questions from
    the majority side of this committee. I noted that some members
    of this committee oppose, it sounds to me like, at least two
    legs of your triad. We had a lot of discussion. I remember last
    year that they did not support national missile defense. They
    did not support the offensive portion of what we are talking
    about, the nuclear capability, so we did not plan for where we
    had adequate response levels as far as offensive sizing. Are we
    not substantially increasing the risks that other nations will
    view us as vulnerable, and as a result of that, be encouraged
    to build up their own offensive weapons arsenal?
        Secretary Feith. I think that danger and others are the
    reason why we view the various elements of this new triad as a
    package. I think it would be imprudent to make the offensive
    force level reductions without addressing the other elements of
    the program, without developing defenses, without developing
    the greatest intelligence, without developing the
    infrastructure, without improving command and control.
        Senator Allard. Mr. Chairman, I think we are coming up on a
    vote. I want to save my time for other questions. I yield back
    the balance of my time.
        Chairman Levin. Senator Sessions.
        Senator Sessions. I thank Senator Allard for making that
    point. You are making some real changes in our strategy with
    regard to national missile defense as a justification for a
    reduction in weaponry. In all of that, I hope you are thinking
    clearly. It seems to me that you are. Let us point out one
    thing, though, with regard to our number of weapons that I
    think is important. There are two ways to have deterrence or a
    nuclear capability. One is the number of weapons and the other
    one is their capabilities, how modern, effective, and how
    efficient they are in operation. So now we are reducing our
    numbers. That is correct, is it not?
        Admiral Ellis. The number of the operationally deployed
    weapons, yes, sir.
        Senator Sessions. Over the last few years we ceased to
    manufacture new weapons and we are not undertaking any research
    and development of more capable weapons, as General Gordon
    suggested in his remarks earlier, so in two different areas
    that give us some enhanced capability, we have capped
    ourselves, is that fair to say?
        Secretary Feith. It is fair to say, Senator. I put it in
    the context that we made some choices as to how we are going to
    sustain our nuclear capability, and all of you have been
    supportive about sustaining that capability at some level. We
    decided we were not going to build new weapons because of the
    testing capabilities for that. We decided we weren't going to
    remanufacture old designs, and we elected to do away with that
    manufacturing capability and, as a result, the way we have
    chosen to sustain this capability once we have defined what
    this is through an aggregation of weapons, active and inactive,
    that will serve the needs of this Nation to sustain a strategic
    stockpile with all the uncertainty that the future holds over
    the next 10 to 12 or 20 years. That was the choice that we
    made. That was deemed to be in the national interest. We made
    an effort to sustain that effort in a manner in which you
    described.
        Senator Sessions. I thank you for that. It puts us in a bit
    of a box, and we need to understand that. Then I think we are
    even further in the box, are we not, Secretary Feith, if we
    enter into some treaty with Russia that makes us incapable of
    developing new weapons or increasing our numbers? So we have to
    watch that as we enter into this negotiating process, do we
    not?
        Secretary Feith. Yes. We are conscious in the talks with
    the Russians of the importance of preserving our flexibility to
    deal with threats that could arise in the future. We intend to
    preserve that but we don't think that preserving that precludes
    our reaching certain kinds of useful agreements with Russia.
        Senator Sessions. Just be careful. Admiral Ellis, it is
    great to see you again. I remember visiting you in Italy when
    you were directing the air campaign over Kosovo and discussing
    it with you. While your planes went out at night, got back in
    in the early morning, you did not sleep until the last plane
    was in, like the good shepherd you are. We had extraordinary
    success on that. I know you slept in the office wherever you
    could find a place, and you served so extraordinarily well
    then. I have great confidence that you will be quite successful
    in defending the policies that will guarantee that we remain
    capable of defending our national interests wherever in the
    world there are threats.
        Admiral Ellis. Thank you for those kind words and that
    confidence.
        Chairman Levin. Thank you, Senator Sessions. Secretary
    Feith, you stated this morning that President Bush and
    President Putin agreed to substantial reductions. You did not
    mean to imply, I believe, that President Putin has agreed that
    the word reduction is the same as relocation? The Russians have
    not agreed to relocate warheads to a warehouse, which according
    to you would constitute a substantial reduction. Have they yet
    agreed to that?
        Secretary Feith. I think what I said, or in any event what
    I meant to say, is that they announced substantial reductions.
        Chairman Levin. My question is did you mean to suggest that
    Russia has agreed that a relocation would constitute a
    reduction? That is my simple question. Have they agreed to
    that?
        Secretary Feith. I don't think we asked the question that
    way.
        Chairman Levin. You might want to ask yourself that, if you
    have not, because if you are going to discuss reductions with
    the Russians, you are going to have to find out whether or not
    they believe that a relocation of a weapon, to store it, would
    constitute a reduction. If you are going to enter into serious
    discussions with them, you are going to have to resolve that
    issue. It is very much an issue. It is all over the press. That
    is an issue, yet you say they have never raised it. Is that
    correct?
        Secretary Feith. Chairman Levin, whoever sets the terms of
    the debate has the high ground, and I think it is, if one
    characterizes something as significant as reducing the number
    of operationally deployed weapons as mere relocation, it
    changes the debate.
        Chairman Levin. They have not raised the issue, is that
    correct? This has not been a subject of discussion between us
    and the Russians. That is just how you characterized it?
        Secretary Feith. No. I think we have discussed it with
    them. We have told them that what we mean by reduction is
    reducing the number of operationally deployed weapons.
        Chairman Levin. Is that what they mean by it?
        Secretary Feith. We will see. We are in the process of
    discussing that.
        Chairman Levin. You do not know yet whether they mean that
    or not, is that correct?
        Secretary Feith. I do not know for sure where we are going
    to wind up on that issue.
        Chairman Levin. That wasn't my question. Not where we wind
    up. Have they said that that is not what they mean by it, that
    is my question.
        Secretary Feith. We have had general discussions with them
    and told them what we intend to do. They have come back and
    told us what they intend to do. We are next week going to
    Moscow to work out greater clarification on these things, I do
    not know quite how to answer this because it is not definite
    enough yet.
        Chairman Levin. Admiral Ellis, from a military planner's
    perspective, does the continued existence of Russian MIRVed
    ICBMs make any difference?
        Admiral Ellis. As you look at the classic analysis of
    single warhead platform versus a MIRV in the old context of
    confrontation with the Soviet Union, clearly as you know well
    from your background, the considered opinion was that MIRVed
    warheads tended to be less stable in that context. I think the
    important point is that we have moved beyond that, or we intend
    to move beyond that, as Secretary Feith has noted. Clearly, we
    are moving in that direction, as you are well aware, and we can
    talk more about it in the closed session to address that issue
    in our own forces. We certainly would hope that the Russians
    would follow suit. I would argue that the implications of that
    may have changed as the staging of the relationship has moved
    beyond the historical context in which those concerns were
    first raised.
        Chairman Levin. Would you say it is still relevant or
    perhaps less relevant?
        Admiral Ellis. I am not a scholar in that regard. But I
    think the issue, as Secretary Feith has noted, is that we are
    moving in a direction that best serves our national interests
    and we would hope that the Russians would move similarly in a
    direction that serves theirs.
        Chairman Levin. Secretary Feith, executive agreements are
    not legally binding upon us. Treaties are. There is a
    difference between treaties under the Constitution and the
    force of law. Executive agreements do not have the force of law
    except on the executive who signs them. Go back. See if you
    want to revise your statement. If you do not, that is fine.
    Leave it the way it is.
        Last question, Admiral Ellis, have you had any contact with
    your Russian counterparts?
        Admiral Ellis. No, sir. In the 2\1/2\ months I have been at
    STRATCOM, I have not. I have, however, had contact with those
    who oversee that program in an effort to scope a resumption of
    that at the appropriate level.
        Chairman Levin. Are you hoping to do that?
        Admiral Ellis. Yes, sir, absolutely.
        Chairman Levin. Do you have an answer from the people that
    are in charge?
        Admiral Ellis. No, sir, I do not.
        Chairman Levin. The committee will reconvene in closed
    session in Hart 219 after this vote. We are adjourned until
    then.
        [Questions for the record with answers supplied follow:]

                 Questions Submitted by Senator Daniel K. Akaka

                                  COST SAVINGS

        1. Senator Akaka. General Gordon, in your testimony you state that
    ``possible cost savings from having to refurbish fewer warheads for a
    smaller stockpile would not be realized until well into the next
    decade.'' How much will be saved by the year 2012, the time frame for
    the Nuclear Posture Review?
        General Gordon. At this time no savings can be projected by 2012.
    The NPR reaffirmed the current stockpile refurbishment plans for the
    B61, W76, and W80, which had previously been agreed to by NNSA and DOD,
    including the ``block upgrade'' concept, which provides flexibility to
    adjust the plan to evolving weapons numbers. The first block
    refurbishments start in the fiscal years 2006-2007 time frame, and each
    block lasts approximately 5 years. In addition, significant costs
    through the 2012 time frame are driven by the need to restore
    production capabilities and revitalize the infrastructure, not by the
    number of warheads in the stockpile, or even the number of warheads to
    be refurbished.

        2. Senator Akaka. General Gordon, if no cost savings were
    estimated, why were they not estimated?
        General Gordon. NNSA is continuing to work with DOD to size the
    stockpile appropriately in response to the NPR. Once the force
    structure and the size of the stockpile are determined and stockpile
    support requirements are studied, cost savings, if any, will be
    determined. However, as I stated previously, it is not anticipated that
    such savings will occur until well into the next decade.

        3. Senator Akaka. General Gordon, in your testimony you mentioned
    that you have a serious human capital problem. Could you provide more
    details concerning the extent of your problem and your approach to
    resolving it?
        General Gordon. The NNSA, like most of the Federal Government, has
    been faced with significant downsizing over the last 8 years. The
    management approach was to reduce as older workers left Federal
    employment either through retirement or for new opportunities outside
    the national security arena. As a result, the NNSA now has an average
    employee age of 49, with over 233 employees eligible to retire in
    fiscal year 2002. This trend is expected to continue well through 2006,
    where the number of employees eligible for retirement will approach 40
    percent of the workforce. We are facing a sizable gap in mid-level
    positions located between entry level and senior management where
    technical practices and product knowledge are crucial to season and
    prepare tomorrow's leaders. The NNSA re-engineering and our long-term
    workforce plan are focused on consolidating technical expertise,
    improving mobility by analyzing skill mixes, and targeting recruitment
    in scientific and engineering curriculums and by expanding and
    strengthening our ties to the university systems to improve recruitment
    and educational opportunities for existing employees. This activity
    combined with the building of NNSA career paths will foster mobility in
    the development of our younger employees and the leadership
    capabilities of our senior managers. It will also support re-training
    by focusing skill needs at a corporate level and bolster our diversity
    by expanding access to positions complex-wide. My second report to
    Congress on the organization and operations of the NNSA will lay out
    the specific objectives and milestones for reinvigorating and
    rightsizing the Federal staff.

                                 TIMELY UPLOADS

        4. Senator Akaka. General Gordon, you mentioned that you will
    support the Department of Defense in ``uploading the responsive force''
    and that NNSA's tasks ``must be carried out on a time scale consonant
    with DOD's ability to upload these weapons.'' In the Defense
    Department's planning, what is considered a ``timely'' upload, in what
    condition do weapons need to be maintained in order to ensure a timely
    upload, and how close to launchers do weapons need to be stockpiled in
    order to ensure a timely upload?
        General Gordon. Upload timelines depend on the delivery system to
    be uploaded and range from weeks for bombers, months for Submarine-
    Launched Ballistic Missiles (SLBMs), and a few years for
    Intercontinental Ballistic Missiles (ICBMs). The necessary upload time
    determines the warhead maintenance condition (limited-life components
    such as tritium bottles may have to be installed) and proximity to
    launchers. Since NNSA is responsible for the ground transportation of
    nuclear warheads and nuclear material within the U.S., including
    transport of warheads between DOD sites, we will continue to work with
    DOD to assure that longer-term warhead transportation needs, including
    potential depot storage of responsive warheads, deriving from the NPR
    can be met.

                          RESPONSIVE FORCE DETERRENCE

        5. Senator Akaka. Secretary Feith, the Nuclear Posture Review's
    theme is that we should base the number of nuclear weapons on what we
    need rather than on what others have. At the most, what we need is to
    deter a nation with a small nuclear arsenal. How does a responsive
    force of thousands of weapons address this need, even if the number of
    nations with small nuclear arsenals doubles or triples in the next 10
    years?
        Secretary Feith. The NPR examined the requirements for
    operationally deployed nuclear warheads in light of the defense policy
    goals identified in the QDR. These goals are assurance, dissuasion,
    deterrence, and defense (i.e., defend against and defeat aggression).
    The NPR's conclusions with regard to the overall requirement for the
    operationally deployed force informed the President's decision to
    reduce U.S. strategic nuclear warheads by approximately two-thirds, to
    a level of 1,700-2,200 operationally deployed warheads, by 2012.
    Defining these requirements involved both quantitative analyses and
    considered judgments.
        Using a capabilities-based approach, the NPR sized the
    operationally deployed force and established requirements for the
    strategic force structure according to:

             the requirements judged necessary to assure friends
            and allies;
             the requirements judged necessary to dissuade
            potential opponents;
             the requirements to deter potential opponents;
             the requirements to defend against and defeat an
            opponent if dissuasion and deterrence fail;
             the need for adaptability and flexibility in an era of
            uncertainty and surprise; and,
             the need to preserve a force structure that can be
            reconstituted to provide a responsive capability for dissuasion
            and the deterrence of potential contingencies.

        Based on these considerations, the NPR concluded that a diverse
    force structure of ICBMs, bombers, and SSBNs should be preserved, and
    that 1,700-2,200 operationally deployed warheads on a force structure
    that could be reconstituted efficiently would be adequate to meet these
    requirements.
        However, we can not now know with absolute precision what the
    requirements for operationally deployed nuclear forces will be a decade
    from now. Many of the factors that will contribute to determining those
    requirements, including, for example, the threat environment, are
    dynamic and cannot be predicted with the precision necessary to
    identify the specific number of operationally deployed nuclear warheads
    that will be required in 2012.
        The NPR also concluded that we must maintain the capability to
    reconstitute our nuclear capabilities in the event changes in the
    international security environment warrant it. It is important to note
    that our consideration of the deterrence requirement for operationally
    deployed nuclear forces excluded any immediate contingency involving
    Russia. As the non-nuclear strike capabilities, defensive capabilities,
    and responsive infrastructure of the new triad are fielded, the
    requirements for operationally deployed nuclear forces may be further
    reduced.

                       RESPONSIVE FORCE: RUSSIAN REACTION

        6. Senator Akaka. Secretary Feith, if we retain a ``responsive
    force'' of thousands of warheads, we should assume that the Russians
    will do the same. How will we confront the expanded proliferation risk
    of the stored Russian warheads that would have otherwise been
    dismantled?
        Secretary Feith. We do not believe that U.S. retention of a
    responsive capability will cause Russia to retain additional warheads.
    Russia will continue to deploy and maintain the number of warheads it
    deems prudent to meet its security requirements. We should not expect
    Russia to mirror U.S. behavior. In fact, Russia has an entirely
    different philosophy with respect to the maintenance of its strategic
    stockpile. For example, although the U.S. stopped manufacturing new
    nuclear weapons a decade ago, Russia continues to manufacture new
    nuclear weapons while dismantling old ones every year.
        [Deleted.]
        The U.S., on the other hand, currently has no nuclear warhead
    production capability and we are several years from developing one. As
    the only recognized nuclear power that does not have the capability to
    produce new warheads, we have an obligation to our future security
    needs to ensure that any reductions in strategic nuclear warheads are
    handled in a responsible and responsive manner.
        Furthermore, DOD is already addressing the proliferation risk of
    stored Russian nuclear warheads by working closely with the Russian
    Federation to improve the security of Russian nuclear weapons in the
    Cooperative Threat Reduction program. Under applicable international
    agreements, we are working with the Russian Ministry of Defense (MOD)
    to enhance the security of nuclear weapons storage sites that hold both
    tactical and strategic warheads. We also are working together to
    improve the security of warheads during transportation. In recent
    years, we have provided ``quick fix fencing'' and other equipment for
    storage site improvements, inventory control systems, personnel
    reliability and safety equipment, emergency response equipment, and
    guard force equipment. We also conduct railcar maintenance, and our
    assistance has helped reduce MOD's response and recovery times to
    respond to nuclear accidents or incidents.

        7. Senator Akaka. Secretary Feith, is it in our national security
    interests to encourage a Russian responsive force, rather than weapon
    dismantlement?
        Secretary Feith. Russia already possesses a responsive capability
    inherent in its continued manufacture of new nuclear weapons and
    delivery systems. Because the United States is not producing new
    nuclear weapons and lacks the ability to do so, our only means of
    maintaining a responsive capability is to store existing nuclear
    weapons. Naturally, we plan to dismantle warheads we no longer need and
    encourage the Russians to do so as well.
        Russia's maintenance of a large inventory of non-deployed nuclear
    warheads is driven more by the nature of its infrastructure than a
    desire to match U.S. warhead inventories. Russia's philosophy for
    maintaining its nuclear forces is significantly different from that of
    the U.S. Russia's nuclear warheads have a relatively short shelf life,
    so it maintains a large active complex to produce new warheads to
    replace warheads whose service life has expired. U.S. nuclear warheads,
    on the other hand, have a much longer shelf life and, since we have no
    warhead production capability and are at least several years from
    developing one, our responsive capability relies on the retention of
    warheads.
        [Deleted.]

                     THE NPR IN THE CONTEXT OF ARMS CONTROL

        8. Senator Akaka. Secretary Feith, rather than the dire predictions
    in the 1960s of large increases in the number of nuclear states, the
    number has actually declined over the past 30 years. Do you feel that
    our continual reliance on nuclear weapons, as outlined by the Nuclear
    Posture Review, undermines the global trend away from nuclear weapons?
        Secretary Feith. In 1972, 5 states had nuclear weapons programs; 9
    states possessed ballistic missiles; and 10 states possessed chemical
    weapons. Today, 12 states have nuclear weapons programs; 28 states
    possess ballistic missiles; and 16 states possess chemical weapons. The
    United States cannot predict with confidence what nations, combination
    of nations or non-state actors may pose a threat to our vital interests
    or those of our allies well into the future. However, we are likely to
    confront one or a combination of adversaries armed with a wide range of
    capabilities, including nuclear, biological, chemical, and other
    advanced weapons and the means to deliver them over a long range. In
    this context, the Nuclear Posture Review concluded that nuclear weapons
    would continue to play a critical role in the defense capabilities of
    the United States, its allies, and friends. They provide credible
    military options to deter a wide range of threats including WMD and
    large-scale conventional attack.
        The Nuclear Posture Review shifts planning for our strategic forces
    from the threat-based approach of the Cold War to a capabilities-based
    approach. As the non-nuclear strike capabilities, defensive
    capabilities, and responsive infrastructure of the new triad are
    fielded, the requirements for operationally deployed nuclear forces may
    be reduced beyond what we can now foresee. If so, the reductions path
    announced by the President may prudently be undertaken more rapidly
    and/or deeper reductions may be possible.
                                     ______

                   Questions Submitted by Senator Ben Nelson

                       THE U.S. STOCKPILE: LOWEST NUMBER

        9. Senator Ben Nelson. Secretary Feith, last summer in testimony
    before the Strategic Subcommittee, Admiral Ellis's predecessor, Admiral
    Mies, stated that to maintain a ``viable nuclear triad,'' the bottom
    line for our nuclear stockpile should remain above 2,000 warheads--
    somewhere in the neighborhood of 2,200. President Bush has said that
    the bottom line could drop as low as 1,700. Which figure is correct?
        Secretary Feith. The two statements are generally consistent. As
    the NPR indicates, the total number of operationally-deployed nuclear
    warheads is a subset of the total number of weapons in the stockpile.
    We are maintaining nuclear weapons in storage in part to address the
    issue Admiral Mies raised, as well as to maintain a responsive
    capability should developments in the international security
    environment warrant re-deploying some weapons. The final number of
    nuclear weapons in the U.S. stockpile has not been determined.
        Based on these considerations, the NPR concluded that a diverse
    force structure of ICBMs, bombers, and SSBNs should be preserved, and
    that 1,700-2,200 operationally deployed warheads on a force structure
    that could be reconstituted efficiently would be adequate to meet these
    requirements. However, a range is necessary when attempting to identify
    requirements for 2012 because we cannot now know with absolute
    precision what the requirements for operationally deployed nuclear
    forces will be a decade from now. Many of the factors that will
    contribute to determining those requirements, including, for example,
    the state of the threat environment, are dynamic and cannot be
    predicted with the precision necessary to identify ``the number'' of
    operationally deployed nuclear warheads that will be required in 2012.

                          THE RUSSIAN STOCKPILE: RISKS

        10. Senator Ben Nelson. Admiral Ellis, are you concerned about the
    risks of proliferation from terrorists or governments that support
    terrorists if Russia stockpiles old weapons instead of destroying them?
        Admiral Ellis. Yes, I am concerned about the risks of proliferation
    associated with the Russian nuclear stockpile; however, I believe the
    CTR program is addressing these concerns. Sometimes referred to as the
    Nunn-Lugar program, CTR has enjoyed broad, bipartisan support since its
    inception in Congress in 1994. As a first priority of CTR, the United
    States is helping ship nuclear warheads to consolidation and
    dismantlement sites to encourage their reduction. CTR is also enhancing
    the security of the weapons storage sites that will remain open, and is
    a cost-effective means to aid in the ``denuclearization'' of former
    Soviet states, to continue to promote stockpile safety and security in
    Russia, and help stem the proliferation of weapons of mass destruction.

        11. Senator Ben Nelson. Admiral Ellis, should the United States and
    Russia agree to destroy their warheads?
        Admiral Ellis. The United States will dismantle retired weapons or
    those scheduled for retirement as approved by the Nuclear Weapons
    Council. From a warfighter's perspective, it is vital to maintain a
    credible and reliable stockpile, so I support our current schedules for
    dismantlement as well as warhead life extension programs. We can
    prudently pursue additional warhead dismantlement programs when we
    successfully complete the life extension programs, or when we expand
    the capacity of the nuclear weapons infrastructure complex in order to
    concurrently extend warhead life and dismantlement, or when the United
    States has an adequate warhead production capability.

                 DEPARTMENT OF ENERGY NONPROLIFERATION PROGRAMS

        12. Senator Ben Nelson. General Gordon, when you testified before
    the Strategic Subcommittee on April 25, 2001, I inquired about the cuts
    in President Bush's fiscal year 2002 budget made to the Department of
    Energy's nonproliferation programs. There were cuts of approximately
    $400 million. That included the Material, Protection, Control, and
    Accounting Program (MPC&A), which improves physical security at Russian
    nuclear weapons facilities, which was cut by $31 million, and the
    Nuclear Cities Initiative, a program to assist Russian weapon
    scientists transition to commercial positions, which was cut by $20
    million. How did these programs fare this year, and how important are
    they in the post-September 11 world?
        General Gordon. The budget request for fiscal year 2003 is $233
    million for MPC&A. This is below the fiscal year 2002 level; however,
    due to the fiscal year 2002 supplemental of $120 million, we have
    enough funds to accelerate significantly our MPC&A work by as much as 2
    to 3 years.
        Regarding our NCI and IPP programs that have now been consolidated
    under the Russian Transition Initiatives (RTI), we have sufficient
    funds in RTI to meet our goals. This is because $10 million was
    recently released (late in fiscal year 2001) due to the lifting of a
    legislative restriction, and $15 million was received in fiscal year
    2002 from the emergency supplemental.
        Since the September 11 attacks, we have developed a set of
    aggressive measures to accelerate MPC&A upgrades and complete them 2
    years ahead of schedule. Our new schedule is to have the Russian Navy
    nuclear warhead sites done by 2006 and all the MinAtom (Russian
    Ministry of Atomic Energy) sites completed by 2008. This program has
    taken on new resonance in the post-September 11 world.
        September 11 also illuminates the importance of the IPP program. It
    is critical to prevent the adverse migration of scientific knowledge
    into the hands of those that would use this knowledge for their own
    diabolical ends.

        13. Senator Ben Nelson. General Gordon, are the resources in the
    fiscal year 2003 budget request for MPC&A enough?
        General Gordon. Yes, I fully support the President's request for a
    fiscal year 2003 funding level of $235 million for our MPC&A and Second
    Line of Defense work. That amount--combined with the fiscal year 2002
    budget of $293 million, of which $120 million was received as part of
    the emergency supplemental package--provides the program sufficient
    resources to accelerate its planned activities with the Russian
    Ministry of Atomic Energy, Russian Navy, and Russian Customs.

                THE WAR ON TERRORISM AND U.S. NUCLEAR FACILITIES

        14. Senator Ben Nelson. General Gordon, could you please provide
    information about the homeland side of our war on terrorism and address
    the safety of our nuclear stockpile from a terrorist threat?
        General Gordon. The DOE/NNSA has a defense in-depth approach to
    security. This approach consists of access control, physical security
    systems, and protective force response. Only authorized personnel are
    allowed unescorted into nuclear weapons security areas which are
    controlled by armed Protective Force members. Authorized personnel must
    have a DOE ``Q'' clearance, be in a human reliability program (i.e.,
    personnel assurance program or personnel security assurance program),
    and have a ``need to know.'' All other personnel are under strict
    escort requirements and all personnel entering such security areas are
    subject to search for prohibited articles.
        Physical security systems include barriers, intrusion detection
    systems, video assessment, and access controls. Protective forces
    provide additional assessment capability and are present in numbers
    sufficient to defeat the DOE's Design Basis Threat. The efficacy of the
    barriers providing delay, systems providing detection, assessment, and
    response are thoroughly modeled, assessed, and validated by the DOE/
    NNSA.
        The DOE/NNSA also has in place contingency procedures for the
    recovery of a stolen nuclear weapon and maintains specialized teams
    that can be readily deployed to nuclear or radiological events.
        In addition to physical security measures described above, the DOE/
    NNSA employs use control on its weapons systems. This includes:
    Enhanced Nuclear Detonation Safety which prevents the electrical
    systems from accidently firing the detonators during accidents;
    Insensitive High Explosives which unlike conventional explosives are
    highly resistant to unintended detonation; Permissive Action Links
    which are electronic locks inside the weapons which prevent it from
    unauthorized detonation; Command Disable Features which facilitates
    non-violent disablement of a weapon by destroying critical components
    if loss of control is eminent; and Active Protection Systems which
    automatically disables weapons upon unauthorized tampering.

        15. Senator Ben Nelson. General Gordon, what efforts and specific
    steps have you taken to increase security measures at our nuclear
    facilities?
        General Gordon. Following September 11, NNSA immediately increased
    its security posture from Security Condition 5 (routine security) to
    Security Condition 2 (terrorist action is imminent). Security Condition
    2 includes enhanced response capability, more stringent access
    controls, additional searches, and heightened awareness. We are
    currently maintaining security capability at our sites at Security
    Condition 3 (terrorist activity is more predictable) with some
    additional measures. NNSA also conducted a vulnerability assessment of
    our facilities based on the events of September 11 to determine the
    types of new concerns that needed to be addressed. An emergency
    supplemental was requested immediately after the events of September
    11. These funds are being used by NNSA to increase the protective
    forces and address the highest priority security improvements to meet
    heightened security implemented as the result of September 11.
    Additionally, I established a Combating Terrorism Task Force to review
    headquarters and field actions implemented to protect our site assets.

        16. Senator Ben Nelson. General Gordon, does this budget provide
    enough resources to ensure that our facilities remain as safe as
    possible?
        General Gordon. As we understand the threats and requirements at
    this time, the total safeguards and security request of $510 million
    for fiscal year 2003 fully funds the Department's current priorities.
    As we learn more and understand more about the threats we will continue
    to reshape and rework our requirements and our programs.
                                     ______

                 Questions Submitted by Senator Strom Thurmond

                                NEW CAPABILITIES

        17. Senator Thurmond. Secretary Feith, in describing the new triad,
    you state that nuclear forces will be integrated with, rather than
    treated in isolation from, other military capabilities. This creates
    opportunities for substituting non-nuclear strike capabilities for
    nuclear forces and defense systems for offensive means. What new
    capabilities must we develop to get the same effects as a nuclear
    weapon?
        Secretary Feith. Advanced, non-nuclear strike capabilities,
    integrated with the other capabilities in the new triad, would provide
    a broader range of effective options for national leaders to consider
    than has been available in the past. By developing new capabilities, we
    will enable a future President to make tradeoffs among various options.
        The challenge of defeating an adversary's mobile ballistic missiles
    illustrates these tradeoffs. At present, using existing C\3\I systems
    and conventional capabilities, it is difficult to precisely locate
    mobile launchers and deliver weapons on each target in a timely manner.
    Should a potential adversary arm such missiles with weapons of mass
    destruction and launch, or threaten to launch them at the United States
    or a major ally, it would obviously be urgent that we defeat the
    threat. In theory, high-yield nuclear weapons could destroy mobile
    missile launchers in a barrage attack, but such an attack would pose
    problems of its own. The Nuclear Posture Review seeks to develop
    capabilities that will give the United States the ability to target and
    defeat such weapons without resort to nuclear weapons. For example,
    improvements in intelligence capabilities, coupled with advanced,
    conventional weapons that continually cover a threat region for an
    extended time and respond quickly to targeting needs could be more
    effective and desirable for this important mission. Similarly,
    ballistic missile defense could help mitigate the threat posed by
    mobile ballistic missile launchers.

                     AGREEMENT WITH THE RUSSIAN FEDERATION

        18. Senator Thurmond. Secretary Feith, I understand that you
    believe the adjustments to the nuclear stockpile should be done without
    negotiations since they would impede or derail the significant
    reductions that both the United States and Russia want. Does the
    administration propose to sign an agreement on the reductions? If not,
    why not? If we sign no agreement, what is the legal standing of any
    understanding we have with Russia?
        Secretary Feith. The United States is working toward an agreement
    on reductions of strategic nuclear weapons with Russia because the
    Russian government has made it a high priority. We will make the
    announced reductions in our operationally deployed strategic weapons
    whether or not there is an agreement.
        Since the Russian government desires a signed document, the U.S. is
    willing to consider a range of agreements to promote transparency,
    predictability, and flexibility.
        We are discussing a package of agreements with the Russians, some
    of which may be legally binding, some of which may be politically
    binding, and some of which may be statements of intent, with
    transparency. Substance will determine the final form of the agreement.

                           RUSSIAN NUCLEAR REDUCTIONS

        19. Senator Thurmond. Secretary Feith, although the United States
    has announced that it will reduce the number of its operationally-
    deployed nuclear warheads, I am not certain to what degree Russia has
    announced that it will reduce its nuclear stockpile. Could you please
    provide the details on Russia's nuclear reductions?
        Secretary Feith. Unlike the United States, Russia maintains its
    stockpile by continually renewing it, i.e., Russia manufactures new
    nuclear weapons and dismantles old ones on an ongoing basis. President
    Putin has stated that Russia is willing to conditionally reduce the
    number of its strategic warheads to 1,500 to 2,200 from its
    approximately 6,000 accountable warheads under START I.
        The Intelligence Community estimates that deployed Russian
    strategic nuclear weapons will fall to fewer than 2,000 warheads by
    2012, irrespective of an arms control agreement.

                        OPERATIONAL VS RESPONSIVE FORCE

        20. Senator Thurmond. Admiral Ellis, in Secretary Feith's prepared
    statement, he describes the responsive force as an augmentation of the
    operationally deployed force, largely through the loading of additional
    warheads on bombers and ballistic missiles. Does the responsive force
    include additional force structure or is it solely additional warheads?
        Admiral Ellis. The responsive force does not include additional
    force structure. The responsive force is comprised of warheads that are
    retained to increase weapon loading on existing strategic platforms.

                         INVESTMENT IN STRATEGIC FORCES

        21. Senator Thurmond. Admiral Ellis, the NPR calls for renewed
    investment in existing and future operating forces. General Myers has
    already highlighted the need for improved command and control
    capabilities. What specific improvements in the operational force are
    your highest priorities?
        Admiral Ellis. My highest priorities for my operating forces are
    full funding of Trident II and Minuteman III life extension, E-4B and
    E-6B command and control aircraft modernization and sustainment,
    modernization of our bomber communication suites, and the supporting
    strategic cryptographic systems. Our current air, land, and sea based
    strike assets will remain the backbone of our strategic capability for
    at least the next 20 years. Many of these assets are scheduled to
    remain in service well past their original design life and require
    robust sustainment and modernization programs in order to remain viable
    until planned replacement dates.
        The Nuclear Posture Review calls for development of a broad
    spectrum of new capabilities. We must invest in new strike, command and
    control, and intelligence capabilities leading to the full dimensional
    defeat of the rapidly proliferating hard and deeply buried and mobile
    target sets. We must transform our strategic war planning system into a
    system that retains the rigors and expertise developed over the last 50
    years, yet employs modern computing techniques and streamlined
    processes to significantly improve our planning capability. This effort
    is a critical element in enabling the required rapid, flexible crisis
    response that integrates nuclear, conventional, and non-kinetic weapons
    into our war plans.

                             FACILITY IMPROVEMENTS

        22. Senator Thurmond. General Gordon, the NPR calls for improving
    the nuclear infrastructure to increase confidence in deployed forces,
    eliminating unneeded weapons and mitigating the risk of technological
    surprise. How does this goal translate into funding requirements for
    the Department of Energy?
        General Gordon. Nuclear weapons will remain a vital part of the
    national security strategy for the foreseeable future. Indeed, the R&D
    and production infrastructure needed to develop, build, and maintain
    nuclear offensive forces is a key element of the ``new triad''
    established under the NPR. As long as we rely on nuclear weapons, we
    will require this infrastructure, and talented and skilled personnel,
    both to ensure the safety and reliability of the enduring stockpile and
    to permit us to dismantle safely weapons no longer needed.
        Substantial work must be completed soon to restore capabilities and
    capacities in time to begin refurbishment work on key warheads later
    this decade. Among other things, there is a backlog of $800 million in
    deferred maintenance of facilities, and a need for about $500 million
    per year over the next 10 years in additional investment to
    recapitalize the production complex. This investment does not include
    new construction projects (e.g., a modern pit facility) to ensure
    sufficient capacity and capability for future-decade stockpile
    refurbishments.
        The condition of the nuclear weapons facilities and infrastructure
    will, as the backlog of required maintenance increases each year,
    present increased risk to the stockpile stewardship program. The
    majority of the facilities in the infrastructure are 40 years old; some
    facilities are unavailable for use. Many facilities were not designed
    to meet today's safety, security, and environmental standards. Indeed,
    physical and cyber security requirements continue to increase
    particularly in light of the elevated threat reflected in the events of
    September 11.
        Planned renovations of existing facilities will assure a capacity
    that will be sufficient to meet the anticipated NPR workload with a
    reserve capacity that would be available to fix unanticipated problems
    in the stockpile, respond to new warhead production requirements, or
    handle a potentially increased dismantlement workload (resulting from
    force reductions) without disrupting planned refurbishments.

                              DISPOSAL OF WEAPONS

        23. Senator Thurmond. General Gordon, although we are currently
    dismantling numerous nuclear warheads, the further reductions called
    for in the NPR present the potential for increased dismantling. How do
    you plan to dispose of the additional nuclear material that will result
    from the dismantling?
        General Gordon. The President announced in November 2001 that the
    United States would reduce its operationally-deployed strategic nuclear
    warheads to between 1,700 and 2,200 over the next 10 years. Some of the
    warheads removed from operational status will become part of the
    responsive force. Some will no doubt be retired and dismantled, but
    specific types and quantities are yet to be determined. Among other
    things, the NPR reaffirmed the earlier decision to retire the W62
    warhead by 2009. All nuclear material resulting from disassemblies is,
    and will continue to be, considered for appropriate disposition, which
    may include future reuse or disposal.

                                NUCLEAR TESTING

        24. Senator Thurmond. General Gordon, since the NPR proposes that
    the United States retain most nuclear weapons, it is critical that
    these weapons are reliable and safe. Does it also become critical that
    we are prepared to conduct nuclear testing?
        General Gordon. Responsible stewardship requires that we prepare
    for the possibility of an issue arising in a warhead critical to the
    U.S. nuclear deterrent that will require testing to re-establish our
    confidence in the safety and reliability of the warhead. We take very
    seriously the Presidential requirement for an annual assessment of the
    safety and reliability of the nuclear stockpile, and, at this time have
    no information that challenges our confidence in the stockpile such
    that we would recommend a nuclear test. At the same time, the stockpile
    is aging beyond its original design life, and refurbishments and
    modernizations as part of the life extension program are underway (W87)
    or planned (B61, W80, W76) and will help to ensure that these systems
    will remain safe, secure, and reliable for an additional 20 to 30
    years.

        25. Senator Thurmond. General Gordon, what is the current state of
    our nuclear testing facilities and what will it take to reduce the
    current 2 to 3 years required to begin testing once a decision to test
    is made?
        General Gordon. It has been about 10 years since the U.S. has
    conducted an underground test. While a number of key capabilities
    required for test readiness have been maintained through ongoing
    stockpile stewardship activities, such as the subcritical experiments
    program, other capabilities would have to be reconstituted. To enhance
    our test readiness posture, we must act now to ensure adequate staffing
    levels and training in critical skill areas, make technical
    preparations in areas such as diagnostics, maintain required facilities
    and infrastructure, and conduct additional subcritical experiments and
    test-related exercises.
        The NNSA is currently engaged in a study that I commissioned to
    determine what steps must be taken to maintain our present capability
    into the future and what would be required to achieve and sustain a
    shorter timeframe to conduct a test. This study will be completed by 31
    May 2002.

                         MODERN PIT PRODUCTION FACILITY

        26. Senator Thurmond. General Gordon, in your testimony before the
    committee you stated, ``The Los Alamos production capacity will be
    insufficient to meet future requirements for pits. As a result of the
    NPR, we seek to accelerate planning and initial design work to
    establish an MPF. Relevant activities about to begin include
    preliminary design, associated technology development, and initiation
    of the National Environmental Policy Act process.'' How do you plan to
    accelerate the design of the Modern Pit Facility when you have again
    deferred conceptual design?
        General Gordon. Conceptual design has not been deferred again.
    During fiscal year 2001, and continuing into fiscal year 2002, the NNSA
    developed the documentation required to obtain formal approval of
    Critical Decision 0 (CD-0), Mission Need for an MPF. CD-0 approval is
    expected in April 2002. Once CD-0 is approved conceptual design of an
    MPF will begin immediately with a projected completion in fiscal year
    2006. The NNSA will follow the baseline approved by the Energy Systems
    Acquisition Advisory Board and will seek to accelerate completion of
    the conceptual design consistent with future year budgets.
                                     ______

                    Questions Submitted by Senator Bob Smith

                        RUSSIAN TACTICAL NUCLEAR WEAPONS

        27. Senator Smith. Secretary Feith, in 1991 and 1992, Presidents
    George H.W. Bush, Mikhail Gorbachev, and Boris Yeltsin announced their
    intention to unilaterally reduce U.S. and Russian tactical nuclear
    weapons arsenals by both reducing the warhead stockpiles and by
    eliminating entire classes of weapons. The current U.S. arsenal of
    tactical nuclear weapons (TNWs) has been reduced to around 1,670
    warheads, and there are few concerns about the safety of storage
    conditions of these weapons. There have been reductions in the Russian
    force, but significant uncertainty remains about the size and safety of
    the Russian TNW arsenal, estimates of which range from anywhere between
    3,500 to more than 18,000. In 1997, the United States outlined its
    concerns about the security of Russian tactical nuclear weapons and
    raised the issue in tandem with bilateral efforts to reduce strategic
    forces in the context of a START III framework.
        More recently, NATO has expressed its concerns about the large
    number of Russian ``tactical nuclear weapons of all types'' and has
    called on Russia ``to bring to finish the reduction in these forces
    announced in the 1991-1992, and to further review tactical nuclear
    weapons.'' Aside from vague references in speeches, however, little of
    substance has been done by Russia to clarify what it has done to
    address the concerns about its tactical nuclear weapons arsenal.
        What is the United States doing to attain more clarity from Moscow
    on the status of Russian follow-through on the 1991 and 1992
    Presidential Nuclear Initiatives on tactical nuclear weapons, and the
    status of the current stockpile of the Russian tactical nuclear
    arsenal?
        Secretary Feith. There are no recent official U.S.-Russian
    exchanges on the status of the Presidential Nuclear Initiatives (PNIs).
    In the early to mid 1990s, the Russian Ministry of Defense sent
    periodic progress reports to DOD about the elimination of tactical
    weapons returned to Russia from other former Soviet republics. However,
    these proffered Russian status reports ceased about 1995. According to
    the Russian PNIs, the tactical warhead eliminations pledged by
    President Yeltsin were to be completed by the end of 2000. In various
    venues, including military writings, the Russians stated in 2000 and
    2001 that, except for the elimination of ground forces' nuclear
    weapons, their PNIs have been completed.
        Moscow has never declared the number of nuclear warheads in the
    Russian stockpile. While bilateral declarations of stockpiles could
    become part of some future agreement, Russia has argued that non-
    strategic weapons are outside the scope of START. At this time, Russia
    continues to deploy a considerable number of tactical nuclear weapons.

        28. Senator Smith. Secretary Feith, what is the United States doing
    to ensure the safety and the reduction of Russian tactical nuclear
    weapons?
        Secretary Feith. The Department of Defense, through the CTR
    program, is working closely with the Russian Federation to prevent
    nuclear proliferation by improving the safety and security of both
    strategic and tactical nuclear weapons. Under applicable international
    agreements, we are working with the Russian Ministry of Defense to
    enhance the security of nuclear weapons storage sites that hold both
    tactical and strategic warheads. We also are working together to
    improve the security of warheads during transportation.
        In recent years, we have provided ``quick fix fencing'' and other
    equipment for storage site improvements, inventory control systems,
    personnel reliability and safety equipment, emergency response
    equipment, and guard force equipment. We also conduct railcar
    maintenance, and your assistance has helped to reduce MOD's response
    and recovery times to respond to nuclear accidents or incidents. We are
    encouraged by the reduction and consolidation of tactical and strategic
    weapons in Russia by transporting warheads to consolidation and
    dismantlement facilities. Since the nuclear weapons transportation
    security project's inception in January 2000, shipments of nuclear
    warheads to such facilities have increased to seven or eight a month.

           RUSSIAN TACTICAL NUCLEAR WEAPONS AND THE TERRORIST THREAT

        29. Senator Smith. Secretary Feith, the threat of a terrorist
    attack using a nuclear weapon has been more urgent as organized
    terrorism increases. Russia's stored tactical nuclear weapons are
    potentially vulnerable to terrorists or unfriendly nations that will
    buy or steal them. Compared to the United States, Russia lacks
    stringent, centrally coordinated procedures for ensuring the safety of
    its tactical nuclear weapons. Russia has an unspecified number of these
    weapons, which could pose a proliferation and terrorist threat.
    Tactical nuclear weapons are smaller and more portable than strategic
    nuclear weapons and some models could be used by terrorists without the
    authority of centralized command and control oversight mechanisms. What
    steps are currently being taken to ensure Russian TNWs are secure and
    will not fall into the hands of terrorists?
        Secretary Feith. The Department of Defense, through the CTR
    program, is working closely with the Russian Federation under
    applicable international agreements to ensure that tactical nuclear
    weapons are transported to dismantlement facilities or to central
    storage sites where they can be consolidated and protected along with
    strategic warheads. By taking these steps, we are reducing the
    likelihood that tactical nuclear weapons could fall into the hands of
    terrorists. Since the nuclear weapons transportation security project's
    inception in January 2000, shipments of nuclear warheads to
    consolidation and dismantlement facilities have increased to seven or
    eight a month.

        30. Senator Smith. Secretary Feith, now that the United States has
    a better relationship with Russia and both nations are cooperating to
    prevent terrorism, what is being done to address specifically the
    proliferation and terrorist dangers associated with tactical nuclear
    weapons?
        Secretary Feith. The Department of Defense, through the CTR
    program, is addressing the proliferation and terrorist dangers
    associated with both tactical and strategic warheads while in storage
    and during transportation. Under applicable international agreements,
    the CTR program addresses a broad range of safety and security measures
    including physical security, inventory control, personnel reliability
    and safety, and guard force equipment and training. Progress has been
    hindered, however, by the fact that the Russian Federation will not
    permit DOD to access its nuclear weapons storage areas in order for DOD
    to provide installation and implementation support. Although DOD and
    the Russian MOD are working on an agreement that would allow DOD site
    access to provide assistance in this important area, Russian law and
    regulations currently still prohibit such access.

        31. Senator Smith. Secretary Feith, there has been no specific
    mention of tactical weapons in the context of President Bush's proposed
    strategic nuclear reductions, nor have they been noted in any public
    announcements concerning the recent Nuclear Posture Review. Why have
    tactical nuclear weapons not been mentioned?
        Secretary Feith. The Nuclear Posture Review is quite specific as to
    the role of tactical nuclear weapons. The application of the
    capabilities-based approach to U.S. nuclear forces has resulted in a
    decision to transform the existing triad of U.S. strategic nuclear
    forces into a new triad composed of a diverse portfolio of systems. The
    ``strike capabilities'' element of the new triad is composed of both
    nuclear and non-nuclear weapons systems. The deployed nuclear strike
    capabilities include the three legs of the existing strategic triad and
    theater-based, nuclear capable dual-role aircraft. Nuclear-armed sea-
    launched cruise missiles, removed from ships and submarines under the
    1991 Presidential Nuclear Initiatives, are maintained in a reserve
    status.

        32. Senator Smith. Secretary Feith, to what extent are tactical
    nuclear weapons addressed as part of United States-funded CTR and
    nonproliferation programs with Russia?
        Secretary Feith. The Department of Defense, through the CTR
    program, addresses both the safety and security of Russian tactical and
    strategic nuclear weapons through specific projects. For example, under
    applicable international agreements, we provide assistance to transport
    both tactical and strategic warheads to dismantlement facilities and
    consolidated central storage sites. Our physical security enhancements
    project addresses nuclear weapons storage sites in Russia that contain
    strategic and tactical warheads. The United States encourages Russian
    compliance with the 1991-1992 Presidential Nuclear Initiatives by
    transporting tactical warheads to dismantlement sites or consolidated
    storage sites.
        Our remaining nuclear weapons safety and security projects support
    all types of nuclear weapons and do not distinguish between tactical
    and strategic systems. These projects include inventory control,
    personnel reliability and safety, guard force equipment and training,
    nuclear weapon storage site support equipment, physical security
    enhancements, railcar maintenance, and transportation safety including
    emergency response equipment.
        Progress has been hindered, however, by the fact that the Russian
    Federation will not permit DOD to access its nuclear weapons storage
    areas in order for DOD to provide installation and implementation
    support. Although DOD and the Russian MOD are working on an agreement
    that would allow DOD site access to provide assistance in this
    important area, Russian law and regulations currently still prohibit
    such access.
                                     ______

                   Questions Submitted by Senator Jim Bunning

                    NATIONAL LABS AND PERSONNEL RECRUITMENT

        33. Senator Bunning. General Gordon, with an aging workforce at our
    national nuclear labs, what are we doing to put in place a program to
    recruit young, highly qualified personnel that will protect the legacy
    of our nuclear programs and transform it for the future security of our
    Nation?
        General Gordon. The report of March 1999 by the congressionally
    chartered Commission on Maintaining United States Nuclear Weapons
    Expertise (a.k.a. the Chiles Commission) addressed this subject and
    developed findings and recommendations aimed at the recruitment and
    retention of scientific, engineering, and technical personnel needed
    over the long term to maintain a safe and reliable nuclear weapons
    stockpile without underground nuclear testing. In response, NNSA
    established several initiatives to ensure effective critical skills
    programs at each of the eight facilities and management contractors in
    the weapons complex. Central to each one was a focus on more effective
    contractor workforce planning that assesses current and projected
    mission needs against the existing workforce to identify gaps in
    critical skills, and develops strategies to recruit and develop
    employees to minimize and, if possible, to eliminate those gaps. We
    look to our contractors to develop and implement those plans, and it's
    our job to provide guidance and oversight on the results.
        For each of our eight contractors, NNSA uses the annual performance
    evaluation plan in the contract to ensure that each contractor focuses
    on maintenance of critical skills and is held accountable for the
    success of their efforts. We also established a set of performance
    metrics with our field sites and contractors that we used to assess
    overall performance in the complex semi-annually.
        For the two nuclear design labs managed by the University of
    California, Los Alamos and Lawrence Livermore National Laboratories, we
    established a 2-year task in the recently revised contract specifically
    focused on critical skills. We are now monitoring results against the
    plans that the laboratories developed last year.
        We are convinced that, with the right amount of management
    attention, our contractors will be able to maintain needed critical
    skills and develop a new generation of nuclear weapons stewards. We and
    our contractors view this as an overarching requirement for current and
    future mission success.

            PRODUCTION CAPABILITY AND A CAPABILITIES-BASED STRATEGY

        34. Senator Bunning. Secretary Feith, currently, it appears that we
    are the only nuclear power without the ability to produce nuclear
    weapons. In fact, Russia continues to produce nuclear warheads today.
    This being the case, explain the shift in our nuclear strategy from a
    threat-based strategy to a capability-based strategy when the United
    States has disposed of its own nuclear production capability?
        Secretary Feith. The Nuclear Posture Review recognizes that the
    defense infrastructure of the United States, including our nuclear
    infrastructure, has atrophied. One of the key elements of the new triad
    that resulted from a shift from a threat-based approach to a
    capabilities-based approach is the need to improve our R&D and
    industrial infrastructure. This includes the research facilities,
    manufacturing capacity, and skilled personnel needed to produce,
    sustain, and modernize the elements of the new triad as well as the
    supporting intelligence and command and control capabilities.
    Reestablishing a responsive infrastructure that can augment U.S.
    military capabilities through development of new systems or accelerated
    production of existing capabilities in a timely manner provides
    strategic depth. In particular, a modern, responsive nuclear weapons
    sector of the infrastructure is indispensable, especially as the size
    of the operationally deployed nuclear force is reduced.

                      NATIONAL MISSILE DEFENSE AND THE NPR

        35. Senator Bunning. Secretary Feith and Admiral Ellis, with the
    United States' declining strategic nuclear force structure and
    infrastructure, and the potential for a multilateral nuclear threat,
    please further explain the significance of developing national missile
    defense in order to maintain our dominance as a nuclear superpower.
        Secretary Feith. We are developing missile defenses in recognition
    that offensive capabilities alone may not deter aggression in the new
    security environment of the 21st century. Missile defenses also provide
    new capabilities for managing crises when faced with coercive threats
    to U.S. or coalition partners, thereby assuring allies and friends of
    our ability to maintain our commitments. Finally, should deterrence
    fail, missile defenses could protect the United States, our deployed
    forces, our allies, and friends against attack. Missile defenses are
    not being developed to create or maintain strategic dominance, but are
    essential in providing for U.S. national security.
        Admiral Ellis. The Nuclear Posture Review envisions a re-shaping of
    our strategic capabilities, to include passive as well as active
    defenses, non-nuclear and even non-kinetic as well as nuclear strike
    capabilities, a responsive infrastructure, and improved C\4\ISR that
    enables each of these elements. We will field the capability to respond
    promptly, decisively, and proportionately to any threat. Our ability to
    respond is not tied to any one element, but rather to the unique
    capabilities of each element and the synergies achieved by their
    interaction. Fielding a missile defense will be one critical element of
    our new strategic capabilities.

        36. Senator Bunning. Secretary Feith and Admiral Ellis, without
    NMD, and without a capability to produce nuclear weapons quickly and
    effectively, what would be the strategic choices available to the
    United States in comparison with its peer competitors?
        Secretary Feith. The Nuclear Posture Review concluded that missile
    defenses bring specific capabilities required to meet the objectives
    laid out in the QDR. Specifically, missile defenses would:

             Assure allies and friends that threats of ballistic
            missile attack against the territory of the U.S. or its forces
            will not deter the U.S. from fulfilling its security
            commitments;
             Dissuade potential adversaries from investing in or
            developing ballistic missiles by devaluing their utility as
            instruments of coercion or warfighting;
             Deter ballistic missile attacks by complicating an
            adversary's attacks and reducing his probability of success;
            and
             Defend the U.S. population, its forces, and friends/
            allies should deterrence fail--providing political and military
            commanders a wider range of options for countering attacks.

        The Nuclear Posture Review also found that nuclear weapons continue
    to play a critical role by providing credible military options to deter
    a wide range of threats. Thus, a modern, responsive nuclear weapons
    infrastructure is indispensable, especially as operationally deployed
    forces are reduced.
        Failure to make the investments necessary to construct the new
    triad will call into question the ability of the United States to
    further reduce its dependence on nuclear weapons and to provide a more
    secure America in the face of determined adversaries that may not be
    deterred by our current offensive capabilities alone.
        Admiral Ellis. The Nuclear Posture Review envisions a re-shaping of
    our strategic capabilities, to include passive as well as active
    defenses, non-nuclear, and even non-kinetic as well as nuclear strike
    capabilities, a responsive infrastructure, and improved C\4\ISR that
    enables each of these elements. We will field the capability to respond
    promptly, decisively, and proportionately to any threat. Our ability to
    respond is not tied to any one element, but rather to the unique
    capabilities of each of the elements and the synergies achieved by
    their interaction. This synergy allows us to reduce our reliance on
    nuclear weapons and meet the President's goal of 1,700-2,200
    operationally deployed weapons by 2012. Without a demonstrated missile
    defense capability, or a responsive infrastructure, we may not be able
    to meet the President's goal.

        37. Senator Bunning. Secretary Feith and Admiral Ellis, can the
    United States afford to shrink the inventory of operationally-deployed
    warheads without a national missile defense?
        Secretary Feith. Missile defenses have an essential role in the new
    triad. The Nuclear Posture Review sets forth a new deterrent strategy
    whereby U.S. operationally deployed strategic nuclear force levels and
    future missile defense forces are not sized to Russian offensive or
    defensive force levels. Instead, we are pursuing a capabilities-based
    approach that is not country-specific, but which is designed to address
    the uncertainties of the future.
        Admiral Ellis. The Nuclear Posture Review envisions a re-shaping of
    our strategic capabilities, to include passive as well as active
    defenses, non-nuclear and even non-kinetic as well as nuclear strike
    capabilities, a responsive infrastructure and improved C\4\ISR that
    enables each of these elements. We will field the capability to respond
    promptly, decisively, and proportionately to any threat. Our ability to
    respond is not tied to any one element, but rather to the unique
    capabilities of each of the elements and the synergies achieved by
    their interaction. This synergy allows us to reduce our reliance on
    nuclear weapons and meet the President's goal of 1,700-2,200
    operationally deployed weapons by 2012. Without a demonstrated missile
    defense capability, we may not be able to meet the President's goal.

        38. Senator Bunning. Secretary Feith, without a nuclear weapons
    production capability and a national missile defense, will the United
    States be able to maintain strategic nuclear flexibility?
        Secretary Feith. The operationally deployed forces are sized to
    provide the capabilities required to meet U.S. defense goals in the
    context of immediate and unexpected contingencies, i.e., a sufficient
    number available on short notice to counter known or unexpected
    threats. Nevertheless, greater flexibility is needed with respect to
    nuclear forces and planning than was the case during the Cold War. U.S.
    forces must take into account an increasingly complex security
    environment in which surprise is a dominant strategic consideration.
        In this context, the Nuclear Posture Review found that
    fundamentally, a diversified portfolio of offensive and defensive
    forces--combined with a responsive infrastructure and enhanced command,
    control, communications, intelligence, and adaptive planning
    capabilities--provides the U.S. with more flexibility than the Cold War
    triad. Against adversaries with limited ballistic missile capabilities,
    defenses can provide protection if deterrence based on offensive strike
    capabilities fails. Defenses that intercept ballistic missiles,
    particularly missiles fired from mobile launchers, can ease the task of
    offensive strike capabilities. Similarly, offensive strike capabilities
    that destroy enemy ballistic missile forces can ease the task of active
    and passive defenses.
        The Nuclear Posture Review also found that nuclear weapons continue
    to play a critical role by providing credible military options to deter
    a wide range of threats. Thus, a modern, responsive nuclear weapons
    infrastructure is indispensable, especially as operationally deployed
    forces are reduced.

              THE STOCKPILE STEWARDSHIP PROGRAM: DATA RELIABILITY

        39. Senator Bunning. General Gordon, since the SSP is based on data
    from actual nuclear weapons tests, and since we have not had an actual
    underground nuclear test for some time, how certain are you as to the
    reliability and certainty of the data generated by the SSP?
        General Gordon. Over the last several years, the Stockpile
    Stewardship Program has greatly increased our understanding of
    fundamental physical principals and properties of nuclear weapons, far
    beyond what we had during nuclear testing. Subcritical experiments and
    gas gun experiments using plutonium have improved our knowledge of
    issues that affect the performance of a primary in a nuclear weapon.
    High energy density experiments on NOVA, Omega, and the Sandia Z-
    machine are increasing our knowledge of properties and processes under
    conditions relevant to the performance of the secondary stage of a
    nuclear weapon. When NlF becomes operational in 2004 we will begin
    experiments for the stewardship program that will lead ultimately to a
    greater understanding of the pressures, temperatures, and densities
    that affect the performance of secondaries. The three-dimensional
    simulation capabilities being developing in the ASCI program provide
    far more powerful predictive and analytical tools than we have ever had
    in the past. So in a certain sense, the data we are getting now is
    better and better analyzed than any we had during the testing era.
        Stockpile Stewardship is based on using this improved knowledge and
    these better capabilities to analyze the effects on performance and
    reliability of changes in the stockpile as it ages or as we replace
    components. The goal will be to manage those changes so that we remain
    confident in the stockpile with the tools we have in hand or will
    develop.

        40. Senator Bunning. General Gordon, do you foresee a need to test
    in the future, based on the available data in the SSP?
        General Gordon. Senator, obviously we cannot predict the future;
    however, over the last 6 years both the Secretaries of Energy and
    Defense have annually reported to the President that the stockpile is
    safe, secure, and reliable, and that there is no need to conduct a
    nuclear test. At the same time, the stockpile is aging beyond its
    original design life, refurbishments and modernizations, as part of the
    Life Extension Program, are underway (W87) or planned (B61, W80, W76)
    that will help to ensure that these systems will remain safe, secure,
    and reliable for an additional 20-30 years. Responsible stewardship
    requires that we maintain a prudent capability to resume underground
    testing if an issue rises that undermines our confidence in a weapon
    system in the stockpile.

        [Whereupon, at 12:33 p.m., the committee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2003

                                  ----------

                             TUESDAY, MARCH 5, 2002

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

        UNIFIED AND REGIONAL COMMANDERS ON THEIR MILITARY STRATEGY AND
                            OPERATIONAL REQUIREMENTS

        The committee met, pursuant to notice, at 9:39 a.m. in room
    SH-216, Hart Senate Office Building, Senator Carl Levin
    (chairman) presiding.
        Committee members present: Senators Levin, Reed, Akaka,
    Bill Nelson, E. Benjamin Nelson, Warner, Inhofe, Roberts,
    Allard, Sessions, and Collins.
        Committee staff members present: David S. Lyles, staff
    director; and Christine E. Cowart, chief clerk.
        Majority staff members present: Richard D. DeBobes,
    counsel; Evelyn N. Farkas, professional staff member; Richard
    W. Fieldhouse, professional staff member; Jeremy L. Hekhuis,
    professional staff member; Maren Leed, professional staff
    member; Gerald J. Leeling, counsel; and Michael J. McCord,
    professional staff member.
        Minority staff members present: Judith A. Ansley,
    Republican staff director; Edward H. Edens IV, professional
    staff member; Gary M. Hall, professional staff member; George
    W. Lauffer, professional staff member; Patricia L. Lewis,
    professional staff member; Thomas L. MacKenzie, professional
    staff member; Ann M. Mittermeyer, minority counsel; Scott W.
    Stucky, minority counsel; and Richard F. Walsh, minority
    counsel.
        Staff assistants present: Daniel K. Goldsmith, Thomas C.
    Moore, and Nicholas W. West.
        Committee members' assistants present: Jason Matthews and
    Jeffrey S. Wiener, assistants to Senator Landrieu; Elizabeth
    King, assistant to Senator Reed; Davelyn Noelani Kalipi,
    assistant to Senator Akaka; William K. Sutey, assistant to
    Senator Bill Nelson; Eric Pierce, assistant to Senator Ben
    Nelson; Benjamin L. Cassidy, assistant to Senator Warner; Dan
    Twining, assistant to Senator McCain; John A. Bonsell,
    assistant to Senator Inhofe; George M. Bernier III, assistant
    to Senator Santorum; Robert Alan McCurry, assistant to Senator
    Roberts; Mike Bennett, assistant to Senator Allard; Arch
    Galloway II, assistant to Senator Sessions; Kristine Fauser,
    assistant to Senator Collins; and David Young and Derek Maurer,
    assistants to Senator Bunning.

           OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

        Chairman Levin. Good morning, everybody. The committee
    meets today to receive testimony from three of our regional
    combatant commanders. All of our witnesses are well known to
    this committee. Admiral Dennis Blair is the Commander in Chief
    of the U.S. Pacific Command. General Thomas Schwartz is the
    Commander in Chief of the United Nations Command-Combined
    Forces Command and U.S. Forces Korea. Major General Gary Speer
    is Acting Commander in Chief of the U.S. Southern Command.
        Admiral Blair and General Schwartz are before the committee
    for the last time in their current assignments. I just want to
    thank them on behalf of the committee for their tremendous
    careers and commitment to the well-being of this Nation.
        Our witnesses today command U.S. military forces stationed
    from the DMZ and the Korean peninsula to the farthest reaches
    of the Pacific Ocean, to the Caribbean and the South American
    continent. I would ask each of you to convey the appreciation
    of this committee to the men and women under your command for
    their professionalism, their dedication, and their service.
        We have a number of important issues to discuss with our
    witnesses this morning. Among them are the following: Admiral
    Blair commands the Special Operations Forces recently sent to
    the Philippines in response to the request from Philippine
    President Arroyo. The mission of these forces is to help train
    the Philippine Army to more effectively fight terrorists and
    insurgents. The terms of reference signed by U.S. Pacific
    Command and the Philippine Army representatives state that the
    training exercise is targeted against the Abu Sayyaf terrorist
    group in the southern Philippines. But there are other
    terrorist groups with bases located close to those of the Abu
    Sayyaf. At least one of them, the Moro Islamic Liberation
    Front, has indicated that they would take military action if
    U.S. troops encroached on their territory.
        I am concerned that our operations in the Philippines could
    unintentionally expand beyond training the Philippine Army to
    fighting the Abu Sayyaf terrorist group. I understand that U.S.
    forces are providing training at the battalion level only, but
    those headquarters are located out in the jungles. Could the
    mere presence of our troops on the island of Basilan make them
    the target of attack not just by the Abu Sayyaf, but by other
    groups?
        How are we operationally and tactically limiting our
    involvement to training the Philippine Army rather than
    becoming caught up in the actual fighting between the Abu
    Sayyaf and the Philippine Army? How are we ensuring that our
    involvement will remain limited to the Abu Sayyaf threat? Is
    the 6-month duration for this training mission realistic?
        General Schwartz commands our armed forces in South Korea.
    We all want to reduce North Korea's threatening military
    posture. I am concerned that the lack of negotiations between
    the U.S. and North Korea and between North and South Korea is
    turning back the clock on some of the diplomatic advances that
    have been made over the last several years.
        I am concerned by recent suggestions that the Agreed
    Framework is in jeopardy and I am interested in hearing General
    Schwartz's assessment of whether the Agreed Framework
    contributes to our national security and whether it is still
    viable.
        In the Southern Command area, we need to discuss, among
    other issues, the implications of President Pastrana's recent
    decision to end the safe zone of the Revolutionary Armed Forces
    of Colombia (FARC) on the stability of the Colombian
    government; whether the existing limitations on the U.S.-
    trained counterdrug brigade should be maintained; and whether
    future U.S. assistance to the Colombian military should be
    geared toward counter-insurgency capabilities.
        General Speer has also recently taken on the mission of
    running the camp for detainees at the U.S. Naval station at
    Guantanamo Bay, Cuba.
        So there is a great deal of ground to cover this morning.
    Again, I am glad that we have these experts with us. Before we
    turn to them, let me recognize Senator Warner.

                    STATEMENT OF SENATOR JOHN WARNER

        Senator Warner. Thank you, Mr. Chairman. Your opening
    statement embraces many of the sentiments I have and therefore
    I will ask that my statement to be placed into the record.
        Chairman Levin. Thank you. It will be made part of the
    record.
        [The prepared statement of Senator Warner follows:]

                   Prepared Statement by Senator John Warner

        Thank you, Mr. Chairman. This hearing, one in a series of annual
    hearings this committee conducts to hear from our Unified and Regional
    Commanders on their military strategy and operational requirements, is,
    in my view, one of our most important hearings.
        Admiral Blair, General Schwartz, General Speer, you are this
    nation's warfighters--on the front lines, protecting U.S. national
    security interests and presenting the face of American resolve to
    allies, friends and potential adversaries. The committee values your
    unique contributions and perspectives.
        Your input and insight provide us with important information we
    need to make decisions regarding policies and programs that impact each
    of your areas of responsibility (AOR). This is of particular
    significance this year due to the ongoing global war on terrorism and
    this Nation's global responsibilities in which each of you play a
    critical role.
        I want to take a moment to acknowledge both Admiral Dennis Blair
    and General Thomas Schwartz in what may well be their last appearance
    before our committee. Both Admiral Blair and General Schwartz are
    scheduled to retire this May.
        Gentleman, you have served our Nation with the highest level of
    dedication and professionalism. I know what this duty has required of
    you--the long hours, the missed family events, the cancelled plans. I
    want to express my personal thanks to both of you for your selfless
    service to country. We have been fortunate as a Nation to have men such
    as you at the helm--well done.
        Mr. Chairman, I would now like to take just a moment to highlight a
    number of specific concerns I have within each of our witnesses' AORs.
        While China and the Korean Peninsula remain areas of primary
    concern, in the Asia-Pacific region the global war on terrorism has now
    moved to the Philippines with U.S. troops deployed to that nation to
    help the Philippine Government fight terrorist groups. I look forward
    to receiving an update on the status of that important mission.
        Last year, our bilateral relations with China reached a low point
    following the unfortunate EP-3 incident. I am interested in Admiral
    Blair's perspective on the current U.S.-China relationship,
    particularly the current state of U.S.-China military to military
    contacts and China's reaction to the recent visit of President Bush.
    Additionally, I look forward to receiving an update on the situation in
    the Taiwan Strait.
        The continuing stalemate between India and Pakistan remains an
    issue of utmost importance. I am interested in Admiral Blair's
    perspective on this important region, particularly in light of his
    regular interaction with Indian military officials.
        Tensions remain high on the Korean peninsula. While food shortages
    remain at crisis level throughout North Korea, there appears to be no
    letup in North Korea's troop buildup along the DMZ. I look forward to
    hearing General Schwartz's insights on the situation on the Korean
    peninsula following President Bush's recent visit to Seoul and the DMZ.
    I am particularly interested in any change in North Korea's military
    posture since the war on terrorism began last fall, as well as your
    assessment of North Korea's ballistic missile and proliferation
    activities.
        Colombia remains a focus of my concern in SOUTHCOM's AOR,
    especially in light of renewed fighting in that nation. I am interested
    in receiving an update from General Speer on Plan Colombia, including
    what role U.S. military advisors are currently playing in Colombia and
    what, if any, future role you envision our advisors playing. Finally, I
    am interested in the situation at Guantanamo Bay and your assessment of
    how the global war on terrorism is impacting operations in SOUTHCOM's
    AOR.
        We welcome our witnesses this morning and look forward to their
    testimony.

        Senator Warner. I will, however, join you in commending our
    two distinguished service persons, Admiral Blair and General
    Schwartz, for a career that each of you can look back on with
    great pride and share that pride with your family. We often
    think of the officers themselves, but their families, their
    spouses, make a direct contribution.
        Behind you sit some very competent staff, each of whom
    would like to move up into those chairs. I always remember when
    I was in the Navy Department I had two four-stripers; each of
    them became Chief of Naval Operations. That was remarkable in
    view of their assignment with me, for them to overcome that and
    achieve that status.
        Admiral Blair, you sit on a key part of the world,
    including China. I hope you will give us a good, succinct,
    professional, as well as personal, perspective. The tragic
    incident of the EP-3 and the loss of one of their pilots, we
    certainly regret the loss of life. I hope steps have been taken
    to ensure that the level of reocurrence of that incident is
    much lower. I continue to believe that an incident-at-sea type
    of framework similar to what we had with the former Soviet
    Union, and now with Russia, could be adopted with China.
        I know you have some concerns about the Homeland CINCNORTH
    and the various command and control of forces in the Pacific
    region, and I think it is quite proper that perhaps you express
    those concerns here. Several of our colleagues here in the
    Senate have consulted with you on that matter and I would hope
    you would make your views a part of today's record.
        Taiwan continues to be a valued ally. I hope you will cover
    Taiwan and the continuing stalemate between India and Pakistan.
        General Schwartz, we had a very good discussion yesterday
    when you visited my office and I hope you cover those personnel
    issues today. I think you have approached them with a degree of
    realism and pragmatism that needs to be expressed and made a
    part of today's record. Speaking for myself, I do believe the
    committee would join in trying to help that situation. It is
    not just a housing problem. There must be other factors when so
    many fine professionals, officer and enlisted, look upon
    assignment to your post as one where they are forced to make a
    choice between whether they want to stay in uniform and accept
    that assignment or go on to civilian pursuits. We may as well
    meet that issue head-on.
        I share the Chairman's views about the North-South
    relationships on the Korean peninsula. The Chairman and I used
    to work with Dr. Perry. I spoke with him recently, Mr.
    Chairman, and expressed to him my continuing belief that he
    made a very valuable contribution in that area, and that we
    appreciate his willingness to continue to give advice to the
    Senate regarding the situation on the Korean peninsula.
        I hope we can lessen tensions and further reconcile the
    differences between North and South Korea. The starvation in
    the North is, as you said yesterday, at one of its higher
    levels because of the diversion of so much of the world's food
    supply to the Afghan region. So that is important.
        Of course, SOUTHCOM. You are carrying on in the stead of a
    very fine officer who now sees the Senate quite often. General
    Pace is one of the principal briefers for the Secretary of
    Defense to the Senate and the House, and he has handled that
    very commendably.
        Colombia remains a focus and a major concern to this
    committee and we look forward to your comments today. It is not
    an easy situation to address.
        Thank you, Mr. Chairman.
        Chairman Levin. Any other opening remarks before we call on
    our witnesses?
        Senator Roberts.
        Senator Roberts. Thank you, Mr. Chairman.
        These three men oversee the regions of the world that are
    vital to the United States, as has been pointed out by the
    distinguished leadership of our committee. Aside from the
    ongoing war in Afghanistan and the war against terrorism, no
    other issues will be as critical to the future of our Nation as
    those pertaining to the Pacific and the Korean peninsula and
    the American Southern Hemisphere.
        The potential emergence of China as a peer competitor, a
    nuclear India and Pakistan, and the entire Pacific Rim fall
    under the responsibility of the Pacific Command and have a
    great deal of significance to this Nation. The responsibility
    of maintaining the pulse on the events that happen or do not
    happen in regards to Korea, which by the way is one-third of
    the so-called axis of evil, and being prepared to respond to an
    attack from Kim Jong Il and a very capable North Korean force,
    rests with the commander of our Korean forces. Korea is one of
    the very few places where the potential for a major force-on-
    force conflict actually exists and continues to exist.
        Lastly, I want to salute Major General Speer--this is why I
    have chosen to make some opening remarks--who is carrying a
    tremendous load and the responsibility for what I consider to
    be one of the very critical areas to the United States.
        Let me say that, in regards to the Southern Command, I am
    very concerned that we have sort of a benign neglect. I know
    that we have a purpose there, we have a mission there, we are
    trying very hard there, but I regret that the administration
    has to be so slow in replacing General Pace as CINCSOUTH. This
    is absolutely no reflection on Major General Speer's ability.
    If I had two stars on me, I would pin them on you right now so
    you would have the rank I think you deserve, which would be
    commensurate with your duties and the way you are carrying out
    your duties.
        But I must say, Mr. Chairman, from a vital national
    interest perspective there is a great deal to be concerned
    about to our south and the region should be under the
    responsibility of a four-star general. There are 360 million
    people in the Southern Command, living in 31 nations. We have
    made tremendous progress since the eighties. Average age 14,
    suffering from malnutrition. We all know both General Pace and
    General Wilhelm did a great job and, as I have indicated, so
    has General Speer.
        But let me just say that since Kosovo, when we took a lot
    of infrastructure away from the Southern Command and moved from
    Panama, I think we are spread too thin down there. If you look
    at the issues that concern our vital national interest, I am
    still concerned about not-so-benign neglect. Under the Emerging
    Threats and Capabilities Subcommittee and basically under this
    committee, our responsibility is fighting drugs and that is
    where the drugs are coming from, at least to a great degree. We
    have a lot of immigration problems. We talk about immigration
    problems, illegal aliens, in regards to border control, and
    that obviously is in the Southern Command's jurisdiction.
        We talk about trade and the opportunity to feed, as I have
    indicated, 360 million people with our bulk commodities
    exchanged for specialty crops, to raise the standard of living
    there. I do not think we are doing nearly as much as we could.
    We do not even have Presidential trade authority to get those
    bilateral trade agreements working.
        In terms of refugees, I read a column the other day that
    said, in regards to that part of the world, that there are more
    refugees there than there were in Kosovo. That is hard to
    believe, and yet you do not see any press coverage in that
    regard.
        In terms of terrorism, I think there is a growing threat.
    We will ask General Speers about that. In Cuba we have a
    policy, as far as I am concerned, that is very difficult to
    understand. We get 17 percent of our energy supply from that
    part of the world--17 percent. There is a lot of talk about 8
    percent in regards to Saddam Hussein, but in regards to that
    part of the world, if something would go wrong, especially with
    Mr. Chavez down there in Venezuela, it would completely disrupt
    our economy.
        We do not have anybody appointed in regard to the Special
    Operations-Low Intensity Conflict (SOLIC) position. So I am
    urging the administration publicly to pay attention to the
    Southern Command. They are our neighbors. We need a four-star
    and we need a person in charge of SOLIC and we need to at least
    answer some tough questions in regards to where we are headed
    in the Southern Command part of the world.
        Again, Mr. Chairman, these are three very important parts
    of the world. These men are key to protecting our national
    interests in their regions. I salute them and thank them for
    appearing before the committee.
        Chairman Levin. Thank you, Senator Roberts.
        Senator Nelson.
        Senator Ben Nelson. Thank you, Mr. Chairman.
        I would like to welcome these gentlemen here today. On a
    personal note, General Schwartz, I wore my Pammunjon cufflinks
    that I received there a few years ago in recognition of your
    being here today. I want to commend you on the work that you
    are doing on the peninsula.
        General Speer, I certainly second what my friend from the
    south in Kansas said. I think you are doing an outstanding job.
    Of course, the Pacific is where the action clearly is going to
    be in the future, as well as in South America. I am looking
    forward to your comments this morning on these important areas
    and these important issues that face us.
        It seems like most of the news today is centered in another
    part of the world, the Middle East. But certainly we must keep
    in mind what is going on in other parts of the world and not
    become so concentrated that we cannot keep a broad perspective
    of worldwide events and where other challenges and other
    opportunities exist.
        So I appreciate your being here today. I look forward to
    your comments. Thank you.
        Chairman Levin. Thank you, Senator Nelson. We also have a
    statement from Senator Thurmond that will be placed in the
    record.
        [The prepared statement of Senator Thurmond follows:]

                  Prepared Statement by Senator Strom Thurmond

        Thank you, Mr. Chairman:
        Mr. Chairman, I join you in welcoming Admiral Blair, General
    Schwartz, and General Speer. I especially want to recognize General
    Speer, who is the acting Commander in Chief of Southern Command, and
    this is his first appearance before the committee.
        General Speer, I hope the fact that you are appearing with the two
    distinguished officers seated with you at the witness table is a sign
    of the promotions ahead of you.
        Mr. Chairman, the committee is fortunate to have these
    distinguished officers testify on the status of their commands and the
    military strategy to support the Nation's national security objectives
    in their region. Although the national focus is on Southwest Asia and
    the global war on terrorism, the Pacific region, Korea, and South
    America are areas of continued concern. These regions not only are
    areas of continuing instability, but also are areas where the United
    States has vital economic interests. I look forward to our panel's
    testimony and I want to thank them for their leadership,
    professionalism, and concern for the men and women under their command.
        Thank you, Mr. Chairman.

        Chairman Levin. We will go to our witnesses then. Admiral,
    I think we start with you.
        Admiral Blair.

      STATEMENT OF ADM. DENNIS C. BLAIR, USN, COMMANDER IN CHIEF,
                     UNITED STATES PACIFIC COMMAND

        Admiral Blair. Thank you, Mr. Chairman, members of the
    committee. Before I address the specific concerns that you and
    other members raised, sir, if I can make a few general comments
    about the past year in the Pacific, because our men and women
    have been busy this past year and they have been performing
    magnificently.
        The U.S.S. Carl Vinson battle group from San Diego reported
    to Central Command on September 11, 2001. They had prepared for
    other missions. They were soon in the thick of the action in
    Afghanistan and they came up with innovative ways to operate
    and did it just magnificently. A little later the Kitty Hawk
    battle group, the John C. Stennis battle group, patrol
    aircraft, and the Peleliu and Bonhomme-Richard amphibious ready
    groups with the 15th and 13th Marine Expeditionary Units
    reported in for duty, and all of them did just magnificent,
    innovative, and effective things in an entirely new form of
    warfare which we have fought successfully there, which
    continues to this day.
        Air Force bombers deployed across the Pacific to our base
    at Diego Garcia and were soon flying combat sorties. Reserve
    forces came out and augmented our forces in many different
    ways. Our allies, our traditional allies as well as a broad
    range of regional security partners, quickly offered overflight
    rights and the use of facilities to support Operation Enduring
    Freedom. Several of them, including Australia, Canada, New
    Zealand, Japan, and Korea, all provided forces to participate
    in or support the operation.
        Now, our part of the mission in the Pacific in this war on
    terrorism is to eliminate al Qaeda, all of its support and
    sympathizers, and to make it a very inhospitable place for
    those outside the region seeking a new home. The key to this is
    relentless pursuit of both the terrorists and their support and
    unprecedented cooperation with the other countries in the
    region, who all share our goals.
        We have had some initial successes. There have been recent
    arrests in Singapore, Malaysia, and the Philippines. This has
    eliminated both threats to our military forces there and parts
    of the network that supports al Qaeda. We are providing advice,
    training, and material assistance to the Philippine Armed
    Forces as they work to eliminate the Abu Sayyaf Group (ASG),
    which has links to al Qaeda and also has two American
    missionaries hostage. Our joint task force there is the largest
    U.S. operation currently ongoing in the Asia Pacific region,
    and I will address the issues involved in its deployment a
    little later.
        Sadly, even operations to assist are dangerous. A little
    less than 2 weeks ago we lost a helicopter with eight soldiers
    and two airmen aboard.
        So the war on terrorism is very much on our minds in the
    Asia-Pacific region, but our day jobs that were there on the
    10th of September still remain: the Taiwan military balance;
    the EP-3 incident that Senator Warner mentioned; North Korea
    starving its populace while it still continues to sell missiles
    and other weapons around the world; continued tensions between
    neighbors India and Pakistan, which have fought in the past and
    now have nuclear weapons; all these keep me awake at night and
    they keep our forces in the Pacific Command very busy
    maintaining deterrence, staying ready, and through theater
    security cooperation, supporting our interests in each of those
    issues.
        But let me turn a little bit to those specific command
    forces, and it all begins with people. First, I do want to
    express thanks to all the members of this committee and its
    leadership for the support which you have given our men and
    women in recent years. Thank you for the largest pay raise in 2
    decades, which was passed in this year's bill. That continues
    to decrease the pay gap between the armed forces and those in
    the private sector. Our people out there know that you care.
        In this high operating tempo (OPTEMPO) world, we need to
    keep this trend moving and work on other financial stress
    points. As General Schwartz has testified many times so
    eloquently, our people in Korea routinely run hardships for
    which there is inadequate compensation. Elsewhere in the
    Pacific, costs for the things involved in these long moves,
    like quarantine costs for pets and shipment costs for an
    additional car, really add up, especially for junior enlisted
    families when they move overseas. We need to continue viable
    quality education and proper housing for all of our families.
        Also on the personnel side, to fight this war on terrorism
    we have had to bring additional people into the Pacific
    Command. They have come primarily from the Reserve component
    and they have performed important jobs magnificently. As we
    brought reservists into our headquarters, which were operating
    on a wartime basis from September 11, the Deputy Secretary of
    Defense waived the congressionally-mandated fiscal year 2001 10
    percent headquarters manpower reduction. We also brought most
    of these reservists on board in order to increase the security
    of our bases.
        Our estimate is that we need about 5,000 additional billets
    to sustain this war on terrorism indefinitely in the Pacific
    Command region. We need to address tradeoffs between mobilizing
    Reserves, which is how we have handled it in the short-term,
    and the proper mix of active billets, and of course we need to
    continue to buy the equipment that will either decrease the
    numbers of people we need or increase their effectiveness.
        Our ships, planes, and ground equipment performed well in
    the battle in Afghanistan. It was a tribute both to the people
    who maintained them and to those investments in readiness that
    have been made in recent years. But we will require continued
    sustained funding for operation and maintenance, especially of
    the select forces that we have ridden hard and put away wet in
    these operations. I am talking about Navy forces, Marine Corps
    forces, Special Operations Forces, intelligence, surveillance
    and reconnaissance forces, and strategic airlift in particular.
    We need to replenish ammunition stocks which we have used in
    these and other recent campaigns, particularly the precision-
    guided munitions.
        Our theater security cooperation with our allies and
    partner nations has never been more important. It is this
    sustained interaction that both improves their readiness for
    coalition operations so they can join us quickly and
    effectively and also it is the basis for our using their bases
    when we need them to support shared interests. Some of our
    allies and partners, particularly the Philippines, will need
    continued assistance to wage the war on terrorism which is in
    our combined interests.
        Transformation of the Armed Forces has been an important
    interest of this committee and it is important for the Nation.
    In the Pacific Command we have made some significant
    improvements in the speed of formation of our joint task
    forces, the speed of their decisions. We have conducted
    experiments which have given an insight into dramatic gains
    that we can make on the battlefield.
        Every time we find that when we get engineers working
    directly with operators, with financial and other support
    coming from the services, from Washington, we make tremendous
    strides. I urge this committee not to settle for transformation
    that will take decades, but to insist on transformation that is
    measured in months or in small numbers of years, and
    transformation to take care of the real challenges that all of
    us regional Combatant Commanders face every day.
        Lastly, I urge this committee to keep an eye on the
    condition of our bases, camps, and stations. As we pour a lot
    of money into the protection of these bases from the outside,
    they still are crumbling on the inside. These are the
    ``canaries in the coal mine.'' These are the indicators of
    whether the money that you put in for readiness is really
    getting down to the field.
        I can tell you we are still not working down that backlog
    of deferred maintenance which we have in the Pacific Command.
    Far too many of our family homes, barracks, buildings, and the
    utilities in places like Schofield Barracks, Camp Pendleton,
    Elmendorf Air Force Base, and Pearl Harbor Naval Station are
    still old and shabby. We owe our people first class facilities
    for them to do their work well.
        So members of the committee, I certainly appreciate the
    chance to be before you to discuss these issues in detail and I
    look forward to detailed comments and questions. Thank you.
        [The prepared statement of Admiral Blair follows:]

                Prepared Statement by Adm. Dennis C. Blair, USN

                                  INTRODUCTION

        Mr. Chairman and Members of the committee: on behalf of the men and
    women of the United States Pacific Command, I thank you for this
    opportunity to testify on security in the Asia-Pacific region.
        Incidents and action drove the year 2001 for the U.S. Pacific
    Command (USPACOM). In February, U.S.S. Greeneville collided with and
    sank the Japanese fisheries training vessel Ehime Maru, resulting in
    the loss of nine Japanese lives. Soon after, a Chinese fighter jet
    collided with one of our EP-3s, resulting in the loss of the Chinese
    pilot and the detention of our crew on Hainan Island for 11 days.
    During this time, seven USPACOM personnel from Joint Task Force-Full
    Accounting died in a helicopter crash in Vietnam. Then came the
    terrorist attacks of 11 September. We have gone on the offensive
    against terrorism while sustaining our readiness, improving the
    readiness of regional forces to contribute to coalition operations, and
    transforming the capabilities of our forces. The men and women of
    USPACOM have been busy.
        We cannot provide adequate protection to our citizens and our
    forces while only playing defense. Since 11 September, combating
    terrorism on U.S. territory and throughout the Asia-Pacific region has
    been USPACOM's top priority. We are succeeding, largely as a result of
    cooperation among many nations.
        Countering terrorism has accelerated security cooperation in the
    Asia-Pacific region, but has not fundamentally altered the region's
    security challenges. A secure, peaceful and prosperous Asia-Pacific
    region remains very much in the interests of America and the world. An
    uncertain Asia will present crises and dangers. We continue to base our
    power and influence on our values, economic vibrancy, our desire to be
    a partner in this critical region, and our forward-stationed and
    forward-deployed forces of USPACOM.
        Overall, we are in better shape than we were a year ago. We have
    gone on the offensive against terror organizations we did not know the
    name of a year ago. Although there are persistent deficiencies,
    particularly in facilities upkeep and replenishment of precision
    weapons, our readiness is on its way to a satisfactory level. If we can
    maintain our momentum, the future is bright for the U.S. Pacific
    Command.

                 COMBATING TERRORISM IN THE ASIA-PACIFIC REGION

    International Terrorism in the Asia-Pacific Region
        The terrorist threat in the Asia-Pacific region (APR) consists
    primarily of local groups with links to al Qaeda that are hostile to
    the United States and our friends. These groups have plotted attacks
    against American forces, embassies, and other citizens, and have
    provided transit assistance to al Qaeda members. Our understanding of
    the threat has increased greatly since 11 September, as we brought more
    intelligence resources to bear and shared intelligence with other
    countries. Jemaah Islamiyah, which has plotted against U.S. and other
    nations' citizens, vessels and facilities in Singapore, is one group of
    concern. The Governments of Singapore and Malaysia moved quickly
    against this al Qaeda-linked group. Continued vigilance, actions such
    as this, and enhanced cooperation among governments, will keep
    terrorists on the run and root them out over time.
        At present, no ``Afghanistans''--sanctuaries for active terrorist
    organizations with governments fully supporting them--exist in this
    area of responsibility (AOR). Governments throughout the region
    fundamentally support the campaign against international terrorism.
    Each country in the region faces different circumstances and unique
    challenges, and each has varying capabilities in contributing to the
    international war on terrorism. Domestic political considerations are
    factors in countries such as Indonesia and Bangladesh. However, nations
    in this region are cooperating with the United States in many different
    ways, and this cooperation is succeeding against international
    terrorism.
        We have actively engaged our regional partners to support Operation
    Enduring Freedom (OEF) in Afghanistan. Our Asia-Pacific allies and
    regional partners have condemned the terrorist attacks of 11 September,
    and many are contributing resources. We appreciate the many military
    contributions of our allies and regional partners, Australia, New
    Zealand, Japan and the Republic of Korea.
        Australia invoked the ANZUS Treaty immediately following 11
    September for the first time in the 50-year history of this treaty. In
    addition to its ongoing naval contribution to Maritime Interdiction
    Operations supporting U.N. Security Council Resolutions against Iraq,
    Australia provided additional ships to the Arabian Gulf and aircraft to
    Diego Garcia. Australia was one of our first allies to deploy ground
    troops to Afghanistan. New Zealand has provided a contingent of its
    Special Air Service for operations as well.
        The Government of Japan has implemented major policy and
    legislative changes to allow Japan to provide force protection and
    logistical support to U.S. installations in Japan. The Japan Air Self
    Defense Force has flown relief missions to Pakistan and lift missions
    for our forces in the USPACOM AOR. For the first time since World War
    II, the Japan Maritime Self Defense Force is at sea far from Japanese
    waters, providing fuel and other support to coalition naval forces.
        The Republic of Korea (ROK) is providing air and naval logistic
    support to OEF. Several other countries have given overflight rights
    and seaport and airport access to our aircraft and ships.
        The bottom line is that our previous bilateral and regional
    cooperation with the countries of the APR has paid off in valuable
    cooperation with regard to the war on terrorism.
    Antiterrorism Efforts--Defense
        USPACOM's Force Protection Program has effectively protected our
    armed forces and supported civilian authorities throughout the Asia-
    Pacific region since the 11 September terrorist attacks. We activated
    Joint Rear Area Coordinators (JRACs) to counter the threat and
    accelerated the Critical Infrastructure Protection (CIP) Program.
        JRACs integrate the defensive measures by all the military units in
    the same location--Hawaii, Alaska, Guam, Japan and Korea. In addition,
    they coordinate Department of Defense (DOD) efforts with Federal,
    State, and local agencies. JRACs have written and exercised plans and
    are fielding the Area Security Operations Command and Control (ASOCC)
    system. Over the past year, we have made significant progress
    identifying and protecting critical infrastructure by making CIP part
    of all major exercises and using JRACs to protect critical assets. We
    are also accelerating the fielding of the Pacific Mobile Emergency
    Radio System in Hawaii and Alaska to improve coordination efforts
    between civilian authorities and their JRAC counterparts. USPACOM's
    JRACs and CIP program are widely recognized as the model for
    interagency coordination, combined scenario-based training events, and
    unprecedented cooperation and information sharing.
        Following the attack on the U.S.S. Cole, USPACOM began a full
    reassessment of vulnerabilities at foreign ports we visit. We have
    established plans and increased deployable security measures at all
    these ports. To date, we have completed 25 force protection memoranda
    of agreement (MOA) with U.S. embassies, including MOAs with embassies
    in India, Russia, Singapore, Malaysia, the Philippines and China. These
    agreements clearly delineate U.S. responsibilities for all our military
    forces in Asia-Pacific countries.
        A major challenge is to sustain these intense efforts over the
    long-term. Substantial resources are required to maintain higher Force
    Protection Conditions (FPCONs) that will be a way of life for many
    years to come.
        As long as we are engaged around the world, terrorists will look
    for soft spots for further attacks. On every deployment, every exercise
    and especially now at home stations, force protection is an essential
    mission.
    Counter-terrorism--Offense
        USPACOM forces--U.S.S. Kitty Hawk, John C. Stennis, and Carl Vinson
    battlegroups, patrol aircraft, and U.S.S. Peleliu Amphibious Ready
    Group with the 15th and 13th Marine Expeditionary Units--played major
    roles in the successful Afghanistan campaigns. At the same time, we
    have gone on the offensive in the Pacific region.
        We have already deployed personnel to U.S. embassies in the
    Philippines, Indonesia, Malaysia and India to better integrate our
    operations with interagency country teams. We have established a
    Directorate for Counter-Terrorism to fuse all sources of intelligence,
    to plan and coordinate operations, and to begin true interagency
    integration across the region. We have sent equipment and an assistance
    team to the Philippines. Our Joint Intelligence Center Pacific (JICPAC)
    has rapidly improved its support to the counter-terrorism mission.
    Analytical depth and breadth of the terrorism threat in the AOR has
    significantly improved, with increased collection, analysis, and
    reporting in this area.
        To build coalition support for our offensive efforts since 11
    September, I have visited the Philippines, Thailand, Malaysia,
    Indonesia, India, Singapore, Japan and Korea, and met with each
    country's U.S. ambassador, and key senior government and military
    leaders to discuss our intentions, and how their support can help. The
    response to our plan has been positive, and we are building capability
    to act with other countries against terrorism.
        We continue to foster interagency participation in our planning and
    operations. While our counter-terrorism cell includes a Joint
    Interagency Coordination Group to seamlessly interconnect with the
    national architecture as it is established, a Joint Interagency Task
    Force with direct tasking authority that transcends agency stovepipes
    would be a more effective organization.
    USPACOM Requirements for the War against Terrorism
        Manpower
        Legislation mandating a 15 percent headquarters manpower reduction
    over 3 years was passed before 11 September. As we launched the war on
    terrorism, we brought additional Reserve component (RC) personnel on
    board to handle the increased workload. On 12 October 2001, the Deputy
    Secretary of Defense waived the fiscal year 2001 10 percent
    headquarters manpower reduction. As long as the war on terrorism
    continues, there will be more requirements for intelligence,
    operations, logistics, communications, and planning officers on USPACOM
    combatant headquarters staffs.
        The war on terrorism has created new manpower requirements. Over
    5,000 additional billets are needed to address the full range of force
    protection, antiterrorism, and counter-terrorism missions throughout
    USPACOM. Examples of additional manpower requirements include increased
    shore and harbor security patrols in response to enhanced Force
    Protection Conditions (FPCONs), additional teams to assess security of
    foreign ports and airfields we visit, and around-the-clock manning of
    JRACs and crisis action teams. We are working to address these manning
    and management challenges from within existing endstrength levels.
    Combating Terrorism Readiness Initiatives Fund (CBT RIF)
        Funding obtained through CBT RIF continues to play a major role in
    addressing emergent requirements. This initiative provides the
    geographic CINCs additional avenues for resourcing against emerging
    threats. Some examples of USPACOM funded CBT RIF projects include
    weapons/metal detectors and explosive vapor detectors for Marine Corps
    Base Okinawa and blast mitigation windows for Yongsan Base in Korea.
    USPACOM received $3.95 million in CBT RIF funding in fiscal year 2001.
    USPACOM received nearly $3.9 million more in the first allocation of
    fiscal year 2002 funding, including $850,000 for U.S. Forces Korea
    (USFK). However, USPACOM still has over 1,070 unfunded Anti-Terrorism
    Force Protection (ATFP) projects totaling nearly $1.5 billion to
    achieve full compliance with current standards. Service funding will
    meet some of these requirements, but the CBT RIF program fills the
    gaps.
    Foreign Military Financing (FMF)
        FMF is an essential tool for our allies and partners to improve
    their capabilities against international terrorist groups and their
    supporters. A detailed discussion of FMF funding requirements, with
    particular emphasis on FMF for the Philippines, is included at pages
    34-35.

                          OTHER REGIONAL DEVELOPMENTS

    Australia
        Australia remains America's oldest ally in the Asia-Pacific region.
    Last year we celebrated the 50th anniversary of our defense treaty.
    Australia's steadfast support has been a key facet of our counter-
    terrorism campaign in the Asia-Pacific region.
        Australian armed forces remain in the lead role in East Timor and
    in the shaping of East Timor's new defense force. In addition,
    Australia maintains an important presence in Papua New Guinea,
    Bougainville and the Solomon Islands, ensuring peace and security in
    these problematic areas. The Australian government has been active in
    promoting the return of democracy in Fiji and security and peaceful
    development throughout the archipelagic states of Southeast Asia and
    the South Pacific.
        Our relationship with Australia is mature and as strong as it has
    ever been. USPACOM works hard through bilateral and multilateral fora
    to keep the ANZUS Treaty relationship with Australia healthy and
    looking forward. We are currently conducting a strategic top-down
    interoperability study with Australia's armed forces. It will return
    great long-term dividends in acquisition, information technology,
    operations, research and development, and further strengthening the
    relationship with this trusted ally.
    Japan
        Japan hosts nearly 41,000 U.S. Armed Forces personnel and 14,000
    additional sailors afloat with the Seventh Fleet. It contributes $4.57
    billion in host-nation support, the most of any U.S. ally. These
    forward-stationed and forward-deployed forces are key to the U.S.
    commitment to defend American interests throughout the Asia-Pacific
    region. The U.S.-Japan alliance is the cornerstone of U.S. security
    interests in Asia and fundamental to regional security and peaceful
    development.
        Over the past year, Japan and the United States have made steady
    progress in strengthening our alliance. We signed the first bilateral
    defense plan under the 1997 revised Defense Guidelines. It incorporates
    additional Japanese support for U.S. operations, and opens new areas
    for defense cooperation.
        After 11 September, Japan passed historic legislation to assist
    U.S. combat operations. For the first time since World War II, Japan
    sent its Self-Defense Force (JSDF) overseas to support a combat
    operation and work with other countries in a U.S.-led coalition.
        JSDF roles and capabilities are evolving to meet future challenges.
    In addition to Japan's military contribution in support of OEF, the
    JSDF will deploy a 700-member engineer battalion to East Timor in March
    2002, and will continue to provide a 45-man transportation unit as part
    of the Golan Heights U.N. Disengagement Observer Force. The JSDF has
    also worked closely with USPACOM components in restructuring bilateral
    exercises to develop skills for humanitarian assistance; search and
    rescue; non-combatant evacuation; consequence management for chemical,
    biological and nuclear incidents; and complex contingency operations
    likely to occur in the future. I am also encouraged by the increased
    attention the JSDF is giving to cooperating with regional armed
    forces--the ROK in particular.
        We successfully completed the search and recovery effort on the
    Ehime Maru last October with the recovery of eight out of nine missing
    crewmembers. The U.S. Navy's intense efforts and our two nations'
    exceptional cooperation overcame the effects of the tragedy, and even
    strengthened the ties between our two countries in many areas.
        We continue to work to be good neighbors on our bases in Japan.
    Japan closed the industrial waste incinerator next to the U.S. Naval
    Air Facility Atsugi, ending an environmental hazard. Because of steady
    progress made under the Special Action Committee on Okinawa (SACO), a
    relocation site for Marine Corps Air Station Futenma has been selected
    in northern Okinawa, and detailed discussions have begun over the type
    and scale of the facility.
        Japan's timely, meaningful and visible contribution to the campaign
    against terrorism is a new stage in our alliance relations. This
    lynchpin relationship is vital for security and peaceful development in
    Asia.
    Republic of Korea (ROK)
        Encouraging events on the Korean Peninsula in 2000 appeared to
    indicate a new era. However, progress stalled last year. Since March
    2001, the North has canceled events and refused to meet regularly with
    the ROK. At the same time, North Korea's ``military-first'' policy
    remains. Its training cycles in 2001 were at normal levels, but the
    ongoing 2002 winter training cycle has featured unusual corps-level
    activity. North Korea continues to maintain more than 60 percent of its
    forces within 100 kilometers of the Demilitarized Zone (DMZ). The North
    remains a formidable force that we must guard against and deter.
        During 2001, the U.S. and the ROK successfully negotiated several
    important alliance issues. Our military relationship is on a stronger
    footing every year.
        The Special Measures Agreement (SMA), once completed, will
    significantly increase contributions to the maintenance of U.S. troops
    on the Peninsula. Under the SMA, the ROK will cover 50 percent of the
    non-personnel stationing costs for U.S. forces by 2004. The Commander
    of U.S. Forces Korea (USFK) has also reached a tentative agreement with
    the ROK government on a Land Partnership Plan (LPP) that will
    consolidate U.S. force presence. The plan will reduce the number of
    major U.S. bases in Korea from 41 to 26 while enhancing training and
    combined warfighting capability. Commander USFK and the ROK Ministry of
    National Defense have agreed to review the 1990 agreement to relocate
    Yongsan Army Garrison, the home of USFK, from its location in downtown
    Seoul.
        We must continue to enhance the quality of life for our troops and
    their families stationed in Korea. The ROK provides critical Host
    Nation Funded Construction (HNFC) support. However, HNFC, coupled with
    the current level of U.S. Military Construction (MILCON) funding, is
    inadequate. Many of the facilities, including unaccompanied personnel
    housing and family housing, are of Korean War vintage. Personnel live
    in inadequate barracks, apartments, even Quonset huts and ``temporary''
    Vietnam-era buildings that we have maintained at increasing cost as
    age, infestation, and Pacific weather have taken their toll. The fiscal
    year 2003 funding shortfall for facility construction and modernization
    across Korea is estimated at $315 million. Congressional support of
    MILCON funding for Korea in the fiscal year 2001 supplemental and
    fiscal year 2002 MILCON Appropriations bills was sorely needed and very
    appreciated. We seek your continued support for MILCON and sustainment,
    restoration and maintenance funding as provided in the President's
    fiscal year 2003 budget.
        The ROK increasingly contributes to regional security by deploying
    over 400 troops to the peacekeeping mission in East Timor, in addition
    to its other peacekeeping commitments in Western Sahara, the Republic
    of Georgia, Cyprus and the India-Pakistan border region. ROK forces
    participate in exercises such as Rimpac (a major, multilateral naval
    exercise), Pacific Reach (a submarine rescue exercise also involving
    naval forces from Japan, Singapore and the United States), and Cope
    Thunder (a multilateral air exercise in Alaska). Most recently, the ROK
    and USCINCPAC co-hosted a Multilateral Planning Augmentation Team
    (MPAT) workshop in Korea. Hosting an exercise with over 20 non-U.S.
    participants, including Japan, was a significant first for the ROK.
        Following the 11 September tragedy, the ROK aggressively supported
    our efforts to combat terrorism. They have dispatched forces to support
    Operation Enduring Freedom, currently deploying four C-130 aircraft, a
    naval tank landing ship (LST) and a Mobile Army Surgical Hospital
    (MASH) unit. The ROK has also sent liaison officers to the headquarters
    of USCINCPAC and Commander in Chief, U.S. Central Command to coordinate
    ROK government support for the Afghan campaign and continuing war. The
    ROK has worked closely with USFK to fully ensure the highest levels of
    protection of U.S. forces on the Peninsula. This is in addition to the
    $45 million pledged for the reconstruction of Afghanistan.
        By joining the coalition to combat global terrorism and
    participating in peacekeeping missions and USPACOM's regional exercises
    and cooperative initiatives, the ROK plays a very positive role in the
    region. Although there has been little or no substantive progress
    toward normalization and reunification of the Peninsula, the United
    States and the ROK have strengthened our alliance, and the ROK has
    continued its contribution to regional security.
    Philippines
        Our relationship with the Republic of the Philippines (RP), a long-
    time U.S. ally, had major developments last year. The RP continued to
    be a strong partner in regional security initiatives--hosting various
    conferences, the annual bilateral Balikatan Exercise linked to the
    regional Team Challenge exercise, and numerous Joint Combined Exchanges
    for Training (JCETs).
        The Armed Forces of the Philippines (AFP) are challenged by
    budgetary constraints, logistical problems and a lack of adequately
    trained personnel. These factors hamper the AFP's ability to deal with
    internal insurgent groups, like the Abu Sayyaf Group (ASG) that also
    has ties to al Qaeda and poses a threat to Americans.
        President Arroyo has championed Philippine and regional support for
    the international counter-terrorism campaign. During her November 2001
    visit to the United States to commemorate the 50th Anniversary of the
    U.S.-RP Mutual Defense Treaty, she and President Bush agreed that the
    11 September terrorist attacks on the United States, and the terrorist
    activities of the ASG (which now holds Filipino and American hostages
    in the Southern Philippines), underscore the urgency of ensuring that
    the two countries maintain a robust defense partnership into the 21st
    century. The two leaders agreed to strengthen the military alliance on
    a sustained basis, through increased training, exercises, and other
    joint activities. Finally, they declared that the American and Filipino
    people stand together in the global campaign against terrorism.
        USPACOM has deployed a Joint Task Force (JTF) to the Southern
    Philippines and has organized a substantial program to improve the
    maintenance of AFP equipment. The JTF package includes: a training/
    advisory team of Special Operations ground, naval and air personnel to
    train the AFP from their Southern Command Headquarters potentially down
    through company level. Training will focus on effective counter-
    terrorism campaign planning, intelligence/operations fusion,
    psychological operations (PSYOP), civil-military operations (CMO) and
    field tactics. Additionally, civil affairs (CA), maintenance, medical,
    and other support personnel round out the Special Forces team.
        The JTF initial deployment of advisors was approved during
    implementation planning in January 2002. The recently concluded Terms
    of Reference (TOR) provided both governments with the necessary
    framework for executing our deployment to the Philippines.
        The war against the ASG will not be won by military operations
    alone. Improvements in law enforcement, intelligence, economics,
    business, information, media, academia, community leadership and
    religion will have enduring and important roles in the battle. A solid,
    sustainable socio-economic program by the Government of the Philippines
    in the affected areas is also essential. USPACOM is working on a civil
    affairs assessment to support the JTF operation. Our training,
    assistance, and maintenance package will improve the AFP's CT
    capabilities. Continued U.S. support to the Philippines through the FMF
    program is critical to the success of the AFP's campaign against
    terror.
    Thailand
        Thailand is one of the nations in Asia most committed to building
    regional approaches to the future challenges of counter-terrorism (CT),
    counter-drug (CD) interdiction, peacekeeping operations (PKO),
    humanitarian assistance (HA), and other transnational concerns. The
    Team Challenge multilateral training event to improve multinational
    capability/interoperability is held in Thailand.
        Thailand has taken a leading role in Southeast Asia in support of
    peacekeeping operations (PKO) by maintaining battalion strength forces
    in East Timor and again supplying the U.N. military commander there.
    Thailand has also sponsored several multilateral PKO seminars. We have
    supported humanitarian demining in Thailand and are transferring that
    program to Thailand in fiscal year 2002. USPACOM continues to respond
    to Thailand's request for U.S. assistance to the Royal Thai Army in
    combating drug traffic across the Burma-Thai border. Joint Interagency
    Task Force West (JIATF-W) is the standing task force for all CD issues
    in the theater and has the lead in training, equipment, and
    organizational coordination initiatives to assist the Thais with their
    CD mission. Full funding of fiscal years 2002/2003 Foreign Military
    Financing (FMF) for Thailand is critical to our efforts to help
    Thailand sustain its CD and PKO over the next 2 years.
        Since 11 September, Thailand has coordinated fully with the United
    States in combating terrorism by supplying access to Thai military
    facilities, granting overflight permission, making formal public
    statements of support, and cooperating in information sharing and in
    investigation of terrorists using Thailand for a transit point and for
    other support. During a December 2001 trip to Washington, DC, Prime
    Minister Thaksin offered the U.S. Deputy Secretary of Defense Thai
    security contributions to multilateral presence in Afghanistan.
        Our effective military-to-military cooperation with Thailand meets
    the security concerns of both our countries. Our attention to Thai
    political and military priorities supports our ability to call for
    access to military facilities. Thailand will continue to be our key
    ally in Southeast Asia.
    Singapore
        The March 2001 completion of the deep-draft pier at Changi Naval
    Base, constructed entirely at Singapore's expense, will support
    continued U.S. presence in the region for many years to come. U.S.S.
    Kitty Hawk was the first aircraft carrier to berth pierside at Changi.
    Though not a formal treaty ally, Singapore is a solid security partner
    in the Asia-Pacific region, a vocal proponent for U.S. access, and a
    strong supporter of U.S. counter-terrorist efforts. Additionally,
    Singapore supports and hosts many significant multilateral activities.
    Last year, it hosted Exercise Pacific Reach, participated in Exercise
    Cobra Gold and numerous anti-piracy regional conferences, and hosted a
    Western Pacific Naval Symposium (WPNS) regional Mine Counter-Mine
    exercise.
        Singapore seeks greater interoperability with the U.S. armed
    forces. It views high technology and advanced hardware as a deterrent
    and is increasing its cooperation with the United States in several
    projects. Singapore participated with Extending the Littoral
    Battlespace (ELB) Advanced Concept Technology Demonstration (ACTD) and
    is active in other developments such as the Joint Mission Force (JMF)
    and Asia-Pacific Area Network (APAN).
        Singapore has worked against terrorist groups in the country who
    were targeting U.S. interests. Immediately following the 11 September
    attacks, Singapore was unwavering in its support to Operation Enduring
    Freedom, allowing our aircraft to use its airfields and increasing
    protection to vital shipping in the Strait of Malacca.
        Singapore's arrest of 13 al Qaeda-linked terrorists in December led
    to additional arrests in Malaysia and the Philippines in January.
    Information sharing between these countries provided unprecedented
    insights into the al Qaeda network in the Asia-Pacific region.
        Singapore has rapidly matured into a solid regional partner in a
    strategic location.
    India
        U.S. military relations with India have greatly expanded over the
    past year. India offered rapid and valuable assistance to the United
    States in conducting military operations in Afghanistan. USPACOM
    officers have met with their Indian counterparts and agreed on programs
    and exercises for the next 6-18 months. The primary areas of
    cooperation focus on peacekeeping, counter-terrorism, special
    operations training and naval activities.
        We are closely following India's current confrontation with
    Pakistan. Throughout our interaction with our Indian counterparts, we
    continually stress the importance of a peaceful negotiated long-term
    solution to the Kashmir issue.
        India and the United States have many common interests and our
    growing military cooperation will support this increasingly important
    security relationship.
    Indonesia
        Indonesia continues to go through a complete transition toward a
    modern democracy and a market economy. A key factor influencing
    Indonesia's political transformation and the prospects for its
    stability and unity are the Armed Forces of Indonesia, or TNI.
        Military reform made some progress last year, but more remains to
    be done, especially in the areas of accountability and professional
    conduct. Separatist and sectarian violence in Aceh, the Moluccas,
    Sulawesi, and Irian Jaya, and inadequate TNI resources and capabilities
    have slowed the momentum of reform. TNI's future course is central to
    Indonesia's development and important to U.S. interests in combating
    terrorism, maintaining freedom of navigation on important trade lanes,
    and supporting regional security.
        The Indonesian government has condemned terrorism and approved
    overflights of U.S. aircraft supporting the war on terrorism. It has
    improved security for our citizens and the U.S. embassy in Jakarta.
    However, Indonesia's very geography makes it vulnerable to terrorist
    penetration. With many challenges on its plate, and diminishing
    resources, Indonesia's security apparatus does not have full control of
    its borders. Moreover, Indonesia has not aggressively investigated
    domestic elements that are sympathetic to the aims of al Qaeda. We need
    to strengthen cooperation with Indonesia on terrorism. Current
    restrictions on our interaction with the TNI limit our effectiveness.
    However, the newly established Regional Defense Counter-Terrorism
    Fellowship Program may offer us a valuable tool to provide TNI mid-
    grade officers non-lethal training focused on counter-terrorism and
    combating transnational threats. We look forward to exploring this
    possibility with Congress.
        USPACOM activities with TNI include inviting some officers to
    multilateral conferences, subject matter information exchanges, senior
    officer visits, and the annual naval Cooperation Afloat Readiness and
    Training (CARAT) exercise focusing on humanitarian assistance and anti-
    piracy. CARAT 2002 will now include a counter-terrorism element.
        A responsible, developing Indonesia is key to the security and
    development of the Southeast Asia region; it is in our interest to help
    ensure the security of this important country.
    East Timor
        East Timor is preparing for independence in May of this year. U.N.
    Transitional Administration in East Timor (UNTAET) support has been
    successful in assisting and guiding East Timor toward independence.
    USPACOM forces in U.S. Support Group East Timor (USGET) played a vital
    role in supporting this monumental international effort. USGET has
    provided a significant U.S. presence, vital civic actions, humanitarian
    assistance, and regular ship visits. Today, East Timor is generally
    secure from the militias, and ready to face the challenges of a
    democracy.
        After East Timor's independence, USPACOM will transition from civic
    action orientation in East Timor to a more traditional military
    cooperation program. This program will support an international effort,
    led by Australia, to further develop the East Timor Defense Force into
    a viable self-defense force.
    China
        Many important political, economic, and military developments
    occurred in the People's Republic of China (PRC) last year, and Chinese
    actions affected U.S. military relations with the People's Liberation
    Army (PLA).
        Last year's military exercises in the PRC showed a measurable
    increase in quality, as the PLA continued to modernize its forces, with
    an emphasis on integrating ground, air and naval forces into a viable
    joint capability, and on creating a more professional officer and
    noncommissioned officer cadre. In addition to basic maritime combat
    skills, the 2001 exercises demonstrated efforts to conduct joint
    amphibious operations combined with missile and air strikes against key
    targets, such as airfields, naval ports and command centers.
        China continued to build and exercise its force of short-range
    ballistic missiles ranging Taiwan. It still seeks to develop a range of
    military options to influence and intimidate Taiwan, and has not
    abandoned the option of using force to resolve Taiwan's status.
        Across the Strait, Taiwan's armed forces continue to restructure
    and modernize. They are reorganizing and modernizing command, control,
    communications, computers, intelligence, surveillance, and
    reconnaissance (C\4\ISR). The U.S. government last year approved the
    sale of naval, ground and air equipment to maintain Taiwan's sufficient
    defense in the near-term. Taiwan still needs to focus on developing and
    modernizing C\4\ISR, integrated air and sea defense, and the ability to
    integrate its armed forces to conduct effective joint operations.
        The PLA is still years away from the capability to take and hold
    Taiwan. Continued improvements in Taiwan's capabilities and development
    of USPACOM capabilities will be necessary to maintain sufficient
    defense.
        The April 2001 EP-3 crisis was eventually resolved--the crew and
    airplane returned. However, the aggressive behavior of the Chinese
    pilot who caused the collision and the detention of the crew for 11
    days damaged China's relations with the United States.
        Military-to-military relations are resuming slowly, and in
    accordance with the National Defense Authorization Act. It is in the
    interests of the United States to interact with the PLA to address
    common interests, such as combating terrorism, peacekeeping operations,
    search and rescue, counterdrug, counterpiracy, and humanitarian
    assistance. These interactions should be reciprocal and transparent and
    serve to reduce misunderstandings and the risk of miscalculations on
    both sides.

                       POW-MIA EFFORTS IN SOUTHEAST ASIA

        Joint Task Force-Full Accounting (JTF-FA) continues progress on the
    fullest possible accounting of Americans unaccounted for as a result of
    the war in Southeast Asia.
        The risks of this noble mission were sadly underscored by the
    helicopter crash on 7 April 2001. Seven American service members and
    nine Vietnamese tragically died in Quang Binh Province, Vietnam, while
    conducting advance work for the 65th Joint Field Activity (JFA). We may
    never know the exact details of the accident, but a report by the U.S.
    investigator indicated that deteriorating weather conditions, poor
    visibility, and pilot error were factors. This tragic incident was a
    deep loss for USPACOM, the task force, and the American and Vietnamese
    people.
        During fiscal year 2001, JTF-FA conducted nine JFAs--three in
    Vietnam, five in Laos, and one in Cambodia where 211 cases were
    investigated and 37 sites excavated. One JFA in Vietnam was canceled
    due to the tragic helicopter crash. JTF-FA continues to maintain its
    pace of operations in fiscal year 2002, with 10 JFAs scheduled--4 in
    Vietnam, 5 in Laos, and 1 in Cambodia.
        Last year, 44 sets of remains were identified and returned to their
    loved ones. JTF-FA recovered and repatriated 27 remains still to be
    identified, but believed to be Americans unaccounted for (16 from
    Vietnam, 10 from Laos, and 1 from Cambodia).
        We remain committed to obtaining the fullest possible accounting of
    Americans still missing in Southeast Asia and to the return of all
    recoverable remains. We seek continual support for funding of this
    mission.

                          THEATER SECURITY COOPERATION

    Theater Security Cooperation Overview
        Ready forces are the foundation for USPACOM's cooperation with the
    Asia-Pacific region. They reassure our friends and partners, and
    dissuade our potential enemies. During 2001, we maintained a strong
    program of Theater Security Cooperation (TSC) designed to maintain
    coalition warfighting skills for deterrence, and build regional
    coalition capabilities to carry out common missions, from peacekeeping
    through combating terrorism.
        The three primary goals of TSC--influence, access, and competent
    coalition partners--led to an active program that proved its worth
    after 11 September. All countries in the Asia-Pacific region declared
    support for the global war on terrorism, and contributed in many ways.
        Seminars, simulations and multilateral exercises are inexpensive
    and powerful ways to develop the capabilities to work effectively--as
    coalitions in complex contingencies (such as East Timor); as partners
    in countering terrorism, illegal drug trafficking, and piracy; in
    managing the consequences of chemical, biological or nuclear attacks,
    natural disasters and accidents; in evacuating citizens caught in the
    path of violence; in search and rescue of mariners and airmen in
    distress; and in providing humanitarian assistance. TSC develops a
    cadre of competent coalition partners able to contribute when called
    upon.
        Such a call came 11 September. Under the banner of Operation
    Enduring Freedom, many of our partners in enhanced regional cooperation
    stepped forward to make significant contributions to the emerging OEF
    coalition. We have also focused on building long-term, strategic
    relationships necessary to plan and execute the protracted theater
    campaigns to eradicate terrorism. Many of our efforts with key allies
    and friends, such as Australia, Japan, Korea, the Philippines, Thailand
    and Singapore, are expanding on strong foundations nurtured by TSC to
    improve our counter-terrorism capabilities. With other strategic
    nations in our theater, such as India, the events of 11 September are
    the catalyst for accelerating more meaningful military-to-military
    contact and cooperation. Finally, many nations, such as Vietnam,
    Cambodia, Laos and Burma, have offered varying levels of support and
    cooperation to the global campaign against terrorism. Their proposed
    contributions and offers, although perhaps not strategically
    significant, forecast meaningful regional cooperation on a threat that
    affects all Asia-Pacific nations.
        We will continue to cultivate and maintain the necessary
    operational access and coalition cooperation (diplomatic/financial/
    military) to plan and execute current and future operations. For all
    these purposes, USPACOM should maintain a baseline of multilateral
    conferences and International Military Education and Training (IMET)
    for every country.
    Coalition Exercises
        Team Challenge 2002 links the multilateral Cobra Gold exercise in
    Thailand with the bilateral Balikatan Exercise in the Philippines to
    address bilateral and multilateral training objectives, and to improve
    the readiness of regional armed forces to contribute to multilateral
    operations. Singapore will participate again this year alongside Thai
    and U.S. forces in Cobra Gold. Observer nations (with an eye toward
    possible participation in future years) will include Japan,
    Philippines, Malaysia, Indonesia, France, ROK, Mongolia, Russia, China,
    India, Cambodia, Tonga and Sri Lanka; Vietnam has been invited. In Team
    Challenge, we will exercise elements from the full spectrum of missions
    that our combined forces may be called upon to do together, from
    complex contingencies to humanitarian assistance. Team Challenge
    continues to be our largest multilateral exercise in theater, while
    serving as our premier Combined Joint Task Force training exercise.
    International Military Education and Training (IMET)
        IMET is the cornerstone of our Theater Security Cooperation
    Program. It provides education opportunities for personnel from foreign
    armed forces to study U.S. military doctrine and to observe U.S.
    commitment to the rule of law, human rights, and democratic values. It
    is the best means for promoting professionalism within foreign armed
    forces, and exposing foreign armed forces to the principle of a
    military responsive to civilian control. IMET is an effective tool for
    assisting armed forces to develop in ways that meet their own and U.S.
    objectives. Indonesia is a case in point, where officers from the
    Indonesian armed forces have not attended professional U.S. military
    education courses since 1992, with an attendant loss of U.S. influence
    on an entire generation of Indonesian company/field grade officers.
    Regional Defense Counter-Terrorism Fellowship Program
        The Regional Defense Counter-Terrorism Fellowship Program
    complements the IMET program. DOD funding will be used to send foreign
    military officers to U.S. military institutions and selected regional
    centers for non-lethal education. This program will provide the
    regional CINCs with additional flexibility in executing our security
    cooperation strategies, and it will have an immediate and positive
    impact in encouraging reform, professionalism, and regional cooperation
    in addressing counter-terrorism and other transnational threats.
    Foreign Military Financing (FMF)
        FMF for acquiring U.S. military articles, services and training
    enables key friends and allies to improve their defense capabilities
    and improve their potential contributions as a coalition partner. In
    response to our original fiscal year 2002 FMF request, three USPACOM
    countries were granted FMF funds: Mongolia ($2 million), the
    Philippines ($19 million), and East Timor ($1 million), which gains its
    independence 20 May of this year.
        To prosecute the global war on terrorism, it is in the U.S.
    interest to provide equipment to select countries facing threats. The
    administration is reviewing potential threats and options.
    Philippines FMF Maintenance Program
        The Philippines FMF Maintenance Program is the foundation for
    effective security assistance to the Armed Forces of the Philippines
    (AFP) in their campaign against terror. We are in the first year of a
    5-year, $68 million FMF plan to sustain critical AFP military
    capability while promoting clear and positive actions to correct
    budgetary and logistics deficiencies. We have developed courses of
    action to improve AFP readiness rates for specific systems such as C-
    130 aircraft, UH-1 helicopters, 2\1/2\ ton trucks, and 78-foot Fast
    Patrol Craft. We have also developed a statement of work to implement
    contractor management assistance and ways to track improvements in
    readiness rates. Full funding over the 5-year program will enable the
    AFP to sustain higher readiness levels for key weapons systems. This
    funding is essential for the AFP to achieve a self-sustaining
    capability.
        As the efforts in the Philippines evolve, possible opportunities to
    maximize effectiveness of counter terrorism operations may require
    additional resources. Fiscal year 2003 FMF funding for the Republic of
    the Philippines Maintenance Program remains key to achieving one of our
    long-term goals of improving AFP readiness.
    Enhanced International Peacekeeping Capabilities (EIPC)
        EIPC programs promote standards for peacekeeping doctrine,
    training, and education at the institutional level. In fiscal year
    2001, five USPACOM countries (Malaysia, Mongolia, Nepal, Philippines
    and Thailand) received a total of $2.227 million to achieve this goal.
    In fiscal year 2002, we hope to add Fiji, Madagascar, Tonga and India
    to this list. While EIPC programs are not as visible as IMET or FMF
    grants, EIPC plays a key role in developing host country self-
    sufficiency to train its forces to be effective players in worldwide
    peacekeeping efforts.
    Nonproliferation, Antiterrorism, Demining, and Related Programs (NADR)
        NADR funding supports U.S. efforts to reduce threats posed by
    international terrorists, landmines, and stockpiles of excess weapons,
    as well as by nuclear, chemical, and biological weapons and their
    associated technologies. We have received limited funds in the past,
    primarily for demining activities in Cambodia, Laos, Thailand, India
    and Vietnam. Our war against terrorism could benefit by any expansion
    of these programs. We will work closely with U.S. Country Teams to
    ensure we use these limited funds wisely.
    Overseas Humanitarian Disaster and Civic Aid (OHDACA)
        OHDACA appropriation provides the critical ability to respond to
    humanitarian needs in the Asia-Pacific region and is the primary source
    of DOD financing for foreign disaster assistance, demining, excess
    property donations and other humanitarian projects. While other Federal
    agencies also have responsibilities to respond to man-made and natural
    disasters, armed forces are frequently called upon first. Additionally,
    our annual assistance programs provide important access to some
    countries where other means of security cooperation are inappropriate.
    These non-threatening programs demonstrate the peacetime capabilities
    of DOD to our Pacific neighbors without impacting readiness. Approved
    fiscal years 2002/2003 Humanitarian Assistance requirements for
    construction projects and property donations total approximately $5.1
    million.
    East Timor Defense Force (ETDF)--Logistics System/East Timor Engineer
            Plan
        The U.S. armed forces continue to conduct operations in East Timor
    by providing liaison officers, engineers and humanitarian assistance
    during ship visits. Fiscal year 2002 engineering priorities include
    water plant, electrical system, and health clinic projects. The State
    Department programmed $4.8 million in FMF funds in fiscal years 2001-
    2003 to assist in developing the East Timor Defense Forces (ETDF)
    logistics support system and to conduct training to develop the skills
    necessary for self-sufficiency. We will need to look at avenues to
    provide the ETDF the support they need to provide for their own
    security. There should be no haven for terrorism in the Asia-Pacific
    region, in countries with histories old or new.
    Asia-Pacific Center for Security Studies (APCSS)
        The APCSS regional study, conference, and research center continues
    to do great work. Graduates from its 3-month executive course total 764
    from 41 countries, including Pakistan. I meet many of the outstanding
    graduates when I travel, and all are convinced that the regional
    approach works.
    Asia-Pacific Regional Initiative (APRI)
        The APRI program increases USPACOM access, regional readiness and
    U.S. influence in the Asia-Pacific region. APRI funding supports a wide
    range of exercises, programs, and training symposiums such as Exercise
    Team Challenge, the Pacific Reach multi-national submarine rescue
    exercise, the annual multilateral Chiefs of Defense conference, and
    search and rescue and humanitarian assistance/disaster relief
    exercises.
        Asia-Pacific Area Network (APAN)
        Funded by the APRI program, APAN provides information exchange
    throughout the region that directly supports Theater Security
    Cooperation. It functions as an interactive Web-based network that is
    attracting ever-widening attention and participation. APAN's membership
    has grown from about 300 users from 17 countries in June 2000 to more
    than 4,000 self-registered users (by 1 January 2002) from every country
    in the Pacific region except Burma and North Korea. APAN has also
    attracted users from over 20 other countries outside the region. The
    Web site supports regional exercises and conferences, and provides
    information resources to functional areas such as peacekeeping
    operations, disaster management and counter-terrorism. More
    importantly, it has been a catalyst to the creation of multinational
    information-based relationships and collaboration. Since APAN's
    operational capabilities and information are entirely unclassified,
    they are available to government agencies and non-governmental
    organizations (NGOs) that are important as participants in complex
    humanitarian emergencies and as partners in any combined military
    effort. After 11 September, APAN began a commercially secured Web site
    for Hawaii's Joint Rear Area Coordinator (JRAC) effort, a multi-agency
    effort comprising 17 Federal, State, and local agencies in Hawaii
    responsible for critical infrastructure. APAN is working with the U.S.
    Coast Guard to develop a similar commercially secured operational
    network capability for multinational collaboration in the Northwest
    Pacific and with the Department of State for similar collaborative
    sites to support ASEAN Regional Forum Confidence-Building Measures in
    Counter-Terrorism and possibly Maritime Security. Part of the
    international experience of 11 September has been overcoming resistance
    to new operating methods and information-based relationships. APAN has
    encouraged regional countries and United Nations organizations and NGOs
    to use and contribute to building experience in network centric
    operations that will pay off in future multinational force operations.
        Multinational Planning Augmentation Team (MPAT) Program
        The MPAT Program, also funded through APRI, brings together expert
    military planners from nations with Asia-Pacific interests that can
    rapidly augment a multinational force headquarters. Using standardized
    skills, they would plan and execute coalition operations in response to
    small-scale contingencies in the region. Through a series of workshops
    and planning exercises, MPAT members have developed a knowledge base of
    the various national crisis-action-planning procedures in the Asia-
    Pacific region and strong working relationships with each other. MPAT
    members have also begun developing common crisis-action planning
    procedures that any lead nation could use during a crisis.
        We have successfully completed three MPAT workshops each involving
    over 25 countries, co-hosted by the Philippines, Thailand, and Korea
    respectively. We have also completed six concept and standard operating
    procedures (SOP) workshops. The strength of the MPAT program lies in
    its ability to foster the development of a consensus on multinational
    responses to crises in a region with only a strong bilateral tradition.
    The Center of Excellence in Disaster Management and Humanitarian
            Assistance (COE)
        COE plays an important role in our pursuit of key strategic
    objectives in USPACOM. COE engages countries in the Asia-Pacific
    region, builds burden-sharing relationships among our friends and
    allies, and prepares U.S. forces to perform effectively in complex
    contingencies. COE's mission in disaster management, humanitarian
    assistance, and peace operations offers a low profile tool to engage
    civilian and military communities throughout the theater that might
    otherwise be hesitant to work with us. COE's support of our peace
    operations capacity building efforts in the Asia-Pacific region have
    helped improve capabilities in the Philippines, Thailand, Bangladesh,
    Nepal, and Malaysia. Finally, by promoting broader collaboration among
    non-traditional partners, COE contributes to the creation of an
    environment less hospitable to terrorism.

                            READINESS AND RESOURCES

    Personnel
        The war on terrorism along with ongoing commitments throughout the
    Asia-Pacific region place heavy pressures on our troops and their
    families. It is especially important today, that our young men and
    women in uniform feel the support of our country. The quality of life
    (QOL) initiatives included in the Fiscal Year 2002 National Defense
    Authorization Act are welcome and let our people know their elected
    representatives value their hard work and sacrifices.
        Thank you for supporting the administration's request for the
    largest pay raise in two decades. Competitive pay is essential to
    attract and retain the highly skilled personnel critical to our
    national defense.
        There are areas where compensation has failed to keep up with the
    times. For example, most American families today own two cars for
    parents' jobs, school, and children's extracurricular activities. This
    is a necessity, not a luxury. At present, our military families are
    only allowed to transport one vehicle when transferred to and from
    overseas duty stations in the United States. Developing programs to
    meet the needs of today's military families will go a long way toward
    improving retention.
        Another much-needed improvement is reducing Permanent Change of
    Station (PCS) out of pocket expenses. We calculate the average military
    family pays $1,700 above reimbursements when moving to Hawaii.
    Legislation like that in the Fiscal Year 2002 Defense Authorization
    Act, to increase partial reimbursement of mandatory pet quarantine fees
    incurred by members transferred to various overseas locations within
    and outside the United States, helps reduce this financial burden. The
    removal of entitlement limits that previously excluded junior personnel
    from receiving proper reimbursement for expenses incurred during their
    first PCS move is also a standout. Even a seemingly small gesture, like
    helping our volunteer Reserve or Guard members deal with excess accrued
    leave as they move from hot spot to hot spot, sends a message that we
    care.
        In past conflicts, Reserve component (RC) personnel have mobilized
    to serve in and around combat zones. For the war on terrorism, we have
    mobilized thousands of reservists and guardsmen to protect our military
    bases and civilian facilities like airports. The President has clearly
    stated that the war on terrorism will continue for years. RC support
    will be a vital part of the war effort. In USPACOM, our reservists have
    done a magnificent job. The flexibility and support of their employers
    has been a key element of this successful mobilization.
        We need to reexamine RC polices and programs to sustain the war on
    terrorism over the long-term. Cold War-era regulations and public laws
    still sometimes prevent RCs from providing the responsive and flexible
    capability they are so eager to deliver. I applaud the efforts of the
    Office of the Secretary of Defense (OSD) and Joint Staff to push for
    improvements to law, policy, and regulations. I support ways not only
    to increase funding but also to modernize the rules that govern RC
    support. To do this, we need more full-time support to perform tasks
    like managing manning documents, pre-screening medical records before
    recall, and providing support at the locations where the RC personnel
    are frequently mobilized.
        While we are fortunate to have many eager and talented volunteers
    willing to make sacrifices to serve their country in times of crisis, I
    am concerned about the long-term impact of reliance on recalled Reserve
    augmentation forces. Given the nature of our protracted war on
    terrorism, we need to take a hard look at Active-Duty Force levels
    required in the next 5-10 years to combat terrorism, because now is the
    time to make recruitment and force authorization adjustments.
    State of Housing, Family Support
        Military family housing remains one of our top QOL priorities. We
    are working to replace or renovate substandard military family housing
    by 2007. Pacific Fleet (PACFLT), Marine Forces Pacific (MARFORPAC),
    Pacific Air Forces (PACAF), and U.S. Army Pacific (USARPAC) will meet
    this goal with their current master plans and programs. We must
    continue to restore and increase funding to ensure that our military
    family housing is safe, modern, and secure. Congressional efforts last
    year resulted in a welcome and much needed increase in attention to
    overseas MILCON in USPACOM. I applaud your efforts to fix the grossly
    inadequate housing in Korea and other deficiencies throughout the AOR.
    There is still so much to do.
        People are our most important resource. Recognition, adequate
    compensation, and housing are the foundation of a decent quality of
    life for our people and their families.
    Operations and Maintenance (O&M) Funding
        The second important component of readiness is sufficient
    operations and maintenance funding for training and maintaining
    equipment.
        Last year I testified that with regard to our funding for
    Operations and Maintenance (O&M) ``news is not positive'' and,
    ``accordingly the readiness of our component commands is not expected
    to reflect any significant increase this fiscal year.'' I am happy to
    report this year, due to supplemental funding, our readiness picture is
    more optimistic.
        Funding for training and maintenance across service components has
    been adequate to keep units trained and their equipment in good repair.
    This readiness was proved in combat as USPACOM carrier battlegroups
    (CVBGs), amphibious ready groups (ARGs), and marine expeditionary units
    (MEUs) deployed on short notice to Afghanistan and were effective in
    combat immediately.
        Let me highlight my current readiness concerns.
    Precision Guided Munitions (PGMs)
        Ongoing support of Operation Enduring Freedom (OEF) has
    significantly reduced the already limited worldwide stocks of precision
    munitions across all services, especially the Joint Direct Attack
    Munition (JDAM). The President's fiscal year 2003 budget request
    contains aggressive programs to restore inventories to adequate levels.
    Sustained funding to restore/increase PGMs stockage levels to support
    the spectrum of military operations--counter-terrorism (CT) operations,
    small-scale contingencies (SSCs), major theater wars (MTWs), training/
    testing expenditures, theater positioning, and combat-sustainment
    requirements--must remain a priority.
    Intelligence, Surveillance, and Reconnaissance (ISR) Aircraft
        Our AOR requires more ISR aircraft coverage to meet operational
    demand. While I cannot provide exact numbers in this forum, our
    collection rates of required intelligence information is dangerously
    low. Recent funding of ISR aircraft as part of the counter-terrorism
    (CT) supplemental will help, but this projected increase must be
    realized in increased surveillance units in this theater. New aircraft
    must also be developed to replace aging ISR assets. The projected
    retirement of aircraft over the out years puts at risk Service
    commitments to maintain a minimum number of operational ISR aircraft.
    Aircraft Readiness
        Mission Capable (MC) rates for Pacific Fleet (PACFLT)/Marine Forces
    Pacific (MARFORPAC) aircraft and cannibalization of Pacific Air Forces
    (PACAF) aircraft continue to be major readiness concerns in USPACOM.
    Availability of repair parts is a significant contributor to aircraft
    readiness shortfalls. Although funding for repair parts for Navy,
    Marine Corps, and Air Force aircraft has improved in the past 2 years,
    shortages still exist, causing cannibalizations on PACAF aircraft and
    crossdecking/temporary equipment loans in PACFLT. Of PACAF aircraft
    tracked from January to December 2001, 80 percent did not meet the
    aircraft standard for cannibalization rates.
    Infrastructure, Logistics Inventories, and Related Support
        The final component of readiness is infrastructure, logistics
    inventories, and related support. This component still requires
    attention.
    Facilities: Sustainment, Restoration, and Modernization (SRM)
        The combined effects of aging facilities and years of under funding
    have produced an enormous backlog of restoration and replacement
    projects. The current recapitalization backlog was caused by a
    combination of factors. Funding intended for facilities sustainment has
    often been diverted. When bases closed in the Philippines, Guam, and
    Hawaii, SRM funds were not redistributed for remaining facilities but
    were reduced as part of the ``peace dividend.'' Rising utility costs
    and higher costs to accomplish base-operating support by contract
    further reduced funds available for SRM. As a result of inadequate
    funding, bases, camps, posts and stations across the Asia-Pacific
    region are shabby and deteriorating to a point we can no longer ignore.
    Our people deserve much better than this; they deserve to live and work
    in a quality environment.
        At current Future Years Defense Plan (FYDP) funding levels, the
    $5.3 billion USPACOM recapitalization backlog will nearly double over
    the FYDP. USPACOM requires an additional $8.4 billion over the FYDP to
    eliminate the backlog and prevent future backlog growth through proper
    sustainment.
        SRM funding shortfalls not only affect quality of life, but also
    impact readiness, operation plan (OPLAN) execution, retention, and
    force protection. Unfunded backlog projects affect OPLAN execution in
    Korea, Guam and Wake Island. Without additional funding,
    recapitalization backlogs will continue to grow if we do not realign or
    close any installations or facilities, and will further deteriorate,
    jeopardizing critical functions throughout USPACOM's AOR.
    New Pacific Command Headquarters
        Construction on the Nimitz-MacArthur Pacific Command Center at Camp
    Smith is underway and going vertical. Completion is scheduled for
    December 2003. We appreciate the restoration of $3 million included in
    the fiscal year 2002 MILCON Appropriations Act to fund critical design
    elements, including antiterrorism force protection (ATFP) and
    information security requirements. Unfortunately, this funding was
    reduced by over $400,000 due to an across-the-board reduction of all
    fiscal year 2002 MILCON funding, creating an unexpected shortfall just
    as critical ATFP and information technology security requirements are
    being addressed.
    Pacific Security Analysis Complex (PSAC) MILCON04
        USPACOM needs a single shared intelligence complex on Oahu, Hawaii,
    that optimizes the missions and operations of both Kunia Regional
    Security Operations Center (KRSOC) and the Joint Intelligence Center
    Pacific (JICPAC). The current KRSOC is obsolete. The facility was built
    in 1945, and the last major renovation occurred in 1979. Current
    estimates for necessary renovations to ensure a 30-year continued use
    exceed $185 million, with annual operating costs of approximately $8
    million. Construction costs for a new KRSOC facility, incorporating
    Naval Security Group Activity (NSGA) Pearl Harbor and NCPAC, are
    currently estimated at $220 million, with annual operating costs of $6
    million. Additional savings in renovation costs to NSGA Pearl Harbor
    and NCPAC are estimated at $9 million. Thus, it would be less costly in
    the long-term to build the new facility.
        The JICPAC theater intelligence production facility has force
    protection vulnerabilities due to its location on a main civilian
    thoroughfare. Co-locating with KRSOC would lead to savings of roughly
    $30 million over 4 years in JICPAC operating costs, and enhance fusion
    of all-source intelligence. The PSAC presents an unprecedented
    opportunity for immediate in-depth collaboration between the premier
    signals intelligence and production centers.
    USPACOM Simulation Center MILCON04
        Increasing exercise activity, training complexities, and command,
    control, communications, computers, intelligence (C\4\I) modernization
    have outgrown USPACOM's exercise simulation infrastructure and support
    capabilities. This deficiency significantly reduces the ability to
    train USCINCPAC and Joint Task Force (JTF) commanders in crisis action
    readiness procedures; degrades the ability to improve combined
    interoperability with friends in the region; and contributes to
    increased operating tempo (OPTEMPO), training time and associated costs
    for USPACOM forces before responding to contingencies. The current
    facility does not support future technologies or meet force-protection
    requirements. The planned state-of-the-art simulation center will link
    with simulation centers throughout the Asia-Pacific region to train
    joint integrated forces, rehearse mission requirements, provide
    commanders with quick-reaction combat analyses, and exploit information
    from open sources. It will transform USPACOM through the use of
    advanced simulations, collaborative tools, and C\4\I systems in joint
    experiments.
    Wake Island Airfield Funding
        Wake Island remains critical for support of strategic deployment of
    forces for major theater wars (MTWs). The funding in the Air Force
    program is the first year of a multi-year program that must be
    maintained to ensure availability of this critical asset to meet
    wartime contingency requirements.
    Mobility Infrastructure and Strategic Lift (C-17/C-5) Reliability
            Enhancement and Re-engine Program
        USPACOM depends on continued funding of the programmed C-17
    aircraft buy and the C-5 aircraft Reliability Enhancement and Re-engine
    Program and Avionics Modernization Program. Equally important are our
    efforts to exploit advanced sealift technology to reduce our dependency
    on premium airlift. Over the past year, III Marine Expeditionary Force
    (MEF) has been testing and evaluating off-island deployments using a
    leased High Speed Vessel (HSV). Initial analysis of the HSV suggests
    considerable cost savings while significantly reducing in-transit
    deployment time for Marine forces. Based on these encouraging initial
    returns, we are pursuing the HSV as a theater-lift asset in USPACOM.
        Real world operations in other theaters are impacting USPACOM's
    exercise program. We are beginning to face regular shortages of airlift
    and aerial tankage. This, in turn, makes it more difficult to train
    soldiers, sailors, airmen, and Marines that we are depending on to
    execute ongoing operations. For example, to send the 3rd Wing to Red
    Flag to prepare them for deployment to Operation Southern Watch, we
    will need to contract civilian airlift at a cost of approximately $1.1
    million. The original budget was $250,000 using KC-10. Overall, the
    PACAF exercise program has been cut $734,000 and the JCS exercise
    program was cut $1.2 million. Successful achievement of combat
    readiness training will hinge largely on sufficient funding for
    exercises.
    Intelligence
        The events of 11 September have introduced additional requirements
    on our already heavily tasked national and tactical intelligence
    systems. The demand for precise and timely intelligence has never been
    greater, including in-depth understanding of long-term potential
    adversaries, regional hotspots, and transnational threats--terrorism
    and the proliferation of weapons of mass destruction.
        Signals Intelligence (SIGINT)
        National and tactical SIGINT systems must be modernized to meet the
    advances in global telecommunications technology. National Security
    Agency (NSA) and Service SIGINT capabilities are key to our daily
    operations and the execution of OPLANs and contingencies in the USPACOM
    AOR. They must be funded to continue modernizing SIGINT collection
    capabilities against both modernized militaries and terrorists. Funding
    is also needed to replace the Kunia Regional Security Operations Center
    (KRSOC) and accompanying land-based collection architecture.
        Our support to Operation Enduring Freedom (OEF) has exacerbated our
    peacetime shortage of intelligence collection aircraft. While
    additional aircraft are in the pipeline, we still need more in the
    inventory to help us reach and maintain our longstanding minimum
    theater requirements, and we need them soon. We encourage development
    of a follow-on to current manned aircraft and await availability of
    high altitude, long dwell, unmanned aerial vehicles. We must also
    upgrade the collection equipment on the aircraft. This is especially
    true for SIGINT, where existing collection equipment is ineffective
    against modern communication technology. Similar land and maritime
    collection capabilities also need upgrades. USPACOM fully supports
    integrated, joint development of the next generation signals collection
    tools, along with further consolidation of funding to hasten this
    event. Extra aircraft and new collection tools are meaningless, though,
    if we lack trained personnel to exploit the information. The existing
    shortage of linguists has worsened due to the war on terrorism. We now
    face regional languages and dialects never considered important before
    11 September.
        Imagery Analysis
        Requirements for imagery continue to grow. New platforms are
    producing an increasing flow of data, but our ability to exploit this
    data has not kept pace. We are doing well on the Tasking portion of the
    Tasking, Processing, Exploitation, and Dissemination (TPED) of imagery,
    but insufficient communications and lack of imagery analysts hamper the
    remaining aspects of the process. Additional funding is needed to
    realize the full potential of this intelligence source. USPACOM still
    requires a robust theater-level intelligence gathering capability
    against the entire threat spectrum.
    Command, Control, Communications, and Computer Systems (C\4\)
            Capabilities
        Information technology (IT) continues to influence warfare at every
    turn. C\4\ is the unsung workhorse of any operation, requiring 24 hours
    a day/7 days a week reliable, timely and uncorrupted service. As
    evidenced by the world's recent response to terrorist events, the need
    for information sharing between service, joint, and coalition partners,
    as well as local, State, and Federal organizations, has increased
    exponentially. This requirement places a strain on an already
    antiquated and stressed communications network. Since C\4\ encompasses
    a wide spectrum, I will focus on three primary areas of continued need:
    (1) an end-to-end communications infrastructure, (2) information
    assurance, and (3) interoperability.
        First, the end-to-end communications enterprise provides the
    foundation to electronically link garrison and forward-deployed forces
    to commanders at all levels. USPACOM's vast AOR, mostly separated by
    ocean and encompassing countries with under-developed C\4\
    infrastructures, requires forces to rely heavily on satellite
    communications (SATCOM). We continue to make great strides in many of
    the SATCOM programs and I thank you for your continued support.
    However, aging equipment and specifically, limited Ultra High Frequency
    (UHF) SATCOM capacity over this AOR, is fast becoming a factor in my
    ability to command and control forces. With the recent terrorist
    attacks and our ongoing efforts to root out terrorism as a whole,
    SATCOM connectivity to our highly specialized forces is more critical
    than ever before. The new challenge is to ensure that critical SATCOM
    upgrades, the fielding of new satellite programs, and the launching of
    new satellites remain on track to replace the aging fleets currently
    orbiting the earth in support of warfighters.
        As an inseparable partner with the space segment, we must inject
    similar technology advances into the base, post, camp, and station
    infrastructures. In the Pacific Theater, we still operate on cables and
    wiring installed as far back as the 1960s. These cables are no longer
    dependable. Coupling this condition with the ever-increasing user
    requirements for more and more information, we must quickly modernize
    to support the growing bandwidth and increased speed requirements of
    our intelligence gatherers, planners and warfighters. Information is
    truly a force multiplier.
        Our second focus area is information assurance (IA). How we protect
    our sensitive information from potential adversaries while providing
    access to, and sharing it with, our coalition partners is probably the
    toughest challenge we face in today's C\4\ environment.
        Although we have made significant strides to improve IA in USPACOM,
    we are far from 100 percent protected. Cyber warfare never rests. Our
    USPACOM networks continue to receive daily cyber probes and potentially
    dangerous virus and hacker attacks. They can occur at any time and any
    place in the theater and the consequences can be severe, if we are not
    on guard around the clock. The payback for IA is not always as easily
    recognizable as with the production of new airplanes, ships, or tanks.
    You cannot touch and feel information protection, but a loss of
    critical or time-sensitive information, or a denial of service, can be
    far more detrimental to national security than any single weapon
    system. An example of the heavy IA investment needed for additional
    hardware is the protection afforded by current cryptographic equipment
    to secure networks for command and control of daily operations.
    Replacement parts for this aging equipment are difficult to obtain--a
    limiting factor as technology increases the speed, connectivity, and
    capacity of our networks. Cryptographic modernization programs are
    essential to improve the effectiveness of the U.S. Government
    cryptographic inventory. For example, airline flight schedules and
    blueprints of our embassies are simply tidbits of information. But,
    that information in the wrong hands may improve the enemies' chances of
    producing devastating results as evidenced by recent terrorist
    incidents.
        Ongoing IA improvements will require a continued heavy investment
    in equipment, training and technically skilled people. I ask for your
    support as we strive to implement a ``defense in depth'' posture into
    our daily information operations.
        The third C\4\ area is interoperability. The events of 11 September
    have caused us to concentrate hard on interoperability, especially with
    civilian and coalition partners in support of global counter-terrorism
    efforts. We must reassess our processes in these areas.
        I firmly believe we must revamp our acquisition system, especially
    in the area of IT. Long-term replacement programs are detached at an
    early stage from the dynamic reality of operations and warfare. They
    emerge decades later with new systems that are better than what they
    replace, but not as good as what they could or should be in meeting the
    needs of the warfighter.
        Our system does not put engineers together with the operators to
    fix real operational problems, deal with real war plan deficiencies and
    emerging threats, or take advantage of real opportunities. The current
    system, which drives the actions of the detached bureaucracy of
    requirements writers, contracting officers and program managers, is
    only tenuously connected to what our forces need to operate and fight
    better.
        We must integrate the engineers with the operators in a spiral
    development approach in which we build a little, test a little, and
    then build a little more. Let them see firsthand the interoperability
    problems that exist between civilian, joint and coalition
    organizations. For example, our Joint Task Force (JTF) commanders use
    service variants of our Global Command and Control System (GCCS),
    because the joint version is not as capable as the service variant and
    is not fully fielded across the theater. As another example, the land
    mobile radio systems that our police and fire departments use are not
    interoperable with our military systems. These incompatibilities
    prevent key personnel from sharing critical information in a timely
    fashion, and could easily lead to catastrophic results.
        We can address many of these interoperability issues by using this
    spiral development approach, and putting engineers in the field during
    joint exercises, training maneuvers and technology demonstrations.
    Initially, this approach comes with an increased cost until we can
    identify capabilities in programs that we do not need. But the timely
    and increased operational capabilities provided to the warfighter as
    result of it more than justify the initial expense.
        Maintaining our leading edge in C\4\ technology, assuring our
    critical information and improving interoperability with our coalition
    partners are essential to protecting American security interests in the
    21st century. Our command is working hard to mitigate these
    limitations; however, we need increased C\4\ funding to maintain the
    operational edge over our adversaries.
    Multiple Theater War Sustainment Issues (Harvest Eagle, APS-4)
        Refurbishment and reconstitution of Air Force Harvest Eagle bare
    base assets are key to both current operations plans (OPLANs) and
    USPACOM operations in support of the global war on terrorism. Harvest
    Eagle's tent-based housing modules allow forward-deployed or
    reinforcing units to establish airfield operations where local
    infrastructure is austere or lacking. Degraded before their use in
    current operations, our deployable bare-base assets capacity will
    continue to be a limiting factor to executing OPLANs and contingencies
    without fully funding refurbishment and reconstitution.
        Shortfalls in pre-positioned equipment and supplies to support
    combat operations in the Korean Theater of Operations are also of major
    concern. The Army maintains a strategic inventory of sustainment
    supplies as part of Army Pre-positioned Stocks (APS). These stocks
    sustain forward-deployed and initial follow-on ground forces, and
    include major end items such as engines, repair parts, medical
    supplies, packaged petroleum products, barrier/construction materials,
    operations rations, and clothing required to sustain combat operations.
        Additionally, we have significant shortfalls in Army APS-4
    Sustainment Stocks designated to replace projected combat losses,
    especially critical during the early stages of a major theater war
    (MTW) on the Korean Peninsula. Within these sustainment stocks, Class
    VII (Major End Items) and Class IX (Repair Parts) have the most serious
    shortfalls. Finally, less than 30 percent of Joint Service Lightweight
    Integrated Suit Technology chemical protection suits (to support
    operations in a nuclear, chemical, biological environment) are
    available in sustainment stocks. The combination of these shortfalls
    degrades our ability to conduct sustained combat operations on the
    Korean Peninsula.

                          USPACOM FORCE TRANSFORMATION

        Our enemies and potential enemies are working hard to develop ways
    to defeat the U.S. Armed Forces. We cannot allow our current military
    dominance to lead to complacency and future defeat. Force
    transformation is a priority at USPACOM. We have made rapid progress
    over the past year in developing Joint Mission Force capabilities, in
    our Advanced Concept Technology Demonstrations (ACTDs) and in aligning
    force transformation with our Joint Training and Theater Security
    Cooperation (TSC) plans. Experimenting as we exercise and operate is
    becoming routine. Individual commanders are also making advances
    through their own initiatives, with service and USPACOM support.
    Examples include the High Speed Vessel (HSV) that Marine forces on
    Okinawa have leased to make movement within the theater faster at less
    expense and the development of numerous networking and decision support
    capabilities. We continue to work closely with U.S. Joint Forces
    Command (USJFCOM), the executive agent for joint force experimentation,
    and are increasing the involvement of allies and coalition partners to
    enhance interoperability and combined force capabilities as we
    transform U.S. forces.
    Joint Mission Force (JMF) Objectives
        The objectives of USPACOM's JMF concept are to enhance the speed of
    action, precision, and mission effectiveness of Theater Joint Task
    Forces (JTFs). Our vision is to create a seamless Joint/Combined
    Pacific Theater response force capable of accomplishing the full
    spectrum of missions, from a complex contingency through humanitarian
    assistance (HA), and serving as the leading edge during a major war.
    This transformation effort has moved from its concept development in
    war games to implementation in exercises that enhance our ability to
    rapidly form and deploy a JTF.
        Through the JMF concept, Battle Staff Rosters supported by service
    components now provide tailored on-call augmentation for key billets at
    USPACOM's designated JTF headquarters. These staffs are trained to
    provide the performance of a Standing JTF Headquarters, without
    incurring the overhead of a separate organization. Command
    relationships for designated JTF and component commands are already
    established and rehearsed to enable rapid activation and deployment.
        Command, control, communications, computers, intelligence (C\4\I)
    baseline requirements have also been established and are routinely
    tested in our command and control exercise program to ensure our
    ability to establish a common operating picture and theater network for
    collaborative planning. Our JTFs now use newly published CD-ROM based
    and Web-accessible standard operating procedures (SOPs) internally
    linked with checklists and templates. Information management serves as
    the foundation for the SOP, and is supported by a standardized JTF Web
    site that facilitates Web-centric information pull. Our primary JTFs
    now train to assigned missions with packaged, mission-oriented training
    standards, including new tasks designed to examine draft doctrine
    linked to technology, for integrated and synchronized fires and
    maneuver.
        The current focus for transforming JTF capabilities are in the
    areas of joint fire and maneuver, battle space situational awareness
    and the common operational and tactical pictures, coalition force
    integration, force protection, and rapid JTF formation.
        Based on 3 years of development, the JMF concept is our prototype
    standing JTF Headquarters. JMF provides greater flexibility for
    multiple crises, capitalizes on component core competencies, requires
    no additional manpower, and allows for normal service rotations and
    deployments.
        During Exercise Kernel Blitz (Experimental) in June 2001, we
    demonstrated Wide Area Relay Network (WARNET) technologies in the
    Extending the Littoral Battlespace (ELB) ACTD. Our follow-on JTF WARNET
    initiative will provide our JTFs with organic, wireless, and secure
    connectivity for planning and execution at the tactical level. The JTF
    WARNET communications network, associated applications, and interfaces
    support joint forces across a widely distributed battlespace to provide
    real-time and near real-time command and control (C\2\), collaboration,
    common tactical picture and joint fires across service boundaries.
    Under the technical leadership of the Office of Naval Research with
    substantial funding support from OSD, JTF WARNET development continues
    for prototype deployment with operational forces in 2004.
    Coalition Involvement in Joint Mission Force (JMF) Efforts
        Our JMF concept is an essential part of Theater Security
    Cooperation (TSC). To improve regional readiness for coalition
    operations, we are developing a Multinational Force (MNF) SOP tailored
    from the JTF SOP we built last year. This more generic document will
    include broad operational considerations that our multinational
    partners can readily implement when one acts as the lead nation with
    the United States serving in a support role. The Multinational Planning
    Augmentation Team (MPAT) serves as the instrument for MNF SOP
    development. The MPAT conducts collaborative development of the
    document over the Asia-Pacific Area Network (APAN) and at workshops in
    the region. Joint Experimentation with coalition partners is
    coordinated in bilateral venues such as the Annual Staff Talks with
    Singapore and Australia. This spring, USPACOM will fully involve
    coalition partners by hosting a Coalition Transformation Workshop as
    part of our annual ACTD conference.
    Joint Task Force (JTF) Joint Experimentation Program (JEP)
        Our JTFJEP focuses on transforming JTF operations and is fully
    coordinated with the JEP of USJFCOM. Our JTFJEP includes technology
    insertion experiments during exercises to advance our practice of JTF
    operations, both in the U.S. and coalition venues.
        This year we have planned two major experiments. The first
    experiment will occur as part of our command and control exercise
    (C\2\X) series where we train for rapid formation of a JTF. Our C\2\Xs
    over the past year made significant advances in sharing common
    procedures and a common operational picture (COP) among JTF subordinate
    commanders, and in collaborative planning. We will experiment next with
    advanced capabilities to manage and control information flow on the JTF
    networks, and incorporate advanced fires management capabilities. Our
    second experiment will be in a coalition environment during Exercise
    Cobra Gold with Thailand, Australia, Singapore, and Malaysia. By
    experimenting as we exercise, we provide a continuous series of field-
    tested warfighting improvements in joint and combined operations before
    we make key procurement decisions.
    Advanced Technology Development
        I am a strong supporter of USPACOM's Advanced Concept Technology
    Demonstrations (ACTDs). They provide important near-term joint and
    combined warfighting capabilities. Since I last spoke with you, USPACOM
    has been awarded 6 new ACTDs, bringing the number of ACTDs involving
    USPACOM to 18, more than any other major command. Almost all our
    service Component Commanders, designated JTF Commanders, Subordinate
    Unified Commanders, and each of my Staff Directors have responsibility
    for executing one or more ACTDs. USPACOM forces are involved in
    transformation across the theater.
        Our six new ACTDs will provide new operational and tactical
    capabilities.

             The Micro Air Vehicle ACTD will provide small units
            enhanced situational awareness using miniaturized sensors on a
            man-portable unmanned air vehicle.
             The Language and Speech Exploitation Resources ACTD
            will reduce language barriers and improve coalition operations
            by providing a tool to automatically translate languages.
             The Joint Explosive Ordnance Disposal--Knowledge
            Technology Operations Demonstration ACTD will provide Explosive
            Ordnance Disposal (EOD) teams in the field with a portable,
            rapidly updateable, computerized database for safely disarming
            explosive devices in the field.
             The SPARTAN ACTD will provide enhanced battlespace
            awareness and increased force protection for surface and
            subsurface operations, by demonstrating the capabilities of
            unmanned surface vessels with modular sensor packages. SPARTAN
            is also the leading candidate for an improved TSC initiative
            involving co-development of advanced capabilities with
            coalition partners. The Singapore Armed Forces are interested
            in co-developing this system with us.
             The Thermobaric Weapon ACTD provides a standoff weapon
            for attacking tunnels and underground facilities. This program
            potentially provides two to three times the lethality over
            currently fielded penetrating weapons.
             The Signals Intelligence Processing ACTD provides
            improved capabilities to collect and process signals.
    Coalition Theater Logistics
        In parallel with transforming our forces, we must also bring along
    coalition partners. Last year, I testified that, thanks to your strong
    support, we were starting work on our Coalition Theater Logistics ACTD.
        This is an important initiative, co-sponsored by Australia, to
    demonstrate how coalition logistics information can be exchanged at the
    national, operational and tactical levels. Over the last year, we've
    finalized operational requirements; signed a project arrangement with
    Australia that leverages technology from both countries, and embarked
    on a technical development program that puts us on the brink of
    providing a coalition force with a breakthrough capability--plan and
    execute coalition force deployment through selective information
    exchange between existing national logistics information systems.
    Continued support will ensure that we achieve all our objectives.
        We have also partnered with Thailand and are beginning discussions
    with Singapore, Korea, and Japan to partner with them during future
    phases of ACTD development. In parallel with transforming our forces,
    we must also bring along coalition partners.
    Joint Warrior Interoperability Demonstration (JWID)
        USPACOM is the designated-host commander in chief for the fiscal
    years 2002 and 2003 execution of the Joint Staff J6I-sponsored JWID.
    Despite numerous other interoperability and transformation initiatives
    in progress, JWID has exceptional potential to address the real and
    near-term command, control, communications, computers, intelligence,
    surveillance, and reconnaissance (C\4\ISR) interoperability challenges
    facing joint and coalition operations. Working with the U.S. Marine
    Corps, this year's lead service, USPACOM has broadened the scope of
    challenges being investigated, focused the operational environment
    underpinning JWID to simulate demands of current military operations,
    expanded the list of countries participating to include Pacific Rim
    countries for the first time, and introduced warfighter rigor in
    executing the demonstration period and assessment of proposed
    technology solutions.
        U.S. industry and government activities have responded to the call
    for interoperability solutions that span the C\2\ spectrum from
    strategic to tactical and that embrace new approaches to challenges in
    the situational awareness, common operating picture, decision support,
    collaboration, logistics, multi-lingual, joint and coalition fires,
    multi-level security, and medical arenas. For the first time, there
    will be incipient focus on support for humanitarian assistance and
    disaster-relief enablers. Due to success in our JMF program, USPACOM
    has introduced a Combined Task Force Web-portal interface for
    organizing, visualizing, and transferring the products produced by
    various JWID demonstrations and interoperability trials.
        We have also made a concerted effort to enhance the understanding
    and participation by other Commanders in Chief to ensure that the
    results from JWID will deliver solutions to the C\4\ISR challenges that
    each of them confront in routine and contingency operations.
    Multi-Domain Dissemination System (MDDS)
        An unresolved challenge of furthering coalition readiness in the
    Pacific is the problem of multi-level security. Our intelligence-
    sharing relationships with our theater partners vary from country to
    country. Therefore, completely separate structures for passing
    classified information are required to interoperate with each
    individual country. To meet this requirement, developing and
    accrediting multi-level security technology, such as the MDDS, remain a
    high-interest item in USPACOM. Such technology and capability is
    imperative toward fully realizing our engagement strategy for any
    Pacific coalition force.

                               SUMMARY STATEMENT

        In summary, the forward deployed and forward-stationed forces of
    the U.S. Pacific Command are making a difference in promoting American
    interests in security and peaceful development in the Asia-Pacific
    region. We are relentlessly pursuing terrorists that threaten American
    citizens and interests. With a sustained effort and support of regional
    partners, we will succeed in rooting them out. U.S. Pacific Command's
    priorities remain readiness, regional (theater) security cooperation,
    and transforming U.S. forces to achieve a revolution in military
    affairs. The men and women of the U.S. Pacific Command appreciate this
    opportunity to tell their story and the support that you give them.

        Senator Reed [presiding]. Thank you, Admiral.
        General Schwartz.

    STATEMENT OF GEN. THOMAS A. SCHWARTZ, USA, COMMANDER IN CHIEF,
      UNITED NATIONS COMMAND, U.S. FORCES KOREA, COMBINED FORCES
                             COMMAND KOREA

        General Schwartz. Yes, sir. Senator Warner, members of the
    committee, thank you for having me here today. I appreciate
    this opportunity. I am honored to be with you today. After 27
    months in Korea, almost completing 6 years service in Korea,
    the highlight of my 35 years is being a part of this great
    alliance and serving our country in northeast Asia.
        We are accomplishing our mission every day, no doubt about
    it. We are deterring war. We did it for 50 years. President
    Bush came to us recently and he said to the public: We will do
    it for 50 more if need be; we are committed to the alliance.
    That is very reassuring.
        We are ready to fight tonight. We know it. South Korea
    knows it. The good part of that is, North Korea knows it. That
    is all part of deterrence. That is why we have peace and
    prosperity on the peninsula today, because we are trained and
    ready.
        I am proud of our soldiers, sailors, airmen, and marines
    that are there. They face the enemy every day. I am amazed
    every day at how positive they are--upbeat about the mission,
    understanding, and willing to drive on and stay trained and
    ready.
        I am also pleased to announce to you that over 175
    Senators, Congressmen, and members of their staff have come to
    the peninsula within the last 2\1/2\ years while I have been a
    combatant commander to visit, to understand, and to hear the
    Korean story brief. It has been reassuring to us and to all
    those soldiers, sailors, airmen, and marines serving overseas.
    We thank you so much.
        It is a great story, Korea, but it is a hardship story.
    Eighty-five percent of the young men and women serving our
    country today who are classified by the Department of Defense
    as serving in a hardship area serve on the peninsula of Korea.
    It is not easy. There are expenses to them out of pocket that,
    even lowballing it, are $4,000 to $6,000. While their families
    are at home trying to make do, they are spending this money. It
    is a hardship on these families. It is a hardship on the young
    people. This is one of the reasons that I am very excited about
    the initiative, both in the House and the Senate, to try to
    give them some tax break to help compensate for some of the
    sacrifices that they make.
        We have a high declination rate of command. I discussed
    this with Senator Warner yesterday. In fact, the first three
    lieutenant colonels and colonels that I called to congratulate
    on command in Korea informed me they were not coming, they were
    declining command and resigning from the United States
    military. That is not reassuring, but it is a track record that
    we have to do something about.
        I report to you that North Korea remains without a doubt
    the major threat to stability and security in northeast Asia.
    The President was clear about this when he was on the
    peninsula. He was strong, he stated his convictions, and there
    is no doubt in either Korea's mind where this country stands
    with respect to North Korea.
        Kim Jong Il continues to build his military at the expense
    of his people. He grows stronger while his people suffer, and
    he remains dangerous, adaptive, and unpredictable, again at the
    expense of his people.
        I would remind you, as we all well know, every day we serve
    there we are not at peace. We need a road map, if we are not at
    peace, to a peaceful solution. We refer to those as confidence-
    building measures. We have come to a good agreement with the
    South Koreans about a road ahead, about the confidence-building
    measures, a four-phased approach to dialoguing with North
    Korea.
        Senator Warner, you asked about the dialogue and how it was
    going. It is not going well. We are ready to talk. The
    President came to the peninsula and said to North Korea that we
    are ready to talk. The stumbling block there? North Korea. We
    are waiting. We will wait patiently, but we are ready to
    engage.
        I am amazed every day at this great alliance. I am amazed
    and I have to report to you how great the Republic of Korea is
    as an ally. They have stepped up to the plate. Right after
    September 11, President Kim asked ``What can we do?'' They
    offered 470 personnel. They have sent their navy, an LST. They
    have sent four C-130s. They sent a medical support unit. They
    are willing to meet any request that we have, and President Kim
    said they would spend in excess of $500 million to support this
    effort. He would exceed the money he spent on Operations Desert
    Storm/Desert Shield. Quite an ally.
        They also have stepped up to the plate in the Special
    Measures Agreement. Last year, I can report to you, they
    contributed $425 million in direct contributions. We just
    finished a contract negotiation with them. This year they will
    contribute $490 million; the year after that, 10 percent more
    to about $550 million; 10 percent more after that, to $600
    million. That is stepping up to the plate. That is a good ally.
        They have increased their contribution from a measurable 41
    percent to an expectation of 50 percent, and if you throw in a
    new agreement we have with them on the Land Partnership Plan
    they will exceed 60 percent of the contribution. Of course, we
    set a goal of 70. They are on the move and they are making a
    difference.
        I am excited about the Land Partnership Plan because it is
    best referred to as BRAC-Korea. I looked at the 85 camps and
    stations we had. I looked at the 41 major installations on that
    peninsula and I said we can do better. We can consolidate. We
    can improve the quality of life, we can improve the force
    protection, and we can improve the readiness of the forces in
    Korea if we shrink this footprint.
        We have negotiated now for 2 years with the Koreans and on
    the 15th of March we are going to sign a landmark agreement
    called the Land Partnership Plan, BRAC-Korea. It will cost the
    Koreans in excess of a billion dollars to consolidate our
    forces, again stepping up to the plate. It is a win for that
    country because we return over 50 percent of the acres we
    currently own--every acre is precious in Korea--and it is a
    good step forward in terms of our relationships. It is a win-
    win situation for both countries.
        My priorities I think are well stated in the summary that I
    submitted to this committee. I would be glad to answer
    questions on them in the future.
        Let me conclude with this, if I may. This alliance is
    strong. This alliance is ready. We have a world-class military
    called the Republic of Korea. It is becoming a high tech,
    information age military. It is moving and transforming with
    us, a remarkable ally. I am proud to serve there, proud of what
    our country is doing there, trained and ready.
        Thank you very much, sir.
        [The prepared statement of General Schwartz follows:]

               Prepared Statement by Gen. Thomas A. Schwartz, USA

        Chairman Levin, Senator Warner and distinguished committee members,
    I am honored to appear before you as Commander in Chief, United Nations
    Command, Republic of Korea--United States Combined Forces Command
    (CFC); and Commander, United States Forces Korea (USFK). We want to
    first express our deep gratitude to the United States Senate for the
    consistent support you have provided our forces over the years. During
    the last year several members of the Senate spent time visiting the men
    and women of USFK. From this committee, Senator Bunning, Senator
    Nelson, and Senator Sessions honored us with a visit last year. They
    experienced the culture of this critical region, saw the area's
    urbanization and economic growth and were able to discuss current
    issues with the Korean people. They talked with American troops about
    their sense of mission and readiness to fight, monitored their morale,
    and mentally noted the incredible sacrifices they make every day. They
    had the opportunity to see for themselves the ``good, bad, and ugly''
    living and working conditions in Korea and to visit with many of our
    service members and families. The more than 37,000 soldiers, sailors,
    airmen, marines, and Department of Defense civilians of USFK benefit
    from your commitment, which enables us to accomplish our vital mission,
    the defense of Korea.
        We welcome this opportunity to present a brief update on the
    current security situation. We are grateful to report today that the
    ROK-U.S. security alliance remains strong. Our alliance continues to be
    one of the greatest enjoyed by the U.S., and remains essential to the
    peace and security of Northeast Asia. This great alliance is
    effectively deterring North Korean aggression today, and if called
    upon, will successfully defeat a North Korean attack. The tragedy and
    subsequent challenges of terrorist attacks on the World Trade Center
    and the Pentagon have actually strengthened our cohesion, as the Korean
    government works with us to combat terrorism on a global level. We
    stand ready to support the war on terrorism, and to continue close
    coordination on many issues. Our efforts will continue to ensure
    security and contribute toward regional stability. Northeast Asia
    demonstrates enormous economic potential, but it is a region with a
    long history of conflict and strife.
        Today we will key on the following topics: (1) Northeast Asia, A
    Critical Region for America, (2) Korean Peninsula Overview, (3) North
    Korean Overview and Strategy, (4) ROK-U.S. Alliance, (5) Vision for the
    Future, and (6) Command Priorities. Throughout this statement, we will
    identify key requirements and areas that merit continued attention and
    the full application of available resources. On behalf of all the
    service members of USFK, I want to thank you for all Congress has done
    to improve and enhance the successful mission accomplishment of this
    command. Your efforts have advanced the national interests of our great
    nation and promoted peace throughout the region.

                I. NORTHEAST ASIA--A CRITICAL REGION FOR AMERICA

        Northeast Asia is second only to the Americas in economic impact to
    the U.S. It is a geographic crossroads, a place of historic conflict
    and an area of great hope for the future. The physical presence of U.S.
    ground, air, and naval forces in Korea and Japan contribute
    significantly to U.S. interests and to those of our Northeast Asian
    allies, friends and partners. These contributions will endure well into
    the future. U.S. presence provides the military security in Northeast
    Asia that encourages economic growth and political stability. The U.S.
    has made great strides in our ability to rapidly project power, but
    there is no substitute for some degree of forward presence when faced
    with limited warning times, an unpredictable foe, and the tyranny of
    distances. Physical U.S. presence brings peace of mind to the
    democratic nations of the region, and provides tangible deterrence. Our
    presence also provides the access and influence necessary for defending
    the Republic of Korea today and responding to regional threats in the
    future.
        This security is directly responsible for much of the economic
    vitality and political stability in the region. Physical presence has
    fostered the rapid expansion of the mutually reinforcing elements of
    democratization and market economies. The U.S. commitment in Northeast
    Asia provides the confidence necessary for foreign investment to flow
    into the region. The results are staggering. In the course of a single
    generation, the countries of Japan, China, Korea, Taiwan, and Singapore
    have risen respectively to numbers 3, 4, 7, 8, and 10 in total trade
    with the U.S. China ($4,800,846 billion), Japan ($2,950 billion), Korea
    ($626 billion), Russia ($620 billion) and Taiwan ($357 billion) rank as
    the 2nd, 3rd, 13th, 14th and 17th largest economies in the world when
    measured by Gross Domestic Product (GDP) purchasing power. This U.S.
    presence is a force for stability and prosperity that diminishes the
    need for costly arms races and successfully deters aggression in an
    area with a history of regional wars, revolutions and memories of
    violent colonization.
        For over two millennia, the Korean peninsula has sat astride a
    geographic fault line where civilizations and cultures clash. The
    interests and influence of the four great powers--U.S., China, Russia
    and Japan, converge on the Korean Peninsula. Ancient cultural
    animosities remain a dynamic political force. China is striving for an
    increased regional leadership role through economic development and
    military modernization. Russia seeks to increase its regional influence
    and power. Japan is accelerating the evolution of its security role
    internationally, as well as in the region. Throughout history, great
    powers have clashed on the Korea peninsula. As a result, the Korean
    peninsula has witnessed over 30 major wars in its history. Today, the
    current demarcation line between North and South Korea remains the most
    heavily armed in the world.

        Northeast Asia is currently the world's most dynamic region as the
    figure below illustrates. Five of the world's six largest militaries
    (China, U.S., Russia, North Korea, and South Korea) and four nuclear-
    capable powers converge on the Korean peninsula. Northeast Asia's
    military forces are primarily ground-focused and lack precision
    weapons. Conflict would result in tremendous devastation, property
    destruction and loss of life. In this geo-political landscape, the
    presence of U.S. forces supports peace and stability to the region.
    Northeast Asia is truly a critical region for the U.S. and the world.

                         II. KOREAN PENINSULA OVERVIEW

        Optimism over the pace of North-South reconciliation efforts
    following the June 2000 summit meeting between ROK President Kim Dae-
    jung and Chairman Kim Chong-il, the dictator of North Korea, has been
    tempered by a year of progress and then followed by year of slowdown in
    peninsular dialogue. Chairman Kim Chong-il has yet to follow through on
    his promised visit to South Korea. North Korea unilaterally cut off
    most Inter-Korean contacts in March 2001 and has elected to not sign an
    agreement to de-mine a portion of the Demilitarized Zone (DMZ) that
    would pave the way for a North-South transportation corridor.
    Ministerial talks resumed in September, but planned family re-unions
    were abruptly cancelled in October by North Korea. The sixth
    Ministerial Talks ended with limited measurable results in November
    2001. No further talks are planned at this time. Unfortunately, we have
    come to realize that North Korea is either unwilling or unable to
    significantly improve relations with the ROK or U.S. The security
    situation remains dynamic and the military threat has not been
    fundamentally reduced on the peninsula or in the region. The North
    Korean military continues to remain a formidable threat to the security
    of Northeast Asia. North Korea remains on the U.S. State Department's
    list of ``Nations that Sponsor Terrorism.'' On January 29th, our
    president stated our ``goal is to prevent regimes that sponsor terror
    from threatening America or our friends and allies with weapons of mass
    destruction. Some of these regimes have been pretty quiet since
    September the 11th. But, we know their true nature. North Korea is a
    regime arming with missiles and weapons of mass destruction, while
    starving its citizens.'' Despite attempts by the South Korean
    government, North Korea has shunned all attempts to discuss substantive
    military confidence building measures to reduce tensions. As reported
    in numerous press accounts, Pyongyang views these confidence-building
    measures as ``premature'' and continues to castigate the U.S.
    administration's policies as being too aggressive.
        North Korea initially responded to the events of September 11 with
    ``deep regret'' and some condemnation of the acts. In addition,
    Pyongyang publicly rejected terrorism and the support of terrorist
    organizations, and signed two anti-terrorism treaties and announced
    plans to sign five more. However, started to condemn Pyongyang
    criticized the American military actions in Afghanistan and elsewhere.
    Although North Korea did welcome the new Afghan government, North Korea
    has responded negatively toward President Bush's recent state of the
    Union address in recent writings and public broadcasts. Although we
    welcome and hope for more direct North-South dialogue and
    reconciliation, we watch with caution as the military threat from North
    Korea continues to remain high, both in conventional capability and
    weapons of mass destruction. North Korea continues to divert a large
    percentage of its national resources toward military expansion and
    modernization, and maintains approximately 70 percent of its forces
    within 90 miles of the DMZ.
        In 2002, we expect North Korea to continue diplomatic outreach
    strategies designed to garner much needed economic aid and assistance.
    However, in 2003, three critical events will influence the political-
    military affairs on the Peninsula. First, changes in regional politics
    will take place with elections in the ROK. Secondly, pressure will
    intensify on the DPRK to start cooperating with the International
    Atomic Energy Agency (IAEA), so as to avoid unacceptable delays in the
    delivery of essential nuclear components necessary to build two light
    water nuclear reactors in North Korea. Third, while North Korea has
    said it will continue a moratorium on missile launches until 2003, it
    has not made a commitment to extend beyond that time. These three
    events form a potential nexus for increased tension on the Peninsula.
    These key events are centered around the United Nation's International
    Atomic Energy Agency (IAEA) inspections of reprocessing facilities in
    the north, which must occur prior to delivery of key components for the
    light water reactors. We will watch these events carefully. Failure to
    allow a timely completion of IAEA inspections into the history of the
    North Korean nuclear program could jeopardize existing agreements.

                    III. NORTH KOREAN OVERVIEW AND STRATEGY

        North Korea continues to pose a dangerous threat to the stability
    and security on the Korean Peninsula, the region, and, increasingly,
    the world. They remain a dangerous adversary with regional operational
    reach and global proliferation impact. The Kim Chong-il Regime
    continues to maintain a large, capable, and forward deployed military--
    making the area between Seoul and Pyongyang the most militarized place
    on earth. Korea remains a place where U.S. Forces could almost
    instantaneously become engaged in a high intensity war involving
    significant ground, air, and naval forces. Such a war would cause loss
    of life numbering in the hundreds of thousands and cause billions of
    dollars in property destruction. The military capabilities and policies
    of North Korea have remained fundamentally unchanged since my testimony
    last year.
        Political Environment: Kim Chong-il is firmly in control and, with
    the support of the military and his leadership circle, he establishes
    all policies for North Korea. We were optimistic throughout last year
    that the June 2000 summit between Kim Dae-jung and Kim Chong-il would
    lead to improved North-South relations. In the months that followed the
    June Summit, the North and South held several Ministerial and sub-
    Ministerial discussions as well as three small-scale family reunions.
    In early 2001, the North for its own reasons broke off discussions with
    the South. President Kim's administration, with U.S. support, has
    continued to pursue dialogue with the North, and has taken a number of
    steps to encourage the North to return to the table. As President Bush
    has noted, we are disappointed that the North has yet to react
    favorably.
        On June 6, 2001, President Bush stated our willingness to undertake
    serious discussions with North Korea on a broad agenda, including
    improved implementation of the Agreed Framework, verifiable constraints
    on North Korea's missile programs and a ban on its missile exports, and
    a less threatening conventional military posture. This position has
    been restated repeatedly by Secretaries Powell, Rumsfeld and others.
        Over the years, North Korea has established diplomatic relations
    with 150 countries. This past year, North Korea focused its efforts on
    establishing diplomatic relations outside the Northeast Asia region,
    particularly in Europe where it established relations with 13 of the 15
    members of the European Union. Kim Chong-il visited China and Russia in
    part to counter-balance the South's growing relationship and influence
    with the North's historical benefactors, but also to garner much needed
    economic assistance and political support. This increased diplomacy
    allows them to enlarge their donor base for aid while expanding their
    growing illicit trade activities.
        The North Korean diplomatic outreach, in many ways, undermines the
    international legitimacy of the regime. Ambassador after ambassador who
    have visited North Korea tell me about the dismal and almost surreal
    conditions that exist there. Authoritarian controls strictly censure
    all facets of information into the country. The more North Korea
    engages other countries, the more the world learns about North Korea
    and they see for themselves the reality of life for the people that
    live under the Kim family regime.
        Economic Environment: North Korea remains incapable of feeding its
    population or providing for its basic energy needs. Their
    infrastructure continues to deteriorate and they are unable to reverse
    their current economic situation through improved industrial
    production. Consequently, they depend on others, predominately the
    U.S., the ROK, Japan, and China to meet their food and fuel needs. The
    North maintains a policy that ensures the military gets first priority
    on national resources. The policy allows the Korean People's Army (KPA)
    to operate a parallel military economy in which weapons, missiles, and
    drugs are produced for sale. Profits from those sales accrue directly
    to the military. Additionally, Kim Chong-il continues to provide luxury
    items such as cars, housing, and food to supportive senior leaders to
    ensure their loyalty. We see no potential change in this policy that is
    clearly designed to support the military and ruling elite at the
    expense of the North Korean people.
        Accurately assessing the size and condition of the North Korean
    economy is difficult at best. North Korea continues to treat most
    economic data as a state secret and much of its economy is supported by
    foreign aid and illicit activities. Consequently, economic assessments
    of the North Korean economy remain nothing more than educated guesses.
    Based on current and projected conditions in North Korea, we expect no
    significant economic change in 2002. North Korea will continue to
    require and receive outside aid for survival.
        Role of Military: The Korean People's Army (KPA) is by far the
    dominant presence in the country. It is the one instrument of power
    that enables North Korea to extract aid from its neighbors in the
    region. The KPA ensures regime survival by controlling the internal
    situation and deterring external threats. The military also plays a
    major role in the economy. The armed forces are North Korea's largest
    employer, purchaser and consumer. It provides the regime with a
    substantial portion of its hard currency through weapons sales and
    illicit activities.
        Conventional Forces: The KPA is the fifth largest active duty
    military force in the world, numbering over 1.17 million personnel. The
    ground force is the world's third largest, numbering almost one million
    soldiers. An estimated six million Reserves support the Active-Duty
    Force. The North Korean air force has over 1,700 aircraft. The navy has
    more than 800 ships, including the largest submarine fleet in the
    world. The North fields a total artillery force of over 12,000 systems,
    including 500 long-range systems, deployed over the past decade, with
    the ability to strike Seoul from their current location. About 70
    percent of the North Korean Army is deployed south of Pyongyang and
    those forces are capable of conducting an attack with very limited
    tactical warning. However, an attack scenario appears unlikely at this
    time because North Korea clearly knows that its regime would ultimately
    be destroyed as a result of any attack.
        Asymmetrical Forces: The North's leadership has developed
    substantial capabilities in ballistic missiles, special operations
    forces, and weapons of mass destruction. The North's asymmetric forces
    are dangerous, receive a large portion of the military budget, and are
    well trained. Methodical improvements continue in each area.
        Because the North's ballistic missile program provides such
    powerful diplomatic and political leverage, the North's ballistic
    missile program remains a top priority. Over the past 2 years, North
    Korea has upheld its self-imposed moratorium on flight-testing long-
    range missiles, but has not halted research and development. They
    continue to refine their missile capabilities by continued testing of
    rocket engines and other components. Kim Chong-il stated to President
    Putin that the current missile flight-testing moratorium will remain in
    place at least until 2003. However, they continue to export missiles
    and missile technology throughout the world. Their ballistic missile
    inventory includes over 500 SCUDs of various types that can threaten
    the entire peninsula. They continue to produce and deploy medium-range
    No Dong missiles capable of striking Japan and our U.S. bases there.
    Pyongyang is also developing multi-stage missiles capable of striking
    the continental United States. They have tested the 2,000-kilometer
    range Taepo Dong 1 missile and continue significant work on the 5,000
    plus kilometer Taepo Dong 2 missile.
        North Korea's special operations forces (SOF) are the largest in
    the world. They consist of over 100,000 personnel and constitute a
    significant force multiplier. We consider them a tough, dedicated, and
    profoundly loyal force. They undergo year-round training to develop and
    maintain their skills. During wartime, these forces would attack from
    the ground, air and sea against both our forward and rear areas. The
    North will concentrate SOF against our critical warfighting nodes and
    seek to prevent rapid force and sortie generation by U.S. and ROK
    forces.
        North Korea also possesses weapons of mass destruction. A large
    number of North Korean chemical weapons threaten both our military
    forces and the civilian population centers of South Korea and Japan. We
    assess that North Korea has very large chemical stockpiles and is self-
    sufficient in the production of chemical components for first
    generation chemical agents. Additionally, North Korea has the
    capability to develop, produce and weaponize biological warfare agents.
    They can deploy missiles with chemical warheads and potentially have
    the ability to weaponize biological agents for missile delivery.
        We continue to be concerned with North Korea's potential nuclear
    threat. Though in January 2002, North Korea allowed the IAEA to visit
    an isotope facility, North Korea still refuses to comply with nuclear
    non-proliferation protocols. If North Korea will not allow inspections
    of their nuclear facilities, the international community cannot verify
    that they have in fact stopped their nuclear weapons development
    program. Current assessments indicate that North Korea may have
    produced enough plutonium for at least one, and possibly two, nuclear
    weapons.
        Proliferation: North Korea contributes to the instability in the
    Middle East and South Asia through its aggressive sales of arms,
    missiles, and technological expertise. Missile sales and the transfer
    of missile technology to Iran, Syria, Libya, Iraq and Pakistan
    especially trouble us. The possibility that North Korea could transfer
    nuclear technology to extremist regimes is real and is one of our
    greatest concerns.
        Illicit Activities: North Korea engages in a variety of other
    state-sponsored illicit activities to include counterfeiting of U.S.
    currency, money laundering, the production and sale of illegal drugs,
    trading in endangered species, and smuggling. In many cases, these
    illicit deals are sponsored by the military, with the cash profits
    returning to military hands.
        Force Improvements: North Korea cannot afford to significantly
    modernize its aging conventional force. They continue to produce
    limited numbers of replacement systems and depend on China and Russia
    to provide equipment and spare parts. North Korea continues to
    modernize systems that can marginalize specific U.S. military
    strengths. North Korea is adaptive. They study our actions, most
    recently in the Balkans and Afghanistan, in order to develop tactics
    and techniques aimed at offsetting our technological advantage. They
    concentrate their efforts against U.S. surveillance, precision
    munitions and force generation capability. They continue to improve
    their command, control, communications and intelligence (C\4\I)
    systems, harden and bury their facilities, improve lines of
    communication, disperse forces, and improve camouflage, concealment,
    and deception (CC&D) measures. The result of these efforts has been to
    increase the survivability of North Korean combat power, and to
    complicate our ability to generate the forces and sorties required to
    defeat a North Korean attack.
        North Korean force improvements are indicative of their continued
    policy to maintain a large, capable and effective military.
    Unfortunately, many people view the North Korean military from a cold
    war or conventional perspective and mistakenly assess them to be
    incapable of challenging the ROK--U.S. alliance. Such people become
    blind to the continuing threat posed by North Korea. The North Korean
    military is evolving in ways that make them a threat into the 21st
    century. They constantly study how we fight and develop capabilities
    that leverage their strengths against our weaknesses. They are adaptive
    and are methodically improving their military capabilities. They can
    conduct operations that span the spectrum from smuggling, kidnapping
    and assassination, to conventional combat. They are clearly the type of
    current and future threat that is described in the Quadrennial Defense
    Review.
        As a result of their specific actions, North Korea continues to
    pose a dangerous and complex threat to the peninsula and the WMD and
    missile programs constitute a growing threat to the region and the
    world. The Kim Regime seems unwilling or unable to change its stated
    intent, goals, and policies. Consequently, they will continue to use
    the threat of military action to gain concessions, mostly in the form
    of economic aid from neighboring countries in the region and the United
    States. It is our opinion that North Korea's infrastructure will
    continue to degrade and that the regime will require outside aid to
    meet basic food and fuel requirements. Despite the extreme hardships on
    its people, the Kim regime will continue to support the elite and the
    military at the expense of the general population. Kim Chong-il will
    remain in power and the North Korean government will likely not
    experience an economic driven collapse in 2002. Although an attack on
    the ROK would cause many casualties and great destruction, CFC would
    rapidly defeat North Korean forces.

                             IV. ROK-U.S. ALLIANCE

        The alliance between the Republic of Korea and United States of
    America remains the best in the world. It is an alliance built on
    honor, respect, a common set of values and a commitment to the defense
    of the freedom of South Korea. Our power, might and daily readiness are
    unmatched. Unquestionably, our South Korean partners are professional
    warfighters. They can mobilize over 4.5 million service members and can
    bring 54 divisions to the fight. Our combined warfighting assets after
    full mobilization include over 1,500 strike aircraft that can launch
    over 2,000 daily sorties, over 1,000 rotary aircraft, more than 5,000
    tracked vehicles, 3,000 tanks and over 250 combat ships to include four
    or more carrier battle groups. If necessary, this unequalled combined
    combat power and might will decisively defeat a North Korean attack and
    destroy its military and the Kim regime. It is this real and
    overmatching power that strengthens our deterrence mission and
    ultimately provides regional security.
        Our continuing cooperation and understanding is a success story in
    many ways. This success has been institutionalized in our Mutual
    Defense Treaty of 1953, the Status of Forces Agreement of 1966, the
    annually conducted Security Consultative Meetings that have been held
    since 1968 and Military Committee Meetings that have been held since
    1978. The Republic of Korea has actively supported American non-
    proliferation efforts and joined the Missile Technology Control Regime
    (MTCR) in 2001. The ROK expects to resume chemical weapons destruction
    by the spring of 2002 and hopes to achieve a 4 to 5 percent destruction
    this year and 45 percent destruction within two to 3 years. Three
    alliance areas deserve particular note: Impact of September 11, Wartime
    Fighting Readiness, and an update on the Special Measures Agreement and
    Defense Burdensharing.
        Impact of September 11: The public condemnation of the terrorist
    acts against the U.S. was led by President Kim Dae-jung, who pledged
    support in the spirit of the Mutual Defense Treaty. He was quick to
    pledge support even greater than the ROK provided during Operation
    Desert Storm. The outpouring of sympathy from the Korean people and
    military was phenomenal, as was their commitment to the security and
    safety of U.S. troops. The ROK immediately moved to match words with
    deeds, sharing intelligence, increasing force protection measures and
    planning support packages for multi-theater use for Operation Enduring
    Freedom (OEF).
        We believe the events of 11 September will prove to be a seminal
    event in the history of the ROK-U.S. alliance. As we speak to you
    today, ROK forces are leading a U.N. mission, providing force
    protection for U.S. interests on the peninsula, and supporting OEF on a
    global scale. The ROK sent liaison officers to both PACOM and CENTCOM
    and quickly learned how the war on terrorism would be prosecuted. They
    have worked hard to learn lessons about how to support freedom's effort
    on both a regional and global scale. ROK forces are standing shoulder
    to shoulder with U.S. forces from Tampa to Kyrgyzstan and from CENTCOM
    to PACOM. They have accomplished this while increasing their U.N.
    support and taking command of the U.N. mission in Cyprus. This is an
    incredibly strong alliance!
        In addition to their efforts on the Korean peninsula, our allies
    have sent forces in support of OEF. The ROK Navy has been supporting
    OEF since 18 December 2001, with one Landing Ship Transport (LST).
    Utilizing over 170 personnel, they have delivered construction
    materials for runway repairs to coalition facilities at Diego Garcia
    and are assisting with search efforts regarding the downed B-1 bomber.
    The ROK Air Force continues to support U.S. global efforts with four C-
    130s conducting transportation operations between Guam and Wake Island
    with support as far west of Diego Garcia. Furthermore, the ROK has
    provided a Mobile Field Hospital since February. This team of 130
    personnel has provided medical care in the vicinity of Afghanistan in
    support of coalition efforts in OEF. Overall, the ROK has committed
    over 470 personnel, high value equipment, and significant force
    structure to support OEF objectives. The ROK support for the U.S. led
    coalition against terrorism has been comprehensive from humanitarian
    aid to global deployments of medical personnel, navy ships and air
    force units. We believe this type of support is key to a greater global
    and regional perspective for the Republic of Korea and will assist
    their evolving role as a regional leader.
        The Republic of Korea, along with Japan, will co-host the 2002
    World Cup Soccer Games between 31 May and 30 June. Teams from thirty-
    two nations will participate. An estimated five million visitors are
    expected to attend these events. This is the largest sporting event in
    the world and is of enormous importance to the Republic of Korea, Japan
    and all of Northeast Asia. This is the first time the World Cup has
    been held in Asia and the first time it has been co-hosted by two
    nations. In the wake of the September 11th attacks against the World
    Trade Center and the Pentagon, the world is looking to the Republic of
    Korea and Japan for assurance that they can provide a secure and stable
    setting for the World Cup Games. Unfortunately, the World Cup could
    also provide a lucrative terrorist target. The Republic of Korea has
    prepared extensively to ensure the utmost safety and security of
    athletes, officials and visitors, but is seeking the benefit of U.S.
    support and experience from our lessons learned.
        The ROK JCS has formally requested U.S. military support to the ROK
    for 2002 World Cup Games. We will work with ROK JCS to respond to their
    request in order to strengthen an already unshakable alliance and
    demonstrate U.S. resolve to prevent further acts of terrorism or
    aggression. The U.S. Forces Korea staff continues to work the details
    of our support to the World Cup Games closely with the ROK JCS Staff.
    We have found this coordination effort to be another opportunity to
    leverage the strength of this great alliance. As the Secretary of
    Defense told me--this command and the Nation pledges its assistance to
    our ROK allies. Together, we will ensure that these games are safe!
        Wartime Fighting Readiness: Combined Forces Command (CFC) is ready
    to fight and win tonight. We are making great strides in our
    capabilities and readiness. In this section, we will briefly discuss
    three topics: (1) Exercise and Training, (2) Force Protection
    Initiatives, and continued (3) Modernization efforts by ourselves and
    the ROK.
        (1) Exercise and Training Programs--The primary component of our
    warfighting readiness and bedrock of this great ROK-U.S. alliance is
    the CFC Exercise and Training Program. Both the content and timing of
    these combined and joint exercises successfully posture this command to
    deter, defend and decisively win any military engagement. However,
    because of the proximity of the threat, the complexity of this theater
    and the high turnover of both ROK and U.S. military personnel, we must
    conduct robust theater level exercises annually to maintain combat
    readiness. Each exercise is unique and focused on essential components
    of the combined warfight. The Exercise and Training Program is a
    critical pillar in our theater engagement strategy, I cannot stress
    this enough. We must fully resource this program. That being said, I
    regret to report that any loss or reduction of dollars to support these
    exercises will weaken readiness and deterrence, hamper our combined
    forces training and put at risk our ability to fight and win.
        The exercise support we receive from the U.S. Chairman of the Joint
    Chiefs of Staff is invaluable. The combination of the increased cost of
    strategic lift with a flat-line strategic lift budget has eroded our
    exercise strategic lift capability. We must address this by some means.
    Simply put, we are bringing fewer personnel to train for a higher cost
    than ever before. It would be unwise to let this trend continue over
    the Future Years Defense Plan (FYDP).
        We have made significant changes in our exercise program over the
    last year. The linkage of the Reception, Staging, Onward Movement and
    Integration (RSOI) exercise and the Foal Eagle (FE) exercise is a
    monumental step for this alliance. We have not sacrificed realism nor
    readiness--we've enhanced it. We have not reduced our exercise tempo--
    we've made a giant step forward in quality training. We monitor
    everything we do in combat readiness training carefully because these
    exercises are not hypothetical. These training events exercise the real
    ``go-to-war'' plans. Korea remains one of the only theaters in the
    world where real war plans form the basis of our exercise program.
        We are working equally hard to improve our training capability. The
    training environment, for U.S. forces stationed in Korea, is best
    described as a ``Tornado in a Closet.'' Our 93 percent personnel
    turnover rate, as well as constraints with land to train on, provides
    significant challenges. Personnel and units can, and do, train to
    standard, but it requires intense, detailed, and creative planning and
    management on the part of our leadership to make this happen. Our
    commanders accept these challenges, and become innovative in their
    approaches to provide better and more realistic training environments
    for their Soldiers, Airmen, Sailors and Marines. We are creatively
    maximizing our Joint Use Ranges using mobile target sets that
    synchronize our efforts with ROK forces. We have several initiatives
    aimed at improving our urban training capability and we have a
    strategic roadmap aimed at improving key training areas such as
    Rodriguez Range for joint and live fire training. The fiscal year 03
    President's Budget restored the Korea Battle Simulation Center to full
    funding; we must now address the remaining requirement of $3.0 million
    for training and instrumentation. We will continue to develop our range
    capabilities to ensure readiness now and for the future.
        (2) Force Protection--The events of September 11 have caused us to
    re-evaluate every aspect of our force protection program. The most
    significant lesson learned was that a high number of personnel must be
    committed to maintaining an increased force protection posture. At
    increased force protection levels, 20 percent of our force is
    committed. The environment in Korea presents several unique challenges
    for the protection of our members. Although we assess the terrorist
    threat in Korea to be generally low, our vulnerability to such an
    attack remains high. While we have taken significant steps to improve
    our security posture, many of the solutions require long-term
    programmatic changes, which cannot wait for a specific threat to
    appear.
        Our force protection challenges here in Korea are centered on the
    following systemic issues: lack of standoff and our off-post personnel
    and activities.  Compounding these challenges is the impact of the 1-
    year tour on the majority of service members.
        Our most difficult and ``resource intensive'' challenge is the lack
    of standoff. Urban encroachment at our facilities, and the lack of
    available real estate for force protection requirements contribute to
    this vulnerability. As a result, our installations will have virtually
    no early warning of a hostile action, whether by vehicle or a personnel
    infiltration. This challenge is intensified by the fact that USFK has
    85 manned installations, many quite small, spread across the theater.
    We have organized these installations into 12 ``base clusters'', which
    operate as our major ``hubs''. While not ideal, since many of these
    bases lack the ability to plan or respond to terrorism, this is the
    best balance of our manpower and resources. However, many of these base
    clusters still lack resources necessary for basic force protection.
    Large portions of our personnel reside in off-post lodging. Because of
    the lack of on-base housing, many of our service members, civilians and
    family members must live in the local civilian community, with little
    security.
        Our challenges are numerous. We have several initiatives underway
    to improve our force protection posture. On-going initiatives, which we
    will describe in detail later, will reduce the number of installations
    and eliminate many of the smaller facilities. This will have multiple
    payoffs for force protection: eliminating our smallest and most
    difficult to defend installations, thus reducing the manpower burden of
    defending them; creating standoff at our enduring installations; and
    allowing us to position our security and terrorist incident response
    forces for maximum benefit. USFK is also a test bed for the use of
    Biometrics for our access control systems. This technology has DOD wide
    application; it allows central management of who is authorized on our
    bases, and also dramatically reduces the risk of counterfeit ID Cards
    and passes. Starting last year, we began aggressively exercising our
    security systems through the use of Red Teams and terrorist incident
    response exercises. These initiatives are part of our on going force
    protection strategy review.
        We have developed a force protection strategy that addresses
    immediate concerns as well as long-term requirements. We brought in a
    team to assist our base clusters in updating their antiterrorism plans,
    identifying vulnerabilities and mitigation procedures and determining
    resource requirements. The next phase is to address the physical
    security shortfalls at our ``enduring'' installations. This will
    involve placing perimeter intrusion detection and monitoring systems at
    our major bases to partially compensate for the lack of standoff.
    Additionally, we will restructure our access gates to more easily
    support increased security postures. Currently this posture requires
    large manpower commitments and creates major difficulties in
    maintaining base operations. The final phase will be to fully integrate
    force protection as we consolidate our forces on enduring
    installations. During the execution of this consolidation and base re-
    alignment, we plan to carefully balance the location our security
    forces and incident response forces.
        In addition, as part of our force protection review, we concluded
    an anthrax policy study, which consolidated requirements and re-
    evaluated our posture versus chemical and biological terrorism. The
    events of September 11 were a call to re-evaluate all threats and the
    damage they can do. We re-energized a vigorous education program to
    ensure our USFK personnel and their families are aware of current
    threats and appropriate preventive and deterrent measures. We have
    coordinated our efforts with the ROK Ministry of National Defense to
    ensure that both we and the ROK are prepared to meet this threat. We
    will continue to make force protection our top priority.
        (3) Modernization Efforts--The ROK continues to develop defense
    policy changes. They are committed to a post-unification presence for
    the U.S. and an enhanced regional role for the ROK. The ROK has begun a
    subtle but definite shift in their security focus from a unidirectional
    North Korean view to a multidirectional Northeast Asian and world-view.
    Indicative of this shift is their interest in coalition support for the
    ``war on terrorism'' and their shift in defense spending away from an
    infantry-heavy army and to transform into a high-tech, agile,
    information age military. As a result, the ROK Ministry of National
    Defense has supported budget shifts that now favor more development and
    growth in air and naval forces. Together with regional diplomatic and
    world economic activity, this military shift indicates a ROK desire to
    increase their role in East Asian security and world stability.
        The ROK paper entitled Defense Outlays Preparing For The Future
    2001, published by the ROK Ministry of National Defense (MND),
    emphasizes aggressive modernization goals for South Korean forces based
    on the near-term North Korea threat and an uncertain regional security
    environment. United States Forces Korea wholeheartedly supports these
    efforts. South Korean force modernization improvements continue in many
    key areas through indigenous production, co-production, direct
    commercial sales and procurement through Foreign Military Sales. The
    ROK armed forces continue to demonstrate a very strong preference for
    U.S. military equipment. South Korean military purchases from the U.S.
    as a percentage of total foreign procurement has ranged from 59.2
    percent to 98.9 percent in the last 10 years. The decade average is
    78.6 percent.
        Last year South Korea addressed counter-fire shortfalls by fielding
    indigenously produced K-9 155mm self-propelled artillery systems.
    Significant automated shooter-to-sensor challenges remain, but the K-9
    fielding coupled with this year's procurement of a second battalion of
    U.S. multiple launched rocket systems (MLRS) and the purchase of the
    Army Tactical Missile System Block 1A (ATACMS) set the stage for an
    improved counter-fire capability, which was previously addressed as a
    serious shortfall.
        The events of September 11 have alerted the world to the dangers of
    terrorism. In Korea, MND is reviewing the possibility of a new Anti-
    terrorism command to develop force protection policy and apply it to
    current and potential regional threats. Additionally, the current
    chemical, biological and radiological defense command will be
    reinforced, reorganized, and placed under the ROK Joint Chiefs of Staff
    for Homeland Defense in preparation for the World Cup and Asian Games
    in 2002.
        All of Northeast Asia is currently experiencing a slowing of the
    economic growth that was projected earlier in 2001. In the ROK, this
    economic downturn has forced purchase delays of major weapon systems
    that were planned for 2002--including the future fighter, the Patriot
    (SAM-X) missile system, an airborne warning and control system (AWACS),
    and cancellation of attack helicopter modernization initiatives. The
    military remains committed to improving South Korea's military
    capabilities as the economy improves. South Korea plans to sign a
    contract to procure 40 future fighters in 2002. Negotiations on the
    purchase of two Patriot Battalions for the 2002-2004 time period are
    ongoing. In addition, the ROK plans to initiate negotiations to procure
    three Aegis type destroyers. When procured, these acquisitions will
    significantly address South Korea's air defense problems. The ROK Navy
    also plans to procure eight additional P-3C anti-sub/anti-surface
    aircraft from the U.S. and completely refurbish them.
        It is essential that these systems be interoperable with U.S.
    systems. This will ensure that military might can be brought to bear
    quickly and decisively as required. Not only will these systems improve
    today's ROK-U.S. combat power, they will also contribute to future
    regional security in Northeast Asia.
        Three areas remain where the Republic of Korea must acquire
    capabilities to support our combined combat readiness: (1) Command,
    control, communications, computers, and intelligence (C\4\I)
    interoperability; (2) Chemical and biological defense capabilities; and
    (3) Preferred munitions necessary for the early stages of the war plan.
    USFK is working closely with the ROK on C\4\I interoperability. As a
    result of the September 11 terrorist attack, the ROK is also placing
    more emphasis on chemical and biological detection. While the ROK has
    procured preferred munitions, more are needed. To accomplish this we
    must maintain close coordination as we analyze, research, develop and
    test the best systems for our combined alliance. We are working hard to
    ensure that both U.S. and ROK modernization and transformation progress
    is synchronized and complimentary. A cornerstone of this is the on-
    going OSD/MND Future Study of the Alliance. In 2001, we completed the
    Joint Study of the Alliance analyzing the future role of USFK in the
    next 20 years. The study addressed Confidence Building Measures that
    potentially could be implemented in efforts reduce military tensions in
    support of Korean reconciliation. This year we are studying both ROK
    and U.S. increasing regional roles and our combined modernization
    efforts.
        A key element of our U.S. modernization efforts would be to acquire
    an Army Interim Brigade Combat Team (IBCT) in Korea to replace one
    existing brigade. This will provide the maneuverability and combat
    power necessary to operate in the mountainous and increasingly
    urbanized terrain of Korea. The ICBT will add a new component in USFK's
    deterrence capability to counter a North Korean threat or provocation.
    It will also prepare us to refocus the Army's forward deployed forces
    in Korea for a regional role. The IBCT provides a rapidly deployable
    ground force to complement Air Force Aerospace Expeditionary Forces,
    Marine Expeditionary Forces, and Navy Amphibious Ready Groups and
    Carrier Battle Groups as U.S. Forces Korea's role transitions to
    regional security.
        USFK must continue to improve our support capability to insure our
    wartime fighting readiness. Headquarters accounts continue to be
    squeezed and our UNC/CFC/USFK/8th U.S. Army Command Headquarters
    Support and Air Force Base Support account is no exception. We need our
    full requirements recognized if we are to repair critical
    infrastructure, replace aged systems and train our combined team.
        Defense Burden-sharing and Special Measures Agreement Update: The
    current ROK Defense Ministry continues its long-standing reputation of
    support. It demonstrates daily a commitment to honoring its host nation
    responsibility for defense cost sharing. The military budget for the
    Republic of Korea (CY 2002), recently passed the National Assembly is
    $12.5 billion (16.3 trillion won). ROK defense spending, as a
    percentage of Gross Domestic Product, will increase to 2.8 percent for
    2002, which remains below the 3.0 percent minimum level identified in
    the ROK modernization plan. If this trend continues this could reduce
    their ability to modernize.
        The 2001 Report to Congress on Allied Contributions to the Common
    Defense identifies four burden-sharing categories--Multinational
    Military Activities, Defense Spending as percentage of Gross Domestic
    Product, Foreign Assistance and Cost Sharing. Of those four categories,
    South Korea met the congressional goal in two, namely Multinational
    Military Activities and Foreign Assistance. However, at a defense
    budget of 2.7 percent GDP in 2000, the ROK did not match the U.S.
    defense budget of 3 percent GDP. The ROK has contributed soldiers to
    U.N. peacekeeping operations (PKOs) since 1993. The ROK continues to
    maintain a peacekeeping battalion on in East Timor. It provides
    military observers to India/Pakistan, Georgia and the Western Sahara
    for a total contribution in 2001 of 474 soldiers. Also, it is worthy to
    note that the first ROK general officer was selected to command a U.N.
    PKO. Lieutenant General Hwang, Jin-ha (a former military attache to the
    U.S.) will command the U.N. peacekeeping force in Cyprus in 2002. The
    ROK met the Foreign Assistance goals in 2001. In the cost-sharing
    category, although significant progress has been made, the Republic of
    Korea has not yet offset 75 percent of U.S. stationing costs. The U.S.
    and ROK Special Measures Agreement (SMA 99-01) outlines the cost-
    sharing contributions of both nations. Contributions are made in both
    cash and in-kind support--71 percent of the program is in cash and the
    remaining 29 percent is in-kind. In accordance with the SMA
    Implementation Agreement (IA), USFK and the ROK MND jointly calculated
    and agreed the SMA contribution for 2001 is roughly $425 million. This
    contribution reflects an 8 percent growth adjustment from the 2000
    contribution.
        This year, the Koreans agreed to a new Special Measures Agreement
    for 2002-2004 (SMA 02-04) pledging $490 million for 2002, an increase
    of 15 percent from the $425 million in 2001. The Koreans have steadily
    increased their share of non-personnel stationing costs rising from 36
    percent in the 2001 burden-sharing report to 41 in the 2002 report.
    Their contributions over the next 3 years will push them over 50
    percent. The total contribution rose 15 percent, the biggest single
    increase in SMA in 8 years. In addition, 2003-2004 contributions will
    be increased by 8.8 percent plus inflation protection in the form of
    Gross Domestic Product Deflator as determined by the Korean National
    Statistics Office. The 2002-2004 SMA demonstrates the ``real and
    meaningful growth'' we are seeking for USFK Non-Personnel Stationing
    Costs.

                            V. VISION FOR THE FUTURE

        As President Bush has said, ``Power is defined by mobility and
    swiftness, influence is measured in information, safety is gained in
    stealth, and force is projected on the long-arc of precision-guided
    weapons. This revolution perfectly matches the skills of our country,
    our people and the superiority of our technology. The best way to keep
    the peace is to redefine war on our terms.'' I would add that our
    strength is also measured in our personnel readiness and the values we
    teach to our military forces. The real lesson learned in Afghanistan is
    that our soldiers, sailors, airmen and marines are the best quality
    force in the world. In Korea, we want to blend our strengths with that
    of a great ally who is determined to improve their capabilities and
    whose courage and loyalty is unmatched. We are faced with a two-fold
    challenge to modernize and move to a capabilities-based force while
    ensuring that our near-term readiness is unmatched and that we are
    ready to fight and win tonight.
        We must modernize our forces, improve our capabilities and fix
    long-term problems with a comprehensive plan. Our strategy to modernize
    and transform is based on our ability to build a capabilities-based
    organization and enhanced warfighting structure centered on key hubs.
    The key to this organizational change is the transition to
    organizational hubs as part of our Korean Master Plan for 2010. The
    picture below illustrates this plan.

        A great example of our future capability is our proposed Northeast
    Asia Regional Simulation Center (centered at our C\2\ hub). We are on a
    path to have a ``Center of Excellence'' capability for Joint and
    Combined simulations and exercises by 2008. This will become the
    cornerstone for merging ROK/U.S. doctrine in the near-term. It has the
    inherent growth potential to provide a multi-lateral focus as both
    USFK's and the ROK's power projection capability evolves to meet the
    future. The simulation center also provides the means to work difficult
    coalition integration issues as we build a more effective combined
    doctrine.
        The key feature of our strategic facilities vision is the Land
    Partnership Plan (LPP), which will allow us to move from 85 scattered
    bases into the centralized hubs I have described above. We will divest
    ourselves from 41 major bases to 20 enduring installations. This will
    improve near-term readiness, enhance force protection, reduce
    stationing costs, reduce our footprint and return valuable land to the
    second most densely populated country in the world.
        The LPP is our vision for the future and it has now been
    incorporated into the Overseas Basing Requirements Study. It gives us a
    comprehensive approach to ensure that USFK is the best manager of
    precious Korean land. We are happy to report significant progress from
    last year.
        Our combined efforts with the ROK have produced an agreement which
    we are confident will be ratified by the ROK National Assembly. This
    long-term effort is fully funded and will require no additional support
    from Congress, however, it is fully dependent on stable MILCON funding.
    The picture below illustrates this plan.

        LPP seeks to improve the combined forces readiness posture, enhance
    public safety, stop training range encroachment, improve force
    protection and advance quality of life for U.S. forces. This initiative
    will also reconfigure and protect training areas and consolidate our
    forces around enduring installations. LPP potentially returns about
    32,000 acres of valuable commercial and agricultural land to South
    Korea. This will provide a long-term cost savings for USFK by allowing
    the command to invest in and sustain our reduced infrastructure at the
    enduring installations. In exchange, the command seeks the acquisition
    of about 612 acres of additional land adjacent to enduring U.S.
    installations where we plan to relocate units and activities. The ROK
    will also grant USFK joint use of its own military training areas on a
    very efficient limited time-share basis. This will enable us to improve
    training and preserve readiness. Installations returned to the ROK will
    be transferred in accordance with the Status of Forces Agreement (SOFA)
    and current DOD guidance. The plan does not add any requirement for
    USFK to meet stricter environmental standards than those already
    required under the current DOD policy or the SOFA. However, being good
    stewards of the environment in our host country is critical to our
    mission and the alliance. We urge you to support LPP, which we feel is
    a key to positioning USFK forces to meet security requirements well
    into the future. It will provide ``irreversible momentum'' to our
    efforts to fix significant command problems brought on by years of
    neglect. We expect to have a signed agreement by 15 March 2002.
        The congressional funding that you provided last year has been of
    enormous help, and we are extremely grateful for your demonstrated
    concern. Change is in the air, and on-going construction on USFK
    installations is a common site today. Family housing improvements,
    barracks renovations, workplace upgrades and new utilities are
    currently being developed. Our vision is beginning to be realized in
    USFK. But in order to ensure that our ``first-class military'' is
    provided with ``first-rate facilities,'' it is important to sustain
    this encouraging progress. Continued investment-your investment-is
    critical to provide the force protection and basic quality of life each
    service member deserves. Your involvement will enhance our military
    readiness and preserve and protect the environment of our South Korean
    ally, while providing enhanced regional stability.

                             VI. COMMAND PRIORITIES

        I would now like to discuss the status of programs and areas in
    which we have resource allocation concerns. My intent is to discuss
    possible problem areas as they now appear. However, these program areas
    and their associated funding levels may change as a result of the
    strategy and defense review, which will guide future decisions on
    military spending. For fiscal year 2002, the President's budget
    includes funding to cover our most pressing priorities. I ask that you
    consider my comments in that light. Achieving our vision and
    accomplishing our missions requires us to prioritize scarce resources.
    Our command priorities are: (1) Command, Control, Communications and
    Computers, Intelligence, Surveillance, and Reconnaissance (C\4\ISR)
    Functionality; (2) Precision Engagement; (3) Support toward
    Reconciliation Efforts; and (4) Improve Quality of Life.
        (1) C\4\I Functionality--United States Forces in Korea are working
    very hard toward achieving the vision articulated in the Department of
    Defense's Quadrennial Defense Review--to attain and maintain the
    asymmetric advantage afforded with network-centric warfare systems. We
    are in the process of modernizing these systems, and with your help, we
    will maximize our technological lead to ensure victory on the
    battlefield.
        The Korean theater poses special problems in attaining and
    sustaining information superiority. The destructive effects resulting
    from the lethality of modern weapons compressed into such a small
    geographical area overwhelm the imagination. It not only increases the
    potential for high casualties and collateral damage, but due to exposed
    and vulnerable C\4\I facilities and infrastructure, may significantly
    affect our ability to command and control forces and execute the war
    plan. It is this reality that sets Korea apart from all other theaters.
    It mandates C\4\ISR that is survivable, interoperable, and secure in a
    joint and combined environment.
        We have developed a strategy to address both our short-term needs
    and our long-range requirements. This strategy is made up of three
    objectives: (1) Developing a theater-wide C\4\I vision that supports
    the operational needs of the operator while facilitating process
    change; (2) Aligning and institutionalizing the Program Objective
    Memorandum (POM) with operational requirements to resource and sustain
    the vision; and (3) Fielding C\4\I capabilities that support current
    readiness and enhance our ability to ``fight tonight.'' We have made
    tremendous progress in each of these areas. The power of information
    and information technology is the catalyst for several comprehensive
    changes we are making to our command and control structure as well as
    operational concepts and warfighting processes.
        Common Operational Understanding (COU) is the organizing mechanism
    for this transformation. COU is a process that transforms situational
    awareness into knowledge-based decisions. It ensures U.S. and ROK field
    commanders dispersed throughout the theater not only have the same view
    of the common operating picture (COP), but have the same level of
    understanding on what the COP means. This consensus can best be
    achieved with C\4\I functionality that provides real-time, interactive
    collaboration capabilities. In an environment where the fleeting nature
    of targets compresses the planning, decision and execution cycle from
    days and hours, to minutes and seconds, achieving COU is paramount to
    success, and in more direct terms, is the essence of decision
    superiority.
        Survivable theater intelligence systems are a critical part of the
    common operating picture and essential to successful combat operations.
    We want to express our deep gratitude for the funding support you have
    provided to our C\4\I infrastructure with regard to the intelligence
    automation and communications segment, called the Pacific Command
    Automated Data Processing Server Site Korea (PASS-K). Our current
    intelligence funding level is addressed in this year's Program
    Objective Memorandum (POM) is adequately funded through the General
    Defense Intelligence Program (GDIP). This stable funding is essential
    to ensure that the planned enhancements necessary to maintain
    information dominance in collaboration with national and theater
    systems become a reality.
        The progress we have achieved with your help, with programs such as
    PASS-K, is a success story, but taking full advantage of the emerging
    technologies has been a constant challenge for this command due to
    years of C\4\ISR funding shortfalls. In the past, un-funded C\4\I
    requirements have had a significant impact on our ability to maintain
    an adequate infrastructure needed to support the increased bandwidth,
    network redundancy, and the modern decision and collaboration tools
    required by my unit commanders. This has forced local units to divert
    money from other operations and maintenance accounts in order to
    maintain our C\4\ISR capability. We have the technical expertise in
    place to fully utilize these technologies but have lacked the
    acquisition authority and consistent funding stream to fully put these
    technologies to work. Such funding would help sustain our C\2\ systems,
    as well as the progress we made in areas such as C\4\ infrastructure
    and information assurance. More importantly, it provides some momentum
    as we look toward the additional plus-ups provided in the fiscal year
    2003-2007 budget.
        However, the C\4\I funding provided to Korea over the next 5 years
    with implementation of Program Budget Decision 725 is absolutely
    critical to addressing our shortfalls. This new funding, starting with
    $67 million in fiscal year 2003, will not only allow us to make up the
    lost ground that occurred over the years, but will serve to facilitate
    the advances we need to implement our vision. I strongly urge your
    continued support of this funding increase over the duration of the
    Future Years Defense Plan (FYDP). Failure to achieve this will result
    in a serious risk to our ability to execute existing warplans.
        (2) Precision Engagement--Precision Guided Munitions, or PGMs, are
    a critical enabler for our Korean warfighting strategy. These state-of-
    the-art munitions are an important part of what we need to be ready to
    win decisively. Since North Korea continues to shelter forces in
    underground facilities and hardened bunkers, we must be able to
    overcome these defenses with key penetrating weapons. The complexities
    of Korean climate drive up our need for Joint Direct Attack Munition
    (JDAM) weapons--our fight demands their accuracy in any kind of
    weather. We are studying the lessons from Operation Enduring Freedom to
    apply in our theater. Just like Afghanistan and Kosovo, precision
    strike is needed to avoid collateral damage on the highly populated
    Korean peninsula. On the other hand, unlike Afghanistan, we face an
    adversary with thousands of mechanized targets and prepared defenses-
    one who has been preparing to fight us as a modernized force for the
    past 50 years. Worldwide, readily available stocks of precision-guided
    munitions are mandatory for our ``warfight'' and our inventories that
    have been diminished by Operation Enduring Freedom must be replenished
    quickly. Since Operation Desert Storm, the American public has become
    accustomed to watching video clips on the nightly news where enemy
    vehicles or bunkers, seen targeted in cross hairs, instantly erupt in
    explosions. That capability does not come cheap, but the cost to not
    pursue PGMs is higher. When we fall back to ``dumb bombs'' to destroy
    enemy targets, historical examples illustrate that the final total cost
    is actually higher. Many more ``dumb bombs'' are required to destroy
    the same target that one PGM has a high probability of hitting.
    Additionally, we increase the risk of collateral damage and civilian
    casualties. PGMs must be addressed by both the ROK and the U.S. We need
    a solid inventory readily available on the peninsula.
        (3) Support Reconciliation Efforts--Although there has been no
    formal change in ROK defense policy toward the North Korean threat,
    early last year it was obvious that a perception of peace had emerged
    within the South Korean public. However, recent failures in talks have
    once again led to a change in how the ROK public regards the reality of
    a heavily armed North Korea. The ROK government has historically given
    much in terms of economic aid and assistance to North Korea, in the
    hope of developing better, more peaceful relations. All talks have now
    stalled, and no tension reduction measures of any sort have been agreed
    to or employed. Even the execution of planned family reunions between
    family members in North and South Korea, have now been postponed
    indefinitely
        The United Nations Command (UNC) will continue to fully support
    President Kim Dae-jung's reconciliation process and the development of
    a road/rail transportation corridor through the Demilitarized Zone.
    President Kim Dae-jung has termed this railroad, spanning Asia and
    Europe, as the new ``Iron Silk Road.'' As the vision of the Korean
    railroad begins to take shape, Korea could benefit immensely from its
    central geographic location. The promise of opportunity and economic
    commerce that these lines could generate is substantial. Any
    development of this Inter-Korean railroad, and the security
    implications involved, will be a significant source of careful
    planning, negotiation and bilateral inter-agency coordination. However,
    the transportation corridor is fully complete on the South side, while
    on the North side we see no progress whatsoever.
        The 1953 Armistice Agreement authorizes the Commander In Chief,
    United Nations Command (CINC UNC) jurisdiction authority over the
    Southern portion of the Demilitarized Zone. To facilitate work on the
    transportation corridor, acting as the CINC UNC, I have delegated
    administrative oversight to the South Korean Ministry of Defense. Close
    cooperation between United Nations Command and the South Korean
    Ministry of National Defense has guaranteed a powerful defense is
    active and in place, and will continue to ensure sufficient levels of
    security in the DMZ during de-mining, corridor construction and future
    operation. As we work closely with North Korea over issues concerning
    access and commerce in this corridor, we will continue to insist that
    all actions, and all confidence-building measures (CBMs) are both
    reciprocal and transparent. I am proud to report that our year-long
    Confidence Building Measures study has strengthened our alliance and
    has produced verifiable options to reduce tension if North Korea will
    only take the same steps. This is exactly the type of armistice issue
    that the UNC seeks to resolve carefully with all our UNC allies and
    coalition partners.
        (4) Improve Quality of Life--As stated in President Bush's
    statement A Blueprint for New Beginnings ``. . ., we cannot honor our
    servicemen and women and yet allow substandard housing levels to
    endure.'' The Korean peninsula faces significant shortfalls in both
    family housing and barracks and has identified substandard living and
    working conditions in most areas. Our facilities are old--32 percent of
    all buildings in the command are between 25 and 50 years old and 32
    percent are classified as temporary buildings. The investment
    philosophy of ``50 years of presence in Korea . . . 1 year at a time,''
    without a continuous and sustained commitment, has taken a severe toll
    on our housing, infrastructure, and morale.
        Our goal is a quality of life that is comparable to other overseas
    assignments. We want to make a tour of duty in Korea an ``assignment of
    choice'' by providing the best quality of life possible. A Korea
    assignment today involves some of the poorest living and working
    conditions of any permanent change of station (PCS) assignment in the
    military. According to current studies, ``Army assignment experts
    report that Korea is their only problematic assignment location for
    both officers and enlisted personnel . . . the Army must nominate many
    enlisted members to fill a single vacancy in Korea . . . the Army must
    contact several officers in order to fill one officer vacancy in
    Korea.'' While no confirmation data was provided by the Air Force,
    ``assignment policy experts opined that Korea and Turkey are the least
    desirable locations in their overseas assignment inventory.'' We must
    improve both the housing and barracks living conditions for our
    personnel and their families to reach our ``assignment of choice'' and
    ``quality of life'' goals. We appreciate Congress's assistance in
    helping improve the grim conditions regarding housing throughout this
    command. Yet over 95 percent of the currently assigned and accompanied
    service members and their families live in inadequate and substandard
    quarters. Furthermore, over 50 percent of the unaccompanied service
    members in U.S. Forces Korea live in inadequate quarters. Overcrowded
    facilities force us to billet many unaccompanied personnel outside our
    installations in dense urban areas, creating force protection concerns
    and imposing a high financial burden on them from out-of-pocket living
    expenses. Investment in USFK facilities has declined as a result of
    constrained defense budgets and competing requirements. Now we see
    growth in the backlog of work necessary to maintain the readiness edge
    we established in past years. We must balance overseas funding among
    the priorities of people, readiness, modernization, and infrastructure.
    Because of past funding shortfalls, we are at a breaking point. We
    cannot continue to mortgage this aspect of our force readiness without
    significant long-term effects. Accordingly, we are finalizing a budget
    that will meet this challenge. Meanwhile, the expectations of our
    commanders, our people, and our families remain high as they urge us to
    balance direct mission support and quality-of-life efforts in the face
    of aging infrastructure and very constrained budgets.
        We recognize that quality-of-life and readiness also extends into
    the workplace environment. Deteriorating work facilities impair
    readiness, reduce the efficiency of uniformed and civilian workers, and
    lowers retention rates of highly qualified and otherwise motivated
    people. Our Sustainment, Restoration, and Modernization (SRM) funding
    levels have only allowed us to provide day-to-day critical maintenance
    of our work facilities and infrastructure and does not allow us to
    address our SRM backlog. To illustrate the hardship this causes, let's
    look at an airman whose job is to maintain an F-15 engine, a soldier
    maintaining an Apache attack helicopter and a mechanic fixing a
    fighting vehicle. They may work in a hangar where the roof leaks or
    they may repair vehicles in the freezing cold. In these conditions they
    are often distracted from fixing the F-15 engine, the Apache helicopter
    or the fighting vehicle. This has both a quality-of-life implication as
    well as a readiness impact. When our service members are distracted
    from accomplishing their primary mission, our readiness suffers. Our
    Soldiers and Airmen see this as quality-of-life issue, and they are
    frustrated that they have to spend an increasing amount of time on non-
    productive efforts. They assume that their leaders do not care! The
    Department of Defense spends millions of dollars training these young
    men and women to work on sophisticated equipment, yet they are required
    to work many non-productive hours tending to their run-down workplaces.
    I think we're losing the battle to maintain the high standards our
    people have come to expect. Aging facilities are more costly to
    maintain. Continued disrepair exacerbates an already serious problem
    and impacts readiness, especially when coupled with a high operational
    tempo and harsh conditions, such as we experience daily in Korea.
        With the high operational tempo and the increasing number of
    married members, we recognize an integral link between family readiness
    and total force readiness. A key element of our quality of life
    initiative is our goal to provide safe, adequate housing for our
    personnel and their families. We firmly believe providing quality
    accommodations improves our members' quality of life, increases their
    satisfaction with military service and ultimately leads to increased
    readiness and retention. Indeed, Korea's uniqueness as a yearlong
    unaccompanied tour has been purchased at a great price. We provide
    government owned and leased housing for only 1,979 personnel--less than
    10 percent of our married service members serving in Korea--compared to
    more than 70 percent in Europe and Japan.
        Our goal is to increase the command-sponsored rate for Korea and to
    house at least 25 percent of our married military members and their
    families by 2010. This initiative will require additional resources and
    support. If we were to address this shortfall, and meet this increased
    demand for housing with traditional military construction alone, it
    would cost the U.S. taxpayer $900 million. Under our comprehensive LPP,
    utilizing Host Nation Funded Construction and cost savings achieved
    with base consolidation, we can cut this cost in half. In order to
    obtain the remaining capital investment required, we plan to use
    existing build-to-lease authority, and leverage the Korean private
    sector to obtain an additional 2,000 units. If we can get help to raise
    the existing statutory per/unit cost limitation from $25,000 to $35,000
    per/unit for overseas leased family housing, we will develop these
    2,000 units at no additional cost to the U.S. taxpayer! With your help,
    we will realize our vision for improving the housing situation in
    Korea, and we will minimize the financial burden on the U.S. Congress.
        We will also improve the quality of our existing housing in fiscal
    year 2003 by continuing our phased renovation and conversion of housing
    units located in Hannam Village in Seoul. We began last year with your
    support and the results have been outstanding. The enthusiasm of the
    occupants over these improvements is spreading across the Korean
    peninsula. They see first hand our efforts to make a difference.
        Unaccompanied Housing Improvements also remain a critical priority.
    Our objective is to provide enlisted service members with quality
    housing by the Department of Defense mandated date of 2008. We have two
    long-range planning tools to guide our investments: The Air Force
    Dormitory Master Plan and Army Barracks Upgrade and Buyout Plan. These
    planning tools have and will continue to guide us in providing quality
    living conditions for our unaccompanied service members allowing us to
    use our limited funds where they are needed the most and at the same
    time keeping our good units good. On-going renovations will continue to
    ensure we provide quality living facilities, however based on our plans
    we still short of our total requirement. The current upgrade plans do
    not cover senior enlisted soldiers. Adequate housing for unaccompanied
    senior enlisted soldiers (E7--E9) and officers is urgently needed as
    well. Unlike CONUS Army units, all Second Infantry Division soldiers,
    including senior enlisted and officers, are required to live on post.
    Eighth Army's shortfall for senior enlisted and officers housing is
    3,100 quarters for E7--E9 and 2,800 for officers. Adequate housing for
    these service-members has been neglected for too long. We urgently need
    to continue our efforts and Congress can help to support this
    responsibility by funding the $81 million MILCON requirement beginning
    in fiscal year 2003.
        Infrastructure Maintenance and Repair is required immediately.
    Funding increases in MILCON for infrastructure upgrades have helped
    USFK to improve conditions not only in our barracks and dormitories,
    but also in other traditional quality-of-life facilities such as
    physical fitness centers. We greatly appreciate your support. However,
    we still have a lot of work to do. The master plans mentioned earlier,
    addressing family housing, barracks and dormitories, respectively, have
    been extremely valuable tools in helping to focus and guide our
    actions. Accordingly, we have just added to our arsenal a Physical
    Fitness Center Master Plan and a Maintenance Facility Master Plan.
    Together, these plans guide us toward wise investments in our most
    urgent quality of life requirements. We need to replace or upgrade 52
    maintenance facilities and 17 physical fitness centers. To begin buying
    out this requirement in fiscal year 2003, we intend to use $21 million
    from the Host Nation Funded Construction program for the maintenance
    facilities. To correct other quality of life and infrastructure
    deficiencies, we need to further address military construction. The
    funding Congress provided in fiscal year 2002 will enable us improve
    infrastructure, facilities and barracks across the peninsula. We will
    continue this effort by applying the remaining $171 million of Host
    Nation Funded Construction money against this improvement effort.
        As part of this comprehensive plan, USFK must demonstrate its
    unwavering commitment to protecting the health of Korean and U.S.
    personnel, while preserving the environment everyday. USFK continues to
    wrestle with environmental protection and problem mitigation programs
    given the age and poor condition of our infrastructure. The number of
    environmental incidents is on the rise in the past year due to failed
    infrastructure and lack of maintenance. Our most immediate
    environmental concern is with the command's aging underground storage
    and heating oil tanks. The cost to remove and replace these tanks will
    be $133 million, but it will be spread over several years.
        Although we have a solid, attainable, and comprehensive self-help
    plan to make service in Korea an assignment of choice for our service
    members, it will take 10 or more years to complete. In the interim, we
    must provide fair incentives to those who serve in the inadequate
    working and living conditions to close the quality of life gap that
    exists today between military service in Korea and service in either
    the continental United States or other overseas locations. To do this,
    we ask that you increase the pay and allowances of military members
    that serve in the Republic of Korea. We have an essential requirement
    to recruit and retain skilled military personnel. We need to continue
    the effort to adequately compensate our people for their service.
    Unlike most American businesses, we financially penalize our military
    members for Korean service. While our service members are motivated by
    much more than money, pay and morale are nonetheless linked. Service
    members want and deserve equal pay for substantially equal work under
    the same general conditions. In addition to an average cost of $3,000
    to $5,000 of out-of-pocket ``hidden 2nd household'' expenses for a 1
    year unaccompanied tour in Korea, our forces see a basic pay inequity
    between their deployment here and equally harsh, but shorter tours to
    southwest Asia and the Balkans. For example, an Army Sergeant (E5)
    serving only a 6-month tour in Bosnia receives approximately $500 per
    month more than an E5 in Korea who is separated from his family for 12
    months. The difference results from tax relief and separate rations
    benefits received by those who faithfully serve in the Balkans--
    entitlements that do not now apply to a typical Korean tour of duty. We
    need your help to level the playing field by providing compensation
    such as a Balkans or Kuwaiti tour provides.

                           CONCLUSION--THE ROAD AHEAD

        The ROK-U.S. Alliance is built on the principle of Katchi-
    Kapshida--``We Go Together!'' Simply put, we have fought a war and kept
    the peace for over 50 years as a combined team. As we prepare for the
    future, both USFK and the ROK military are reviewing their
    modernization plans and transforming our militaries into a
    capabilities-based force. We are looking at new organizational
    structures that will increase our effectiveness, improve our combined
    doctrine and take advantage of new equipment. As we modernize together,
    we must identify complimentary capabilities that support regional
    security and one that helps both the American and Korean militaries to
    focus critical resources on the most cost effective capability.
        Despite the unprecedented June 2000 summit between North and South
    Korea, there is still no ``peace dividend.'' This posture statement
    reflects our efforts to optimize USFK's presence in the most efficient
    manner to meet both current and future missions. For many years, our
    funding requirement statements have merely reflected OMA incremental
    increases over a baseline. Candidly, as a result, we have looked at
    Korea ``one year at a time.'' The result is that we still have
    substandard living and working conditions for our service members that
    are having an adverse effect on the readiness and a significant impact
    on long-term retention. As a commander, I am ashamed of how I ask our
    service members to live and work.
        In conclusion, we would like to leave you with six thoughts:
        First, we want to emphasize that the support of Congress and the
    American people is vitally important to our future in Korea. We thank
    you for all you have done. However, we must also ensure that our
    resolve is consistent and visible so that North Korea, or any other
    potential adversary, cannot misinterpret it. We urge committee members
    to come to Korea and see first-hand the importance of the American
    military presence and the strength and vitality of the United States--
    Republic of Korea alliance.
        Second, the North Korean military continues to adapt its non-
    conventional threat and conduct large-scale training exercises in spite
    of severe economic problems and a perception of a thawing relationship
    between North and South Korea. North Korea's continued growth in
    military capability and their implied intent amounts to a continued
    significant threat. Now, more than ever, the strength of the Republic
    of Korea--United States alliance, built on a foundation of teamwork and
    combined training, provides both nations with a powerful deterrent as
    well as the readiness to fight and win. The North Korean threat to
    peace and stability in Northeast Asia will not fundamentally diminish
    until the North engages in tangible military confidence building
    measures that are reciprocal and transparent.
        Third, now and in the future, the U.S. and Northeast Asian nations
    cannot secure their interests and economic prosperity without credible
    air/land/sea forces in Korea. Presence is essential to security,
    commitment to long-standing friends, and access into the region. As the
    only presence on the mainland of East Asia, U.S. forces in Korea will
    likely play a vital role in the future peace and stability of the
    region. The U.S. forces in Korea require a continued investment in
    basic readiness and quality of life, even if our role shifts from North
    Korea to a regional focus.
        Fourth, achieving our vision and accomplishing our missions
    requires us to prioritize scarce resources. For U.S. Forces serving in
    Korea, the number one command priority remains improving C\4\I
    functionality. We urgently need your help in order to achieve the
    information age advantage that network-centric warfare systems will
    provide. Second, we need a solid inventory of readily available
    precision-guided munitions on the peninsula. Lastly, now and in the
    future, if we are to sustain our Combat Readiness it must be balanced
    and tempered with a quality-of-life that is commensurate with other
    duty locations throughout the world. A First Class Military requires
    First Rate Facilities. As the only presence on the mainland of East
    Asia, U.S. forces in Korea will likely play a vital role in the future
    peace and stability of the region. The U.S. forces in Korea require
    critical investment in basic readiness and quality-of-life now. The
    Land Partnership Plan, that we hope to have ratified by both
    governments by 15 March, 2002, will put us on the proper course to
    improve the Quality-of-Life for U.S. Forces in Korea and their
    families.
        Fifth, this is the third year of commemorations recognizing the
    significance of the 50th Anniversary of the Korean War, viewed by many
    of our veterans as the ``forgotten war.'' We are committed to honoring
    the brave veterans, living and dead, and hope you can join us in Korea
    for these commemorations to remember their sacrifice.
        Finally, you can be justifiably proud of all the exceptional things
    the soldiers, sailors, airmen, marines, and Defense Department
    civilians continue to do with great spirit and conviction. They remain
    our most valuable asset. They sacrifice for our Nation every day. This
    is why we remain so firm that we owe all those who faithfully serve
    proper resources for training, an adequate quality of life, and a
    quality infrastructure. Again, thank you for this opportunity to share
    our thoughts with you.

        Senator Reed. Thank you, General Schwartz.
        General Speer.

    STATEMENT OF MAJ. GEN. GARY D. SPEER, USA, ACTING COMMANDER IN
                 CHIEF, UNITED STATES SOUTHERN COMMAND

        General Speer. Senator Warner, distinguished members of the
    committee: Thank you for the opportunity to allow me to
    represent United States Southern Command here today and provide
    for you the command's posture. A special thanks to Senator
    Nelson, Senator Inhofe, and Senator Sessions for your recent
    trip to Guantanamo Bay, Cuba, to see first-hand the great work
    of the men and women of Joint Task Force 160 in the difficult
    circumstances of our detainee operations.
        But also, thanks to all the members of the committee for
    your unwavering support of United States Southern Command, and
    today a special thanks for your support of the men and women in
    uniform around the world.
        Latin America and the Caribbean make up a very important
    region for the United States. It is a region of growing
    importance and significance, based on demographics, trade,
    natural resources such as oil, and, if nothing else, its
    proximity to the United States at large.
        The last quarter century represents tremendous progress in
    this region, a progress aimed toward building a hemisphere
    composed of a community of democratic nations. Much of the
    credit is due to the men and women of the U.S. military who
    have served in the region during that time. What they have done
    through day-to-day interaction, (joint training, exercises, and
    the opportunities for professional military education in the
    United States for foreign officers and noncommissioned
    officers) is to provide a role model for the proper conduct of
    a military in a democratic society, one that respects the rule
    of law, understands human rights, and is subordinate to civil
    authority.
        All of that set the conditions for the transformation which
    today marks 31 of 32 countries in the area of operations that
    have democratically elected governments. But many of those
    democracies are still fragile. There are challenges that we see
    stemming from instability and corruption, as a result of drugs
    and arms trafficking, illegal migration, organized crime,
    terrorism, and other transnational threats.
        Since 11 September we too at SOUTHCOM have been focused on
    the global war on terrorism. While I cannot tell you that there
    are any confirmed links to al Qaeda originating from Latin
    America, I can tell you that in the tri-border area of Brazil,
    Paraguay, and Argentina there are individuals who have links to
    Hamas, Hezbollah, and al Gama'at. They are terrorist supporters
    in that they provide the resources and funnel funds back to
    those organizations.
        Elsewhere in the theater, there are several domestic groups
    which exact terror on the population through extortion,
    kidnapping, and other acts of violence. Certainly as we look to
    Colombia, I am proud to tell you that we are doing a great job
    in executing the Department of Defense's role in supporting
    Plan Colombia. But certainly, as mentioned earlier, President
    Pastrana's elimination of the Despeje on 20 February changes
    the landscape in that country.
        The Colombian military has done a good job protecting
    civilians as they move to reoccupy the population centers of
    the Despeje. But as we look to the future, the Colombian
    military and the Colombian police lack the resources to fully
    reestablish a safe and secure environment throughout the
    countryside.
        As we continue to look at these challenges at United States
    Southern Command, we will continue with a very comprehensive
    security cooperation plan aimed at every country in the AOR.
    But some of the regional militaries and security forces lack
    the capabilities to fully safeguard their borders against these
    trans-national threats, much less to be full participants in
    regional security cooperation.
        For example, over the last decade security assistance
    through foreign military financing has been insufficient to
    even satisfy the sustainment requirements for the aircraft and
    the equipment that the United States has provided, much less to
    address legitimate modernization needs throughout the region
    and new initiatives that respond to changing challenges.
        The United States Southern Command has some shortfalls
    operationally. Even with the assistance of the Department of
    Defense and the Joint Staff, Intelligence, Surveillance, and
    Reconnaissance (ISR) allocations for Southern Command are
    insufficient to meet the intelligence requirements that we have
    for the missions assigned and for anticipated contingencies. To
    a certain degree, many of those ISR assets that are assigned to
    us are restricted by the source of the funding or the locations
    from which they operate, further limiting their effectiveness
    at meeting the intelligence requirements throughout the region.
        In summary, Latin America and the Caribbean is a growing
    important region for the United States, but it is a region with
    some serious challenges. I thank the members of the committee
    for your continued support of United States Southern Command as
    we try to address the challenges and preserve the gains of the
    past 25 years. Thank you again for the opportunity to be here
    today. I look forward to your questions.
        [The prepared statement of Major General Speer follows:]

               Prepared Statement by Maj. Gen. Gary D. Speer, USA

        Mr. Chairman, Senator Warner, and members of the committee, I am
    honored to appear before you today to present United States Southern
    Command's current posture, role in the global war on terrorism, and
    long-term strategic objectives. On behalf of the men and women deployed
    to the Naval Base at Guantanamo Bay, I extend a personal thanks to
    Senators Nelson, Inhofe, and Sessions for your recent trip to observe
    the efforts of your Armed Forces as they ensure maximum security and
    humane treatment for the detainees. To all Members of the committee,
    thank you for your unwavering support to United States Southern
    Command.
        I have served as the acting Commander in Chief since October 1,
    2001 when General Pace assumed the position of Vice Chairman of the
    Joint Chiefs of Staff. I welcome the opportunity to provide my
    assessment of this outstanding command to the United States Congress.
        During the past 25 years, nations of our hemisphere have made
    substantial progress toward achieving peace through democratically
    elected governments, economic development, and the subordination of the
    military to civilian authority. However, nations in Latin America and
    the Caribbean are currently struggling with economic and political
    instability, corruption, institutional weakness, high unemployment and
    crime, while simultaneously facing the challenges of terrorism, drug
    trafficking, and other illicit transnational activities. We must remain
    active in assisting these countries to maintain stability, promote
    prosperity, and enhance regional cooperation in this area of
    significant strategic importance to the United States while we execute
    the global war on terrorism.

                      STRATEGIC IMPORTANCE AND ASSESSMENT

        The Southern Command area of responsibility encompasses one sixth
    of the world's landmass and includes 32 countries and 14 protectorates
    throughout Latin America and the Caribbean. The United States has
    strong economic, strategic, cultural, and security ties to Latin
    America and the Caribbean, which are of significant importance to our
    national security.
        Today, more than 40 percent of our trade is conducted within the
    Western Hemisphere, and 49 cents out of every dollar spent on imports
    in the region goes to the purchase of United States goods and services.
    By 2010, trade within the hemisphere is expected to exceed our trade
    with Europe and Japan combined.
        An area rich in natural resources, 35 percent of United States oil
    comes from Latin America and the Caribbean, more than all Middle
    Eastern countries combined. Latin America is critical to the global
    environment as the Amazon Basin produces 20 percent of the world's
    freshwater runoff and 25 percent of the world's oxygen. Also, 25
    percent of United States pharmaceuticals are derived from sources in
    this same area.
        In addition to strong economic and strategic ties to the region, we
    have increasingly important cultural ties. United States citizens of
    Hispanic descent are now the largest and fastest growing minority in
    our country and constitute the world's fifth largest Spanish-speaking
    population. These new immigrants from Latin America and the Caribbean
    maintain strong cultural ties to their families in their countries of
    origin. If present trends continue, by 2047, one out of every four
    United States residents will be of Hispanic descent.
        Contrary to the common perception, this is not a homogeneous
    region, united by a common language or culture. Instead, it is a region
    of very diverse populations, economies, languages, cultures, histories,
    and traditions. We must recognize this diversity and foster security
    cooperation with every country to minimize the increasing possibility
    of creating security voids that may be filled by other countries, or
    exploited by transnational threats.

                              SECURITY ENVIRONMENT

        Without a clear or imminent external threat, Latin American and
    Caribbean nations are essentially at peace with their neighbors. All
    countries, except for Cuba, have democratically elected governments.
    However, many of these democratic institutions remain fragile, and
    economic development in some countries is in danger. The transnational
    threats of terrorism, drug and arms trafficking, illegal migration, and
    international organized crime constitute the greatest challenge to
    security and stability in the region. Governments are feeling the
    strain of weak economies, rampant corruption, ineffective judicial
    systems, and growing discontent of the people as democratic and
    economic reforms fall short of expectations.
        Transnational threats in the region are increasingly linked as they
    share common infrastructure, transit patterns, corrupting means, and
    illicit mechanisms. As President Bush recently stated, ``it's so
    important for Americans to know that the traffic in drugs finances the
    work of terror, sustaining terrorists--that terrorists use drug profits
    to fund their cells to commit acts of murder.''
    Terrorism
        Southern Command recognized a viable terrorist threat in Latin
    America long before September 11. If not further exposed and removed,
    that threat poses a serious potential risk to our own national security
    as well as to our hemispheric neighbors. Domestic terrorist
    organizations threaten security and stability in the region with a
    demonstrated capability to execute bombings, kidnappings, extortion,
    and assassinations. Additionally, individuals within the region have
    been linked to transnational terrorist organizations including
    Hizballah, HAMAS, Islamyya al Gama'at (IG), the Irish Republican Army
    (IRA) and the Basque Fatherland and Liberty (ETA). At Southern Command,
    we have been monitoring terrorist activities for years with such
    incidents as the bombing of the Israeli Embassy in 1992 and Jewish-
    Argentine Cultural Center in Argentina in 1994 attributed to Hizballah,
    the capture of the Japanese Ambassador's residence by the Tupac Amaru
    Revolutionary Movements (MRTA) in Peru in 1996, and the pattern of
    narco-terrorism in Colombia.
        In recent years, international terrorist groups have turned to some
    Latin American countries as safe havens for support bases that sustain
    worldwide operations. As an example, the tri-border area of Argentina,
    Brazil, and Paraguay serves as a base of support for Islamic Radical
    Groups, such as Hizballah, HAMAS, and Islamaya al Gama'at. These
    organizations generate revenue in the tri-border area through illicit
    activities that include drugs and arms trafficking, counterfeiting,
    money laundering, forged travel documents, and even software and music
    piracy. Additionally, these organizations provide safe havens and
    assistance to other terrorists that transit the region.
        The Revolutionary Armed Forces of Colombia (FARC), the National
    Liberation Army of Colombia (ELN) and the United Self Defense Group of
    Colombia (AUC) are all on the State Department's list of Foreign
    Terrorist Organizations. The FARC has been implicated in kidnappings
    and attacks against United States citizens and interests, to include
    the murder of three U.S. citizens in 1998. Notwithstanding the
    Government of Colombia's eleventh hour extension of the FARC's ``safe
    haven'' in January, the FARC recently initiated a national terror
    campaign with more than 85 attacks since January 20 against the
    Nation's infrastructure, security forces, and cities. These attacks
    ultimately prompted President Pastrana to suspend the ``safe haven,''
    and initiate operations to occupy the area.
        The FARC and ELN are also active in carrying out attacks against
    Colombia's energy infrastructure. Attacks on the Cano Limon-Covenas
    pipeline cost the Government of Colombia more than $40 million per
    month in revenues when the pipeline is not operational. During 2001,
    the pipeline was offline for more than 266 days.
        Other domestic terrorist groups pose similar local threats,
    elsewhere in the hemisphere, such as the Sendero Luminoso (Shining
    Path) and Tupac Amaru Revolutionary Movement (MRTA) in Peru and the
    Jama'at al Muslimeen (JAM) in Trinidad and Tobago.
    Illegal Migration
        Latin America and the Caribbean are major avenues for worldwide
    illegal migration. This migration creates economic and social
    imbalances that strain the effective rule of governments in the region.
    Illegal migration and human smuggling operations are linked to drugs
    and arms trafficking, corruption, organized crime, and the possibility
    for the movement of members of terrorist organizations.
        According to the Census Bureau's latest figures, more than eight
    million illegal immigrants reside in the United States; 2 million of
    them are from this hemisphere. The United States Immigration and
    Naturalization Service estimates more than 300,000 illegal immigrants
    annually originate in, or transit through Central American countries
    destined for the United States. Also, many Chinese illegal immigrants
    destined for the U.S. transit through Suriname. Human trafficking is
    highly profitable and provides revenue of more than $1 billion annually
    to smuggling organizations within the region. Further, human
    trafficking provides the means of entry into the U.S. for potentially
    dangerous individuals.
    Arms Trafficking
        Although Latin America and the Caribbean spend less than any other
    region on legal arms purchases, illegal arms sales pose a significant
    threat to the stability of the region. Of particular concern is the
    rising trend in which Drug Trafficking Organizations exchange drugs for
    arms, which are then provided to terrorist organizations such as the
    FARC, ELN, and AUC in Colombia. Illegal arms originate from throughout
    the world and transit through the porous borders of many of Colombia's
    neighbors. Arms traffickers use a variety of land, maritime, and air
    routes that often mirror drug and human trafficking networks.
    Drug Trafficking
        Illegal drugs inflict an enormous toll on the people and economy of
    the United States and our hemispheric neighbors, and appropriately,
    have often been characterized as a weapon of mass destruction.
    According to the latest Office of National Drug Control Policy figures,
    drug abuse killed 19,227 Americans and accounted for $143.4 billion in
    expenses and lost revenue (1998 figures). The majority of cocaine and
    heroin entering the United States is produced in the Andean Ridge.
        Drug trafficking persists as a corrosive threat to the democracy,
    stability, and prosperity of nations within the region, especially in
    the Andean Ridge, adversely affecting societies and economies as scarce
    resources are diverted to rehabilitation, interdiction, and crime
    prevention efforts. Drug trafficking generates violence, fosters crime,
    and corrupts public institutions. Increasingly, terrorist organizations
    support themselves through drug trafficking. This trend is particularly
    troubling in Colombia where we find clear connections between drug
    trafficking, guerrillas, and terrorist activities.
        Although we have seen some success in reducing production in the
    source zone and interdicting shipments in the transit zone, supply
    continues to exceed demand. Partner nations are willing to work with us
    to develop regional approaches to counter the production and
    trafficking of illegal drugs; but effective and sustainable counterdrug
    operations are beyond the capabilities of their thinly stretched
    security forces. United States counterdrug assistance to security
    forces helps Colombia and other nations in the region develop more
    effective counterdrug capabilities; however, drug trafficking
    organizations have shown considerable flexibility in adjusting their
    operations in reaction to counterdrug efforts. These small, efficient,
    and well-financed drug trafficking organizations will rapidly change
    the place of production, transport routes, points of transshipment, and
    markets when eradication or interdiction programs achieve success.

                            GLOBAL WAR ON TERRORISM

    Global Campaign
        Since September 11, our clear priority has been on the planning,
    coordination, and execution to support the global war on terrorism. Our
    objectives are to disrupt and destroy global terrorist organizations,
    eliminate havens for terrorists, prevent terrorist access to weapons of
    mass destruction, and assist partner nations in attaining the
    capability to prevent the resurgence of terrorist groups within the
    region. Prosecuting this campaign requires an attack on those very same
    threats that challenge the security and stability of the region. We
    forged an integrated effort with other United States Government
    agencies and partner nations to defeat terrorists and their supporters;
    interdict their means including drug trafficking, arms trafficking,
    money laundering, and financial backing; and eliminate their freedom of
    movement by arresting and prosecuting their corrupt officials,
    disrupting trade in false documents, and interdicting illegal
    migration. We center our efforts on working with our partner nations in
    information sharing, enhancing skills to combat terrorism through
    bilateral training, planning assistance, and equipping; and integrating
    the efforts of the interagency region-wide. Expanding on our pre-
    existing interagency relationships from counternarcotics, our
    coordination and cooperation with the interagency has been outstanding
    and is paramount to prosecuting a successful campaign.
    Joint Task Forces 160 and 170 Operations
        Although we are executing our campaign plan to combat terrorism
    throughout the area of responsibility, our most visible efforts are the
    detainee operations executed by Joint Task Force 160 (JTF-160) and
    Joint Task Force 170 (JTF-170) at Guantanamo Bay, Cuba. On January 4,
    2002, we received the execute order to take custody of designated
    detainees within the United States Central Command area of
    responsibility, and to escort and hold the detainees at Guantanamo Bay
    for further disposition. The commander of JTF-160 and elements of his
    staff began arriving on January 6 with the first detainees arriving on
    January 11. Currently, 300 detainees are being held at Guantanamo Bay.
        With the requirement to begin housing detainees within 96 hours of
    the execute order, JTF-160 immediately began to upgrade existing
    facilities to a total of 320 short-term detention units at a temporary
    holding facility designated Camp X-Ray. Camp X-Ray also has facilities
    for interrogation, security forces, administration, and medical care.
    On February 13, the Secretary of Defense notified Congress of our
    intent to expend $20.6 million for the design and construction of an
    interim, modular, detention facility of 408 units. We expect the
    construction to begin in March and anticipate completion by mid-April.
        JTF-160 is currently manned by a multi-service organization
    augmented by various interagency representatives. In addition to
    holding the detainees, the Secretary of Defense directed Southern
    Command on January 21 to implement a Department of Defense/Interagency
    interrogation effort. As a result, Southern Command established the
    Joint Interagency Interrogation Facility (JIIF) on January 22 and
    immediately began interrogations focused on intelligence collection,
    force protection, and planned terrorist activities. This interrogation
    effort also supports law enforcement agencies, and tribunal efforts. On
    February 16, Southern Command received an execute order and stood up
    JTF-170 to coordinate U.S. military and government agency interrogation
    efforts in support of Operation Enduring Freedom.
        As a group, the detainees pose an unprecedented security risk to
    those responsible for guarding them as well as to each other, evidenced
    by detainee uprisings at Mazir-i-Sharif and at the Pakistani border. As
    your colleagues have seen first-hand, within necessary security
    measures, the detainees are treated humanely, consistent with the
    provisions of the Geneva Convention. All detainees are provided three
    meals daily that meet Muslim dietary laws, medical care, clothing,
    shelter, showers, soap and toilet articles, foam sleeping pads and
    sheets, towels, prayer mats, and washcloths. They have the opportunity
    to worship, are provided correspondence materials and have the ability
    to send mail. The U.S. Navy deployed a fleet hospital with a capacity
    to care for 20 inpatient detainees. The hospital has a pharmacy and
    laboratory and is capable of providing intensive care, x-rays, surgery,
    and postoperative treatment. To date, the medical staff has performed
    thirty-four surgical procedures for the detainees.
        Staff members of the International Committee of the Red Cross
    (ICRC) have been at Guantanamo Bay since January 18. They will continue
    to visit the detainees privately and submit comments and suggestions to
    the Commander of JTF-160. We view continuous ICRC access to the
    detainees as a necessary and helpful measure. The ICRC is the only
    International Organization or Non-Governmental Organization authorized
    to have direct contact with the detainees.

                              SECURITY COOPERATION

        Given the increased importance and geographic proximity of the
    region, our theater security cooperation focuses on activities
    conducted with friendly nations that advance mutual defense or security
    arrangements, build capabilities for self-defense, and enable coalition
    operations while affording our forces greater access, if needed, during
    crisis response. Southern Command security cooperation seeks to expand
    United States influence and to reassure our friends while dissuading
    and deterring potential adversaries. At the same time, Southern Command
    remains focused on the development of strategic partnerships that will
    promote security and stability in Latin America and the Caribbean.
        The strategic goals we seek to achieve within the area of
    operations are to develop multilateral regional cooperation that
    creates and sustains the positive trends toward democracy, stability,
    and economic prosperity that marked the past quarter century.
    Historically, our engagement focused on democratization through the
    professionalism of the armed forces, national security, humanitarian
    assistance and disaster preparedness, peacekeeping, transnational
    threats and counterdrug operations. Continued engagement in these areas
    lays the foundation for expanded cooperation in countering terrorism
    and enhancing regional cooperation.
        Southern Command works to foster respect for the rule of law, human
    rights, civilian control of the military, and support for democratic
    ideals through a robust legal engagement program. We annually
    coordinate and direct more than 30 military-to-military legal
    engagement activities. Specific goals include the creation of a
    military legal corps, reform of military justice codes and procedures,
    human rights and law of war education, and the inclusion of military
    lawyers in the planning and execution of military operations.
        Similar initiatives for professionalization of the military and
    security forces and regional cooperation exists in other disciplines
    such as medical, public affairs, civil affairs, engineers activities,
    and information sharing.
        The most visible successes in our security cooperation program are
    engineer and medical projects executed during New Horizons exercise
    deployments under our Humanitarian and Civic Assistance (HCA) program.
    These projects routinely include school and clinic construction; water
    well drilling; and medical, dental, and veterinary outreach to local
    citizens. In addition to providing substantial training benefit to U.S.
    forces by deploying, training, and operating in foreign and austere
    environments, these exercises establish strong relationships with the
    region's militaries and engender goodwill toward the United States.
    Last year, our HCA effort numbered 109 projects in fifteen countries.
        In a region often plagued by natural disasters, our security
    cooperation program also aims at improving partner nation disaster
    response capabilities. We use Exercise Fuerzas Aliadas (FA) or Allied
    Forces Humanitarian to focus on disaster preparedness and military
    support to civilian authorities when disaster strikes. This makes
    partner nations less dependent on the United States during times of
    response, precluding the necessity to deploy our troops and resources.
    The commendable reaction by the Armed Forces of El Salvador to last
    year's devastating earthquakes is a testament to the success of this
    program and justifies maintaining it as a priority. Further, as an
    example of regional cooperation, the militaries of Nicaragua, Honduras,
    and Guatemala deployed troops to assist El Salvador, executing in
    actual crisis response the scenarios played out in our exercise
    program.
        Southern Command executes separate service deployments throughout
    the area of responsibility. This year, we will have 193 deployments
    that will include combating terrorism and counterdrug training; small
    unit exchanges; air combat and tactical airlift; and search and rescue
    operations. These activities enhance the readiness and proficiency of
    our forces, build military-to-military relationships, improve host
    nation capabilities, and provide access for our forces should a need
    arise.
        A significant part of our security cooperation efforts go to
    exercises and training aimed at enhancing our partner nation's
    counterdrug capabilities. Our instrument for executing counterdrug
    operations is Southern Command's Joint Interagency Task Force East
    (JIATF-E), at Key West, Florida.
        JIATF-E is a full time interagency coordinator of maritime and air
    interdiction operations while exercising tactical control of all
    detection and monitoring assets in the region. During the past year,
    JIATF-E achieved continued success with counterdrug operations in the
    transit zone. Despite a significant reduction in assets after September
    11, JIATF-E continues to provide planning and tactical command for more
    than 30 concentrated counterdrug operations annually. In 2001, JIATF-E
    supported cocaine seizures increased by more than 50 percent over 2000
    levels. This year, JIATF-E is again experiencing record cocaine
    seizures, particularly in the eastern Pacific. During a 2-day period in
    February, 14.5 metric tons of cocaine, worth $174.4 million in Miami
    street value, was seized in the eastern Pacific. Additionally, during a
    recent combined counterdrug operation with Guatemala, 2.4 metric tons
    of cocaine was seized in the eastern Pacific, and over 200,000
    marijuana plants eradicated.
    Andean Ridge
        No other region is suffering the destabilizing effects of
    transnational threats more than the Andean Ridge countries. Southern
    Command's efforts in this region are aimed at counterdrug operations,
    sustaining democracy, professionalizing militaries (to include legal
    reform within the Colombian military), and combating transnational
    threats. We are cooperating with security forces of each Andean Ridge
    nation to build more effective counternarcotics capabilities.
        The violence in Colombia remains a significant threat to the region
    as the nexus of guerrillas, terrorists, drug-traffickers, and illegal
    self-defense forces has severely stressed the government's ability to
    exercise sovereignty and maintain security. We have seen movements by
    illegal defense forces and insurgents into neighboring countries
    including Panama, Ecuador, and Venezuela. In addition, neighboring
    countries remain transshipment points for arms and drugs entering and
    exiting Colombia.
        From a military perspective, President Pastrana's decision on
    February 23 to suspend the FARC's ``safe haven'' and reoccupy the area
    was the right move. The FARC was using the ``safe haven'' as an area to
    support their drug trafficking operations, launch terrorist attacks,
    and recruit and train their forces. The Colombian military has
    aggressively initiated operations to occupy the area. We have also
    received increased requests of support from the Government of Colombia.
        We continue to execute the Department of Defense's support to Plan
    Colombia, President Pastrana's long-term national security plan. Our
    efforts in Colombia are a fight to save democracy in that country.
    Additionally, our efforts mitigate destabilizing effects to other
    countries at risk within the region.
        We are beginning to see positive results from our support. We have
    witnessed a steady improvement in the professionalism and respect for
    human rights by the Colombian military, accompanied by increased
    effectiveness in counterdrug operations. Our legal assistance projects
    in Colombia, which include developing a Judge Advocate General (JAG)
    school and legal and human rights reform, continue on track. The
    initial JAG school courses began last month for 60 judge advocates and
    clerks in temporary facilities. Additionally, we recently held a Human
    Rights Seminar with 60 Colombian media and international
    representatives and began bimonthly Human Rights roundtables. Twenty
    students from the Armed Forces, National Police, Ministry of Defense,
    and Commanding General's office are currently receiving specialty
    degrees in International Humanitarian Law. In a short period of time,
    the Colombian military has emerged as one of the most respected and
    trusted organizations in Colombian society. Less than 3 percent of
    complaints of human rights abuses last year were attributed to the
    Colombian Security Forces, down from a high of 60 percent just a few
    years ago. The Colombian Military have also aggressively stepped up
    operations against the AUC. This progress reflects a strong and
    principled leadership and the genuine desire of the Colombian military
    to honor and promote democratic principles in their country.
        The United States trained Counterdrug Brigade (CD Brigade)
    headquarters and its three battalions are now fully trained and
    equipped. The CD Brigade, the best trained unit in the Colombian Army,
    has made impressive gains during drug interdiction operations by
    destroying coca processing labs, providing security to eradication
    operations, and seizing chemical precursors and coca leaf. Since
    operations began in December 2000, 866 drug labs have been destroyed,
    119 people detained, and the CD Brigade has provided security to the
    spraying of 50,000 hectares of coca. There have been no allegations of
    human rights abuses against the CD Brigade. We appreciate the support
    of the United States Congress in providing us the necessary resources
    to effectively train and equip the CD Brigade. Based on the success of
    the initial CD Brigade, the administration is supporting Colombia's
    request to train and equip a second CD Brigade in fiscal year 2003 for
    employment elsewhere within the country.
        All fourteen Plan Colombia UH-60 Blackhawk helicopters have been
    delivered. Based on the current production delivery schedule, we expect
    the Huey II helicopters to be in-country by the end of August 2002. We
    are now training Colombian pilots and maintenance personnel to
    operationally field the Blackhawk and Huey II helicopters.
        Colombia engineer projects continue to progress. The riverine base
    at El Encanto and the riverine maintenance facility at Nuevo Antioquia
    are complete. At Tres Esquinas, the runway extension, A-37 Ramp, and
    Schweitzer hangar are in progress with completions scheduled this year.
    The Tres Esquinas riverine facilities are scheduled to be complete in
    March 2002. The UH-60 facilities in Larandia are under construction
    with completion expected in December 2002. The airfield runway
    improvements at Marandua remain unfunded; this airfield will be
    critical to supporting operations in Eastern Colombia.
        In addition to counterdrug assistance, the administration has
    proposed to Congress $98 million to help Colombia to enhance the
    training and equipping of units to protect the Cano Limon-Covenas oil
    pipeline, one of the most vulnerable elements of their economic
    infrastructure. If approved, this training will assist the Colombians
    to mitigate the debilitating economic and financial effects of constant
    attacks on critical infrastructure.
        We continue to improve our infrastructure at the Forward Operating
    Location (FOL) in Manta, Ecuador. Last year, operations at the FOL
    ceased for 6 months while we made runway improvements. The current
    construction for living quarters and maintenance facilities will be
    completed in June 2002. The Manta FOL is critical to our source zone
    counterdrug operations and provides coverage in the eastern Pacific
    where we have seen the greatest increase in drug smuggling activity.
        We support reinstating the Air Bridge Denial Program in Colombia
    and Peru as an effective means to interdict the flow of drugs, arms,
    and contraband. By incorporating the recommendations of the Beers and
    Busby reports, we can safely resume United States support to air bridge
    denial operations and reinforce our counterdrug commitment to partner
    nations.
        Ecuador remains the country most vulnerable to any spillover
    effects from the narcoterrorism in Colombia. As such, we sponsored a
    senior-level crisis response exercise with United States and Ecuadorian
    civil and military leaders. Participants worked through a realistic,
    terrorist-oriented, weapons of mass destruction (WMD) consequence
    management scenario. The exercise produced a better understanding of
    how both countries would respond to a terrorist-related crisis, and
    improved the capability of Ecuador to respond to a consequence
    management crisis. This fiscal year, three additional seminars are
    being coordinated in other countries to replicate the success of this
    event.
        In Venezuela, we seek to maintain military-to-military contacts
    where we can. There are more Venezuelan military students in United
    States schools than from any other country; this is extremely important
    since they will be the future leaders of the Venezuelan Armed Forces.
        In Peru, the government institutions are slowly recovering from the
    Fujimori experience. In spite of the prevailing terrorist and drug
    threats within the country, the military force structure and budget
    have been significantly reduced. Likewise, Bolivia faces similar
    challenges, in part stemming from their success in curbing coca
    cultivation and the resulting dissatisfaction from the cocaleros (coca
    producers).
        We are validating requirements for partner nation militaries to
    assist the State Department as it begins executing the Andean Ridge
    Initiative program to address the potential regional production,
    processing, and spillover resulting from successful Plan Colombia
    execution. In each case, we are seeking to sustain the military
    contacts focused on professionalization of the armed forces and the
    specific challenges and needs within resources available.
    Caribbean
        Like their neighbors in Latin America, some Caribbean democracies
    remain fragile, and corruption within governments still exists. The
    security forces are small and under-resourced. Economies in this region
    are heavily dependent upon tourism, and the attacks of September 11 had
    a devastating effect on the tourist industry, which will reduce
    resources available for the security forces. Our security cooperation
    in the Caribbean focuses on combating transnational threats and
    counterdrug operations, disaster preparedness, and humanitarian
    assistance. Cuba and Haiti remain the two major concerns in the
    Caribbean. Cuba continues its efforts to exert influence within the
    region, usually at the expense of the United States. Haiti's economy is
    in shambles and its government institutions, to include its security
    forces, still do not function; however, the Haitian Coast Guard shows
    promise.
        Tradewinds, our annual exercise to strengthen the capabilities and
    cooperation of partner nations, includes most countries of the
    Caribbean with a focus on disaster response, maritime interdiction
    operations, and basic military skills. Tradewinds develops increased
    professionalism of the military forces in the region and greater
    regional capability to respond to natural disasters, illegal migration
    and narcotics trafficking. Stronger security force relationships are
    enhanced as well. From the Tradewinds experience, the Caribbean Island
    Nations formed the composite battalion task force under CARICOM that
    participated with the United States in Operation Uphold Democracy in
    Haiti in 1994-1995.
        In a region of scarce resources, New Horizons engineering and
    medical exercises have significantly benefited the people of the
    Caribbean, while enhancing the capabilities of our Armed Forces to
    deploy and train in foreign environments. During 2001, Southern Command
    conducted three New Horizons exercises in the Caribbean area--Bahamas,
    St. Vincent, and St. Lucia. Fiscal year 2002 will see three more New
    Horizons exercises in Barbados, Dominica, and Jamaica.
    Central America
        Natural disasters, weak political systems and economies, illegal
    migration, and illicit trafficking plague the Central American
    countries. Military forces range from none to capable. Costa Rica and
    Panama do not have militaries, rather internal security forces; in
    fact, Panama lacks the capability to control its border with Colombia.
    Our security cooperation in Central America focuses on peacekeeping
    operations, disaster response, humanitarian and civic assistance, and
    counterdrug coordination.
        This year we are conducting Peacekeeping Operations--North 2002 in
    El Salvador, an annual exercise focusing on peacekeeping operations
    procedures while providing a forum for regional cooperation among
    participating nations. The Conference of Central American Armies
    (Nicaragua, El Salvador, Honduras, and Guatemala) indicated a desire to
    form a composite peacekeeping force for international operations.
    Guatemala demonstrated its capability as a peace operations partner as
    part of the United States-led multinational forces in Haiti.
    Additionally, we conduct New Horizons exercises annually in Central
    America. During fiscal year 2001, Honduras and Guatemala hosted New
    Horizons exercises while El Salvador and Nicaragua are currently
    engaged in New Horizons exercises.
        Central America is an important focus of our counterdrug efforts,
    which include regional counterdrug operations to enhance capabilities
    and foster coordination and cooperation within the region. The Forward
    Operating Location in Comalapa, El Salvador, provides the capability
    for coverage throughout Central America, the eastern Pacific, and
    western Caribbean. In addition to its counterdrug mission, Comalapa
    served as an instrumental logistics center in the aftermath of last
    year's earthquakes in El Salvador. Comalapa is a valuable operating
    location and we will continue to pursue infrastructure improvements
    this year.
    Southern Cone
        Within the Southern Cone, we focus our attention on
    interoperability, combating terrorism, peacekeeping operations,
    regional cooperation, and professionalizing militaries. Our military-
    to-military contacts within this region are strong, as evidenced by
    increased defense cooperation as potential coalition partners with the
    United States worldwide, dialogue, and multilateral training exercises.
    Although resource limitations remain an impediment, the military
    modernization within Chile and Brazil continues to progress.
        Chile recently committed to purchase 10 F-16 fighter aircraft and
    associated equipment after conducting a thorough, open, and transparent
    competition. This purchase opens the door for even more cooperation and
    bilateral training with an eye toward increased interoperability and
    coalition operations. Chile is also exploring the possibilities of a
    naval modernization program.
        Brazil is actively pursuing a larger advanced fighter aircraft
    purchase with the F-16 as one of the final competitors. As in the case
    of Chile, the purchase of the F-16 by Brazil would lead to long-term
    regional and bilateral cooperation. Brazil's Navy is upgrading its
    carrier air operations with increased training in the United States on
    the A-4 aircraft, directly related to the development of a naval fixed-
    wing aviation force.
        Argentina is in the midst of a serious economic crisis. Throughout
    this difficult period, the Argentine military has remained loyal to the
    constitution and has been a voice of restraint and respect for the
    democratic process.
        Before the financial crisis, Argentina petitioned to join the
    multinational peace force for Afghanistan. Likewise, Uruguay has
    volunteered to participate in the Multinational Force and Observer
    Mission in the Sinai as a measure to free United States troops for
    other missions.
        We are pleased with the cooperation we have received from Southern
    Cone countries in sharing information and tracking suspected terrorist
    organizations in the tri-border area. We are working with security
    forces to enhance combating terrorist capabilities. Paraguay has been
    particularly aggressive in searching out, disrupting, and detaining
    terrorist suspects and their supporters.
    Professional Military Education
        One of the cornerstones of our security cooperation strategy is to
    provide the opportunity for professional military education in the
    United States for students from the area of responsibility. Our
    professional military education institutions dedicated to the region
    provide those opportunities and serve as vital tools in achieving
    United States strategic objectives in Latin America and the Caribbean.
        The National Defense University's Center for Hemispheric Defense
    Studies (CHDS) at Fort McNair, Washington DC, supports the development
    of civilian specialists from Latin American and the Caribbean in
    defense and military matters by providing programs in defense policy
    planning, resource management, and political and civil-military
    relations. CHDS significantly enhances the concept of military
    subordination to civilian authority by training a core of civilian
    defense specialists who serve in the region's defense ministries and
    legislatures.
        The Interamerican Defense College (IADC) provides senior service
    level professional military education for senior officers, including
    officers from the United States.
        The Western Hemisphere Institute for Security Cooperation (WHINSEC)
    at Fort Benning, Georgia, offers instruction that promotes democratic
    values, respect for human rights, and regional cooperation. WHINSEC
    provides an opportunity for regional military and police leaders to
    receive, in Spanish or English, the same instruction we provide our own
    Armed Forces. The capstone course at WHINSEC is the year-long resident
    Command and Staff Course, which includes approximately 40 percent
    United States officers from all services. Concepts and values taught at
    WHINSEC are continually reaffirmed, as our hemisphere's militaries are
    increasingly supportive of democratic values and the subordination of
    the military to civilian control.
        The Inter-American Air Force Academy (IAAFA) at Lackland AFB,
    Texas, and Naval Small Craft Instruction and Technical Training School
    (NAVSCIATTS) at Stennis, Mississippi provide specialized technical and
    tactical training on aircraft maintenance and small boat operations to
    the region's militaries. This training enhances the interoperability
    and increases the life cycle of U.S. equipment used by countries in the
    region.
        For some of these courses and other military schooling, the
    International Military Education and Training (IMET) Program are
    critical. We appreciate the continued support of this valuable program.
    However, in order to reach the future military leaders for Guatemala,
    we need to remove the prohibitions on junior and field grade officer's
    attendance of the same professional military training as their U.S.
    counterparts such as command and staff college and advanced courses.
        These schools produce graduates who make positive contributions to
    their countries through distinguished military and public service. In
    many cases, the interpersonal relationships forged during a common
    educational experience serve as valuable tools for security cooperation
    while promoting regional stability

                                  REQUIREMENTS

    Command, Control, Communications, and Computers (C\4\)
        We are enhancing our C\4\ for fixed and mobile operations
    throughout the region. Because most of the countries in this theater
    are still maturing their C\4\ infrastructure, satellite communications
    are vitally important to our deployed forces, especially in times of
    crises. However, current satellite communications provide limited
    bandwidth. We continue to expand the Cooperating Nations Information
    Exchange System (CNIES) and the Counter-narcotics Command and
    Management System (CNCMS). These programs have proven instrumental in
    the prosecution of our counterdrug mission and have helped optimize the
    available satellite bandwidth. Since existing military systems alone
    have not proven sufficient in meeting the demand, we are partnering
    with the Defense Information Systems Agency and the Department of
    State's Diplomatic Telecommunications Service Program Office to explore
    commercial alternatives such as fiber optic communication links. This
    effort shows promise for improving C\4\ effectiveness throughout our
    area of responsibility.
    Intelligence, Surveillance and Reconnaissance (ISR)
        Our global war on terrorism continues to reinforce the critical
    role that a comprehensive ISR posture plays in any operational
    environment, whether home-based or abroad. Secretary Rumsfeld noted in
    the 2001 Quadrennial Defense Review that: ``We cannot and will not know
    precisely where and when America's interests will be threatened. . .
    .'' His observation is particularly applicable to the Southern Command
    area of responsibility, where threats take many forms and are often
    ambiguous. These threats present a range of intelligence challenges--
    from tracking terrorist groups and drug trafficking organizations of
    the Andean Ridge to monitoring international criminal and terrorist
    activities throughout Latin America and the Caribbean. To mitigate
    these threats, we depend heavily upon multi-disciplined intelligence
    collection and sophisticated all-source analysis backed by secure,
    interoperable systems. However, even with Department of Defense and the
    Joint Staff's assistance in this area, our current ISR capabilities
    fall short of meeting our requirements, particularly where we need to
    be proactive rather than reactive in crucial mission areas such as
    combating terrorism, force protection, counterdrug support, and
    anticipating crisis.
        Essential to these efforts is sound intelligence and sufficiently
    financed intelligence operations. With this in mind, we fully support
    National Security Agency's (NSA) ongoing transformation efforts. It is
    essential that NSA remain a relevant provider of signals intelligence
    and information assurance products and services. Competing realities of
    existing and expanding mission requirements and budgetary constraints,
    will force NSA to reach difficult decisions about resources, which
    could further impact intelligence collection for Latin America and the
    Caribbean.
        The limited availability of national sensors, airborne
    reconnaissance platforms, and tactical military intelligence--meets
    only a small percentage of our priority intelligence requirements and
    is inadequate for maintaining a comprehensive intelligence operating
    picture. United States Southern Command's mixture of new and old
    technology systems presents unique challenges that have and will
    continually test our resourcefulness until we acquire more organic and
    reliable capabilities as noted in our Joint Monthly Readiness Review
    and Integrated Priority List.
        The National Security Agency's responsibilities related to
    protecting the Nation and supporting the global war against terrorism
    fall among the highest priorities for budget decisions if signals
    intelligence and information assurance initiatives are to continue to
    preserve our Nation's security and support the unique intelligence
    needs for our area of responsibility.
        The restrictions placed on the use of certain collection assets
    exacerbate the constraints inherent to the limited availability of
    intelligence resources in our area of responsibility. Today, many of
    the intelligence assets allocated to Southern Command are funded from
    counterdrug appropriations. Therefore, the employment of these scarce
    assets is further restricted to supporting only counterdrug operations
    or force protection.
        Our ability to execute effective operations--especially those
    associated with the global war on terrorism--is further hampered by
    restrictions on sharing data with our partner nations. We need to
    streamline sharing procedures that are currently used for time
    sensitive intelligence information. Like other unified commands, we are
    developing information-sharing networks that will allow us to combat
    asymmetric and other specific threats in our region more effectively.
    The South American Net, the Caribbean Information Sharing Network, and
    the Cooperating Nations Information Exchange System are all prime
    examples of initiatives that enable us to share certain types of
    information expeditiously; but we must do more.
        We also continue to experience shortages of intelligence personnel,
    qualified human intelligence collectors, linguists, and signal
    intelligence experts. A fully resourced Regional Security Operating
    Center at Medina, Texas is essential to supporting operations within
    the area of responsibility. Our ISR capabilities must provide
    predictive and actionable intelligence to preclude strategic,
    operational, and tactical surprise. Even with potential for
    improvements in the near future, the reality is, we need additional and
    advanced ISR support today.
    Anti-Terrorism and Force Protection
        The security of our forces in-theater is our first priority.
    Southern Command continues to commit resources to address its force
    protection requirements and provide the best protection measures to our
    forces. We have intensified ongoing efforts to identify potential
    threats through the use of Joint Service Integrated Vulnerability
    Assessments throughout the region, most notably at the forward
    operating locations, Guantanamo Bay, and the Southern Command
    headquarters. Additionally, we use force protection response groups to
    determine if our operating locations are under surveillance and to
    identify critical vulnerabilities to attack scenarios. The Colombian
    forward operating sites have been assessed to properly address force
    protection for our military personnel.
        The global war on terrorism has heightened our awareness of threats
    and provided a new sense of urgency to our force protection efforts. We
    continue to make progress in securing our headquarters, bases, and
    FOLs. Where we are unable to mitigate threats through physical or
    structural enhancements, we address the risk with procedural
    modifications for our personnel.
    Foreign Military Financing
        Foreign Military Financing (FMF) is an important element of the
    U.S. national security strategy that fosters and supports cooperative
    security arrangements. Although military expenditures in the region are
    the lowest in the world, Latin American and Caribbean militaries do
    have legitimate defense sustainment and modernization requirements. As
    we incorporate the assistance of partner nations in fighting terrorism
    and other transnational threats, FMF is the primary source of equipment
    and training for resource strapped countries. Additionally, much of the
    military equipment and capability throughout the region requires
    modernization.
        Against these requirements, Latin America and the Caribbean
    received less than 0.1 percent of the annual worldwide FMF program,
    which although an increase over last year, was just $8.7 million. This
    allocation is not sufficient to cover the sustainment of the aircraft
    and other equipment previously provided to our regional partners. It
    also limits our ability to influence the direction and scope of
    regional military modernization and enlist the full cooperation of
    partner nations. Further, it limits the capabilities of the militaries
    within the region to assume a more active role in security cooperation
    against transnational threats, disaster response, and peacekeeping. We
    continue to work with the Department of State in support of the FMF
    program.
    Maturation of Headquarters
        In 1999, Southern Command and its components completed an
    unprecedented transformation. We satisfied treaty requirements and
    withdrew from Panama, relocating our headquarters operations and
    component commands. Through this endeavor we remained focused on
    properly supporting the Command's strategic requirements.
        In 1997, Southern Command's headquarters relocated to Miami, an
    international city with strong political, economic, and cultural ties
    to the region. This location complements our mission requirements,
    providing Southern Command direct access to United States government
    officials and foreign political and military leaders transiting to and
    from the area of responsibility. Access to members of the local
    academic community, as well as the tremendous coordination
    opportunities with regional offices of other Federal agencies and the
    international diplomatic community with the large number of consulates,
    further enhances our efficiency and effectiveness. Operationally, from
    the perspective of executing the mission, Miami is the best location
    for the Southern Command headquarters.
        The current lease for the main headquarters' building expires
    February 2008 and does not include provisions for extension. We are
    working with the Deputy Under Secretary of Defense for Installations
    and Environment and the Army to develop a plan to mature our
    headquarters in an efficient and effective manner. Our planning tenets
    focus on support of our mission, operational effectiveness, and prudent
    use of taxpayer resources. Imbedded in the planning are force
    protection requirements and the ability to adequately support military
    personnel and their families. These plans will include reasonable
    flexibility for future requirements. Including these plans for
    headquarters maturation in the fiscal year 2004 budget is necessary to
    ensure time for implementation.

                                   WAY AHEAD

        Southern Command will continue to execute operations and activities
    to enhance the region's militaries, advance democracy, promote regional
    security, support hemispheric cooperation, foster economic
    opportunities, promote peace, sustain freedom, and encourage
    prosperity. Further, we will prioritize these activities in areas that
    offer the greatest leverage for protecting and advancing United States
    regional and global interests. Our primary vehicle for accomplishing
    these goals remains the professionalization of the region's militaries
    through military-to-military contacts. Southern Command will continue
    to conduct disaster relief, humanitarian assistance, crisis response,
    and counterdrug activities. Also, we are adapting our plans to assure
    our allies, dissuade foreign military competition, deter potential
    adversaries, and if this fails, defeat our adversaries, whether
    terrorists or nations.

                                   CONCLUSION

        In summary, Mr. Chairman, the Latin American and Caribbean
    countries are of growing strategic importance to the United States. The
    economic, cultural and security ties within our own hemisphere are
    critical to safeguarding the security of the United States and its
    citizens. During the last 25 years, the region has been a success story
    for the United States National Security Strategy as the countries
    within our area of responsibility have made a clear transition toward
    democracy and subordination of military forces to civilian authority.
    This is due in large part to a carefully planned and robust engagement
    program of professional military education, training, and exercises
    that emphasize respect for democratic values, regional cooperation,
    human rights, and the role of the Armed Forces in a democratic society.
        Our vision for the hemisphere continues to be a community of
    democratic, stable and prosperous nations dedicated to countering
    terrorism, illicit drug activities, and other transnational threats.
    Our goal is to ensure these nations are served by professional,
    modernized, interoperable security forces that embrace democratic
    principles, demonstrate respect for human rights, are subordinate to
    civil authority, and capable of multilateral responses to challenges.
        Today, however, we also recognize the insidious nature of hostile
    activities that threaten the stability, security, and economic
    development of many of these nations. We clearly recognize the
    existence of a terrorist threat within our hemisphere as profits from
    illicit drug trafficking fuel terrorist activity that can ultimately
    have national security implications for the United States. United
    States Southern Command will continue to seek every opportunity to
    resource, plan, and combat terrorism within the region to ensure for
    our national security and win this war.
        We are confident that continued support from you and your
    colleagues on the committee and in Congress will provide the resources
    to ensure that the hard-earned gains of the last 25 years are not
    reversed, and to enhance regional partner nation capabilities that
    build and maintain support for the global war on terrorism. Thank you
    again for providing me the opportunity to discuss the superb work
    performed by the soldiers, sailors, airmen, marines, coastguardsmen,
    and civilian personnel of Southern Command in Latin America and the
    Caribbean.

        Chairman Levin. Thank you, General Speer.
        We will proceed as usual under the early bird rule. Let us
    have an 8-minute first round.
        Admiral Blair, first on the Special Operations mission in
    the Philippines. In your written testimony you stated that the
    Special Operations teams will train their Philippine
    counterparts ``potentially down through the company level.''
    But General Myers told us just a few weeks ago that the
    training would be limited to the battalion level. Now, is it
    planned that the training will go below battalion level and
    what criteria will be used to determine whether or not it does?
        Admiral Blair. Yes, sir, Mr. Chairman. I will answer that
    question. I would like also to reach back to the question you
    asked in your opening statement, with its very justified
    concern about expansion of the mission of our forces there.
    Certainly no officer of my generation who went to Vietnam can
    not be worried about starting out as advisers and then
    eventually creeping into missions much greater than originally
    anticipated.
        Our operations in the Philippines I think have four ways
    that they are limited to ensure that they meet the objectives
    we seek. The first limit is the leading role of the Armed
    Forces of the Philippines. It is absolutely clear that
    President Arroyo, her Armed Forces, and all of the Armed Forces
    of the Philippines recognize that this is their fight, their
    country, their sovereignty. They are going to be the ones who
    conduct it. They only want assistance, not replacements in this
    fight. That is factor number one.
        Factor number two, it is limited in role. We have
    instructed our troops and I have instructed my commanders that
    we will advise our Philippine counterparts. We will not be
    doing the fighting for them. So right now we have 12-person A
    teams deployed at the battalion level. A battalion is about 600
    in the Philippines these days. They are in the battalion
    headquarters. Their role, their explicit role, is to provide
    covered communications and intelligence information to their
    Philippine commanders and commanders' staffs whom they provide.
    In the battalion garrisons they provide training to those 600
    people, whether it be squad leader patrol planning, or whether
    it be lane training or marksmanship. So it is limited that way,
    in role.
        It is limited in space to the southern Philippines. It is
    limited in time. The 6 months that is specified in the Terms of
    Reference is a time limit on the initial phase of activity that
    we are involved in now. We may agree that there would be some
    particular training modules that will be separate and might
    have longer tails than that. We may agree that there would be
    some civil affairs engineering projects that might take longer
    than that. But there is a 6-month limit on the operation that
    we are now involved in.
        Finally, it is also controlled, I would say, by a very
    careful awareness on our part of the different factions who are
    involved in the southern Philippines. You mentioned the Moro
    Islamic Liberation Front (MILF). The MILF and the Moro National
    Liberation Front (MNLF) are both political entities which are
    primarily dealing with the Philippine government in a political
    way. There are some fighters at the lower level who go back and
    forth between and among these groups and we may--the Armed
    Forces of the Philippines may encounter somebody in the field
    who was an MILF fighter yesterday and now he is an Abu Sayyaf
    Group fighter.
        But the main dealings with the MILF and the MNLF are
    through the political process and we know who they are and how
    they work and we can keep it separate.
        On your question regarding the level of the training, Mr.
    Chairman, right now our teams, as I mentioned, are down to
    battalion level. It would be a separate decision to take them
    any lower than that and would depend on the recommendation of
    our commander there, whether he thought our basic tasks would
    be enhanced by moving down that one level.
        Even if they were to move down to the company level, I need
    to emphasize that they are advising the commander of a company,
    beside the company commander, who is typically an O-3, a
    captain in the Armed Forces of the Philippines. We are not
    talking about American special forces going out on point in
    patrols engaging the enemy directly.
        Chairman Levin. Thank you. Given the statements of both
    yourself and General Myers, we would assume that there would be
    notice to the committee prior to any change in that mission.
        Admiral Blair. Yes, sir, I will make sure that happens.
        Chairman Levin. Thank you.
        General Schwartz, on the Agreed Framework question with
    ourselves and North Korea. That Agreed Framework is in effect.
    Former Secretary of Defense Perry told this committee that if
    North Korea completed the other nuclear reactors that it
    previously had under construction, they could produce enough
    plutonium for tens of nuclear weapons by now and many more in
    the future.
        I have a number of questions on the Agreed Framework.
    First, do you believe that it is in our security interest that
    the Agreed Framework be maintained and be complied with by both
    sides? Has North Korea complied with the Agreed Framework up to
    this point of time?
        On the missile testing issue of North Korea, they have
    publicly committed to a missile testing moratorium as long as
    the U.S. continued the dialogue with North Korea on their
    missile and nuclear programs. Has North Korea kept their
    commitment not to test a missile?
        General Schwartz. Yes, sir, thank you very much. First of
    all, I would say this, Mr. Chairman, that the Agreed Framework
    is viable. The great work of Dr. Perry, as you said, Senator
    Warner, in your recent conversation with him, I think set the
    foundation for the future. It is the road map to the future in
    my opinion.
        As far as whether it is in the best security interest of
    the United States, and vital interest of that area, absolutely.
    It serves that purpose and is serving us well at this time.
        I would say this about it. It stopped their nuclear
    development, there is no doubt about it. We got in there, we
    looked at their two reactor facilities, we shut them down as a
    result of the Agreed Framework. It gave us a continual
    presence. The International Atomic Energy Agency (IAEA) is in
    there at those facilities continuously monitoring. So it gave
    us a monitoring capability that we want to have.
        But I also think, Mr. Chairman, that while it is not part
    of the Agreed Framework, it is a stepping stone to the flight
    missile moratorium.
        As far as the missile moratorium, we are very confident
    that they have not tested any missiles since the agreement. We
    have a tremendous capability to monitor that and they have not
    violated it. So I think the Agreed Framework has served us
    well. It is in our best interest and it is the stepping stone
    to redundant negotiations in the future.
        Chairman Levin. Thank you.
        Admiral Blair. May I add something? The Agreed Framework,
    Mr. Chairman, also poses some responsibilities on the North
    Koreans in terms of coming into full compliance before we pass
    on these reactors. We need to see North Korea pulling its part
    of the Agreed Framework as well as what we have agreed to do.
        Chairman Levin. Of course. But that compliance will be
    assured prior to those reactors being supplied, is that
    correct?
        Admiral Blair. That is the way the agreement is written.
        Chairman Levin. We are not at that point yet where we are
    ready to supply those reactors.
        Admiral Blair. Yes, sir.
        General Schwartz. Sir, the light water reactor components
    we are talking about are projected to be supplied to North
    Korea in 2003. There are a lot of people who refer to the
    crisis of 2003 and what they are talking about is the ability
    of the North Koreans to open themselves up to the inspections
    necessary before we provide those light water reactor
    components. So it is a very important time. Admiral Blair is
    absolutely correct.
        Chairman Levin. Thank you very much.
        Senator Warner.
        Senator Warner. Thank you. I think that is an important
    point, Mr. Chairman.
        What about the movements of Kim Jong Il, the leader of
    North Korea? Is he still trying to make some contacts with the
    outside world? For a while he traveled a bit, but lately I have
    not heard much about him. I think it is helpful if he engages
    other nations and perhaps those nations can in some way
    reinforce the efforts of both South Korea and the United States
    towards a reconciliation of differences.
        General Schwartz. Yes, sir. We watch their diplomatic
    contacts carefully. Over the last 18 months they have had about
    150 diplomatic initiatives. They have established relationships
    with 17 countries. So in that sense are they making an effort
    to open up or to reach out from a diplomatic perspective? At
    least more so than ever before. There is goodness in that.
        But as far as Kim Jong Il is concerned, we share your
    opinion, Senator. North Korea seems to be very quiet as of
    late, particularly as of September 11, and we are watching them
    carefully to see if they are participating in any kind of
    terrorist activities that would support terrorism around the
    world. I can report to you that we have had no indicators they
    are doing that.
        But they are still, they are quiet, and I think they are
    studying who is next, where do they stand on this list of
    terrorism, what do they need to do to get themselves off. They
    are looking at this, but they are not proclaiming to anybody
    exactly what they are doing. They are very quiet.
        Senator Warner. What about their export of weapons? They
    have been a significant exporter worldwide.
        General Schwartz. They are the number one proliferator of
    missiles and also of conventional weapons. That is where they
    get their money. That is how they have kept their economy
    alive. They are actively pursuing those interests around the
    world.
        Senator Warner. Is the intensity on the increase or has it
    leveled off?
        General Schwartz. Sir, actually just as of late, the last
    couple of months, it has increased. It died for a while, but I
    would say it is in a steady state. If they do not keep it
    going, they die on the vine.
        Senator Warner. I am glad you made reference to Secretary
    Perry. I commend you for that. I really feel very strongly on
    that issue. You and I have talked privately about the personnel
    situation over there, and I am going to try and spend some
    additional time on that. But I would hope in your
    consultations, perhaps on this visit to the Pentagon, that you
    address this with General Shinseki. I am going to bring it up
    with him when he appears before us on Thursday. In the
    Secretariat, perhaps you could talk to Under Secretary
    Brownlee, who was on this committee staff for many years and
    has the confidence of the committee.
        I would like to see the Secretary, whether it is White or
    Brownlee, and Shinseki come forward to this committee with a
    specific package of recommendations as to how to correct this
    problem, which you have made known to Congress I think in a
    very courageous and forthright manner. What is the corrective
    action? We cannot tolerate three lieutenant colonels being
    assigned to your command, respectfully saying to you that they
    are forced, together with their families, to make a choice to
    accept that command or retire from the United States Army. I
    find that unacceptable.
        General Schwartz. Yes, sir. I thank you very much, sir. I
    have spoken to those people that you mentioned. I will speak to
    them again in a follow-up as per your direction.
        Senator Warner. You have done your job. You have brought it
    to our attention.
        Admiral Blair carried a very interesting article this
    morning on the Chinese defense budget. I remember last year
    when you were here about this time they raised it a significant
    amount. This year 17 percent. What sort of a signal is that
    sending? Are those 17 percent real dollars or is the accounting
    a little fuzzy, and is it something that we should take into
    consideration as you look at your overall responsibilities in
    the region?
        Admiral Blair. Yes, sir. That is a development we need to
    look hard at. I think if you look at our interaction with China
    over the last year since I was before this committee, it really
    illustrates the full range of our interactions with that
    country. The EP-3 incident, of course, dominated the first part
    of last year. In reply to your question, following that
    incident we did have one meeting with the Chinese in which we
    stated our position that we had the right and indeed the
    obligation to fly our aircraft in international air space, as
    did other nations, and that it was the responsibility of
    countries who are sending airplanes to intercept other aircraft
    to conduct themselves in a professional manner that did not
    hazard either airplane.
        Senator Warner. But my dump-out from one source on that
    meeting was that it was somewhat perfunctory. It seems to me,
    with the United States being the superpower, and China seeking
    recognition among the councils of military professionals
    worldwide, that they would want to accept perhaps an overture
    from us to elevate these talks to a level like we had with the
    former Soviet Union and have an ``Incidents at Sea Agreement.''
    We are putting at risk our aviators and others in that AOR and
    we don't want to see a foolish lack of professionalism, as was
    exhibited I think in the last incident, by either side. I am
    not here to point fingers.
        Admiral Blair. Oh, I am pointing fingers. It was our side.
        Senator Warner. On that incident it was, but we had a very
    tragic incident with a submarine right there off Hawaii.
    Mistakes are made. No matter what degree of professionalism,
    mistakes are made.
        I just think there is a high risk to our people, perhaps a
    risk to their people. So we ought to step up to the table and
    see if that cannot be initiated. That might be one of the
    things you can do as you conclude your distinguished watch and
    you might encourage others. I will do it back here at home,
    because I think putting our people at risk in those situations
    is not a wise thing to do.
        On the homeland defense of the United States, Mr. Chairman,
    you have heard me say that is the highest priority right now of
    our President and Congress. I know you have some concerns about
    the new CINCNORTH. Can you tell us, is that moving along to
    your satisfaction? Does there appear to be a reconciliation of
    views on that? I would hate to have another incident happen to
    the United States and we still do not have in place a command
    and control structure that could have stepped in to perhaps
    deter or certainly respond very quickly.
        Admiral Blair. Yes, sir, I have been involved in the
    Department's negotiations and examination of that issue. I am
    very much in favor of the establishment of Northern Command, a
    commander whose responsibility it is to bring together all of
    the responsibilities for both defending this country and
    supporting civil authorities if there is an incident.
        Where that command's responsibilities overlap with mine are
    in Alaska, in Hawaii, and the West Coast forces currently
    assigned to the Pacific Command. So my primary concerns relate
    to making sure that Northern Command can carry out his overall
    responsibilities, ensuring that our forces in Alaska, Hawaii,
    California, Oregon, and Washington are able to fit smoothly
    into that structure, and yet to be able to keep our focus on
    Asia and the jobs that most of our forces have, which have to
    do with deterrence of North Korea, keeping an eye on the Taiwan
    Straits, and the many other things we do.
        So we are working our way through that and I believe we are
    approaching satisfactory arrangements on that having to do with
    clarity of who does what and how quickly you can do it. I will
    tell you that after September 11 the work in Hawaii, as Senator
    Akaka knows, was done by those of us who live in Hawaii. We did
    not have a lot of contact or direction from folks back here,
    who had other things to do. I was also talking to Alaska a lot
    in order for General Schwartz up there to get our defenses in
    Alaska in shape. As I think was reported in the press, there
    was an airplane that was flying over from Asia that was showing
    the wrong signals, that we thought might be another hijacking
    situation, which was being worked very, very hard.
        Our forces of the Third Fleet in San Diego and the First
    Marine Expeditionary Force and the Third Corps in Washington
    are very much part of our plans and our theater security
    cooperation in Asia, and we need to keep that focus for them,
    keeping them assigned to Pacific Command while they support
    their homeland defense responsibilities, which will take a
    relatively small part of their forces.
        So I support Northern Command, but I believe we need to
    keep our focus on Asia while we are doing it, and I believe
    that those forces that point towards Asia should continue to be
    assigned to Asia, assigned to the Pacific Command.
        Senator Warner. Well, I think it is imperative that this
    Nation move out as quickly as possible to establish that
    command and I hope that your contribution can work towards a
    reconciliation of what differences remain.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you.
        Senator Reed.
        Senator Reed. Thank you, Mr. Chairman.
        Admiral Blair, you discussed our operations that are
    ongoing in the Philippines. One impression is that we are
    conducting generally small unit training. Could you comment on
    any intelligence operations and intelligence sharing that is
    ongoing with the forces in the southern Philippines?
        Admiral Blair. Yes, sir. We are integrating an element of
    our task force into the operations and intelligence center that
    the Southern Command has set up in the Philippines. Consistent
    with protecting sources and methods, we will provide
    intelligence from U.S. sources of all types--air-breather,
    overhead, human intelligence. In fact, one of the keys is
    merging that with the intelligence the Philippines have, which
    is by and large human intelligence. We can build an
    intelligence picture of the battlefield and then help the
    Philippines use the combination of intelligence and operations
    in order to whip the Abu Sayyaf Group (ASG). So we will be
    providing intelligence of all types consistent with protecting
    them.
        Senator Reed. Now, in response to the Chairman you
    indicated that this operation would have a limit of 6 months.
    But I assume, given the relationship we are developing with the
    Armed Forces of the Philippines, that we have to look much
    longer than that, perhaps not this specific operation, but an
    ongoing relationship with the Armed Forces of the Philippines.
    Is that longer perspective being planned for and anticipated?
        Admiral Blair. We are in consultation with the Philippines,
    working out the particular modules of training, some of which
    will undoubtedly have tails longer than 6 months: the parts of
    the civil affairs-engineering support to military operations
    and the longer-term economic development of that region, which
    will be primarily non-military but may have some military
    pieces to it, and also any sorts of follow-on sustainment
    training and advice, I would say, are modules that may be
    needed.
        So certainly this intense phase will be limited at 6
    months. The war itself will go on for a longer time than that.
    I think various forms of U.S. assistance to the Philippines in
    fighting that war will go on for months, but not really for
    years.
        Senator Reed. Thank you very much, Admiral.
        General Schwartz, one of the key dilemmas when you look
    north is to determine what the intentions are of the North
    Korean government and their Armed Forces. As you have told the
    Chairman, they are maintaining a moratorium on long-range
    missile flights. They have accepted International Atomic Energy
    inspectors. You have looked closely and found no links to
    ongoing terrorism around the world. You suggest that a lot of
    their proliferation is driven by economics, not by ideology--
    they just need the money, which might suggest that there is a
    real opening for a political-diplomatic dialogue.
        Yet, we are not initiating that. We are saying we are ready
    to talk to you. But what is your view in terms of initiating a
    dialogue, taking the first step and trying to move the
    situation forward?
        General Schwartz. Sir, the President in his visit set the
    stage, in my opinion, by the talks that he gave while he was
    there to open that dialogue. He was very clear: We want a
    dialogue. He repeatedly asked North Korea to meet us in
    dialogue with no preconditions. So, from the President of the
    United States, I think it is absolutely clear.
        I think the ball is in North Korea's court. They have done
    the things you indicated and I have talked about. I think the
    conditions are right for this dialogue. Secretary Powell was
    there with the President. He repeated several times that we are
    initiating efforts to initiate that dialogue. So I do not have
    all the details of that, but I am very confident that we are
    doing everything, from my understanding at least, to get the
    dialogue open and to initiate an effort to try to bring peace
    to that peninsula.
        Senator Reed. Thank you, General Schwartz.
        General Speer, the situation in Colombia has deteriorated
    rapidly in the last few weeks. In your assessment, from a
    military standpoint, do the various insurgent groups,
    particularly the FARC, have the capability of destabilizing the
    government of Colombia in the sense that it could stop
    effectively functioning and protecting its people and open up
    Colombia to exploitation by international forces or other non-
    Colombians?
        General Speer. Thank you, Senator. I would submit that the
    activities of the FARC, the ELN, and the illegal paramilitaries
    have already created an environment of seriously instability. I
    mean, the fact is that in Colombia today you often hear people
    cite statistics that the FARC controls so much of the
    countryside. Well, the real issue is that the government of
    Colombia, through its security forces, the police and the
    military, do not control portions of the country, and in the
    areas where they are not present and do not have control, there
    is a lack of a safe and secure environment, which basically
    undermines everything to do with governance in Colombia.
        Senator Reed. Also with respect to Colombia, it is a fairly
    substantial piece of territory. Does the current Colombian army
    have sufficient end strength, manpower, to effectively exert
    control over large parts of the country?
        General Speer. It is my assessment that the current force
    structure and the resources available to the Colombian military
    are inadequate to establish a safe and secure environment.
        Senator Reed. So there are things that Colombia must do and
    so then what is your recommendation with respect to the United
    States' participation?
        General Speer. Well, first of all, still in terms of the
    authorities that we have, our interaction with the Colombian
    military is still only in support of counterdrug operations.
    The administration has proposed to Congress two follow-on
    initiatives. One would be to create a second counterdrug
    brigade in pattern of the success of the first counterdrug
    brigade in the south, but it would still be counterdrug
    support.
        The second initiative is to provide training and equipping
    assistance to infrastructure security units centered around
    Aravca, which is the heart of the pipeline area. This would be
    a break and a step beyond support in a counterdrug- only
    context.
        As a minimum, the Colombian military needs additional
    resources. Whether that is provided through security
    assistance--and I would submit that if you look at the first
    counterdrug brigade, it is probably the best-trained and
    equipped brigade in the Colombian army. It is a model that can
    be applied elsewhere.
        Senator Reed. Thank you very much.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Reed.
        Senator Roberts.
        Senator Roberts. Thank you, Mr. Chairman.
        Admiral Blair, I have sort of an unfair question for you.
    The Chairman has indicated his concern--which I think we all
    share--about our involvement in the Philippines and whether or
    not the training and the intelligence is limited to a company
    level or a platoon level or, for that matter, a squad level.
        But the American hostages that are being held in the
    Philippines are from Wichita, Kansas, and I am very concerned
    about the Burnhams and their welfare. I guess my comment would
    be that, in terms of their capture and their imprisonment and
    their treatment, it has not been very limited. As a matter of
    fact, one of the individuals that was captured along with them
    was beheaded. That is not very limited action, to say the
    least.
        Can you give me some light on the state of play of the
    Philippines, more specifically in regards to the status of Mr.
    and Mrs. Burnham? I understand they are on that island still,
    Basilan Island, where the Abu Sayyaf terrorists reside under a
    triple canopy of jungle.
        Admiral Blair. Yes, sir. We worry about the Burnhams a lot.
    All of us have read the letters and seen the videotapes, which
    rip your heart out, frankly. They are being pulled around from
    place to place. They are not being fed enough, they are subject
    to diseases, and they are in pretty rough shape according to
    our best information.
        You are right, the third American hostage who was captured
    with them was beheaded fairly early on in the event in a brutal
    way.
        From our military point of view, we think the best thing we
    can do to help the Burnhams is to keep the military pressure on
    the Abu Sayyaf Group by making the Armed Forces of the
    Philippines--and they are the ones that have the 6,000 troops
    there on this island--more effective. We think that
    everything----
        Senator Roberts. We have about 160 military personnel on
    the ground, right?
        Admiral Blair. Right.
        We think that everything we do to make them effective in
    terms of intelligence, communications support, equipment
    support and training will make them better able to rescue the
    Burnhams. We have made it clear that that is the top priority.
    We trained a light reaction company a year ago--after the first
    American hostage was taken--whose job it is to go in and rescue
    a hostage in a standoff situation, and we think that they are
    competent of doing that.
        So, Senator Roberts, we are keeping the pressure on, and I
    think this is the best chance we have of getting the Burnhams
    back safely. I think that we stand a good chance of doing that.
        Senator Roberts. I hope and pray that is the case. I would
    hope any talk of a time limit would not give any credence to
    the terrorists' belief that if they just wait this thing out we
    will just give up.
        General Speer, you responded to a very good question by my
    colleague Senator Reed regarding the proposal for the United
    States to provide military training to a brigade of Colombians
    to defend their infrastructure, such as dams and bridges and
    pipelines, and that this would be a shift from the current
    assistance program we have. What are we talking about,
    including the number of U.S. personnel you believe would be
    required to provide this kind of training? Then I think in
    connection with that, could you talk about the possibility of a
    growing terrorist threat in regards to the instability that we
    see in that country, and would that apply to the pipeline and
    obviously to the infrastructure?
        General Speer. Thank you, Senator. The current proposal is
    only for protection of that specific pipeline that centers on
    Aravca. We anticipate that the training requirements for the
    Fifth Mobile Brigade and the Eighteenth Brigade, which have
    responsibility for the pipeline--in this case it is a matter of
    enhancing the training of existing units, unlike the situation
    with the first counternarcotics brigade, which was basically
    building a unit from scratch, forming a unit and taking it
    from, if you will, basic training all the way up to an
    operational capability.
        We think that the resources required in terms of manpower
    to do those tasks would be no greater than it was in the first
    counterdrug brigade. So in other words, no significant increase
    to the footprint and we will probably stay within the mandated
    numbers, even though this is not a counterdrug mission.
        Senator Roberts. If you can in the short time we are
    allotted, could you give me just a capsule comment on Venezuela
    and Argentina? I might preface that by saying when I had the
    opportunity with Senator Akaka and Senator Baucus to meet with
    Fidel Castro in Havana, something we call Saturday Night Live
    with Fidel, it went on for 16, 18 hours, and we asked him about
    Venezuela and Mr. Chavez and asked, is he the next Castro? He
    indicated, well, if he is that would certainly be good for
    Venezuela. I do not think that is the case. I do not agree with
    that.
        But it is his oil minister that turned the spigot in
    regards to the production on OPEC that caused some of the price
    spike we went through here about 6 months ago that got
    everybody upset. Could you give me just a capsule comment on
    how you feel, where we are both with Argentina, which is going
    through some real tough economic times, and also Venezuela?
        General Speer. Senator, let me start with Argentina. You
    are well aware that they are experiencing a financial crisis.
    There will be some effects not only in Argentina, but certainly
    in Uruguay and Paraguay, because of the trade intra-region. As
    a result of the financial crisis, certainly there is an amount
    of social unrest and at least uncertainty. At this point I am
    happy to report the military certainly is staying within its
    constitutional role and I see absolutely no indication that the
    military would take any actions outside of the constitution to
    become involved in that particular crisis.
        What I think we will see is the military assume some of the
    border security mission away from the gendarmerie, to free the
    gendarmerie to again do more traditional police functions. But
    in the case of Argentina certainly the military is supporting
    the constitutional process.
        In Venezuela I guess I like to say that anybody's guess as
    to where Mr. Chavez is taking Venezuela is as good as the next.
    Certainly there is cause for concern based on the company that
    he has been keeping and the places that he has been visiting.
    What we have seen in Venezuela is that the FARC moves with ease
    across the border into Venezuela, as it does northern Ecuador
    to some extent and Panama. We have seen weapons shipments
    arriving to the FARC and the ELN that originated in Venezuela.
    We still do not have any evidence at least where we can tie in
    official government involvement in any of those weapons
    shipments or the support to the FARC, but there are certainly
    some implications that it could be there.
        Senator Roberts. My time has expired, but I am going to do
    something that most do. I have one real short question if I
    might, Mr. Chairman.
        Chairman Levin. How long is the answer? [Laughter.]
        Senator Roberts. It is going to be about 15 seconds if it
    works out.
        It is to General Schwartz. Just a few years ago, Senator
    Stevens took a CODEL to North Korea, the first delegation
    allowed in there. We got a briefing in South Korea that should
    an attack occur the missiles would be about 18 minutes or less
    away from Osan Air Force Base. In keeping with Senator Warner's
    question in regard to some real problems with battalion
    commanders signing up for duty in Korea, would it be helpful if
    we just had a 12-month tour there, similar to other combat
    zones we have had, as opposed to the 2-year tour, with families
    who are 18 minutes away? If Kim Jong Il pulls the trigger, they
    are at risk.
        I could never really figure that out when we went through
    the quality of life issues at various bases, where we were
    improving officer clubs and football teams and other things,
    why we were doing that when we were so close to possible attack
    and putting people at great risk.
        Is that a reasonable suggestion, that if you had only a 12-
    month tour we might solve two problems there?
        General Schwartz. Senator, thank you very much, sir. It is
    an approach. I do not happen to agree with it because the
    thrust of what I am trying to do is going just about in the
    opposite direction. We have about 10 percent of our command
    that is eligible to be command-sponsored on the peninsula. It
    equates to about 1,900 command-sponsored families. The thing
    about it is 96 percent of all those that serve in Korea are on
    a 1-year tour. It does not provide for the continuity that a
    warfighter needs in terms of command structure, command and
    control, and the ability to orchestrate that very difficult
    fight.
        So we want to get an element of that command stabilized.
    Two years is reasonable, and if you are there 2 years we would
    like to bring the families. We have deterred war for 50 years.
    We think, as the President said, we can do it for 50 more. I
    believe, as a CINC warfighter, it is a reasonable risk to bring
    some of the families in there, provide them the quality of
    life, and allow them to be together with continuity for the
    warfighter we need to fight and win.
        So that is my perspective on it and I am actually going a
    little different direction from you, Senator.
        Senator Roberts. I appreciate that. Thank you.
        Chairman Levin. Thank you.
        Senator Akaka.
        Senator Akaka. Thank you very much, Mr. Chairman. I join
    other members of this committee in welcoming our distinguished
    guests to this hearing this morning.
        Admiral Blair, I have enjoyed working with you and I want
    to commend you for work well done as Commander in Chief of the
    Pacific Command. On behalf of the people of Hawaii, I want to
    thank you for the security you provide, not only for Hawaii,
    but for our great country.
        General Schwartz, I want to thank you for taking the time
    to visit me and to discuss your command and some of the
    challenges that you face.
        General Speer, I am looking forward to working with you. It
    is good to hear about your command and the challenges that you
    face.
        To all of you, I want to say that I remain committed to
    working with you to ensure the readiness of our Armed Forces,
    as we all work together to defend our great Nation.
        Admiral Blair, some of the forces that would be under your
    command in the event of a contingency are currently supporting
    our efforts in Operation Enduring Freedom. What is your
    assessment of the impact of this diversion on your missions in
    the Pacific theater both in the short-term and, if this
    situation persists, for a long period of time?
        Admiral Blair. Sir, in the short-term I think it runs an
    acceptable risk. The primary way we measure it is support to
    General Schwartz. For example, when we sent the Kitty Hawk
    Battle Group to the North Arabian Sea that took away a lot of
    the early air power that would be needed in a Korean
    contingency and so we deployed a squadron of Air Force land-
    based aircraft from Alaska to Korea during that period and we
    were able to mitigate the risk.
        That is doable in the short-term. Over the long-term,
    however, a sustained commitment of force in the Central Command
    region at the levels that we have held for the last 6 months
    would require that we beef up our forces in the Pacific in some
    other way. You can do that by deploying naval forces more
    quickly, with less time back in home station. You can do it by
    activating Reserves. There are a number of ways you can do it.
        But we would have to over the long-term, I think,
    compensate for a sustained presence in Central Command at the
    levels we have had.
        Senator Akaka. Admiral Blair and General Schwartz, like
    many people I am concerned that we remedy shortfalls in
    munitions and in particular precision-guided munitions.
    However, I understand that our storage facilities are already
    at near capacity. As we attempt to increase and upgrade our
    munitions stocks, do we have adequate storage to protect and
    maintain them? If not, what is being done to remedy these
    problems?
        Admiral Blair. Yes, sir. I will leave the particular Korea
    situation to General Schwartz. That is his responsibility. But
    I can tell you that elsewhere in the region it is primarily an
    Air Force and Navy problem you are talking about, and we have a
    ways to go before we would max out our storage capacity right
    now. I will get you the exact numbers, but we have places to
    put more weapons which we need to build quickly before we need
    to build more facilities. I will provide some exact numbers to
    you in a classified response.
        [The information referred to follows:]

        Admiral Blair. We have the capacity to store additional Precision
    Guided Munitions (PGMs) throughout the U.S. Pacific Command (USPACOM)
    Area of Responsibility (AOR), however, many facilities require upgrade
    to improve storage and handling efficiency. These older facilities,
    including WWII-type igloo magazines, [deleted], and require labor
    intensive work-arounds for moving assets in and out of storage
    facilities. The ordnance infrastructure has been underfunded for many
    years and subsequently storage facilities have not been upgraded for
    optimal handling efficiency. Storage site security is sound, even under
    increased Force Protection following 11 September.
        With respect to the Air Force within the USPACOM AOR, [deleted].
    Currently PACAF has an unfunded requirement to upgrade munitions
    facilities of $105 million. There are several projects currently being
    implemented to rectify some of the shortfalls. The [deleted] project to
    replace the munitions control facility and build 30 magazines is
    underway, costing $14.5 million. [Deleted] costing $4.7 million. These
    construction projects are for reducing outside storage and for
    increasing the service life of munitions and containers in which they
    are housed. Under the Afloat Pre-Positioned Force (APF), USAF currently
    stores munitions on three Military Sealift Command (MSC) leased
    container ships; [deleted]. A fourth ship will be added in late fiscal
    year 2002 for handling new production, depot stocks and the current
    fleet. [Deleted].
        With respect to the Army within the USPACOM AOR, Army munitions on
    the [deleted]. This storage problem is compounded by a $115 million
    shortfall for the Army Ammunition Operations and Maintenance account.
    This shortfall funding has stopped the Army's effort to initiate a
    retrograde program [deleted] of unserviceable U.S. munitions back to
    the United States. Retrograde and demilitarization of these munitions
    would alleviate the storage shortfall problems that exist [deleted].
    [Deleted].
        With respect to the Navy and Marine Corps within the USPACOM AOR,
    the Navy is currently utilizing [deleted] of their storage capacity.
    This does not include [deleted] (reduced operating status) and
    [deleted]. Modernization of the Navy's ordnance storage and handling
    facilities is not keeping pace with weapons upgrades within the fleet,
    the ordnance stockpile, or transportation technology. The Navy is using
    breakbulk for transporting ordnance vice containerized shipping.
    Commander in Chief, U.S. Pacific Fleet (CINCPACFLT) is developing an
    Ordnance Infrastructure Plan for improving its ordnance capabilities in
    both handling and storage. Their priority sites for improvements
    include [deleted] with a projected cost of $188 million.
        In conclusion, storage is not an issue. The respective Services
    within the USPACOM AOR can store additional PGMs. However, storage area
    upgrades are required to improve storage and handling efficiency.
    Additionally, older and obsolete munitions need to be funded for
    retrograde and demilitarization to free-up storage space for more
    modern and preferred munitions within the USPACOM AOR.

        Senator Akaka. Thank you.
        General Schwartz. Sir, we have adequate facilities on the
    peninsula to store the munitions we need to fight and win, no
    doubt about it. But we have a challenge and the challenge is to
    retrograde some of the outdated ammunition that currently
    exists in those facilities so we can bring new and updated
    ammunition on board.
        We have started an initiative to do that. We have full
    cooperation all the way up through the chain of command and we
    are in the process of doing that now. It will take a little
    time, but it is in progress.
        Senator Akaka. General Speer, have any of the assets that
    would normally support SOUTHCOM missions been diverted to
    participate in Operation Enduring Freedom? If so, what is your
    assessment of the impact of this on your ability to command
    current or future missions in SOUTHCOM?
        General Speer. Yes, Senator. A significant number of the
    assets that we would normally be allocated under the
    counterdrug executive order have been diverted for both
    Operation Enduring Freedom and Noble Eagle. Having said that,
    we still are able to maintain a presence in each of the
    counterdrug threat areas and we are able to maintain the
    critical ISR taskings for Colombia and the immediate area. But
    collectively it is insufficient to do the full job.
        What it has forced us to do is be smarter in using the
    assets we have. I am happy to report that as we look to the
    operations from Joint Interagency Task Force-East (JIATF-East),
    our functional counterdrug command focused on both the transit
    and the source zone. Already this year seizures are ahead of
    the pace of last year, even with the reduced assets. That is
    really as a result of better use of the intelligence available.
        Senator Akaka. General Speer, there is an interest in this.
    When will we make a decision on whether the headquarters of
    U.S. Army South (USARSO) will be relocated from Puerto Rico to
    ``to be announced''?
        General Speer. Sir, regarding the components in Puerto
    Rico, I know that each of the services are going through their
    courses of action within the service as to what should be the
    appropriate follow-on location. I do not know when, in the case
    of U.S. Army South, the Army will announce a decision if it
    intends to move USARSO or not.
        From my perspective, both United States Army South and Navy
    South as component headquarters could do their job from CONUS
    as well as they can do their job from Puerto Rico, because
    fundamentally they are coordinating headquarters focused on the
    AOR and there are no real assigned troops. We have a different
    challenge with our Special Operations Command.
        Senator Akaka. Thank you very much, Mr. Chairman. My time
    has expired.
        Chairman Levin. Thank you, Senator Akaka.
        Senator Collins.
        Senator Collins. Thank you, Mr. Chairman. Good morning,
    gentlemen, and thank you for your service to our Nation.
        General Schwartz, this morning you aptly described North
    Korea as the number one proliferator. Indeed, there are many
    examples of North Korea providing technical assistance and
    weapons to adversaries of the United States. For example, North
    Korea has been the key source of missile-related technology
    expertise and equipment for the Iranians since the early 1990s.
    Due to this extensive equipment and technical assistance from
    North Korea, Iran can now produce Scud missiles.
        Which technologies do you suspect that North Korea is
    providing to other major adversaries and which regimes do you
    believe are actively seeking that kind of assistance from North
    Korea?
        General Schwartz. Thank you very much, Senator. They are
    active, as I testified. I have a list here I could provide to
    you later of all the countries and exactly what they have
    provided since the last several years. It is quite extensive.
        But primarily it is missile technology and missiles, it is
    artillery and tank systems, submarines. They are the number one
    producer of submarines in the world--a small country--not high
    tech submarines on any kind of equity with what we have, but
    nevertheless they have a capability there and they are
    exporting it.
        I guess the other area is ammunition. They are supplying
    numerous countries with ammunition, and I can provide the list
    of those countries and the details if you would like.
        Senator Collins. I would. I ask that you provide that for
    the record.
        [The information referred to follows:]

        [Deleted.]

        Senator Collins. An article today that appeared in the
    Korean Herald indicates that U.S. military officials are having
    increased discussions with South Korea to try to have South
    Korea take a stronger and broader role, a more active role, if
    you will, in addressing the concerns about the North's nuclear,
    chemical, and biological weapons. Could you comment on those
    discussions?
        General Schwartz. The President had extensive discussions
    on this subject with President Kim. But as a follow-up to that,
    there was an emergency meeting in South Korea about the road
    ahead. The dialogue there was what can we do together, ROK-
    U.S., to address the entire challenge, not just weapons of mass
    destruction, but also the conventional issue that exists on the
    peninsula.
        So I think there was an agreement to move together on both
    issues and not then have single lanes, the U.S. leading one,
    ROK leading the other, but that we move forward together. This
    is my understanding and I think this will produce the kind of
    dialogue and progress that we need for the future. I think that
    is the center of the comment that you were talking about or at
    least read about in the paper.
        Senator Collins. Are there other actions that we should be
    taking to try to put more pressure on North Korea to stop the
    proliferation activities?
        General Schwartz. I think right now as far as I am
    concerned as a warfighter the actions we are taking, the
    initiatives the President articulated so well when he visited,
    are right on target. The initiative with the Agreed Framework,
    the follow-up in 2003 as we reach that point, and some major
    decisions we have to make, are in the right direction. The
    confidence-building measures that I talked about earlier in my
    opening statement are the right way to go. This is a good road
    map to dialogue and to peace on the peninsula.
        So I think we have the right initiatives now to move
    forward.
        Senator Collins. General Schwartz, when I visited the
    peninsula, I think it was 2 or 3 years ago, and we went to the
    DMZ, I was appalled at the conditions of the barracks that our
    young soldiers were living in. Has progress been made in that
    specific area?
        General Schwartz. Yes, there has been progress. Believe me,
    Congress has been very generous and has been attentive to our
    needs. I have tried to articulate them to the House side as
    well as the Senate. We have had many visitors like you, as well
    as literally hundreds of others, and we are making gains.
        There is a lot to do. It is part of that story of trying to
    help our young men and women from a personal perspective, but
    it is also the MILCON, the quality of life issues that are
    extremely important. 50 percent of the facilities we have on
    the Korean peninsula were built in the early fifties. They are
    almost 40 to 50 years old. They need attention, and this has
    been part of my campaign plan to improve the quality of life of
    the men and women who sacrifice so much and come to serve their
    Nation in this great alliance.
        Senator Collins. You have been a tremendous advocate in
    that regard. I recall our discussions when I was in Korea. I
    just want to pledge my continued support to improving the
    quality of life for our soldiers serving there.
        Admiral Blair, I was in Pakistan in January and met with
    President Musharraf. Our delegation talked with him about the
    rising tensions with India, which had massed its troops all
    along the common border. Could you give us your assessment of
    the state of tensions between these two nuclear powers?
        Admiral Blair. I think the state of tension remains too
    high for anybody's comfort, Senator Collins. The forces of both
    countries are highly mobilized, are forward, and it would be a
    matter of days before conflict, high level conflict could break
    out, based on the sheer military preparations made on both
    sides.
        So it really brings you back to the political negotiations.
    I think that from the Indian point of view--and I am more
    familiar with the Indian views than the Pakistani views because
    only India is in Pacific Command's AOR--they are looking at the
    indicators of infiltration across the border. They are
    certainly looking at any sorts of terrorist incidents, like the
    attack on their parliament, like the attack on their government
    buildings in Srinigar of last year, as being events which might
    trigger action by them.
        I believe that the way forward there has to be for those of
    us outside of the region to simply put pressure on both sides
    to reach the solution that they both see is in their interests.
    Then the words have to be backed up with demonstrations of
    actual achievements which the two sides can point to. They can
    then go back to where they were, because their goals as far as
    terrorism goes are similar. Their goals for Kashmir, of course,
    are completely different, but those are goals they both agree
    should be reached peacefully.
        Senator Collins. It is of great concern. I personally think
    that General Musharraf has shown great courage in cracking down
    on the Islamic extremist groups within Pakistan. But it is a
    daunting task and it still remains just a tinderbox that is of
    great concern to me.
        Admiral Blair. A tinderbox with nuclear implications.
        Senator Collins. Exactly.
        Admiral Blair. Which is even more dangerous than the three
    times they fought in the past.
        Senator Collins. You mentioned in passing last year's
    incident with the EP-3. Can you comment on recent patterns of
    activity by China with regard to operations that our aircraft
    have been conducting since that time? Is China being more
    careful as far as the aggressiveness of its pilots?
        Admiral Blair. Yes, Senator. The recent intercepts for
    identification of our military aircraft flying off the coast of
    China have been conducted at about the same rate they were
    previously, but with more professionalism. That is a military
    buzzword. They have done it safely. They are doing it safely
    now, and the pattern that we saw before the EP-3 incident of
    this flat-hatting--more military jargon--of these dangerous
    maneuvers has stopped and they are conducting their
    identification runs in a safe way.
        Senator Collins. Thank you, Admiral.
        My time has expired.
        Chairman Levin. Thank you very much, Senator Collins.
        Senator Sessions.
        Senator Sessions. Thank you, Mr. Chairman.
        Admiral Blair, I had a very fine visit to Korea and Japan
    in January. It was a good learning experience for me. One of
    the things we discussed, and I would like your brief thoughts
    on it as ranking member of the Seapower Subcommittee, was the
    decline in our number of Navy ships. We know that the Kitty
    Hawk is due to be decommissioned at some point. It performed
    very well as a forward staging base in this move from Japan
    over to the Afghanistan area.
        What do you see with regard to that ship in particular and
    is it something we could preserve and maintain for maybe not
    every purpose other carriers can perform, but does it have a
    unique role and should we think in terms of keeping it rather
    than letting it go? When is it due to be decommissioned?
        Admiral Blair. Senator, we were glad for your visit and I
    had very good reports of it. I myself visited the Kitty Hawk
    after you were there and in the interest of full disclosure I
    must tell you that she used to be my flagship, so as far as I
    am concerned she can do everything. So you are not talking to
    an impartial witness here.
        But the combination of the crew of the Kitty Hawk and the
    superb repair facilities provided by the ship repair facility
    in Japan, which I am sure they told you about, is keeping that
    ship in good condition. A carrier is such a big box of steel
    that you can change out pieces from turbines--a turbine is a
    huge piece of gear bigger than this table, weighing several
    tons, which I saw being replaced while I was there--through the
    electronics, which can be upgraded. So she has a lot of life
    left in her.
        The official decommission date that we are projecting for
    the Kitty Hawk is in 2007 or 2008, but there is a certain
    amount of flexibility in that. I can tell you that I do not
    have an abundance of aircraft carriers in the Pacific Command
    such that I feel I have extras lying around. So I am for making
    sure that we have enough to do the job in the Pacific,
    especially as we send them, as we talked earlier, to other
    theaters where they also do good work.
        Senator Sessions. I am hoping that we can look at that
    pretty hard. I think Senator Kennedy and I will be asking some
    of those questions on the Seapower Subcommittee. We visited the
    Spruance-class O'Brien that is also due to be decommissioned.
    It performed well. We are having such a hard time building
    sufficient new ships to keep our fleet at the size we need it
    to be that perhaps one solution would be to maintain some of
    our older ones, even though they may not be quite as productive
    as the new ones.
        General Schwartz, it is good to see you. I am glad to hear
    you talk about the housing situation in Korea. I visited the
    bases there, several of them. I personally went in a number of
    the housing units at those bases, and was frankly saddened by
    them. They are just not places you would want to take your
    family. The story of one wife breaking into tears going into
    one of the housing units was poignant to me.
        I also visited some senior enlisted men's quarters that are
    50 years old. They were not built for permanent quarters. We
    have been there 50 years. We do not seem to see an ending date
    to get out.
        Tell us your plan of consolidation and improving quarters.
    Can we not do that? I believe you would have support in
    Congress to accomplish it.
        General Schwartz. Sir, I think we can. I think we have laid
    out a vision for the future. I think it is a good one. It
    centers around this thing called the Land Partnership Plan
    (LPP), the BRAC-Korea that I mentioned initially in my opening
    statement. It is a 10-year vision. It consolidates the
    footprint. It saves a lot of money. It provides for readiness.
    It increases the quality of life and enhances training.
        I think it is a good plan. We are ready to sign it on the
    15th of March. It will definitely be a monumental step forward
    in improving that. What we ask of Congress to coincide with
    that effort is to sustain the military construction. Incumbent
    upon progress will be a sustained MILCON so that we can ensure
    that the barracks as well as the housing moves along with the
    LPP plan. So we would ask Congress to sustain MILCON or
    increase it as the case may be. I think if we keep those two
    azimuths together we will realize the progress we need and we
    will do right by our men and women who serve there.
        Senator Sessions. What do you have, 30 or more base camps
    and housing areas along the DMZ?
        General Schwartz. Yes, sir. We have 41 major installations.
    We are going to consolidate to 20, creating these hubs of
    efficiency.
        Senator Sessions. We will have more security with a lesser
    number and better quality of life in a lesser number.
        General Schwartz. Senator, that is exactly right.
        Senator Sessions. It makes sense to me and I congratulate
    you for it. I want to thank you for the quality of your staff,
    General Zanin and Lance Smith and all, Colonel Sinclair and his
    wife. They were very hospitable to us as we visited there.
        With regard to Korea, I came away from my visit somewhat
    troubled and a bit concerned. We heard talks about North Korea
    moderating and opening up a bit, but when South Korea built the
    railroad that was supposed to be extended into North Korea,
    North Korea refused to complete their end of it. There were
    going to be family exchanges, but North Korea blocked that as
    well.
        The word I am hearing is that Kim Jong Il recognizes that
    his power is based on nothing more than military power and does
    not want more openness to the rest of the world because more
    people would know just how oppressive this regime is, and it is
    absolutely one of the most oppressive regimes in the world.
    People in South Korea have a huge world class economy, make
    automobiles, buildings are going up everywhere, and they are
    starving to death right across the DMZ. There is no reason for
    that to happen except his brutality, his evil regime that is
    causing people to starve to death.
        I am troubled about how to deal with him. I am not sure
    just being nice is always going to do the trick. How do you
    feel about that?
        General Schwartz. Senator, I agree with you. I think the
    world is troubled about this man. Our President was clear when
    he was there, saying that he has trouble with the man and his
    leadership. He has tremendous empathy and sympathy for the
    North Korean people. But the leadership is oppressive. It is
    doing things to people, making them suffer and starve while he
    and those that surround him personally benefits.
        We have problems with that. The South Koreans, to their
    credit, since the summit, have initiated so many things to try
    to open the dialogue and to try to open the flow of peace and
    prosperity on the whole peninsula. But the fact of the matter
    is North Korea has done nothing.
        Senator Sessions. That is what I believe is accurate and it
    is a sad thing.
        General Speer, I would say just in closing that I think we
    have to change our focus in Colombia. I have never felt that
    the focus solely on narcotics was a wise policy. I believe
    President Pastrana has now given peace every possible chance.
    He has now made a decision I think we need to support. He has
    to take back his country.
        I do not know how we can ever expect Colombia to stop the
    importation of narcotics into the United States if they do not
    control their territory. Once Colombia is reunited and is a
    healthy country, I think we can demand some things with regard
    to narcotics that we cannot do now.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Sessions.
        There has been a great deal of discussion about North
    Korea's missile and missile technology exports, and properly
    so. There has been an effort to try to get North Korea to stop
    exporting ballistic missiles and technology, and also to stop
    the long-range missile program. We made some progress on the
    testing, at least. I think everybody would concede that it is
    in our interest to try to get North Korea to give up their
    long-range missile program and to stop exporting missiles.
        My question relates to China, because China also, according
    to unclassified sources, supplies missile technologies to two
    of the missile proliferators that are of greatest concern to
    us. We have a great deal of concern about North Korea and Iran
    as proliferators. It is my understanding from unclassified
    sources that China supplies missiles or missile technologies or
    other WMD technologies to Iran and North Korea.
        Is that accurate, Admiral?
        Admiral Blair. Mr. Chairman, I would rather provide that in
    closed session if I could, because sometimes I do not know if I
    am looking at a top secret document or something in a
    newspaper, and I do not want to give you the wrong information.
    I can tell you, though, that I am worried about the missiles
    China builds for its own purposes, which threaten Taiwan, and I
    am concerned about the missiles North Korea builds for its own
    purposes, which threaten South Korea and Japan.
        Unfortunately, those programs continue apace and they
    threaten our allies in Japan and Korea. They threaten our
    forces in Korea, and of course they threaten Taiwan and in case
    of conflict would cause a lot of damage there.
        In that regard, the recent cancellation of the Navy Area
    Missile System built on the Aegis technology I think is a blow
    in terms of our plans to be able to deploy sea-based forces
    quickly to the vicinity of Japan, to the vicinity of Taiwan, if
    ordered, to be able to handle those missiles that threaten
    those two locations. I certainly hope we can put that program
    back together so we can provide that sort of assurance and
    actual protection to our forces and citizens of other countries
    that might be threatened in the near-term.
        Chairman Levin. According to unclassified sources, let me
    just state that China has been an exporter of missile
    technology to Iran, North Korea, and Libya, among other
    countries. We would ask you then for the record, for this open
    record, to tell us whether or not that is accurate and if so
    give us the same kind of list relative to those technologies
    that General Schwartz is providing for the record for Senator
    Collins relative to North Korea.
        Admiral Blair. Yes, sir, I will do that.
        [The information referred to follows:]

        China is now one of the leading exporters of equipment, materials,
    and technology used to develop surface-to-surface ballistic missiles.
    Beijing has made numerous nonproliferation pledges, and has sought to
    abide by a very limited interpretation of the Missile Technology
    Control Regime (MTCR). The Chinese pledged, in 1994 and 1997, not to
    export surface-to-surface missiles that violated MTCR limitations of a
    300km range and/or 500kg payload. In 2000, following U.S. sanctions
    applied because of Chinese assistance to Pakistan's ballistic missile
    program, Beijing specifically declared it would ``not help states
    develop ballistic missile programs that can be used to deliver nuclear
    weapons.''
        Despite these promises, we have detected continued Chinese exports
    of missile technology. This is directly related to Beijing's refusal to
    recognize the MTCR's key technology annex. China objects to limitations
    on its technology and product exports, arguing that there are no
    similar controls applicable to manned aircraft, which can deliver
    weapons of mass destruction over significant distances. Because of
    this, [deleted].

        Chairman Levin. General Speer, there has been some
    discussion here this morning about Colombia and I want to ask a
    couple of related questions. The Colombian government reported
    last week that the amount of coca under cultivation had been
    reduced as a result of Plan Colombia and its eradication
    campaign. But according to some media accounts, the CIA
    estimates that coca cultivation is either stable or slightly
    greater than last year.
        Can you give us your assessment of how effective Plan
    Colombia's Eradication Campaign has been over the last year?
        General Speer. Thank you, Mr. Chairman. What I am not
    really prepared to do is enter the debate as to whether the
    government of Colombia's figures, the Counternarcotics Center's
    figures, or the embassy's figures are the right figures on
    whether it is more or less than last year, because frankly, I
    just do not know.
        But what I can tell you is we have seen great progress in
    terms of DOD support to Plan Colombia. Since the time that you
    visited Colombia--I believe it was February of last year--we
    have completed the training and equipping of the entire
    Counternarcotics Brigade. At that time, two battalions had been
    trained and the third battalion completed training in May of
    last year.
        They have been operational since December of 2000. So in
    essence, in terms of operational results from Plan Colombia we
    are just into the fourteenth month of what was designed as a 6-
    year plan. The Counterdrug Brigade has been very successful.
    Again, they are focused on the Putamayo and Cacaca regions of
    southern Colombia. They have destroyed in excess of 860 labs,
    most of those being base labs as opposed to HCl labs. The
    forces of the Counterdrug Brigade have provided the ground
    security, which has allowed the Department of State aerial
    eradication operations to basically cover 59,000 hectares in
    southern Colombia.
        So with that snapshot, which was the focus of phase one of
    Plan Colombia, I think we have had some successes.
        Chairman Levin. From a purely military perspective, do the
    limitations on our aid to counternarcotics activity make sense
    in a country whose government is under the kind of pressure
    that it is under from insurgencies and terrorist tactics? Or
    have you recommended that that aid be broadened? I know Senator
    Sessions and others have made reference to this, but I am not
    sure I heard a clear answer. There may have been one, but I am
    not sure I heard it.
        General Speer. Again, to review the bidding, Mr. Chairman,
    policy-wise my authorities have not changed and what I can do
    is counterdrug-related only.
        Chairman Levin. Have you recommended, though, that it be
    broadened?
        General Speer. Sir, my assessment is that the current level
    of support to the Colombian military is insufficient for the
    Colombian security forces to reestablish a safe and secure
    environment. As you pointed out, for all of Plan Colombia to
    work, all of those non-military elements--judicial reform,
    social development, alternative development, all the elements
    of governance to be re-established--up front you have got to
    have a safe and secure environment and the current level of
    support would not do that.
        Chairman Levin. Does that mean you have taken the next step
    and made a recommendation that our aid restrictions be lifted
    so that we can have a broader target for the assistance?
        General Speer. Sir, I have provided courses of action that
    would address both continued support within the current
    restrictions as well as what we could do beyond the current
    restrictions.
        Chairman Levin. Thank you.
        Senator Nelson, I am going to recognize you next if you are
    ready because you have not had a first round.
        Senator Bill Nelson. Yes, sir. I am ready, but I am
    certainly willing to defer to my great chairman and my great
    former chairman.
        Chairman Levin. We have all had a round.
        Senator Warner. Go right ahead.
        Chairman Levin. Senator Nelson.
        Senator Bill Nelson. Mr. Chairman, a few weeks ago we had
    General Peter Pace here, and before that we had the Secretary
    of Defense. I asked when we were going to get a four-star CINC
    for SOUTHCOM to replace General Pace, who came up here. He said
    it would happen momentarily. So I am just wondering; if you
    have another couple stars around, we could just go pin them on
    General Speer here?
        Do you have any idea?
        General Speer. Sir, the answer to that question is above my
    pay grade.
        Senator Bill Nelson. Yes, I understand.
        Senator Warner. That is a very good answer. [Laughter.]
        Senator Bill Nelson. Well, if I had them I would put them
    on you.
        General Speer. Thank you, sir.
        Senator Bill Nelson. But now having raised the issue, it is
    important that we have a four-star CINC there and I am going to
    start being a thorn in the side of the Defense Department until
    we do. I think I have been patient enough now. General Pace
    assured me that was the case. He was a terrific CINC, by the
    way. He was just so well accepted in the Miami community.
    Everybody just loved General Pace down there. So I want to see
    that they follow through on this.
        It is my understanding that in earlier commentary here
    there was reference made to moving the Army and the Navy
    Southern Commands out of Puerto Rico. What in your professional
    military judgment would be some of the priorities that we
    consider in the site selection if they are moved out of Puerto
    Rico?
        General Speer. Senator, from the Southern Command
    perspective I think the Army and Navy component headquarters
    can do their job within CONUS as well as they can within Puerto
    Rico. Candidly, time and distance-wise, most of their
    coordination within the area of responsibility, with the
    exception of the northern Caribbean, is done by commercial air.
    The first stop is Miami, which is 2 hours away. So access to a
    major airport hub really is all we need for those components to
    do their job.
        But I think the services have plenty of options to deal
    with, considering the service infrastructure available.
        Senator Bill Nelson. Would that be applicable to the Navy
    command as well?
        General Speer. Yes, sir, but let me make a distinction in
    terms of the environment in Puerto Rico. There are really three
    separate issues as we look at U.S. military forces in Puerto
    Rico. The first and the one that has occupied the news
    certainly in the last few years has been the question of
    training in Vieques. That is a question of Navy and Marine
    Corps training readiness and the Navy certainly has the lead in
    terms of determining the alternatives for the way ahead as it
    pertains to Vieques or post-Vieques.
        The second issue in terms of forces, the one we are
    concerned about, is the fact that we have an Army, Navy, and
    Special Operations component located in Puerto Rico that
    belongs to Southern Command. Since our Army and Navy component
    headquarters are predominantly just that, headquarters that
    coordinate activities for their service within the region, as I
    stated, their duties can be executed from CONUS as well as from
    Puerto Rico.
        In terms of our Special Operations Command, it is the only
    command that has a joint task force readily available to
    respond to a crisis throughout the region. If they are moved
    from Puerto Rico there would have to be special consideration
    to maintaining that capability.
        The third issue is the strategic value of Naval Station
    Roosevelt Roads in terms of the airfield and port. That
    platform in terms of the airfield and port are critical to the
    execution of our day to day operations in the AOR, both in
    terms of logistics or in terms of just a base for aircraft
    operations. As we look to the future and look to the realm of
    all the things that could happen, other than Guantanamo Bay,
    Naval Station Roosevelt Roads is the only other U.S.
    territoried airfield. We do have access to a C-5 capable
    airfield in Honduras, but again one that we own, Naval Station
    Roosevelt Roads is pretty significant.
        Senator Bill Nelson. I want to compliment you on the way
    that you accommodated so quickly all of those detainees coming
    into Guantanamo. All of the press attention was over whether or
    not they were being humanely treated, which of course we knew
    they were. After Jeff Sessions, Jim Inhofe, and I visited the
    base, we were able to say that to the press.
        But my concern was that we were not getting the information
    out of them quickly enough. At the time we were still taking
    them to a tent to do the--there is another word that you all
    used for ``questioning.''
        Chairman Levin. ``Interrogation''?
        Senator Bill Nelson. No, I used the word ``interrogation,''
    but they have another. ``Screening,'' that was the word.
        There did not seem to be a lot of information forthcoming.
    But the marines were just finishing the building of those
    screening facilities. Can you give us some idea about your
    observation of the progress of the screening activity since we
    were there?
        General Speer. Senator, as I probably mentioned to you that
    day, or if I did not General Lehnert probably did, Guantanamo
    has been a work in progress in terms of that whole operation. I
    would be happy to give you a little bit more detail, but I
    would prefer we do it in a closed session if possible, sir.
        Senator Bill Nelson. OK. It also looks like you are moving
    ahead pretty well now on the building of the new facilities and
    that is certainly going to make your life a lot easier.
        General Schwartz, I was one of those Senators that have
    been to Korea and I compliment you on the kind of relationship
    that you have with the Korean government. That is a real
    success story. Admiral Blair, it was my pleasure to visit with
    you en route to Japan and Korea with Senator Shelby, and you
    certainly had your hands full out there. I thank you very much
    for your service, all three of you, to our country.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Nelson.
        Senator Warner.
        Senator Warner. Thank you, Mr. Chairman.
        That is a very good line of questioning you had, Senator
    Nelson. I recall your trip with Senator Sessions. It was very
    timely on behalf of the committee. I was not able to personally
    make it at that time or otherwise I would have joined you.
        General Speer, I think we always carefully cover at our
    hearings with Southern Command the subject of the Panama Canal.
    I think an update for this record would be helpful. Would you
    kindly do so?
        General Speer. Sir, I know that, in terms of the canal
    itself, there was a lot of anxiety in terms of what would
    happen post-2000.
        Senator Warner. Particularly the interest expressed by
    China, I suppose indirectly by virtue of a certain Chinese or
    affiliate company, in obtaining at both ends of the canal some
    facilities which ostensibly are for civilian commercial trade.
        General Speer. Yes, sir. First of all, or the canal itself,
    canal operations are going very well. Frankly, as long as the
    canal administration is kept separate and distinct from the
    government of Panama, I think there is every prospect that they
    will continue to operate in a manner sufficient for the
    demands.
        Senator Warner. What is the annual transit now of U.S. Navy
    vessels and then our commercial vessels?
        General Speer. Sir, I am not sure. I will have to get back
    to you on that.
        [The information referred to follows:]

        During fiscal year 2001, 75 U.S. Navy vessels and 369 U.S.-flagged
    commercial ships transited the Panama Canal.

        You expressed concern about the Hutchison Whampoa, which is
    the Chinese-owned shipping company that does run the container
    ports at each end of the canal, both on Colon and in Balboa.
    Again, there is no evidence to indicate anything other than a
    commercial venture. Obviously, just the presence of a Chinese
    company as opposed to a U.S. company causes concern. Of note,
    that same company has a similar interest in the Bahamas and has
    just bid on a similar interest in the port of Manta in Ecuador.
        Senator Warner. What about drug trafficking and the ability
    of the government to try and effectively handle that?
        General Speer. Sir, I would tell you that the security
    forces in Panama are improving. I would also tell you that they
    are not at a level where they can adequately control their
    borders, whether you are talking about the FARC operating at
    will, moving across from Colombia into the Darien province or
    any of the possibilities of transit of weapons, drugs, or any
    other contraband through Panama.
        Senator Warner. Admiral, I think you and General Schwartz
    carefully discussed here today the very necessary chopping of
    your naval assets from the AOR of Korea and the AOR of the
    Pacific to CENTCOM's AOR, where you said they performed
    brilliantly. Having visited the Nimitz with my distinguished
    chairman over Thanksgiving, we can testify to their
    professional efficiency and the really extraordinary
    performance of our naval forces deployed in that area.
        But has it in any way brought about a concern in either
    you, Admiral Blair or General Schwartz, as to the chopping of
    those forces into the Afghan AOR?
        Admiral Blair. In the short-term, Senator Warner, we have
    been able to take compensating measures which have maintained
    deterrence within adequate levels of risk. In the long-term, we
    would need to make some adjustments if we are to keep at this
    level of Navy and Marine Corps commitment to the Central
    Command region, which, as you know better than anybody, puts
    tremendous strain on the base of naval forces to maintain them
    at that distance for that period of time.
        Senator Warner. General Schwartz.
        General Schwartz. Sir, I would echo what Admiral Blair
    said. We did some exceptionally good things in terms of
    mitigation that were articulated earlier. I think that needs to
    be done because part of this whole deterrence is the message of
    resolve. When we do that, clearly we indicate a strong resolve
    on the peninsula. I think in the long-term we just need to
    watch our assets that need to come to that peninsula and if we
    have war, we must have a careful eye that we do not overextend
    ourselves, as indicated by Admiral Blair.
        Senator Warner. Admiral Blair, Indonesia is a very
    important part of your AOR. Do you have any comments on
    Indonesia's stability or instability level and our commitment
    there? We have a very small force, but I think an important
    force, still dealing with some elements of that instability, am
    I not correct?
        Admiral Blair. Yes, sir. The picture in Indonesia--and I
    have visited there during the last 6 months--continues to be
    mixed. We see elements of greater competence of the Indonesian
    Armed Forces in dealing with the insurgencies really at both
    ends of the country and the sectarian violence in the center.
    But there still are shortfalls in terms of ability to handle
    those tough tasks.
        The Indonesian Armed Forces are stretched too thin to be
    able to perform basic functions like containing piracy on their
    northern coast toward the coast of Malacca or being able to
    contain illegal migration that goes through their country down
    to Australia.
        Senator Warner. What evidence is in the open with regard to
    any connections with al Qaeda or any elements in that
    archipelago?
        Admiral Blair. The Indonesian officials themselves have
    given conflicting statements, some saying that there are al
    Qaeda elements and ties to Indonesia, some saying that there
    are not. There is certainly evidence that Indonesian groups are
    in touch with al Qaeda groups. The one example I can give you
    that has been talked about freely in the papers is an
    Indonesian citizen who went into Singapore to assist in
    plotting attacks against U.S. embassies and U.S. ships. When
    the Singaporeans made a bunch of arrests, this man, whose name
    is Fathur Rahman al-Ghozi, fled to the Philippines, where he
    was captured by the Philippine police. He is an Indonesian
    citizen.
        So there are Indonesians who are connected with this group
    that is centered in Singapore, Malaysia, and the Philippines.
    In addition, the Indonesians themselves tell me that this
    difficulty of controlling their borders as tightly as they
    would like to makes them vulnerable to those who would move
    into Indonesia in order to continue their work. So it is a
    concern and frankly Indonesia is not having the success that
    Malaysia and Singapore are having in terms of identifying,
    pursuing, and arresting terrorists.
        Senator Warner. Does Indonesia have a potential of being
    faced with the problems of having training camps established,
    perhaps not on the proportion of Afghanistan, but some lower
    level?
        Admiral Blair. 17,000 islands, a 3,000-mile breadth. There
    is certainly the potential for establishing that sort of a
    camp.
        Senator Warner. I recognize that. 17,000 islands in that
    nation's archipelago.
        Admiral Blair. Yes, sir, and plenty of opportunity for
    mischief of that type.
        Senator Warner. Mr. Chairman, with Admiral Blair's
    forthcoming departure from active duty, it is my understanding
    you are going to come to Virginia; is that correct?
        Admiral Blair. Yes, sir. As we mentioned, instead of
    working for you, you are going to be working for me. I am going
    to be a Virginia voter.
        Chairman Levin. How quickly is this going to happen?
    [Laughter.]
        Now, under a very technical interpretation of the early
    bird rule, Senator Nelson would actually be next. But I think
    he understands why I am going to use a more common sense
    approach to the early bird rule and call on Senator Sessions.
    We have checked that out and he agrees that common sense
    dictates we go to you next, Senator Sessions.
        Senator Sessions. Thank you, Mr. Chairman. You are always
    fair and run a great committee hearing.
        General Speer, just to follow up a little bit on
    perspective on where we are, you are familiar with the history
    of instability and the attempts at the peace process. Even the
    radical chic Europeans have all tried to deal with the FARC and
    tried to bring them to the peace table and make progress. Are
    you aware now, considering the decision that President Pastrana
    has made to take back the territory and go to war, of any
    diplomatic or political reasons that that is a mistake? Is it
    not a good decision that he has reluctantly made?
        General Speer. Certainly, Senator, as I stated in my
    written statement, from a military perspective it was the right
    thing to do. We have seen in the open press just over the
    weekend an interview with one of the FARC commanders--I am
    sorry, I do not recall the name. In essence, it was kind of an
    admission that the FARC had used the peace process as nothing
    more than an effort to buy time to restock their forces, to
    provide for training, rest and recuperation, and basically to
    prepare to take the campaign back against the people of
    Colombia, and in essence admitted that there never were any
    real negotiations in terms of negotiating in good faith on the
    part of the FARC.
        Senator Sessions. That is what it has appeared to be. I
    appreciate that. Is it not classical military-political theory
    that under these circumstances the only real hope for a
    legitimate peace process is to get the other side on the
    defensive militarily? Generally, if you have peace
    negotiations, is that not when it occurs?
        General Speer. Yes, sir, I think that as long as the FARC
    enjoyed the protection of the Despeje, in other words the safe
    haven, an area that both the Colombian military and the
    Colombian police were denied access, the FARC had free rein. As
    long as they could string that out, they had no real reason to
    resolve it.
        What we have also seen--and this gets back to some of the
    reporting coming out on the coca cultivation, there is general
    consensus that the coca cultivation inside the safe haven
    drastically increased over the last year.
        Senator Sessions. I think that is the grim truth of it. We
    wish it were not so. We wish we could avoid taking this bitter
    pill. But the people of Colombia, 40 million people, they are a
    democracy. They have been allies of the United States. They are
    good trading partners with the United States. Would you not say
    that this situation now is at a critical stage, that President
    Pastrana and the leadership in Colombia have made a new and
    historic commitment to taking back their territory and unifying
    their country as a democracy?
        General Speer. Senator, certainly President Pastrana
    gambled his entire administration on this peace process. That
    is the campaign platform that he was elected on and everything
    that he had done up until the 20th of February had been aimed
    in that direction. But even after his eleventh hour extension
    of the Despeje on the 20th of January after the international
    community was involved in leveraging or at least brokering an
    extension in terms of an agreement, between the 30 days that
    followed and his ultimate decision to suspend the Despeje there
    were in excess of 100 terrorist acts by the FARC. So the FARC
    certainly had some very strange negotiating tactics in a peace
    process.
        The fact is the Colombian security forces, as I stated,
    both the police and the military, lack the resources today to
    reestablish a safe and secure environment. Now, those
    resources, as alluded to, to some degree that is a
    responsibility of the government of Colombia, because the other
    thing that we have not seen is increases in terms of funding
    and support from the government of Colombia's own budget to the
    Colombian military even as a result of this latest action.
        Senator Sessions. It does appear now, does it not, that the
    polls show a growing majority--what does it show for the
    support of the Colombian people for fighting the terrorists?
        General Speer. Senator, I am not aware of what the latest
    figures are, but there is an overwhelming majority, the trend
    line from January to this date, that support Pastrana's action
    to discontinue the Despeje. If you use the other measure, which
    is to take a look at the upcoming presidential election, the
    presidential candidate Arribe is the more hard-line candidate,
    in terms of the actions that he proposes to take against the
    FARC. Certainly in January his popularity pushed him to the
    lead of the campaign, and even since Pastrana's decision to
    discontinue the Despeje Arribe he has gained in popularity
    based on the polls. So this indicates that there is genuine
    public support for this action.
        Senator Sessions. I assume part of his platform is to
    expand the defense budget and strengthen the military?
        General Speer. Sir, I am not conversant on what his actual
    campaign platform is.
        Senator Sessions. I remember talking to President Pastrana
    several years ago and giving him my opinion, which I am sure he
    thought not worth much, that the peace process probably would
    not work and that ultimately he was going to have to be an
    Abraham Lincoln: He was going to have to unify his country
    through military force. Lincoln was not prepared to do it the
    first year. It took him a long time, but he succeeded.
        Should we not be helping the people of Colombia? They are a
    democracy. They have been patient. They have tried every
    possible peace process. They are good allies of ours. They are
    fighting against communists, they are fighting against
    kidnappers, terrorists, people who are drug dealers and
    furthering the drug industry that we oppose. Should we not be
    on the right side of this battle?
        General Speer. Sir, Colombia is important to the United
    States for all the reasons you just said. It is certainly the
    second oldest democracy in the hemisphere, second only to the
    United States. The criticality of Colombia is that it is the
    linchpin in the Andean Region. It is critical for the United
    States that Colombia survive as a democracy and re-establish
    its security, because without that it will only grow throughout
    the region. So Venezuela, Panama, and Ecuador are certainly at
    risk to some degree based on what happens in Colombia.
        Senator Sessions. Well said. I think that is an important
    point to make and it really troubles me and causes me some
    concern. I remember about 2 or 3 years ago we had President
    Clinton's ambassador here, Ambassador Pickering, and he stated
    flatly our only emphasis in Colombia is anti-drugs. I said,
    ``Sir, are we on the side of the democratic government of
    Colombia and against the communist insurgents or not?'' He
    repeated: ``Our only mission in Colombia is counternarcotics.''
        Has anything changed?
        General Speer. I am not sure of the exact words that
    Secretary Powell used, but I was with Under Secretary Grossman
    in Colombia the first of last month in the press conference
    that he gave following our meetings with President Pastrana,
    the foreign minister, the minister of defense, and the military
    leadership. Our support to Colombia at that time--now, this was
    pre-Pastrana's decision--was characterized as still focused on
    counterdrug, but the wording was not exclusive, because of the
    proposal for the pipeline security.
        Senator Sessions. Well, I think it is time to switch. I
    think we need to support the government, help it re-establish
    its control over its territory, and then we can deal better
    with the narcotics problem under those circumstances.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Sessions.
        Senator Nelson.
        Senator Bill Nelson. General Speer, would you comment on
    your observations on Venezuela?
        General Speer. Unfortunately, you missed the other question
    on that topic. Let us see if I can recapture most of it. We are
    very concerned about President Chavez. Your guess as to what
    direction Chavez is taking Venezuela is as good as mine or
    anybody else's. What we do know is he is experiencing a severe
    deterioration in terms of popularity. His promises have not
    yielded deliveries.
        I mentioned that the FARC operates at will across the
    border into Venezuela. There are arms shipments originating in
    Venezuela that get to the FARC and the ELN. We have been unable
    to firmly establish a link to the Chavez government, but it
    certainly causes us suspicions.
        The company that Chavez keeps around the world, although
    under the guise of OPEC, certainly causes additional concerns
    as well.
        Senator Bill Nelson. Mr. Chairman, I do not know if it is
    symbolic or symptomatic or what-not, but clearly the interest
    of the United States was served so well when all the countries
    of Latin America basically were democracies. Now we see a
    disturbing trend in a number of those countries that are moving
    away from democracy. So at some point it might be well for some
    of us to get together with maybe the Foreign Relations
    Committee and talk about the future of Latin America, and what
    more we should be doing to aid the drug fighting down there in
    order to shore up these additional democracies.
        When you and I went to Colombia, we had a sobering sense of
    reality that if we were able to stamp out the coca growing in
    the south it could pop up right across the border in either one
    of those other countries, Ecuador or Brazil. So I would like to
    get my hands around that a little more as it involves the
    future interest of the United States.
        Here we have, right across from Colombia, a problem in
    Venezuela. So I do not know the answers, but I am sure going to
    be asking some questions.
        Chairman Levin. That is an important point, Senator Nelson,
    and I think we ought to talk to Senator Biden and see if there
    is some joint work that our committees can do. As you point
    out, the coca problem is not just because other places can grow
    it, but other places in Colombia apparently have grown it. You
    indicated the safe haven area has increased its production,
    which may have made up for the destruction in areas where we
    have sprayed. So without getting into the numbers or even
    knowing the exact numbers, I think we face that possibility,
    too, which reinforces the point about the importance of the
    government being strong enough to go after not just the
    counterinsurgencies, but also after the paramilitaries as well.
        At any rate, I do not want to interrupt you, but I agree
    with your assessment.
        Senator Bill Nelson. I appreciate it.
        Admiral Blair, if we end up going after the terrorists in
    places like Indonesia and the Philippines, how do you handle
    the command structure there, since it would not be directly in
    General Franks' area of command?
        Admiral Blair. Before I answer that, Senator, could I pile
    a little bit onto that previous discussion you had?
        Senator Bill Nelson. Please, please.
        Admiral Blair. At the working level, we find that as we
    attack these threats like terrorism and counternarcotics, which
    are threatening entire countries, and as we are building the
    ability for governments to control their borders, we trip
    across one of the traditional approaches that we have built up
    for very good and sufficient reasons in terms of our funding
    flows and how money is used. We often find as we try to put
    together a coherent program towards a country, to work with a
    country like the Philippines in my case or like Colombia in
    General Speer's case, that we have to almost deform our
    policies to get the job done that needs to be done because of
    the type of money, the source of money, and the restrictions
    that it must be spent on, often based on other countries.
        Now, you who give us the money need to know how we are
    spending it and what purpose it is for and that is absolutely
    right and proper and it keeps us very well on the right track.
    But I think we can have a richer dialogue in terms of getting
    at big problems involving all aspects of a country. Often a
    country that cannot control its terrorism cannot control its
    narcotics, cannot control the running of guns, does not control
    its financial affairs very well.
        We have a term in our AOR called a ``seam of lawlessness,''
    which just brews up bad stuff in all sorts of ways, of which
    terrorism is the most damaging. If that discussion between the
    Armed Services Committee and the Foreign Affairs Committee
    comes up with approaches that we could make into really
    coherent, integrated approaches to assist countries to do work
    which is in our interest, and make the money available in a way
    that would match the country that we are dealing with, that
    would be a great help to us at the working end.
        As I say, I do not argue that you ought to write us a check
    and leave us alone until we fix it. I think we ought to be
    fully accountable for what we are doing. But right now we kind
    of push against some of those funding restrictions as we try to
    do what we think is what both you in Congress and our bosses in
    the Executive Branch want us to do.
        But as for the question on the command structure for the
    forces in our area of responsibility, Senator Nelson, in the
    Philippines we have established a joint task force. That is a
    very familiar form of command and control to us. The commander
    of that joint task force, General Wurster, works directly for
    me and he takes his direction from me. He coordinates with the
    ambassador as far as the country team goes. But we keep a very
    clean, two-level chain of command in that area.
        It is more complicated in countries like Malaysia,
    Singapore, and Thailand, where there is not such a direct
    military element. In that case we work very much with the
    embassies and I, in fact, send officers into the embassies who
    are called counterterrorism liaison teams. They function as
    part of the ambassador's staff, but they have direct linkages
    with my staff that works on terrorism, so you get good linkage
    up at the level where you are making your plans and you are
    carrying it out, so that what we are doing with the other parts
    of our programs in these countries is well linked in with the
    military assistance that we provide.
        So it is either the joint task force or else it is the
    counterterrorism liaison force working with the embassy. I
    think we have to invent, just as we do with the more flexible
    funding mechanisms. I think we on our side need to develop more
    integrated structures for these problems that cut across so
    many lines. Frankly, right now there is a little bit of
    coordination and mother may I and would it not be nice, rather
    than: This is the plan, here is the military piece, here is the
    diplomatic piece, here is the economic piece; go out and
    execute and make it happen.
        So we are working our way towards new forms, but we are
    using the old categories, the both the funding and authorities,
    in order to do the job right now.
        Senator Bill Nelson. If we were in a hot war in that part
    of the world, as we are now in Afghanistan, would the lines of
    authority be through the CINC of the Pacific Command?
        Admiral Blair. Yes, sir, from the Secretary of Defense to
    me. If it were a war in Korea they would go straight from the
    Secretary of Defense to General Schwartz, and I support him. It
    is pretty clean in war. But as we have found in these sorts of
    wars that we get in these days, it is really not so clean. In
    Afghanistan, for example, as General Franks I am sure can tell
    you himself, the business of coordinating with the other parts
    of government that are concerned--the Department of State, the
    intelligence agencies, the law enforcement agencies like the
    FBI, international organizations --there still is a great deal
    of coordination that has to go on in order to get the common
    job done.
        So although the military side is clean and everybody knows
    who has responsibility to shoot weapons and all, for the total
    integrated effort in a country, which involves much more than
    just military actions, we sort of invent that as we go.
        Senator Bill Nelson. Well, that is in large part why I have
    such admiration for all of you. I am the most familiar with
    Southern Command and the CINC in Southern Command has to be a
    diplomat par excellence. So you all wear many hats and you wear
    them very well.
        Thank you, Mr. Chairman.
        Chairman Levin. Senator Nelson, thank you.
        Just a couple questions, finally, from me. First, General
    Speer, the Colombian military's record with respect to human
    rights and collaboration with the paramilitary groups has been
    a major factor in Congress' attitude about assistance to the
    Colombian military. In your formal statement you said the
    following: ``We have witnessed a steady improvement in the
    professionalism and respect for human rights by the Colombian
    military, accompanied by increased effectiveness in counterdrug
    operations.''
        You also stated that: ``In a short period of time, the
    Colombian military has emerged as one of the most respected and
    trusted organizations in Colombian society. Less than 3 percent
    of complaints of human rights abuses last year were attributed
    to the Colombian security services, down from a high of 60
    percent just a few years ago. The Colombian military,'' you
    said, ``have also aggressively stepped up operations against
    the AUC,'' which are the paramilitaries. ``This progress
    reflects a strong and principled leadership and the genuine
    desire of the Colombian military to honor and promote
    democratic principles in their country.''
        Finally: ``There have been no allegations of human rights
    abuses against the Counterdrug Brigade.''
        I think if Congress is going to look at broadening the
    mandate in terms of our aid and its recipients in terms of our
    aid and purpose, it is essential that Congress, my colleagues,
    believe that testimony. So anything you can do to give examples
    to flesh out that testimony, to give support to your beliefs, I
    think will help in terms of whether or not we are going to
    continue to restrict aid just to the counterdrug effort or
    whether we are going to broaden it to try to support that
    democratic government down there, which is elected
    democratically, which has plenty of problems on its hands,
    which needs, and I believe, deserves our support.
        So they are connected, is my point here, and the linkages
    between, for instance, the Colombian military and the
    paramilitary have been very destructive in terms of confidence
    of Congress in the military down in Colombia. On our visit I
    think we saw surely an effort on the part of the leadership at
    least of the Colombian military to break those linkages which
    exist at the grassroots level.
        But at any rate, your testimony is very much on point and
    on target in that regard and it is essential again that
    Congress reach that conclusion, I think, if we are going to
    broaden the purpose of the aid.
        That is not a question. It is just a comment to you. I
    welcome any reaction if you like.
        General Speer. Sir, just to amplify, I am convinced that
    the military leadership in Colombia is firmly committed to
    setting things straight in terms of taking action on any
    reports of wrongdoing. They have suspended officers and
    noncommissioned officers for acts of wrongdoing. They certainly
    have stepped up their operations against the illegal
    paramilitaries. In fact, General Tapias has told me that he
    views the paramilitaries as the long-term threat they have to
    deal with, more so than the FARC.
        So their real challenge is that the government of Colombia
    and the Colombian military needs to tell the story about what
    they are doing and take credit for the accomplishments that
    they have attained. They have been unable to do that up to this
    point.
        Chairman Levin. Thank you.
        Finally, Admiral Blair, in your remarks in January in San
    Diego titled ``Force Transformation in the Pacific'' you said
    the following: ``Over the past year I have become even more
    convinced that our current approach to transforming our Armed
    Forces must be changed, particularly in the way we acquire
    systems. If we do not change it, it will break us. I say that
    even though we are winning wars with the current system. The
    joint task forces of the Central Command have done very well in
    Afghanistan.
        ``However,'' you said, ``we are wasting our money, missing
    opportunities, and, worst of all, not using our greatest
    resource in the job of transformation--the sailors in the fleet
    and the soldiers in the field.''
        Basically, you stated that our acquisition system is by
    service and our operations are joint. I am wondering if you
    would just tell us briefly about your views in that area,
    because we are in the middle of an effort to transform and I
    think your views are very important.
        Admiral Blair. Yes, sir. I find that when we put a joint
    task force together the tactical service units are not able to
    plug in cleanly, pass a picture of the battlefield back and
    forth across component lines up to the joint task force
    commander headquarters in order to allow the sort of
    flexibility that will bring the enormous firepower the United
    States can bring to bear in any part of the world. We
    demonstrated that in Afghanistan, along with being able to move
    our maneuver forces about such a battlefield, in the most
    effective way.
        In my experience, a large part of the reason for that is
    the Service origin of that equipment. I think the best way to
    fix it is through operations like Afghanistan, when smart
    sergeants and airmen get together and figure out how to put
    bombs on enemy forces, but also, when we do not have an
    operation going, through exercises to force actual events in
    the field to demonstrate whether we can or cannot interoperate
    in the joint task force and then to fix those problems.
        To me that is a much faster cycle that addresses real
    problems than to send written requirements back to a systems
    command, have that systems command work out a system that on
    paper and in lab testing works, and then send it forward to the
    forces in the field for them to operate with. I think that
    turning cycle for information technology systems, which is the
    key to revolution in the near-term, has to be faster based on
    field exercises as well as field operations, and has to have a
    much higher component of joint requirement to the field rather
    than Services developing their capabilities in the service
    channels and then providing them to joint forces for use.
        It does not work for tanks and planes and big pieces of
    gear that the Services have all of the expertise to develop,
    but it has to be different for the information systems on which
    joint warfighting depends. It just has to have a higher joint
    relevance and a faster speed to be effective. That is what I
    think we need to have a real revolution, Mr. Chairman.
        Chairman Levin. Thank you all again for your service.
    Thanks for your testimony.
        We will stand adjourned.
        [Questions for the record with answers supplied follow:]

                   Questions Submitted by Senator Carl Levin

                                THE PHILIPPINES

        1. Senator Levin. Admiral Blair, assuming the Abu Sayyaf Group is
    eliminated, and given the fact that we want to keep the Philippines
    free of terrorists, will we expand the operation to fight the other
    terrorist groups operating in the Philippines?
        Admiral Blair. To date, the Government of the Philippines (GOP) has
    not asked the United States Government (USG) to expand our operational
    efforts against other terrorist organizations. A GOP request that the
    USG expand efforts to fight other terrorist organizations would
    necessitate a new USG policy decision. At the conclusion of current
    operations, the current USG assistance to the GOP/Armed Forces of the
    Philippines (AFP) will provide their Armed Forces with the capability
    to respond effectively to other internal threats. Moreover, the Mutual
    Defense Board planning will provide additional assistance to the AFP to
    respond to further threats over the long-term.

        2. Senator Levin. Admiral Blair, who will be authorized to issue
    commands to U.S. troops--will Philippine commanders have operational or
    tactical command over U.S. forces?
        Admiral Blair. The Terms of Reference for Republic of the
    Philippines--United States (RP-US) Exercise Balikatan 02-1, paragraph
    1, number 4, Policy Level, explicitly states: ``In no instance will
    U.S. Forces operate independently during field training exercises
    (FTX). AFP (Armed Forces of the Philippines) and U.S. Unit Commanders
    will retain command over their respective forces under the overall
    authority of the Exercise Co-Directors. RP and U.S. participants shall
    comply with operational instructions of the AFP during the FTX.''

                     COMBATING TERRORISM IN SOUTHEAST ASIA

        3. Senator Levin. Admiral Blair, in your testimony, you mentioned
    the local Southeast Asian groups that have ties to al Qaeda. Do you
    intend to conduct any new operations in the future to reduce the threat
    from these groups or to prevent terrorists from using bases in the
    area?
        Admiral Blair. I am working with other U.S. agencies and our
    friends across the region in an effort to ensure major counterterrorism
    (CT) operations are not required in our theater. I certainly do not
    anticipate any Afghanistans in the Asia-Pacific region. My theater CT
    campaign incorporates a wide range of theater security cooperation
    activities designed to help each nation in my area of responsibility
    develop the individual and collective will and skill to defeat current
    CT threats and deter future threats. These activities range from our
    current assistance program in the southern Philippines to combined
    exercises that incorporate CT themes to humanitarian assistance
    activities that dissuade the development of terrorist support bases and
    breeding grounds.
        Military operations alone will not suffice to defeat terrorism. In
    U.S. Pacific Command (USPACOM), we are working hard to make the overall
    global CT effort as effective as possible by coordinating our military
    activities with the myriad of international interagency diplomatic,
    economic and information CT initiatives. As part of my CT campaign, I
    have stood up a Joint Interagency Coordination Group for
    Counterterrorism (JIACG/CT) in my headquarters to serve as the focal
    point to integrate the wide range of intelligence, planning and
    operations into a fused, synergized regional CT campaign.
        One key function of this JIACG/CT organization is to operationalize
    incoming intelligence, working with my intelligence directorate and
    interagency intelligence elements, to ``mine nuggets'' of actionable
    intelligence from the huge volume of available information. We have
    found that non-military tools usually provide the most effective method
    to defeat or preempt the threats we have identified, and therefore it
    is critical to synchronize our efforts beyond Department of Defense
    assets. The successful disruption of planned Jemaah Islamiya attacks in
    Singapore is one recent example of highly productive international
    interagency cooperation.
        I am working to ensure such cooperation is the norm in the Asia-
    Pacific region. Some countries have a way to go in developing the skill
    and/or will that I think they need to capably diminish and marginalize
    terrorism and its supporters within their borders. USPACOM is ready to
    act unilaterally, if required, to defeat any potential threat to the
    United States. My preference, however, is to help the regional nations
    to individually, cooperatively and successfully address the common
    threat.

                                  NORTH KOREA

        4. Senator Levin. General Schwartz, what is your assessment of the
    future of talks between North Korea and the U.S. and between North and
    South Korea?
        General Schwartz. I remain hopeful that North Korea will act on
    President Bush's invitation to negotiate in good faith with North Korea
    ``any time any place.'' Thus far North Korea has been either unwilling
    or unable to significantly improve relations with the Republic of Korea
    (ROK) or U.S., despite numerous diplomatic, economic, and political
    overtures from the ROK government and President Kim Dae-jung and I do
    not see any indications this will change in the near-term. The North
    Korean regime has demonstrated that it is neither a reliable nor
    predictable partner. The North Korean threat to peace and stability in
    Northeast Asia will not fundamentally diminish until the North engages
    in tangible military confidence building measures that are verifiable
    and transparent. I do believe that we must follow our current policy of
    ``anytime, anyplace'' and continue to advocate that the North Koreans
    meet with the ROKs. I still believe, as I stated at the hearing, that
    we are doing everything we can to get the dialogue moving.

        5. Senator Levin. General Schwartz, have you detected any change in
    military posture in North Korea since President Bush's visit? What
    conclusions do you draw from your observations?
        General Schwartz. We have detected no significant change in North
    Korea's military posture since President Bush's visit. The North Korean
    military remains a large, forward deployed force capable of inflicting
    great damage to South Korea and directly attacking Combined Forces
    Command's (CFC) United States and Republic of Korea Forces, with little
    notice.
        They still pose a dangerous threat to the stability and security on
    the Korean peninsula, the region, and increasingly, the world. They
    continue to modernize systems that can marginalize specific U.S.
    military strengths. Their Winter Training Cycle program was a little
    above average as was the output of their propaganda and rhetoric.
        I believe it is too soon following President Bush's visits to draw
    meaningful conclusions. Change in North Korea rarely happens quickly. I
    believe that we must observe North Korean actions over a long period to
    determine if any meaningful change in their military posture will
    actually occur.

        6. Senator Levin. General Schwartz, has North Korea kept its
    plutonium reprocessing program frozen, as required by the Agreed
    Framework, including the canning of spent reactor fuel that I observed
    from the Yongbyon reactor?
        General Schwartz. Although, the DPRK has, for the most part, lived
    up to the letter of the Agreed Framework and the agreement has achieved
    the near-term objective of shutting down the Yongbyon facilities,
    implementation of the Agreed Framework is progressing--although very
    slowly. To date, these graphite-moderated reactors remain frozen, and
    all known intact rods are canned, and under International Atomic Energy
    Agency (IAEA) seal.
        The history/records of the DPRK's nuclear program need to be
    inspected so the IAEA can really analyze the extent of reprocessing of
    nuclear materials. I depend on the U.S. Intelligence Agency Report and
    IAEA reports as the basis for my assessment. The theater systems under
    my control do not enable me to independently verify North Korean
    compliance with the Agreed Framework.

        7. Senator Levin. General Schwartz, in my opening comments, I asked
    whether the Framework Agreement is viable. What can we do to ensure
    that we stay on track? Do you believe North Korea will allow the
    inspections required in order for the U.S. to deliver the light water
    reactor components in 2003?
        General Schwartz. I believe the Agreed Framework is viable as long
    as the North Koreans fulfill the IAEA inspection requirements and we
    have a complete history of their nuclear program. President Bush's
    waiver vice certification this year placing North Korea on notice is
    one way to keep North Korea on track. I remain hopeful North Korea will
    allow the required IAEA inspections. While there has been some recent
    dialogue and visits with the IAEA, we have not seen any indications
    that North Korea is ready to accept the prerequisite level of
    transparency. When North Korea accepts and starts the IAEA inspection,
    it will take approximately 3 years for the inspection to be completed.
    Therefore, I would not anticipate key component delivery of the LWR
    prior to 2005.

                     NAVY AREA DEFENSE PROGRAM CANCELLATION

        8. Senator Levin. Admiral Blair, last December the Defense
    Department canceled the Navy Area Defense Ballistic Missile Defense
    program because it had exceeded its planned costs by nearly 60 percent.
        As the regional commander with operational responsibility for a
    large portion of the world's oceans and regions where ballistic
    missiles pose an existing threat to our forces, are you concerned by
    the cancellation of the Navy Area program, and the fact that it means
    we will no longer have that theater ballistic missile defense
    capability in the next few years, as we planned?
        Admiral Blair. Yes, I am particularly concerned with the
    cancellation of the Navy Area Defense program. With the increase in
    ballistic missile defense development and proliferation of these
    technologies by potential adversaries, having a naval ballistic missile
    defense system is critical in the U.S. Pacific Command AOR. Since the
    Navy is forward stationed and can self-deploy, the sea-based missile
    defense (MD) platforms can be on station in a short amount of time.
    This allows strategic airlift assets to be utilized in other areas. The
    sea-based MD platforms can also remain in international waters, thereby
    posing fewer political ramifications than ground-based systems. The
    Navy Area Defense program was a critical program. The benefits of sea-
    based defense are enormous and something we need not only in my AOR but
    also around the globe.

         NAVY THEATER WIDE DEFENSE AND UNITED STATES-JAPAN COOPERATION

        9. Senator Levin. Admiral Blair, the United States and Japan have
    been discussing cooperation on what was previously known as the Navy
    Theater Wide Missile Defense System. The newly reorganized Ballistic
    Missile Defense program changes the previous theater missile defense
    focus of the Navy Theater Wide program to a system called Sea-based
    Midcourse that is intended to be able to defend against medium-range
    theater targets and long-range targets for national missile defense.
    What impact do you think this change will have on the U.S.-Japan
    research and development program for sea-based theater missile defense?
        Admiral Blair. Navy Theater Wide (NTW) Program has always been
    designed to provide an intercept capability against medium and long-
    range theater ballistic missiles. We have been working all along with
    the Japanese to cooperatively design a weapon suitable to meet these
    needs. Japan's level of financial commitment to the MD research remains
    strong. The recent successful test of the Sea-based Midcourse Defense
    Segment on 25 Jan 02 eased Japan's concerns that cooperative work is
    producing positive results. U.S.-Japan research and development for
    Sea-based MD remains a priority for Japan's security and should
    continue to receive support.
                                     ______

                 Questions Submitted by Senator Daniel K. Akaka

                    LAND PARTNERSHIP PLAN--AIRCRAFT TRAINING

        10. Senator Akaka. General Schwartz, are you satisfied that the
    Land Partnership Plan (LPP) that the governments of the United States
    and the Republic of Korea expect to sign on March 15, 2002 will
    guarantee us the access we need to training ranges for our ground
    forces?
        General Schwartz. Yes. The LPP will provide substantial benefits
    for training over our current capabilities. The benefits of LPP are
    enormous. With the release of encroached training areas, subsequent
    consolidation of military facilities and areas on enduring land grants,
    our training base will provide quality-training support well into the
    future.
        The LPP guarantees USFK ground forces access to critical Republic
    of Korea (ROK) military training facilities that, coupled with our
    enduring facilities, gives us an overall increase in training capacity
    and resolves long standing training issues in the southern region of
    the peninsula. Additionally, with the infusion of simulator and
    simulation technologies, the cumulative effect of: LPP on training will
    be a significant and measurable increase in support for both
    operational and training missions designed to achieve increased force
    readiness and strategic combined defense objectives.

        11. Senator Akaka. General Schwartz, does this agreement provide
    similar guarantees for access to air-to-ground ranges for our tactical
    air forces? If not, what additional steps do we and the Republic of
    Korea need to take to ensure the availability of adequate training
    ranges for tactical aircraft?
        General Schwartz. The LPP did not include any of the U.S. Air Force
    air-to-air or air-to-ground training areas. We currently have adequate
    access to our ranges and will continue to work closely with the
    Republic of Korea to identify and remove encroachments that would have
    a detrimental impact on Air Force training.
        The strength of the LPP is the close coordination that evolved with
    Koreans and Americans working together to solve problems, promote
    combined efficiencies in training, and working together to maximize
    limited use ground training ranges. This methodology is a recipe for
    success and as soon as the LPP is approved, we will begin work in the
    ROK-U.S. Joint Committee (responsibility for LPP success) of applying
    that model to airspace issues and training range issues.

                        BRINGING MORE FAMILIES TO KOREA

        12. Senator Akaka. General Schwartz, your testimony states that
    your goal is to increase the number of personnel in Korea on
    accompanied tours from 10 percent today to 25 percent by 2010 and that
    this initiative will require additional resources. I understand you
    wish to further increase that to 50 percent accompanied tours by 2020.
    Has your command estimated the additional requirements this would
    create not just for family housing, but also for increased medical and
    child care facilities and services and for force protection, and what
    the additional cost of those requirements would be? When would you seek
    to start funding this plan?
        General Schwartz. When we started to look at improving the quality
    of housing in Korea and increasing the accompanied rate, we brought all
    the stakeholders together to talk about the impacts one would have on
    the other. This group included senior people from within the community,
    from the Department of Defense Dependent Schools, the Army and Air
    Exchange Service, the Defense Commissary Agency, the Medical Command
    and the base agencies responsible for family support services.
        As the CINC, I have the authority to establish command
    authorizations in Korea and I have currently established the ceiling at
    3,000. The current acceptance rate for an accompanied assignment to
    Korea is 65 percent or about the number I can really provide houses
    for. My real limitation is housing. I only have 1,979 units of
    government owned and leased housing. This is less than 10 percent of
    the married personnel as compared to more than 70 percent in Europe and
    Japan.
        As we build new housing, more service members will be allowed
    accompanied tours to Korea. We anticipate that by 2006, we will have
    housing for the 3,000 authorizations already established. During the
    initial stages of our program, my initial goal is to concentrate on
    improving existing quarters, and bring more people currently living off
    post, on post. This will dramatically improve quality of life, force
    protection, and assist the command should we have to perform a Non-
    Combatant Evacuation Operation.
        Most of the new housing will be funded from the Host Nation
    Construction Program. We will use approximately $780 million Host
    Nation dollars over the next 10 years to build 1,066 units. As we move
    above the 3,000 authorizations and begin working towards our 25 percent
    goal, we have anticipated that we will need; 3 new Combined Activity
    Centers, 1 new elementary and middle school, expansion of 2 existing
    commissaries, 2 new child care centers, the expansion of 2 medical
    centers, 1 new exchange and the expansion of a second, 2 new youth
    centers and 2 new libraries. Some of these projects have been
    programmed in the current Military Construction Future Years Defense
    Plan process and others will be programmed as we move forward, but we
    will not reach the decision point to increase to the 25 percent
    accompanied rate until 2006. The estimated cost of these facilities is
    approximately $140 million.
        We plan to use existing ``build-to-lease'' authority, to leverage
    the Korean private sector and thereby obtain the remaining capital
    investment required to develop an additional 2,500 units in Korea. Our
    first effort to apply ``build-to-lease'' will be at Camp Humphreys.
    This project will accommodate 1,500 families and provide associated
    community support activities such as a Post Exchange, commissary,
    school, child development center, community activity center, gymnasium,
    and medical/dental clinic. We expect the first units to be ready in
    2005. We are currently working with the Department of the Army to get
    the initial funding, $12 million we need to get this initiative
    started.
        Increasing the accompanied rate should not increase the force
    protection costs identified in the Long Range Housing Plan. All
    physical security requirements are embedded in the construction design
    of all new facilities so these costs are already accounted for.

                        BRINGING MORE FAMILIES TO KOREA

        13. Senator Akaka. General Schwartz, has the Republic of Korea
    agreed to finance any of this increase under the LPP, or is this a
    separate United States initiative? To what extent will the cost of
    these additional facilities be funded within current levels or as part
    of the Land Partnership Plan, and to what extent will additional U.S.
    funding be required?
        General Schwartz. The LPP and Long-Range Housing Plans are not
    directly tied to one another. None of our initiative to improve current
    housing conditions or to increase the number of is included in, nor
    funded from the Land Partnership Plan. We will; however, spend
    approximately $780 million from the Host Nation Construction Program
    over the next 10 years to construct 1,066 units. Military Construction
    (MILCON), which is already in the programming channels, will construct
    approximately 440 units valued at $220 million, and our build-to-lease
    initiative provide 2,000 units at approximately $72 million per year.

                        UNFUNDED FACILITIES MAINTENANCE

        14. Senator Akaka. Admiral Blair, your testimony states that
    ``unfunded backlog projects affect OPLAN execution in Korea, Guam, and
    Wake Island.'' Would you describe, in classified form if necessary, the
    current deficiencies, their impact on the execution of your war plans,
    and the estimated costs and current schedule for repairing these
    deficiencies?
        Admiral Blair. Korea: Current Deficiencies and impact on operations
    in support of war plans:
        [Deleted].
        [Deleted].
        It is critical for U.S. Forces Korea (USFK) to be able to rely on
    utility systems, and maintenance facilities and operational command and
    control facilities. Korea continues to be under funded by 45-50 percent
    each year and this exacerbates an already serious problem and impacts
    readiness, especially when merged with a high operating tempo and harsh
    conditions, such as they experience daily in Korea.
        Estimated costs and current schedule for repairing these
    deficiencies:
        [Deleted].
        Korea requires stable Sustainment, Restoration, and Modernization
    (SRM) funding of approximately $260 million per year to prevent further
    decline. Current SRM funding levels have allowed USFK to provide day-
    to-day critical maintenance of their essential facilities, the
    Sustainment piece, but they are not able to get to the Restoration and
    Modernization piece with current funding levels. There is no easy fix
    for Korea. Under funding and the lack of Military Construction has
    taken its toll. USFK has articulated a vision in a comprehensive Fix
    Korea Business Plan, which incorporates training, infrastructure, and
    quality of life.
        Guam: Current Deficiencies and impact on operations in support of
    war plans:
        [Deleted].
        The significant infrastructure deficiencies that affect operations
    include deteriorated piers, ordnance terminals and magazines, bulk
    fueling terminals, roads, and airfields. There are also unsafe
    helicopter maintenance hangars, unreliable utilities, and delayed
    harbor dredging.
        Estimated costs and current schedule for repairing these
    deficiencies:
        Commander Naval Forces Marianas has $75 million in SRM backlog. The
    approximate annual SRM funding is between $18-25 million. However, this
    SRM funding only sustains current requirements and does not address the
    $75 million backlog.
        Andersen Air Force Base has $49.6 million in critical and degraded
    SRM requirements, which impact the base mission. These requirements
    repair projects on the airfield, munitions storage facilities, base
    water system, etc. The approximate annual SRM funding is $6.4 million,
    which does address some of the $49.6 million backlog. However, this
    annual funding is not enough to eliminate the backlog.
        Wake Island: Current Deficiencies and impact on operations in
    support of war plans:
        [Deleted].
        Wake Island infrastructure is either in disrepair or nearing
    failure. Since 1993, neither SRM, nor Military Construction (MILCON)
    monies have been spent on Wake Island. Wake Island has deteriorated to
    the point where immediate repairs are required. The runway will be
    unusable for fighters by fiscal year 2003 and heavy lift by fiscal year
    2005. Chief of Staff of the Air Force (CSAF) directed Wake Island be
    placed in a Very Limited Operations (VLO) status starting on 1 Oct 02.
    The runway is CLOSED for day-to-day operations except--or wartime
    requirements, emergency diverts and; contractor/tenant support.
        Estimated costs and current schedule for repairing these
    deficiencies: Between fiscal years 2003-2007, operation and maintenance
    projects include facilities sustainment, environmental compliance, long
    haul communications, satellite communications, and air traffic control
    and landing systems. The funding profile is approximately $12 million
    per year. MILCON funding during fiscal years 2003-2006 is approximately
    $25 million per year for repair of sea access facilities airfield
    pavements, and island-wide infrastructure.

                               AIRCRAFT READINESS

        15. Senator Akaka. Admiral Blair, your testimony states that
    aircraft mission capable rates ``continue to be major readiness
    concerns in USPACOM'' despite increased funding for spare parts. Would
    you describe why you think problems remain despite increased funding
    levels, and the steps you believe are necessary to correct these
    problems?
        Admiral Blair. While recent programming decisions address the
    shortage of spare parts, the age of aircraft systems, along with the
    pace of operations and deployments, continue to impact readiness.
        Problems remain, despite increased funding levels, because many of
    our key aircraft systems are aging, and suffer from persistently high
    operating tempo (OPTEMPO) usage rates, often above programmed goals.
    Aging systems experience high failure rates and require more frequent
    repairs. These systems also experience incompatibility and
    interoperability problems, increased spare parts usage, time consuming
    workarounds, and require additional costs to operate.
        Exacerbating the problem is the fact that for some systems,
    manufacturers have gone out of business or ceased production of spares.
    The loss of critical parts manufacturers limits spares inventories and
    dramatically increases cannibalization rates. Cannibalization further
    reduces readiness rates.
        Merely procuring additional spare parts at the current rate will
    not solve the aging problem. Reversing this trend will take additional
    funding and a concerted recapitalization and modernization effort.
    Recapitalization and modernization of existing aircraft will reduce the
    number of legacy systems that require operational upgrades and service
    life extension program (SLEP) iterations. Further, resources must be
    provided to achieve full modernization since limited or partially
    modernized legacy systems are not compatible with modernized systems
    and require different training, material, and services.
                                     ______

                 Questions Submitted by Senator Strom Thurmond

                                THE PHILIPPINES

        16. Senator Thurmond. Admiral Blair, the United States has had a
    long and historic relationship with the Republic of the Philippines.
    For that reason, it is important that we provide the necessary
    assistance to deal with the internal insurgency groups, like the Abu
    Sayyaf Group. Why did it take this long to provide the training and
    assistance for the Republic of the Philippines?
        Admiral Blair. Not until the hostages were taken from Sipadan
    Island in 2000, did the Government of the Philippines (GOP) express any
    interest in U.S. support to address their internal security challenges.
    [Deleted] and Foreign Military Financing (FMF).
        Indeed, the United States has had a long and historic relationship
    with the Republic of the Philippines, but after the ``bases era'' and
    until the Visiting Forces Agreement (VFA) was signed in 1998, the U.S.
    Pacific  Command's (USPACOMs) security cooperation program was quite
    limited. After the signing of the VFA, we began to re-engage under the
    terms of the Mutual Defense Treaty (MDT) and developed programs
    designed primarily to assist the Philippines in strengthening their
    external defense requirements, as they interpreted the MDT. However, as
    recently as last year and perhaps as a result of their present
    situation, the GOP re-examined their position with regards to our
    military-to-military program and the emphasis on external defense. We
    are adjusting our normal bilateral program towards one that will assist
    the Armed Forces of the Philippines (AFP) in mission areas known in
    U.S. military parlance as Most Likely Operations (MLOs). Counter-
    terrorism is just such an operation. With this new direction, [Deleted]
    and recommended an increased FMF package. When the Burnams' were taken
    from Dos Palmas Island in May 2001, we began using these arrangements
    to assist the AFP/GOP in dealing with internal terrorist threats. But,
    it was not until the November meeting between Presidents Arroyo and
    Bush that agreements were reached that brought us to the present
    effort.

                               ENROUTE STRUCTURE

        17. Senator Thurmond. Admiral Blair, one of the most critical
    shortfalls facing our combatant commands is in our strategic lift. At
    virtually every hearing, commanders at all levels have voiced the same
    concerns about our ability to move large numbers of troops and
    equipment over long distances. Your statement reflects similar
    concerns. Although additional lift is critical, so are the enroute
    structures of airfields and refueling points. What is your assessment
    of the enroute facilities in the Pacific region? Where would you place
    additional emphasis?
        Admiral Blair. Our enroute infrastructure is reliant upon 40-50
    year old facilities that will eventually fail or will severely limit
    our airlift throughput capability unless required improvements are
    made. Below are specific examples of U.S. Pacific Command (USPACOM)
    infrastructure requiring improvement to support our warfighting
    requirements.
        Theater Munitions Infrastructure: Commander in Chief, U.S. Pacific
    Command (USCINCPAC) requires an additional $147 million be applied to
    upgrading theater munitions infrastructure. In many instances,
    facilities are 1950's era and do not support next generation weapons
    systems nor the reception of containerized munitions.
        [Deleted]. The $9.7 million for military construction (MILCON) in
    fiscal year 2002 repairs only the wharf and seawall. It is the minimum
    essential project to bring in construction equipment and supplies for
    Phase 2 and 3 projects for the runway and taxiway repair, scheduled for
    fiscal year 2003 and fiscal year 2004. [Deleted]. The future years of
    fiscal year 2004, fiscal year 2005, and fiscal year 2006 reflect a
    current Pacific Air Forces (PACAF) funding profile of $24 million, $25
    million, and $10 million, respectively.
        USCINCPAC requires the capability to project power and provide
    warfighting support from a network of bases with first class
    facilities. This requires sufficient: resources, particularly in
    Sustainment, Restoration, and Modernization (SRM) accounts, to preserve
    capital investment of mission support facilities, as well as in-theater
    MILCON funding for new construction/replacement of old facilities and
    systems vital to the warfighting effort.
        The theater needs a Joint Mobility Center (JMC) at Hickam Air Force
    Base, HI and Elmendorf Air Force Base, AK to support rapid deployment
    of forces and material. Development of JMCs by the Air Force at these
    bases will significantly enhance rapid deployment capability of Army
    forces from Hawaii and Alaska in current and future configurations.
    Army initiatives to study the feasibility of improvement of airfields
    in Hawaii to meet future Army and Air Force joint training needs, as
    well as Army upgrades of mobility training facilities in Hawaii, will
    further enhance rapid deployment infrastructure.

                                INTEROPERABILITY

        18. Senator Thurmond. Admiral Blair, during the committee's recent
    hearings on the future of NATO, General Ralston pointed out that one of
    his concerns was that our European allies were not keeping pace with
    the United States as for modernization of their Armed Forces. How would
    you rate the warfighting capabilities of our key allies in the Pacific
    in terms of interoperability with our forces?
        Admiral Blair. The Command, Control, Communications, and Computers
    (C\4\) interoperable warfighting capability of Pacific allies is less
    than with NATO countries. [Deleted]. Australia is generally
    interoperable by way of a small air, land, and sea capability, but they
    are in great need of modernization, including C4, airlift, air-to-air,
    and command and control. Australia is moving forward with the purchase
    of four Airborne Early Warning and Control (AEW&C) ``mini-AWACS''
    platforms to complement command and control of combined operations.
    Australia and Japan are pursuing Link-16 for future tactical data link
    operations, as have our European allies. [Deleted].
        The political landscape and vast oceans of the Pacific magnify the
    challenges of developing multilateral ``NATO like'' alliances. The U.S.
    modernization of C\4\ capability outpaces that of any allied nation in
    the Pacific and will continue to do so for the foreseeable future.

                               MILITARY FAMILIES

        19. Senator Thurmond. General Schwartz, Seoul, which has the
    largest concentration of U.S. military and civilian personnel, is only
    located only 24 miles from North Korea, well within short range
    missiles and in some cases within long range artillery. Based on this
    threat, why do we continue to concentrate headquarters, troop
    facilities, and family housing in Seoul?
        General Schwartz. Actually, our forces are not concentrated in
    Seoul. While we have some headquarters units in Seoul, our Air Force
    units are well south of Seoul and the main ground units are not located
    in Seoul and we have no plans to bring additional units to Seoul.
        In many ways the ``shared risk'' of our servicemen and families
    living among our South Korean hosts is a significant deterrent factor.
    This situation is similar to our families living along the inner German
    border during the Cold War. Additionally, under the LPP, we eventually
    plan to move from 85 scattered bases into 20 enduring installations.
    This will allow us to concentrate on building new family housing well
    south of Seoul thus, negating the long-range North Korean artillery
    threat.

                             LAND PARTNERSHIP PLAN

        20. Senator Thurmond. General Schwartz, one of the issues facing
    our military is the population encroachment on our facilities and
    ranges. You are working to resolve this issue in part through the Land
    Partnership Plan (LPP), which will return a significant amount of land
    to the Republic of Korea, and in return U.S. forces will get improved
    facilities and less encroachment. What guarantees do you have from the
    Republic of Korea that the encroachment issue will not resurface in
    future years as the Republic's population grows?
        General Schwartz. The Republic of Korea has whole-heartedly agreed
    to the principle of removing encroachment and has incorporated this in
    writing within the LPP. They have agreed to remove encroachment from
    all land retained under the LPP and conduct joint surveys in
    preparation for our security fencing. Security fencing, which will
    commence in January 2004, will further ensure the protection of our
    training lands from encroachment. I believe that once we have
    instituted the principles and actions of the LPP, we will no longer see
    major instances of encroachment within this theater.

                                TRAINING RANGES

        21. Senator Thurmond. General Schwartz, last year Congress provided
    authority to increase the Army's National Training Center at Fort Irwin
    to meet the training needs dictated by more sophisticated weapons
    systems. I expect that to the same degree, our forces in Korea are
    facing similar challenges. How are you addressing the training
    challenges?
        General Schwartz. You are correct in recognizing that we have
    similar training and land challenges in Korea. We are planning for
    training requirements now and in the future to include possible new
    weapons systems. To the greatest extent possible, we re leveraging
    training simulators and simulations to meet training requirements
    through expanded joint use of ROK training land. We are placing great
    emphasis in this area. Our training office is working closely with the
    Republic of Korea (ROK) military to best use training lands to meet
    current and future training requirements for both alliance members.
    Additionally, through LPP, we have gained access to superb ROK training
    areas.

                               MILITARY FAMILIES

        22. Senator Thurmond. General Schwartz, you are a strong advocate
    for improving the quality of life for our military personnel in Korea.
    Top on your list is to improve the quality of family housing and
    increase the number of families allowed to accompany service members to
    Korea. How many family members are currently living in South Korea?
        General Schwartz. We have 13,077 total family members (5,640
    military, 6,271 Department of Defense (DOD) civilians, and 1,166
    retirees) living in Korea. This breaks down to 10,231 command sponsored
    and 2,846 non-command sponsored family members living in Korea.

        23. Senator Thurmond. General Schwartz, considering the tense
    situation in Korea, how do you justify the increase in accompanied
    tours?
        General Schwartz. As you are aware, the quality of life of the
    soldiers, airmen, sailors, and marines and their family members who
    serve in Korea is very important to me. A Korea assignment today
    involves some of the poorest living and working conditions of any
    permanent change of station assignment in the military. Substandard
    facilities, living and working conditions in Korea take their toll on
    the force as a whole. The new Seoul family housing planned is for the
    personnel already authorized accompanied tours who currently reside off
    post. We plan to increase about 90 percent of new family housing south
    of Seoul to negate the threat of North Korean long-range artillery.
        A major factor driving my request for an increase in accompanied
    tours is the effect that a nearly 95 percent annual turnover has on
    this command. In Vietnam, I experienced the debilitating effects of a
    1-year rotation policy. It is a documented fact that 1-year tours
    significantly hurt our warfighting capability, effectiveness, and
    cohesion. A 1-year tour in Korea does not allow a soldier, sailor,
    airmen, or marine to gain the necessary appreciation of the terrain,
    the doctrine, or the threat. Personnel rarely have the overlap
    necessary to ensure a seamless transition and this negatively impacts
    our warfighting capability.
        The North Korean threat is formidable and real; however, I am
    confident that we can successfully implement our Noncombatant
    Evacuation Operations (NEO) plans, which are designed to get our
    families off the Korean peninsula in the event hostilities become
    imminent. We exercise the NEO plan frequently with our colleagues from
    the American Embassy--Seoul. A full scale NEO would represent a serious
    challenge, but we would be successful in evacuating our family members
    out of Korea.

                            KOREA HAS NOT KEPT PACE

        24. Senator Thurmond. General Schwartz, the DOD benchmarks for
    acceptable living and working conditions is C-2. I understand that when
    Korea is compared to both U.S. Army Europe and U.S. Forces Japan, it is
    rated the lowest in all categories. In order to improve the quality of
    life for the men and women serving in Korea, what do you consider your
    most urgent need and why?
        General Schwartz. We have articulated our vision in a comprehensive
    Fix Korea Business Plan which incorporates training, infrastructure,
    and quality of life. The ultimate goal of our plan is to make Korea an
    assignment that service members will actively seek. Our Fix Korea
    Business Plan is the right solution for the problems we face today and
    this roadmap balances resources with requirements and provides the key
    to Balanced Readiness.
        I need stable Sustainment, Restoration, and Modernization funding
    of approximately $260 million per year. Current Sustainment,
    Restoration, and Modernization funding levels have allowed us to
    provide day-to-day critical maintenance of our facilities, the
    Sustainment, but we have not been able to get to the Restoration and
    Modernization piece.
        I also need stable Military Construction (MILCON) funding of $200-
    $300 million per year. Our infrastructure, with regard to electrical
    power, water and sewer upgrades, must be fixed if we are to sustain
    readiness levels. We must have power generation systems, water
    distribution and sewage treatment plants that we can rely upon in times
    of emergency or crisis. We do not have reliable systems today. We must
    take action now to fix these enormous readiness and quality-of-life
    concerns.
        Unaccompanied Housing Improvements is also a part of this critical
    priority. Our objective is to provide enlisted service members with
    quality housing by the Department of Defense mandated date of 2008.
    Even with our great on-going renovations we will continue to face a
    shortfall in fiscal year 2003 of $44.7 million of our total
    requirement. Adequate housing for unaccompanied senior enlisted
    soldiers (E7-E9) and officers is urgently needed as well. Unlike CONUS
    Army units, all Second Infantry Division soldiers, including senior
    enlisted and officers, are required to live on post. Even with the
    Army's support to buyout ALL unaccompanied housing requirements by
    fiscal year 2008, we will still have senior enlisted and officers
    living in inadequate housing when the barracks buyout is complete. We
    urgently need congressional help to support this $81 million Military
    Construction requirement beginning in fiscal year 2003.
        To correct other quality-of-life deficiencies we need to replace or
    upgrade 52 maintenance facilities and 17 physical fitness centers
    throughout U.S. Forces Korea. For fiscal year 2003, we need your help
    with a Military Construction of $102.4 million for maintenance
    facilities and $23.0 million for physical fitness centers, $13.1
    million for a chapel and two fire stations and $32.9 million for
    mission-oriented facilities. Additional Military Construction funding
    will enable us to execute a comprehensive construction program and
    eliminate the unacceptable living and working conditions in aging
    facilities that U.S. forces in Korea face every day.

                             COLOMBIA PEACE PROCESS

        25. Senator Thurmond. General Speer, the United States has made
    Colombia its third-largest recipient of foreign aid after Israel and
    Egypt. Until now the aid, mostly for military equipment and training,
    has been channeled to the war on drugs. Now that the peace process in
    Colombia has fallen apart, will there be an effort to channel this aid
    effort toward fighting the terrorist/rebel groups?
        General Speer. Although we have seen great progress of the
    Colombian military over the last 4 years, the military still lacks the
    resources to create a safe and secure environment in Colombia.
    Fundamental security and stability are necessary for the government of
    Colombia to re-establish its ability to govern. In addition to
    combating the FARC and its current terror campaign, protecting
    infrastructure, and protecting the electoral process, the Colombian
    military must contend on a daily basis with the ELN, AUC and other drug
    trafficking organizations, further strapping their limited manpower and
    resources. As a minimum, the Colombian military needs additional
    resources whether it is through security assistance or another form of
    funding.
        All assistance that U.S. Southern Command provides to Colombia will
    continue to stay within congressionally defined boundaries and be
    consistent with existing policy. If the President or Congress change
    the policy/law to support beyond the current counterdrug focus, then we
    will adjust accordingly. Given the threat to Colombia's democracy, they
    could certainly benefit from additional support aimed at the three
    declared foreign terrorist organizations creating such turmoil in their
    country.

                           SECOND COUNTERDRUG BRIGADE

        26. Senator Thurmond. General Speer, your statement reflects the
    administrations support for training and equipping a second counterdrug
    brigade for the Colombian Army during this fiscal year. Considering the
    current crisis in Colombia, is this the most effective use of our
    resources?
        General Speer. I believe that funding a second counterdrug brigade
    is the most effective use of our resources. Fundamental security and
    stability are necessary for the government of Colombia to re-establish
    its ability to govern. The first counterdrug brigade is the best
    trained and equipped brigade in the Colombian Army. The plan to build a
    second counterdrug brigade for the Colombian Army follows the overall
    strategy outlined in the original Plan Colombia, which is to expand the
    effort against coca growing and processing into other areas of the
    country. The success of the first brigade gives us good reason to be
    optimistic about Colombian efforts to expand the war on production of
    cocaine into more of their country.
        Moreover, additional resources are needed for the Colombian
    military to create a safe and secure environment in Colombia. The
    myriad of challenges facing Colombia will benefit from all forms of
    U.S. assistance. In defining our assistance, it is important to
    recognize the inextricable link between the foreign terrorist
    organization and drug trafficking.

                        POLITICAL SITUATION IN VENEZUELA

        27. Senator Thurmond. General Speer, one of the more controversial
    leaders in South America is Venezuela's President Chavez. Based on
    press accounts, he is harboring leftist groups and sees himself as
    another Fidel Castro. Whatever his political views, what is the
    political situation in Venezuela and how does it affect the rest of the
    region?
        General Speer. The political situation in Venezuela is tenuous.
    President Chavez was elected president as a result of the traditional
    political parties losing credibility, worsening economic conditions,
    and a general sense among the marginalized sectors of Venezuelan
    society that their quality of life could only be improved by a radical
    departure from the political status quo. Chavez' popularity has greatly
    declined, due to his failure to deliver on his campaign promises.
        His extreme political rhetoric has contributed significantly to the
    polarization of the Venezuelan political landscape. President Chavez
    has taken undemocratic steps that have solidified his power, increasing
    opposition from different segments of society including business,
    labor, media, elites, clergy, and members of the military. Although
    opposition has grown in the last several months, it lacks a single
    leader who can unite all of its elements. Consequently, the opposition
    lacks direction and cohesion.
        Likewise, Chavez' rhetoric and actions have strained Venezuela's
    relationship with Colombia, due primarily to the perception that Chavez
    and/or important members of his government maintain a relationship with
    the guerrillas. The FARC moves across the border with ease. There are
    weapon shipments to the FARC and ELN that originate in Venezuela.
    Although we do not have any evidence linking official government
    involvement to these weapons shipments, there are certainly strong
    implications that support official complicity. Moreover, Chavez' anti-
    U.S. and ``Bolivarian'' rhetoric continues to irritate Venezuela's
    Latin American neighbors. He maintains strong ties with Cuba and has
    visited terrorist-supporting governments, including Iraq and Libya.
    Chavez' apparent disdain for Venezuelan democratic institutions and
    systems raises the specter of the ``strongman'' presidencies seen in
    the seventies and has the potential to undermine the democratic
    progress made in the region in the last 20 years.

                                      DMZ

        28. Senator Thurmond. General Schwartz, are there any special
    arrangements for evacuating women soldiers from the areas near the DMZ
    if the feather drops? A commander back in the 70s said it was his
    greatest concern.
        General Schwartz. We have no special arrangements or plans to
    evacuate women soldiers in Korea in case hostilities become imminent.
    Any potential evacuation would be evaluated on an individual case-by-
    case basis.
                                     ______

                    Questions Submitted by Senator Bob Smith

                        CONVENTIONAL ARMAMENTS IN KOREA

        29. Senator Smith. General Schwartz, what would be the first signs
    if Pyongyang were taking National Security Advisor Condoleeza Rice's
    road map and pulling back some of their conventional armaments on the
    DMZ? What would be our minimum requirement?
        General Schwartz. Despite numerous attempts by the Republic of
    Korea government to discuss substantive military confidence building
    measures (CBMs) with North Korea, they have shunned all attempts at
    dialogue. The general principle is that North Korea needs to respond to
    tangible CBMs that are both verifiable and transparent. Any reference
    to specific minimum requirements would be speculation until North Korea
    begins to respond to CBM proposals in good faith.

                U.S./CHINA MILITARY-TO-MILITARY EXCHANGE PROGRAM

        30. Senator Smith. Admiral Blair, I am very disturbed by reports
    that the Department of Defense is considering renewing the U.S./China
    military-to-military exchange program even after the EP-3 incident and
    the illegal detention of that crew, and especially given so many-
    reports that inadvertent disclosures of militarily useful information
    to the Chinese during these exchanges. For example, the Chinese learned
    bar coding after a visit to FEDEX in Memphis. I find this outrageous.
    Do you believe these exchanges are reciprocal and can you tell me what
    is the U.S. interest in having the Chinese observe the Cobra Gold
    military exercise?
        Admiral Blair. U.S./China military-to-military contacts did not
    totally cease in response to the EP-3 incident, but were substantially
    reduced to a few carefully reviewed and appropriate activities. For
    example, the U.S.-People's Republic of China (PRC) Military Maritime
    Consultative Agreement (MMCA) held a special meeting in Guam in
    September 2001 to discuss ways to avoid incidents such as the EP-3.
    This incident and subsequent MMCA meetings underscored the need for
    contacts that keep communications open between us, especially when
    misunderstandings arise. I can assure you that, since I became the
    Commander in Chief of U.S. Pacific Command in February 1999, our
    contacts have been reciprocal, with little chance of national security
    risk for either side. This year, the Chinese, along with other nations
    from the region, will observe the humanitarian assistance aspects of
    Exercise Cobra Gold. This is meant not only to encourage China to
    participate constructively in theater security cooperation efforts, but
    also to satisfy our ally, Thailand, who has raised concerns about
    conducting exercises next door to their giant neighbor. It also assures
    our other allies and friends in the region that we are not trying to
    use them in any effort directed against China.

        31. Senator Smith. Admiral Blair, have we established a strong
    counter-intelligence program to prevent inadvertent disclosures of
    information?
        Admiral Blair. The Air Force Office of Special Investigations, Army
    Military Intelligence, and the Naval Criminal Investigative Service,
    under their respective service Counter-Intelligence (CI) charters,
    provide both threat assessments and defensive briefings for official
    travelers to the People's Republic of China (PRC). [Deleted]. Defensive
    briefs provided by the Service (CI) agents in one-on-one sessions
    further enhance visitor awareness. These briefs use the information
    contained in the threat assessments, as well as database information
    that can be tailored to the specific mission of the traveler.
    [Deleted]. This activity occurs not only at the Service component
    headquarters in Hawaii, but throughout the U.S. Pacific Command
    (USPACOM) AOR at the sub-unified command and unit level.''
        [Deleted].
        In summary, awareness of the threat is key to the prevention of
    inadvertent disclosure, and I am confident that the military CI
    services in this theater are taking a proactive approach in reducing
    the vulnerability of DOD travelers to PRC intelligence collection
    activity.
        I should point out that the Chinese CI is not very effective. A
    senior Colonel defected from China last year--he has extensive contact
    with American officers and grew disenchanted with his lot in China.

        32. Senator Smith. Admiral Blair, are Chinese officers vetted by
    our Embassy for any human rights violations before being asked to visit
    the United States?
        Admiral Blair. Yes. Both the Department of Defense--which would
    typically nominate Peoples Liberation Army (PLA) officers for
    participation in U.S. Government-sponsored programs--and the Department
    of State are keenly aware of U.S. human rights laws and policies, and
    would not extend invitations to known PLA human rights violators.
    Multiple formal and informal institutional screening processes that
    precede final approval of such participation provide adequate
    assurances against the admission of such individuals to this country.

                   CHINA: SOUTH CHINA SEA AND BORDER DISPUTES

        33. Senator Smith. Admiral Blair, I'm concerned that the Chinese
    are still using maps that claim the entire South China Sea as their
    territory, including parts of Russia and India. What parts of India and
    Russia are they claiming and how far do their South China Sea claims
    extend?
        Admiral Blair. There are three main areas of territorial contention
    along the disputed India-China border. The People's Republic of China
    (PRC) claims some 26,200 square nautical miles (nm) of Indian-occupied
    territory in India's Eastern state of Arunachal Pradesh, as well as
    several small areas along the India-China border west of Nepal. India
    claims China is illegally occupying about 12,520 square nm of northern
    Kashmir, including 1,514 square nm ceded to seijing by Pakistan in
    1963.
        Although Russia and China have approximately a 2,500-mile border,
    the specific disputes are confined to several islands in the Amur River
    in northeast China. As the river shifts in its channel, the location of
    the islands shifts, favoring one side or the other. At present, neither
    side has chosen to make this a major diplomatic issue.
        The PRC began publishing maps in 1993 that show an extensive South
    China Sea claim, in addition to the internationally recognized 12nm
    territorial sea limit and 200nm Economic Exclusion Zone (EEZ). The
    claim includes the Spratly Islands between Vietnam and the Philippines,
    and the natural gas fields lying within Indonesia's 200nm EEZ. The
    Chinese claim that their ``historical waters'' include the South China
    Sea and associated islands. However, it is clear their claims in the
    Spratlys are grounded in protecting and pursuing both strategic and
    economic interests in the region.

                    CHINA: STABILITY IN THE SOUTH CHINA SEA

        34. Senator Smith. Admiral Blair, what does this portend for
    stability--does China still have their military presence at Mischief
    Reef, which is in the 200 mile economic zone of the Philippines?
        Admiral Blair. China has used its own maps to good advantage,
    claiming they support Beijing's claims of sovereignty over areas on the
    country's margins. In the case of the South China Sea, the so-called
    ``Chinese Line'' that takes in most of that body of water has been, and
    remains, purposely ill defined. By asserting territorial rights and
    sovereignty over large expanses to which other nations also claim
    rights under international conventions, China believes it gains some
    degree of leverage in negotiations.
        China continues to maintain a military presence on Mischief Reef,
    and has upgraded its facilities there substantially since the original
    construction of the facility in 1995. As you have noted, Mischief Reef
    lies well within the Philippines, 200 nautical mile (nm) Economic
    Exclusion Zone (EEZ), 120nm west of Palawan, and is 150nm east of the
    Chinese headquarters facility on Fiery Cross Reef.
        Nevertheless, the political temperature has cooled somewhat in the
    last 2-3 years. Beijing probably believed, initially, that it could
    finesse any Philippine objections to Mischief Reef in bilateral talks.
    There are other claimants to the Spratlys (Vietnam, Malaysia, the
    Philippines, Brunei, and Taiwan), and Beijing found itself in the
    unaccustomed and uncomfortable position of having to deal with the
    entire Association of South East Asian Nations (ASEAN) grouping on this
    issue, in a multilateral forum. In addition, as China engages
    increasingly on the international stage--as with its World Trade
    Organization accession and selection as an Olympic venue Beijing is
    discovering it must continually fine-tune its international relations
    and priorities.
        In short, we can say at this point that China's interests in the
    South China Sea are attuned more to stability than conflict, and that
    instability there would impede the pursuit of more important goals.
    Last fall, ASEAN agreed to develop a free trade zone with China, for
    instance, and China and the Philippines are scheduled to begin talks
    this year on ``joint development'' of the Spratly archipelago. China
    now has considerably more interest in maintaining stability in the
    South China Sea than in asserting its sovereignty.
        It would be premature to forecast a resolution of competing South
    China Sea claims because the underlying territorial and sovereignty
    issues remain. However, it seems unlikely that the Chinese will stir up
    conflict in this area in the foreseeable future.

                U.S./CHINA MILITARY-TO-MILITARY EXCHANGE PROGRAM

        35. Senator Smith. Admiral Blair, as you are aware, the U.S./China
    military-to-military exchange program has been an ongoing concern of
    mine and several of my colleagues in recent years. In the near future,
    I anticipate a response back from Secretary Rumsfeld to a letter I co-
    wrote with Senator Helms and Representative Rohrabacher, which, among
    many recommendations, expressed our belief that a program needs to be
    implemented by the Department of Defense to ensure U.S. military
    personnel do no divulge, inadvertently, militarily sensitive
    information to the Chinese People's Liberation Army during exchanges.
    From what I have read from various sources, you continue to
    enthusiastically endorse and believe that the U.S./China military-to-
    military exchange program is essential to our relationship with China,
    and will some day pay dividends, despite the fact that such exchanges
    continue to favor China and continue to hemorrhage information which,
    in my view, carelessly places U.S. forces in the Pacific in jeopardy.
        I am sure you have seen the article in The New Republic dated April
    1999 regarding a U.S./China exchange. U.S. and PLA officers conclude
    the days itinerary by breaking bread at the Officer's Club and continue
    ``relationship building''--one of the exchange program's goals. Many
    things were discussed, including U.S. aircraft carrier vulnerabilities.
    This was not classified information, however, it could only be pieced
    together by exhaustive research through decades of military journals.
    Instead of letting the Chinese at least have to work to piece together
    information, this Nation continues to embrace a program where the PLA
    is given direct access to our officers, who have no real program in
    place to guard against such information-gathering by the PLA.
        Do you agree this aspect of the U.S./China military-to-military
    exchange program is a problem and represents a threat which cannot be
    tolerated?
        Admiral Blair. The April 1999 article to which you refer describes
    activities said to have taken place back in 1998, before my tenure as
    Commander in Chief, U.S. Pacific Command (USPACOM), so I am not in a
    position to comment on the article's accuracy. There were very few
    contacts in USPACOM in 1999 before the accidental bombing of the
    Chinese embassy in Belgrade. I would not accept the characterization of
    these contacts as hemorrhaging information to the Chinese. Military-to-
    military contacts ceased for the remainder of 1999, following the
    accidental bombing. Since 2000, all of our military-to-military
    contacts with China have been conducted in accordance with the
    provisions of Public Law 106-65 (Fiscal Year 2000 National Defense
    Authorization Act), which prohibits Chinese exposure to 12 categories
    of activities with the potential to create a national security risk.
    When visiting Hawaii in 2000, members of one Chinese delegation even
    commented on their lack of exposure to operationally oriented
    activities. Finally, I have found personally in my visits to China that
    in discussions with PLA officers I learn more classified information
    about China than the Chinese learn of classified information about the
    U.S. Armed Forces.

        36. Senator Smith. Admiral Blair, in light of examples such as the
    one I highlighted (please see information in question # 35), what have
    you done, and what are you doing presently, to counter such
    information-gathering by the PLA?
        Admiral Blair. I do strongly believe that U.S./China military-to-
    military exchanges are essential to our understanding of China's
    military intentions and capabilities. Due to the closed nature of their
    society, every interaction results in our side acquiring information
    and developing an understanding that is otherwise denied. The Chinese
    participants in the interaction learn no more than what was already in
    the public domain, due to our much more open society. I can converse at
    length on military issues using information already in the public
    media, which tends to result in my Chinese counterpart revealing
    information which was previously unknown to us. Military-to-military
    exchanges have many other benefits, such as creating relationships that
    can be very useful to us in managing crises.
        Recognizing the value of military-to-military exchanges, we do not
    neglect the importance of counter-intelligence (CI) programs to protect
    classified and sensitive information. The Air Force Office of Special
    Investigations, Army Military Intelligence, and the Naval Criminal
    Investigative Service, under their respective Service CI charters,
    provide both threat assessments and defensive briefings for official
    travelers to the People's Republic of China (PRC). [Deleted]. Defensive
    briefs provided by the Service CI agents in one-on-one sessions further
    enhance visitor awareness. These briefs use the information contained
    in the threat assessments, as well as database information that can be
    tailored to the specific mission of the traveler. [Deleted]. This
    activity occurs not only at the Service component headquarters in
    Hawaii, but throughout the U.S. Pacific Command's area of
    responsibility at the subunified command and unit level.
        [Deleted].
        In summary, due to the volume of open source information that is
    already readily available to the Chinese, and because of the proactive
    approach of the military CI services in this theater to prevent
    inadvertent disclosures, I am confident that our side acquires more
    information that was previously unknown to us than the Chinese obtain
    from us via military-to-military exchange programs.

                              SHARING INTELLIGENCE

        37. Senator Smith. General Speer, I have one comment and then a
    question. General Serrano has a sterling reputation on Capitol Hill as
    former head of the Colombia Narcotics Police. He is now being
    considered for director of the U.N. Office for Drug Control and Crime
    Prevention--which would be ideal for him given his experience. The
    State Department apparently is backing a candidate from Italy with no
    counterdrug experience, despite the fact that the next person in this
    job will have a key role in creating an anti-narcotics police force in
    Afghanistan. I'd like you to do whatever you can in your capacity to
    promote General Serrano as the best candidate for this very important
    job--I think its vital to our success in Afghanistan and in the war on
    terrorism.
        Second, I am mystified as to why we're not helping the Colombian
    Armed Forces with intelligence sharing. The narco-guerrillas have been
    on a rampage, kidnapping one Senator, and murdering uncooperative
    Colombian citizens. Please explain to me what possible rationale there
    could be for not sharing intelligence on the whereabouts of these
    Revolutionary Armed Forces of Colombia (FARC) terrorists?
        General Speer. [Deleted].
                                     ______

                  Questions Submitted by Senator Rick Santorum

                      STRATEGIC AND AMPHIBIOUS LIFT ASSETS

        38. Senator Santorum. General Speer and General Schwartz, General
    Tommy Franks, USA, Commander in Chief, U.S. Central Command, recently
    indicated that improving strategic and amphibious lift is a top
    priority in his AOR. While Mobility Requirements Study 2005 (MRS-05)
    established a requirement of lifting 54.5 million-ton-miles-per day, it
    is unclear whether the military can meet this new requirement. Does the
    United States military have enough strategic and amphibious lift assets
    to meet the requirements of your particular AOR?
        General Speer. The Chairman of the Joint Chiefs of Staff recently
    identified that the ``Department of Defense has worked diligently to
    overcome shortfalls in strategic lift capabilities. . . 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 WMD,
    antiterrorism, and force protection. Additionally, in some locations,
    we face operational limitations that may affect mission success.''
        The United States military does not have enough strategic assets to
    meet U.S. Southern Command's (USSOUTHCOM) requirements together with
    all of the other Commands' requirements. Strategic lift satisfies the
    majority of routine support requirements for Embassy and Mission
    personnel. In some instances, operational requirements are met using
    training hours. In a typical month, USSOUTHCOM requires approximately
    eight C-141 and two C-5 strategic assets to satisfy our routine
    requirements. Theater Security Cooperation (TSC) events, however, can
    be more problematic.
        Operation Enduring Freedom (OEF) and the establishment of Joint
    Task Forces 160 and 170 in Guantanamo Bay, Cuba highlighted concerns
    over the competition for limited strategic airlift to support real
    world contingencies. On several occasions, OEF contingency missions in
    the USSOUTHCOM AOR were delayed or rescheduled regardless of their
    priority. For example, on 19 March, the aircraft scheduled to deploy a
    secure communications suite in support of JTF 160 was rescheduled for a
    higher priority mission. The secure communications suite deployed 9
    days later. Future GWOT and DOD operations, Presidential travel and
    other CINC's requirements will further limit availability of a finite
    number of strategic lift assets further complicating mission execution.
    Our ability to execute more robust contingencies in the AOR will be
    significantly impacted if other Major Regional Contingencies are
    ongoing.
        Sustaining military to military engagement and security
    cooperation, preparation for contingency operations, and our mission
    personnel are the center of our strategy to meet the national interest.
    Sustained availability of ample and properly resourced strategic lift
    is crucial in accomplishing this strategy.
        Admiral Blair. The U.S. military has sufficient strategic airlift
    and sealift to meet U.S. Pacific Command (USPACOM) wartime requirements
    when considered independently, meaning when we are not conducting a
    limited number of smaller-scale contingencies. [Deleted].
        [Deleted].
        [Deleted] we strongly support the Air Force effort to procure 180
    C-17 aircraft as well as improve the C-5 aircraft capability through
    the Reliability Enhancement and Re-engineering Program and the Avionics
    Modernization Program. [Deleted].
        General Schwartz. The United States military does not have enough
    strategic and amphibious lift assets to meet the requirements of the
    Korea AOR.
        We fully support the Joint Chief of Staff in the establishment of
    an increased airlift capability requirement. However, we are concerned
    that 54.5 million-ton-miles per day (MTM/D) does not represent a large
    enough increase. In fact, there must be an increase in strategic lift
    to ensure sufficient operational capability arrives in theater as
    quickly as possible. CFC must have more sealift and airlift to close
    forces earlier than indicated in the MRS-05 study. By expediting the
    arrival of required combat, combat support, and combat service support
    forces, we enhance our capability to attack the enemy throughout his
    depth, increase our friendly operational tempo, and decrease the risks
    to our forces.
        While acknowledging the limitations of MRS-05, we believe future
    studies should increase realism to accurately simulate the true nature
    of warfare on the Korean peninsula. Increased involvement of the
    warfighting CINC is a necessity to provide subjective response to the
    model in accordance with current and projected threat capabilities and
    OPLAN CONOPS. Additionally, to insure simulation fidelity and enhance
    validity we recommend continued investment in computer simulations used
    to conduct these types of studies. Based on our analysis, MRS-05
    findings are conservative estimates of future programmatic
    requirements. Although increased lift requirements are identified, we
    believe those requirements are understated.
        Additionally, there has been a long-standing requirement for
    amphibious lift for the assault echelon of three Marine Expeditionary
    Brigades. Having this Expeditionary maneuver capacity aids our Korea
    warfighting requirements.

                                  NORTH KOREA

        39. Senator Santorum. General Schwartz, during his State of the
    Union speech this past January, President Bush called special attention
    to Iraq, Iran, and North Korea-singling them out as members of an
    ``axis of evil.'' Terrorism, warned President Bush, was not the
    paramount danger facing the U.S. Equally worrisome were efforts by
    Iraq, Iran, and North Korea to develop nuclear, chemical, and
    biological weapons.
        The President's National Security Advisor, Condoleeza Rice, has
    stated that ``North Korea is now the world's number one merchant for
    ballistic missiles, open to anyone, no matter how malignant the buyer's
    intentions.'' The Bush administration notes Pyongyang remains a grave
    concern because of its direct support for terrorist organizations which
    operate in many countries to which North Korea has exported and
    continues to export missiles and technology.
        Although North Korea has suffered from economic stagnation and
    famine, do you believe that there is any reason to believe that the
    state of North Korean army or its arsenal of ballistic missiles is any
    less ready than it was 5 years ago.
        General Schwartz. No! In fact, the North Korean ballistic missile
    arsenal has improved over the past 5 years, as evidenced by the Taepo
    Dong launch in 1998, engine testing and increased production. I would
    state that North Korea has improved capabilities in the last few years.
    Their proliferation of missiles have given them regional operational
    reach and global impact.
        North Korea operates what can be described as a wartime economy,
    allocating resources to the military at the expense of the civilian
    sector. The North Korean Army actually produces hard currency that is
    used for its own sustainment as well as for use by the North Korean
    leadership. Consequently, North Korea's economic problems and famine
    (1994-1998) failed to impact the military in the same way it impacted
    the civilian sector. We expect North Koreas ``military first'' policy
    to continue as the North's leadership maintains its reliance on the
    military to sustain the security of the Kim Regime and ensure North
    Korea's regional position.
        Between the early and mid 1990s, economic distress and social
    turmoil eroded readiness and overall military capabilities of the North
    Korean military in Cold War terms, but not in 21st century threat
    terms. The North has learned by studying us and through a methodical
    readiness and force improvement program that continues today. This
    program includes measures such as increased training of key units;
    movement of large numbers of artillery assets forward; expansion and
    upgrading of its ballistic missile inventory; creation of new units in
    the forward area; command and control enhancements; acquisition and
    production of limited quantities of new weapons systems; and equipment
    such as submarines, tanks and artillery.

        40. Senator Santorum. General Schwartz, do you have any reason to
    believe the current regime in North Korea has severed links to
    terrorist organizations?
        General Schwartz. We have detected no North Korean direct links
    with active terrorist groups. However, it continues to provide
    sanctuary to terrorists of the Japanese Red Army (JRA). These
    terrorists had hijacked a plane to North Korea over two decades ago.
    While the JRA itself is no longer an active terrorist group of concern
    to the U.S., these terrorists and North Korea's assistance in allowing
    them to elude justice remain a lasting concern. We consider that the
    expulsion of these terroists would constitute a credible action by
    North Korea that it no longer supports terrorism. However, we do have
    credible information that North Korea continues to sell missiles and
    other weapons to countries in the Middle East and Africa that do
    directly support terrorism.

        [Whereupon, at 12:17 p.m., the committee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2003

                                  ----------

                            THURSDAY, MARCH 7, 2002

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

                                 SERVICE CHIEFS

        The committee met, pursuant to notice, at 9:38 a.m. in room
    SH-216, Hart Senate Office Building, Senator Carl Levin
    (chairman) presiding.
        Committee members present: Senators Levin, Cleland,
    Landrieu, Reed, Akaka, Bill Nelson, E. Benjamin Nelson,
    Carnahan, Warner, McCain, Inhofe, Roberts, Allard, Hutchinson,
    Sessions, and Collins.
        Committee staff members present: David S. Lyles, staff
    director; and Christine E. Cowart, chief clerk.
        Majority staff members present: Daniel J. Cox, Jr.,
    professional staff member; Madelyn R. Creedon, counsel;
    Creighton Greene, professional staff member; Jeremy L. Hekhuis,
    professional staff member; Maren Leed, professional staff
    member; Gerald J. Leeling, counsel; Peter K. Levine, general
    counsel; and Michael McCord, professional staff member.
        Minority staff members present: Judith A. Ansley,
    Republican staff director; Edward H. Edens IV, professional
    staff member; Gary M. Hall, professional staff member; Carolyn
    M. Hanna, professional staff member; Mary Alice A. Hayward,
    professional staff member; Ambrose R. Hock, professional staff
    member; George W. Lauffer, professional staff member; Thomas L.
    MacKenzie, professional staff member; Joseph T. Sixeas,
    professional staff member; Scott W. Stucky, minority counsel;
    and Richard F. Walsh, minority counsel.
        Staff assistants present: Leah C. Brewer, Daniel K.
    Goldsmith, Andrew Kent, and Nicholas W. West.
        Committee members' assistants present: Frederick M. Downey,
    assistant to Senator Lieberman; Andrew Vanlandingham, assistant
    to Senator Cleland; Marshall A. Hevron and Jeffrey S. Wiener,
    assistants to Senator Landrieu; Elizabeth King, assistant to
    Senator Reed; Davelyn Noelani Kalipi and Richard Kessler,
    assistants to Senator Akaka; William K. Sutey, assistant to
    Senator Bill Nelson; Neal Orringer, assistant to Senator
    Carnahan; Brady King, assistant to Senator Dayton; Benjamin L.
    Cassidy, assistant to Senator Warner; Christopher J. Paul,
    assistant to Senator McCain; John A. Bonsell, assistant to
    Senator Inhofe; George M. Bernier III, assistant to Senator
    Santorum; Robert Alan McCurry, assistant to Senator Roberts;
    Douglas Flanders, assistant to Senator Allard; James P.
    Dohoney, Jr., assistant to Senator Hutchinson; Arch Galloway
    II, assistant to Senator Sessions; Kristine Fauser, assistant
    to Senator Collins; and Derek Maurer, assistant to Senator
    Bunning.

           OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

        Chairman Levin. Good morning, everybody. The committee
    meets to receive testimony from the chiefs of the military
    services on the fiscal year 2003 budget request. General
    Shinseki, Admiral Clark, General Jones, and General Jumper, we
    welcome you back to this committee. We have had a long
    tradition of receiving frank and candid advice from our senior
    military leaders on national security issues, and we look
    forward to your testimony this morning.
        As we meet today, U.S. Armed Forces are deployed around the
    globe meeting new commitments in Afghanistan, the Philippines,
    and other places, and fulfilling longstanding commitments in
    Korea and Germany. The loss of life in Afghanistan this week is
    a vivid reminder of the risks that our men and women in uniform
    take when we send them in harm's way. Their courage is
    inspiring, their commitment to their mission is total, and our
    debt to them is immense. Their performance is also a tribute to
    the entire leadership of the Department of Defense, including
    our witnesses today, because that performance depends on the
    training and equipment that the services are responsible for
    providing.
        Some of the systems that are essential to today's forces
    are recent acquisitions, such as the unmanned aerial vehicles
    which have been in use only a few years. Many have been in our
    inventories for decades. The investments that we make today in
    this budget are needed to ensure that our military is as
    prepared for future wars as it has proven to be for Operation
    Enduring Freedom. For this reason, we will be particularly
    interested in the trade-offs that this budget makes between
    investments in our legacy forces and investments in military
    transformation and the basis on which the services are
    recommending these trade-offs.
        The administration's budget request for fiscal year 2003
    includes the largest proposed increase in military spending in
    two decades, $48 billion more than the amounts provided for
    during the current fiscal year. I remain concerned that this
    increase comes without a comprehensive strategy or a detailed
    plan to guide that spending. The administration has not yet
    submitted its national security strategy, which is required to
    be submitted annually with the budget by section 603 of the
    Goldwater-Nichols Act. That was a provision which Senator
    Warner authored and which this committee has strongly
    supported.
        The Department has not issued any military strategy to the
    best of my knowledge, nor has the Secretary of Defense
    submitted his annual report to the President and Congress,
    which is required by section 113 of Title 10 to be submitted
    annually with the budget, and the Department has not yet
    submitted a Future Years Defense Program (FYDP), which is also
    required to be submitted annually with the budget by section
    221 of Title 10.
        I am sure that our witnesses today recognize the difficulty
    that this committee faces in assessing whether we are funding
    the right programs and are setting the right priorities in the
    absence of that strategy or detailed plans for the size,
    structure, or shape of our military. Our hearings so far this
    year have revealed that despite the $48 billion increase
    proposed in the 2003 budget, that there are important areas
    where this budget does not meet the future needs of our
    military services.
        For instance, even as the Navy's budget is going up
    substantially, the number of ships in the budget is going down.
    This budget would build 17 ships over the next 3 years,
    compared to the 23 ships in the shipbuilding plan of the last
    administration for the same period.
        The military construction budget request is 25 percent
    below last year's level. This amount is sufficient to
    recapitalize our facilities every 120 years, almost double the
    Department's goal of a 67-year replacement cycle, and our
    witnesses today have indicated that they have other unfunded
    priorities such as force protection, antiterrorism, and even
    personnel strength. So with this large increase in defense
    spending this still brings us back to the question of
    priorities.
        America's Armed Forces are performing superbly in their
    fight against terrorism. The creativity and ingenuity we have
    seen in the campaign against al Qaeda in Afghanistan shows that
    our military leadership resisted the temptation to fight the
    last war. They are fighting today's war, and now we in Congress
    must resist the temptation to fund the last war. That is, to
    add money to this budget for programs that are a holdover from
    the Cold War and do not help build the kind of military that we
    need to meet the threats of the 21st century. We will continue
    to do, as a committee, all in our power to ensure that our
    Armed Forces have the right resources, tools, and technologies
    to meet those threats.
        Senator Warner.

                    STATEMENT OF SENATOR JOHN WARNER

        Senator Warner. Thank you. Mr. Chairman, so that we can
    move ahead, I am going to ask to include my statement in the
    record and I will just make a few observations.
        First, I certainly join you in expressing my sympathy and
    gratitude to those families who are grieving today for the loss
    of their loved ones and for those injured. I am going to
    comment at the end of my remarks about a period in history 57
    years ago, to give some perspective to the contributions that
    have been made through half-a-century by the men and women of
    the Armed Forces to maintain the freedom of this country.
        Each year, our committee looks forward to this important
    hearing, and with no disrespect to the concept of civilian
    management of the Department of Defense, there has to be in any
    system checks and balances, and traditionally the chiefs have
    come before Congress and given that perspective. I join my
    chairman in asking each of you today to give us not only your
    professional views, but also your personal views, which each of
    you agreed to do at the time of your confirmation. In that way,
    we can get at times a different perspective from that presented
    by the civilian control of the Department of Defense. That
    civilian control, of course, is key. It goes back to the very
    beginning of our history, and yesterday Secretary Rumsfeld came
    to the Senate and met privately with, I believe, 70 Senators.
    He spent an hour-and-a-half and responded to each and every
    question asked by those present.
        I stayed from the beginning until the very end. It was a
    full coverage of all aspects of the operation now in the Afghan
    area of responsibility (AOR) and in other parts of the world.
    He clearly enunciated the goals of President Bush, a very
    courageous President.
        At this critical time in our history I think he is
    surprising the world with the brilliance of his leadership and
    the strong conviction he has about the need to rid the world of
    terrorism. Your men and women of the Armed Forces are right
    there in the front lines, and also a number of other nations
    are very much involved in this operation. For various reasons,
    we cannot give all the details on it, but the American public,
    and especially the Muslim world, should understand this is not
    the U.S. versus the Muslim world, this is the free world versus
    small, unrepresentative elements of the Muslim world, and we
    are joined by an extraordinary coalition of forces in this
    engagement.
        Our committee has a very heavy responsibility this year. We
    face the largest increase percentagewise in defense spending
    since Ronald Reagan was President and we are going to go about
    that in a very careful and methodical way. First, we will start
    with the oversight, and then with other means to hopefully
    convince all members of the Senate that this budget submitted
    by this courageous President is the one that we need at this
    time, not only for the projection of our forces abroad to deter
    attack, but for our homeland defense, the President's highest
    priority, this Senator's highest priority, and each of you in
    various ways are participating in that.
        In my judgment, not since World War II has this Nation been
    so unified behind its President, the men and women in uniform,
    and the vast array of civilians who work directly to support
    the men and women in uniform in your respective departments. We
    are exceedingly grateful to all.
        Further, this war has truly been a joint operation. That
    has been a goal we have been trying to achieve for many years.
    I think at long last we go onto the battlefields, onto the
    ships, and into the air in every respect proud of the various
    units and respective services, but fully accepting joint
    responsibility to prosecute this very difficult war.
        Lastly, these past 2 weeks, as I visited with families and
    others that have been hit by these casualty situations, and as
    I traveled through my state talking to my constituents about
    this conflict, I remind them of our history, of what has gone
    before us. Every casualty, one single individual, is a
    frightful loss to our Nation, to their families, and to their
    services. I remember so well 57 years ago in that period in
    history when two great battles raged between the United States
    and our adversaries in Europe and in the Pacific.
        Take the Battle of Iwo Jima: in 30 days from February 19,
    1945, until March 26, 1945, the total American casualties were
    25,851, with 6,800 dead and 19,000 wounded. That was in the
    Pacific. In Europe, during the Battle of the Bulge, from
    December 16, 1944 to January 19, 1945, approximately 83,000 of
    the Eighth Corps were attacked by 30 German Divisions. Of the
    83,000, there were 41,000 casualties, with 4,000 killed in
    action, 20,000 wounded, and some 17,000 missing. That is the
    price that our Nation has paid, working with our allies, to
    protect freedom. I hope all Americans will reflect on the proud
    history of those who preceded you, wearing the uniforms of your
    respective services, and what they, their families, and this
    Nation have done in our world leadership role to protect
    freedom.
        At this point, I would like to submit my opening statement
    and the statements of Senators Thurmond and Allard.
        [The prepared statements of Senators Warner, Thurmond, and
    Allard follow:]

                   Prepared Statement by Senator John Warner

        Thank you, Mr. Chairman. I join you in welcoming our service chiefs
    this morning.
        I want to express my sincere appreciation to each of you for your
    service to our country. This committee holds many hearings each year,
    but none more important than this one. We look to you for the
    professional military judgments that are so critical to our annual
    budget deliberations. Time and time again, you and your predecessors
    have summoned the courage to point out growing shortfalls and
    challenges to current and future readiness. Balancing the many needs
    and competing priorities of your respective services, and making the
    tough recommendations, is a difficult, but critical task.
        I want to begin by expressing my sympathies, condolences, and
    gratitude to the families, units, and friends of our service men and
    women who have lost their lives in this important global war against
    terrorism. Their loss, defending America and freedom, reminds us of the
    dangers our men and women in uniform face every day, as they defend our
    freedom around the world. We were encouraged by our early success in
    the war, but these tragic losses serve to remind us that this war on
    terrorism is just beginning. It is a struggle that will take us to the
    far corners of the world and the price will be high, but as President
    Bush recently reminded us: ``While the price of freedom and security is
    high, it is never too high.''
        The President's budget request for fiscal year 2003 represents the
    largest increase--$48 billion over the fiscal year 2002 appropriated
    level--for the Department of Defense in two decades. All of you have
    long advocated significant increases in defense spending to reverse
    years of overuse and underfunding of our military forces. Now,
    following the most devastating attack on our homeland in history, with
    our Nation at war, it is essential that Congress stand together with
    our President and our men and women in uniform by providing the
    resources you will need to fight this war and prepare for the many
    challenges ahead.
        The President has rallied the Nation, and, indeed the world, to
    fight this global war against terrorists and those who harbor them. It
    is a war unlike any we have ever fought before. It is a credit to each
    of you gentlemen that when the Nation called, each of your services was
    ready. Over the past few weeks, we have heard from our regional
    commanders in chief and from Secretary Rumsfeld about just how well our
    service men and women have performed. Clearly, it has been with
    distinction. The Nation is thankful to you, gentlemen, for the trained
    and ready forces that continue to make our Nation proud--well done.
        The events of the past week have been a stark reminder that this
    war is far from over. Our forces have performed magnificently so far,
    but many challenges lie ahead. We will continue to depend on you,
    gentlemen, to answer the difficult questions about the long term impact
    of the current high operational tempo; to tell us what has worked well;
    and, to tell us what needs to change.
        This war has truly been a joint operation--all services operating
    together as one and many coalition nations operating with U.S. forces.
    When the full story is told, people will marvel at the new roles played
    by our special operations forces, our maritime forces, our unmanned
    vehicles, and other high tech weaponry and techniques. During my
    travels to the region and in my on-going conversations with troops and
    commanders, I am constantly reminded that we are fighting a new kind of
    war and writing a new chapter in military history. Each of you has
    championed evolutionary and revolutionary changes within your
    respective services that will enable this new chapter to have a
    positive ending. Now, we must ensure that we adequately fund the
    capabilities and concepts that have served us so well, and carefully
    study the lessons learned to determine what more is required to
    transform our forces to meet the new and unexpected threats ahead.
        I am supportive of this budget request and its priorities of
    winning the war against terrorism, defending our homeland, improving
    quality of life for our service personnel, and transforming our forces.
    But, I do have some concerns that I hope each of you will address.
    Despite a $48 billion increase, it is clear that this budget request
    does not fully address the needs of our Armed Forces, as evidenced by
    unfunded requirements for the services which are in excess of $23
    billion. Significant shortfalls in the shipbuilding account and unmet
    needs for additional end strength are high on my list of concerns.
        As we discuss and debate this budget request in the days and weeks
    ahead, as is the duty of this committee and Congress, on one thing we
    can all agree: the commitment, dedication, and performance of the
    soldiers, sailors, airmen, and marines in service to their Nation has
    been remarkable. We are ever mindful of the dangers they confront every
    day and are forever grateful for their willingness and readiness to
    serve.
        The Nation is united in purpose and determination as seldom before
    in our history--united behind our President and our Armed Forces. We,
    in Congress, will do everything we can to provide the resources and
    capabilities you need to train, man and equip your services to carry on
    their proud traditions of service to country.
                                     ______

                  Prepared Statement by Senator Strom Thurmond

        Thank you, Mr. Chairman.
        Mr. Chairman, this morning we meet to receive testimony from our
    senior military leaders regarding the adequacy of the President's
    budget request for the Department of Defense. Before recognizing our
    distinguished panel, I want to express my condolences to the families
    and friends of the soldiers, sailors, airmen, and marines who were
    killed in Afghanistan during the most recent battle against terrorist
    forces. These heroic deaths are vivid reminders of the sacrifices our
    military personnel make daily, whether it is in Afghanistan, Bosnia,
    Korea, or here at home. I want them all to know how proud I am of every
    one of them.
        Today's hearing will provide the committee the opportunity to hear
    directly from the senior leaders we hold responsible for the readiness
    of our military services. General Shinseki, Admiral Clark, General
    Jumper, and General Jones have already had a major impact on improving
    the current readiness of their services. More important, they have
    provided the vision on how to transform their services to meet the
    challenges of the new century. I doubt that any of them envisioned the
    tragedy of September 11 and the war against terrorism, yet each of
    their services responded magnificently both in fighting the terrorist
    on their turf and in providing the visible security at our airports, in
    the sky, and here on Capitol Hill.
        Despite the need to transform each service, we cannot forget the
    basic needs of the men and women in uniform. In prior hearings, both
    General Ralston and General Schwartz went into great detail describing
    the dismal conditions of the facilities in their commands. Many of my
    colleagues have personally seen these facilities and have also
    described them during various hearings. Mr. Chairman, I hope that the
    committee, working with our service chiefs, will dedicate additional
    resources to make headway in upgrading these facilities to the
    standards we owe our soldiers, sailors, airmen, and marines.
        Finally, Mr. Chairman, we must also take actions to ease the
    economic impact the Reserve call up has had on the lives of the
    individuals and their families. Many Reservists, whether from the
    National Guard or Reserves, suffer financially because of their service
    to the Nation during this time of crisis. Since we will be relying on
    our citizen soldiers to a greater extent than ever before, we have to
    ensure that their service does not result in an economic hardship on
    them, their families, or business. I hope we can work together to
    provide a solution to this persistent problem.
        Thank you, Mr. Chairman.
                                     ______

                   Prepared Statement by Senator Wayne Allard

        Thank you Mr. Chairman.
        First and foremost, I want to express my most sincere appreciation
    to each of you for your leadership and dedication. Today our Nation is
    demanding much of our military to fight a global war on terrorism. Our
    forces are fighting in Afghanistan, protecting our security at home,
    and assisting forces in the Philippines, Yemen, and even Georgia. This
    is in addition to Operations Northern Watch and Southern Watch, and
    other on-going commitments around the world. Despite the strain of
    these demands, the men and women of our Armed Forces have met the
    challenge and demonstrated their great skill, courage, and dedication.
    This success was no accident. Troops take time to develop their
    expertise. Weapon systems such as Global Hawk take time to design,
    build, and test. The leadership must have the vision to coalesce these
    forces so they are ready when ever and where ever their country calls
    on them. You've demonstrated such vision and we are deeply indebted.
        As we fight this war today, we must continue to look to the future
    and build a fighting force ready to defeat the threats of the future. I
    believe the transformation you're undergoing is important and necessary
    to our national security. Although the Taliban may no longer rule in
    Kandahar, and although al Qaeda may no longer train terrorists in
    Afghan camps, many threats to our national security remain. As
    President Bush has clearly stated, regimes exist which wish to do us
    harm. We must remain strong and capable to respond to these threats.

        Chairman Levin. Thank you very much, Senator Warner. I
    think, given the large number of Senators and witnesses we
    have, that we will move directly to our witnesses' statements.
        General Shinseki.

    STATEMENT OF GEN. ERIC K. SHINSEKI, USA, CHIEF OF STAFF, UNITED
                              STATES ARMY

        General Shinseki. Thank you very much, Mr. Chairman.
    Senator Warner, distinguished members of this committee, it is
    an honor once again to appear here before this committee with
    the service chiefs to update you on the posture of the Army and
    its state of readiness.
        First, let me on behalf of the Army, much as Senator Warner
    and the chairman have done, express our deepest condolences to
    the families from all of our services who have suffered injury
    and loss in this war on terrorism. We have the greatest
    fighting forces and the best leaders in the world from all of
    our services.
        Willingly and without hesitation, they continue to
    demonstrate their profound and abiding devotion to this Nation
    and on our behalf they take risks, go into harm's way, shed
    blood, and prepare to give lives as necessary, as some have
    here in the recent fighting. They do so to defend peace and
    freedom and our way of life. They will see this through to its
    decisive outcome, and we could not be prouder of all of them.
        Senator Warner's remarks remind me that perhaps for the
    first time since World War II we have American young men and
    women fighting directly on behalf of the American people, as a
    result of what happened on September 11.
        Let me further report, Mr. Chairman, that our soldiers and
    our civilians in the Army appreciate much more than I can put
    into words what you have accomplished on their behalf this past
    year, enhancements in pay, health care, housing, and retirement
    benefits. They continue to make incredible contributions and
    even more incredible sacrifices, but they look to us to
    demonstrate both the Nation's appreciation and its commitment
    to them and their families. It is a commitment that you have
    honored well, and they are grateful.
        Nearly 3 years ago, the Army took a hard and discriminating
    look at itself. After examining our capabilities against the
    emerging strategic environment as we saw it then, we decided to
    take some risks. We committed ourselves to transforming the way
    we will fight and win the new wars of the new century. This
    committee elected to underwrite Army transformation when the
    very term was unfamiliar and a bit uncommon.
        Today, when one considers the magnitude of what we have
    accomplished with your support, it is staggering. With this
    submission, the Army buys its last heavy tank, confirmation of
    our sustainable momentum and our move towards the
    irreversibility we seek to achieve through 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 beyond, as we transform today's
    capabilities into Objective Force overmatch. This August, our
    first Interim Brigade Combat Team (IBCT) at Fort Lewis will
    achieve its initial warfighting capability. By December we
    intend to operationally test two of its battalions, and by next
    spring we will evaluate the entire interim brigade. This
    interim capability will safeguard us through the remainder of
    this decade.
        Finally, the Defense Advanced Research Projects Agency
    (DARPA) and the Army will shortly announce the lead systems
    integrator for our Future Combat Systems of the Objective
    Force, the future force that we are trying to bring on by the
    end of this decade. It will be a new solicitation and
    acquisition strategy that will accelerate transformation to
    that Objective Force by the year 2010. Through this
    transformation strategy, selectively recapitalizing the legacy
    force, modest investments in an interim capability, and then
    transforming into future Objective Force capabilities, we
    remain 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.
        The Army has done a lot to help itself. We have made our
    own tough decisions to the critical fund transformation
    requirements for the Interim and Objective Force between fiscal
    years 2003 and 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 to 101
    percent, moving our personnel resources within our structure.
        Since October 2000, the strength of other early-deploying
    units has grown from 92 percent to 99 percent, and we project
    reaching 100 percent by the end of this fiscal year. The ``Army
    of One'' advertising campaign has been a resounding success. In
    2001, we achieved our recruiting targets for the second year in
    a row, and we have exceeded our retention goals as well. This
    year, for the third year in a row, we will induct roughly
    180,000 Americans into the force.
        We have been changing our stance as an Army, and the
    President's budget builds on the momentum we have attained over
    the last 2\1/2\ years. But we do need to do more, and we do
    intend to move faster. The attacks of September 11 validated
    our vision, and the ensuing war against terrorism has
    underscored the need to accelerate.
        All of our troops from all of our services are performing
    superbly, Active, Guard, and Reserve. In Afghanistan, Army
    special operatives enable the anti-Taliban forces to compel the
    enemy to mass so that the significant capabilities of our air-
    delivered munitions could be brought to bear.
        These successes are not accidental, and they are never
    easily won. Victories in battles like Mazar-e-Sharif, Herat,
    Konduz, Bagram, and now in the Shahi Khot region, as well as
    successful operations on objectives Rhino and Gecko and in the
    region of Tora Bora, represent years of difficult work,
    superior training, and real-world experiences in places like
    Bosnia, Kosovo, Nigeria, Colombia, the Philippines, Pakistan,
    and Uzbekistan, 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
    that 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, having
    agile, versatile, lethal, survivable, and sustainable
    capabilities, and then maintaining the infrastructure and lift
    to be able to deliver that force anywhere in the world quickly
    to win decisively.
        That force for the Army is the future Objective Force, and
    with your continued strong support and the support of the
    administration you will see that force fielded by the end of
    this decade.
        Mr. Chairman, thank you. I look forward to your questions.
        [The prepared statement of General Shinseki follows:]

                Prepared Statement by Gen. Eric K. Shinseki, USA

        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.

                           THE STRATEGIC ENVIRONMENT

        The attacks of 11 September 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.

                            THE 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 10 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 2 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 11 September 2001 and our
    subsequent operations overseas validated the Army's transformation. If
    anything, 11 September 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. 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. 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 11 September 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. 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. It is easy to forget that our soldiers have been on the
    ground conducting peacekeeping missions in the Balkans for 6 years, in
    Saudi Arabia and Kuwait for 11 years, and in the Sinai for 19 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 end strength.

             THE ARMY VISION: PEOPLE, READINESS, AND TRANSFORMATION

        On 12 October 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--end strength 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. 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 decisionmaking,
    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 10 brigade rotations (9 Active component and 1 Army
    National Guard) through the National Training Center, 10 brigade
    rotations (9 Active component and 1 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 5 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. 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. 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
    Systems 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 2 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 decisionmaking. 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 some expectations, the post-Cold War period
    has not seen a reduction in the demands placed on soldiers on the
    ground. In fact, 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 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 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, 2\1/2\
    years ago, the Army committed to transforming the way we will fight and
    win the new wars of a new century, and this committee elected to
    underwrite Army transformation. Today, the magnitude of what we have
    accomplished is staggering. With this submission, the Army buys its
    last heavy tank--confirmation of our sustainable momentum, and our move
    towards the irreversibility we seek to achieve in transformation. 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.

        Chairman Levin. Thank you very much, General.
        Admiral Clark.

        STATEMENT OF ADM. VERNON E. CLARK, USN, CHIEF OF NAVAL
                               OPERATIONS

        Admiral Clark. Thank you. Mr. Chairman, Senator Warner, and
    members of the committee, good morning. I appreciate the chance
    to be with you today. Mr. Chairman, I have a written statement
    I would like to submit for the record. I will not go over that
    14-page document, but will offer a few brief words, if that is
    all right.
        Chairman Levin. All of the statements will be made a part
    of the record in their entirety. Thank you.
        Admiral Clark. This is an important day for our Navy
    because I get to come before this committee and talk about our
    Navy. That is why I appreciate the chance to do so, because it
    is about our Navy's men and women, and I want to thank each of
    you for your support, which has allowed us to keep our great
    Navy sharp, at the ready, and on the point today.
        Sometimes these thank-yous are broad and generic, and I
    would like to sharpen them down to two points. I want to thank
    you specifically for the funds that you have provided for
    readiness, which have allowed us to turn around the decline we
    were experiencing. Second, I want to thank you for the numerous
    actions that this committee has taken and spearheaded to make
    our people ready. From compensation, to all aspects of quality
    of service, your actions have greatly strengthened our Navy,
    and I greatly appreciate it. It truly has made a difference.
        Regarding Operation Enduring Freedom, we are realizing
    success in the global war on terrorism, and I believe that is
    due first of all to the dedication of our sailors, and second,
    to the manpower and current readiness investments supported by
    Congress. I also believe that Operation Enduring Freedom has
    proven once again why we have a Navy and the value of
    sovereignty. Via freedom of the seas, we are able to operate
    naval platforms in the far reaches of this world, take the
    fight to a distant enemy, influence events, and carry out
    American foreign policy.
        Naval forces are flexible. Anytime and anywhere is not just
    a bumper sticker, and the thing I like best about our forces is
    that we do not need a permission slip from a foreign government
    to conduct operations around the world. Our forces are about
    precise combat operations every day, and our forces are about
    persistent combat power. When we show up, we are ready to go to
    work for the long haul, and this unique combination of
    independence, mobility, precision, and persistence, is, I
    believe, important to our 21st century military.
        Finally, regarding Operation Enduring Freedom, I am
    gratified by the unprecedented levels of jointness being
    demonstrated every day in these operations. None of us can do
    this by ourselves. The four of us sitting at this table are a
    team that has been called by my commanders in the field ``the
    best ever that they have experienced in their careers.'' I
    believe this is a real tribute to the Army, Air Force, Marine
    Corps, and Navy.
        I want to say that the budget submission that went forward
    from my office to the Secretary of the Navy represents my
    recommendations and includes some real tough choices. It
    prioritizes current readiness and manpower over future
    procurement and infrastructure. The reason is that I believe
    that it is my task to ensure that today's Navy is ready to win.
    Today's Navy is ready to go to sea, fight, and win, and I
    believe that our Nation's security relies upon that.
        Having said that, every one of us that are involved in this
    know that we must keep an eye on the future, and that means
    buying sufficient numbers of ships and airplanes to meet future
    threats. This is the biggest challenge that my Navy faces
    today. It is not just numbers. In addition to buying enough
    ships and aircraft, we must buy the correct ships and aircraft
    for our future fleet.
        Transformation is probably an overused word today, but it
    is a very important word, and we are involved in transforming
    our Navy to the 21st century to meet the challenges of the 21st
    century. At the heart of that is the research and development
    that is involved in the DD(X) program. I believe this is our
    research and development future, and most importantly this
    family of ships is going to define the United States Navy for
    the next four decades.
        But it is about more than just ships and aircraft, it is
    about organizational agility because lots of realignment is
    going on in our Navy; it is about better business practices;
    and it is about buying the right products. Toward that end, we
    have terminated seven programs in this submission and
    restructured 12 others over previous years to capture
    efficiencies and better focus the resources that we have. We
    are not done, for there is more yet to do.
        In summary, Mr. Chairman, I believe America's Navy is
    performing superbly in this war that we are engaged in, and we
    are today concluding, in the year that just passed, a record-
    setting year in retention, the best I have ever experienced in
    my military career. We are winning the battle for people.
    Current readiness is vastly improved, and we are postured to
    capitalize on opportunities for the future.
        So again, I thank this committee for your steadfast support
    for your United States Navy, and for your superb support to our
    sailors and their families. They are committed, and they are
    inspired by the knowledge that our Nation is unified behind
    their cause in the fight for freedom. These young men and women
    are serving with pride and dedication, and some, as you have
    mentioned, Senator Warner and General Shinseki, even to the
    last full measure of devotion, as most recently shown by our
    own Navy Petty Officer First Class Roberts, who was killed in
    action on Monday in Afghanistan. But we are winning this war.
        Sir, I look forward to answering your questions.
        [The prepared statement of Admiral Clark follows:]

                Prepared Statement by Adm. Vernon E. Clark, USN

        Mr. Chairman and members of the committee, 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. I
    speak for the entire fleet in thanking you.

        I: THE UNITED STATES NAVY--PRESENCE . . . POWER . . . PRECISION

        On 11 September 2001, U.S.S. Enterprise was returning from
    deployment when satellite television provided tragic images of deadly
    attacks at home half a world away.
        Within moments, the ``Big E's'' rudder swept over and, using the
    forward presence and mobility unique to naval forces, headed for the
    Arabian Sea. By the next morning, Enterprise was within reach of
    Afghanistan, ready to launch and sustain precision strikes against
    dispersed enemies hundreds of miles from the sea.
        Enterprise was not alone in taking prompt action. U.S.S. Carl
    Vinson steamed at high speed to join her on station while surface
    combatants and submarines prepared Tomahawk missiles for long-range
    strikes. U.S.S. Peleliu's Amphibious Ready Group cut short a port visit
    to Australia and sailed toward the Arabian Sea. U.S.S. Kitty Hawk
    prepared to leave its homeport in Japan to serve as an innovative
    Special Operations support platform.
        At home, shipmates saved shipmates in the Pentagon and swiftly
    reestablished command and control. U.S.S. George Washington and U.S.S.
    John C. Stennis took station off the east and west coasts of the United
    States along with more than a dozen cruisers and destroyers, guarding
    the air and sea approaches to our shores. Shortly thereafter, the
    hospital ship U.S.N.S. Comfort arrived in New York City, joining the
    Military Sealift Command Ship U.S.N.S. Denebola in providing food,
    berthing, and medical support to firefighters and recovery workers
    toiling in the ruins of the World Trade Center.
        In the weeks following 11 September, naval forces led the way.
    Tomahawk shooters suppressed enemy air defenses while carrier strike
    packages flew hundreds of miles beyond the sea, destroying the enemy's
    ability to fight. Nearly 60 U.S. Navy ships have participated in
    Operation Enduring Freedom thus far, and over 9,000 sorties have been
    flown over Afghanistan, many in conjunction with U.S Air Force assets.
    Sustained from the sea, U.S. Marines, Navy SEALS, Seabees, and Joint
    Special Operations Forces worked with local allies to free Afghanistan
    from the Taliban regime and al Qaeda terrorist network.
        Presence . . . Power . . . Precision. Our Navy's response to the
    events of 11 September is testimony to the dedicated service of our
    Active and Reserve sailors, and our Marine and civilian shipmates in
    the Department of the Navy. It underlines the mobility, lethality, and
    reach of naval forces. Most importantly, it shows our dedication to
    mission accomplishment. We stand ready to fight and win!

                  II. VIOLENT HORIZONS AND NAVY TRANSFORMATION

        The global war on terrorism is but the first war of the 21st
    century. Violent horizons lie before us, harboring profound challenges
    including the threat of cyberwar, weapons of mass destruction (WMD),
    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.
        Today's 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. To ensure future warfighting effectiveness in this
    uncertain strategic environment, sovereign naval forces are being
    transformed to better prevent crises and--should deterrence fail--
    project offensive and defensive power ashore to defeat all adversaries.
    To accomplish these missions, we are striving to realize major
    increases in operational mobility, lethality, speed, stealth,
    precision, and firepower.
        We are transforming to become a 21st century Navy of awesome
    capabilities: strategically and operationally agile; technologically
    and organizationally innovative; networked at every level; highly
    joint; and effectively integrated with allies. Enhanced naval
    capabilities will include deterrence options spanning the full range of
    threats facing our Nation. The ability of on-scene naval forces to
    shape events and control crises by both kinetic and non-kinetic means
    will be of increasing importance as WMDs proliferate in the future.
        Dispersed and independent naval forces will provide the Nation with
    global precision and persistent strike capabilities, poised to seize
    the initiative, drive operational timelines, and foreclose enemy
    options. Sea-basing of joint assets will be fundamental to this
    mission, providing sanctuary for friendly forces at sea, away from
    vulnerable cities and troop concentrations ashore.
        Naval forces will provide maritime strategic defense--assuring
    access to troops and cargo, projecting air defenses overland in support
    of joint forces and allies, and serving as a critical part of homeland
    defense by operating alongside numerous agencies, especially the United
    States Coast Guard.
        Our Navy is also dedicated to developing maritime-based information
    operations. Greater naval emphasis on information operations reinforces
    the larger transformation the U.S. military is undergoing in moving
    from the industrial age to the information age. Highly integrated,
    survivable, and redundant information systems are America's asymmetric
    advantage, and naval forces provide critical nodes in our global
    information grid.
        This family of shaping, offensive, and defensive missions will be
    enabled by network-centric warfare--the integration of sensors,
    information systems, platforms, and weapons to achieve major increases
    in warfighting effectiveness. Networks have been a Navy strength for
    decades and we are continuing to invest in this critical area.
        Regarding platforms, 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, SSGN strike submarine, Joint Strike Fighter, Unmanned Aerial
    Vehicles, Unmanned Underwater Vehicles, Tactical Tomahawk, Advanced Gun
    System, Theater Ballistic Missile system, Cooperative Engagement
    Capability, and Navy-Marine Corps Intranet, 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.
        Successful 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.

              III. NAVAL FORCES--LEADING EDGE OF AMERICA'S DEFENSE

        The shaping, offensive, and defensive missions described in section
    II determine our Navy's posture, programs, and character. Expeditionary
    naval forces are central to the National Military Strategy and regional
    Commander in Chief (CINC) plans for combat operations. While some ships
    and squadrons are homeported overseas, most deploy rotationally for
    periods of 6 months in an 18-24 month cycle. This construct drives the
    Navy's force structure.
        Forward-deployed naval forces--immediately employable,
    operationally agile, and capable of sustained combat operations against
    any adversary--are a critical part of America's defense. This has been
    especially true since the end of the Cold War, as the U.S. military has
    become a largely homeland-based force.
        The United States withdrew two-thirds of permanently stationed
    military forces from Europe following the collapse of the Soviet Union.
    In the Middle East, all services fulfill presence requirements with
    rotational units. With the exception of Korea and Japan, Asian
    commitments are covered by naval forces or fly-away units from the
    United States. This draw-down of permanently stationed overseas forces
    amplifies the importance of the expeditionary Navy-Marine Corps team.
        Accomplishing our missions has become steadily more challenging as
    the Navy's force structure declined 41 percent since 1991, from 538 to
    318 ships. Yet the global war on terrorism has increased the call for
    forward-deployed naval forces. To support the war, we routinely have 85
    ships deployed around the world.
        In view of this larger requirement, we are investigating 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 Forces
    equipped to destroy terrorist elements wherever they may be found.
        We are also going to experiment with flexible manning techniques
    that may produce greater efficiencies in conducting prolonged on-
    station missions, such as guarding international straits or other
    locations of exceptional strategic value.
        The Navy's contribution to the global war on terrorism is a vital
    component of our national effort to secure a safer world. It is
    stressing our force considerably, however. There is little elasticity
    in our force structure to allow for growth in the homeland defense,
    overseas defense, and offensive missions associated with the on-going
    campaign.

               IV. MANPOWER AND CURRENT READINESS: SOLID PROGRESS

        Thanks to superb leadership in the fleet--and the full support of
    the American people and Congress--our Navy is making solid progress in
    addressing long-standing issues, particularly concerning manpower and
    current readiness. These are the areas most vital to ensuring we have
    what it takes to win today.
        Navy men and women are our most valuable resource and we must
    provide them with the tools and leadership to succeed. Improvements in
    compensation that Congress supported--bonuses, pay table adjustments,
    retirement reforms, and better medical benefits--are having the desired
    impact. The targeted pay raise and other initiatives in the fiscal year
    2003 budget will reinforce these positive trends.
        We are particularly grateful for congressional support of the
    Career Sea Pay program. Until fiscal year 2002, Career Sea Pay had not
    been increased since 1986, greatly eroding its value. Thanks to new
    authority granted by Congress, Career Sea Pay is now received by all
    sailors from the moment they report for sea duty, bolstering our
    retention efforts. An additional 25,000 sailors now receive Career Sea
    Pay.
        These initiatives are paying off. Navy met its overall recruiting
    goals in fiscal years 1999, 2000, and 2001 and significantly improved
    reenlistment rates. This year, we are well ahead of the record-setting
    pace set in 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. We can do better, however. 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 their 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 also striving to minimize the increased wartime operational tempo
    of the fleet via careful planning and innovative training. This is the
    first time in history that the services have faced a prolonged conflict
    with an all-volunteer force, and we must protect the integrity of our
    fleet.
        A major initiative aimed at strengthening the professional
    development of sailors is Task Force EXCEL (Excellence through our
    Commitment to Education and Learning), which is leading a revolution in
    Navy training. This effort will leverage new delivery mechanisms
    including distance learning technologies and an enhanced Navy
    information exchange network to provide a career-long training
    continuum for our sailors.
        Additional specifics regarding progress being made in manpower and
    current readiness follow:

             Sailors are staying in the Navy and more are being
            advanced. The year 2001 was a record year for retention. We
            retained 57 percent of all eligible sailors at the end of their
            first enlistment, 68 percent of sailors with 6-10 years of
            service, and 84 percent of sailors with 10-14 years of service.
            More than 1,512 sailors were advanced in 2001 than the year
            before.

             Pay is improving. In 2001, Congress provided the
            biggest base pay raise since 1981 and started reducing out-of-
            pocket expenses for housing. Our people are also being
            compensated for their valuable experience and skills via
            special and incentive pays, and retention bonuses.
             Sailors can invest in their own future. The new Thrift
            Savings Plan (TSP) provides a tax-deferred wealth-building
            vehicle to help military personnel achieve financial security.
            Navy leads all services in TSP enrollment.
             More readiness money is flowing to the fleet. Our
            priority is to take care of the Navy our Nation's taxpayers
            have already purchased. Fiscal year 2002's budget adds over $5
            billion to Navy readiness accounts over fiscal year 2001
            levels.
             Combat readiness is improving. Fifty percent of
            additional funding the Department of the Navy received in
            fiscal year 2002 was devoted to enhancing current readiness,
            while 25 percent was directed toward Research and Development.
            Average readiness scores for our airwings improved by 8.2
            percent from fiscal year 2000 to 2001.
             Ships and aircraft joining the fleet are the best in
            the world. In 2001, U.S.S. Ronald Reagan was christened and
            U.S.S. Iwo Jima was commissioned. Production is gearing up on
            more Arleigh Burke class destroyers, Virginia-class submarines,
            F/A-18 E/F strike fighters, MH-60S helicopters, and other
            outstanding programs.
             Innovation is central to our Navy. The new surface
            warfare family of ships will provide firepower across the full
            spectrum of 21st century operations. Our Navy also remains
            committed to Ballistic Missile Defense, working together with
            the new Missile Defense Agency to accomplish this vital
            mission.
             Transformational capabilities are being realized,
            including Cooperative Engagement Capability (CEC), the E-2
            Radar Modernization Program, Tactical Tomahawk, Active
            Electronically Scanned Array (AESA), Advanced Targeting
            Forward-Looking Infrared (ATFLIR), Advanced Rapid Commercial
            Off the Shelf Insertion (ARCI), and the Enhanced Range Guided
            Munition, to name just a few.
             Experimentation has shifted to the waterfront. The
            Navy Warfare Development Command in Newport has been placed
            under Commander, Fleet Forces Command to strengthen the fleet's
            impact on innovation and experimentation.

                           V. THE POWER OF ALIGNMENT

        Proper alignment is critical to ensuring our organization, systems,
    and processes deliver a combat-capable Navy that remains ready to sail
    in harm's way. Toward that end, we reorganized the Navy Staff so that a
    Deputy CNO is focused exclusively on Fleet Readiness and Logistics,
    while another Deputy CNO is dedicated to Warfare Requirements and
    Programs.
        On the waterfront, we strengthened coordination between the
    Atlantic and Pacific Fleets by creating Commander, Fleet Forces
    Command. We also streamlined leadership of naval aviation, surface, and
    subsurface forces by establishing Fleet Type Commanders to lead each of
    those communities. These initiatives will improve operational
    performance by allowing us to more accurately determine requirements,
    enhance readiness, and maximize investment effectiveness.
        We must, at every level, ensure our Navy is functioning as
    effectively and efficiently as possible. The Secretary of the Navy has
    made the incorporation of better business practices a major tenet of
    his plan of action. I share his dedication to this cause. Programs such
    as the Enterprise Resource Planning Group and Business Initiatives
    Council are central to this mission. These efforts are aimed at
    obtaining more accurate requirements forecasting, enhanced stability in
    program execution, greater efficiency in system design and production,
    and improved expenditure discipline in infrastructure maintenance and
    renewal.
        Achieving these goals will provide the taxpayer with a fuller
    return on the investment dollars they entrust to our Navy for their
    defense.

              VI. CHALLENGES: FUTURE READINESS AND INFRASTRUCTURE

        These successes in manpower and current readiness mark important
    progress in strengthening our Nation's defense. Yet challenges remain,
    particularly in the areas of future readiness and infrastructure.
    Current aircraft and ship procurement rates will, if continued, result
    in a Navy numerically smaller than today's, and significantly smaller
    than that needed to sustain the war. Such a fleet would be an
    invitation to greater operational risk and international instability.
        The global war on terrorism has levied new demands on our Navy,
    emphasizing the need for fleet units to confidently meet the challenges
    of an uncertain world on short notice. We must be able to conduct
    combat operations anytime, anywhere with maximum effectiveness and
    minimum risk, including in the homeland defense role.
        Key to achieving this goal is minimizing the loss of readiness that
    occurs between deployments. For too long, the readiness of deployed
    forces has been achieved at the expense of the non-deployed segment of
    our force structure. Although we have made progress in correcting
    shortfalls, many non-deployed units are still operating below
    satisfactory readiness levels, making it difficult to meet operational
    standards, fulfill homeland defense missions, and complete
    predeployment requirements.
        The age of our equipment is a major part of this problem. Many
    amphibious ships and our fleet command ships are reaching the end of
    their service lives. Such units often require unscheduled maintenance,
    diverting funds obligated elsewhere. These actions, in turn, produce
    maintenance backlogs that we cannot afford operationally or
    financially.
        Additionally, ships reaching service mid-life, like some of our
    AEGIS cruisers, require modernization to be operationally viable in the
    future. Funds to complete this type of modernization have not
    historically competed successfully against other recapitalization
    requirements. We must change this mindset.
        Naval aviation, in particular, faces profound challenges. Our
    aviation force now contains the oldest mix of type/model/series
    aircraft in naval history. To provide context, naval aircraft are on
    average 2 years older than our ships. Yet these aircraft are being
    tasked to unprecedented levels in the global war on terrorism.
        Naval aviation was under stress even before the current conflict.
    As a result, the F/A-18 force has been flown well in excess of planned
    utilization rates. More than 300 F/A-18 aircraft will require service
    life extensions earlier than planned. Similar situations apply to F-
    14s, EA-6Bs, P-3Cs, SH-60s, and virtually every other aircraft in the
    fleet.
        One way to address the problems facing naval aviation is to
    introduce new aircraft into the fleet as soon as possible. Toward that
    end, the fiscal year 2003 budget provides some relief, although the 83
    aircraft being requested do not come close to the level required to
    sustain today's fleet at its present level.
        While our 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.

        We must buy an average of 180-210 aircraft and 9 ships a year
    starting in the later years of the FYDP to sustain today's fleet. As
    noted, we are procuring significantly less than that. We will procure
    just 5 ships and 83 naval aircraft in fiscal year 2003.
        The impact of the current 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.
        Still, we are investing in impressive programs that will comprise
    the core capability of our force in the coming decades. DD(X), CVN(X),
    JSF, FA-18 E/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
    (LCS) 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 2013, when that ship is in her 52nd 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-18 E/F. The F/A-18 E/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. We are not requesting additional LPD-17-class ships in the
    fiscal year 2003 budget due to design and production challenges with
    the lead ship. We remain fully committed to the program, however, as it
    supports vital littoral warfighting requirements and promises relief
    from the escalating costs of our aging amphibious ships. The twelve
    projected LPD-17s will replace four older classes of ships and serve as
    central elements of future Amphibious Ready Groups. We need to
    accelerate development 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.
        Infrastructure. Sustaining quality infrastructure is an important
    part of ensuring future readiness. Unfortunately, Navy's shore
    infrastructure condition is unacceptable. We face an annual facility
    sustainment cost of $1.3 billion to keep our infrastructure from
    deteriorating, which we are not meeting. It will cost an additional
    $1.7 billion annually to correct C-3 and C-4 deficiencies and
    recapitalize our infrastructure at the DOD-mandated 67-year rate. Still
    more funding will be required to move sailors ashore who currently live
    onboard ships.
        Meeting these challenges requires consistent total facility life
    cycle investments and finding innovative ways to reduce our facility
    footprint. While the fiscal year 2003 budget makes modest increases in
    sustainment, restoration, and modernization (SRM) and military
    construction accounts, there is much left to be done. We are studying
    this problem and are working on a plan to provide out-year funding to
    help mitigate these significant challenges.

                                VII. CONCLUSION

        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 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 committee 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.

        Chairman Levin. Admiral, thank you very much.
        General Jones.

       STATEMENT OF GEN. JAMES L. JONES, USMC, COMMANDANT OF THE
                              MARINE CORPS

        General Jones. Thank you, Mr. Chairman and members of the
    committee. I am very honored to be here today to present our
    budget request for fiscal year 2003. Before I do that, I would
    like to just say a few words about where your Marine Corps is
    today. Thank you very much for your focused application of
    resources that has enabled us to achieve the highest state of
    readiness across the service by any measurable index in the
    last 10 or 12 years.
        As a result of this application, we are very secure in who
    we are and what we do. We are an expeditionary force of
    combined arms that is rotational in nature and draws on our
    partnership with the United States Navy. Our naval heritage is
    very important to us. We come from the sea, and I believe that
    sea-basing issues will be the subject of great discussion
    starting from this hearing on. We are a stable culture as a
    result of your wise investment. We have a recruiting success
    that goes back 6\1/2\ years. We have a retention statistic that
    I think is admirable, if not astounding. Our young people are,
    in fact, not only joining us, but staying in at record numbers,
    and we are very pleased with the stability of our culture.
        This happy state of affairs shows in our mission execution
    profile. Our rotational base is stable. People are not leaving
    as a result of being overworked or overstressed, although they
    are working very hard. We have been able to make some
    significant and impressive modernization steps for the first
    time in a number of years, and every now and then you get
    tested and asked to see if you can perform. We were tested
    following September 11 in the North Arabian Sea, when the
    Commander in Chief, Central Command asked the First Marine
    Expeditionary Brigade, composed of two Marine Expeditionary
    Units, to proceed to Camp Rhino in Kandahar. We did this at
    distances that were very challenging to us, but for which we
    have prepared for for many years.
        That mission was successfully executed. We displaced two
    Marine Expeditionary Units in a landlocked country at distances
    ranging up to 400 miles and beyond. I would like to pause for a
    moment and introduce to you Brig. Gen. Jim Mattis, who was the
    commanding general of that brigade. Many of us saw him daily on
    CNN. Jim, would you please stand?
        Chairman Levin. Welcome, General.
        General Jones. He just returned home a couple of days ago.
    [Applause.]
        Senator Warner drew some very evocative historical
    analogies, but I would give you one to show you the possibility
    of transformation. Jim Mattis led a Marine Expeditionary
    Brigade headquarters, which was composed of 56 people. Ten
    years ago that would have been 356. Twenty years ago it may
    have been 600. He had 56 people to lead a force of 4,400
    marines from the sea, inland. He had to establish not a
    beachhead, but a position inland that was supportable,
    sustainable, and very precise in the application of power.
        An interesting conclusion of this experience for me, and a
    very satisfying one, is that not only are the four of us at
    this table professional colleagues, we are also all good
    friends. We are almost on a first-name basis. [Laughter.]
        What was really interesting to me in Operation Enduring
    Freedom was the synergy between the forces; the wonderful
    Special Forces who went in first; the marines who came in right
    on their heels and operated seamlessly, almost effortlessly,
    and without any difficulty; the ability to deliver precise fire
    power from the air; the ability to reinforce, to conduct massed
    casualty evacuations when necessary; the ability to recover
    downed aircraft in partnership with Special Forces and with the
    United States Navy, who were supporting us from the sea; and
    the transition to the arrival of the Army forces, the
    conventional forces again. These seamless transitions show that
    those who would suggest that the joint force of today are not
    organized, trained, and equipped to fight are really not doing
    their homework, because we are, and we celebrate that every
    single day.
        The Joint Chiefs of Staff spends a lot of time talking
    about how we can make the mission work for the Nation. That is
    the first order of business, not service priorities, and I am
    very proud to be part of a team that does that.
        So we get our forces to the joint line of departure. They
    are trained, ready to perform, and ready to move on to other
    missions, and I suggest in the global war on terrorism we will
    need more of that in the future. I pledge to you we will
    continue to be full partners in making this a reality.
        The issues of sovereignty are going to confront our forces
    in the global war on terrorism, and in fact are going to be
    ever-present in the 21st century. Sea-basing, as the CNO
    alleged, offers a way to take our Nation's sovereignty to those
    areas of the world that we are concerned about, and to be able
    to react in a capable and quick way to do those things that the
    Nation wants us to do.
        Sea-basing will be an important aspect in our future
    discussions, and I am excited by some of the programs that the
    Navy is pioneering and the Marine Corps are helping with. One
    is the high-speed surface vehicle that we are currently testing
    off of Okinawa, which is a commercial vehicle today, but leased
    to us for experimentation.
        For example, I can transport a full battalion of marines
    and all of their equipment from Okinawa to Guam in less than 2
    days, at a fraction of the cost that we have had to expend
    regularly for strategic airlift. Those aspects of sea-basing
    and innovative ideas for the future will be transformational in
    terms of how we use and deploy our forces in the future.
        The 2003 budget does some great things for your Marine
    Corps. In addition to increasing operations and maintenance,
    manpower accounts, and research and development, we have been
    able to achieve a 20-percent increase in our family housing
    spending. We have some exciting public-private ventures that
    are going to result for the first time in the ability to
    modernize our housing at Quantico, which we are very excited
    about. Starting in 2003, it is conceivable that, with your
    support, we will be able to rebuild every single house at
    Quantico, and that is something that has needed to be done for
    a long time.
        We have had real program growth in the operating forces in
    our bases and stations that this project will provide, and the
    budget for the Marine Corps is a transformational gateway. For
    me, transformation has several components. It certainly has a
    leap in technology component, such as the tilt-rotor
    technologies, the Advanced Amphibious Assault Vehicle (AAAV),
    and the Joint Strike Fighter.
        There is institutional transformation that we are, in fact,
    implementing right now, such as the way we manage the all-
    volunteer force. There is also operational transformation,
    which I just described to you, giving the example of a command
    element manned by only 56 people. These are tremendous
    transformation and logistics concepts, which will preclude us
    from having to stockpile our supplies on the field of battle
    and provide reach-back capability for fire power and delivery
    that significantly reduces the size of the headquarters that we
    need on the ground. Finally, I would suggest that base business
    and acquisition reform is absolutely essential to
    transformation, because if we cannot use our resources more
    efficiently, judiciously, and make quicker acquisitional
    decisions, then we are not going to be making the best use of
    the taxpayer's money.
        We acknowledge a shortfall in the ability to turn around
    our ship constructions. I remain concerned that amphibious lift
    is still not as robustly enhanced as we would like it. The goal
    is 3.0 Marine Expeditionary Brigades assault echelon
    equivalence. We will need to recapitalize our maritime
    preposition forces towards the end of the decade. We have a
    paucity of fire support both from the sea and on land. We have
    plans underway to correct those shortfalls.
        I would close by just asking for your continued support in
    a level sustainment of resources. The thing that makes life
    extremely difficult is the peaks and valleys. I testified 2
    years ago that I thought a sustained investment of between 3\1/
    2\ and 4 percent of the GDP for a global power of this economic
    might is a reasonable goal to shoot for. I am gratified to see
    that the budgets are moving in that direction. I think the key
    for the future is to keep it at that level. I thank you, Mr.
    Chairman. It is a great pleasure to be here.
        [The prepared statement of General Jones follows:]

                Prepared Statement by Gen. James L. Jones, USMC

        Chairman Levin, Senator Warner, and 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.

       I. 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 11, 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. Twenty first 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.

        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.

      II. 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 6 percent of the
    Department of Defense's budget, the Marine Corps provides 20 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.

      III. 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]

    a. 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 1-year period.
        Just as the Marine Corps' new utility uniform is an example of both
    tactical and business innovation, so too are the transformation of
    operational concepts and business practices 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.
      b. 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]

        The leases of our current fleet of Maritime Prepositioning Ships
    (MPS) will expire in fiscal years 2009, 2010, and 2011. The development
    of advanced Maritime 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]

        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 30mm 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 worldwide.
    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 and 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.
                 c. 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. 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 6 to 8 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 6\1/2\ 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, belong
    to a cohesive organization, and 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.

                                 IV. 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.

        Chairman Levin. Thank you, General.
        General Jumper.

    STATEMENT OF GEN. JOHN P. JUMPER, USAF, CHIEF OF STAFF, UNITED
                            STATES AIR FORCE

        General Jumper. Mr. Chairman, Senator Warner, and
    distinguished members of the committee: I am proud to join my
    colleagues up here today and represent your Nation's Air Force
    and airmen. Today, more than 30,000 of our Nation's airmen are
    engaged in operations in Afghanistan, Northern Iraq, Southern
    Iraq, and the Balkans.
        In addition to that, as you all know, we have approximately
    11,000 airmen engaged in daily Combat Air Patrols (CAPs),
    joined by our NATO allies, patrolling the skies over America.
    Eighty percent of this is done by the Guard and Reserve, and
    they are doing a magnificent job for this Nation.
        Sir, we could not be more proud of the fact that, of all
    our technology and weapons systems, we think that the greatest
    weapons system we have in our United States Air Force is our
    people. I carry a simple message today from them as they, for
    the first time in this budget, see the opportunity to reverse
    the trends in readiness, and I echo the sentiments of my
    colleagues. I had one master sergeant on the flight line at
    Langley Air Force Base tell me, ``sir, I would have given up my
    pay raise to get the parts to fix my airplanes.'' For the first
    time in a long time we see the ability to get those parts to
    fix those airplanes.
        It does not happen instantly, as you all know. It takes a
    couple of years to manufacture some of these long lead parts,
    but the indications are all there, and we are giving the people
    the resources that they need to do their job. That is all they
    ask of us, the leadership of the United States military.
        Sir, in this budget you will see a great deal that goes
    into transformation in the form of stealth, standoff precision,
    space, and information. We have seen a lot in Afghanistan. We
    have seen transformation even from the most recent battle in
    Kosovo. We have seen things done in Afghanistan that we could
    not even do then.
        We have all read the stories in the newspaper of the
    Special Forces troop on the ground or a horse with the laptop
    sitting on the saddle horn and a satellite giving him his exact
    position. Bouncing around on the back of the saddle is a tripod
    that holds laser goggles that he stops and sets up.
        One such person was 24-year-old Air Force Combat Controller
    Staff Sergeant Linehart. I recently had him in to brief all of
    the four-stars in the Air Force on a particular mission that
    was referred to earlier. He is a young man, totally unassuming,
    just doing his job, absolutely astounded that a bunch of four-
    star generals would be interested in what he is doing. But here
    you have this perfect marriage of the military art of the last
    century and the century before that, with the military art of
    this century. I studied General Shinseki's budget request very
    carefully. I did not see any cavalry in there, but I am sure
    that it will be back in vogue before long.
        Senator Roberts. We do have a cavalry unit at Fort Riley.
    [Laughter.]
        General Jumper. Forgive me, sir.
        Chairman Levin. Which is now going to be plussed-up
    significantly. [Laughter.]
        General Jumper. This young man sat on a hilltop and called
    in B-52 strikes, and the B-52 from 7 miles in the sky put in
    GPS-guided munitions to within 800 meters of Sergeant
    Linehart's position. This is one snapshot of the vision of
    transformation in today's military; we had a bomber that was
    built 40 years ago putting in a precision strike within 800
    meters of someone's position who just gotten off a horse and
    used a pair of laser goggles to get a very precise set of
    coordinates to data-burst up to that bomber.
        In other situations we have read about, we have seen how
    the Predator unmanned air vehicle (UAV) has taken its streaming
    video and put it into the cockpit of our AC-130 gunships and
    performed essentially scout duties, so when the AC-130 gunships
    arrived on station it could begin engaging targets immediately.
    This has not been just for the Air Force. Sergeant Linehart was
    not just talking about B-52s, he was talking to F-14s, F-18s,
    and AC-130s from all the services who make this technology work
    in a way that saves lives on the ground and engages the enemy
    in more lethal ways.
        Mr. Chairman, we will pursue integration of manned and
    unmanned space and information technologies to close the seams
    that have existed, as we have been closing them for the last 10
    years among our services. My component commander, Admiral Vern
    Clark, said that he has never seen it better. We have come a
    long way from the days of Operation Desert Storm when, as you
    may recall, we had to take an aircraft from the aircraft
    carrier every day and fly the air tasking order out to the
    aircraft carrier in order to coordinate our activities. Sir,
    those days are gone, and I am proud to sit up here with my
    colleagues and to be able to report that to you today, and we
    are going to make it even better.
        Mr. Chairman, let me sum up by saying thank you to this
    committee for giving our people the resources they need to do
    their job. Thank you for our pay raise that shows them that we
    do appreciate their service. In the 35 years I have been
    wearing this uniform, it never ceases to amaze me. Every time
    we have a conflict and I walk among the soldiers, sailors,
    airmen, and marines that are engaged in the conflicts of this
    Nation, I realize they continue to rise to greater heights of
    accomplishments and pride.
        Thank you very much, Mr. Chairman, for the opportunity to
    be here today. I look forward to your questions.
        [The prepared statement of General Jumper follows:]

                Prepared Statement by Gen. John P. Jumper, USAF

        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. 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, 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 11, 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 3 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 DC. Within minutes, Guard F-16s from Langley Air Force Base
    (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-130s to
    support the movement of FEMA, FBI, human organs and blood, Combat
    Support Teams (CSTs), medical equipment, and combat communications. In
    addition, over 70 personnel arrived from Andrews AFB to help coordinate
    emergency medicine at the Pentagon alongside the Surgeon General of the
    Air Force.
        Within 24 hours, the Air Force swiftly deployed 500 medics to
    McGuire AFB, to respond to any Federal Emergency Management Agency
    (FEMA) tasking for equipment and/or personnel needed at the World Trade
    Center. State-of-the-art medical emergency facilities were assembled,
    which included four Expeditionary Medical Support packages (EMEDS)
    (lightweight modular systems). Critical Care Air Transportable Teams
    (CCATT), which provide emergency medical attention while in-flight,
    were quickly established at both the Pentagon and McGuire AFB. The port
    mortuary also was activated, with over 600 Air Force Active Duty,
    Guard, and Reserve personnel deploying to Dover AFB. They assisted in
    the identification and preparation of the remains of the Pentagon
    attack victims, working alongside the Armed Forces Medical Examiner,
    FBI, Army, and Navy personnel. Critical Stress Management Teams
    conducted counseling to personnel assigned to recovery efforts at both
    locations. Finally, since the National Disaster Medical System was
    activated, the Air Force Medical Service (AFMS) also set up its
    aeromedical evacuation assets at both McGuire AFB and Andrews AFB.
        Meanwhile, demonstrating their invaluable integration in the total
    force, Air Force Reserve and Air National Guard airlift crews were
    among the first to bring in critical supplies, equipment, and
    personnel, including emergency response teams from FEMA, fire trucks,
    search dogs, and earth moving equipment. At the time of this writing,
    more than 10,000 Air Force reservists and over 20,000 Air National
    Guard members have been mobilized, and many more continue to provide
    daily support as volunteers. Thousands of Air National Guardsmen,
    Reservists, civilians, contractors, and Active Duty members are
    ensuring air and space security over America.
    Operation Enduring Freedom (OEF)
        When the President decided on the appropriate course of action, air
    and space forces were called into action. At the outset, Air Force
    bombers proved instrumental to putting weapons on targets in
    Afghanistan. The vast mobility capabilities of the Air Force quickly
    moved assets into the theater, while simultaneously making possible
    Navy and Air Force fighter attacks.
        Enduring Freedom also revealed an improvement from even the most
    recent operations. Air and space precision assets paired with multi-
    service special forces on the ground proved an effective, efficient,
    and devastating mix of capabilities. Additionally, we have pushed
    developing technologies forward and have found operational successes in
    advanced employment of Unmanned Aerial Vehicles (UAVs).
        This operation is about creating effects--deterrence and defeat of
    terrorism--so it is more than simply munitions-on-targets. The Air
    Force is at the forefront of psychological campaigns, applying robust
    information warfare campaigns while also leading the humanitarian
    relief mission--essential to any long-term stability in the region.
    Airdropping millions of rations to a starving people, Air Force
    mobility forces directly affected the future of the new Afghan
    Government.
        ``Let's Roll!''
        As it has throughout its history, America will champion the cause
    of freedom and defeat those who would attempt to deny us this most
    basic tenet. Guaranteeing our success is ``. . . the strength of our
    country--the skill of our people and the superiority of our
    technology.''

                                  INTRODUCTION

        The world's premier Air Force begins 2002 under new leadership. The
    Secretary and Chief of Staff bring unique and complementary experiences
    to bear upon the dynamic promise of American air and space power in the
    21st century. The Air Force is in the business of global reconnaissance
    and strike, including the full application of unparalleled mobility
    forces. Our efforts are fuelled by a vision of global vigilance, reach,
    and power to help the Nation assure our allies and friends, while
    dissuading, deterring, or decisively defeating any adversary. The
    specific concept of ``core competencies'' \1\ well known among
    successful organizations has been adapted by Air Force leaders to
    characterize the capabilities that are central to our mission: air and
    space superiority, information superiority, global attack, precision
    engagement, rapid global mobility, and agile combat support.
    ---------------------------------------------------------------------------
        \1\ According to two leading scholars, successful enterprises
    ``consolidate corporate-wide technologies and production skills into
    competencies that empower individual organizations to adapt quickly to
    changing opportunities.'' The three identifying characteristics of core
    competencies are: (1) They transcend a single product or service and
    provide potential access to a wide variety of markets; (2) they are
    perceived by customers to deliver significant benefit; and (3) they
    should be hard to imitate. See C.K. Prahalad and Gary Hamel, ``The Core
    Competence of the Corporation,'' Harvard Business Review, May-June
    1990.
    ---------------------------------------------------------------------------
        The Air Force and the Nation entered 2001 aware of the challenges
    and opportunities of a new administration. The Department of Defense
    was to undergo significant evaluation, with the expectation of dramatic
    changes to follow. President Bush brought an eminently qualified team
    to defense and national security, and the Air Force welcomed the
    injection of energy and attention the Nation's defense was to receive.
    Long a force for innovation, airmen continued their leadership
    throughout the months of military reinvention. Capabilities-based
    planning was emerging as the Quadrennial Defense Review (QDR) focal
    point, and the Air Force strove to maximize the assessment of new
    technologies, revolutionary concepts of operation, and visionary
    organizational changes. However, amidst this important task, terror
    struck the United States. The Air Force, and the Nation, exited 2001 at
    war.
        This new adversary, and those of the future, will pose a formidable
    challenge to American interests at home and abroad. They will attempt
    to intimidate, deter, or defeat our Nation through a variety of means,
    to exploit our asymmetrical vulnerabilities and avoid confronting U.S.
    military power directly. These strategies will include the use or
    threatened use of weapons of mass destruction, and the use of terrorism
    on U.S. soil. They will also attempt to counter the tremendous
    asymmetric advantages of U.S. air and space power.
        To meet these challenges, Air Force strategy calls for a
    capabilities-based approach to defense planning. This enables the
    service to answer a broad range of challenges posed by potential
    adversaries, while also developing the capabilities it needs for the
    future. This capabilities-based planning must remain tied to ongoing
    Air Force transformation that continues to develop new technologies,
    concepts of employment, and organizational adaptations.
    The Road Ahead
        The transformation of the military now runs parallel to the
    transformation of our Nation. Just as the military is exploring new
    capabilities and concepts of operation (CONOPs) to engage threats,
    America as a whole is experiencing new appreciation for the cost of
    freedom. The Air Force, the Department of Defense, and the American
    people are up to the challenge.
        Though a shock, the events of September 11 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 intelligence, surveillance,
    and research (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 Operation
    Northern Watch (ONW) and Operation 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 11, 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 Operation 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 U.S. 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 OPTEMPO 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 U.S. 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 OPTEMPO 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 3 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 (December 1, 2000-February 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 3-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
    U.S. 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 11, 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-130s 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-calendar
    year 2002.
        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 three
    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 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 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.
        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 5 to 10 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 10 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 U.S. 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 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 to: (1) define,
    document, and advocate Air Force IW requirements; (2) integrate those
    requirements into the Air Force Capabilities Investment Strategy; (3)
    identify solutions meeting validated IW needs; and (4) 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 11 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 2000-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 calendar year 2002. 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), 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 U.S.
    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 multiyear 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 multiyear 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 8 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 2003-2007 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 2 to 4 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 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.
    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 11 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 IIs, 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 11 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 standoff 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 hours 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 August 14, 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 October 25, 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
    calendar year 2001. In calendar year 2002, ABL will begin an intensive
    period of subsystem integration and flight testing, progressing toward
    a lethal demonstration against a ballistic missile. The ABL program was
    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 1,760 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 2 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 11, 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 1-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 5 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 to 6 percent over the last 2 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 years 2002/2003. 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 (6 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 8 years until we fully realize the
    effects of the 10-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 toward 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 5
    years of service. In the next 5 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 percent-10 percent) to improve pay based on
    their education and experience levels. Junior enlisted members received
    a 6 percent-6.7 percent pay raise and captains and majors received a 6
    percent-6.5 percent raise while all other personnel received a 5
    percent raise. Basic Allowance for Housing rates effective January 1,
    2002 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 years 2001-2004 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 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 and 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 years 2000-2005 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 April 1, 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 October 1, 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 Operation 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 11 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.

        Chairman Levin. General Jumper, thank you. Thank each of
    you for your very helpful testimony and for your leadership. We
    will have 6 minutes for our first round of questions.
        First, I would like to ask each of you about the
    Quadrennial Defense Review of last year, which moved us away
    from the requirement to be able to conduct two nearly
    simultaneous major theater wars. It is not apparent to me, at
    least yet, what changes in requirements or in priorities among
    requirements have resulted from that change. Can each of you
    briefly tell me what changes in priorities your services have
    as a result of the new guidance?
        General Shinseki.
        General Shinseki. Mr. Chairman, I would offer that much of
    the Army's move toward the QDR's new approach to strategy we
    took on about 2\1/2\ years ago. We looked at our ability to
    deliver our capabilities rapidly to a variety of places we were
    asked to go in the 1990s, and frankly, we had a tough time
    getting there. Once we got there it was tough to sustain that
    over a period of time, and the places we looked at were the
    places we were asked to pay attention to, such as the Koreas,
    China-Taiwan, India, Pakistan, Iran, Iraq, and the Balkans. We
    are still engaged 6 years after going into Bosnia, and then
    even looking across places like Chechnya, where a pretty good-
    sized army was having a tough go.
        When we put those locations on the globe, it describes a
    large area around which we had very little capability. It is
    the area that is circumscribed by those conflicts, the Caspian
    Basin, and when we put our finger in the middle of that area
    and asked whether we could get there or not, at least in the
    Army's perspective, we could not sustain ourselves. Whether we
    would go or not, or we wanted to go or not, when we asked
    ourselves 2\1/2\ years ago whether we could go or not, the
    answer was no.
        Then it led to other questions about what capabilities
    would be needed to get there, and if you developed those
    capabilities, then you could get just about any place else.
    That is what led us 2\1/2\ years ago to begin our own efforts
    to transform.
        Chairman Levin. Thank you.
        Admiral Clark.
        Admiral Clark. The way I interpreted the guidance, instead
    of two major theater wars, it included always a very heavy
    force. It included regime change all the way to the capital.
    This is the way it has been described by Secretary of Defense,
    a 4-2-1 force: deter in four areas; quickly take on an
    adversary in two areas with minimal reinforcement; and do one
    major war that talks about going all the way to the capital.
        The way I interpret that for our forces meant we have to be
    more forward and have a more dispersed force. It means a total
    and complete examination in my ISR assets, and we are
    conducting that.
        I talked to John Jumper about how we are going to team in
    the future, with Jim Jones about how we are going to shape our
    force, because our Air Force is combined. We need long-dwell
    systems to make the future work. Instead of just building a
    force that is netted from the ground up, from the seabed to
    space, we need a more distributed force, as well as manned and
    unmanned vehicles.
        General Jones and I are going to fundamentally restructure
    the amphibious readiness group to an expeditionary strike force
    that will have more striking capability. I will move more
    striking power on the naval side of that. We need an amphibious
    plan that then supports this in the future. That is the LHA(R),
    which we are building the analysis of alternatives to do that
    right now, and is due out this year.
        Finally, I would say that in order to deter in four places,
    the Navy-Marine Corps team must integrate so that we are as
    effective as possible. General Jones and I are working
    proposals, and in fact have made proposals forward, and those
    are the major areas of the QDR that are affecting me.
        Chairman Levin. Thank you, Admiral.
        General Jones.
        General Jones. Sir, very briefly, in addition to what the
    CNO pointed out in the Marine Corps, the biggest change has
    been the reemergence of the Marine Expeditionary Brigade as a
    central war-fighting piece, middle way, if you will, between
    the Marine Expeditionary Units and the Marine Expeditionary
    Force.
        As an adjunct to that, we stood up the Marine Expeditionary
    Brigade, Antiterrorism Capable (AT), by combining four units
    that were disparate units essentially having the same
    commonality of mission, so much more focused application on the
    antiterrorism mission and investments in those accounts. It is
    my goal that every Marine Corps unit that deploys will have an
    antiterrorism capability to be of use to the joint warfighters.
        Integrated logistics concepts is a revolutionary
    transformational way to deal with battlefield logistics. I
    would like to reaffirm the close partnerships with the United
    States Navy, and in the months ahead I predict I will be coming
    to members of your committee and your staff with some
    transformational plans that will be truly out on guard in
    anything the military is doing in the world. I will move to
    bring the Marine Corps a little bit closer to build bridges
    between the Special Operations Command. You know the history of
    Special Operations Command better than I do, and you know how
    the Marine Corps did or did not participate.
        Originally, we signed a memorandum of agreement with the
    Commander in Chief, and we are building bridges to make sure
    that the Nation has the full realm of capabilities needed, sea-
    based and land-based, in the field of Special Operations. Those
    are just a few of the things.
        Chairman Levin. Thank you. General.
        General Jumper. Mr. Chairman, we are transitioning the Air
    Force into a rotational-based force, or expeditionary Air
    Force, so that we can control the OPTEMPO of our people as they
    are called out on these contingency operations.
        Within the expeditionary force structure, we are also
    creating task forces that specialize in some of the most
    difficult things we anticipate in this capabilities-based way
    of looking at things, scenarios like anti-access, rapid
    reaction to terrorists, humanitarian relief, global mobility
    missions, as well as space and command and control,
    intelligence, surveillance, and reconnaissance (C\2\ISR). These
    are task forces that will be organized and integrated with the
    other services to do the specific missions that we think are
    going to be called for.
        As part of those, we have done several things for the F-22.
    We have put more emphasis on its air-to-ground capability,
    because the F-22, by nature of its ability to go mach 1.7
    without using afterburner, can penetrate quickly and deeply to
    help out forces, our own friendly forces in the rear, or to
    take out those most difficult surface-to-air missiles and other
    threats that other systems would have difficulty doing. This is
    a small-diameter bomb that will go on the F-22.
        We have been able to upgrade our priority on unmanned air
    vehicles as we go from the A-model Predator to the ability to
    shoot Hellfire missiles off of the Predator UAV. Even since
    Kosovo we have added the capability to laser designate not only
    for Air Force airplanes, as I mentioned, but for any airplane
    with a laser weapon. We are going to request a step up into the
    B-model Predator, which would add more weapons stations, and it
    will specialize as a hunter-killer aircraft for specialized
    types of missions that we might do with Special Operations or
    other agencies.
        Another example, Mr. Chairman, is the addition of the
    concept of the smart tanker. It occurred to me suddenly one day
    that the thing that is always there in a battle is the tanker
    force. They are there to help the Navy and refuel our airplanes
    and other countries' as well. By adding equipment on, we can
    make it an IP address in the sky and network those tankers.
    Anyone inside of a tanker on land, sea, or in the air can get a
    comprehensive picture of what the AWACS, Rivet Joint, and our
    other high tech sensors are seeing in a comprehensive way.
        Those are a few of the examples, Mr. Chairman, of what we
    have done as a result of this guidance.
        Chairman Levin. Thank you very much.
        Senator Warner.
        Senator Warner. Thank you, Mr. Chairman. Gentlemen, your
    presentations were extraordinary. These are extraordinary
    moments in American history, and each of you have lived up to
    them by your presentations today. I think your respective
    troops can take great pride in your leadership.
        I want to pick up with General Jumper's comment a moment
    ago about what is going on with the tankers. One of the reasons
    I mentioned the statistics of the casualties from World War II
    as compared to our losses today for whom we grieve deeply is
    the advancement of high technology. That has made the
    difference. You point out the trooper who rode up on the horse
    with the high tech equipment that enabled him to bring in a
    series of weapons systems from the B-52 to the AC-130 to the
    naval and Marine Corps aircraft coming in. This goes back to
    what our committee has been working on for several years, way
    prior to September 11.
        Therefore, I am going to ask, based on your current budget
    submissions and your funding plan, do you believe the
    Department of Defense will reach the goal established by this
    committee in the National Defense Authorization Act for Fiscal
    Year 2001 that by 2010 one third of the U.S. military
    operational deep strike aircraft will be unmanned, and by 2015
    one third of all U.S. military ground combat vehicles will be
    unmanned? Perhaps I would add not only meet, but exceed, given
    the lessons that we have learned from this historic conflict, a
    conflict which brings to mind when other members of this
    committee and myself have been in the Afghan region. We all
    come away impressed with those special operations teams of 15
    individuals who go in with 1 officer and 14 sergeants.
        With all deference to the Brigadier this morning, I think
    this may be known as a sergeant's war, so I will start with you
    on the subject of the unmanned vehicles in the Army.
        General Shinseki. Senator, I would just embellish a little
    bit on General Jumper's story. What he failed to tell you is
    that to get to that hilltop where that crew was calling in
    fire, they spent 14 hours on horseback uphill, and for anyone
    who has spent a little bit of time on a horse, that is quite an
    accomplishment. It was also 14 hours back, and then another
    move to another position. So these are not just creative and
    good warfighters, but they are also pretty tough.
        To your question, I think as you look at what the Army has
    put into its program both for the interim and future Objective
    Force unmanned vehicles, robotics are very much a part of what
    we are after. To your specific question whether we have met the
    guidance and the investments, I would like to provide you a
    more specific answer for the record. I would tell you that the
    spirit of language is very much captured in the Army's research
    and science and technology for that future Objective Force to
    achieve unmanned aerial platforms as well as ground vehicles.
        Part of this is in our efforts to field Crusader, an
    artillery weapons system that gets a lot of discussion. There
    is a 3-foot separation between the three-man crew and the
    mechanism that fires that weapons system. But in this small gap
    is the connection between that crew and the ability to fight
    that system totally through the mechanics and controls.
        Senator Warner. On that system, I think you should reserve
    responses for Senator Inhofe. No one has fought harder for that
    system, and I accompanied him out to Oklahoma, where I saw a
    first-hand performance.
        General Shinseki. I will be happy to get back to you with
    an answer on the robotics piece you asked about.
        [The information referred to follows:]

                           Unmanned Vehicles/Robotics

        The Army is making great progress to achieve congressional goals
    for unmanned ground combat vehicles. The Army and the Defense Advanced
    Research Projects Agency (DARPA) are pursuing enabling technologies for
    both unmanned ground vehicles (UGVs) and unmanned air vehicles (UAVs).
    We are especially interested in opportunities to incorporate unmanned
    systems and capabilities in the Future Combat Systems (FCS)
    Transformation initiative. Our commitment to advance unmanned
    capabilities is apparent in the FCS Lead Systems Integrator concept
    that invites industry proposals for several UGVs, an armed
    reconnaissance vehicle, a man portable soldier UGV to extend the
    perception of the dismounted soldier, and a soldier ``mule'' UGV to
    transport materials and supplies. The FCS concept also has three
    classes of UAVs, including a man portable UAV. It is envisioned that
    these UAVs will perform some missions currently accomplished by manned
    systems.

        Admiral Clark. Senator, I understand the guidance to be
    one-third deep by 2010, and one-half by 2015.
        The ground does not affect me, but the deep piece of this
    does. I think we are reaching for unmanned vehicles at speed.
    In this budget we reached out and added two Global Hawks. I
    envision moving to unmanned vehicles, and our vision is to get
    the ISR piece of this headed in that direction as quickly as
    possible.
        The definition of deep could then be interpreted to be deep
    strike, and I will tell you that I do not envision that we will
    be able to meet that time line for that. For us, it is not just
    this piece of unmanned vehicles. We are also pursuing
    underwater unmanned vehicles, but I would like to provide a
    detailed answer to you also for the record.
        [The information referred to follows:]

        The Navy plans to pursue the Navy Unmanned Combat Air Vehicle
    (UCAV-N) program at best possible speed. The technical challenges of
    developing a carrier based, survivable Unmanned Combat Air Vehicle
    (UCAV) make 2015 a realistic IOC estimate. This IOC date depends upon
    an aggressive acquisition approach for the system, but also retains
    enhancing measures such as a robust requirements, definition process,
    and the maintenance of competition in the program. The Navy approach
    will reduce the total cost of the program and ensure the best possible
    UCAV-N reaches the fleet.

        Senator Warner. General Jones.
        General Jones. Sir, I think we are moving quite
    aggressively in the aviation programs. I would have to do some
    research on the ground programs to see if we are apace, but my
    sense is that we are doing better in the air than on the land.
        Senator Warner. General Jumper.
        General Jumper. Senator, we plussed-up considerably the
    budget for the UCAV, which will be a jet-powered vehicle. We
    have your guidance, sir, and we are pressing on as quickly as
    we can to assure that we comply with that guidance.
        Senator Warner. Thank you. Now, Admiral Clark, let's go to
    shipbuilding. You are reputed to have said you envision the
    Navy will need 375 ships in the immediate future years, but
    according to our calculations, at the current budget, we may
    fall below the 300 figure before we start going back up again,
    particularly with aircraft carriers.
        I am proud that they are built in my State, but the parts
    come from the other 49 States. The point is that the ship
    established itself. As you said, it did not require any
    permission slip to stand off-shore in international waters, and
    it provides the platforms for General Shinseki's and General
    Jones' helicopters. It proved its worth and continues to prove
    it every day in this situation.
        With specific reference to the one carrier that was
    slipped, I calculate by almost 2 years in your budget, I will
    do my very best to convince this committee that we should
    restore the necessary funds to put that carrier back on
    schedule. Could you give us an overall view as to the number of
    ships? With regard to this one carrier that was slipped, could
    you speak on the desirability of restoring the budget dollars
    necessary to put it back on schedule?
        Admiral Clark. Let me first respond to the issue of the
    viability and the requirement for carriers. Every so often it
    is required to address the question, is this still an asset we
    need? One of the things we have learned about warfare, and
    which we relearn every time we get into any kind of action, is
    that air space dominance is required.
        I am very pleased with the way we have teamed with the Air
    Force and the Marine Corps in Operation Enduring Freedom. Let
    me just say, so everybody knows, that the United States Marine
    Corps has been flying attack aircraft off of our carriers
    during this mission on a regular basis. Their squadrons are
    integrated into our force.
        Secretary Rumsfeld said we were going to challenge all of
    our assumptions when he came into office. I said that when I
    got this job 19 months ago, so I had to applaud what he was
    saying. I believe that we have proven once again the
    requirement for aircraft carriers, and that roles change over
    time. For example, we never thought about an aircraft carrier
    routinely conducting operations 800 to 1,000 miles inland the
    way we are doing in this operation. This shows us how we need
    to continue to reach out for the technology that is available,
    and future aircraft operating off those decks will give us even
    more reach. First, we have to have that carrier. Second, in
    regards to the 375 number, you can't do ``4-2-1'' with a
    mythical presence. You do that with real combat capability. It
    is my belief that when you analyze the way we will need to do
    this in the future, it has to do with the mix of ships. It is
    not just numbers, Senator, as I said in my opening statement.
    It is about the right kinds of ships.
        The family of ships that I believe are going to spin out of
    the DD(X) program will include some large ships and some
    smaller ships. Those smaller ships are going to be required to
    be greater in number, because of their innate capability and
    the requirement for them to be viewed like an aircraft squadron
    instead of a unit of one when they move into an area. The
    littoral combatant ship is going to deal specifically with
    threats of the future in the near land areas, and we need that
    ship as fast as we can get it.
        We really ought to talk about the specifics of the threat
    in a closed session. I would be happy to do that, or provide
    information for the record if you would like us to do that.
        Regarding my third point, there were two issues with the
    slipping of the carrier. There is no question about it: the
    first reason was affordability. My responsibility is to
    recommend a budget that has the best balancing capability that
    I believe our total Navy needs. We did not have the resources
    to do that without taking the action that we did. We split-
    funded it through 2 years, and it slipped a year.
        So first, it is an affordability issue. Second, there is a
    lot of new technology in that platform. New technology involves
    risk, and so I do not want to say that we did it just for the
    technology. I believe that the risk will be mitigated with the
    program that we have, but I also believe it is a balance of all
    of the issues that we are competing in the 2006 to 2008 time
    frame. That is the reason I made the recommendations we did.
        Senator Warner. Thank you.
        Chairman Levin. Thank you very much.
        Senator Cleland.
        Senator Cleland. Thank you, one and all, for your service
    to our country. I think this has been a fascinating hearing so
    far. It certainly has been for me, maybe even a historic
    hearing in trying to connect the dots.
        First of all, I am saddened by the fact that we have had
    loss of life. My State has 13 military bases, so this country
    cannot go to war without my State going to war. Of the eight
    service men and women killed in the last 72 hours, five were
    based in Georgia: four Army Rangers from the 75th Ranger
    Battalion flying out of Hunter Army Airfield in Savannah and
    one airman out of Moody Air Force Base in Valdosta.
        In terms of the combat that these young men and women were
    under, I just would like to submit for the record a marvelous
    piece by Newhouse News Service, ``Wounded GI's Recount 18-Hour
    Ordeal Under al Qaida Mortar Barrage.'' It is an incredible
    description of what that combat is all about. If there is no
    objection, Mr. Chairman, I would like to have that entered into
    the record.
        Chairman Levin. It will be made a part of the record.
        [The information referred to follows:]

        Senator Cleland. Additionally, in my own experience, having
    served with the First Air Cavalry Division in 1967 and 1968 in
    an operation where General Jumper was flying aircraft into Khe
    Sanh dodging mortars and General Jones was a young officer
    trying to get to Khe Sanh like we were, one of the things that
    has brought all that back is the marvelous movie, ``We Were
    Soldiers.'' Anybody who wants to get a feel for what these
    young servicemen are going through in the mountains of
    Afghanistan ought to see that movie.
        The point is, in this high tech world where we go to fight
    wars with high technology, ultimately we have to put people in
    there, and ultimately people are our greatest resources.
    General Jumper, thank you very much for coming to Georgia this
    week and speaking to our troops at Warner Robins Air Force
    Base. Your words were powerful and very reassuring to all of
    us.
        I will say that it does seem to me, after the work that
    Senator Pat Roberts and I did a couple of years ago about the
    global reach of the United States being 129 countries, the
    combination of downsizing of the American military over the
    last 10 years by some 40 percent and the increased commitments
    of our forces by some 300 percent around the world, as General
    Shinseki has pointed out in other testimony, means we are
    stretched to the limit. We really do not have enough people to
    do all of what we are required to do.
        Recent press reports indicate that instead of the budget we
    are talking about, the Army actually asked for 40,000
    additional troops, the Air Force asked for 8,000 additional
    airmen, and the Navy and Marine Corps asked for 3,000 more
    each. Apparently, this budget only provides for an increase of
    approximately 2,300 to the Marine Corps only.
        I would like to start off with General Shinseki. General,
    if you do not get the 40,000 extra troops, what will it do to
    your ability to meet the commitments not only to service men
    and women under fire, where we are putting more service members
    as we speak in that mountain area, but to your commitments
    around the world?
        General Shinseki. Senator, thanks. Let me go back and
    recount 2\1/2\ years worth of work in this area. Two and a half
    years ago we could not recruit, and so in the last 2 years we
    have fixed our recruiting challenges. You cannot talk about an
    end strength until you get your recruiting programs straight,
    and we have done that.
        I think the 40,000 number crept up in previous testimony
    when we were talking about a two major theater war plus lots of
    peacetime requirements. As the chairman has offered with the
    QDR and the new strategy that has been visited, there are
    details now that we have to go back through and run the
    numbers. There is a big number out there.
        I do not know that the same number of 40,000 that was
    offered a year or so ago is still accurate, but what is clear,
    as I have said and the Secretary has said in previous
    testimony, is that we have an Army too small for the mission
    profile that we are performing. This was even before 11
    September. Since that time, 13,000 soldiers have deployed to
    the Central Command (CENTCOM) area of responsibility (AOR),
    24,000 Reserve component soldiers have been mobilized, and
    soldiers have deployed to the Philippines. The strain continues
    to be imposed on our people.
        Whatever that big number ends up being when our analysis is
    done, I can tell you that there is a requirement for additional
    end strength. I have offered to the Office of the Secretary of
    Defense at least a discussion of growing our end strength above
    the 480,000 authorization this year by something on the order
    of 4,000 or 5,000, which is what we can recruit this year. That
    falls within the congressional guidance of a 2-percent
    accession to the 480,000. I think that is a relevant starting
    point to a discussion that may end up in a much larger number.
    But for right now, we can achieve the increase of about 5,000
    soldiers and it would relieve a good bit of the pressure that
    both Active and Reserve component soldiers are feeling right
    now.
        Senator Cleland. Admiral Clark, is the Navy too small for
    its mission?
        Admiral Clark. Senator, it is good to be with you and see
    you today. If you look at our track history over the last 2
    years, you will see that I have been growing my Navy. I am
    looking at my number here, and 2 years ago it was projected at
    368,600. I am right at 376,000 this year. I put 4,000 in last
    year. I needed it, because we had too many gaps at sea. Last
    year, we had deployed our carrier battle groups and amphibious
    ready groups at a higher readiness state in a manpower way than
    we have at any time in the last decade. Now, after September
    11, the issue for me is how to deal with the security issues
    and anti-terrorism force protection (ATFP).
        I can make it with the end strength that I have. With the
    allocation or the permission that was given by Congress, I can
    now exceed the end strength by 2 percent, instead of the
    previous ceiling that was at 1 percent. At the present time, I
    believe that I will be able to do this until we figure out
    exactly what the new force protection baseline is going to be.
    Within the 2 percent line is 7,400 people.
        Here is the issue, though. That is an authority, but I do
    not have the resources to do that. I have to pay for it, and
    this gets into the second issue I want to address. I have
    capability within the Reserve structure, and I have a little
    over 10,000 people called up. These are people I need for force
    protection. That only exists in the Reserve structure, and in
    the new world that we are living in, we are analyzing if we are
    going to have to put in the Active Force. It is clear that we
    cannot support it long term in the Reserve structure.
        Senator Cleland. General Jones.
        General Jones. Sir, in the 1997 QDR the Marine Corps took a
    cut of about 3,000 marines, and that cut was entirely in the
    muscle. We stood down some combat units and we significantly
    atrophied our reconnaissance capabilities, and since I have
    been in office it has been my goal to try to figure out a way
    to restore that capability. We have done a lot of that in
    internal reforms, and in the last 3 years we will have returned
    4,500 marines to the operating forces by doing away with the
    some of the jobs, civilianizing if we need to keep them.
        We have had some good internal success, and as you
    mentioned, we have requested 2,400 marines, which is in the
    budget. If that is authorized, we will significantly remedy
    that shortfall that I spoke of that occurred in 1997.
        Senator Cleland. General Jumper.
        General Jumper. Sir, thank you for inviting me on the trip
    to Georgia the other day. That was a very pleasant trip.
        During the 1990s, we came down 40 percent in the strength
    of our Air Force. As part of the 2003 budget, we originally
    asked for an increase of 7,000. This is mainly due to the fact
    that we are not able to meet our commitments with our security
    forces. When you declare an elevated threat condition overseas,
    our habit was to take our rotational forces and go fill that
    need. We never anticipated the need to do it overseas and in
    the United States at the same time.
        The Secretary of Defense has rightly asked us to go back
    and look at efficiencies we might be able to find within our
    own force structure, moving missions to the Guard, Reserve, or
    to civilianize certain aspects of it. We are in the process of
    doing that, but we will not be able to continue to do our job
    with the numbers we have now, sir.
        Senator Cleland. Thank you all very much.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Cleland.
        Senator McCain.
        Senator McCain. I would like to follow up on the comments
    that were just made by the witnesses, and also add a comment
    that they are aware of better than I am. The Guard and Reserves
    cannot remain on Active Duty for unlimited periods of time,
    otherwise we would not be able to recruit people to serve in
    either of the Guard or the Reserve. I think that is an obvious
    point that needs to be made here.
        Senator Bayh and I have introduced legislation concerning
    national service. I am very pleased that the President is
    making a big issue of the opportunity to serve ones country,
    community, and Nation.
        In our legislation, Senator Bayh and I propose service for
    men and women in the military on a short-term basis in both the
    Active Duty and Reserve status in return for some compensation.
    It seems to me that with all the homeland security requirements
    that are now being borne for the military, there is not a
    requirement for some of the training that is necessary in other
    functions and missions of the military.
        Without getting into specifics, I would be very interested
    in your views about the concept of citizen soldiers being able
    to serve in both Active Duty and Guard for limited periods of
    time, and take up some of the responsibilities that clearly
    will be with us for a long period of time. We will begin with
    you, General.
        General Shinseki. Senator, we have a fairly active program
    now, where we take soldiers out of the Active component, and as
    they complete their active service, roll them into Reserve
    component units.
        It is good for those individuals. Many of our States offer
    college tuition as an incentive to join the National Guard, and
    it is also good for the Reserve component, because they get
    good experience out of 3 or 4 years of active time embedded
    into their formations, very quickly raising the skills and
    operational experience. I think there is tremendous good in
    having the youngsters from all of our formations being able to
    serve in a variety of other roles.
        I think we send back to this country great leaders,
    whatever the rank and age, because of the way they are used
    operationally and the values that they acquire while they are
    with us. They are a tremendous resource to be used in other
    roles, whether it is for homeland security or other kinds of
    responsibilities.
        I would like to still see a good many of them go into our
    Reserve component formations, because of the tremendous
    capabilities we have gotten out of that.
        Senator McCain. Well, I am sorry you could not answer my
    question.
        Admiral Clark.
        Admiral Clark. Senator, I have this little rule that I
    apply to my life. I never, ever talk to a group without talking
    about service, and so I think the concept of national service
    is fantastic. I applaud your initiative. I do not know exactly
    the way we would apply it if it comes about, but I know we are
    finding that our people sign on to the whole concept of
    serving. That is something that we give our lives to that is
    bigger than ourselves, and that is what it is all about.
        Senator McCain. Thank you, Admiral.
        General Jones.
        General Jones. Senator, I am an active believer in service
    to the Nation. I think it can take all types of service, that I
    think our young people should be provided with encouragement to
    serve the Nation in any capacity they can, military being one
    of them. I am a supporter of national service.
        Senator McCain. General Jumper.
        General Jumper. Senator, I think it is an unprecedented
    time in history to be able to capitalize on the spirit that we
    have in this Nation that we have not seen since World War II.
    The notion of national service is a way to capitalize on it,
    and I fully support it.
        Senator McCain. Thank you. The administration is going to
    be coming over with a proposal. The President has made this, I
    think very appropriately, a high priority, and we look forward
    to working with him. I hope you will be thinking about how we
    can best implement a military component.
        I think it will be difficult. I think we have this problem
    of two classes of the military. We have all kinds of issues
    that need to be addressed, but I think the realities are that
    it is going to be very difficult to increase your end strength
    because of the cost involved. We have so many security
    functions now, just in regard to homeland security, that I
    think we should actively pursue a way to handle those
    responsibilities. But most importantly, we should give young
    Americans a chance to serve, whether it be in the Peace Corps,
    Americorps, which has been an astonishing success, or help out
    with our national security needs. I think as you three have
    mentioned there is no better time in American history to pursue
    this. I thank the witnesses.
        Finally, Admiral Clark, I am disappointed that we seem to
    have a $48 billion increase in defense spending, and yet only
    three additional ships budgeted, less new ships than was
    envisioned before we had this spending increase. I do not quite
    understand that. That is very difficult for me to understand,
    particularly since we have found that the Navy played a vital
    role, as did the Marine Corps, Air Force, and the Army. You
    have young men and women on the U.S.S. Theodore Roosevelt
    proudly breaking the record for the longest period of time at
    sea by an aircraft carrier since World War II, is that correct?
        Admiral Clark. That is correct.
        Senator McCain. Then we had better look carefully at our
    match-up between assets and requirements. I think it is great
    to break the record once. I am not sure how many of them are
    eager to break it on subsequent occasions. If you believe that
    this conflict is going to be extended in nature, I am very
    worried about the strain on materiel, but mostly on the men and
    women in the Navy. I have never been more proud of them, but it
    is a terrific strain on them, and I am not sure we have the
    match-up right now. I really do not understand a decrease in
    ships, with a $48-billion increase in spending.
        I thank the chairman.
        Chairman Levin. Thank you, Senator McCain.
        Senator Reed.
        Senator Reed. Thank you very much, Mr. Chairman, and I
    thank the witnesses for their testimony. Let me associate
    myself with the remarks of the chairman and the ranking member
    in saluting the services and the sacrifice of all of our men
    and women, particularly those in Afghanistan. I had the
    privilege of knowing General Hagenbeck for 30 years, who is
    commanding Operation Anaconda, and I know our forces are being
    well-led.
        General Shinseki, I would note that the Army proposed to
    spend less in 2003 on research, development, test, and
    evaluation (RDT&E) than it did in 2002, $6.9 billion versus
    $7.1 billion. Yet, we all recognize the need to innovate, in
    fact, to pull forward some concepts and ideas that are
    scheduled far out in the future and move them forward. Can you
    comment upon this RDT&E funding situation?
        General Shinseki. Senator, we have put as much into our
    RDT&E as we had flexibility to do. Ninety percent of that goes
    to our future science and technology investments for our
    Objective Force. In balance with all the other things, we are
    trying to ensure we have an appropriate priority for the $10
    billion increase that the Army experienced. About $3.3 billion
    of that went directly in our defense health programs, much-
    needed adjustments over previous budgets.
        About $2 billion, $1.9 billion to be more specific, went
    into compensation. These improvements in pay and allowances,
    which our people tell us was important, are very well spent.
        About $1 billion of that $10 billion goes into pricing,
    fact-of-life adjustments, and costs that have to be addressed.
        About $3 billion of the $10 billion went into programs,
    finding a balance between recapitalizing those legacy systems I
    talked about and making investments in trucks that the Army had
    a longstanding requirement to do.
        About $500 million went into chemical demilitarization, a
    requirement that we have for the Department of Defense.
    Approximately $900 million went into programs, and we have put
    as much energy into research and development as we could, which
    covers about 90 percent of our future combat systems
    requirements.
        Senator Reed. Thank you, General Shinseki.
        Admiral Clark, can you also comment on your RDT&E
    situation? But first, let me associate myself with Senator
    McCain's and the chairman's comments about the shortfall in
    shipbuilding. It is somewhat perplexing to us, and I want to go
    on the record with that point. I also want to commend you for
    your emphasis on underwater unmanned vehicles (UUV), which is
    another aspect of modernization and using RDT&E. I notice that
    you have accelerated a multimission reconfigured UUV and
    upgraded some other systems which are important. Why don't you
    comment on RDT&E generally, and anything else in specifics?
        Admiral Clark. Thank you, Senator, and for your comments on
    UUVs. I believe that UUV and UAV development is going to
    transform our Navy in ways that many of us can only barely
    envision today. They are very important for our future. I do
    not have the exact numbers here on the R&D accounts, but let me
    speak to the issue of shipbuilding.
        I hope I made it clear in my opening comment that I would
    like to have more shipbuilding. I have testified before this
    committee on two occasions about my belief in the requirement
    for us to develop the discipline to create systems where we can
    better partner with industry and level-fund these accounts. I
    believe we are buying all of the ships and airplanes that we
    are involved in at the wrong end of the economic order quantity
    chain. It applies to aircraft as well as to ships.
        We do have the modernization of the two Trident submarines
    that we are paying for in this year, which fundamentally would
    not have been in the total ship number. I believe we need to
    recognize that as part of the Navy's commitment to taking care
    of what the taxpayer has already bought. This budget reaches
    out and rescores SSNs that were going to be lost to the Navy.
        Having said all of that, there is no question about the
    fact that we need to be able to move toward a higher investment
    stream into the shipbuilding business and, of course, these R&D
    lines feed those accounts.
        When we talk about where all the money went, General Jones
    and I received a $9-billion increase. We buy much of our
    hardware out of the same accounts. One of the things I want to
    focus on, which I did not mention it in my opening statement,
    is that almost $1 billion is for munitions. This is an
    investment that we had to make to ensure that we are going to
    be ready to take on future threats.
        Senator Reed. Thank you very much, Admiral Clark.
        General Jones, in a similar vein of RDT&E, could you just
    bring us up to date on the status of the two principal
    developing platforms, the Osprey and the AAAV?
        General Jones. Yes, sir. The AAAV has been found to be a
    mature technology by two major independent review panels. The
    problems associated with the Osprey mostly had to do with
    engineering fixes. We have spent the major part of this year
    addressing those issues with industry, and we have been pleased
    to be able to announce that we will return to a flight-testing
    program in April of this year. We hope that that will prove to
    be successful.
        With regard to the AAAV program, we voluntarily slipped it
    1 year in order to take care of some design problems, mostly
    hydraulic types of issues. But the AAAV program is an award-
    winning program, and clearly one of the most important
    transformational programs we have going. So, we are optimistic
    on both of those.
        Senator Reed. Thank you. General Jumper, my time has
    expired. Let me simply express my great respect and
    appreciation for your pilots and your people on the ground.
    They have done a great job. They flew us around into Bagram.
    Their ingenuity and their skill was very impressive, so please
    relay those comments.
        General Jumper. Thank you, Senator.
        Admiral Clark. Senator, may I add something?
        Chairman Levin. Please.
        Admiral Clark. Senator, our 2002 R&D number was $10.5
    billion, and our 2003 number is $12.5 billion.
        Chairman Levin. Thank you, Admiral.
        Senator Inhofe.
        Senator Inhofe. Thank you, Mr. Chairman. Let me echo what
    Senator Warner said in his extraordinary opening statement and
    the extraordinary statements made by all. I feel compelled
    right now to single out Admiral Clark and tell him that in
    addition to the opening statement he made today, he made a
    great statement to the entire world at the National Prayer
    Breakfast, when he left no doubt as to who is in charge in
    America. I personally appreciate it very much.
        Knowing the high OPTEMPO and the problems that are out
    there, I have had occasion to spend some time recently in to
    Ramstein, Aviano, Vicenza, Bosnia, and Derby. I also spent some
    time at the hospital in Landstuhl where there are people from
    all services. I have to say this just so it gets on the record:
    I talked to the young troops who were injured and to a last one
    they said they wanted to get back to their unit and they wanted
    to make a career out of the military.
        This is a change. This did not happen prior to September
    11. Admiral Clark, I remember one young lady's name, because
    she had the same name as the ship she was on. It was a young
    lady named Stennis. She was on the U.S.S. Stennis, and during a
    refueling operation she got her leg caught and a cable pulled
    her overboard.
        You look over the side of one of those carriers, which we
    have all done, and it is 77 feet down there. She fell down into
    the churning water, and it crushed both of her lungs. She was
    gasping, and between breaths she said she wanted to return to
    her unit, and wanted to make a career out of the United States
    Navy.
        All four of you have done such a great job of instilling
    that sense of patriotism that, as someone else said, has not
    been present since World War II.
        I was going to spend some time on this whole force
    structure issue, but it has been covered pretty well. I would
    only say that I think there are two deficiencies in the budget
    that came from the administration: force structure and military
    construction. Yet, I do not say that critically because we had
    so many needs, primarily modernization. I know you are living
    with the hand that was dealt you, but we are going to try to
    deal you a better hand from this point on.
        As far as the discussion on service is concerned, I happen
    to have been a product of the draft. I may be the only member
    of the Senate Armed Services Committee that openly advocates
    returning to compulsory military service.
        Let me get into a couple of other things, though. General
    Shinseki, you made several comments about the Crusader and I
    want to give you a chance to expand on them. General Jumper,
    you were very courageous 5 years ago when you admitted we were
    not giving our troops the very best of everything on the field.
    There are some strike vehicles that the Russians are making now
    that in some respects are better than our F-15 and our F-16.
        Historically, we have always had the best. That is not true
    any more, and General Shinseki, I have spent sometime over
    looking at the various options on our artillery pieces. The
    German PZH 2000 is a better system than our Paladin now, but
    not as good as our Crusader will be when we get it in the
    field. I would like you to make any comments you want to make
    about the Crusader. I consider it to be the crown jewel of what
    we are going to have. Do you have any comments to make about
    that?
        General Shinseki. Thank you, Senator. Discussions about the
    Crusader have gone on for the last couple of years, and I would
    tell you that in all the time of my service, one of the things
    we lived with throughout the Cold War was a lack of adequate
    artillery. We were both outgunned and outranged by the other
    side, unable to put precision fires where we needed them, and
    without the kind of rate of fires that would give us an edge.
        When you are living in a Cold War environment, where the
    other guy is moving offensively to your formations, you get a
    little return for having lots of less adequate artillery, but
    able to provide, because he is moving into fires, adequate
    concentration.
        Senator Inhofe. I appreciate that, and it is fully funded
    now.
        Let me get to my last question on the U.S.S. Wasp before I
    run out of time. I spent some time with Admiral Dawson and
    Admiral Natter, the Commander of the marine expeditionary unit
    and the Commander of the U.S.S. Wasp respectively, and we
    talked about live-fire training on Vieques. All of them said
    they would like to have had that. They did have inert training
    at the beginning, but they did not have the final unified
    training that they all said that they would like to have had.
        When asked, ``If live-fire is a 10, what is your level of
    training?'' They all said 5. I think that is very significant,
    because the President in his State of the Union speech talked
    about having the very best training. We are not giving them the
    best training, because there is a void there. They told me that
    they thought there was a presidential directive forbidding
    live-fire training, so we looked up that directive. It was
    dated January 31, 2000, when President Clinton said that we are
    going to hold off until a referendum.
        I have had some legal interpretations that say that is no
    longer an active directive. It is gone. It is gone because
    there is no longer a referendum, and that is how we worded it
    in the National Defense Authorization Act for Fiscal Year 2002.
    I would like to get your comments.
        Do you still stand by the letter that you sent out saying
    that you respectfully request support of a wartime modification
    of the current practice to sanction the use of live ordnance
    during combined armed training exercise prior to the
    deployment, signed by Admiral Clark and General Jones?
        Admiral Clark. Yes, sir, I do.
        General Jones. I do as well, sir.
        Senator Inhofe. It has been very confusing to all of us on
    this panel, because we get kind of passed back and forth. Here
    I was talking to those individuals who were responsible for
    training in the field. They all said they really needed to have
    it. There is no place else they can get the unified training.
    As far as your opinions are concerned, would you make Vieques
    available for live-fire training by making that option clear to
    the commanders within the Navy and your Marine counterparts at
    future deployments, if it is up to you?
        Admiral Clark. If I had the option of making it a live-fire
    exercise, then I would have to deal with all the other issues I
    have to deal with around this case, so let me just say it in a
    simple way. If it was a perfect world, and live-fire was
    available to me, we certainly would be exercising that.
        Senator Inhofe. We are going to be striving for a more
    perfect world now that we are at war, so I think that might
    happen. General Jones.
        General Jones. Yes, sir, I agree with the CNO.
        Senator Inhofe. Thank you, Mr. Chairman.
        Chairman Levin. General Shinseki, would you expand for the
    record your answer relative to Crusader? I was not sure that
    you had finished it. Please provide it for the record, because
    I do not want to take any more time.
        Senator Inhofe. Mr. Chairman, I appreciate that. I did cut
    him short because I was afraid I would run out of time on my
    last question.
        General Shinseki. The bottom line is, we need it.
        Chairman Levin. That may be the bottom line, but if I got
    your tone correctly you were going to expand on what you were
    saying. I think it is important, because it is an issue which
    has been raised in a significant way in a number of places. I
    think it is important that we have your complete answer, and I
    know Senator Inhofe had to stop because of our 6-minute rule.
    It would be helpful if you provide an answer for the record.
        [The information referred to follows:]

                                    Crusader

        General Shinseki. We recently designated the Crusader as a ``Legacy
    to Objective'' system that will be present throughout transformation.
    Crusader will significantly improve the capability of the counterattack
    corps with close supporting precision fires, state-of-the-art
    connectivity, autonomy, and improved deployability characteristics.
    These characteristics make Crusader a critical fire support
    augmentation option for the interim and light forces. In the future,
    Future Combat Systems (FCS) based units will have their own organic
    close support capability. But we will still need to rely on Crusader in
    an external support or reinforcing capacity, where it provides risk
    mitigation until we can achieve close support capability with an FCS-
    based platform. The bottom line is that for the next 30 years, Crusader
    will provide close support and external complementary fires to the
    entire force as it transforms.

        Senator Ben Nelson.
        Senator Ben Nelson. Thank you, Mr. Chairman. I would like
    to thank our witnesses for being here with us today. We are in
    the 157th day of Operation Enduring Freedom, saddened by the
    loss of life and the expectation that more service members will
    be placed in harm's way.
        As a point of personal privilege, I would like to comment
    that Sergeant Philip J. Svitak, who was in the Second Battalion
    160th Special Operations Aviation Regiment, was a native
    Nebraskan, born in Lincoln and raised in Fremont. Our personal
    condolences go to his family, friends, and comrades in arms. I
    say that having just returned from a visit to Afghanistan,
    Pakistan, and Uzbekistan, spending some time at K2, as well as
    Bagram and Kabul. I visited with the men and women in the
    military in those locations and the morale was high.
        There was also strong concern about rotation. It is my
    understanding that the rotation for U.S. Central Command
    (CENTCOM) is 179 days. That is the marker for rotation at the
    present time. Does that coincide with your estimate, because
    there is a concern when you are on 12-7 and off 12-7 but have
    no place to go, that it is a very difficult assignment. They
    are not complaining about it, but there was the question raised
    about rotation.
        Maybe the chiefs can comment in connection with rotation.
    We have heard about shortages of personnel, and there is no
    question it is a major challenge. If we wear thin and wear down
    there is a concern about the ability to continue to maintain
    the high quality of our men and women.
        General Shinseki.
        General Shinseki. Senator, I would say that we are not
    hearing the complaints at this point, but we do know that the
    mobilization numbers had to go to our Reserve component
    formations suggest that there is not enough capability in our
    Active component structure to handle all of the requirements.
        An interesting thing happens when you deploy youngsters
    operationally. If they have a very clearly defined mission and
    a purpose, they can handle what they are being asked to do. It
    has a great return and satisfaction for what they are trained
    to do and what they are then doing in the field.
        If it were less operational, I think we would be hearing at
    least questions about what is this mission about. We are not
    getting that from the places we have Active and Reserve
    component soldiers deployed today. I do not get that inquiry. I
    do not get it in Bosnia. We do not get it in Kosovo, the Sinai,
    Southwest Asia, or Afghanistan, and that mission I do think we
    need to pay attention to this, especially where it affects the
    Reserve components, because you can rotate them on an operation
    one time, and then it is a long time before you can go back to
    the same Reserve component soldier.
        Senator Ben Nelson. I would not say that they were in the
    nature of complaints, but it was a matter of concern. Of
    course, concerns untended very often become complaints, or get
    worse than that as time goes by.
        General Shinseki. We watch this closely.
        Admiral Clark. This is an issue on the Active side and the
    Reserve side for me. We are a rotational force, and we
    routinely plan for 6-month deployments. We have had a lot of
    history to analyze, and when the deployments get longer than
    this it creates an extra hardship for our people.
        My responsibility is to try to figure out how to meet the
    taskings that we have been given. My policy, which I inherited
    this from my predecessor and he from his, was that we go to the
    Active side stay at 6-month deployments, and I have said that
    we will do that if we possibly can. But, if winning this war
    means I have to extend somebody I will not blink twice. We are
    going to do that.
        Along with my other commanders, I have to keep this balance
    piece. We have to understand the dynamics of it, because my
    forces are going to deploy, come home, go in a shipyard, train
    up, and deploy again. It is an issue for us and we have to
    watch it very carefully. So far, only a couple of the units we
    have had to do that with.
        On the Reserve side, here is what I am getting in the
    field. I was in the Indian Ocean a few weeks ago, and they just
    want to know what the plan is.
        Senator Ben Nelson. Mostly that is what I found out too,
    what the service members wanted to know was the plan.
        Admiral Clark. Yes, they say ``how long am I going to be
    here? Let me know.'' We are being as honest with them as we
    know how to be, and telling them we are doing a zero-based
    review. Right now we are going through a zero-based review of
    every individual that has been called up and will communicate
    with them where we stand.
        My particular challenge is the segment of the Reserve
    structure that I do not have in the Active Force, and so I have
    to manage it carefully.
        Senator Ben Nelson. Thank you. General.
        General Jones. Sir, my comments are very much like Admiral
    Clark's. We are a rotational force. We are also a young force.
    The average age of a United States marine is around 24 years
    old. They join the Marine Corps to do the kinds of things that
    we are providing for them at present. Our highest reenlistment
    rates are in our deployed units. We are keyed, though, to the
    6-month deployment. We will make exceptions to that as needed
    in order to help prosecute the war and the campaign, and
    everybody understands that. But 6 months is culturally very
    acceptable to the recruiting and retention goals that we set
    for ourselves.
        Senator Ben Nelson. General Jumper.
        General Jumper. Sir, in the Air Force we have a bit
    different problem. When our units return, especially the
    aviation units we have deployed, they are still on tap for a
    72-hour response for the major war plans we have to respond to,
    so we cannot let their skills, the overall spectrum of their
    skills, deteriorate. We try to rotate our aviation units out on
    a 90-day period. This is something we have worked with CENTCOM.
    We are not able to do that for all of our systems, and there
    will be some of the systems we have to keep over there for 180
    days, because of the demands on those assets.
        In addition, we have to pay close attention to our Guard
    and Reserves. They cannot go over for 180 days at a time. We
    are usually rotating them out in cycles, sometimes as often as
    2-week cycles as they come in and out to be able to return to
    their jobs. We have to respect the employers that give these
    people up, and not take for granted the service that our Guard
    and Reserve provides us. Those are the complicators, but we
    work these out with CENTCOM, and it is well-understood.
        Senator Ben Nelson. I appreciate your responses. It is
    obvious that communication is the most important part of
    dealing with that concern. I commend you for your efforts and
    suggest that we all continue to communicate as closely as
    possible, particularly those that have any questions about it
    at all. I thank you very much for what you are doing.
        Chairman Levin. Thank you, Senator Ben Nelson.
        Senator Sessions.
        Senator Sessions. Thank you, Mr. Chairman. Our military has
    on occasion been accused of being hidebound and conservative
    and slow to change. I think that has been the history of our
    militaries around the world. We tend to stick with what has
    done well before, but I have to say that I do not believe
    history will record any military that has transformed itself
    better in the last 20 years than ours. You have made tremendous
    progress, and some of the things you have described in your
    opening statements represent tactics hardly even dreamed of 25
    years ago. I believe you are continuing to move in that
    direction. We would like to see it accelerated and be able to
    help you create even a greater lead than we have today.
        All of you talked about the morale of the soldiers and
    retention. It looks good. As the ranking member on the
    Subcommittee on Seapower, I visited the Fifth Fleet in the
    Gulf, and the Seventh Fleet in Japan. I was just recently in
    the Mediterranean. I agree that morale is very good and
    retention is up. Would you tell me how good retention helps
    you, what benefits that gives to any service, particularly the
    Navy, and can it save us some money that we could use for other
    things, like ships?
        Admiral Clark. It absolutely will save us money, and here
    is how good it is. I just approved a reduction in this year's
    recruiting goal by 4,000. I am not sure I am finished. The
    reason is, my stretch goal for this year is to retain 57
    percent of those first-term sailors that are eligible for
    reenlistment. That is my goal. I am at 64.8 as we speak, and
    the month of January there were 70 percent of them reenlisting.
        I must tell you, Senator, I have been doing this since
    1968, and going to the Indian Ocean to see 20,000 sailors in 3
    days. I have never, ever been prouder to be in the Navy.
        How does it save us money? Every one of those recruits
    costs me $10,000 to $15,000. The Navy is becoming more high
    tech, and that means we need to keep the people we have trained
    and their skills. I believe we are going to have to do some
    more innovation and figure out how to incentivize the process
    to pay for the skills that come to us that are required for us
    to maintain this more sophisticated, driven-by-technology kind
    of military that we want. Of course, we do not want a fair
    fight. We want to out-gun everybody and out-tech everybody.
        Senator Sessions. Thank you. I assume that is a similar
    story with all of you; good retention and savings in a lot of
    different ways. You have more people on the job and not in the
    process of being trained, too, and that strengthens your
    capabilities, does it not?
        Admiral Clark. That is true, which goes back to my response
    to an earlier question regarding end strength. I remember being
    before Congress and talking about this issue and somebody
    saying to me, ``Admiral, you could not get them in the Navy
    anyway if we gave you more.'' That is not the challenge I have.
    Without the 2 percent flexibility given us I would have had to
    close the doors completely last year. In July, I had to lock
    the door on Navy veterans who wanted to come back in.
        So it saves us money and gives us a skill-based force that
    is able to handle the technology of today and of the future.
        Senator Sessions. That is good news indeed. One of the
    things I know you have been dealing with, Admiral Clark, is
    some unfunded requirements of previous years. You are trying to
    work those off, as I understand the numbers. Correct me if I am
    wrong, but I believe you had $600 million for the 2002 budget,
    $500 million for the 2003 budget, and you are setting aside
    some additional money for 2003 so that you will not have that
    kind of unfunded requirement that carry over and diminishes the
    next year's budget. That is effectively what has happened.
    Things did not get fully paid for in 1 year, so now you are
    having to take money out of this year's budget to pay back old
    debts.
        Admiral Clark. I presume we are talking about readiness
    requirements, maintenance, parts, and so forth, is that
    correct?
        Senator Sessions. That is what I understand. You had
    mentioned earlier that there were carryover requirements that
    are eating into your funds, and the numbers I had seen were
    about $1\1/2\ billion.
        Admiral Clark. There are several carryovers. We could be
    talking about prior years shipbuilding bills, or we could be
    talking about the approach to readiness in the past. When I
    first appeared before you I talked about a $600 million
    shortfall in the flying hour account. I want to be on record
    that the 2002 budget was the best readiness budget I had seen
    in at least a decade, and I just stopped counting there,
    Senator. It would go back aways.
        The 2003 budget builds on that. We have this year fully
    funded 100 percent of the aviation flying hour account, and
    2002 was the first time we had ever done that since I have been
    in the Navy.
        Senator Sessions. So a pilot has to have so many hours in
    flight, and if he does not get it in this fiscal year you have
    to give him extra hours the next year to get him caught up?
        Admiral Clark. It is a complex matrix, but if you fall
    behind then it actually costs you more money to catch up.
        Senator Sessions. Hopefully we will get that worked off,
    and that could free up substantial money. If you could stay
    current, then we will not have that burden, and hopefully that
    can be used for ships, too. I wish we could talk more about
    ships, but my time is up, Mr. Chairman.
        Senator Warner. Mr. Chairman, could I ask a prerogative of
    the ranking member and to take a minute of my time now?
        Chairman Levin. It depends upon the other members here.
        Senator Warner. You are eating up my time here. [Laughter.]
        The statistics are the best news I have heard in a long
    time. I think your colleagues should be given the opportunity
    right now in the record to say what your goal for retention was
    for the Army, Marine Corps, and Air Force.
        Senator Roberts. I have that for the Marine Corps, John if
    you would let me say it.
        Senator Warner. Well, Commandant, you have been preempted.
    Could the Chief of Staff of the Army give the goal in
    retention?
        General Shinseki. Absolutely. Two and a half years ago,
    Senator, when I appeared here, we were struggling with
    recruiting. While recruiting was tough, retention was not a
    problem for the Army. We are retaining at 109 percent of our
    goal. We have been anywhere between 104 and 107 percent every
    year since. Now we have fixed the recruiting challenge, and we
    continue to retain at very high rates.
        Senator Warner. The Department of the Air Force.
        General Jumper. Sir, we are at 107 percent of our
    recruiting goals so far this year. We met our goal easily last
    year. On the retention side, for our first term enlistments we
    are meeting our goals, and we have seen 1,100 prior service
    people come back into the service this year, so the news is
    good all the way around.
        Senator Warner. Senator Roberts, you go ahead on the Marine
    Corps.
        Chairman Levin. You want to step out there, Senator
    Roberts? [Laughter.]
        Senator Collins.
        Senator Collins. Thank you, Mr. Chairman. Gentlemen,
    welcome, and thank you for your great service to our country. I
    particularly want to express my admiration for the young men
    and women in uniform who you all represent. Like many of my
    colleagues, I have had the opportunity to visit our troops in
    Afghanistan and throughout Central Asia. Their morale was
    extraordinarily high. I believe that to be the case because
    they know that America is completely united behind them, and I
    think that makes all the difference.
        Admiral Clark, you will probably not be surprised to learn
    I am going to use my time to talk to you about shipbuilding. We
    have a $48 billion increase in the defense budget this year,
    yet the budget provides for the procurement of fewer ships than
    last year. I am very disappointed in that. The numbers tell the
    story. For fiscal year 2001, $11.9 billion was allocated for
    shipbuilding; for fiscal year 2002 it was $9.5 billion; and for
    fiscal year 2003 we are looking at only $8.2 billion.
        Your written statement very candidly describes the problem.
    You said, ``Current aircraft and ship procurement rates will,
    if continued, result in a Navy numerically smaller than
    today's, and I think this is the important part, significantly
    smaller than would be needed to sustain the war. Such a fleet
    would be an invitation to greater operational risk and
    international instability.''
        The Congressional Research Service warns us that if we
    continue down this path we will have a deficit of 47 ships. We
    are well below what the levels are called for in the QDR. We
    know that we need an average of 8.9 new Navy ships per year in
    order to maintain a 310-ship fleet. If we are not reversing the
    decline in shipbuilding in a year when we are having a $48
    billion increase in defense spending, then when are we going to
    do it?
        I am just very concerned that we have uneconomic
    procurement rates that are increasing the cost per ship to the
    Navy and are jeopardizing our shipbuilding industrial base. In
    my judgment, we cannot continue to defer investment year after
    year, so I want to help you solve this problem. I want to ask
    you some questions on how we can start remedying the situation
    now, because we are just getting deeper and deeper in the hole.
        Let us start with your priorities for this fiscal year.
    There is some money in the budget, $74 million, for an
    additional down payment on a third DDG for fiscal year 2003,
    and last year we provided an advance procurement of $125
    million for a third DDG. How high is having a third DDG-51 on
    your priority list?
        Admiral Clark. Senator, I cannot tell you how important it
    is to me and how important it is to increase not only the
    numbers but the investment stream. I talked earlier about my
    requirement to put forward a balanced recommendation to build
    the Navy, and you know how I stacked my priorities.
        From the time I came up here for my confirmation hearing, I
    told you my first priority was going to be the battle for
    people; my second was going to be current readiness; and my
    third priority was going to be the future. We are doing
    splendidly in numbers 1 and 2. There is no question we have to
    do better in number 3, future readiness. In my opening
    statement I tried to emphasize that.
        I also testified here a year ago that I needed to have an
    investment stream, and my total acquisition investment needs to
    be--the CBO first put this number out--somewhere around $33 to
    $34 billion. For the last dozen years it has been about $23
    billion, and so I would like to represent myself on this
    because I am doing what I said I was going to do.
        I do not like the way it has turned out in the shipbuilding
    line, but I have paid the bills to make sure that we have
    people to man the Navy and that the current Navy will be ready.
    I have to figure out how to create internal savings and
    efficiencies in the Navy so that I can do something about the
    $10 billion shortfall.
        I cannot testify where the $48 billion went. I can only
    tell you where the $9 billion went that came to the Navy. Seven
    and a half billion dollars went to current readiness, including
    personnel. I do not think it is fair for me to sit here with my
    hand out begging for more money without doing what I can do
    inside the institution to make it more productive and more
    efficient. But where I am this year, I was unable to find the
    resources to add to the shipbuilding account.
        Now, if I had another $1, where would we put the first one?
    The first one would be in the DDG line. The second one would be
    for LPD and so forth. We need to understand, and I need to go
    on record, about the fact that we need $12 billion of new
    construction funds committed to the SCN line every year. We are
    trying to partner with industry. We have done war games with
    industry to figure out how to get at the right end of the
    economic order quantity line, and that is the way to do it.
        Senator Collins. Mr. Chairman, I think that the committee
    will need to address this problem. This is a serious shortfall
    in shipbuilding. If we do not start addressing it in a year
    when we have a $48 billion increase in defense spending, I do
    not know when we are going to address it. I think one of the
    recommendations that I would make to the chairman and ranking
    member is that perhaps we should take a look at the $10 billion
    reserve fund. Perhaps some of that needs to be rededicated to
    make up for this egregious and continuing shortfall in
    shipbuilding.
        Thank you.
        Senator Warner. Mr. Chairman, I wish to commend our
    colleague for her comments. You have been a steadfast supporter
    of this for all the years you have served on this committee. I
    think the $10 billion is a focal point. Remember, the President
    proposes, Congress disposes, and we have solid testimony here,
    in this hearing and in other hearings, to support augmentation
    of the shipbuilding part of the President's budget. I thank the
    Senator.
        Chairman Levin. Thank you.
        Senator Roberts.
        Senator Roberts. Thank you, Mr. Chairman. This has been a
    rather remarkable morning of testimony, an unbelievable change
    from about 4 or 5 years ago. As I recall, your predecessors
    appeared before us at about the same time of the year and said
    basically, ``steady as she goes with the defense budget.'' They
    said ``we can do this,'' and then in the fall we had an
    emergency meeting, and they indicated that they could not do
    this.
        I would remind everybody that at that particular time, with
    the exception of one service, we were having real problems with
    recruiting and retention, PERSTEMPO, OPTEMPO, mission quality,
    quality of life, distrust between our service members and
    command, and according to several studies, a disconnect between
    the civilian population and the military.
        My, how times have changed, certainly very positively in
    that regard. I want to credit you and our men and women in
    uniform for the much more positive attitude that we have. I
    think we are a much more united country and much more aware of
    the sacrifice that all of you are making.
        According to my distinguished ranking member, I am supposed
    to give some testimony on behalf of the Marine Corps. General
    Jones has indicated that the Marine Corps is a young force. The
    average age of our marines is 24, roughly 6 to 8 years younger
    than the average age of the members of the other services. This
    is due in part to the culture of Marine Corps, unique with 68
    percent of our marines being on their first enlistment at any
    one time.
        The nature of the marine 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 goals in quality and quantity for
    over 6\1/2\ years. The performance of our recruiters has been
    superb.
        This, Mr. Chairman, with the same damn ad on television for
    the last 10 years. [Laughter.]
        Senator Warner. It is working.
        Senator Roberts. Right along there with ``Gunsmoke,'' it
    keeps rerunning. Now we have a little bit of a new one, but it
    is the same thing, the marine takes his marine sword out and
    slays the dragon. The reason I want to bring that up is I
    remember the battle with the appropriators, where every other
    service had an increase in their recruiting and the marines had
    a flat line or a decline.
        All of you gave very glowing reports on retention and
    recruiting. Are you indicating that your retention budgets are
    about right? Do you need more or less?
        General Shinseki.
        General Shinseki. Senator, we are about right, but I will
    tell you that we also look very hard, when we are making
    numbers, at how we can get some efficiency back. As you well
    know, the workforce in our recruiting effort are soldiers out
    of the line, and part of our end strength balance is affected
    by getting them back. So we are looking at it.
        Our number is 180,000. We will do that this year for the
    third year in a row. That is a big number, but we have
    recruiting about right. We have gone to school on the Marine
    Corps, picked up some pointers from them, and we are very proud
    of our recruiting program. But 180,000 is a full year's worth
    of recruiting for us.
        Senator Roberts. Admiral Clark.
        Admiral Clark. As I said a few minutes ago, Senator, I just
    recently reduced my number to 50,000 for this year.
        Senator Roberts. I was a little stunned by that. That is
    amazing.
        Admiral Clark. Our target has been in the neighborhood of
    56,000 to 58,000 in recent years. We increased our recruiter
    force 2\1/2\ to 3 years ago to 5,000. There are things that we
    could do to make them more effective and to give them better
    tools, and we are looking at that now. Nobody has talked about
    it yet, but General Jones and I put together a joint
    advertising campaign, I believe for the first time in our
    history, and it played for the first time 3 weeks ago. When he
    said earlier in the hearing that this is a real team, he is
    correct, and this is the power of teamwork.
        Senator Roberts. General Jones.
        General Jones. Sir, if I could add to your compelling
    testimony---- [Laughter.]
        One point I would make about recruiting is that it is not
    just the numbers, but the incredibly high quality of recruit
    that we are able to attract, virtually all high school
    graduates, and very bright. We are seeing the level of
    education in our services rise. I do not want to speak for all
    of my colleagues, but I think I am probably correct in saying
    that the most consistent demand that we hear from the ranks is,
    ``okay, I am here now, how am I going to continue my
    education.''
        So they come to us highly educated, and they leave even
    better-educated. We celebrate this, because we believe that we
    are providing to our society at the end of an enlistment, for
    those who do not stay with us, an incredible citizen for the
    future. It is someone who appreciates the quality of their
    service and who knows their service has been appreciated by a
    grateful Nation. All of the things you have done in this
    committee to support that has been dramatically effective
    within the ranks.
        A second point I would make is that you can recruit just
    about anyone if you are a good salesman, but the strength of
    your culture is determined by your retention statistics. In
    almost 3 years in office, I found that we had been leaning too
    much on the recruiting banner, and we had not really paid
    enough attention to reenlistment, career planning, and what to
    do once we have people in the service.
        A couple of years ago we frankly had a problem with first-
    term attrition and so we focused on that. We found that we were
    not working hard enough to keep the marines that would have
    wanted to stay with us if we had just worked a little bit
    harder and listened a little bit better. We fixed that in an
    amazingly short period of time.
        We then found that the second-term attrition numbers were
    not really as good as we thought they should have been, because
    institutionally we had a sense that, ``well, we have you now,
    and you are in for 20 years.'' That is not necessarily so, and
    so we fixed that simultaneously. That has allowed us to do what
    Vern Clark said, and now we have a tremendous program for our
    career force and are doing well. But again, it is a complex and
    sophisticated program, and it is not just about numbers.
        Thank you, sir.
        Senator Roberts. General Jumper.
        General Jumper. Senator, we recruit the fewest number of
    all the other services, at about 35,000 a year. Because of the
    technical skills required, such as those Vernon Clark talked
    about, we rely on our retention statistics. We have to work
    that hard, but we are well ahead this year at 107 percent. Up
    until about 3 years ago, the Air Force was never much in the
    recruiting business. We had to learn it from scratch. We never
    had a problem making recruiting, but the robust economy and the
    airline hirings had put us in the recruiting business. We are
    up on the step now. We are making our goals, and we are proud
    of these airmen who are coming in and doing the Nation's
    business.
        Senator Roberts. I read a recent article which suggested
    that the science and technology funding goal is hindered by
    service resistance. There also was an order from the Department
    of Defense for you all to reach the 3-percent goal of total
    defense budget. Senator Reed went into that to some degree. You
    answered the question, and the reason I am bringing that up is
    that Senator Levin and Senator Warner will instruct Senator
    Landrieu and myself on the Subcommittee on Emerging Threats and
    Capabilities to say, ``don't forget the seed corn in regard to
    technology.''
        What will it take for the services to commit to and
    adequately fund the science and technology program? You have
    pretty much answered that, but I wanted to second what Senator
    Reed indicated. If we are going to maintain our lead in terms
    of technology, I think that is essential.
        The last thing that I would like to say is on behalf of
    Senator Collins. I serve on the Intelligence Committee, and the
    ``silent service'' plays an important part in regard to
    intelligence-gathering. They are a very proud service without
    any question, and the silent service is usually silent. Admiral
    Kunetzny was not so silent, and made some good points to
    prevent these ``oh-my-God'' hearings in the Intelligence
    Committee once something happens that turns into a real
    tragedy. It seems to me that we must have adequate
    intelligence-gathering, and our ``submarine service'' is quite
    unique in that regard. Could you address that on top of Senator
    Collins' remarks, because I am very worried about that. I think
    we have huge gaps in our intelligence-gathering capability
    because we do not have the submarines.
        Admiral Clark. We currently are right at the target line
    for the number of submarines we ought to have in our Navy, and
    that is 55 SSNs and the Trident force. It is the ``silent
    service,'' and we do not broadcast where they are out and about
    and what they are doing, but they are an extraordinarily
    valuable asset. This budget has one new Virginia-class in each
    year. What it has added is the advance procurement, so that we
    can get to two, and we must do so. We cannot sustain the force
    at one a year. It is not possible, so the advance procurement
    has to lead the commitment to the end year for the acquiring of
    and contracting of these submarines. That is toward the end of
    the FYDP, sir.
        Senator Roberts. You will be happy to notice you can have
    lunch. My time has expired.
        Chairman Levin. Senator Carnahan.
        Senator Carnahan. Thank you, Mr. Chairman. I want to offer
    my condolences to the families and the loved ones of those who
    were lost in combat this week. Among those we mourn is Sergeant
    Philip Svitak from Missouri, and our prayers certainly go out
    to his wife, children, parents, and family. Sergeant Svitak,
    along with his comrades, died in service to their country,
    defending us from future terrorist attacks. A grateful Nation
    honors their service and their sacrifice.
        General Jumper, your written testimony referred to the Air
    Force's innovative new medical concept, the expeditionary
    medical system (EMEDS). It rushes medics to where they are
    needed rapidly. It can care for patients affected by chemical,
    biological, and radiological weapons. Those capabilities might
    be very useful in responding to terrorist attacks and natural
    disasters within the United States. What benefits might the
    EMEDS program bring to our domestic first responders in case of
    future attacks?
        General Jumper. Senator, the EMEDS is a 20-bed portable
    hospital. We have several of them deployed around the world
    right now, and they do magnificent work with a complete
    surgical suite and the ability to care for a variety of combat
    and noncombat-related trauma. It has served us very well.
        With regard to how this might serve us at home, I think the
    potential is certainly there. In consultation with the Homeland
    Defense Organization, Governor Ridge, and the lash-ups between
    the Homeland Defense Agency and the military organizations,
    this will be something that I think we should explore. I know
    the capability of those systems, and I know that they have been
    very beneficial and productive for all of us in uniform.
        Senator Carnahan. Thank you.
        Admiral Clark, the F/A-18 has proven invaluable in our
    current war on terrorism in Afghanistan. The 2003 budget cuts
    the number of F/A-18s to be delivered next year. We need more,
    but we are getting less. The Navy's unfunded requirements list
    puts 10 more F/A-18, E/Fs, as its third priority. Why is this
    such a high priority for the Navy?
        Admiral Clark. Thank you, Senator, for asking this
    question. We have talked a lot about shipbuilding here this
    morning, and my opening testimony was about shipbuilding and
    aircraft.
        My air force today, which is also General Jones' air force
    because they are flying F/A-18s with us over there, is older
    than it has ever been in our history. The cost of operating
    these old airplanes is high, and we have data generated this
    year that shows the demand on spare parts is climbing at 9
    percent a year.
        We do not have a model that we are sure can accurately
    produce the right numbers, because we have never been here in
    our history. The F-14 is my second highest airplane in terms of
    cost per hour of operation. The F/A-18 E/F will replace that
    and reduce the cost of operation by at least 50 percent. It
    will bring great capability to our air force, which we need.
    Since the average age of our aircraft is 18 years, the only way
    to get better is to buy new ones.
        The program that we have sent forward seeks to accelerate
    the retirement of the F-14 and the S-3, and the desire is to
    bring the F/A-18 E/F online as soon as possible. We clearly
    need to be buying at as high as we can in the multiyear
    contract. That was all that we had the resources for, Senator.
        Senator Carnahan. What are you doing to minimize the risk
    of flying the older aircraft?
        Admiral Clark. We are spending more money on readiness, and
    so when I came and said, ``my priority is to keep the Navy that
    I have today to make sure that it is ready,'' that is the
    tasking I have been given from our Commander in Chief. All of
    us sat across the front when the President spoke to the Nation
    and Congress on September 20, and he looked down at us and made
    clear what our task was: be ready. The way we are being ready
    is that we are having to spend the readiness resources to keep
    it that way.
        Senator Carnahan. Thank you.
        General Shinseki, I understand that it often takes years
    before the most advanced technology gets from research and
    development laboratories to the users at places like Fort
    Leonard Wood, for instance. I am concerned that in the area of
    chemical and biological defense we cannot afford to wait that
    long. The threat of such attacks has never been more real.
    Would you describe how the Army will ensure that our soldiers
    have the most advanced technology to protect them against
    chemical and biological attacks?
        General Shinseki. Thank you, Senator. This is one of the
    areas in which we have expended a good bit of effort, and not
    only in terms of defense for individual soldiers. Investments
    have also gone into detection capabilities, both in operational
    combat theaters and in the homeland, where the ability to
    detect those dangers are often subtle and the risks expose
    large populations.
        We have invested considerable effort in regards to both our
    offensive and defensive capabilities in this arena to better
    equip our soldiers who deploy and increase our ability to
    protect our populations here at home. In fact, we have a good
    bit of sensing capability in operation around this town at this
    moment as a result of September 11.
        We continue to put tremendous effort here, but there is
    more to be done.
        Senator Carnahan. Thank you. I would like to insert the
    balance of my remarks in the record. My time has expired, Mr.
    Chairman.
        [The prepared statement of Senator Carnahan follows:]
                  Prepared Statement by Senator Jean Carnahan
        Thank you Mr. Chairman.
        I want to express my condolences to all the men and women in our
    Armed Forces for the loss of their colleagues.
        I want to offer my condolences to the families and loved ones of
    those who were lost in combat this week.
        The Nation mourns with you.
        The death of these soldiers during combat this week is a sober
    reminder to all Americans that we are at war, and that war is a deadly
    and serious business.
        Among those we mourn is Sergeant Philip James Svitak from Neosho,
    Missouri.
        Our prayers go out to his wife, children, parents, and family.
        Sergeant Svitak and his comrades died in service to their country
    defending us from future attacks of terrorism.
        A grateful Nation honors their service and their sacrifice.
        We are here to discuss defense authorization requests for the
    coming fiscal year.
        We will also examine the budget's ability to fulfill our future
    needs.
        Our military was already in a state of rapid change prior to
    September 11.
        Events of that day, and our current war against terrorism, only
    added greater urgency to the need for military transformation.
        Transformation means shifting to a lighter, leaner, and more lethal
    military. In other words, a military with a smaller footprint but
    bigger capability.
        This committee will work closely with the leaders of our Armed
    Forces to fulfill transformation's intent.
        I am particularly interested in five ongoing initiatives:
        1. Expanding the capabilities of our strategic airlift so we can
    place weapons, equipment, and our forces on the ground anywhere at
    anytime;
        2. Continuing to foster Unmanned Combat Aerial Vehicle (UCAVs)
    technologies. UCAVs bring overwhelming lethality to the enemy while
    removing our pilots from risk;
        3. Investing in technologies that detect and deter the use of
    weapons of mass destruction against our fielded troops and our citizens
    at home;
        4. Creating robust homeland defense programs, which prevent attacks
    upon our soil, and which provide lightening-speed medical response to
    attacks on our Nation; and
        5. Ensuring we have the aircraft needed to perform short- and long-
    range bombing missions. Such missions have proven extremely valuable
    during the war on terrorism.
        A casual observer of these proceedings might think this is about
    spending money on ``things''--tanks, bombs, aircraft, and ships. But I
    read your written testimony and I know you think otherwise. You think--
    and you are right--this hearing is about people.
        This hearing is about that 19-year-old soldier who is thousands of
    miles away from his family and is--as we speak--engaged in combat in
    the mountains of Afghanistan.
        He does not want to be there, but he believes in his country.
        He will do anything we ask of him to defend it.
        We are telling him to fight.
        We may be asking him to die.
        We must make sure everything we provide him works to ensure he
    complete his mission, quickly, effectively, and God willing, safely.

        Chairman Levin. Thank you, Senator Carnahan.
        I would like to ask each of you about your unfunded
    priority lists. Did any of you receive any instructions,
    guidance, or any limitations placed on the content of your list
    by civilian officials in the Department of Defense?
        General Shinseki. No, sir, I did not.
        Admiral Clark. No, I did not.
        General Jones. I did not, sir.
        General Jumper. I did not, sir.
        Chairman Levin. General Jumper, Air Force witnesses have
    previously testified the F-22 program is going to be event-
    driven rather than calendar-driven. In other words, the F-22
    would have to meet certain criteria and pass certain tests and
    gates before the next step would be taken in the process.
        Can you give us assurances that the Air Force is not going
    to cut corners in the development or the operational testing
    stages, and that the F-22 will start operational testing only
    when there is high confidence that the F-22 will be able to
    successfully complete operational testing?
        General Jumper. Senator, I give you my personal assurances
    and hold myself personally responsible as the action officer on
    that very issue. I am reviewing this twice a week, including
    the burn-down rate on the tests, and I can tell you we will not
    put an airplane in the air that is not safe and ready.
        Chairman Levin. I am going to ask each of you a question on
    funding for missile defense programs. Were you asked to express
    your views on the funding for missile defense programs relative
    to other priorities in the defense budget for 2003? General
    Shinseki.
        General Shinseki. Mr. Chairman, I am not aware that I
    provided that kind of input, but there are pieces of missile
    programs such as PAC-3 that we participate in because it has
    primary interest to the ground force. As to an overall program,
    I do not believe I provided that kind of input.
        Chairman Levin. Admiral Clark.
        Admiral Clark. I do not recall a discussion that I have
    been involved in where we sat down and discussed missile
    defense trade-offs.
        Chairman Levin. General Jones.
        General Jones. I am not on the budget lines. No, sir.
        Chairman Levin. General Jumper.
        General Jumper. No, sir.
        Chairman Levin. General Shinseki, relative to the Crusader
    artillery system, please give us the detail for the record that
    you were beginning earlier. In general, could you very quickly
    give us an idea how this system fits in with your plans for a
    more mobile, lighter, and lethal Army? That question is being
    raised, it seems to me, by a significant number of people, so
    try to encapsulate that issue for us.
        General Shinseki. I will, Senator. I think those that
    question the Crusader's utility tied to it sort of a Cold War
    construct, and primarily focus on its weight. I would offer
    that its weight is problematic for me as well, since I have
    spent the last 2\1/2\ years trying to get away from that Cold
    War weight that we carried into this century as an Army.
        But here is what is not Cold War about the Crusader.
    Throughout the Cold War and for most of my professional career,
    as I started to say earlier, we have been outgunned by all of
    our adversaries in terms of range, the ability to put precision
    fire on target, and the ability to move those artillery systems
    so they were not subject and vulnerable to counterfire, which
    is very much a part of what ground artillery combat is all
    about.
        In Desert Storm, we also found out the artillery pieces we
    had could not keep up with our tanks and our Bradleys, so the
    pace at which we attacked often slowed to allow the artillery
    to catch up. We needed to fix that.
        Following Desert Storm, we took 25 percent of our artillery
    pieces and retired them. They did not serve our purposes, and
    that was the amount of risk we could afford to take. Twenty
    five percent of our inadequate artillery we took out of the
    force 5 to 7 years ago, and then put those savings towards
    future capabilities that Crusader now offers: the ability to
    out-range our adversary; the ability to have precision fires on
    which we can fire at more times the rate of fire of our
    opponents, with greater precision; and the ability to once
    firing, move out from the return fires and keep up with our
    tanks.
        We have also taken 25 percent of our tanks out of our
    formations, betting on the outcome that improved artillery will
    shore up this risk. We accept it. We retired 25 percent of our
    infantry-carrying vehicles for the same reason, so there is a
    certain amount of risk we have already invested into our
    formations that we expect Crusader will provide us the return
    on.
        Of the Cold War descriptions, perhaps weight is the one
    thing people focus on, but the Crusader is intended to go into
    combat with our counterattack corps, which comes by surface
    anyway, and that is how they would arrive in-theater.
        When I became Service Chief of the Army, the Crusader was
    rated at something like 55 or 60 tons. We put it on a slim-fast
    diet. It is now coming in at about 40 tons. We hope to get it
    even below that. It will still float into operation with a
    counterattack corps that comes by sea, but at this weight it
    can fly in C-5s and C-17s. Four of them would have covered
    every inch of Kosovo. A firing platoon will outfire one of
    today's batteries, so in terms of savings it will provide us
    greater capabilities at reduced cost.
        Chairman Levin. Thank you.
        Senator Warner.
        Senator Warner. I think that is a very important response
    to an issue that is before this committee, and that testimony
    is helpful.
        I can remember my father in World War I talking about the
    French 75s, and how it outgunned what we had. The Germans had a
    wonderful weapon that they used and kept in service for a long
    time.
        I commend you for trying to tackle this tough issue and
    bring it into the confines of a rapidly-moving, transformed
    Army. It is not easy, General, but I think it is essential that
    this future Army have an artillery element, because it has
    always been there, and it always will be needed. We do not know
    today what faces us in the future.
        Earlier, Senator McCain asked a very important question
    about national service on a broad range of issues, and I
    quickly looked over some memoranda I had here on the subject. I
    have to do a lot of study myself on this issue before I am
    prepared to make decisions. Having had an opportunity to hear
    your other three colleagues, do you wish to augment your answer
    a little bit?
        General Shinseki. I may not have put as fine a point on
    Senator McCain's question. I applaud the effort to offer
    American youth national service.
        I am also challenged with recruiting for the Army, and that
    is a responsibility I have that seems to be going well right
    now. But I think this is a very special time in our history,
    and the response of American youth has been unbelievably
    superb, given this Chief's ability in the month of January to
    assure the force that we will make our recruiting numbers of
    180,000 in September of this year. Normally, we recruit up till
    August and September, and it is the last weeks before we know
    for sure. We have already met that recruiting target, and we
    can declare recruiting a success this year.
        Senator Warner. While I have you, General, earlier this
    week we received the testimony of General Schwartz, our CINC in
    the Korean area of responsibility (AOR). I talked to him
    extensively privately, and then again in open session. We
    basically had the same discussion, in private and in open
    testimony, that there is a problem with regard to either the
    perception or the reality about Army personnel being assigned
    to that AOR. There are astonishing numbers of individuals who
    are faced with the decision, a family decision, between their
    career in the Army and a tour there. They have to forfeit their
    Army career and go to the civilian life versus taking a career
    there. You are familiar with that.
        General Shinseki. I am.
        Senator Warner. I asked General Schwartz if he would
    prepare for me, which of course I will share with the
    committee, a proposal to remedy this, and to do it in
    consultation with you. It would be my hope and my expectation
    that the two of you would have a joint approach to that
    solution, because that problem has to be solved.
        The Korean peninsula is an area where we have the largest
    number of American troops in place overseas where we frankly
    have less direct or indirect support from allies, as opposed to
    the brilliant operations now going on in Afghanistan, where we
    have a number of allies involved. In the Korean AOR, it is
    pretty much the South Koreans and ourselves there. I would like
    to have those recommendations addressed by this committee in
    this authorization cycle to see whether or not we can step up
    and help you with a solution.
        General Shinseki. Thank you, Senator.
        Senator Warner. We need not expand on it now, but I would
    hope that you and General Schwartz could work on that together.
        General Jones, I was struck by your comment on education. I
    have said so many times I would not be here had it not been for
    the GI bill. The continued education opportunities in the
    services are just remarkable. As a matter of fact, last night I
    happened to be seated next to General Kernan, the Commander in
    Chief, Joint Forces Command, and he explained to me that his
    education was basically that he came in through the enlisted
    program and got his commission without any college education.
    He quickly studied nights and weekends to get his college
    degree while on Active Duty.
        Our colleague from Georgia spearheaded, and I think
    everybody on the committee joined him, a remarkable enhancement
    of the GI bill in our last authorization bill. It is a
    transferability provision to family members if the service
    person is not able to utilize their benefits.
        Anything further in the GI bill this year that would help
    you? Obviously, your recruiting is going very well, and that
    was one of the inducements, but any changes that any of you
    feel is necessary?
        General Shinseki. I am not aware of any, and I agree with
    Senator Cleland and respect his interest in the
    transferability. We have had discussions on that.
        Senator Warner. Any of the other Chiefs?
        Admiral Clark. I am a great believer that in order to
    sustain our victories in the battle for people we have to have
    a set of incentives, and I believe transferability is one such
    incentive that can be of great value to us. I do believe it
    needs to be structured in a way that helps us with our career
    force, as opposed to a broad application.
        In other words, I need all the tools I can get to fill all
    of the hard jobs that I have, and anything that can be done to
    make that a reality will be a plus as we shape our force for
    the future.
        Senator Warner. Mr. Chairman, I see my time is up. I have
    two other questions, but I will await my next turn. I want to
    talk about medical care for our active and retired individuals.
        Chairman Levin. Given your recruitment success, why is
    advertising at great expense necessary these days, on the TV
    particularly? General Shinseki.
        General Shinseki. We need it to go to the television
    advertising that we currently have, and really that ad is about
    one-third on television, Senator. It ends with a logo that
    appears and a stamp that says ``goarmy.com,'' and it really
    encourages our youngsters to get on the Internet.
        Chairman Levin. In general, though, why do we have to have
    an advertising budget of the size we have now if our
    recruitment is ahead of our goals?
        General Shinseki. As I said, we constantly review how much
    we spend in this arena, and it is cause and effect. We purchase
    these advertisements some time ago. They are beginning to show,
    and we are getting the response. We will go back and take a
    look.
        Chairman Levin. Would you do that? Admiral Clark.
        Admiral Clark. I don't know exactly what my number is. I
    believe is $76 million, but I do not have it with me to verify.
    Of the thousands of line items, I do not have it right here. I
    will get it for you. We are advertising less on television. Our
    strategy has been to push this, and we are using very short
    spots. It is all appealing to the issue of lifestyle of
    service, and then we are taking them to the web.
        The web this year has enjoyed under this new approach over
    120 percent increase, but again I will get that number for you.
        Chairman Levin. If you could take a look at you advertising
    budget as well, and tell us whether or not you think it is
    still justified, given the recruitment successes, I would
    appreciate it.
        [The information referred to follows:]

        Admiral Clark. As we enter May 2002, Navy recruiting is
    experiencing a level of mission accomplishment not seen since the early
    1990s, with 9 consecutive months of achieving both the monthly
    accession goal and the Delayed Entry Program goal. While the efforts of
    our recruiters in the field cannot be overstated, our advertising
    strategy is key to this success. We are extremely pleased with the
    performance of our advertising agency, Campbell-Ewald, based in
    Detroit, Michigan.
        Campbell-Ewald has been under contract with the Navy since
    September 2000. Their innovative approach and commitment to the Navy's
    core values and service have led to a tremendous partnership that
    continues to grow. As you may know, Campbell-Ewald rolled out the
    ``Navy Accelerate Your Life'' advertising campaign in March 2001,
    designed to attract young men and women of all races and across the
    spectrum of diversity. Results have been exceptional.
        In its partnership with Campbell-Ewald, Navy has prioritized its
    advertising effort in the Internet and radio markets because these are
    key media avenues for reaching our target audience. Television
    advertising is viewed as a support medium. In fact, you may not see
    many Navy commercials on television because of this targeted approach
    (unless you are a frequent viewer of MTV). The common theme in our
    advertising is a call to action, intended to pique young people's
    interest and guide them to Navy recruiting's web site, www.navy.com.
    This has proven to be a highly successful strategy, as evidenced by the
    level of activity we are seeing on navy.com (a 159 percent increase in
    the number of unique visitors per day, over the previous site).
        I know that one of your interest areas is why we need to retain the
    size of our advertising budget when we are meeting our recruiting and
    retention goals. While we talk about having an all-volunteer force, we
    still must ``recruit'' a large majority of the people we access. Our
    research shows that young men and women are less likely to consider
    military service if they have not had the exposure that comes from
    advertising. The advertising investment we make ensures continued
    exposure to the Navy ``brand'' and pays off in recruit quality (high
    school graduates and the number of prospective recruits who score in
    the upper half of the Armed Forces Qualification Test) at a time when
    the youth propensity to enlist in the armed services remains below 20
    percent.
        While we are committed to maintaining an advertising budget that
    grows with the national media inflation rates, this year we have
    leveraged our advertising effectiveness and reduced our recruiting
    force by 10 percent--500 recruiters. In effect, we are balancing our
    commitment to growth in advertising with a reduction in recruiting
    force. Harvesting this benefit we have sent those recruiters back to
    sea to other high priority jobs. As we proved so far this year, being
    able to achieve goal for 9 consecutive months, with a reduced
    recruiting force, reaffirms that advertising is a key to maintaining
    the awareness of target groups and to be able to recruit the highest
    quality sailors.

        General Jones.
        General Jones. Sir, we are also doing less on television.
    We passed up the Superbowl, for example, which is not something
    we usually do, but we have taken our funds and allocated them
    in different ways to take advantage of the means of
    communication that are available that were not there 5 or 6
    years ago.
        We find, for example, that the Marine Corps presence at
    NASCAR events is extraordinarily fruitful in terms of interest
    of people who come by our booths. I do not think our budget is
    growing, but I also think that we have spent a lot of time
    building in our culture a recognition that the recruiting is a
    valuable asset. In other words, the skill set is recognized and
    is conducive for promotion and recognition.
        I think that our recruiters are first and foremost
    wonderful role models for our young people, and fundamentally
    what we want them to experience when they talk to a recruiter
    is a sense of admiration and a sense of an identity that at
    some point they would like to be like those marines. In the
    case of the Marine Corps, in order to provide an incentive to
    the top quality of our force to do that, you have to build a
    culture within the Marine Corps that says recruiting is
    important, and if you succeed in recruiting, your career will
    be enhanced, and we have done that.
        This is certainly a bow wave we are riding right now, but
    at the back of every wave there is always that trough, and we
    just want to be ready when the trough comes.
        General Jumper. Mr. Chairman, again, we are pretty new in
    this business, but we found great success in a series of very
    short, hard-hitting spots. The same TV generation gets
    attracted by that, but as General Jones says, the real proof is
    when they come in and go face-to-face with a recruiter. That is
    what we are really trying to get them to do, so we will,
    believe me, look at this TV budget. I agree with you, the
    prices are high on this, and we will adjust accordingly to our
    success.
        Admiral Clark. Sir, may I follow up? We have received
    unprecedented free advertising this year.
        Chairman Levin. That is not the part I am referring to.
    [Laughter.]
        We are grateful to whoever provided that, but there is also
    a real cost here. I would like all of you to take a look at
    your budget requests, given your recruitment successes and your
    unfunded priority lists. The Army has as large an unfunded
    priority this year as last year. The Marine Corps is higher.
    The other two services are lower, but in light of the unfunded
    priorities, a number of which have been mentioned here this
    morning, take a look at those budgets.
        General Jumper, let me ask you about Operation Noble Eagle.
    The budget request, $1.2 billion to continue combat air patrols
    (CAPs) over the United States into 2003. Can you tell us
    whether or not, in your judgment, the current threat warrants
    maintaining these combat air patrols at the current level, and
    also, are there other ways that we can protect against the
    threat that had such a devastating effect on September 11?
    Finally, as part of the same subject, what impact is
    maintaining these air patrols having on your ability to train
    and deploy your tactical air forces for other missions?
        General Jumper. Thank you, Mr. Chairman.
        Senator Warner. Mr. Chairman, could they also be allowed to
    respond to that question in classified form? I think there are
    two parts to that very important question.
        [The information referred to follows:]

        [Deleted.]

        General Jumper. Mr. Chairman, thank you for that question.
    We estimate right now we are spending about $50 million a week
    in the total effort. This is just within the Air Force. This
    does not include significant ground forces that are at work as
    well to fly the CAPs over the United States, including 5,000
    tanker sorties; our air surveillance aircraft; the people that
    are on alert backing them up; and all the effort that goes into
    that. It is about 11,000 people and 250 airplanes tied up each
    and every day in this effort.
        The Secretary of Defense has asked us to take a look at how
    we might fulfill this with a combination of alert aircraft, and
    that is under study right now. General Eberhardt, the Commander
    at NORAD, has brought forth a proposal that is currently being
    studied at OSD. To directly answer your question, yes, I think
    there is a way we can do this job more safely.
        I think this whole problem is better addressed at the other
    end of the problem, the actions we have taken in the airports
    to ensure security on the airplanes. We want to take care of
    this problem long before you would have to deal with it in the
    air by assuring that terrorists cannot get access to the
    cockpits and the marshalls that are on the airplanes. I think
    on the first two questions we can do something that is more
    efficient.
        On the impact on our rotational forces, it is significant.
    The people that are up there flying these CAPs today are the
    ones we are supposed to be training and getting up to take the
    next rotation, so it does have an impact. It creates a training
    void that we have to scramble to make up within our rotational
    force, and this change in venue will help correct that.
        Chairman Levin. Thank you. Keep us informed and as you do
    that study include us in that effort because we obviously want
    that safety. Again, we want safety and protection against that
    threat, but there are ways of doing it at a lower cost and with
    less impact on our other commitments. We surely want to be able
    to consider that as well.
        General Jumper. Yes, Mr. Chairman.
        Chairman Levin. Senator Warner.
        Senator Warner. Mr. Chairman, I thank you for asking that
    important question, which is asked of all of us as we travel in
    our respective States. But, of course, our primary reason is to
    protect Americans in every way against the unknown and
    uncertain terrorist threats which are manifold.
        I think our President, his Cabinet, and others have been
    very careful in warning us against threats from time to time,
    but never in our history have we ever experienced this type of
    threat to the American public here at home. Therefore, I
    realize it is costly, and it has made for a stressful situation
    on your rotation base, but I think it has been vital in helping
    restore public confidence in civil aviation. Civil aviation is
    in many respects the spoke around which our economy revolves,
    and we have to help it.
        General Jumper. If I might comment, Senator, every day we
    intercept the odd Piper Cub or twin-engine airplane that strays
    off-course and set them right again. I agree with you, sir.
        Senator Warner. In my State, National Airport has suffered
    probably more than any other airport in the Nation. I think the
    administration has done its very best to bring the level of
    flights back up. We are back to over half of what we were
    before September 11, but the repercussions on the economy have
    been devastating in our State.
        But even with the reinstitution of the flights, they are
    not as filled as they once were, because a number of Americans
    for personal considerations are saying, ``well, it is not that
    far to drive our car, so let us just take the car, rather than
    the air transport,'' and that exacerbates the overcrowding we
    have on our highways today. Therefore, I am glad that the
    administration is looking at it, and I commend you and the
    other military people who participated in this very important
    homeland defense initiative.
        Chairman Levin. Just on that subject, before you leave it,
    I think you mentioned, General, that there may be an
    alternative, which may give us some real protection but without
    some of the costs and impacts. One possibility you mentioned
    was having a more alert status. Could you expand on that
    possibility, which would give us the protection we need?
        General Jumper. The details of the proposal, as I said, Mr.
    Chairman, are under study, but essentially it puts us on an
    alert posture in about 20 locations around the United States.
    It enables us to respond within certain timed criteria to any
    event that we would be cued to by the FAA.
        It also includes, and we have already done this, by the
    way, netting the radars of the FAA so that the North American
    Air Defense Command, General Eberhardt, and his command can see
    the internal pieces of the air space in the United States that
    before September 11 we were not looking at. We were looking
    outward, in a long tradition of strategic air defense. That
    part has already been done, and will continue to be improved so
    that we can respond more quickly to these unknown events when
    cued by the FAA.
        The third part, Mr. Chairman, is the part that we will
    continue to have trouble with: the small, light aircraft flying
    at low altitude below the FAA radars and not squawking with the
    Identification Friend or Foe (IFF) system. That will continue
    to be one we will have to worry about.
        Senator Warner. I am always concerned about the medical
    field. My father was a doctor. As a matter of fact, General
    Shinseki, he served in World War I in the trenches as a young
    doctor. The medical treatment we offer our active and retired
    military personnel is of great importance. Could each of you
    give your own professional and personal views as to where we
    are? Hopefully, we are steadily improving.
        The TRICARE for Life program has been an enormous benefit.
    The mechanics and the gears of the program are not meshing
    completely as they should, but it will take time to work out
    some of that down to the level where care is delivered. But I
    think it is a step forward. This committee, working with the
    House Armed Services Committee, spearheaded the effort to
    provide TRICARE for Life.
        It was not the Department of Defense, I have to say, it was
    the committees of Congress. We keep a watchful eye on it. If
    you would, please give us a short summary of where you see that
    important service to both active and retired today. Are there
    any shortfalls we should take into consideration?
        General Shinseki. Thank you, Senator. Compared to where we
    were 2 years ago, when we first met to discuss health care, I
    do not hear the same complaints. I think our people understand
    we have made a major step forward here in providing for their
    health care both while they serve, and even more importantly,
    after they have retired.
        A lot of the mechanics need to be worked out, and we
    continue to work that. From time to time we hear suggestions as
    to how to make that better, and we act on that, but I do not
    get the concerns expressed as I go around that we were getting
    even a year ago.
        Admiral Clark. Just a few weeks ago, there was a large
    TRICARE convention sponsored by OSD, and I was given the
    opportunity to speak. In preparation, I went to the Master
    Chief Petty Officer of the Navy and said, ``give me an update
    of what are you hearing in the field.'' He said that the
    problems have largely disappeared off the scope, and great
    progress has been made.
        Out of the $9 billion commitment to medical care we
    received this year, $2.8 billion was in this category, so there
    is a significant commitment of funding to this area and the
    results are visible.
        General Jones. Sir, I agree with the CNO. The Navy doctors
    and corpsmen are all on Admiral Clark's side of the house, but
    we are the beneficiaries of that. I concur we have seen a
    dramatic turn around, not only for the care of our marines, but
    for their families and our retirees as well, and we thank you.
        General Jumper. Mr. Chairman, I think that the number of
    complaints we hear has certainly gone down. I continue to worry
    that $2.8 billion has to be put into a program that was that
    far out of its budget. I watch large amounts of money being
    dedicated to TRICARE, and we pay a lot of attention getting our
    commanders involved in making sure that these gears mesh
    together properly down at the local level, and that the
    specific kinds of specialists at some of our remote bases,
    especially our northern tier bases, are made available.
        These are minor problems as far as the whole program, but
    they have a profound impact on the attitude of our people when
    we cannot provide the services that the system promises. We
    continue to work this problem down at the commander level, and
    continue to make improvements, but I agree with my colleagues
    that the system is improving. It is getting better, but it
    still remains an item of very serious concern to me.
        Senator Warner. Another personnel issue which has been
    longstanding, like TRICARE for Life, is the issue of concurrent
    receipt. In the final moments of Senate floor debate on the
    conference report, Chairman Levin and I, together with Senator
    Reed and Senator Hutchinson, spoke of that issue. We are now
    beginning to look at it again and see what we can do. We may
    not be able to do it all at once, but we have to determine what
    we can do on that issue now and in the foreseeable future to
    resolve it.
        I will not call for comments now, but I invite you to put
    anything in the record that you feel is pertinent to this
    issue.
        [The information referred to follows:]

        General Jumper. The Air Force supports the Department's position.

        Senator Warner. I want those who are following this hearing
    and who are interested in that subject to know that we feel it
    is an inequity that has to be addressed. The dollars involved
    are very significant, and we are not going to give up. I just
    mentioned the four, but there are others on the committee
    working this issue.
        I have one last question, and then I will defer to our
    chairman. My last question concerns the old adage that the
    military is always preparing to fight the last war. Well,
    transformation has changed that. I think it would be
    interesting if each of you gave two examples of what your
    departments have learned from the current operation, which I
    think is going very well. We have achieved a very large measure
    of success in the Afghan AOR.
        We have not apprehended bin Laden, but we will get him. We
    have not captured Omar, but we will get him. In the meantime,
    we are fighting, dying, and bleeding, but we are carrying out
    the orders of the Commander in Chief.
        What have we learned from this conflict that you have
    immediately incorporated into your current doctrine in your
    respective departments?
        General Shinseki. Sir, I think much of it has already been
    discussed, and that is the capabilities resident in all four
    services here that come together quite well when you have
    great, creative, and tough people on the ground with a sense of
    innovation who can ride in on horseback and direct the fires of
    a B-2.
        The other piece is a reinforcement of the fact that, as
    good as our technology is, we ultimately have to deal with the
    ground environment where you force the other guy to mass. Then
    all the great technology we have invested in is brought to
    bear, but it is a complement of all our capabilities that must
    work together. As Jim Jones and I agreed 2\1/2\ years ago, none
    of us have ever been in an overly crowded battlefield.
        General Clark. It is really hard to just do two, but I
    talked earlier, as did General Jumper, about the incredible
    coordination and integration with the Air Force and the air
    commander and how that is working. Let me blow right by that
    and mention jointness. I was running short of a particular type
    of munition. I picked up the phone and called John and said,
    ``John, I need help.'' He said, ``how many do you need?'' I
    told him, and he told me I would have them in the morning.
    That's how well the joint machine is working.
        But the most important lesson is that many times we use
    measures of effectiveness that I think miss the mark. This
    operation really drove the point home to me. My new favorite
    word is persistence. It appeared a couple of times in my
    opening statement. If we just talk about how many bombs we
    dropped, we miss the point. The level of activity for pilots
    operating off of our carriers today is close to what it was
    when we started the offensive operation, and the reason for
    that does not have anything to do with how many bombs we are
    dropping. It has to do with persistent combat power being
    available, and when you have 4,000 or 5,000 Americans on the
    ground, that is the order of the day.
        What we have found, working hand-in-hand with the Marine
    Corps and the strike fighters in the Air Force, is that we have
    been working and coordinating our resources to make sure we
    have somebody on the scene. One of those young folks on the
    ground can say, ``I need help right away.'' It is about
    persistence, and it has been going on at ranges that we never
    thought possible before. This whole conflict was about target
    opportunity and time-critical targeting, as opposed to a big,
    long, strategic target list that you planned out for months in
    advance. The ability of our people to execute a mission like
    that has been the biggest learning experience for me.
        General Jones. It is difficult to count just two, but I
    would say the first is a relearned experience, and that is the
    value of the men on the ground. You contrast the air campaign
    in Kosovo against the air campaign in Afghanistan, and the
    force multiplier certainly included the technology. But the
    real force multiplier was the soldier, sailor, airman, and
    marine on the ground. That is the harness. That is the
    multiplier that says we can, in a much shorter period of time,
    take all of this technology and apply it with great precision
    and bring about the end results that the Nation wants
    effectively and safely.
        We should be careful in the future, because we should never
    get to the point where Americans in uniform on the ground are
    going to be a disposable asset that will not be needed in the
    future war fight. I do not believe that.
        We can celebrate that we do not see the horrific casualties
    that Senator Warner mentioned in World War II. In the 20th
    century, the coin of the realm was that God was on the side of
    the big battalions. If you came to the fight with more people,
    technology, fire-power, boats, and ships and had competent
    leaders and brave soldiers, sailors, airmen, and marines, you
    could win the fight.
        We are still going to need that in the 21st century, but
    the good news is that because of our incredible asymmetric
    advantage, which we should keep as a Nation against any future
    adversary, we will be able to do things with much smaller
    units. The battalions of the 21st century will do things that
    the regiments of the 20th century did, and we are seeing that
    in Afghanistan.
        The other point I would make is that the four of us
    represent an incredible range of assets resident within our
    services. This Nation has global responsibilities. It is
    responsible for leadership and for celebrating the inexorable
    rise toward true freedom for all people. At various points in
    our use of the military we are going to call on different
    assets. There will be times when sea bases will be prime and
    land bases will not. We have to be very careful as we go along
    in how we invest to make sure that our interests are well-
    understood, and that we understand the power that all of these
    capabilities together bring.
        This is not to say that the Army, Navy, Air Force, or
    Marine Corps should ever be as one. The cultural diversity that
    we bring to the battlefield is in itself a force multiplier. In
    a sense, we have many things that we are doing now that we are
    just slack-jawed over: the distances, ranges, precision,
    responses, and lethality. But the real good news is that we
    have young Americans motivated in the 21st century to do things
    for the same reasons, Senator, that your father, you, and
    others like you did in the 20th century. That is incredibly
    good news for the country.
        Thank you.
        General Jumper. Sir, my number one lesson is that we were
    wrong about this generation of Americans, who we have been
    taught are not as respectful, committed, loyal, or dedicated as
    previous generations. I was down at Lackland Air Force Base for
    graduation ceremonies the week before last. These kids come out
    of the field, having spent many days learning the rigors of
    living in tent cities as a lot of us do, and for the first
    time, as they graduate, they are called airmen instead of
    trainee by their training instructor. For many of them it is
    the first time they have really had a chance to achieve.
        You go around and shake their hands and ask them if they
    are proud of themselves. Five or six said, ``not only am I
    proud, sir, but this saved my life. I have been given the
    opportunity to achieve something I would not have had before.''
    I am proud of the opportunity to take a generation of
    youngsters who have not had the opportunity to be proud of
    themselves and give them that chance.
        On the technical side, we could go on forever. One point I
    would like to expand on made by Vernon Clark is that we learn
    something out of every war. My word of the week is ``balance.''
    You see nothing in the paper over arguments between the Air
    Force and the Navy about who flew the most sorties or dropped
    the most bombs. In fact, if you go over there you find that
    some of the forward air controllers are flying Predators and
    remotely controlling close air support. It is seamless. You do
    not know where it is coming from, and we have learned to do it
    all the same.
        I will tell you, we have learned a lot of this on the fly,
    since this operation began. If I could speak for Vernon Clark,
    the Navy is not used to taking off and flying 8 or 9 hour
    sorties with multiple air refueling. It is not the way they
    train, and it is different. It is different for us, too,
    because the first sorties out of Whiteman Air Force Base were
    44 hours long. We have a cadre of people that know how to do
    that now. That is different.
        Where this will be going in the future, and what we will be
    coming to this committee and asking for help on, is figuring
    out how you fly these complex scenarios where you are putting
    all of the services together. It is going to have to be
    something we do sometimes in the synthetic world, where you are
    using the satellites in space and the manned and the unmanned
    aircraft with precision munitions to get the seams closed and
    weapons on the target. That team includes General Shinseki's
    special operators on the ground, as well as the marines. So you
    have seen this coming together, and it is exemplified better in
    this war than we have in the rest of the decade.
        We all have our part to play. We all bring something to the
    fight, and there is plenty of war for everybody.
        Senator Warner. Those are very responsive answers. I think
    it is one of the best hearings you and I have had, and you and
    I have been here a long time. We do not mention how long we
    have been here.
        Chairman Levin. If you will not, I will not. [Laughter.]
        Senator Warner. I want to pick up on something General
    Jones said. He drew a very interesting comparison to Kosovo. I
    remember so well the last 2 or 3 days of that conflict. Just by
    coincidence, I was on one of my visits, and I was with General
    Clark. He was our NATO Commander and the Commander in Chief,
    European Command at the time. We were in a helicopter, and we
    were going along the border of Kosovo looking at avenues of
    approaches to get ground troops in. He had been operating under
    constraints, some political, some diplomatic, and he was
    prepared to take on that issue publicly, but he wanted to make
    sure that there were avenues of approaches to get the forces in
    and the requisite heavy equipment that must accompany the
    ground forces.
        I remember so well, we looked at bridges, which were 100
    years old, to determine whether or not the engineers could come
    in and in a very short period of time and strengthen those
    bridges. We were looking at the means by which to disembark sea
    forces from ships onto land using barges to take them in. This
    commander was determined that he had to confront this issue and
    take that on.
        Fortunately, that war ended. I remember so well receiving
    the message that hostilities were going to cease. I think your
    peer groups in years prior have recognized that the ground
    element is something that just cannot be discounted in this
    type of operation, and to his credit he was beginning to
    realize that and to take it on.
        Chairman Levin. I have just one last request. General
    Shinseki, you have requested that the Joint Staff conduct a
    study of the implications of the proposed changes to the
    unified command plan, particularly in relation to the creation
    of a new CINC for homeland defense, including the implications
    of that proposed change on your responsibility to train and
    equip our forces. Please let us know for the record the status
    of that study, and please describe some of the concerns you
    might have and when you expect that that study to be completed.
    It is late now, so I will not ask you to comment on that at
    this time.
        [The information referred to follows:]

                                   CINC North

        General Shinseki. Although Army has not commissioned a formal study
    on the formulation of a new commander in chief (CINC), we have
    participated in a series of discussions along with the other services
    and the Joint Staff about the topic. We generally agree on the need for
    this new headquarters. In establishing the new command, it is important
    to get the incoming commander's perspective on the mission and
    organization of the command. We want to ensure the CINC has the
    opportunity to conduct his analysis and then organize the command based
    on his mission analysis.
        We think the CINC's analysis is critical for the successful
    execution of this most important military mission. Preliminarily Army
    analysis indicates this CINC will have very few forces assigned to the
    theater, but would instead receive Army forces through the force
    provision process from Joint Forces Command. The CINC should have
    forces apportioned for deliberate planning however. We anticipate the
    majority of these forces multi-apportioned to other theaters as well.
        We do not anticipate our requirement to train and equip our forces
    to change significantly based on the new CINC. The Army mission is to
    fight and win the Nation's wars. From that warfighting ethos, comes our
    ability to support another lead Federal agency in the homeland. At this
    point, we intend on maintaining the Army's warfighting, expeditionary
    focus, even for forces that might be apportioned or assigned to
    CINCNORTH. That will ensure the Army's ability to meet its non-
    negotiable contract with America to fight and win our Nation's wars.

        Senator Warner. Could I just say, it is so important that
    you bring that up. I have said repeatedly, and I think you have
    joined me in saying, that we have to move swiftly on
    establishing the CINCNORTH, the homeland defense CINC. Let us
    hope and pray we never have another strike against this
    country, but if that were to happen, I think the American
    public would ask what have we done in the interim. That is a
    plan that I hope is going to be put in place as quickly as
    possible, and to reconcile some legitimate differences between
    several CINCs as to how to do it.
        Recently, I have talked with several of them on this
    subject, as you have. Let us get moving on this. I am confident
    that Congress will back you and the Secretary of Defense in his
    decision.
        Chairman Levin. Senator Warner made reference to the issue
    of concurrent receipt, which we tried to address last year
    without success. We did act in the Senate, but we were unable
    to get it through conference. To confirm what Senator Warner
    has said, in a letter to the Budget Committee I asked that they
    address this issue in the budget, and that they find a way, if
    possible, to do it this year.
        There is a big expense to it, but there is also a big
    equity issue here as well. I know that Senator Warner has
    joined in that, and Senator Reid has been carrying the brunt of
    the leadership on this

    issue. It is just something that I wanted to make clear for the
    record, that the letter to the Budget Committee also makes
    reference to that issue.
        Senator Warner. Could I mention, in my letter to the Budget
    Committee, Senator Hutchinson also takes that issue on. As I
    said, it has to be a top priority, because I am concerned about
    your program elements, due to the enormity of these sums.
        Chairman Levin. Senator Warner and I were with our troops
    over Thanksgiving in Uzbekistan, Pakistan, and a number of
    other places, and I can tell you how proud we were to serve
    them dinner. We are all proud of you, and your leadership is a
    big part of our success. We thank you individually and
    collectively for that. It has been a tremendous force for
    strength and cohesion that you have all mentioned, which is
    really striking. We heard many examples of the way the forces
    are now working together, and it was so different many years
    ago when I first got here. Goldwater-Nichols was a big
    contributor to that effort, but you gentlemen have been
    committed to that, and it has made a real difference. We heard
    directly from the troops during Thanksgiving the various
    examples of how they work together as a team.
        We are grateful to you for your testimony today. It has
    been an excellent hearing. We will stand adjourned.
        [Questions for the record with answers supplied follow:]

                   Questions Submitted by Senator Max Cleland

                                 WARNER ROBINS

        1. Senator Cleland. General Jumper, could you outline some of the
    good things that you saw at Warner Robins on Monday, March 4, 2002? I
    would also hope that you could outline steps which Warner Robins, along
    with all of our Airlift Control Centers, could and should undertake to
    become more efficient and effective; it is my hope that the Senate
    Armed Services Committee can assist you by using this information to
    strengthen the Airlift Control Centers' mission.
        General Jumper. Senator Cleland, the Air Force is working to create
    ``world class'' maintenance and repair operations at the depots.
    Getting aircraft, engines, and parts repaired and returned to our
    operational units faster would be a big help in improving the readiness
    of our forces. It would provide the airlift system more available
    airlift assets to better manage the critical flow of airlift cargo
    moving around the world in support of contingency operations. It was
    very encouraging to see the spirit of innovation and the progress being
    made by the depot team at Warner Robins as they re-engineer and
    transform their shop floor practices. The improvements they are making
    are significant in terms of improving output and reducing cost. The
    most impressive thing is the spirit of the people on the floor
    contributing to these improvements. Also impressive were the signs of
    the emerging partnerships that Warner Robins is forming with its
    commercial partners. In the long run these partnerships will pay big
    dividends in helping us to ensure the viability of the depots. All of
    these efforts are part of a much bigger transformation effort that we
    have underway at our depots. These transformation efforts coupled with
    the renewed commitment we are making to increase investment in our
    depots through our emerging depot strategy will truly make our depots
    world class maintenance, repair, and overhaul facilities. We appreciate
    your strong support in helping us to improve our depots so that they in
    turn can improve their support to our operational forces.

                                    GI BILL

        2. Senator Cleland. General Shinseki, Admiral Clark, General Jones,
    and General Jumper, last year we succeeded in enacting a provision that
    authorizes service secretaries to permit service members with critical
    skills to transfer up to half of their benefit to family members in
    return for a service commitment. This proposal gives the DOD and the
    services significant flexibility in how it is implemented. Would you
    outline what plans you have for using this new retention tool?
        General Shinseki. We are exploring several options regarding
    transferring Montgomery GI Bill benefits to family members as a
    retention incentive for certain critical specialties. The first
    priority for the use of these educational benefits will always be for
    the soldier. The soldier earns these benefits for his or her uniformed
    service to the United States. However, the Army will work to find an
    acceptable solution to the transferability of GI Bill benefits to
    family members as a retention incentive for certain critical
    specialties.
        Admiral Clark. Many Navy men and women are concerned about their
    ability to pay for their children's college education, while at the
    same time, they may never have opportunity to use their own Montgomery
    GI Bill (MGIB) benefits. Congressional leadership in this area has
    allowed us to look at new ways of providing career incentives in a
    force where over 60 percent of our people have dependents.
        Navy is embarking on a small-scale program that will measure the
    retention impact of allowing certain members to transfer MGIB. We have
    selected an initial population (in the range of approximately 700-1,000
    sailors that will continue to be refined) that meets the following
    criteria:

             Rating/skill is either critical or undermanned;
             Length of Service is 10-14 years (Zone C);
             End of Obligated Service is between June 1, 2002 and
            December 31, 2002;
             Is currently enrolled in MGIB program; and
             Is a member with qualifying dependents.

        We have constrained the initial population group due to founding
    considerations and to ensure that we can make a meaningful input to the
    report due to Congress in January 2003. A control group will be
    established comprised of sailors who meet the same criteria as the
    initial population, with the exception that they would not be currently
    enrolled in MGIB.
        Once the Department of Veterans Affairs is ready to begin program
    implementation, personnel in the initial population group will be
    individually notified that they have been selected for participation.
    They will be given the option to elect MGIB transferability in exchange
    for an agreement to remain on Active Duty for 4 more years. This
    initial small-scale roll-out of the program will run from June to
    December 2002.
        General Jones. The Marine Corps appreciates the efforts of Congress
    to provide the services with additional tools that may assist them in
    retaining the best and brightest enlisted personnel to meet the career
    level skill demands to sustain the services. Unfortunately, due to the
    war on terrorism, the Marine Corps does not currently have the funding
    available to offer this benefit to our servicemembers with critical
    skills. However, I have directed the Deputy Commandant for Manpower and
    Reserve Affairs to conduct a survey to determine the potential effect
    of Montgomery GI Bill transferability on recruiting and retention
    within the Marine Corps. I would like to reinforce the testimony of
    both the Sergeant Major of the Marine Corps and Deputy Commandant of
    the Marine Corps for Manpower and Reserve Affairs, that this benefit
    should be available to all marines who choose to remain in our corps.
        General Jumper. We have developed an implementation plan to test
    this new retention incentive. The test program will be conducted from
    October 1, 2002 through September 30, 2002, and will focus on critical
    enlisted and officer Air Force Specialty Codes (AFSCs). On the enlisted
    side, these will include our young men and women who are linguists,
    fire fighters, and computer system programs. For the officers, we will
    focus on our engineering and science critical skills and will include
    those in the scientist and developmental and civil engineering
    communities. Since transferability is an unfunded mandate that must be
    borne by the services, implementation is contingent upon adequate
    funding in fiscal year 2003.

                                 TRANSFORMATION

        3. Senator Cleland. General Shinseki, Admiral Clark, General Jones,
    and General Jumper, how have your transformation plans been affected by
    what we have learned and continue to learn about the war on terror? Are
    those realities adequately addressed in the fiscal year 2003 defense
    budget?
        General Shinseki. The attacks of September 11 were more than just
    the first salvo in a new war; they validated the direction of our
    vision and the need to accelerate Army transformation. We have funded
    the Army's top priorities, but have taken some risk in certain areas to
    create a balanced program. The Army is in a continuous process of
    learning and assessing from our experiences with the global war on
    terrorism and is eager to work with Congress to align the fiscal year
    2003 budget with new realities as they emerge. Likewise, we appreciate
    added funding for those areas where we did take risk. Overall, we
    believe our efforts to accelerate transformation are on track with the
    emerging strategic environment.
        Admiral Clark. The global war on terrorism is but the first war of
    the 21st century. Violent horizons lie before us, harboring profound
    challenges including the threat of cyberwar, weapons of mass
    destruction (WMD), 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.
        To ensure future warfighting effectiveness in this uncertain
    strategic environment, sovereign naval forces are being transformed to
    better prevent crises and--should deterrence fail--project offensive
    and defensive power ashore to defeat all adversaries. We are
    transforming to become a 21st century Navy of awesome capabilities:
    strategically and operationally agile; technologically and
    organizationally innovative; networked at every level; highly joint;
    and effectively integrated with allies. The lessons we are learning
    from the war on terror have reaffirmed the importance of this
    transformation.
        The President's budget adequately addresses transformation. Some
    examples of exciting new technologies funded in the President's budget
    that will accelerate our transformation toward a fully networked Navy
    include the DD(X) destroyer, SSGN submarine, Joint Strike Fighter,
    Unmanned Aerial and Underwater Vehicles, Tactical Tomahawk Theater
    Ballistic Missile system, Cooperative Engagement Capability, and Navy-
    Marine Corps Intranet, among others.
        General Jones. Marine participation in Operation Enduring Freedom
    confirmed our vision of likely future contingencies and strengthened
    our resolve to transform our warfighting capabilities as quickly as
    possible. The Marine Corps' capstone concept of Expeditionary Maneuver
    Warfare (EMW) envisioned from its inception an asymmetric battlefield
    on which the enemy would attempt to counter our technological advantage
    with unconventional weapons, decentralized operations, and anti-access
    strategies. EMW addresses the chaos and ambiguity of the environment
    encountered during Operation Enduring Freedom, the rise of non-state
    actors, and the potential for weapons of mass destruction. Our
    transformation strategy remains intended to exercise our current
    capabilities in new and innovative ways while we develop new
    warfighting capabilities to meet exactly these requirements.
        Expeditionary Warfare Capability: Operation Enduring Freedom has
    again demonstrated the need for joint forces to project power far from
    our shores, deep inland, and with minimal dependence on landbases. In
    Afghanistan, Marine forces confirmed their ability to immediately meet
    the enemy, operate from his terrain, and defeat him while relying on
    our expeditionary ethos, maneuver warfare philosophy, and naval
    heritage. Our transformation process will only enhance the ability of
    the Marine Corps to get to the point of conflict with the right mix of
    personnel and equipment to accomplish the mission. Development and
    fielding of the MV-22, the Advanced Amphibious Assault Vehicle, and
    Maritime Prepositioning Force (Future) [MPF(F)] shipping will increase
    our ability to project power from the sovereign seas further ashore and
    more rapidly than we demonstrated during OEF.
        Capabilities for Joint Force Commanders: The global war on
    terrorism has clearly shown the synergy possible when Joint Force
    Commanders have a full toolbox of service-unique capabilities to employ
    and combine for the task at hand. Our forward-deployed Navy/Marine
    Corps team is designed for immediate employment by joint commanders,
    supporting other elements of the joint force and enabling follow-on
    forces. Transformation will add to the capabilities provided by our
    Amphibious Ready Groups (ARGs) and embarked Marine Expeditionary Units
    (MEUs) by strengthening our ability to provide warfighting Commanders
    in Chief (CINCs) with rapidly deployed Marine Expeditionary Brigades
    (MEBs). Additionally, the war on terror has identified the need for
    rapidly deployable and dedicated anti-terrorism forces. Our
    organizational agility, essential to transformation, has responded with
    the establishment of the Fourth Marine Expeditionary Brigade (Anti-
    Terrorism) [4th MEB (AT)], a powerful combined-arms team prepared for
    worldwide anti-terrorism operations. Our Nation's experience in the war
    on terror to date indicates to us that our transformational strategy,
    guided by EMW, is appropriately focused and well targeted to meet the
    needs of tomorrow.
        Seabasing: The war on terror continues to demonstrate the need for
    U.S. forces to be capable of defeating anti-access strategies. We must
    be capable of projecting power despite political constraints or long-
    range weapons and with minimal dependence on fixed and vulnerable
    landbases. In Afghanistan, the Navy/Marine Corps team was able to
    insert and sustain a capable force into theater from the sea, supported
    by, and in turn supporting, other elements of the joint force. As we
    move forward with delivery of the LPD-17-class amphibious ships, plans
    for a replacement to the current LHA fleet, and development of our
    Marine Prepositioning Force (Future), our transformation will
    capitalize on these capabilities. Seabasing will provide the Navy/
    Marine Corps team with greater strategic agility, operational reach,
    and tactical flexibility than we are capable of today, enabling power
    projection independent of host nation support against objectives across
    the breadth and depth of a theater. This enhanced capability will allow
    joint force commanders to introduce marine units deep into a
    challenging environment, sustain those forces indefinitely, and then
    rapidly reconstitute the force for future operations from platforms
    with inherent seabased force protection. The ability to initiate and
    sustain operations without the requirement for port facilities and
    airfields, historical planning inhibitors, will greatly expand the
    operational and tactical reach of the commander, increase tempo, and
    enhance the overall flexibility of the entire joint force.
        General Jumper. Our war on terror is allowing us to witness the
    potential of transformation, a mindset that creates asymmetric military
    advantage by leveraging advanced technologies, focusing on
    capabilities-based concepts of operation, and harnessing innovative
    organizational changes.
        Transformation expands the way we, as airmen, think. It transcends
    just designing new systems. We are witnessing transformation when we
    see our troops riding horseback with a GPS and laser range finder as
    the tools of the trade on the saddle horn. Combine this with a secure
    satellite and radio links, and we are passing target coordinates to a
    B-52, and precisely placing a JDAM in the midst of enemy forces within
    600-800 meters of friendly positions, with complete confidence. No
    single piece of this equation is transformational; rather, it is the
    integration of all our capabilities--both old and new--that elevates
    our operational effectiveness to new heights. This vividly displays in
    living color how real transformation gets down to the operator, and
    that's the focus of our transformation plans. Our 2003 defense budget
    makes important steps in sustaining that momentum.
        Another critical transformation issue is organizational change. The
    transformation of Headquarters Air Force is underway. Recently, we
    directed the stand-up of a new organization, AF/XI. AF/XI's mission
    will be to orchestrate the integration of our warfighting systems--they
    will ensure we capitalize on the changes needed to achieve true
    integration. Their charter will be to focus on new cutting edge ideas,
    thus avoiding the constraints of old think. It's this type of new
    thinking that has positioned us to use 21st century technology to win
    the 21st century wars.

                             UNFUNDED REQUIREMENTS

        4. Senator Cleland. General Shinseki, you testified last week
    before the House Armed Services Committee that the Army's unfunded
    requirements totaled around $9.5 billion. Which, if any, of those
    programs not adequately addressed in the budget request are tied to
    your transformation efforts?
        General Shinseki. Approximately $4.4 billion of the Army's fiscal
    year 2003 critical shortfalls are tied to our transformation efforts,
    including over $2 billion for modernization of the Legacy Forces.

                               HOMELAND SECURITY

        5. Senator Cleland. General Shinseki, on Tuesday, Admiral Blair,
    General Schwartz, and Major General Speer testified before this
    committee and each commented on the additional requirements the war on
    terrorism and Operation Enduring Freedom have placed on their commands.
    Given the lengthy deployment that the war on terrorism is going to
    require, I remain concerned about over-tasking units. To my knowledge,
    only the Marine Corps officially requested an increase in end-strength
    in the fiscal year 2003 budget to meet increased needs. We have fought
    hard for retention and recruitment to ease the overburdening of the
    current force structure. What we fail to do regarding end strength will
    negatively impact retention and recruitment if we don't indicate the
    reality that more is needed. We are at war and must realize the human
    consequences that result from our policy deliberations. Service men and
    women will risk more than their reputations in carrying out the
    policies we approve. What role is the Reserve component going to play
    regarding homeland security and how will that affect their ability to
    support and reinforce active duty units and requirements?
        General Shinseki. The Reserve components are part of the Army's
    overall coordinated homeland security capability--either in a homeland
    defense role or in support to local, state, and federal authorities.
    The Reserve components will continue to play a critical role in
    supporting and reinforcing Active-Duty Forces as the Army meets its
    strategic requirements.
        The Army's non-negotiable contract with the American people is to
    fight and win our Nation's wars. The Army prepares for these
    warfighting missions by maintaining a combat focus with trained and
    ready units. Maintaining a warfighting focus gives the Army the
    capability to support civil authorities in a wide range of domestic
    contingencies and the Guard and Reserve are no exceptions.
        In addition to warfighting, one of the Army's core competencies is
    supporting civil authorities. Most of what the Army has done in
    securing the homeland over the past 6 months has involved supporting
    civil authorities whose own capabilities have been exhausted or
    overwhelmed. The bulk of homeland security responsibilities reside with
    various civil authorities--local, state, and Federal. Because of its
    wide range of capabilities and geographic dispersion across the
    country, the Army is uniquely capable of supporting civil authorities
    across a spectrum of domestic contingencies. The Army's Active and
    Reserve components execute these missions throughout any given year in
    responding to hurricanes, forest fires, and other crises.
        When directed, the Army uses the best available capability, whether
    it is Active Army, Army Reserve, or Army National Guard, to meet
    mission requirements. In responding to the mission, we take into
    account several considerations such as geographic location of the
    capability relative to the mission, accessibility to Reserve component
    units, capability of the unit, availability of the unit, and impact on
    other Army missions.
        National Guard units play a prominent role in homeland security
    because of their ability to be employed in a Federal or a non-Federal
    status and they are often employed under state control to meet the
    needs of local and state authorities. In this capacity, the National
    Guard can support homeland security requirements prior to a Federal
    response being requested or approved.

        6. Senator Cleland. General Shinseki, in their role involving
    homeland security, will any of our Armed Forces' proposed roles be
    limited by the Posse Comitatus Act?
        General Shinseki. The answer would depend upon the status of the
    military personnel when performing a mission related to homeland
    security. The Posse Comitatus Act (PCA) applies to soldiers in a Title
    10 status and, therefore, imposes limits on the participation by the
    military in civilian law enforcement activities. The PCA does not apply
    to National Guard soldiers in a Title 32 or state Active Duty status.
    If soldiers perform homeland security missions that amount to direct
    military involvement with civilian law enforcement activities, while in
    a Title 10 status, then the PCA could limit these soldiers' role.
        The Federal courts have enunciated three tests to determine whether
    the use of military personnel violates the PCA. If any one of these
    three tests is met, the assistance may be considered a violation of the
    PCA. The first test is whether the actions of military personnel were
    ``active'' or ``passive.'' Only the direct, active use of military
    personnel to enforce the laws is a violation of the PCA. The second
    test is whether the use of military personnel pervaded the activities
    of civilian law enforcement officials. To be a violation of the PCA
    under this test, military personnel must fully subsume the role of
    civilian law enforcement officials. The third test is whether the
    military personnel subjected citizens to the exercise of military power
    that was regulatory, proscriptive, or compulsory in nature. A power
    ``regulatory in nature'' is one that controls or directs. A power
    ``proscriptive in nature'' is one that prohibits or condemns. A power
    ``compulsory in nature'' is one that exerts some coercive force.
    Anytime servicemembers are used to stop, search, and potentially
    apprehend citizens during a homeland defense mission, the PCA could be
    implicated.
        There are several general and specific statutory exceptions to the
    PCA. The ``Military Purpose Doctrine'' permits direct assistance if the
    primary purpose furthers a military or foreign affairs function of the
    United States. In certain emergency or civil disturbance situations,
    the President may also approve of direct military assistance to
    civilian law enforcement. Some of the specific exceptions include the
    protection of national parks, crimes against foreign officials, members
    of Congress, or the President, Vice President, and other designated
    dignitaries, and crimes involving nuclear materials.

        7. Senator Cleland. General Shinseki, does the Posse Comitatus Act
    need to be reviewed to ensure we don't limit what benefits the military
    can provide to homeland security? If so, how?
        General Shinseki. No. I believe that the balance created over the
    last century and a quarter is about right and strongly suggest that a
    wholesale revision of the PCA is not necessary. Because members of the
    Armed Forces are not trained to undertake civilian police work, the
    Department does not want to become engaged in law enforcement missions
    except under the most exigent of circumstances. The President has
    adequate authority under the Constitution and existing statute, to
    employ the Armed Forces domestically to deal with terrorist threats
    associated with the September 11 attacks, if he chooses to do so.

                               OPERATION ANACONDA

        8. Senator Cleland. General Shinseki, the actions this past week in
    Operation Anaconda have reinforced how brutal and difficult ground
    combat is and the value we place on leaving no servicemember behind. I
    would like to hear your thoughts on the ground campaign and the
    performance of our soldiers in theater.
        General Shinseki. I am pleased with the results of the current
    operations in Afghanistan. All reports from commanders in the field
    indicate that, despite operating in high altitude and harsh weather
    conditions, our soldiers are doing the job that we have equipped and
    trained them to do. They are demonstrating their profound and abiding
    devotion to this Nation, willingly and without hesitation. They go into
    harm's way on our behalf and are prepared to give their lives to
    preserve freedom and our way of life. We have lost eight American
    servicemembers in this current operation thus far, and many hundreds at
    this moment are putting their lives at risk to deal with this brutal
    and determined adversary. The days ahead will continue to be dangerous
    days for our forces, but the alternative to taking such risk is not
    acceptable. We must defend against terrorists by going after them. It
    is also important to remember that as our soldiers continue to make
    incredible contributions and even more incredible sacrifices, they look
    to us to demonstrate both the Nation's appreciation and its commitment
    to them and their families. It is a commitment that you have honored
    well, and for that, we are all very grateful.

                                  HEALTH CARE

        9. Senator Cleland. General Shinseki, in your prepared statement
    you state that you 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. We are fully committed to making
    TRICARE the very best health care available, so I am extremely
    interested in what you have in mind. What kinds of changes are you
    proposing?
        General Shinseki. With the wonderful enhancements to the health
    care benefit that Congress has recently provided, our focus is on
    improving the delivery of health care to all of our beneficiaries.
    There are several components to this effort.
        First, we must recapitalize our military treatment facilities (MTF)
    and invest in the Direct Care System. For years, we have under-funded
    the real property maintenance and military construction replacement of
    these facilities. We need to fully fund the maintenance account to keep
    our assets in prime condition and replace those facilities that no
    longer meet the mission of modern healthcare or research. The vast
    majority of our Active Duty population and their families, and many
    retirees, obtain health care from the Direct Care System, and they
    should receive care in facilities that are equal to the newer civilian
    offices and hospitals. Furthermore, we must continue to provide
    investment venture capital funding for improvements in the business
    process of our MTFs so that we optimize the performance of our system.
    The Army Medical Department has developed a rigorous business case
    analysis process to validate targeted improvements in parts of the
    system that will not only improve the delivery of health care, but will
    provide a positive return on investment over a period of years. But
    until recently, we have not had a mechanism to make the kind of upfront
    investment in our system which is common in the private sector because
    we have locked ourselves to single year budgeting. Last year, Congress
    allocated $30 million in multiyear funds that are being invested in
    improvements that will optimize the system. This year we are targeting
    ways to improve women's health services in our MTFs and will focus on
    optimizing and improving that aspect of health care delivery.
        Second, we must reduce ``the hassle factor'' when beneficiaries
    access care in the private sector. We must insure that the barriers to
    care are reduced or eliminated. For instance, many private sector
    physicians are refusing to accept new TRICARE patients because of low
    reimbursement rates. We are asking the TRICARE Management Activity
    (TMA) to fully implement the authority given by Congress in the
    National Defense Authorization Act for Fiscal Year 2000 and the
    National Defense Authorization Act for Fiscal Year 2001 for locality-
    based reimbursement, especially in areas which are chronically short of
    providers. We are working with TMA to develop the next generation of
    TRICARE managed care support contracts so we eliminate the problems
    that beneficiaries have when trying to access care or purchase
    pharmaceuticals when they are outside of the TRICARE region they were
    enrolled in. We want these new contracts to do a better job of tracking
    referrals when patients are sent from MTFs to civilian providers and
    providing consults back to the military primary care managers.
        Finally, we see significant opportunity to better synchronize our
    efforts with the Veteran's Administration (VA) and the Medicare system.
    The VA and DOD both operate robust health delivery systems and their
    beneficiary populations are overlapping. There are economies of scale
    and partnering opportunities that we can utilize to both provide a more
    convenient or responsive system for the patient, and save the Federal
    government money at the same time. With respect to Medicare, we have
    1.5 million dual-eligible retirees who now have a TRICARE for Life
    benefit that combines with Medicare Part B to pay virtually all of
    their health care costs. We have a financial incentive to find the most
    cost effective way to manage their care. We still believe that a direct
    discounted payment from Medicare to DOD represents a powerful way to
    leverage the strengths of the DOD Direct Care System to reduce total
    Medicare outlays.

                             ARMY UNIVERSITY ONLINE

        10. Senator Cleland. General Shinseki, I maintain that the services
    can become America's greatest university. The Army has an innovative
    online education program that, by all reports, is a great reenlistment
    incentive. Is this the online electronic Army University program that
    you mention in your prepared statement? Would you describe this program
    for us?
        General Shinseki. On July 10, 2000, the Army announced a major new
    educational initiative, Army University Access Online, now known as
    eArmyU. On December 14, 2000, the Army awarded a 5-year, performance-
    based contract to PricewaterhouseCoopers to serve as the prime
    contractor and education management system integrator responsible for
    eArmyU. PricewaterhouseCoopers leveraged an unprecedented partnership
    of ``best of breed'' providers to harness industry-leading technology
    and to create the eArmyU virtual university.
        eArmyU offers soldiers access to a wide variety of online post-
    secondary programs and related educational services via a comprehensive
    portal. Complementing the existing educational programs and services
    available to soldiers, eArmyU helps to ensure that all enlisted
    soldiers have the opportunity to fulfill their professional and
    personal educational goals while simultaneously building the
    technology, critical thinking, and decision-making skills required to
    fully transform the Army and succeed on the digitized battlefield.
        eArmyU continues the Army's commitment to invest in its people by
    providing soldiers 100 percent tuition funding for anytime, anyplace
    distance learning opportunities. Using a technology package (laptop
    computer, printer, and Internet service provider account) provided by
    eArmyU, soldiers access a university system that provides virtual
    classrooms, materials, discussion groups, virtual libraries,
    encyclopedias, assessment tools, tutoring, academic advisement, and
    administrative and technical support. Soldiers are required to have 3
    years retainability within the Army and must successfully complete 12
    semester hours in the first 2 years of enrollment. With eArmyU,
    soldiers no longer have to choose between their career and their
    personal development.
        To maximize program success, the contract integrator is required to
    bring together and manage a consortium of colleges and universities.
    Participating institutions must agree to provide maximum credit for
    military experience, training, and standardized tests using the
    American Council on Education recommendations; degree plans that
    outline degree requirements and illustrate ways soldiers can meet each
    requirement; and student support services (e.g., basic computer skills
    training, online tutoring and mentoring, and access to electronic
    library resources). Furthermore, eArmyU institutions are accredited by
    agencies recognized by the U.S. Department of Education. All eArmyU
    institutions who provide undergraduate credit-bearing programs are
    members of the Servicemembers Opportunity College Army Degree System.
    Graduate and non-credit programs within eArmyU comply with
    Servicemembers Opportunity College institutional principles and
    criteria.
        While much of a soldier's interaction is virtual through the web
    portal, students also have ample opportunities for face-to-face and
    telephone interactions with academic advisors and course mentors. This
    full range of program services is provided free to soldiers.
        eArmyU is currently offered to enlisted soldiers at Fort Benning,
    Georgia; Fort Campbell, Kentucky; Fort Hood, Texas; Fort Lewis,
    Washington; and Fort Carson, Colorado. Based on available funding, over
    12,000 soldiers were allowed to enroll during the first contract year.
    Participation requests continue to far exceed available funding. More
    than 32,000 soldiers at these installations have expressed interest in
    the program.
        The program has met with overwhelming success. Soldiers view eArmyU
    as a clear demonstration of the Army's investment in them,
    significantly increasing morale. The program has made education viable
    for soldiers; 50 percent of participants have never enrolled in post
    secondary education. As of March 1, 2002, nearly 16 percent of those
    soldiers who signed participation agreements reenlisted or extended to
    take advantage of eArmyU. There is considerable potential for return on
    investment.
        More than a web site, the eArmyU portal (www.eArmyU.com) is the
    gateway to a totally integrated education management system offering a
    full slate of diverse courses and student services. After the first
    year, over 1,400 courses in 90 programs are available through 23
    accredited colleges and universities.
        The Army is expanding program participation to three more
    installations in May 2002: Fort Wainwright, Alaska; Schofield Barracks,
    Hawaii; and Heidelberg Military Community, Germany. The final three
    sites scheduled for fielding in fiscal year 2002 are Fort Drum, New
    York; Fort Bragg, North Carolina; and Camp Casey, Korea. Based on
    availability of funding, the Army is using a phased, incremental
    approach for Army-wide implementation estimated at 80,000 students by
    fiscal year 2007.

        11. Senator Cleland. General Shinseki, is the Army funding the
    continued planned expansion of this program?
        General Shinseki. Funding the continued planned expansion of Army
    University Access Online to Active component enlisted soldiers Army-
    wide presents significant challenges. There are currently unfinanced
    requirements associated with the planned expansion. The Army is working
    to address those challenges.

                  MANNED MULTI-MISSION, MULTI-SENSOR AIRCRAFT

        12. Senator Cleland. General Jumper, in the fiscal year 2003 budget
    the Department of the Air Force has requested research and development
    and procurement funding for both multi-mission command and control
    constellation and multi-mission command and control aircraft (MC\2\A).
    I understand that the funds for MC\2\A include the purchase of a 767
    multi-mission, multi-sensor test bed. Recent articles indicate that the
    Air Force's single solution for a manned multi-mission, multi-sensor
    aircraft is the 767. On the other hand, other multi-mission, multi-
    sensor programs such as the Army's aerial common sensor program, the
    Navy's multi-mission maritime aircraft program, Israel's SEMA program,
    and the Japanese Coast Guard's program are moving toward smaller, less
    costly aircraft to procure and operate. It appears that with the high
    demand/low density problem; potential quality of life issues; the
    advancement of reachback that can minimize the footprint forward;
    potential crew manning and training issues; and potential non-wartime
    missions--not to mention affordability--that these all argue for a mix
    of manned multi-mission, multi-sensor aircraft vice a single point 767
    solution. What in your CONOPS-based acquisition process drives you to
    the 767 as the sole solution of a manned multi-mission, multi-sensor
    platform? Please provide the cost and operational flexibility tradeoffs
    studies that have lead to that conclusion by May 1, 2002.
        General Jumper. The Air Force vision is that these 767-400 aircraft
    with MP-RTIP (Multi-Platform Radar Technology Insertion Program) radar
    would be the forerunners of a larger fleet of multi-sensor/mission
    aircraft. These aircraft, to be seen in future budget submissions, will
    be known as MC\2\A and would serve as hubs for a family of networked
    ISR and strike systems known as a Multi-sensor Command and Control
    Constellation (MC\2\C).
        The 767-400 was selected by the MP-RTIP Analysis of Alternatives
    (AOA) as the best-manned platform to carry a large variant of the MP-
    RTIP sensor--an active, electronically scanned array radar. The MP-RTIP
    sensor satisfies a validated requirement for a Ground Moving Target
    Indicator (GMTI) capability, as well as a focused Air Moving Target
    Indicator (AMTI) capability for Cruise Missile Defense. This selection
    also supports the Concept of Operations conducting multiple missions
    with multiple sensors in support of ISR collection and battle
    management, including an Air Operations Center (AOC) execution cell.
        The MP-RTIP AOA examined many alternatives including 707s and 767s
    as well as larger and smaller aircraft. In this AOA, the 707 was the
    least expensive aircraft to meet single mission requirements similar to
    the current E-8 JSTARS whereas the 767-400 was the least expensive
    alternative for meeting multi-mission requirements. The 767-400
    aircraft with the MP-RTIP sensor will comprise Spiral One of the
    MC\2\A. No other spirals are currently funded. Subsequent spirals will
    be refined and funded, pending completion of appropriate analyses and
    reviews. The four operational 767-400s with MP-RTIP will provide very
    critical capabilities for the Air Force and DOD. The one 767-400 RDT&E
    aircraft being procured in fiscal year 2003 will be a critical hardware
    testbed both for MP-RTIP and the MC\2\A concept.
        The 767 has been selected as the current Air Force solution for a
    manned multi-mission, multi-sensor platform within the Air Force vision
    of a MC\2\C. The MC\2\C will be a horizontally integrated architecture
    of C\2\ISR capabilities in the air, in space, and on the ground. This
    future constellation will include MC\2\A aircraft as well as E-8 JST
    ARS, E-3 AWACS, Global Hawk UAVs, and other manned and unmanned
    aircraft as well as space and ground sensors, including systems
    operated by other services and agencies. The objective composition of
    the MC\2\C consisting of a combination of sensors and platforms will be
    determined after operational and technical systems architectures have
    been completed.
                                     ______

                 Questions Submitted by Senator Daniel K. Akaka

                               UNFUNDED AIRFRAMES

        13. Senator Akaka. General Jumper, the Air Force's unfunded
    priority list includes $163 million for maintenance for three different
    airframes. Apparently, if these funds are not provided, numerous
    aircraft may be grounded. As the Chairman of the Readiness and
    Management Support Subcommittee, I am obviously quite concerned about
    this issue. Can you explain why the Air Force did not include funds for
    these critical repairs in its budget request?
        General Jumper. The depot maintenance environment is dynamic, and
    these additional requirements surfaced after the fiscal year 2003
    President's budget was submitted. The crash damage aircraft and
    increased engine maintenance are driven by Operation Noble Eagle and
    Operation Enduring Freedom. The requirements to repair the B-1B wing
    pivot shear repair, B-2 hot trailing edge repair, and F-15 horizontal
    stabilizer upgrades were revealed after the budget was submitted.
    Additionally, these requirements are either safety of flight issues or
    are critical repairs that may be necessary in the future ground
    aircraft. The B-1B fleet reductions and the increased direct material
    requirements were not known until after the fiscal year 2003
    President's budget was submitted.

        14. Senator Akaka. General Jumper, if Congress is unable to provide
    additional funding for this maintenance, what is the Air Force's plan
    to ensure that we are not forced to ground bomber and fighter aircraft?
        General Jumper. If the required maintenance is not funded we will
    be forced to resort to extraordinary measures to be borne by the
    maintainers in order to keep the system in operation. Cannibalization
    rates will increase. Delayed entrance into Program Depot Maintenance
    (PDM) has the added negative effect of driving significant inspections
    and maintenance in the field. The special inspections designed to keep
    aircraft airworthy beyond their scheduled PDM input dates, serve only
    to provide temporary relief from a grounding condition. These
    inspections increase in complexity and become significantly more labor-
    intensive, ultimately resulting in the weapon system being grounded.
    When the aircraft do come into PDM the cost will higher and the flow
    time longer. Operating systems beyond their planned service interval
    has the added risk and potential to increase the failure rates which
    may result in Emergency Action Time Compliance Technical Order
    Inspections/repairs. Ultimately, we will keep the equipment operating
    but it will come at the expense of the men and women who must
    accomplish this additional work with fewer resources. This, in turn,
    will also have a negative impact on our ability to retain skilled
    technicians. The right answer must be to fund the needed maintenance.

                           INTERIM BRIGADES OVERSEAS

        15. Senator Akaka. General Shinseki, I understand that, based upon
    the recommendations of the Quadrennial Defense Review, the Army is
    considering stationing an Interim Brigade Combat Team (IBCT) in Europe.
    In testimony before this committee earlier this week, General Schwartz
    stated that a key element of modernization on the Korean peninsula
    would be to replace one existing brigade with an IBCT. What is the
    Army's position on the need for additional IBCTs beyond the six
    currently planned to be based in the United States?
        General Shinseki. In the process of studying and planning the
    stationing of an IBCT in Europe, the Army has validated a requirement
    for six IBCTs. While a case can be made for an additional seventh IBCT
    that is additive to the force structure, it was determined in
    consultation with the Office of the Secretary of Defense, that it was
    not an affordable option at this time. The Army's assessment is that
    operational risk can be mitigated by the on-time arrival of the Army
    Objective Force, and the funding of the critical components of the Army
    recapitalization and modernization plan.

        16. Senator Akaka. General Shinseki, will one of the existing six
    be reallocated to Europe or to Korea, or is the Army pursuing
    additional brigades?
        General Shinseki. In July 2001, the Army announced the location of
    the six IBCTs. This was based upon operational and strategic
    considerations. DOD tasked the Army to study a plan to station an IBCT
    in Europe by the end of 2007. The Army briefed the Deputy Secretary of
    Defense on February 20, 2002, on the findings of that analysis. The
    Army prefers to maintain the status quo until the arrival of the first
    Objective Force units in 2010, but is prepared to rotate an IBCT to
    Germany and return of a mechanized brigade to the continental United
    States in 2007.

        17. Senator Akaka. General Shinseki, if more interim brigades are
    needed, how will they be funded?
        General Shinseki. At this time, the Army does not have plans for
    additional interim brigades. If at a future date, more brigades are
    necessary, the Army will attempt to make more difficult decisions to
    reallocate funding internally, and possibly seek additional funding if
    necessary.

                                    VIEQUES

        18. Senator Akaka. Admiral Clark, Secretary England plans to find a
    replacement for Vieques by May 2003, a little over a year from now. Any
    funds needed to prepare an alternative location by that date would have
    to be expended in fiscal years 2002 and 2003. It is my understanding
    that no funds are included in the fiscal year 2003 budget to set up an
    alternative site or sites for east coast training, but that the Navy
    has since prepared a cost estimate at the direction of the Office of
    the Secretary of Defense. Can you provide the committee with this
    estimate, along with possible sources of these funds, if they are
    required?
        Admiral Clark. The DOD fiscal year 2002 Supplemental Request
    includes $16 million to support initial environmental documentation and
    infrastructure improvements for several of our east and gulf coast
    training range/OPAREA complexes. These improvements are needed and
    valuable regardless of any decision regarding our training at Vieques.
    Requirements beyond fiscal year 2002 have not been finalized. After the
    Center for Naval Analyses' study on future training alternatives is
    received and evaluated, these requirements will be reviewed in the
    fiscal year 2003 Apportionment Review, and funding decisions made in
    light of competing priorities and available resources.

        19. Senator Akaka. Admiral Clark, what is your plan for creating a
    replacement site or sites by 2003?
        Admiral Clark. We expect the Center for Naval Analyses' 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.

        20. Senator Akaka. Admiral Clark, the Navy and the Clinton
    administration made an agreement with the government of Puerto Rico
    regarding Vieques. Part of that agreement was to provide $40 million in
    economic assistance upfront, regardless of the ultimate outcome on
    continued training on Vieques. Congress provided those funds in July
    2000. To date, only $12.8 million of those funds have actually been
    used. It is my understanding that funds have not been provided for one
    of the major economic development projects that both the Clinton
    administration and the Bush administration told Congress they support
    the construction of a ferry terminal. Does the Navy intend to provide
    the full $40 million in economic assistance that was agreed to?
        Admiral Clark. The Navy carefully considers each proposed economic
    assistance project to ensure it is executable, and that it positively
    and directly provides lasting impacts to the Vieques inhabitants. We
    will continue to be good stewards of the taxpayers' dollars.

        21. Senator Akaka. Admiral Clark and General Jones, when Secretary
    England testified before this committee a few weeks ago, he did not
    clearly state whether he will make the decision to allow live-fire
    training to resume on Vieques, whether the decision is above his pay
    grade, or whether he had delegated that decision to you or other
    military leaders in the Department of the Navy. Do you have a request
    pending to resume live-fire training on Vieques, and if so, who will
    make the decision?
        Admiral Clark. There is no pending request to use explosive
    ordnance on the Vieques training range.
        General Jones. The October 31, 2001, letter from myself and Admiral
    Clark to the Secretary of the Navy requesting use of live ordnance
    during combined arms training on Vieques was written in order to
    receive a wartime modification of the current restrictions on live-fire
    training. This request was for limited scope, graduate level training
    to finalize coordination procedures and certify end-to-end handling and
    delivery of live munitions. The realism afforded by live-fire training
    is essential preparation for success on the battlefield and due to the
    ongoing requirements of the global war on terrorism, necessitate this
    shift to wartime operations. The request indicated that both the JFK
    Battle Group and WASP Amphibious Ready Group were next to deploy to the
    Central Command Area of Responsibility in support of Operation Enduring
    Freedom, but it was not intended to apply solely to those units and
    their assigned sailors and marines. The October 31, 2001, request for
    live-fire training on Vieques remains in effect.

              USE OF NATIONAL GUARD FOR AIRPORT AND BORDER PATROL

        22. Senator Akaka. General Shinseki, given the high operating tempo
    of our forces today and the demand for the Guard to support military
    missions, do you feel the Guard should be used to provide security at
    airports or on the border on a long-term basis, or should the Guard
    concentrate on fulfilling missions where their unique military training
    is required?
        General Shinseki. The National Guard plays an important role in
    homeland security. It also plays a critical role in supporting the full
    range of strategic requirements. The National Guard can be employed
    under different authorities to best meet requirements. Soldiers from
    the National Guard are supporting the airport security mission under
    Title 32 authority--state control with Federal money. The border
    security mission is being performed under Title 10 authority--on a
    straight Federal basis.
        The Army's non-negotiable contract with the American people is to
    fight and win our Nation's wars. The Army prepares for this mission by
    maintaining a combat focus with trained and ready units. Maintaining a
    warfighting focus also gives the Army the capability to support civil
    authorities in a wide range of domestic contingencies. The bulk of
    homeland security responsibilities reside with various civil
    authorities--local, State, and Federal. When Active Army, Army Reserve,
    or Army National Guard forces are used to support domestic civil
    authorities, our contributions should be temporary. The Army is
    typically tasked to support civil authorities whose own capabilities
    have been exhausted or overwhelmed. Support is normally for a
    specified, relatively short duration to allow those responsible to
    reach self sufficiency.

                            HIGH DEMAND/LOW DENSITY

        23. Senator Akaka. General Shinseki, Admiral Clark, General Jones,
    and General Jumper, Secretary Rumsfeld was quoted recently as saying
    that we made the mistake of not buying enough of certain high demand/
    low density forces in the past and that the administration would not be
    making the same mistake in the future. General Jumper, your prepared
    statement notes that we have deployed almost our entire inventory of
    Airborne Warning and Control Systems and Special Operations aircraft to
    support the war on terrorism. Could each of you highlight what steps
    your budget request takes to address shortfalls of high demand/low
    density forces?
        General Shinseki. We have incorporated our Total Army Analysis
    results, where we invested Active component spaces in high demand/low
    density units and in units needed for the war on terrorism. We are
    building four multi-component Biological Integrated Detection System
    companies, which is a 200 percent increase over the current two
    companies in the force. In addition, we increased the manning levels of
    all Active Component Patriot battalions to 100 percent and restructured
    the Army's Technical Escort Unit, almost doubling its size and
    capabilities.
        With respect to the global war on terrorism, we invested 986 spaces
    in Amy Special Forces capabilities to include buying two additional
    psychological operations companies and two additional civil affairs
    units in the Active component. We are also pursuing resourcing an
    additional MH-47 battalion in the 160th Special Operation Aviation
    Regiment. However, the $100 million plus cost per airframe is proving
    beyond the Army's capabilities of resourcing. We also invested almost
    500 spaces into resourcing the CINCs theater level military
    intelligence brigades and groups that dramatically increase the day-to-
    day capabilities. Finally, we increased the manpower in Third U.S. Army
    by 157 spaces, significantly improving the resourcing of Central
    Command's Army Service Component Command. In addition, the President's
    budget provides the Army with targeted recruiting and retention
    incentives through several programs to retain shortage specialties.
        Admiral Clark. The Navy fiscal year 2003 budget request contains
    RDT&E funds to commence System Development and Demonstration for a
    replacement to the EA-6B as well as funds for the sustainability of the
    EA-6B, until the replacement aircraft Initial Operational Capability
    (IOC) in fiscal year 2009.
        Two additional Patrol Squadron Special Projects (VPU) aircraft are
    being procured with fiscal year 1999 and fiscal year 2000 funds. The
    aircraft will be produced by modifying P-3C airframes that were in
    desert storage to the VPU configuration. These modifications are in
    progress and deliveries of the aircraft are scheduled for the second
    and third quarters of fiscal year 2003, respectively. These two
    additional aircraft will ensure the ability of force providers to
    provide the required four VPU aircraft to warfighting commanders.
        In a separate program, the mission systems of two existing VPU
    aircraft are being transferred to two more modern and sustainable
    airframes. These conversions will be completed in the first and third
    quarters of fiscal year 2003, respectively.
        General Jones. The Marine Corps' only high demand/low density asset
    is the EA-6B Prowler aircraft. The DON has completed the
    congressionally-funded ($10 million of $16 million study) Airborne
    Electronic Attack Analysis of Alternatives (AEA AOA) and intends to
    fund the RDT&E efforts in the POM 2004 FYDP for a follow-on platform to
    replace the EA-6B. The services are currently analyzing the numerous
    platforms presented by the AOA and will make a decision by June 2. The
    DON recognizes an increase in inventory from 122 to 184 EA-6Bs is
    required to remove the EA-6B from high demand/low density status.
        General Jumper. The Air Force has requested almost $1 billion in
    the fiscal year 2003 President's budget for investment funding in
    support of high demand/low density assets (HD/LD). The fiscal year 2003
    President's budget provides funding to support research, development,
    test, and evaluation, aircraft modifications and other procurement
    initiatives in support of HD/LD assets. Current Air Force HD/LD assets
    include funding for combat search and rescue (HC-130 and HH-60),
    special operations (AFSOC C-130), and intelligence, surveillance, and
    reconnaissance (E-3/AWACS, E-8/JSTARS, U-2, RC-135/Rivet Joint, and
    Modular Control System) platforms.

        24. Senator Akaka. General Shinseki, Admiral Clark, General Jones,
    and General Jumper, does your budget support upgrades of those current
    high demand low density forces that have been having problems, such as
    the EA-6B?
        General Shinseki. Unlike our request for fiscal year 2002, the
    Army's fiscal year 2003 budget requests the fill authorization of
    480,000 manyears. In addition, we have requested enabling incentives to
    recruit and retain specialty skills found in the high demand/low
    density units.
        Admiral Clark. Yes. The Navy fiscal year 2003 budget procures EA-6B
    ICAP III systems that will reach IOC in fiscal year 2005. Although
    there may be some configuration differences, ICAP III forms the
    capability baseline for the EA-6B follow-on platform. To ensure a
    smooth, rapid, successful transition to the EA-6B follow-on aircraft,
    we must procure a limited number of EA-6B ICAP III systems to allow
    fleet introduction and tactics development while the follow-on platform
    is in development.
        In recognition of the fact that VPU aircraft are operated at a high
    rate of fatigue life accumulation, a program of Special Structural
    Inspections (SSIs) is funded in the fiscal year 2003 President's
    budget. This program will fund inspections of key areas of aircraft
    structure and will also provide needed repairs to allow the aircraft to
    operate for up to 5 years (or 600 flight hours) beyond the point at
    which they reach 100 percent fatigue life expended. This combination of
    four newer airframes in the VPU force along with the program of SSIs
    will provide the bridge in capabilities needed until the P-3 aircraft
    replacement, the Multi-mission Maritime Aircraft (MMA), reaches full
    operational capability.
        General Jones. The current budget presented to Congress fully funds
    122 EA-6B ICAP-III upgrades. ICAP-III is the baseline warfighting
    capability upgrade that will be used in the AEA AOA and is required to
    effectively counter the most recently fielded Surface to Air Missile
    threats. The Marine Corps fully supports the DOD requirement to upgrade
    the entire EA-6B fleet to ICAP-III. The CMC and CNO have included three
    additional jammer upgrade and service life extension items not
    contained in the fiscal year 2003 President's budget on their unfunded
    program lists. These items were not included in the fiscal year 2003
    President's budget due to competing priorities and limited resources:

             EA-6B Wing Center Sections (8), $40 million;
             EA-6B Band 9/10 buyout, $37 million; and
             EA-6B USQ-113 Communications Jammer, additional 57
            units, $35 million.
        General Jumper. The Air Force has requested $975 million in the
    fiscal year 2003 President's budget to develop, procure, and install
    upgrades on Air Force HD/LD platforms. Current Air Force HD/LD assets
    include funding for combat search and rescue (HC-130 and HH-60
    modifications), special operations (AFSOC C-130 development and
    modifications), and intelligence, surveillance, and reconnaissance (E-
    3/AWACS, E-8/JSTARS, U-2, RC-135/Rivet Joint, and Modular Control
    System development and modification initiatives) platforms.
                                     ______

                Questions Submitted by Senator Mary L. Landrieu

                                  SHIPBUILDING

        25. Senator Landrieu. Admiral Clark, one of your predecessors
    stated in testimony before this committee that ``while numbers matter,
    the number is less important than the capability inherent in those
    numbers.'' Obviously, this is a source of much debate. While I agree
    with the long-standing American tradition of quality over quantity, it
    is true only to a point. Having dropped $6 billion in shipbuilding from
    fiscal year 2001 to fiscal year 2003, we simply will not be able to
    meet all peacetime presence commitments. Further, I have emphasized
    again and again that current shipbuilding plans in the FYDP are putting
    our Navy into an ever-tightening death spiral which will ultimately
    stabilize at a Navy which is completely incapable of meeting peace or
    wartime requirements. I'm a very outspoken supporter of our
    shipbuilding programs and believe we need to be buying more than what
    the FYDP calls for, not less as we have done in the recent past. Do you
    agree that current shipbuilding levels will take us into the
    dangerously mediocre arena of a 300-ship Navy? Applying that standard
    today, could we sustain our current operations?
        Admiral Clark. The 2001 Quadrennial Defense Review (QDR) provides
    the baseline for Navy's force structure requirements. Current
    shipbuilding levels will permit us to sustain that QDR battle force of
    310 ships over the short term, but not for the long term. Capabilities
    of this size force are judged to provide a moderate operational risk
    for several combinations of scenarios. Our experience of the last 10
    years has demonstrated that such a force is severely stressed, placing
    an undue burden upon our sailors and marines. In consonance with the
    new defense strategy, the 2001 QDR calls for a new force-sizing
    construct. Although we have not determined the exact number of ships
    required, this transformed force will be sized and outfitted to meet
    warfighting missions, homeland defense, and smaller-scale
    contingencies. Today's manpower and current readiness requirements have
    prevented the Navy from fully investing in future procurement accounts,
    including shipbuilding. The Navy will require an additional $10 billion
    annually to build for the future and recapitalize the entire fleet--
    ships, aircraft, and submarines, at a rate that will maintain the Navy
    that the Nation needs.

                                     LPD-17

        26. Senator Landrieu. Admiral Clark, I was happy to see in your
    statement you referenced the LPD-17 with regards to ``investing in
    impressive programs that will comprise the core capability of our force
    in the coming decades.'' You also wrote that ``we need to accelerate
    development as rapidly as design and production facilities will
    allow.'' It is my understanding that in order to provide flexible
    response and assured access, our plans require the capability to
    rapidly deploy the equivalent of three Marine Expeditionary Brigades.
    It is also my understanding that we are currently well below this
    requirement, and yet the LPD-17 was not given additional funding. What
    is the current lift capability and what are the implications of this
    shortfall?
        Admiral Clark. Current inventory of 38 Active and 1 Naval Reserve
    Force amphibious ships (5 LHAs, 7 LHDs, 11 LPD-4s, 8 LSD-41s, 4 LSD-
    49s, and 3 LSD-36s) provides 2.1 Marine Expeditionary Brigade-Assault
    Echelon (MEB AE) equivalent, as limited by vehicle lift. The current
    inventory meets the other four fingerprints of the fiscally constrained
    (2.5 MEB AE) amphibious lift goal, specifically cargo cube, troop
    berthing, rotary wing spots and landing craft spots.)
        To counter this lift shortfall, the Navy established the Amphibious
    Lift Enhancement Program (ALEP), which has five LKAs and four LSTs in a
    deep reduced operating status. These ships would take a minimum of 6
    months to reactivate, but would allow Navy to meet the 2.5 MEB AE
    fiscally constrained goal. As the Senator notes, the Marine Corps
    requirement calls for 3.0 MEB AE amphibious lift to fight a Major
    Theatre War.

        27. Senator Landrieu. Admiral Clark, to what extent does the
    procurement of 12 LPD-17-class of ships address this shortfall?
        Admiral Clark. Once the final LPD-17 is delivered, around 2014/
    2015, amphibious lift capacity will meet the fiscally constrained 2.5
    MEB AE goal achieving 83 percent of the lift required for one Major
    Theater War.

        28. Senator Landrieu. Admiral Clark, what are the implications of
    delaying acquisition of the LPD-17-class of ships?
        Admiral Clark. The Navy will not reach the fiscally constrained
    goal of 2.5 MEB AE lift within the Active fleet until 2015. The last
    LPD-17-class ship was originally planned to deliver in 2009. By 2006,
    all LPD-4-class ships will have reached or exceeded their 35-year
    expected service lives. As a result of the delays to the LPD-17 program
    the Navy has coordinated adjustments as needed to the decommissioning
    schedule to maintain lift capability and the operating tempo for ships
    in commission. Six LPD-4-class ships are now scheduled to receive
    extended sustainment maintenance ($70 million per ship) to adequately
    account for the unexpected extension of service life. Due to delays in
    the LPD-17 program, the LPD-4 ships will retire with an average age
    exceeding 41 years. Additionally, the fleet commanders are delayed in
    receiving the manpower reductions, survivability improvements, and
    warfighting capability increases associated with the LPD-17-class
    ships.

                                 MC\2\A FUNDING

        29. Senator Landrieu. General Jumper, since the Gulf War we have
    seen a technological revolution in Air Force intelligence,
    surveillance, and reconnaissance. From airborne warning and control
    systems, to unmanned aerial vehicles, to JSTARS, the United States Air
    Force's intelligence, surveillance, and reconnaissance (ISR)
    capabilities are a true benefit for our warfighting efforts. Please
    know I share your commitment to expanding this ISR dominance.
    Accordingly, I am pleased by the fiscal year 2003 budget commitment to
    the procurement and long-lead funding of JSTARS 17 and 18.
    Additionally, the development of the Multi-Platform Radar Technology
    Insertion Program (RTIP) is integral to expanding the Air Force's ISR
    dominance. Nevertheless, I have concerns that the Air Force has not
    made a budgetary commitment for the Multi-Sensor Command and Control
    Aircraft (MC\2\A) in the fiscal year 2003 budget. Nor do I see this
    program listed in the Air Force's unfunded requirement list. You and I
    discussed this matter thoroughly last year, and it was my impression
    that the Air Force's commitment to the MC\2\A was a long-term
    commitment that would be part of the fiscal year 2003 request and the
    FYDP. Could you comment on why the MC\2\A cannot be found in the fiscal
    year 2003 budget, or in the Air Force's unfunded requirements list?
        General Jumper. First, to clarify a point made earlier, the Air
    Force has provided for long lead and procurement funding for JSTARS P-
    17 in its fiscal year 2003 budget request. There is not funding
    identified for a P-18 in the request, although the Air Force has not
    reached a final decision on when the JSTARS production should end as we
    transition to the MC\2\A.
        In fiscal year 2003, the Air Force has requested $679 million
    toward the Multi-Sensor Command and Control Aircraft effort. One
    hundred ninety one million dollars of these funds are in the fiscal
    year 2003 budget request (RDT&E Line 148, PE 0207449F, and Multi-sensor
    Command and Control Constellation). This $191 million includes $149
    million for continued design and development of the MP-RTIP sensor and
    $42 million for beginning development of the 767 RDT&E test bed
    aircraft. The additional $488 million is requested in the fiscal year
    2003 President's Budget Defense Emergency Response Fund. These funds
    will procure the 767 testbed; plan the spiral implementation of the
    MC\2\A sensor capabilities on that platform; design and develop common
    modifications for other 767-based aircraft (e.g. tanker and Rivet
    Joint) and the command and control networking architectures essential
    for realizing a horizontally integrated network of manned and unmanned
    air, space, and ground systems.

        30. Senator Landrieu. General Jumper, why have none of the 767s
    leased for modernization of the tanker fleet been allocated for MC\2\A
    use?
        General Jumper. See answer to question 29.

        31. Senator Landrieu. General Jumper, what affects will the change
    of thinking on MC\2\A have on the future of JSTARS procurement and RTIP
    development?
        General Jumper. The Air Force hasn't changed its mind on the Multi-
    Sensor Command and Control Aircraft (MC\2\A). The Air Force is fully
    committed to achieving MC\2\A Spiral 1 Ground Moving Target Indicator
    (GMTI) and Cruise Missile Defense (CMD) capability by the 2012 date
    required by OSD. The fiscal year 2003 President's budget requested a
    $2.1 billion increase over the fiscal year 2002 President's budget
    (including the $488 million in fiscal year 2003 DERF). Between the
    fiscal year 2002 President's budget and the fiscal year 2003
    President's budget we've established a new program element that holds
    funding for both the Multi-Platform Radar Technology Insertion Program
    (MP-RTIP) and the MC\2\A. That new program element is PE 0207449F,
    Multi-Sensor Command and Control Constellation (MC\2\C) and is found at
    line R-148 in the fiscal year 2003 President's budget documentation.

                            ARMORED SECURITY VEHICLE

        32. Senator Landrieu. General Shinseki, the Army's fiscal year 2004
    budget plans call for the termination the Armored Security Vehicle
    (ASV). Frankly, I am troubled by that decision, which is not consistent
    with my recollection of representations made to me last year about
    continuing the program. First, there is nothing wrong with the vehicle,
    and it meets its mission very well. Its need has only increased after
    September 11. It is strongly supported by the military police (MP) in
    Bosnia and Kosovo. I am confident it will perform well if sent to
    Afghanistan.
        Second, we hear a great deal about the Army's investments to
    achieve strategic mobility. MPs are critical to strategic mobility.
    There is no other armored, wheeled vehicle that has the same mobility
    as the combat force. Add-on armor to other wheeled vehicles reduces
    mobility for HMMWVs, and add-on armor does not provide the safety to
    the men and women in the vehicle like that of the ASV.
        Third, the Army cites cost as a prohibition for the ASV in fiscal
    year 2004. Yet, very attractive industry proposals have been given to
    the Army to continue production in fiscal year 2004 and beyond at or
    near the current prices. The Army knows these proposals are very
    attractive, if not below cost.
        Fourth, roughly 500 more ASVs need to be purchased to meet the
    recently revised acquisition objective. These vehicles are needed to
    equip the counter attack corps and other essential units necessary to
    the Army's transformation.
        As Chairman of the Emerging Threats and Capabilities Subcommittee,
    I see this vehicle as absolutely necessary and of no less priority than
    other vehicles you are purchasing and propose to purchase. Is it the
    Army's intention to fully obligate the extra $3.5 million provided last
    year for additional ASVs?
        General Shinseki. The Army will fully obligate the additional $3.5
    million in April 2002 for ASVs.

        33. Senator Landrieu. General Shinseki, will you fully obligate the
    fiscal year 2003 funds for vehicles as requested in the budget?
        General Shinseki. At this time, the Army plans to fully obligate
    the fiscal year 2003 ASV funds.

                            ARMORED SECURITY VEHICLE

        34. Senator Landrieu. General Shinseki, are we putting lives at
    risk in up-armored HMMWVs to save money?
        General Shinseki. No, the Army is not putting soldiers' lives at
    risk in up-armored HMMWVs to save money. The very nature of soldiers'
    missions puts their lives at risk; however, we do everything possible
    to operationally mitigate those risks. Soldier protection is a top
    priority, and we strive to provide soldiers with the protection needed
    to accomplish their missions.
                                     ______

                  Questions Submitted by Senator Jean Carnahan

                          EXPEDITIONARY MEDICAL SYSTEM

        35. Senator Carnahan. General Jumper, your written testimony
    referred to the Air Force's innovative new medical concept, the
    Expeditionary Medical Systems (EMEDS). It rushes medics to where they
    are needed, rapidly. It can care for patients affected by chemical,
    biological, and radiological weapons. These capabilities might be very
    useful in responding to terrorist attacks and natural disasters within
    the United States. What benefits might this EMEDS program bring to our
    domestic first responders in the case of future attacks?
        General Jumper. The EMEDS concept provides a highly mobile,
    flexible medical response that can be tailored to any situation. The
    greatest benefit of EMEDS is that it allows for rapid response--the
    quick mobility of medical assets to a disaster site. This rapid
    response is defined in terms of hours, not days, which will make the
    difference in saving lives. EMEDS is also very flexible in that it
    allows tailoring the response to the particular threat and situation at
    hand. Not every situation will require a full 25-bed hospital
    capability. In addition, various specific response packages may be
    added, such as preventive medicine, pharmaceutical, agent detection,
    patient decontamination, and others, as required. Tailoring the
    response to the threat is an efficient use of resources while meeting
    the requirement. In addition to being highly mobile and flexible, EMEDS
    can be collectively protected against biological/chemical
    contamination, thus providing a safe medical environment. The concept
    of an EMEDS-like capability can be adapted by any state/agency/
    organization to operationalize their disaster response plans.

                         UNMANNED COMBAT AERIAL VEHICLE

        36. Senator Carnahan. General Jumper, the Unmanned Combat Aerial
    Vehicle (UCAV) is fascinating technology and will play a variety of
    combat roles. In Afghanistan, UCAVs have already demonstrated their
    value in reconnaissance and are beginning to excel as weapons
    platforms. Can you describe the contribution the UCAV will provide to
    other missions such as destroying enemy air defenses?
        General Jumper. UCAVs will provide a tremendous contribution to
    SEAD/Strike in the early stages of a high threat conflict. Early
    warfighter emphasis remains on addressing the 2010-plus anti-access
    problems in the high-risk ``double-digit'' SAM environment, using
    UCAV's precision and increased stealth to target advanced SAMs, and
    paving the way for our legacy platforms. In addition, the Air Force is
    exploring the potential for limited near-term electronic attack and
    tactical reconnaissance role and studying the long-term potential for
    directed energy and precision all weather attack capability.

                               STRATEGIC AIRLIFT

        37. Senator Carnahan. General Jumper, our war on terrorism has
    caused an important shift in our strategic outlook. We have moved from
    a doctrine of containment, to the concept of preemption: attacking, or
    helping to attack, potential enemies before they strike us. What new
    demands will this place on the Air Force's strategic airlift?
        General Jumper. The Air Force is still assessing potential changes
    in airlift requirements resulting from the ongoing war on terrorism.
    However, Mobility Requirements Study fiscal year 2005 (MRS-05)
    identified a requirement of 54.5 million ton miles per day--to execute
    a two near simultaneous war scenario. Currently, we are experiencing a
    shortfall in meeting that requirement. The proposed follow-on C-17
    multiyear procurement will bring the fleet total to 180 aircraft. This
    continued C-17 procurement combined with C-5 modernization will allow
    the Air Force to meet MRS-05 airlift requirements and provide options
    to continue growth if additional demands are identified as a result of
    the global war on terrorism.

        38. Senator Carnahan. General Jumper, does the fiscal year 2003
    budget begin to address these new issues?
        General Jumper. This budget underpins our vision of providing the
    Nation a total air and space force with global reconnaissance and
    strike, including supporting troops and deploying them, across the full
    spectrum of operations. Our investments in a wide variety of strike
    systems (both new or improved), sensors, and communication links bring
    us closer to our vision of having an all weather, 24 hour a day, 7 days
    a week ability to provide near instantaneous ground attack from the air
    with a wide variety of platforms.

                              C-17 STRATEGIC ROLES

        39. Senator Carnahan. General Jumper, what roles will the C-17 play
    in this new strategic framework?
        General Jumper. The C-17, along with the C-5, will play a
    significant role in our strategic airlift force's ability to react to
    the rapidly changing international security environment. The C-17s
    capability to operate from short, semi-prepared airfields, and airdrop,
    make it uniquely capable of operations into austere locations as
    illustrated during the current campaign in Afghanistan. With its high
    mission capable rates and unmatched flexibility, the C-17 will remain
    the backbone of our strategic airlift forces for the foreseeable
    future.

                                     F/A-18

        40. Senator Carnahan. Admiral Clark, the F/A-18 has proven
    invaluable in our current war on terrorism in Afghanistan. The fiscal
    year 2003 budget cuts the number of F/A-18s to be delivered next year.
    We need more. We are getting less. The Navy's unfunded requirements
    list puts 10 more F/A-18 E/Fs as its third priority. Why is this a high
    priority for the Navy?
        Admiral Clark. The unfunded requirement for 10 additional F/A-18 E/
    Fs is a high priority because it allows the Navy to replace an aging
    inventory of F-14s more rapidly and increases the combat capability of
    our air wings. While the F-14 has served the Navy well, it costs twice
    as much as the F/A-18 E/F to operate, and imposes a high workload on
    our sailors to maintain the aircraft.

        41. Senator Carnahan. Admiral Clark, your written testimony says
    our current F/A-18 forces have ``flown well in excess of planned
    utilization dates.'' You said, ``more than 300 F/A-18s will require
    service life extensions earlier than planned.'' We are flying these and
    other aircraft beyond their expected life span and beyond their
    programmed limits. Can you comment on this situation and your describe
    your efforts to minimize the risks of flying aging aircraft?
        Admiral Clark. The Navy's estimate of service life extension
    requirements for the F/A-18 (over 300 aircraft) is based on the
    procurement plan of replacement platforms (F/A-18 E/F and Joint Strike
    Fighter) and the structural limits of the aircraft. F/A-18 structural
    limits are based primarily on the number of carrier catapults and
    arrested landings (2000) and wing root fatigue life expended on each
    aircraft. The Navy closely monitors aircraft service life remaining
    through the Structural Appraisal of Fatigue Effects (SAFE) program, and
    conducts rigorous inspections to track the structural integrity of each
    aircraft. The SAFE program provides monthly tracking of each aircraft's
    service life remaining and allows the Navy to accurately project
    service life extension requirements. In addition, an Operational Safety
    Improvement Program (OSIP 11-84) has been established to correct
    airframe structural deficiencies when they are discovered during the
    inspection process.
        As aircraft utilization rates increase, catapult and arrested
    landings and wing root fatigue increase, thereby decreasing the service
    life remaining on the aircraft. These factors collectively accelerate
    the requirement to conduct service life extensions on the aircraft.

                             SCIENCE AND TECHNOLOGY

        42. Senator Carnahan. General Shinseki, I understand that it often
    takes years before the most advanced technology gets from the research
    and development laboratories to the users at places like Fort Leonard
    Wood. I am concerned that in the area of chemical and biological
    defense we cannot afford to wait that long. The threat of such attacks
    has never been more real. How will the Army ensure our soldiers have
    the most advanced technologies to protect them against chemical and
    biological attacks?
        General Shinseki. Protection against chemical and biological attack
    is critical for all of our warfighters. By law, chemical and biological
    defense is consolidated under Office of the Secretary of Defense
    management, specifically the Assistant to the Secretary of Defense for
    Nuclear, Chemical, and Biological Defense. The executive agent for the
    Chemical and Biological Defense Program is the Army.
        The Chemical and Biological Defense Program has implemented a
    technology maturity metric (technology readiness levels (TRLs)) and
    assessment process to ensure technologies are not transitioned
    prematurely into systems development and demonstration (SDD). In that
    regard, we believe the key to speeding products to the warfighter is in
    the science and technology (S&T) community maturing their emerging
    technologies sufficiently prior to transition so any potential cost and
    schedule growths are minimized during SDD. Past program experience has
    shown that it is less expensive to fix technical problems in S&T than
    it is in SDD.
                                     ______

                   Questions Submitted by Senator John Warner

                         ARMY COUNTERMINE CAPABILITIES

        43. Senator Warner. General Shinseki, the January 21, 2002, edition
    of Inside the Army quoted an internal Army review that stated ``the
    service faces countermine capability `shortfalls' in four key areas:
    see and detect from standoff ranges; mine neutralization; force
    protection; and demining and clearing.'' What capabilities do our
    soldiers have currently for standoff mine detection from a vehicle or
    aircraft?
        General Shinseki. U.S. soldiers do not presently have a standoff
    detection capability from a vehicle or aircraft. The Army is assessing
    a standoff detection technology from a rotary wing UAV known as a
    Camcopter. This is expected to be a limited capability for detection of
    changes in routes that would indicate the presence of mining activity.
    Development of a minefield stand off detection capability from a UAV is
    slated to be initiated in fiscal year 2003. Standoff detection from a
    vehicle in a pure sense is not achievable today. What is planned in the
    near term is the use of an unmanned ground search platform to remove
    the soldier from the vehicle during search operations. This is the
    Ground Standoff Mine Detection System program under development today.

        44. Senator Warner. What is the fielding status of the Army's
    current next-generation mine detection systems, the Ground Standoff
    Mine Detection System (GSTAMIDS) and the Handheld Standoff Mine
    Detection System (HSTAMIDS)?
        General Shinseki. The GSTAMIDS is currently in development with a
    planned transition to production for the Block 0 version to occur in
    February 2003. The HSTAMIDS is currently in development with a planned
    transition to production at the end of fiscal year 2003. As a result of
    Operation Enduring Freedom, the Army initiated an acceleration of the
    program to provide 200 production units of an interim variant to be
    delivered by the end of calendar year 2002.

        45. Senator Warner. General Shinseki, what measures has the Army
    taken to mitigate risk until these systems are fielded?
        General Shinseki. The Army has committed $29 million for urgent
    operational requirements in support of Operation Enduring Freedom to
    mitigate risk until these systems are fielded. The forces have deployed
    mine sniffing dog teams on the ground in Afghanistan. D7 bulldozers
    have been equipped with armor protection for use in clearance of some
    areas with mines. Tele-operated mini-flails have been deployed to clear
    areas of antipersonnel mines. We have procured state-of-the-art metal
    detectors from Australia that are more effective in highly mineralized
    soil conditions found in some parts of Afghanistan. This is an interim
    measure until the Handheld Standoff Mine Detection System mine
    detectors are available.

        46. Senator Warner. General Shinseki, what are the countermine
    capabilities for the Interim Brigade Combat Team?
        General Shinseki. In addition to the HSTAMIDS and GSTAMIDS systems,
    countermine capabilities for the Interim Brigade Combat Team consist of
    a suite of equipment to be deployed with the Engineer Squad Vehicle
    Variant of the Interim Armored Vehicle. Each vehicle will be equipped
    with light weight rollers or light weight full-width blades. As part of
    the ensemble, each vehicle will also be equipped with a magnetic
    signature duplicator to deal with magnetic influence fuzed mines. Six
    of the vehicles in the nine vehicle engineer company will also tow a
    Mine Clearing Line Charge (MICLIC). The MICLICs will be replaced
    starting in the fiscal year 2005 time frame with the Explosive Standoff
    Mine Clearance system, also known as Mongoose. Mongoose will provide a
    more robust capability across the full spectrum of the threat.
                                     ______

                 Questions Submitted by Senator Strom Thurmond

                                  END STRENGTH

        47. Senator Thurmond. General Shinseki, Admiral, Clark, and General
    Jumper, in previous testimony before the committee, we were told that
    more than 60,000 National Guard and Reserve personnel have been called
    to active duty. Although a large number of these personnel are on duty
    to provide airport security, the majority supports the war against
    terrorism. In fact, it is acknowledged that the Active-Duty Forces
    could not prosecute the war without the support of the Reserve
    components. Since the Reserve components cannot be kept on active duty
    indefinitely, what will be the impact on the operation if the Reserve
    call-up is terminated?
        General Shinseki. Active component forces are so fully integrated
    with the Reserve components that we cannot conduct sustained operations
    without direct inclusion of the Reserve components. The impact of
    termination of the Reserve call-up would be severe and would
    dramatically affect our ability to sustain our current operations. Were
    the Reserve call-up terminated, we would be hard pressed to support the
    warfighting commanders in chief and have difficulty meeting homeland
    security needs and maintaining readiness of our Active component
    forces. The Army has called on nearly 28,000 Army National Guard, Army
    Reserve, Individual Mobilization Augmentee, and Individual Ready
    Reserve soldiers in support of Operations Noble Eagle and Enduring
    Freedom. Approximately 57 percent are supporting homeland defense
    efforts, while 43 percent are engaged in the war on terrorism.
        Admiral Clark. The termination of the Reserve Mobilization will
    most significantly impact our ability to sustain force protection, plan
    and implement the war on global terrorism, conduct harbor defense, and
    affect the quality and quantity of information gathered and analyzed by
    our intelligence components. To date, the top four mission areas
    supported by Navy mobilized Reservists are:
                                                                     Percent
    Force Protection                                                      54
    Unified Command/Service Staffs                                        12
    Intelligence                                                          10
    Harbor Defense                                                         7

        Without augmentation by the Reserve component, either Active Duty
    PERSTEMPO will increase or responsiveness to current and anticipated
    tasking will be protracted.
        General Jumper. The Active-Duty Forces cannot prosecute this war in
    its entirety without the support of the Reserve components (RC). This
    is especially true due to the complexity and robust response of the
    United States to the war on terror. In fact, the level of RC support,
    the combination of mobilized and volunteer forces, has remained
    relatively constant for some time. The Air Force policy from the
    inception of hostilities has been that our gaining commands must
    certify that requirements cannot reasonably be sourced from the Active
    Duty or Reserve component volunteer forces. We therefore have been
    prudent from the start with our use of mobilized RC forces and will
    continue to be. We have also worked closely with the theater commanders
    and instituted a policy that, as much as possible, we will rotate our
    outside CONUS-deployed forces on our 90-day AEF construct.
    Unfortunately, not all of out career fields have the depth of personnel
    to do this, but the majority will be able to comply. The effect of this
    policy is that we can reduce the duration of support from the RC forces
    alleviating the impact on the individuals and their civilian employers.

        48. Senator Thurmond. General Shinseki, Admiral Clark, and General
    Jumper, if you were to increase the end strength (E/S) of your service,
    what would be the optimum increase?
        General Shinseki. The current operational environment places
    additional demands on the Army that were previously unrealized. Post-
    September 11 events have only increased demands placed on the force,
    and the Army will likely require an end strength increase to fully meet
    these demands.
        The Total Army Analysis (TAA) process will determine the size and
    composition of the Army within a constrained budget. The current
    effort, TAA 09, is not complete but will account for the additional
    emerging requirements in the area of homeland security and the global
    war on terrorism.
        To address the immediate need, the Fiscal Year 2002 Defense
    Authorization Act permits the Department of Defense to allow the
    services to exceed their end strength by 2 percent in any fiscal year
    in which there is a war or national emergency. Taking full allowance of
    this provision would allow the Army to increase its Active component
    end strength to 489,600.
        The Army can realistically increase recruiting by an additional
    4,000 soldiers per year in fiscal year 2003 and 2004 to address the
    most immediate needs of the war on terrorism and homeland security,
    provide relief for Reserve component soldiers, and allow more time to
    analyze enduring requirements.
        Admiral Clark. Based on current force structure and mission
    requirements, the Navy needs to be at 376,000 plus 4,383 additional end
    strength needed to support increased anti-terrorism force protection in
    fiscal year 2003. The increased security end strength will permit the
    fleet's to meet force protection conditions necessary for a long-term
    security posture. Total Navy end strength requirements are 380,383.
        General Jumper. Initial projections show a 30,000 increase in total
    military (Active/Guard/Reserve) end strength requirement, but our
    production base could only execute 7,000 in fiscal year 2003. SECDEF
    challenged us to pursue more innovative solutions to offset the need
    for additional E/S. We are currently meeting E/S requirements through
    partial mobilization of the ARC and stop loss actions, but we can't use
    these tools indefinitely. In anticipation of demobilization and an end
    to stop loss, we are starting the lengthy process of determining the
    best and most efficient way to meet our increased requirements.

                                 TRANSFORMATION

        49. Senator Warner. General Shinseki, based on the experience of
    the current operations in the Balkans and Afghanistan and the prospect
    that future conflicts will be unlike those we fought in the past, have
    you considered advancing the schedule for the Army's Transformation?
        General Shinseki. Yes, from our current operations in the Balkans
    and the global war on terrorism, the Army is in a continuous process of
    learning from and assessing these experiences. The attacks of September
    11 were more than just the first salvo in a new war; they validated the
    direction of our vision and the need to accelerate transformation. We
    believe our efforts to accelerate transformation are on track with the
    emerging strategic environment.

        50. Senator Warner. General Shinseki, what is the pacing issue in
    the Army's Transformation?
        General Shinseki. The Objective Force is the pacing issue of the
    Army's transformation. The Objective Force is the integration of
    people, systems, and emerging technologies. The success of Army
    transformation and the realization of the Objective Force will
    ultimately depend on our people. Soldiers remain the centerpiece of our
    formations, and it will take trained, educated, disciplined, tough, and
    dedicated soldiers at every level to implement this change. The
    Objective Force soldier must be multi-faceted, adaptive, self aware,
    innovative, creative, and a risk-taker. The only way to ensure this is
    through realistic training at home station, emergency deployment
    readiness exercises, and the combat training centers allowing soldiers
    to train as we want them to fight.
        When we equip these soldiers with systems like the Future Combat
    Systems, Warfighter Information Network-Tactical, Comanche, Objective
    Force Warrior, and other emerging technologies, they will be the most
    skilled, knowledge-based force in the world. We will continue to
    exploit the revolutionary potential of information superiority and
    networked sensors, shooters, supporters, and decision-makers, to allow
    the force to see first, understand first, act first, and finish
    decisively in full spectrum military operations. It will change the way
    we deploy, fight, sustain, and use information.

                              CONDITIONS IN KOREA

        51. Senator Thurmond. General Schwartz has made a strong case for
    improving the quality of life for our military personnel assigned to
    Korea. Since the Army has the largest contingent of forces in Korea,
    what is the Army doing to improve the quality-of-life for the soldiers
    assigned to Korea?
        General Shinseki. General Schwartz has indeed made a compelling
    case to improve the well-being for all military personnel serving in
    Korea and their family members. His goal to make Korea an assignment of
    choice is a worthy endeavor that I fully support. The generous
    financial assistance that Congress has provided Korea in the last few
    years is gratifying, and the result is that significant inroads have
    been made into many of the most pressing near-term quality of life
    challenges. Still, more needs to be done to fix the long-term problems.

        52. Senator Thurmond. General Shinseki, in your judgment, why are
    Army officers turning down command in Korea?
        General Shinseki. We reviewed the reasons several officers gave in
    fiscal year 2002 for declining command in Korea, but found no single
    quantifiable reason. The majority cited general ``family reasons.''
    Overall command declination rates have remained relatively stable. As
    we look at command declinations Army-wide, we find no trend why
    officers decline command, nor can we find a pattern indicating officers
    are more likely to decline command of one type of unit over another.
        Many officers who decline command in Korea and elsewhere have
    served our Nation proudly for 18 to 22 years. Some have deployed to
    Panama, Southwest Asia, the Balkans, and other remote locations leaving
    behind their families for extended periods. This takes an undeniable
    toll on family relationships, and many choose family stability over
    command.
        Several changes beginning in fiscal year 2003 should help alleviate
    the number of declinations. Officers may now decline command as soon as
    they are notified of their board selection while maintaining their
    eligibility for command in future years. This allows officers to
    reconsider their selection should their circumstances change.
    Additionally, officers who are contacted for activation for command may
    state their non-availability for command at that time due to personal
    or professional reasons. This ensures they will not be forced into
    accepting or declining command for the wrong reason while they maintain
    their alternate status for future commands during that fiscal year.

        53. Senator Thurmond. General Shinseki, if given the authority what
    immediate changes would you make to enhance the assignment to Korea?
        General Shinseki. The well-being of our soldiers, civilians, and
    their families stationed overseas continues to be a priority. There are
    several initiatives that are contributing to the improvement of the
    well-being for Army personnel in Korea, such as new barracks and family
    housing construction and renovation. This will allow more service
    members to serve tours in Korea with their families. There are two
    major programs that are part of our Army facility strategy: one-plus-
    one barracks standard by 2009 and improvements in family housing
    through renovation and construction by 2007. This is a long-term goal,
    but we continue to improve existing housing through a phased renovation
    and conversion of family housing units. Our Korea housing and barracks
    plan will move us closer to our objective of providing a standard of
    housing commensurate with our civilian counterparts.
        The Army is also addressing the concerns of a force that is more
    computer and Internet savvy by working to improve the connectivity of
    Internet portals for better e-mail communication. With increased
    emphasis on technology and communications, Eighth Army morale, welfare,
    and recreation (MWR) has stepped up to provide low-cost Internet access
    to our customers. Whether it's surfing the Internet or writing to loved
    ones back home, our community activity centers provide cyber cafes with
    DSL connections. Additionally, all MWR libraries are equipped with
    Internet-accessible computers.
        Eighth Army MWR has offered cable television to members of the
    military community living in on-post quarters for over 5 years. Every
    barracks room and private living quarters receive free basic cable,
    which includes Armed Forces Network channels, local Korean channels,
    and free radio. Customers may also subscribe to the cable premium
    package, which offers additional programming, including CNN
    International, Discovery Channel, and many others. Costs for the
    premium package cover only the cost of channel licensing fees.
        If given the authority to make immediate changes for improvement in
    the overall well-being of personnel in Korea, I would speed-up the
    timeline on the issues mentioned above. The single greatest effort
    would be in increasing barracks, family housing, workplace environment,
    and other facilities renovations and construction.

                              CIVIL AFFAIRS UNITS

        54. Senator Thurmond. General Shinseki, the current operations have
    demonstrated the need for increased unconventional operating forces
    including the need for civil affairs units. I understand that the Army
    relies almost exclusively on the Army Reserve to support the civil
    affairs function and that these assets arc being stretched to the
    breaking point. What, if any, are your plans to address the operations
    tempo of the Reserve civil affairs units?
        General Shinseki. You are correct that civil affairs is primarily a
    U.S. Army Reserve (USAR) mission. Ninety-seven percent of Army civil
    affairs forces are in the USAR, because only in the USAR can we
    maintain the unique skill sets that civil affairs specialties require.
    USAR civil affairs soldiers bring special skills and experience from
    their civilian jobs that we cannot maintain in the active Army. For
    example, there is no Army specialty that duplicates the knowledge and
    skills needed to assist in reestablishing the economic and banking
    systems in a post-conflict environment. Reserve component civil affairs
    units have that capability, because they can recruit soldiers whose
    daily job is running a large bank, or a similar important position in
    the U.S. economic sector.
        USAR civil affairs units have been involved in every operation and
    contingency for the last 20 years, from Grenada through the Gulf War
    and the Balkans, to the current operations against terrorism.
    Consequently, many Reserve civil affairs units have been deployed
    frequently and repeatedly, but the force is not yet at the breaking
    point. Currently, only 1 percent of the civil affairs force is
    mobilized supporting Operations Joint Guard and Joint Forge, and 5
    percent of the civil affairs force is mobilized supporting Operations
    Noble Eagle and Enduring Freedom. On average during the past 5 years,
    only 12 percent of the force has been mobilized at any one time. That
    said, the civil affairs force does have some challenges. Due to the
    high operations tempo over the last several years, we have a challenge
    in the retention of qualified civil affairs soldiers. Also, 45 percent
    of the Reserve component civil affairs force has already been mobilized
    and performed duty in the Balkans. Current DOD policy only allows for
    one rotation per mobilization, which raises concerns about the ability
    of the civil affairs force to sustain both the Balkans mission and the
    global war on terrorism.
        More than 2 years ago we initiated a force structure increase for
    both Active and Reserve component civil affairs to better support the
    regional combatant commanders. This force structure increase will also
    serve to partially alleviate the increasing operations tempo. Between
    now and fiscal year 2005, the Army will create four new Reserve
    component civil affairs battalions, totaling over 1,100 spaces. In
    fiscal years 2004 and 2005, the Active component civil affairs
    battalion will add one new company per year, for a total of 118 spaces.
    Additionally, this year the U.S. Army John F. Kennedy Special Warfare
    Center and School has doubled the number of officer and enlisted civil
    affairs courses to increase the available pool of qualified civil
    affairs soldiers.
        These force structure changes will not happen overnight.
    Recruiting, training, and retaining for the new units will be a
    challenge. It will take approximately 2 years for each new Reserve
    component civil affairs unit to be fully trained and validated to
    deploy to execute missions. In the meantime, we are looking at other
    means to effectively manage the operations tempo for our Reserve units.
    These include potentially increasing the length of operational
    deployments, which will, over time, reduce the number of units and
    personnel mobilized, and closely evaluating and prioritizing other
    commitments for our Reserve civil affairs, such as exercise
    participation, to ensure that the essential requirements of the
    regional combatant commanders are being met while not overtaxing our
    Reserve Forces during the war against terrorism.

                             U.S.S. JOHN F. KENNEDY

        55. Senator Thurmond. Admiral Clark, during the past several
    months, the materiel readiness of the U.S.S. John F. Kennedy has
    received a great deal of media coverage. According to several of the
    U.S.S. John F. Kennedy's chiefs interviewed by The Navy Times, the
    problems with the ship stem from the high OPTEMPO during 2001 and the
    lack of money for repairs. Do you agree with the chiefs' assessments
    that the high OPTEMPO and lack of funds were the cause of the U.S.S.
    John F. Kennedy's problems?
        Admiral Clark. U.S.S. John F. Kennedy's recent materiel readiness
    problem had a number of causes. Of particular note was the conversion
    of the fiscal year 1993 Service Life Extension Program (SLEP)
    availability to a Complex Overhaul, reducing the planned $650 million
    work package to $331 million. Cancellation of distributive system work
    from the SLEP program has caused systemic problems in steam, fuel oil,
    containment holding and transfer, and other piping systems. Other
    contributing factors include a 5-year period of time in the Reserve
    fleet with lower levels of maintenance funding as well as near-term
    poor oversight and enforcement of standards by shipboard leadership.
    More readiness money is flowing to the Fleet. The fiscal year 2002
    budget has increased funding for Navy readiness accounts over fiscal
    year 2001 levels. Our priority is to take care of the Navy our Nation's
    taxpayers have already purchased.

        56. Senator Thurmond. Admiral Clark, what assurance do you have
    that there are no other ``U.S.S. John F. Kennedys'' out in the fleet?
        Admiral Clark. The Navy has an active inspection program that
    periodically inspects each ship's operational readiness and material
    condition. The Navy's Board of Inspection and Survey discovered the
    U.S.S. John F. Kennedy's recent material readiness problems during a
    routine inspection.
        Fleet readiness is a top Navy priority. The fiscal year 2002 budget
    has increased funding for Navy readiness accounts over fiscal year 2001
    levels. This has significantly reduced the level of deferred fiscal
    year 2002 ship maintenance from the levels of previous fiscal years.

                         FORWARD DEPLOYED STAGING BASE

        57. Senator Thurmond. Admiral Clark, I understand that based on the
    successful deployment of special forces from the U.S.S. Kitty Hawk
    during the operation in Afghanistan, the Navy is looking at the notion
    of an afloat forward staging base designed to meet the special forces
    requirement without straining the carrier fleet. What can you tell us
    about this concept?
        Admiral Clark. I have directed a study on the feasibility of
    acquiring a platform that will provide, among other things, an
    operational capability similar to that seen in U.S.S. Kitty Hawk (CV
    63) last year. Teams from Naval Sea Systems Command (NAVSEA) and
    Military Sealift Command (MSC) have explored more than 40 sea-borne
    platforms to assess their ability to meet this requirement. NAVSEA's
    and MSC's combined analysis and their recommendations will provide a
    basis for future decisions on afloat forward staging bases.

                                SUBMARINE FLEET

        58. Senator Thurmond. Admiral Clark, in testimony before this
    committee during deliberation on the fiscal year 2001 budget, your
    predecessor, Admiral Johnson, stated: ``The submarine force is no
    longer able to meet all the regional CINC's requirements due to the
    draw-down in force level.'' What is your assessment of the size of the
    submarine fleet compared to the real world operational requirements?
        Admiral Clark. Our 54 attack submarines (SSNs) in the inventory are
    insufficient to meet the theater demand today. Following September 11,
    combined requirements from the Combatant Commanders for SSNs available
    in theater surged to 12.9. Our 54 SSNs are only able to provide a
    theater presence of 10 to 10.5. To compensate for this shortfall, we
    are stretching the budget and innovating where possible. Three specific
    items in the fiscal year 2003 budget address this shortfall.
        First, the fiscal year 2003 budget includes advance procurement to
    get to a three per year build rate for Virginia class SSN starting in
    fiscal year 2008. A build rate of at least two Virginia's per year is
    needed as soon as possible in order to maintain long-term attack
    submarine force structure above 55.
        Second, the fiscal year 2003 budget includes refueling 8 of 10
    available Los Angeles class SSNs throughout the FYDP to make more SSNs
    available before they reach their end of life around 2016.
        Lastly, commencing late in fiscal year 2002, and complete by 2003,
    three refueled SSNs will be forward-based in Guam. Since these SSNs are
    closer to their theater of operation, they will spend the bulk of their
    time in theater and will be able to provide more operational days at-
    sea as compared to CONUS-based SSNs. This opportunity was enabled by a
    new operating cycle concept and by leveraging off existing Guam
    infrastructure that only required modest upgrades for the three SSNs.

        59. Senator Thurmond. General Jumper, although the Air Force
    exceeded its retention for first term enlistments, it fell short of the
    goals for second term reenlistments, and career reenlistments. In your
    judgment, what is the greatest hindrance to achieving the reenlistment
    goals for the career force?
        General Jumper. In our most recent exit survey, second term and
    career airmen ranked ``availability of civilian jobs'' and ``pay and
    allowances'' as their number 1 and 2 reason for leaving the Air Force.
    The perception among those leaving was jobs were plentiful. In fact,
    about two-thirds of those leaving already had a job lined up. Since we
    can't change the economy, our efforts are focused on improving ``pay
    and allowances''--to ensure our competitiveness in the marketplace.
    Compensation is an issue that continues to be of significant importance
    to military members and was cited by over half the enlisted members as
    a ``strong'' or ``very strong'' influence to leave. Despite the
    targeted pay raises, only 40 percent of separating members said their
    military income covered their basic expenses with money left over.
        With your help, we are working hard to address these concerns. The
    improvements in basic pay, and other quality of life programs that
    Congress provided in the recent NDAA were a boost to our airmen and
    should go a long way in helping retain our career enlisted force. We
    will, however, continue to closely monitor reenlistments to ensure we
    retain our most valuable assets--our trained and experienced airmen.

                             MISSION CAPABLE RATES

        60. Senator Thurmond. General Jumper, in reviewing the briefing
    information on the Air Force budget, I noted that the Air Force
    projected an aircraft mission capable rate projection for fiscal year
    2003 of 78 percent. This represents an increase of 5 percent over
    fiscal year 2000, but is still short of the rates in the early 1990s.
    How will the operations in Afghanistan impact your mission capable
    rates?
        General Jumper. There were three effects from Operation Enduring
    Freedom (OEF) on Air Force mission capable rates:

             An initial effect accelerated an existing 15-month
            improvement in MC rates as the AF mobilized to a warfooting
            (depots surging, deployed aircraft receiving high-priority
            supply codes, and Reserve Forces activations) resulting in the
            aggregate MC rate spiking to 77.1 percent in December.
             Since September Air Force Reserve and Air National
            Guard rates increased dramatically in fiscal year 2002
            following troop activations; this positively influenced overall
            AF aggregate rates with the Reserve components MC jumping from
            67.9 percent in fiscal year 2001 to 75.8 percent in fiscal year
            2002 (as of March 1, 2002)--a 7.9 percent improvement in 6
            months.
             Following 6 months of increased operations and high
            aircraft utilization rates for certain high demand assets (not
            overall aggregate AF rates) there has been a slowdown in the
            improving trends. For example, the KC-10, E-3, and C-17
            decreased slightly as a result of extremely high utilization
            rates after September 11. AF fiscal year 2002 aggregate rates
            are still improving over an already improved fiscal year 2001
            trend, but not as much as surge in October-December timeframe.

                            EN ROUTE INFRASTRUCTURE

        61. Senator Thurmond. General Jumper, one of the most critical
    shortfalls facing our combatant commands is strategic lift. At
    virtually every hearing, commanders at all levels have voiced the same
    concerns about our ability to move large numbers of troops and
    equipment over long distances. Although additional lift is critical, so
    is the en route structure of airfields and refueling points. What is
    your assessment of the en route facilities throughout the globe and
    where would you place additional emphasis?
        General Jumper. In general, we are pleased with the condition of
    our en route infrastructure. However, there are certain locations where
    we still need to invest.
        Over the last decade, our overseas basing structure was in a state
    of flux. During this time, we intentionally minimized overseas
    infrastructure investment. As a result, our overseas installations
    suffered. In the latter half of the 1990s, we were able to target
    funding at our en route infrastructure through the Mobility Enhancement
    Fund (MEF) and the Defense Logistics Agency's (DLA) military
    construction programs (in conjunction with companion Air Force military
    construction projects). This targeted investment helped us offset some
    of that minimized investment previously mentioned.
        We base our en route infrastructure investment priority on mission
    need, as advocated by the theater CINCs. In our fiscal year 2003 budget
    request, we have included strategic airlift (en route) infrastructure
    projects at Naval Station Rota, Spain, and at Wake Island. DLA has also
    included in their fiscal year 2003 program a number of fuels
    infrastructure projects (including Rota) that support strategic
    airlift. Unfortunately, we have not seen any MEF funding in the last 2
    years.
        Our investment strategy has targeted completion of aircraft parking
    ramps, hydrant refueling systems, and key support facilities to meet
    the strategic airlift throughput objectives defined during Mobility
    Requirements Study-2005 (MRS-05). These projects are well supported in
    the current AF and DLA fiscal year military construction programs
    through fiscal year 2005, with the projects coming to fruition into
    fiscal year 2006. Based on evolving guidance in the National Military
    Strategy and defense plans, our theater CINCs may define additional
    strategic lift requirements to support their future areas of concern.
    If and when those additional airlift requirements are defined, they
    will no doubt drive some additional infrastructure challenges.

                            RECONSTITUTION OF FORCE

        62. Senator Thurmond. General Jones, our marines who made the first
    assaults into Afghanistan fulfilled their assignment in the great
    tradition of the Marine Corps. We all saw the harsh conditions that
    both the marines and their equipment had to endure throughout their
    deployment, but we have not had any reports on what impact the
    operations had on your aging equipment. As you are reconstituting the
    force, what problems are surfacing with the equipment and are you
    sufficiently funded to repair fully or replace the equipment?
        General Jones. The foremost problem impacting Marine Corps aging
    ground equipment in theater has been the harsh environment. Sand, dust,
    and wind along with the cold weather conditions has caused scheduled
    preventive maintenance to be expedited. Rolling stock, such as the
    HMMWVs, appears to have suffered more mechanical failures than
    expected. Fuel system problems have also been experienced. However, due
    to experience and interoperability, Marine Corps maintenance personnel
    at FOB Rhino, were able to overcome equipment failures and even
    assisted the Navy with their mechanical problems. Survivability of
    equipment in harsh environments continues to be a major area of concern
    when conducting operations. Additional analysis is required on
    equipment as it returns, since operations are ongoing. Additional
    funding may be required, and if needed will be identified via our
    resource requirement processes, to ensure maintainability of older
    equipment until new replacements are on line and fully integrated into
    the supply pipeline.

                             COUNTER-TERRORISM UNIT

        63. Senator Thurmond. General Jones, the Marine Corps is requesting
    an increase of 2,400 marines to field the 4th Marine Expeditionary
    Brigade. I understand that this unit's principal role will be counter-
    terrorism. How will the organization of this unit differ from the other
    Marine units?
        General Jones. The mission of the 4th Marine Expeditionary Brigade
    (Anti-Terrorism) is not ``counter-terrorism,'' but rather anti-
    terrorism. Anti-Terrorism (defensive component) and Counter-Terrorism
    (offensive component) are combined together in Combating Terrorism.
        This organization of the 4th MEB (AT) is different from other
    Marine units as reflected in its mission statement: To provide Unified
    Combatant Commanders with a rapidly deployable and sustainable
    specialized Anti-Terrorism Force to deter, detect, defend, and conduct
    initial incident response to combat the threat of worldwide terrorism.
        Fourth MEB (AT) is an organization composed of existing USMC
    capabilities augmented by a newly created and permanently assigned
    Anti-Terrorism battalion that is undergoing specialized training
    consistent with its dedicated mission of Anti-Terrorism.
        The 4th MEB (AT), like all Marine Air-Ground Task Forces (MAGTFs),
    can task organize their organic units and various other ground, air,
    and support elements, into a single force specifically focused on anti-
    terrorism operations. Leveraging capabilities already available within
    the Marine Corps, three commands with specific anti-terrorism/force
    protection missions were assigned to the 4th MEB (AT): the Marine
    Security Guard (MSG) Battalion, the Marine Corps Security Force (MCSF)
    Battalion, and the Chemical/Biological Incident Response Force (CBIRF).
    4th MEB (AT) combines into a single command, under a common commander
    and supporting staff, the ability to perform all the elements of anti-
    terrorism operations and leverages current and emerging technologies to
    achieve economy of force. The Brigade possesses the combination of
    personnel, equipment, training, and tactics that exceed the
    capabilities of regular Marine Corps units to conduct anti-terrorism
    operations.
        Fourth MEB's Anti-Terrorism (AT) Battalion was created from an
    infantry battalion. Its capabilities are built on the core Marine
    infantry battalion skills combined with the key element of a trained AT
    mindset. This mindset consists of the ability of an individual marine
    to recognize key indicators prior to a terrorist attack and take the
    appropriate action without hesitation. Key training includes
    understanding terrorist tactics and operations, reconnaissance/
    surveillance, surveillance detection and counter-surveillance skills.
    In addition, marines also receive enhanced NBC, marksmanship, and urban
    skill training. As a result, the marines of the AT Battalion are able
    to effectively operate in an urban environment with the skills
    necessary to engage terrorists while minimizing civilian casualties.
        In summary, the 4th MEB (AT) is a unit whose mission is to conduct
    anti-terrorism operations. It has the capability to provide highly
    capable, scalable, and rapidly deployable anti-terrorist units from
    platoon to brigade size. Each unit, regardless of size, will be
    specifically trained in anti-terrorism operations and have the
    integrated intelligence and communications assets that will enable it
    to effectively detect, deter, and defend against terrorism threats
    worldwide.

                               HIGH SPEED VESSEL

        64. Senator Thurmond. General Jones, the Marine Corps recently
    signed a lease with an Australian company for a high speed vessel to
    ferry marines from Okinawa to training sites on Japan and other
    training areas in the Far East. Considering the cost of the lease, what
    tactical capability does this vessel add to the Marine Corps?
        General Jones. The High Speed Vessel (HSV) is not considered a
    tactical asset. It is viewed as an innovative means to increase unit
    readiness and reduce the burden of strategic lift required by MARFORPAC
    forces to meet their off-island training requirements. The lease and
    the utilization of this vessel enables Marine Corps units to move a
    battalion of marines (970) and 350 short tons of unit cargo in one lift
    at a rate of speed of 37-42 knots. This one-way lift is normally
    completed within a 30-36 hour period depending on distance to the
    training or exercise area. Utilization of the HSV replaces 17
    individual one-way C-17 sorties. These C-17 sorties are normally
    accomplished over a 17-day period moving 100 marines or 45 short tons
    of cargo at a time. The estimated cost of moving a battalion of marines
    and 350 short tons of cargo via the HSV is $104,000. Likewise; the
    estimated cost of moving the same marines and cargo via strategic air
    is estimated at $500,000.
        The WESTPAC EXPRESS is considered a ``transformational'' intra-
    theater administrative (non-tactical) lift asset, which is service-
    unique, and theater assigned specifically to ease the transportation
    shortfalls in support of Marine Corps units in the Western Pacific. It
    is transformational in that we have re-engineered the OCONUS
    transportation equation by introducing a new commercial ``off the
    shelf'' technology platform which has regional capabilities,
    supplanting the much more expensive use of U.S. military strategic
    transportation platforms, thereby reducing costs while simultaneously
    increasing operational tactical training and strategic engagement
    opportunities. Its acquisition was also transformational in that it was
    acquired under a 36-month lease rather than a purchase arrangement.
    This technology is turning over with the same rapidity that the
    automated data processing industry experienced in the 1990s. The Marine
    Corps can upgrade to a more capable model in 36 months as opposed to
    being restricted by the traditional acquisition process, which would
    normally lock us into a 96-month or longer time frame. It is
    undoubtedly the transformational acquisition success story of 2001.
                                     ______

                   Questions Submitted by Senator John McCain

                                  SHIPBUILDING

        65. Senator McCain. Admiral Clark, a January 28, 2002 article
    titled, ``Responding to Lott, DOD Starts Funding LHD-9 And One More
    DDG-51'' by Chris Castelli in Inside the Navy states: ``At the urging
    of Senate Minority Leader Trent Lott (Republican--Mississippi), the
    Pentagon has made last minute adjustments to the Navy's shipbuilding
    plan in the Bush administration's fiscal year 2003 budget. The Pentagon
    put $74 million more toward a third DDG-51 destroyer and allocated $10
    million in advance procurement for a ninth amphibious ship, LHD-9, that
    was not previously in the Navy's budget.'' Is this true?
        Admiral Clark. The OSD Comptroller made two late changes to the
    Navy's fiscal year 2003 shipbuilding budget request by adding $74
    million in advance procurement funding for a third DDG 51 destroyer in
    fiscal year 2004, and shifting $10 million for advance procurement
    funding for a fiscal year 2008 LHD-9. Any specific questions on the
    factors that precipitated the decision for these shifts should be
    referred to the OSD Comptroller.

        66. Senator McCain. Admiral Clark, are you aware of an effort going
    on by the Department of the Navy to look at an AOA to replace the
    current LHA with an LHA(R)? Are you aware that the Comptroller's Office
    of the Secretary of Defense deleted the funding for the study on the
    AOA-cutting $16 million from the research, development, testing, and
    evaluation effort for the LHA replacement?
        Admiral Clark. The Department is aware of this situation. During
    the November 2001 review of the Navy's Fiscal Year 2003 Budget request,
    the OSD Comptroller's Office deleted fiscal year 2003 and 2004 RDT&E
    funding for the LHA(R) program.
        LHA(R) R&D funding throughout the FYDP was briefed to and approved
    by OSD (including the OSD Comptroller) at Milestone A as the minimum
    RDT&E funding necessary to support the least expensive LHA(R) AOA
    alternative--a repeat LHD-8. Since the AOA completes in fiscal year
    2002, this fiscal years 2003-2004 RDT&E deletion does not directly
    impact the AOA study, the AOA final report, or the Navy's ability to
    decide which LHA(R) alternative to pursue. However, the Department of
    the Navy will select a preferred alternative based on the results of
    the AOA and adjust RDT&E and SCN profIles as required to move forward.

        67. Senator McCain. Admiral Clark, does the $10 million in advance
    procurement for LHA-9 that was added by the Office of the Secretary of
    Defense Comptroller, according to the Castelli article, predetermine
    the results of the AOA?
        Admiral Clark. No. The results of the LHA(R) AOA are not
    predetermined. The LHA Replacement Analysis of Alternatives is ongoing
    and will report out in summer 2002. Alternatives being considered
    include: Repeat LHD-8 with evolutionary modifications, Modified LHD-8
    upgraded to enhance the ability to operate the larger and/or heavier
    new generation amphibious systems, and New Ship Designs spanning a wide
    range in size and capability. Based on the analysis presented in the
    AOA, the Navy will determine the optimal alternative for the LHA
    replacement as part of the LHA(R) program. The preferred alternative
    mayor may not be based on the LHD-8. The $10 million in the fiscal year
    2003 budget request allows the Navy to begin refining the AOA selected
    alternative's detailed capabilities/characteristics and other
    developmental work.

                      PLANNED FUTURE AIRCRAFT AND VEHICLES

        68. Senator McCain. Admiral Clark, I recently traveled to
    Afghanistan with other members of this committee. While there, I heard
    from several Navy and Marine Corps officers that the number one concern
    for replacing the LHA is safety because of a stability problem,
    especially with deployed aircraft. Their concern was that even with
    some minor fixes with fuel compensation systems, the problem will be
    exacerbated when the service deploys larger aircraft, such as the
    Osprey (MV-22) and the Joint Strike Fighter (JSF) which are
    replacements for the CH-46 and AV-8B respectively. I am told that the
    MV-22 is twice the weight of the CH-46 and that the JSF is believed to
    be about twice the weight of the AV-8B. Does the LHD class have similar
    stability problems as the LHA class, and would you agree that the
    problem could be exacerbated with the planned future aircraft and
    vehicles envisioned for the Marine Corps?
        Admiral Clark. The seven ships of the LHD class have improved
    stability characteristics over the LHA class and therefore do not
    experience weight and center of gravity issues to the same extent as
    the LHA. For example, LHD-7, commissioned in 2001, has greater than the
    required 1,000 long tons of service life weight growth allowance.
        LHDs have the growth allowance to accommodate MV-22 and JSF with
    aggressive weight control measures and the fuel oil compensation ship
    alteration although LHDs have less vehicle storage space (square
    footage) than LHAs.
        The Navy's five LHAs need to be replaced as soon as possible, as
    they are rapidly reaching the end of an already extended service life.
    The LHA(R) AOA was initiated to ensure that both Marine Corps and Navy
    21st century requirements are addressed, including the issues the
    Senator raises regarding the impact of heavier and larger aircraft/
    vehicles and overall amphibious force vehicle storage area. An LHD
    repeat is just one of several alternatives being considered in the
    LHA(R) AOA to meet requirements.

        69. Senator McCain. Admiral Clark, what growth percentages are
    currently planned for the LHD class of ships?
        Admiral Clark. The CNO-specified minimum Service Life Allowance for
    the LHD class at delivery from the shipyard is 1/2 foot for vertical
    center of gravity reserve and 1,000 long tons (about 2.5 percent) of
    displacement service life reserve. The requirement is documented in the
    LHD Class Top Level Requirements document.

        70. Senator McCain. Admiral Clark, is the LHD a good replacement
    for the LHA class of ships, considering that the ship does not meet the
    requirement in planned future vehicles and aircraft for the Marine
    Corps or our special operations community and considering the
    amphibious lift requirement of 2.5/3.0 Marine Expeditionary Brigade?
        Admiral Clark. The ongoing LHA(R) AOA is addressing whether the LHD
    is a good replacement for the LHA class. Continuing to build LHDs, as
    well as ship design modifications to enhance the capability to operate
    the larger and heavier new generation amphibious systems are currently
    being examined as options. The AOA is also investigating the optimum
    way to reach the fiscally constrained amphibious lift requirement of
    2.5 Marine Expeditionary Brigades. The AOA is expected to report out
    later this year and will present its conclusions at that time.

        71. Senator McCain. Admiral Clark, because of the well deck inside
    the LHD, isn't the LHD available square footage less than the LHA?
        Admiral Clark. See answer to question 70.

        72. Senator McCain. Admiral Clark, it seems to me that the LHD is
    not a very transformational program especially considering that it is
    the exact same hull of the current LHA class that is based on a 1950s
    design. It seems to me that if the LHA (R) class ship is built to have
    a lifespan of 50 years with no further research and development (R&D)
    funding, then the LHD-9 will be a 100-year-old design when it is
    decommissioned in the 2050 timeframe. Would the Navy develop an
    aircraft carrier, destroyer, or submarine without a robust R&D effort?
        Admiral Clark. The Navy is currently conducting an AOA for LHA(R).
    Numerous alternatives are under consideration, including a LHD-8 repeat
    design. If the results of the AOA support a repeat LHD or new ship
    design, additional RDT&E funds will be required. At that time, it may
    be necessary to revisit the current plan to use the $10 million in
    fiscal year 2003 SCN AP for a LHD-9.
        While the LHA(R) hull shape may be close to the original, its
    combat systems suite, communications gear, and information technology
    set up will be state-of-the-art.

        73. Senator McCain. Admiral Clark, where is the R&D funding for a
    major amphibious ship like the LHA (R)?
        Admiral Clark. See answer to question 72.

        74. Senator McCain. Admiral Clark, are you relegating the
    amphibious Navy to non-transformational status?
        Admiral Clark. See answer to question 72.

                              CRUISE SHIP PURCHASE

        75. Senator McCain. Admiral Clark, there are reports that the Navy
    is being approached to purchase a pair of unfinished cruise ships at
    the Northrup Grumman Shipyard in Pascagoula, MS that were left behind
    when American Classic Voyagers went bankrupt for use as mobile housing
    or hospital ships. Is the Navy in any way interested in purchasing such
    ships? Is there a need for such ships?
        Admiral Clark. The Navy has declined the offer to acquire or use
    the cruise ships under construction. A team of Navy engineers recently
    visited the partially completed passenger ships in Pascagoula,
    Mississippi, and concluded that the ships are not suitable for use as
    command and control ships due to their structural design and lack of
    military survivability features. We also looked at the ships' utility
    for other non-combat ship missions. While the ships are viable with
    modifications for use as hospital, recreational, or berthing vessels,
    the Navy does not have a requirement or need for any more of these ship
    types today.

                               T-5 TANKER BUYOUT

        76. Senator McCain. Admiral Clark, on February 8, 2002 Rear Admiral
    Church delivered to Congress the Department of the Navy's ``Fiscal Year
    2003 Budget Overview.'' On page 18 of the Navy's budget brief is a
    slide called ``Promote Better Business Practices, Managing the
    Department in a Business-like Manner.'' I noticed a bullet that states
    ``T-5 Tanker Buyout.'' Will you please tell the me why the Navy has
    decided in its fiscal year 2003 budget to buy the T-5 tankers rather
    than continue leasing them as was the plan several years ago?
        Admiral Clark. The T-5 Tankers were leased in the early 1980s
    rather than purchased because of the budgetary circumstances that
    existed at the time. When the ships were leased, the Navy negotiated
    for favorable purchase options that, conditions permitting, could be
    exercised at the appropriate time. Those conditions exist and that time
    is now. We have a continuing need for these vessels beyond their lease
    terms, which end in 2005 and 2006. If we let our options expire, we
    will end up chartering (leasing) higher cost replacement tankers.

                                  767 TANKERS

        77. Senator McCain. General Jumper, are you beginning to negotiate
    the lease of the 100 767 tankers, as well as the 4 737 VIP aircraft
    that were added by the Senate Appropriations Committee and enacted in
    the Fiscal Year 2002 Department of Defense Appropriations Act last
    December?
        General Jumper. The Air Force has begun separate negotiations with
    Boeing on the air refueling tanker and the 737 aircraft. Prior to
    entering into any contract, we will provide reports to the four defense
    committees as required by the fiscal year 2002 DOD Appropriations Act.

        78. Senator McCain. General Jumper, do you believe in competition?
    If you believe in competition, then why did the terms of the proposed
    lease arrangement exclude potential competitors/lessees?
        General Jumper. Yes, the Air Force believes in competition. Well
    before Congress provided us with an opportunity to attempt to negotiate
    a lease for new air refueling aircraft, we had engaged in extensive
    discussions with the major aerospace companies regarding future air
    refueling aircraft. After the Appropriations Statute was signed,
    Secretary Roche spoke with M. Phillipe Camus, Co-CEO of Airbus, and
    noted that the AF was interested in hearing from them. In February, the
    Air Force issued a non-binding Request for Information to both Boeing
    and to Airbus/EADS in order to conduct market research and to gauge
    available technology and business cases. The responses to this request
    for information clearly demonstrated that only the Boeing Company could
    currently meet the requirements of Section 8159 of the Fiscal Year 2002
    Appropriations Act. The other offering presented a higher risk
    technical approach and a less preferred financial arrangement. The USAF
    encourages aerospace companies to continue their air refueling boom and
    other tanker developmental efforts to ensure a vibrant and fully
    competitive global defense industrial base well into the future.

        79. Senator McCain. General Jumper, I read in the Air Force Times
    article of January 21, 2002 that you said Plan A is to buy the Boeing
    767 tankers and Plan B is to lease the tankers. If that is correct, why
    have you not included a single tanker in the fiscal year 2003 Air Force
    budget request recently submitted to Congress?
        General Jumper. The fiscal year 2003 Air Force budget includes seed
    money, with the intent of acquiring new air refueling tankers in the
    outyears.

                              TANKER ACQUISITIONS

        80. Senator McCain. General Jumper, in a letter dated December 7,
    2001, to Senator Patty Murray, Secretary Roche wrote, ``The most
    important and critical factor is that this replacement program starts
    as soon as possible. To this end we will work with the Assistant
    Secretary of Defense (Acquisition, Technology, and Logistics) and the
    Office of the Secretary of Defense Comptroller to amend the fiscal year
    2003 budget currently being vetted through the Department.'' Again let
    me pose the same question: if Plan A is to buy the Boeing 767 tankers,
    then why haven't you included a single tanker in the fiscal year 2003
    Air Force budget request recently submitted to Congress?
        General Jumper. Our Tanker ``Plan A'' is to begin acquiring new air
    refueling tankers in the out years of the FYDP. The fiscal year 2003
    Air Force budget includes seed money to begin this effort.

        81. Senator McCain. General Jumper, what events caused the Air
    Force to circumvent the normal disciplines of the budget process--not
    ventilating a tanker modernization plan in the Office of the Secretary
    of Defense, Office of Management and Budget, or through the authorizing
    committees and appropriations committees about leasing Boeing 767
    tankers?
        General Jumper. The USAF budget had funds in fiscal year 2002 to
    begin the process that would start replacing KC-135s with a follow-on
    tanker we call KC-X. We are pursuing this plan because the tanker age
    and corrosion situation has become increasingly worrisome to the USAF.
    The KC-135 tankers are 40-year-old-plus aircraft that are wearing out.
    The KC-135E models, our oldest and least capable, are spending over 400
    days in depot being rebuilt every 5 years, and they require significant
    communications upgrades to allow them access to airspace worldwide. The
    remaining 545 KC-135 aircraft were purchased between 1957 and 1965.
    They will all age out at approximately the same time. It has become
    increasingly expensive for the Air Force to operate and maintain these
    aircraft. In May 2001, we sent letters to the chairmen and ranking
    members of all the defense committees requesting approval for
    accelerating our effort.
        This fall, while we were well into the process of submitting the
    President's budget, we had a significant series of three events occur
    that focused USAF attention on reevaluating our tanker
    recapitalization, and thus potentially avoid having to replace the
    entire 545 aircraft fleet simultaneously. The first event came after
    the attacks on September 11; we started to fly our tanker aircraft at
    approximately twice their annual rate to support Operations Noble Eagle
    and Enduring Freedom. Simultaneously, the second event occurred, and
    that was the softening of the commercial aircraft market, and
    announcements from the US aviation industry that they were starting to
    shut production lines, and lay off U.S. aviation workers. Lastly, the
    Boeing Company had expended their own capital and research and
    development to commercially offer Air Refueling Tankers, for delivery
    in 2005, based on their 767-200ER platform. The Japanese and Italian
    Governments have both selected this aircraft as their new air refueling
    tanker. The combination of these three events made us closely examine
    the possibility of jumpstarting the replacement of the oldest tankers
    in our fleet.
        Given the apparently weak market demand for wide-body aircraft, we
    thought there existed a chance for a smart business opportunity to
    replace the KC-135Es with the commercially developed 767 tanker
    aircraft while maintaining a strong bargaining position for the USAF.
    Boeing provided the Air Force a briefing proposing a lease of 100
    aircraft for 10 years with the option to buy at the end of the lease
    for the final payment. Leasing appeared to be a viable option since the
    aircraft were: (1) commercially derived, (2) commercially developed,
    and (3) quickly available in larger numbers through a lease to augment
    the aging fleet of tankers. In addition, the Air Force expects savings
    to result from operating and maintaining modern commercial aircraft
    rather than 40-year-old-plus KC-136 aircraft.
        The USAF was then asked by members of the House and Senate to
    provide informational briefings on this proposal. The briefing was
    provided to members of Congress, including members of the SAC, SASC,
    HAC, and HASC, who requested it from the AF. It was also provided to
    members of the OSD staff, CBO, and OMB. CBO and OMB had concerns with
    scoring Boeing's lease proposal. They recommended an ``operating
    lease'' compliant with the existing provisions of OMB Circular A-11.
    CBO's and OMB's recommendations are reflected in section 8159 which
    permits the USAF to attempt to negotiate a lease arrangement, for up to
    100 aircraft, for up to 10 years, for not more than 90 percent present
    value of the fair market value of the aircraft. The lease type
    specified' ultimately returns the aircraft to the private sector.
        The AF cannot enter into any lease deal without the permission of
    the four defense committees, and no funds can be expended. This, sir,
    is the genesis of this lease possibility. It was generated out of our
    perceived need to accelerate existing replacement plans and to assure
    that we can meet our mission in the future.

        82. Senator McCain. General Jumper, we all know that leasing Boeing
    767 tankers was not in the fiscal year 2002 Air Force budget or the Air
    Force long-range 6-year procurement plan. The Air Force's unfunded
    priority list did not have tanker replacement listed until March 1,
    2002. I have examined your previous unfunded priority list, totaling 60
    programs at a total cost of nearly $10 billion, which was prepared by
    you 6 weeks after September 11 and 3 weeks after the air war started,
    and tanker replacement is not listed. What would account for this?
        General Jumper. On October 22, 2001, the Air Force provided a copy
    of its July 2002 Unfunded Priorities List, with highlighted
    requirements that could boost the defense sector. Following that, on
    November 26, 2002, the July list was provided in its entirety with a
    note in the transmittal memorandum indicating that a tanker lease could
    help accelerate the replacement of our most aging KC-135E tankers.

        83. Senator McCain. General Jumper, the Operation Enduring Freedom
    chronology briefed by Secretary of Defense Rumsfeld and Joint Chiefs of
    Staff Chairman General Myers, and Commander in Chief of U.S. Central
    Command General Franks states that the air war did not start until
    October 7, 2002. Can you explain to me why Major General Paul W.
    ``Bill'' Essex, Assistant Secretary of the Air Force for Acquisition,
    briefed Senator Murray's staff on October 3, 2001, 4 days before the
    air war started, on the need to replace the KC-135 tanker fleet with
    Boeing 767 tankers?
        General Jumper. By October 1, 2001, the USAF had already flown a
    significant number of missions in support of Operation Noble Eagle and
    in preparation for Operation Enduring Freedom. Starting on September
    11, the Combat Air Patrols provided over the USA's major cities by
    Operation Noble Eagle were made possible by the KC-135 air refuelers
    that kept the fighters in the air doing their job protecting us. The
    missions supporting Operation Enduring Freedom required the AF to
    establish extensive Air-Bridges composed of pre-positioned KC-135s and
    KC-10s. Without the Air-Bridges, our strike aircraft could not have
    accomplished the missions CENTCOM had in store for them. All of these
    actions were occurring well before the first strikes were made in
    Afghanistan. All of these actions were beginning to stress our oldest
    and least capable tankers.

                             PERSONNEL REQUIREMENTS

        84. Senator McCain. General Jumper, in the current issue of the Air
    Force Times a senior Air Force official is quoted as saying the Air
    Force will need upwards of 30,000 additional people in the coming years
    when reservists supporting Operation Enduring Freedom and homeland
    defense are demobilized and ``stop-loss'' ends. What are your
    requirements for additional personnel in the coming years?
        General Jumper. Initial projections show a 30,000 increase in total
    military (Active/Guard/Reserve) end strength requirement, but our
    production base could only execute 7,000 in fiscal year 2003. SECDEF
    challenged us to pursue more innovative solutions to offset the need
    for additional E/S. We are currently meeting E/S requirements through
    partial mobilization of the ARC and stop loss actions, but we can't use
    these tools indefinitely. In anticipation of demobilization and an end
    to stop loss, we are starting the lengthy process of determining the
    best and most efficient way to meet our increased requirements.

                                  END STRENGTH

        85. Senator McCain. General Shinseki, Admiral Clark, General Jones,
    and General Jumper, more than a year ago, service men and women were
    promised that the frequent number of deployments that they became all
    too familiar with during the Clinton administration would ease and the
    number of worldwide commitments would be reduced. I am told that most
    of the Services feel that has not happened to the extent promised and
    may have even worsened because of ongoing war operations. While all
    support the budget recently submitted, privately all the Services admit
    they need additional end strength to get the job done. In fact, one
    service has told me that they may need as many as an additional 42,000
    service members. Do you have any comment on the need for additional
    service men and women?
        General Shinseki. The current operational environment places
    additional demands on the Army that were previously unrealized. Post
    September 11 events have increased demands placed on the force, and the
    Army will likely require an end strength increase to fully meet these
    demands.
        The Total Army Analysis (TAA) process will determine the size and
    composition of the Army within a constrained budget. The current
    effort, TAA 09, is not complete, but will account for the additional
    emerging requirements in the area of homeland security and the global
    war on terrorism.
        The immediate solution for the war on terrorism was the
    mobilization of our National Guard and Reserve soldiers and the
    implementation of ``stop loss'' for selected skill sets. The
    performance of these soldiers has been exemplary, but these are
    temporary measures, not a long-term solution.
        The Army may seek to take advantage of the Fiscal Year 2002 Defense
    Authorization Act that permits the Department of Defense to allow the
    services to exceed their end strength by 2 percent in any fiscal year
    in which there is a war or national emergency. Taking full allowance of
    this provision would allow the Army to increase its Active component
    end strength to 489,600.
        As the Army increases end strength, we must ensure the recruiting
    increase is achievable, the training base can meet additional
    requirements, and high standards and quality of life are maintained.
        Admiral Clark. Most of the Navy's current personnel needs are
    directly attributed to the increased requirement for anti-terrorism/
    force protection. The Navy has conducted a comprehensive study that
    identified requirements for additional personnel at entry control
    points, pier-side, and on the flight line. The total estimated
    personnel need is 4,383. The Navy is working to determine the proper
    mix of military, civilian, and contractors based on military
    essentiality and legal constraints placed on the use of contractors at
    Stateside installations. The Navy is working to determine the proper
    way to transition from Reserve mobilization to the right levels of
    Active and Reserve forces. The Navy is also exploring opportunities to
    exploit the use of technology to reduce manpower requirements.
        General Jones. The Marine Corps fiscal year 2003 President's budget
    submission supports the Marine Corps growing to 175,000 Active Duty end
    strength. This growth of 2,400 marines was decided only after looking
    internally at how we could create efficiencies within our own
    organization. Over the last 2 years, the Marine Corps has been able to
    transfer many jobs and responsibilities over to the civilian sector
    which has promoted efficiency and allowed the Marine Corps to reassign
    our Active Duty marines to meet readiness concerns in the operating
    forces. The 2,400 increase in Active Duty end strength for fiscal year
    2003 would provide the additional end strength needed to ensure our
    Nation gains a robust Anti-Terrorism force without degrading personnel
    readiness that currently exists in our current Marine Corps units.
        General Jumper. See answer to question 84.

                              RESERVE DEPLOYMENTS

        86. Senator McCain. General Shinseki, Admiral Clark, General Jones,
    and General Jumper, I understand that there are over 85,000 National
    Guard and Reserve men and women supporting Operations Noble Eagle and
    Operation Enduring Freedom, citizen soldiers who juggle two careers:
    civilian and military. Also included in the category of ``twice the
    citizen'' are the employers who, for no incentive that I know of, hire
    Reservists and National Guardsmen and put up with monthly weekend
    drills, 2-week annual training periods, and recalls to active duty with
    little information on how long they will be away from their jobs.
    Today, every single one of the recalled 85,000 Reservists are told that
    they are on 1-year orders and may be continued for 2 years or more.
    What is the plan to bring the Reservists back home and back to their
    civilian jobs that they left, and who will replace them if we have a
    force structure, that according to the Services, is already stretched
    thin?
        General Shinseki. Today's Active Forces are so thoroughly
    integrated with the Reserve components, that we are always mindful of
    the sacrifices of the Reservist or Guardsman, as well as the employers
    who support the citizen soldier. To help manage the burden on
    Reservists and deployed soldiers, the Secretary of Defense has limited
    all orders to 12 months, even though partial mobilization authority
    traditionally permits a period of up to 2 years. Currently, orders may
    only be extended over 12 months by specific approval authority. While
    manpower needs of our commanders in chief and services, and the actual
    deployment length of mobilized forces must be based on the evolving
    realities of current operations, we are taking several actions to help
    return Reservists and all soldiers home as quickly as possible. First,
    we are implementing a plan to readjust the distribution of soldiers
    being used in homeland defense force protection and installation
    security roles.
        We are beginning to leverage the use of security technology to help
    reduce the number of security force soldiers required, as well as
    increasing the number of civilian guards at our installations. These
    actions will help keep our Active Forces performing their primary role
    of maintaining and sustaining combat readiness and will enable us to
    begin to systematically demobilize Reserve component soldiers providing
    force protection augmentation. To help better manage our total force,
    we have put into place a force rotation policy to provide our leaders
    and soldiers with more deployment predictability and stability for
    units and individuals. We are also currently analyzing our Active
    roster to determine if soldiers can be freed up from nonessential jobs,
    and continue to re-look our ongoing operations to identify where we can
    reduce or readjust our commitments. We have recently moved to reduce
    the size of our peacekeeping force in Bosnia and are examining the
    possibility of reducing or eliminating our peacekeeping deployment in
    the Sinai. Through better management of our planned deployments,
    redistribution of soldiers from nonessential jobs, re-engineering force
    protection needs, and reducing force commitments, we can return our
    citizen-soldiers home as quickly as possible, while also providing for
    our future force needs.
        Admiral Clark. The Navy has mobilized approximately 10,000
    Reservists. Over 50 percent of those Reservists are meeting anti-
    terrorist/force protection requirements. The Navy has determined that
    the overall mobilization can be reduced by 25 percent. Over the next
    few months we will return approximately 3,500 Reservists to their homes
    and families. As the Navy increases the Active Duty security force by
    4,383 in fiscal year 2003, the Reserve requirement will be further
    reduced allowing additional Reservists to be demobilized. The Naval
    Reserve has sufficient inventory to relieve all of the Reservists
    remaining after 1 year with the exception of those in the Master-at-
    Arms rating. Navy expects to retain these Reservists on Active Duty for
    up to 2 years to meet anti-terrorism/force protection requirements. As
    additional Active Duty Master-at-Arms are recruited and converted from
    other ratings, the Reserve Master-at-Arms will be relieved at or before
    the end of their second year mobilized. As mobilization requirements
    are reduced, Navy is contacting every reservist to identify those who
    are volunteers to be demobilized and those who would prefer to remain
    mobilized. Billet swaps are being arranged where possible to
    accommodate their preferences. Reservists for whom demobilization would
    cause hardship are being identified and every effort is made to find a
    swap, to mitigate or eliminate the hardship, or to delay the
    individual's demobilization until the hardship is eased. In short, Navy
    is going to great lengths to keep faith with our Naval reservists who
    have sacrificed to serve their country and to return them to their
    patriotic employers as soon as the war effort permits.
        General Jones. The Marine Corps was authorized by the Secretary of
    Defense to mobilize up to 7,500 Reservists to support Operations Noble
    Eagle and Enduring Freedom. The Marine Corps has been very judicious in
    using its mobilization authority. As of March 27, 2002, the Marine
    Corps had a total of 4,455 Marine reservists on active duty.
    Additionally, we have demobilized 66 reservists who are no longer
    needed on active duty. The Marine Corps is currently participating in a
    DOD sponsored mid-year review of USMC Component Activations to
    determine whether or not further reductions can be made. If we need to
    continue to fill these billets, we will either have to find another
    ``volunteer,'' involuntarily extend the current individual, or find an
    active duty marine to fill the billet.
        General Jumper. The need to call up our Reserve component (RC)
    forces is driven by requirements to support our Combatant Commanders,
    as well as requirements driven by increased operations at our stateside
    bases (especially force protection). We do not take this responsibility
    lightly, and have worked diligently to ensure that we call up only what
    is absolutely required. In the early stages of the war on terror, we
    did indeed approve all mobilization authorizations for a 1-year
    duration with the opportunity to extend to the full 2 years allowed by
    Title 10. Subsequently, we have begun to limit the duration of the
    mobilization authorizations in those cases where we can forecast a
    limited need (90-day rotation is one example). This is giving the
    individuals and their employers a clearer idea of what our forecasts
    were showing. Due to the rapidly changing dynamics of the war on
    terror, we may eventually be in the position of having to once again
    request assistance from these forces in the future.

        87. Senator McCain. General Shinseki, Admiral Clark, General Jones,
    and General Jumper, is it possible that you may need to increase end
    strength at some point to replace the National Guard and Reserve
    service members who eventually will have to come home? If so, what
    options would you consider to increase our end strength?
        General Shinseki. Yes, post September 11 events have increased
    demands on the force, and the Army will likely require an end strength
    increase to fully meet these demands.
        In 1999, the Army started using the Reserve components in the
    rotational mix in Bosnia and the Sinai to reduce Active component
    operational tempo. These soldiers have performed magnificently in these
    enduring missions. Additionally, Reserve component soldiers are
    supporting emerging, immediate missions--both for the global war on
    terrorism and for homeland security. These missions, such as airport
    security, will eventually be turned over to civilian authorities.
    Mobilizing Reserve component soldiers to meet these immediate
    requirements is not a long-term solution.
        To address the immediate need, the Fiscal Year 2002 Defense
    Authorization Act permits the Department of Defense to allow the
    services to exceed their end strength by 2 percent in any fiscal year
    in which there is a war or national emergency. Taking full allowance of
    this provision would allow the Army to increase its Active component
    end strength to 489,600.
        The Army can realistically increase recruiting by an additional
    4,000 soldiers per year in fiscal year 2003 and fiscal year 2004 to
    address the most immediate needs of the war on terrorism and homeland
    security, provide relief for Reserve component soldiers, and allow more
    time to analyze enduring requirements.
        Admiral Clark. The Navy identified a long-term requirement of 4,383
    for anti-terrorism/force protection. These requirements are being
    filled with Reservists mobilized immediately after September 11. The
    Navy goal is to replace the Reserve personnel with Active Duty,
    civilian, and contract personnel. Other Reservists were mobilized to
    support operational requirements at forward locations or State-side
    units. These short-term requirements are more suited to be filled from
    the Reserve Forces. The non-ATFP Reservists will either be demobilized
    when the requirement for their service subsides, as is already
    happening for some Reservists, or they will be replaced with more
    Reservists.
        General Jones. The fiscal year 2003 President's budget submission
    supports an Active Duty end strength of 175,000 and is fully funded.
    This is an increase of 2,400 over our fiscal year 2002 end strength.
    The additional 2,400 is the additional force structure required to
    activate the 4th MEB (AT). The 4th MEB (AT) provides designated
    supported commanders with rapidly deployable, specially trained, and
    sustainable forces that are capable of detecting, deterring, and
    defending designated facilities against terrorism, and conducting
    initial incident response in the event of chemical, biological,
    radiological, nuclear, or high yield explosive (CBRNE) terrorist
    attacks worldwide. This contingency response force gives our Nation a
    dedicated anti-terrorism force without degrading personnel readiness in
    our existing Marine Corps units.
        General Jumper. See answer to question 84.

                     HOMELAND DEFENSE AND FORCE PROTECTION

        88. Senator McCain. General Shinseki, Admiral Clark, General Jones,
    and General Jumper, would you support a less expensive personnel
    program that would provide a cadre of people who could do many of the
    homeland defense and force protection duties that National Guardsmen
    and Reserve service members are performing at home in the United States
    and would ease both the active duty and Reserve open-ended commitments
    that the Department of Defense has put in place following September 11?
        General Shinseki. While the Army is concerned about personnel tempo
    and the strains that heightened security requirements place on the
    force, it is important that any potential policy involving homeland
    defense and force protection get a thorough inter-agency review. This
    is especially germane in light of the recently established Homeland
    Security Office, the decision to stand up Northern Command, and the
    very high priority the President and Secretary of Defense have placed
    on defending the homeland.
        Admiral Clark. Approximately 50 percent of Navy's mobilized
    reserves are serving in Force Protection duties. Navy is working to
    determine the proper way to transition from Reserve mobilization to the
    right levels of active and Reserve Forces, while evaluating the
    appropriate mix of military, civilian, and contractors to provide force
    protection. The use of less expensive personnel may have a place in an
    optimized force mix, but could result in greater recruiting, training
    and permanent change of station expenses. This approach would have to
    be weighed against meeting the force protection requirements with
    career force military or civilian personnel.
        General Jones. The Marine Corps would support such a program
    provided the program did not impact on the recruiting, training, and/or
    readiness of either our regular or Reserve components. In addition, the
    personnel involved in this program should not count against Active and
    Reserve component end strength and should not compete with Active and
    Reserve components for current MPMC/RPMC funding.
        General Jumper. We are always interested in the most effective ways
    to access quality young men and women into the Air Force. However,
    reducing expenses does not always translate into producing individuals
    who meet enlistment standards (education, test scores, physical, moral,
    etc.) and can complete the required training for the specialty in which
    they are needed. A cadre of people, if not properly trained and
    qualified, provides little benefit--regardless of the cost.

                                NATIONAL SERVICE

        89. Senator McCain. General Shinseki, Admiral Clark, General Jones,
    and General Jumper, if this less expensive personnel program would also
    offer the added benefit of allowing young men and women to fulfill
    their ideal of national service, would that be something that you would
    support?
        General Shinseki. Yes, a less expensive personnel program that
    offers the added benefit of allowing young men and women to fulfill
    their ideal of national service would be something that we would
    support.
        Admiral Clark. Navy fully supports a military component to National
    Service. There is considerable merit in tapping into the enthusiasm and
    patriotism of youth who do not have the propensity to join the military
    for longer commitments. While Navy has successfully met its recruiting
    goals with an all-volunteer force for the last three years, a change to
    the dynamics of the recruiting marketplace could adversely impact
    Navy's ability to meet recruiting goals in a cost effective manner.
    This is of particular concern if benefits under a National Service
    Program for the less expensive, short-term personnel, are perceived in
    the recruiting market as better than those offered to long-term
    enlistees. Integrating a cadre of less expensive sailors for short
    enlistment periods presents challenges in execution, but Navy is
    prepared to work with Congress to support the President's call for
    service.
        General Jones. See answer to question 88.
        General Jumper. We fully support national service and believe that
    voluntary military service is an outstanding means for young men and
    women to serve their country. This fiscal year alone, the Air Force
    will enlist nearly 38,000 young people to serve in over 130
    specialties. Their 4- to 6-year enlistment allows them to garner state-
    of-the-art training and experience while allowing the Air Force to
    recoup its training investment and remain mission ready. Many who do
    not choose to make the military a career go on to serve in the Air
    National Guard and Air Force Reserve because they have had the training
    and experience on Active Duty to make them productive in a Reserve
    capacity.

        90. Senator McCain. General Shinseki, Admiral Clark, General Jones,
    and General Jumper, Senator Bayh and I have submitted a ``Call to
    Service Act of 2001'' to the Senate. We envision this program not as an
    exact replica of existing, effective career military service programs,
    but as a complementary, vocational program to match Americans'
    propensity to serve their country with national community service
    opportunities, including military service opportunities, that are
    generally non-career-related and of short duration. The incentives
    proposed for such service cannot be compared on an apples-to-apples
    basis with those developed to attract and retain career military
    service men and women. To attract top-notch national service plan
    candidates to address immediate, short-term military service needs, our
    plan would not offer an incentive of TRICARE for Life and the full
    complement of Montgomery GI Bill benefits. Instead of accruing this
    tremendous long-term cost, we would propose offering a much more modest
    severance pay that would permit the National service plan participant
    to use that money for educational goals or other similar efforts
    immediately after concluding his or her service. Is this an effort that
    you and your staff would commit to working on with Senator Bayh and me
    this year? Please comment on your views regarding national service and
    more importantly the utility of a military component to national
    service.
        General Shinseki. Yes, the Army fully supports national service of
    any kind and feels your proposal warrants further study. The Army also
    believes that serving in the military is the purest form of national
    service, so any national service plan must have a military component.
    The Army would commit to working with you and Senator Bayh to further
    study your proposal for possible impacts on recruiting, retention, and
    attrition and on any bills that may emerge from your proposal.
        Admiral Clark. Navy fully supports a military component to National
    Service but has some concern over elements of the initiative. In
    particular, short enlistments with near term benefits that equal or
    exceed those for long-term enlistments may negatively impact our
    ability to recruit career oriented sailors in a cost-effective manner.
    Navy has been working with the Under Secretary of Defense for Personnel
    and Readiness to develop a program that can meet the needs of the Navy,
    while also providing an opportunity for short-term enlistments for
    national service. The Navy is committed to working with the Congress to
    meet the President's call for service.
        General Jones. The Marine Corps stands ready to assist DOD in
    evaluating the impacts of the ``Call to Service Act of 2001.'' I
    believe that national service is an important part of our National
    culture and, each year, the Marine Corps gives approximately 39,000 of
    America's finest young men and women the opportunity for national
    service as marines. I share your concern for the need for providing
    forces for homeland security, yet remain cautious that we not create a
    program that will impact our ability to recruit, train, and maintain a
    high state of readiness in both our Active and Reserve components.
        General Jumper. The Air Force fully supports National Service for
    today's youth and supports in principle Senators McCain and Bayh and
    your efforts to expand opportunities to serve our country. However, it
    is our position that the best way to serve in the military is with a
    minimum 4-year enlistment. Shorter service obligations are not cost
    effective from a training and operational standpoint and could
    adversely affect our ability to attract individuals to our high tech
    needs that have longer training requirements. To ensure future
    readiness, the Air Force must secure and retain the technically
    qualified applicants required to maintain our force. The Air Force has
    very limited ``low-tech'' opportunities, with most such jobs having
    been outsourced through privatization. We are able to attract the
    required number of applicants for our lowest skilled jobs (those that
    might be appropriate for short-term enlistments) without paying
    bonuses.
                                     ______

                    Questions Submitted by Senator Bob Smith

                               COBRA HELICOPTERS

        91. Senator Smith. General Jones, it is understood that the AH-1W
    to the AH-1Z conversion program is one of Marine aviation's highest
    priorities. The AH-1Z is not due to be introduced into the fleet until
    around 2008, and much later for the Marine Reserve Cobra units. In
    order to maintain a high level of combat capability in the Reserve
    Cobras, the issue of upgrading the ``first generation'' forward-looking
    infrared radar (FLIR) in these Reserve helicopters needs to be
    addressed. As a means of increasing combat effectiveness and the
    usefulness of these Reserve Force helicopters in the counter terrorism
    and force protection roles, would the Marine Corps favorably support
    additional authorization and funding to upgrade the Night Targeting
    System FLIRs used in the Marine Reserve AH-1W Cobra helicopters with
    third generation FLIR systems pending the arrival of the AH-1Z model to
    the Reserve Force, and would this have economic cost savings benefits?
        General Jones. Yes, the Marine Corps would support the upgrade of
    the Night Targeting System. The upgrade from a ``first generation''
    configuration to a ``third generation'' FLIR for the Night Targeting
    System would enhance the operational capabilities of the USMC Reserves
    and ensure their warfighting relevance through the year 2015 when they
    will begin receiving the AH-1Z. The primary benefits with the system
    upgrade would be in the increased operational capabilities the Night
    Targeting System provides the Marine Air-Ground Task Force.

                              INDIVIDUAL EQUIPMENT

        92. Senator Smith. General Jones, one issue I do have a concern
    with is the Marine Corps' continued ability to locate. designate, and
    hand off targets for attack aircraft and the growing importance of
    active night vision devices and laser pointers for the individual
    ``trigger pullers'' who are on the line each and every day. I also
    understand you are actively working to better improve your ties with,
    and coordination with, Special Operations Forces. Can you please
    explain the Corps' plans to improve their ability to locate, designate,
    and hand off targets for attack aircraft?
        General Jones. The war against terrorism highlighted the
    complementary capabilities of crisis response forces, the Marine Corps,
    and forces assigned to the United States Special Operations Command
    (SOF). Restraints imposed by today's environment magnify their
    contribution because they are unencumbered by the requirements for
    extensive regional infrastructure. Moreover, as demonstrated during the
    recent campaign, the surgical precision of SOF coupled with the
    combined arms punch of forward deployed amphibious-based Marine Air-
    Ground Task Forces prove not only their individual utility, but
    illustrate the synergy in overcoming specific challenges such as:

             the remote and austere nature of the battlefields
            where forces prosecute our Nation's campaign against terrorism;
             host nation concerns regarding the presence of
            American forces within their borders; and
             the need to conduct strike operations while
            maintaining increased operational security.

        The recent events highlighted the need to establish service-level
    links between SOCOM directorates and their counterparts within the
    Marine Corps to develop detailed areas of mutual interest spanning the
    entire continuum of service level concerns. We believe this will
    enhance the mutual support our two organizations can provide one
    another. Through a recently signed Memorandum of Understanding (MOU)
    between the USMC and SOCOM, the focus of effort will be to:

             examine current capabilities and missions in order to
            leverage the unique capabilities of each organization, thus
            enhancing interoperability;
             establish and continue the interface between CONUS-
            based and theater-based SOF and deploying Marine Air-Ground
            Task Forces; and
             synchronize USSOCOM and USMC warfighting developments,
            as well as material research and procurement initiatives.

        We believe the USSOCOM-USMC Board is a forum for Special Operations
    Forces (SOF) and the Marine Corps to interface and coordinate with
    regard to common mission areas and similar procurement initiatives.
        How will we continue to improve target identification and
    designation using night vision devices and laser target designators?
    There is one program of record: Target Location, Designation, and Hand-
    off System (TLDHS). TLDHS is a Modular Universal Laser Equipment (MULE)
    replacement with an IOC of 4th quarter, fiscal year 2004. TLDHS can
    both target locate and designate and has night thermal capability. The
    Marie Corps Systems Command (MCSC) is looking at an interim Laser
    target location fix through a commercial off-the-shelf (COTS) solution
    that could make a binocular type device available this summer. An
    interim designator COTS solution would take 11 months manufacturers
    lead time to produce.
        As a result of 15th MEU Aviation Command Element (ACE) Operation
    Enduring Freedom lessons learned and back briefs from the Marine Corps
    Combat Action Team, the Commanding General, Marine Corps Combat
    Development Command, signed a Statement of Need (SON) for the immediate
    procurement of 180 precision targeting systems. Presently, the Marine
    Corps employs the AN/GVS-5 Laser Observation Set to assist fire support
    observers in determining distance to a target. The AN/GVS-5 does not
    determine azimuth or inclination, which are critical in determining an
    accurate target location (target grid coordinate generation). It does
    not possess a data interface capability. Operating Force feedback and
    experimentation have identified the deficiencies of this legacy system.
    MCSC has a funded program called the Advanced Eye-Safe Laser
    Rangefinder (AEROS), which addresses the same requirement; however,
    programmatics dictate a system will not be fielded until fiscal year
    2005. Through market research, MCSC has identified a commercial off-
    the-shelf (COTS) solution (Leica Vector/Viper II) to meet the SON (also
    being used presently by SOCOM in response to their Combat Mission Needs
    Statement). While this solution does not completely meet the
    requirements spelled out for AEROS, it is immediately available in mass
    quantities a does meet the requirements of the SON. MCSC evaluated this
    system the week of March 25, 2002. If funding could be identified and a
    production decision reached, the Leica Vector could be available to the
    operating forces as early as June 2002. The PTS-180 program will also
    serve as a test bed for the AEROS program, providing feedback on
    current capabilities and impacting future operational requirements.
    AEROS is not a redundant program to TLDHS. EROS is a separate program
    meant to compliment TLDHS' capabilities.

        93. Senator Smith. General Jones, can you provide an explanation on
    the Marine Corps' operational plans for utilizing night vision devises,
    both passive and active systems, to improve their ability to ``own the
    night?''
        General Jones. The Night Enhancements Capabilities for the Marine
    Air-Ground Task Force (MAGTF) (1995-2004) study conducted in 1993
    provided the basis for subsequent night vision requirements definition
    and acquisition strategy. Drawing from the results of the study, the
    Marine Corps Combat Development Command (MCCDC) developed the Aided
    Battlefield Vision Implementation Plan (ABVIP) which provides direction
    for the experimentation, requirements determination, materiel
    development, and fielding of equipment designed to enhance the
    warfighter's battlefield vision. Following the publication of the
    ABVIP, MCCDC reviewed the Marine Corps' night vision requirements and
    determined that there were sufficient night vision devices in the
    inventory, however, they were not in all cases distributed correctly.
    Subsequently, the Commanding General, MCCDC, in the Night Vision
    Equipment Redistribution Plan of August 25, 1997, directed the
    redistribution of night vision devices throughout the Marine Corps. In
    order to update the results of the 1993 study and to account for
    technological changes, emerging threats, and tactical requirements
    associated with Expeditionary Maneuver Warfare, MCCDC will conduct a
    MAGTF Optical Capabilities Study which is scheduled to begin third
    quarter, fiscal year 2002. This study will assist us in determining our
    overall non-aviation and non-vehicular optical requirements by
    providing an operational requirements analysis and a cost benefit
    comparison of various materiel alternatives. The analysis will include
    impact assessments related to life cycle costs, training requirements,
    and operational readiness. The results of the study will provide the
    foundation for future night vision equipment acquisition initiatives.

                         PERSONNEL--QUALIFIED LINGUISTS

        94. Senator Smith. General Jones, I have seen several press
    accounts indicating that we may not have had sufficient numbers of
    linguists trained in the languages spoken in Afghanistan, such as Dahri
    and Pashto, to communicate with the locals as quickly as we would have
    liked. As a force provider who works for and with the regional
    commanders in chief, and in preparing expeditionary units ready to
    respond around the world, do you have enough foreign language speakers
    in the appropriate language skills to provide the essential link
    between your forces and the native populations? Would you have like to
    have more, and do we need more language training programs? Last year we
    succeeded in enacting a provision that authorizes service secretaries
    to permit service members with critical skills to transfer up to half
    of their benefit to family members in return for a service commitment.
    This proposal gives the DOD and the services significant flexibility in
    how it is implemented. Would you outline what plans you have for using
    this new retention tool?
        General Jones. In 1996, Headquarters Marine Corps established the
    8611 Additional Military Occupational Specialty (AMOS) to identify
    marines with critical heritage foreign language skills to serve as
    interpreter/translators. In 1999, Headquarters Marine Corps initiated
    an aggressive effort to more accurately screen and identify all
    heritage foreign language speakers as they entered our ranks. The early
    identification of heritage speakers in ``less-commonly-taught''
    languages such as Dari, Urdu, and Pashto and the assignment of these
    heritage language speakers as translators were essential in allowing
    the Marine Corps to meet emerging contingency foreign language
    requirements.
        Under the Marine Corps' Language Identification Program (LIP),
    marines are screened during the recruiting process. Those determined to
    have heritage foreign language skills then have their language
    proficiency validated for potential future assignment. The success of
    this effort over the last 2 years has been demonstrated by the
    identification of thousands of native speakers who can be temporarily
    assigned additional duty as translators/interpreters, thereby ensuring
    that foreign language skilled marines in intelligence billets can
    remain focused on their assigned primary mission.
        During 1998, in an effort to stabilize manning of the Intelligence
    Occupational Field, Headquarters Marine Corps temporarily doubled the
    number of basic language seats at the Defense Language Institute (DLI).
    As a result, the Marine Corps currently has approximately 320 Modern
    Standard Arabic (MSA) speakers in the Active Force. MSA is a common
    language linking the myriad extremist groups targeted in support of
    Operation Enduring Freedom (OEF). This robust inventory of Marine MSA
    speakers is a considerable asset that can be leveraged in response to
    emerging OEF foreign language requirements.
        The Marine Corps continues to search for more efficient ways to
    identify, screen, and train marines with foreign language skills to
    support operational and intelligence requirements. The Marine Corps'
    foreign language requirements are identified by the Marine Operating
    Forces in response to planning guidance via the assignment of
    appropriate Military Occupational Specialty (MOS) billets on unit
    Tables of Organization (T/O). Given the constraints of authorized
    Marine Corps end strength and the large set of languages required to
    meet projected military missions, the Marine Corps has traditionally
    focused its foreign language training program on those core languages
    spoken in areas where large-scale military action is either planned or
    anticipated. The small population of marines with heritage foreign
    language skills in the ``less-commonly-taught'' languages such as Dari,
    Urdu, and Pashto has been augmented through the Headquarters Marine
    Corps directed action of selectively cross-training existing linguists
    at the DLI, and through the conduct of un-programmed contract language
    courses in a subsequent language. Additionally, as requirements are
    validated, marines are selectively recruited and cross-trained in these
    ``less-commonly-taught'' languages during lateral moves into a new MOS
    or during reenlistments.
        During 1999, Headquarters Marine Corps initiated a comprehensive
    review of the Marine Corps' foreign language requirements. As a result
    of this review, the Marine Operating Forces were directed to determine
    their existing and anticipated foreign language requirements in an
    effort to better identify and project both the number of speakers and
    the variety of languages they require. In March 2001, the Director of
    Intelligence (DIRINT) approved a plan to restructure the intelligence
    occupational field to meet the increase in requirements for speakers in
    ``less-commonly-taught'' languages. Implementation of the plan in
    February 2002 resulted in the Headquarters Marine Corps directed
    modification of unit T/Os, leading to the addition of 122 intelligence
    linguist billets in a variety of ``less-commonly-taught'' languages.
    The Marine Corps is now executing a 5-year plan to recruit and train a
    sufficient number of marines to fill these newly identified billets.
        Following the September 11 terrorist attacks on the United States,
    the Secretary of Defense tasked the services to identify emerging
    language training requirements to support the OEF campaign.
    Headquarters Marine Corps compiled a list of projected language
    requirements and, in cooperation with the DLI, implemented a training
    plan in December 2001 to satisfy the identified training shortfalls.
    The aggressive assignment of heritage language speakers as translators,
    combined with the quick response of DLI in setting up language training
    courses to meet the Marine Corps' contingency training requirements,
    has allowed the Marine Corps to successfully meet its current
    operational language requirements.

               HANDHELD STANDOFF MINE DETECTION SYSTEM (HSTAMIDS)

        95. Senator Smith. General Shinseki, I understand that the Army, in
    response to critical needs in Afghanistan, will speed up the production
    of the new HSTAMIDS in order to field approximately 200 of these
    devices within the next 12 months. I applaud the service for its
    decision. Landmines present a serious threat to U.S. personnel and
    their allies. to say nothing of the civilian population. Equally clear,
    the low metallic content of most of today's landmines just screams for
    the deployment of this new mine detector, which is the best we have in
    picking up such mines. What concerns me is the overall production
    schedule of the HSTAMIDS. I note that after this emergency, there is no
    money for production in the fiscal year 2003 budget, and that
    everything seems to revert back to the pre-September 11 production
    schedule, calling for production to begin in fiscal year 2004 and of
    only a nominal quantity of less than 90. To abruptly stop the
    production is a significant cost to both the Army, with respect to unit
    costs, and to the manufacturer. Given the need and the economics of
    production, I would urge the Army to seriously examine speeding up the
    production schedule. The recent ``emergency buy'' clearly demonstrates
    there is a requirement for the new mine detector. I would like to know
    what plans the Army has for accelerating the production of the
    HSTAMIDS. I understand the recent buy is a one-time deal, and after
    that production reverts to the original slow-crawl schedule of less
    than 90 devices in fiscal year 2004. If that is so, it seems to me
    we're placing an unnecessary tax on the Army and the American people by
    this uneven production schedule. Can you tell me whether the Army plans
    to accelerate its production in fiscal year 2003 and beyond?
        General Shinseki. As you have indicated, the Army has aggressively
    accelerated fielding of the HSTAMIDS system to support our troops
    participating in Operation Enduring Freedom. This acceleration will
    result in the emergency release of approximately 200 systems over the
    next 12 months. These systems will be tested prior to use by our troops
    under the specific conditions expected in Afghanistan. Production of
    this limited quantity of systems does not qualify it for full-rate
    production and use under all possible operating conditions.
        Additional development is required to complete the remaining
    testing and pre-production engineering. This development will result in
    a superior detector for use by soldiers in the long term. Continued
    low-rate production for operational contingencies has not been ruled
    out at this time.

                           ENVIRONMENTAL ENCROACHMENT

        96. Senator Smith. General Shinseki, Fort Lewis, the home of the
    1st Special Forces Group, has had 72 percent of its ranges designated
    for critical habitat, severely limiting training. Fort Lewis also sits
    above an EPA-designated sole source aquifer. Regulatory restrictions
    have the potential to curtail training even more. How will you work
    within the Army and with other departments to make sure that the
    training of Special Operations Forces are not degraded from the loss of
    these ranges?
        General Shinseki. Special Forces training is comprised primarily of
    small arms weapons fire and dismounted maneuver. The 1st Special Forces
    Group has conducted this type of training in a manner that either
    avoids critical habitat or works within established restrictions. To
    date, they have been able to minimize the impact that endangered
    species restrictions have on their operations on Fort Lewis without
    unacceptably diminishing training effectiveness.
        The Army is currently monitoring groundwater and surface runoff at
    Fort Lewis to ensure that explosive constituents do not negatively
    impact the surrounding communities. Fort Lewis is working with the
    State of Washington, the Environmental Protection Agency, and the
    Nisqually tribe as they plan and analyze results of this monitoring
    effort.
        Fort Lewis recently held an installation sustainability conference
    with the local community and regulators to discuss a wide variety of
    training and environmental issues, including the effects of endangered
    species on military training. Outreach and partnership with the local
    community is critical to ensure continued community support for our
    major installations.
        The Army as a whole is working internally and with other agencies
    with environmental regulatory responsibilities to mitigate the effects
    and potential effects that encroachment has on our training and
    readiness. Our principal internal effort is the Sustainable Range
    Program (SRP). The objective of SRP is to maximize the capability,
    availability, and accessibility of ranges and training land to support
    training and testing requirements. SRP is based on three tenets: (1)
    Scientifically Defensible Information. Develop and maintain complete
    data on all aspects of ranges--operational characteristics of training
    facilities, physical characteristics of real property, and data on the
    range as part of the natural and cultural environment; (2) Integrated
    Management. Integrate across the four disciplines that directly affect
    ranges: range operations and modernization; facilities and installation
    management; explosives safety; and environmental management; and (3)
    Outreach. Inform political leadership, regulators, and communities and
    improve understanding of the Army's need for training and resting and
    the Army's more sophisticated range management approach.
        Although we believe our efforts will minimize the impacts of
    encroachment on our ranges and training lands, we also recognize the
    need to clarify the application of several environmental laws to
    military testing and training. The Army has been working with our
    sister services and the Office of the Secretary of Defense to develop
    initiatives that clarify our responsibilities under variety of
    environmental statutes. These initiatives focus on supporting our
    training activities and allow flexibility to consider impacts to
    military readiness in the implementation of environmental statutes.

        97. Senator Smith. General Jumper, the Air Force Special Operations
    Command (AFSOC) at Hurlbert Field faces challenges of an expanded
    mission while suffering from shrinking airspace due to proposed
    commercial air routes, noise restrictions, and over scheduling. What
    will you do to see that the only AFSOC range on the Atlantic Coast is
    protected from these urban encroachments?
        General Jumper. This is an important issue for the Air Force as
    well as for Americans across the country. Air Force requirements need
    to be met while addressing public, State, and Federal concerns. We
    require adequate airspace and land space to train our forces and test
    our weapon systems under realistic combat conditions. We are actively
    working with the Federal Aviation Agency (FAA) in their national
    airspace redesign effort to ensure we maintain our needed airspace both
    now and in the future. Noise issues are generally local and we strive
    to work with the local governments to encourage compatible development
    with our military mission. Therefore, the key solution to the Air
    Forces' encroachment issues is outreach, which includes building
    partnerships and coalitions with our local communities around our
    installations and ranges. Florida, specifically has initiated state
    level activities that are supported by military representatives.
    Finally, this issue is not limited to the Air Force, and proactive
    efforts alongside the other services and agencies will help fully meet
    this challenge.

        98. Senator Smith. Admiral Clark, the Navy SEALS have lost
    considerable live-fire and demolition training at Coronado and San
    Clemente Island in California due to critical habitat designations.
    What will you do to see that your SEALS do not lose any more valuable
    training?
        Admiral Clark. The OSD Readiness and Range Preservation Initiative
    coming forward to the Congress will aid in addressing these concerns
    while still meeting our environmental responsibilities. Also, the Navy
    is currently evaluating a sustainable range program in the fiscal year
    2004 budget process to improve our management of range resources.

                           AERIAL REFUELING SHORTAGE

        99. Senator Smith. General Jumper, the special operations community
    has made a heroic account of themselves in the war in Afghanistan. The
    innovation, daring, and bravery of these troops played a major role in
    our successes in the conflict. We must give these people on the tip of
    the spear our utmost support. Lt. Gen. Paul Hester, Commander of Air
    Force Special Operations Command, recently said that there has been an
    acute shortage of tanking capability for our Special Operation Forces.
    He said last week that only about 36 percent of tanking requests are
    being met. Since then, we have suffered the loss of one of our MC-130
    tankers. What is being done in the fiscal year 2003 budget to correct
    this deficiency and what are the long range plans to ensure our special
    operators have the tools they need to carry out their missions?
        General Jumper. SOF-unique requirements are funded by USSOCOM using
    MFP-11 dollars. The tanking requests referenced in this statement are
    for refueling both USA and USAF SOF helicopters. The shortage
    referenced is calculated using Active-Duty Forces only. When USMC and
    Reserve forces are used for augmentation, support increases to 67
    percent. In the USSOCOM fiscal year 2003 APOM, an AFSOC initiative to
    outfit 24 MC-130H Talon II aircraft as tankers was funded through MFP-
    11. This initiative will increase AFSOC's special operations C-130
    refueling capable fleet from 37 aircraft to 61. The recent loss of one
    MC-130P during the war on terrorism in Afghanistan is factored in this
    total.

                               C-17 SAFETY ISSUES

        100. Senator Smith. General Jumper, it is my understanding that the
    Air Force is experiencing operational limitation issues with the C-17
    attributable to the existing On-Board Inert Gas Generation (OBIGGS)
    fuel tank inerting system. What failure rate per flight hour are you
    currently experiencing with the existing C-17 OBIGGS when it is used?
        General Jumper. For the last 12 months, the C-17 OBIGGS has had a
    Mean Time Between Failure (MTBF) rate of 185.3 flight hours.

        101. Senator Smith. General Jumper, can you please describe your
    plans for developing a new OBIGGS for the C-17 to replace the existing
    system?
        General Jumper. The AF has been developing a more robust, simpler
    in design, less costly, and more reliable On Board Inert Gas Generating
    System (OBIGGS II). The 2-year development program is a fiscal year
    2003 new start.

        102. Senator Smith. General Jumper, where is the development of a
    new OBIGGS or its replacement in your priority list?
        General Jumper. Air Mobility Command and Boeing have a planned
    replacement for the current OBIGGS system for the C-17. Replacement of
    the current C-17 OBIGGS is not tracked on an Air Force-Level priority
    list.

                           GLOBAL POSITIONING SYSTEMS

        103. Senator Smith. General Jumper, with the increasing reliance on
    Global 7 Positioning Systems (GPS), both in terms of our military and
    in the civil sector, it seems we should be very clear in our minds
    where we are headed with GPS issues such as frequency protection,
    military versus civilian control, signals, power, accuracy, and
    international involvement. I have not seen a clear plan for the future
    of GPS and how it will continue to support national security objectives
    while the commercial use of the system expands. Are we working on one?
    Are we making sure we focus on all elements of the system, both long
    and short term?
        General Jumper. GPS Modernization is based on numerous studies,
    Presidential Directive, and statute, which all recommend enhancements.
    A modernization plan was briefed to Congress in 2000 to initiate the
    upgrade of GPS in response to the jamming threat as well as the
    national policy to encourage civil use of the system without degrading
    military utility. Short term efforts are focused on modifications to
    Block IIR and Block I satellites as well as associated user equipment
    upgrades (to include antijam antennae). Longer term efforts are derived
    through GPS III, which provides maximum antijam benefits that are
    practical from space along with new user equipment to take advantage of
    the modernized signals and upgraded digital antenna electronics.
        Prudent constellation management provided the opportunity to
    modernize satellites currently in storage. The current plan is to
    modify 10 IIR satellites (referred to as IIR-M) by adding a second
    civil signal and new military signal (first launch in fiscal year
    2003). The IIF satellites will incorporate a third civil signal, L5
    (first launch in October 2005). GPS III will include higher power
    military signals (first launch in fiscal year 2009).
        GPS User Equipment consists of standardized receivers, antennae,
    and antennae electronics grouped together in sets to derive navigation
    and time information transmitted from GPS satellites. Due to the
    increasing military dependence and emerging Electronic Warfare (EW)
    threat, the Navigation Warfare (Navwar) program was established to
    address EW solutions for GPS. Key elements of Navwar include protecting
    U.S. military and allies' use of GPS, preventing hostile exploitation
    of GPS, and preserving civil use of GPS outside the area of operations
    (AOO).

                           PORTSMOUTH NAVAL SHIPYARD

        104. Senator Smith. Admiral Clark, I would like to first thank you
    and Secretary England for your attentiveness to my concerns for the
    engineered refueling overhaul of the U.S.S. Albuquerque last year.
    Representatives from the Navy have informed me that the U.S.S.
    Albuquerque will be completed under schedule and within cost. Even
    though we encountered a bump in the road concerning the reprogramming
    of funds for the U.S.S. Albuquerque, I believe the fact that the U.S.S.
    Albuquerque work will be completed at a fixed price, under schedule,
    and within cost speaks volumes for Portsmouth Naval Shipyard's
    capabilities and its worth to the Navy. I do have another concern
    regarding Portsmouth Naval Shipyard (PNSY). The U.S.S. Annapolis, which
    was scheduled for a Depot Maintenance Period (DMP) in fiscal year 2003,
    is now unfunded for fiscal year 2003 and is being scheduled for a DMP
    in fiscal year 2004. As I understand it, this will create a workload
    gap, losing 40,000 man-days at PNSY. I am concerned about the gap in
    workload at PNSY due to the slippage of overhaul work on the U.S.S.
    Annapolis. According to the Navy, this was done to assist the Navy in
    meeting ``wartime requirements,'' and it is desirable to fund the
    U.S.S. Annapolis in fiscal year 2003. However, the fiscal year 2003
    budget was submitted without U.S.S. Annapolis at PNSY in fiscal year
    2003 workload. When will the work be done on the U.S.S. Annapolis?
        Admiral Clark. The fiscal year 2003 workload phasing challenge at
    PNSY is primarily driven by the difficult decision to delay the U.S.S.
    Annapolis Depot Modernization Period (DMP). Delaying this DMP was
    considered the best option to fund Navy priorities within our financial
    resources.
        The Navy is continuously evaluating the scheduling of ship
    availabilities to achieve the highest state of readiness balanced
    against shipyard workload and efficiency considerations. In formulating
    the fiscal year 2003 budget, the Navy carefully considered workload at
    PNSY. The budgeted workload is consistent with fiscal year 2002
    budgeted levels.
        The Navy considers several factors when assigning submarine
    availabilities. They include:
        (a) Assignment of effort to an industrial facility near the ship's
    homeport;
        (b) Maintaining reactor servicing skill levels; and
        (c) Avoiding, to the extent practical, major shifts in workload
    levels across all the shipyards.
        The Navy is in the process of evaluating availability assignments
    through the FYDP. All four of the naval shipyard commanders are part of
    the planning process. Their inputs are extremely valuable as the Navy
    goes through the difficult effort of achieving the optimum balance
    between fleet readiness, fiscal realities, and shipyard workloading.

        105. Senator Smith. Admiral Clark, what are the plans to ensure the
    people at PNSY are not laid off or to ensure the workload is equally
    distributed due to the gap in coverage?
        Admiral Clark. We recognize that the expected phasing of the
    planned work at PNSY over the course of fiscal year 2003 is not
    optimum. There is value in level loading the workload, and we are
    reviewing options to achieve this at PNSY. I understand your concerns
    and assure you that we are actively working to provide an appropriate
    workload for PNSY within our budgetary constraints. There are no plans
    for layoffs at PNSY; we are committed to ensuring the continued
    efficiency and contribution to the Navy of the PNSY workforce.

        106. Senator Smith. Admiral Clark, additionally, I would like your
    insight into why the required funds to support the war were not paid
    for using the money specifically allocated for the war effort?
        Admiral Clark. All ship maintenance costs associated with the war
    on terrorism have either been accommodated with Defense Emergency
    Response Funds or are included in the supplemental request currently
    before Congress.
                                     ______

                  Questions Submitted by Senator Rick Santorum

                              ARMY TRANSFORMATION

        107. Senator Santorum. General Shinseki, the Army has terminated 18
    programs and/or systems as part of the fiscal year 2003 request. There
    have been 29 cancellations and 12 restructures since the unveiling of
    the ``transformation'' initiative. Among the terminations for fiscal
    year 2003 are TOW Fire-and-Forget, M113 recapitalization, Armored
    Combat Earthmover, Wolverine, Hydra Rocket, Improved Recovery Vehicle,
    and Bradley Fire Support Team. Is the Army or the Office of the
    Secretary of Defense (OSD) expecting Congress to ``buy back'' these
    terminations? Put another way, should Congress expect to see these
    programs/ systems on the Army's unfunded requirements list? While 18
    programs/systems have been terminated, have the requirements that
    supported these programs gone away?
        General Shinseki. To achieve the goals of Army Vision, we will
    transition to a force that is strategically responsive and dominant
    across the full spectrum of operations. To achieve this vision, the
    Army has planned to transform across three axes: the Objective Force,
    the Legacy Force, and the Interim Force. This is critical to force
    shaping and maintaining our current capabilities to fight and win
    today's wars while preparing for the battles of the future.
        To ensure that we maintain a capability that guarantees warfighting
    readiness that supports the National Military Strategy, we have had to
    make hard choices regarding the modernization of the Legacy Force.
    During the last year, the Army terminated 18 programs that are not
    planned for the Objective Force. Eleven of those programs will be
    terminated in fiscal year 2003, while the remaining seven will be
    terminated between fiscal year 2004 and fiscal year 2007. The funding
    associated with these 18 systems has been reprogrammed to support
    higher priorities. We will not buy back any of the terminated systems
    through the unfunded requirements process. Rather, we will fund
    research, development, and acquisition for next generation solutions
    for the requirements to support the Objective Force.

                            INTERIM ARMORED VEHICLE

        108. Senator Santorum. General Shinseki, press reports note the
    majority of the Army's new Interim Armored Vehicles (IAV) are too heavy
    to fly in C-130 transport aircraft, a key requirement of the new
    Interim Force. Army documentation notes that ``8 of the 10 IAV variants
    exceed the load limits for the C-130; much of the support equipment is
    overweight/oversize as well.'' The non-compliant IAVs are the fire
    support and medical evacuation vehicles. The Army's Interim Brigade
    Combat Team (IBCT) program office has confirmed that some of the
    vehicles currently exceed the 38,000-pound weight limit to fly on a C-
    130, with the mobile gun system (MGS) exceeding the maximum by 3,000
    pounds. The MGS had weighed as much as 45,000 pounds until an
    ``aggressive'' weight reduction program. The four requirements for the
    IAV are: C-130 transportability; carry a nine-man infantry or engineer
    squad and a crew of two; communications interoperability among the 10
    vehicles; and 105mm cannon be able to destroy bunkers. In order to be
    C-130 transportable, the weight of the IAV cannot exceed 38,000 pounds.
    The Army plans to field the first IBCT by May 2003. The first IBCT will
    contain three surrogate vehicles, MGS, fire support, and nuclear,
    biological, and chemical reconnaissance vehicle, because not all
    variants will be available by May 2003. Can you execute this program
    within the time limits you have set and the total cost estimate given
    by the Army?
        General Shinseki. Yes. The IAV program is executable within the
    established schedule and funding. We are confident that the Stryker
    will be able to meet the weight requirements. 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. The allowable weight to fly 1,000 miles under normal
    operating conditions is 38,000 pounds. All Stryker configurations are
    C-130 deployable today, though several require cross loading of some
    equipment. By prioritizing load lists for the eight production
    configurations and closely managing weight on the two developmental
    configurations, we will meet our C-130 transportability goal of 1,000
    nautical miles, ready for immediate combat operations.

                                  F-22 RAPTOR

        109. Senator Santorum. General Jumper, on the basis of concern
    expressed by this and other congressional committees, Congress imposed
    a cost cap on both the developmental and production costs associated
    with the F-22 Raptor in the National Defense Authorization Act for
    Fiscal Year 1998. As part of its work on the National Defense
    Authorization Act for Fiscal Year 2001, this committee provided 1.5
    percent relief from the development cost cap for the F-22. Last year,
    this committee led the way to repeal the F-22's development cost cap
    during deliberations on the Fiscal Year 2002 National Defense
    Authorization Act. Congress has not adjusted the production cost cap.
    The current Air Force procurement goal is 339 F-22s, well short of the
    initial 750 F-22s the service intended to purchase. Estimates are that
    the Air Force will need to procure 381 F-22 Raptors to fill out 10
    squadrons for its aerospace expeditionary forces. Currently, the Air
    Force estimates that the F-22 program is $2 billion above the
    congressional cost cap for production, while the Office of the
    Secretary of Defense's Cost Analysis Improvement Group (CAIG) estimates
    the program to be $9 billion over the production cost cap. Congress has
    since learned of additional developmental test problems and a unit
    production cost increase. Reports are that the Air Force has begun
    lobbying members of Congress to either lift or modify the F-22
    production cost cap. Can you address whether or not the Air Force
    supports efforts to lift or modify the F-22 production cost cap? Have
    you had any discussions with members of this committee about lifting
    the production cost cap?
        General Jumper. OSD requested, ``Congress remove the current
    production cost cap for the F-22 program'' in a September 13, 2001,
    letter to the Defense Committees. OSD will be submitting a separate
    legislative initiative on this subject.
        The F-22's combination of stealth, supercruise, maneuverability,
    and integrated avionics coupled with improved supportability,
    represents an exponential leap in warfighting capabilities and allows
    for the full realization of operational concepts that are vital to the
    21st century Air Force. Using GPS guided bombs, the F-22's all-aspect
    stealth offers the capability to penetrate deep into enemy territory
    and destroy our greatest future threat--the next two generations of
    double-digit Surface to Air Missile (SAM) systems. Avionics
    improvements in the F-22 fire control system will enable it to engage
    mobile ground targets in any weather, 24-hours a day, deep within enemy
    territory. The future incorporation of the Small Diameter Bomb will
    double its precision capacity and result in a two-fold increase in
    effectiveness. With its internal weapons storage, the F-22's increased
    range and maneuverability will allow it to defend itself and protect
    the F-117 and the B-2, facilitating stealth operations to counter enemy
    attempts to deny access. The F-22 will enhance the joint fight by
    gaining and maintaining air superiority, thus providing ground, naval,
    and special operations forces with unimpeded access to their targets.
    Finally, the F-22 cannot be matched by any known or projected adversary
    aircraft. This transformational combat system will allow the Air Force
    to replace more than 700 air-to-air F-15Cs and air-to-ground F-15Es
    with F-22s. The Air Force will work within the production cap
    identified as part of the Defense Acquisition Board's Low Rate of
    Initial Production of between 303 and 339 aircraft. The F-22 will
    enable the world's premier air and space force to deliver air dominance
    in any threat environment for decades.

                              PRECISION MUNITIONS

        110. Senator Santorum. General Jumper, the success of U.S. military
    operations in Kosovo and Afghanistan is due in large part to our
    inventory of precision munitions, both Joint Direct Attack Munitions
    and Laser-Guided Bombs. Like many members of this committee, I support
    the competitive procurement of weapons systems and munitions. I want to
    commend Admiral Clark and members of the Navy's acquisition corps who
    have been strong advocates for the competitive procurement of Laser-
    Guided Bombs. Do you, on behalf of the Air Force, support the
    competitive procurement of Laser-Guided Bombs?
        General Jumper. The Air Force absolutely supports the competitive
    procurement of Laser-Guided Bombs (LGBs) in fiscal year 2003 and
    beyond, contingent upon a second source becoming qualified and provided
    the operational requirement allows time for a competition. Even for
    those requirements that are urgent, the Air Force will employ a
    strategy that includes all qualified sources. In order to foster
    competition, the Air Force is in the process of qualifying Lockheed
    Martin as a second source for Paveway II LGBs.

        111. Senator Santorum. General Jones, it appears that the Marine
    Corps has a shortfall in fire support. The DD-21, which was slated to
    provide offshore fire support, was restructured last year. The Land-
    attack Standard Missile, fitted with advanced navigation system and
    guided by GPS to provide the required range and accuracy needed to
    support Marine Corps power projection from the shore, has been canceled
    with this budget. The Lightweight 155 field artillery system has
    slipped, impacting modernization of the on-shore field artillery. How
    do you plan to address this apparent shortfall in Marine Corps fire
    support requirements?
        General Jones. The Marine Corps' ground fires programs are
    addressing the need to field fire support systems to support
    Expeditionary Maneuver Warfare. The Lightweight 155 program is still on
    track for a production decision early in fiscal year 2003, and although
    the projected IOC has slipped 6 months, it is still on schedule to meet
    our IOC objective in fiscal year 2005. Fiscal year 2005 we will also
    introduce an interim High-Mobility Artillery Rocket System (HIMARS)
    capability with the fielding of one functional battery, with IOC to
    follow in fiscal year 2007, and the fielding of two HIMARS battalions.
    We are also pursuing an Expeditionary Fire Support System (EFSS)
    solution in POM04 that will provide an enhanced fire support capability
    to vertically-lifted maneuver forces. Planned IOC for EFSS fiscal year
    2006-2007.
        A credible Naval Surface Fire Support (NSFS) program is a critical
    component of forcible entry from the sea, especially during the
    critical time before the landing force's organic fire support systems
    can be established ashore. Three specific programs will significantly
    enhance NSFS capabilities through the mid-term (to fiscal year 2009);
    the 5 inch/62 caliber naval gun, the Extended Range Guided Munition
    (ERGM), and Supporting Arms Coordination Center (SACC) Automation.
    Although these systems will provide an enhanced NSFS capability, all of
    our NSFS requirements will not be met until DD(X) joins the fleet in
    strength. In the interim, we will continue to rely heavily on carrier
    and amphibious-based rotary and fixed wing close air support. Tactical
    attack aircraft, however, do not provide an all-weather, 24-hour,
    immediately responsive fire support capability that ground and naval
    surface fire support systems provide.
        DD(X) is a vital component of expeditionary fire support and is
    essential if we are to realize the full potential of Expeditionary
    Maneuver Warfare in the far-term. The systems envisioned for DD(X),
    which include the 155mm Advanced Gun System and the Advanced Land
    Attack Missile, are essential elements of an expeditionary fire support
    system that will provide responsive, all-weather fire support ``from
    the sea'' in support of forces operating throughout the depth of the
    littoral battlespace.
        I am concerned, however, that DD(X) will be fielded with less
    warfighting capability and in fewer numbers than previously planned for
    DD-21. The magazine capacity of DD(X) must be sufficient to provide
    sustained fire in support of Marine, joint, or coalition forces ashore,
    and there must be a sufficient number of ships available to sustain
    these fires for extended periods of time. Additionally, there must be
    enough Vertical Launch System (VLS)/Advanced Vertical Launch System
    (AVLS) cells dedicated to the Advanced Land Attack Missile (ALAM),
    which will provide the Landing Force Commander with responsive, medium-
    range interdiction and battlespace shaping fires throughout the
    duration of operations.

                           AMMUNITION INDUSTRIAL BASE

        112. Senator Santorum. General Shinseki, Admiral Clark, General
    Jones, and General Jumper, according to recent testimony, the Air Force
    has a $2 billion shortfall in its munitions accounts. For reference,
    the Department of Defense spent about $6 billion on munitions in fiscal
    year 2001, compared to $16 billion in fiscal year 1991. Recently,
    Colonel James Naughton, Deputy Chief of Staff for Ammunition, Army
    Materiel Command, said that there is not enough money to remanufacture
    obsolete ammunition stockpiles. While the budget increases funding for
    the procurement of ``smart munitions,'' the portion of the industrial
    base that manufactures bullets, projectiles, propellants, fuses and
    pyrotechnics is not thriving. In addition, many of the subcomponents in
    the ammunition sector are military-unique items, with limited or no
    commercial market. An industry association, the Munitions Industrial
    Base Task Force, believes that our munitions accounts are underfunded
    by $400 million. What actions can be done to shore up the entire
    ammunition industrial base, not just the precision or preferred
    munitions base?
        General Shinseki. The best way to support the munitions industrial
    base is to buy ammunition. The end of the Cold War gave us a surplus of
    ammunition, but now that stockpile is either depleted or aged.
    Currently, the Army has a $544.4 million unfunded requirement for
    ammunition, which includes stockpile management. Much of this
    ammunition UFR is for common use ammunition items such as small arms,
    pyrotechnics, artillery, mortars, and grenades. Funding procurement of
    these items would go a long way towards shoring up many of these
    critical, niche producers.
        Admiral Clark. The Department of the Navy (DON) supports the
    strategies developed by the United States Army, which acts as the
    Single Manager for Conventional Ammunition (SMCA). The Secretary of the
    Army was designated the single manager because the Army controls the
    majority of the industrial base. One of the more important functions of
    the SMCA is management of the Defense ammunition industrial base. To
    that end, Assistant Secretary of the Navy for Research, Development,
    and Acquisition has recently coordinated a memorandum that reminds and
    emphasizes the intent and importance of Section 806 of the National
    Defense Authorization Act for Fiscal Year 1999. The Act tasks the SMCA
    to examine the industrial base and make procurement decisions, which
    help to underpin the vitality of the ammunition industrial base. The
    DON is encouraged by the SMCA's implementation of multiyear
    procurements and long-term requirements contracts.
        The DON will continue to investigate management architectures and
    SYSCOM relationships that satisfy warfighter needs, stabilize
    requirements and inventories, and yet still allow the industrial base
    flexibility enough to respond to inevitable wartime surge demands. The
    Navy has also commissioned studies by Department of Commerce to examine
    the health of those portions of the industrial base where there is
    concern about the strength of the enterprise (e.g., high performance
    explosives).
        The ammunition industrial base has suffered in the past, and the
    DON is working closely with our partners on the Munitions Industrial
    Base Task Force to help ensure that this important element of our
    industrial capacity is preserved.
        General Jones. The majority of the responsibility for maintaining
    the munitions industrial base rests with the U.S. Army. The Secretary
    of the Army was designated the Single Manager for Conventional
    Ammunition (SMCA) as the Army controls the majority of munitions
    procurements which drives the industrial base. The United States Marine
    Corps supports the strategies developed by the U.S. Army in their role
    as the SMCA. The Marine Corps shares the concern over the stability of
    the industrial base and feels one of the most important roles the SMCA
    has is the management of the munitions industrial base. The Marine
    Corps understands the importance of Section 806 of the National Defense
    Authorization Act for Fiscal Year 1999 and to the extent possible
    ``buys American.'' The act tasks the SMCA to examine the industrial
    base and make procurement decisions, which help to underpin the
    vitality of the ammunition industrial base. The Marine Corps continues
    to be supportive of the SMCA's implementation of multiyear procurements
    and long-term requirements contracts as tools to encourage stability in
    the industrial base.
        The Marine Corps is working closely with the Munitions Industrial
    Based Task Force and the Army to develop a sound munitions industrial
    base that meets the needs of the services both in times of peace and
    war.
        General Jumper. The Air Force shares your concern about the health
    of the ammunition industrial base. Since the end of the Cold War, the
    Air Force has shifted its emphasis more towards precision-guided
    munitions, reducing the need for non-precision munitions. However,
    there are niches in the ammunition industrial base that warrant
    continual attention. In addition to funds already provided for the
    munitions and ammunition industrial base since September 11, a number
    of acquisition excellence strategies, such as multiyear procurement,
    contractor incentives, and lean enterprise practices, could be
    incorporated to support and strengthen the entire ammunition industrial
    base.
        Successful application of these strategies could enhance corporate
    financial health and stockholder value by increasing a contractor's
    ability to capture corporate profits and realize sufficient returns on
    investment. This, in turn, could lead to expanded growth for both
    contractors and their supply chain plus a greater potential for
    attracting investors, recruiting fresh talent, and retaining valuable
    expertise. In addition, the Government could realize improved schedule
    performance, reduced cycle times, and reduced acquisition costs
    throughout the industrial enterprise as a result of these strategies.
        Since the Army is the Department of Defense's Single Manager for
    Ammunition, responsible for consolidating Army, Navy, and Air Force
    ammunition procurements, we believe they would be in the best position
    to implement these strategies. Similar strategies were successfully
    incorporated in the Air Force's recent procurement of precision-guided
    munitions (e.g., Joint Direct Attack Munitions), and the Air Force
    would support the Army's efforts to implement these strategies.
                                     ______

                  Questions Submitted by Senator Wayne Allard

                            SPACE-BASED CAPABILITIES

        113. Senator Allard. General Shinseki, Admiral Clark, General
    Jones, and General Jumper, each of your services have described space-
    based capabilities as an enabler for transformation. Can each of you
    expand on what you see as the role of space assets in you respective
    Services' transformation? Can you also discuss your view of the role of
    commercial space-based assets, such as commercial space-based imagery,
    in transformation?
        General Shinseki. Army transformational air and space requirements
    are articulated in the operational concept for the Objective Force,
    which General John Abrams and his staff at the Army Training and
    Doctrine Command (TRADOC) are defining. The Objective Force will
    conduct operations to, from, in, and through the space medium in
    support of national interests both on Earth and in space. Not only will
    commanders of Objective Force units be able to better maneuver in the
    vertical dimension, but they will also leverage other combat
    capabilities based hundreds of miles above the Earth.
        In an environment where space-based and aerial assets enhance the
    mobility, communications, intelligence products, and lethality of
    ground forces, the Objective Force must strive to create a seamless,
    vertical continuum through which the commander can exploit space-based
    and aerial assets to see first, understand first, act first, and
    achieve decisive overmatch. Space operations and systems provide the
    essential underpinnings for robust and effective command, control,
    computer, communications, intelligence, surveillance, and
    reconnaissance (C\4\ISR). Consequently, the Objective Force will be
    equipped and trained to exploit space-based capabilities. A responsive,
    integrated, and interoperable C\4\ISR system that collects, processes,
    and disseminates information in a timely manner is critical to the
    development of situational awareness on the future battlefield. The
    Army is following a strategy that supports digitization by implementing
    a sound, integrated, information technology architecture, and
    horizontal technology integration that incorporates a ``space to mud''
    C\4\ISR approach.
        While the Objective Force will be postured to exploit space-based
    capabilities, it will also be developing and executing protective
    measures for space systems as well as avoiding absolute dependency on
    them. U.S. dominance in space is not guaranteed. Adversaries may probe
    our space systems and segments for vulnerabilities, or they might alter
    the space environment to disrupt or deny our space operations. Space
    control, a mission shared by all the services, ensures freedom of
    action for Objective Force units and, when directed, denies an
    adversary freedom of action in using space-based systems and products.
        Commercial space resources are an important augmentation of
    Department of Defense-owned systems, providing efficiencies in meeting
    information requirements. The Army position on commercial space
    resources is that they augment, but do not replace, Department of
    Defense-owned systems. With commercial systems, the Department of
    Defense has no real control over the resources. It is the Army's
    position that it be the owner, operator, and decision-maker for
    mission-critical applications.
        Admiral Clark. The transformation of our Naval Forces focuses on
    achieving the capabilities which are necessary for a networked, sea-
    based power projection force. Space will provide the connectivity to,
    and thus the early in-theater backbone for, a powerful grid of
    national, joint, and sea-based sensors. These space-based intelligence/
    surveillance/reconnaissance sensors, navigation, and meteorology/
    oceanography capabilities will only increase in importance. The
    immediately employable naval elements of the joint force are able to
    strike with ever increasing speed and precision using both networking
    to increase speed of decisions, and high-speed weapons to increase
    speed of attack. Navy takes advantage of cost effective commercial
    satellite communications today with programs like our Challenge Athena
    Commercial Satellite Communications effort, and will continue-in the
    future to seek out and use the best available commercial space-based
    assets.
        DOD relies heavily on imagery from space for a variety of missions.
    Several missions, such as precision targeting, still can only be
    satisfied by sophisticated U.S. reconnaissance assets. Other missions
    which have historically been supported primarily by U.S. national
    imagery could be assisted by commercial imagery in certain scenarios,
    assuming military issues such as tasking, image quality and speed of
    delivery could be guaranteed and established.
        General Jones. Space-based systems provide the ultimate ``high-
    ground'' that can support the demanding requirements of Expeditionary
    Maneuver Warfare (EMW). The capabilities we acquire from space systems
    will play a significant role in future Marine Corps operations as we
    expand operational maneuver from the sea (OMFTS) to over-the-horizon
    (OTH) amphibious assault and power projection deep into the littoral
    area. The intelligence, surveillance, and reconnaissance (ISR) efforts
    in these denied areas prior to and during the execution of a military
    operation are significantly dependent on space-based assets, including
    those commercial assets that can be effectively and efficiently
    leveraged in support of military operations. The scope of this
    requirement will only increase in the future.
        This is particularly true in the case of the Marine Corps, where
    forward deployed units are routinely the first called upon to react to
    crises. Rapid and on-call expeditionary operations are unique among
    military operations in that significant challenges are posed by a lack
    of timely terrestrial ISR asset access in the operation area from the
    planning phase through the transition to shore. This challenge is
    enhanced by the requirement to provide predictive analysis to
    compensate for relatively longer periods of uncertainty and, in many
    cases, total chaos. The initial stages of over-the-horizon amphibious
    operations will always rely heavily on space-based collection assets.
    This reliance is endemic in all aspects of amphibious force
    intelligence operations that are conducted across the strategic,
    operational, and tactical spectrum.
        The space segment of any communications network is a major piece to
    the overall communications capability desired. Often times, space-based
    communications provide the best means to support the Marine Corps'
    communications requirements because it is more suited for units on the
    move and widely dispersed.
        Commercial satellite communications (SATCOM) can certainly be used
    to augment our capabilities, and the fielding of the Lightweight
    Multiband Satellite Terminal (LMST) gives our operating forces the
    ability to take advantage of commercially available bandwidth.
        The Global Positioning System (GPS) continues to be an enabler for
    almost every type of operation we conduct and with its integration into
    more weapons systems, our ability to conduct precision strike missions
    is being enhanced. GPS also plays a significant role in being able to
    conduct Blue Force Tracking (BFT) in beyond line-of-sight situations.
    This nascent capability contributes to a more comprehensive Common
    Operational Picture (COP), reduces the risk of fratricide, and has the
    potential to significantly enhance the commander's conduct of
    operations.
        General Jumper. The Quadrennial Defense Review (QDR) operational
    goal number 5 is the foundation of our space transformation efforts:
    ``Enhance the capability and survivability of space systems and
    supporting infrastructure.'' To meet this goal, the Air Force is
    pursuing next generation satellite and launch systems to provide the
    warfighter with the tools they need to effectively execute joint
    operations. Early warning will be transformed as the old Defense
    Support Program (DSP) is replaced by the new Space Based Infrared Radar
    System, High Component (SBIRS-High) Legacy launch vehicles, based on
    1950s-era ICBMs, will be replaced with the new, efficient, and cost-
    effective Evolved Expendable Launch Vehicle (EELV). Persistent
    intelligence, surveillance, and reconnaissance (ISR) will be enhanced
    with the new Space Based Radar system, providing denied area access to
    joint warfighters. A study on satellite communications is underway,
    with an expected July 2002 completion, to transform MILSATCOM
    warfighter capabilities.
        As you are aware, the new Under Secretary of the Air Force, Mr.
    Peter Teets, has been assigned milestone decision authority for all
    major DOD space acquisition programs. Army, Navy, and Marine Corps
    space transformation efforts are of significant interest to the AF in
    being good stewards for space. I will defer to my associates on the
    specifics of how space will enable their transformations. However, let
    me say that the Air Force, as the primary provider of the space
    capabilities, recognizes the inherently joint nature of space and the
    importance it will play in enabling robust communications on the move;
    real-time tracking, targeting, and sensor to shooter capabilities; and
    protected precision navigation capabilities. The Air Force will work
    hard with the National Reconnaissance Office (NRO) to transform air and
    space ISR capabilities into persistent, global, on-demand joint assets
    for tomorrow. Seamless integration of space with joint land and air
    forces is imperative.
        Finally, the role of commercial space-based assets is significant,
    providing key support to the warfighter in the areas of communication
    and imagery.

        114. Senator Santorum. General Jumper, Mr. Aldridge recently signed
    a directive delegating milestone decision authority for all military
    space systems to the Air Force. The Air Force is now charged with being
    a steward for all the services' space program needs. This is a
    significant new responsibility for the Air Force. During Secretary
    Roche's testimony to this committee last month, Secretary Roche
    indicated that some of the problems encountered with the Space-Based
    Infrared Radar System, High Component (SBIRS-High) acquisition program
    was ``in the fundamentals.'' What specific steps are you taking to
    ensure the ``fundamental'' problems encountered with SBIRS-High will
    not be repeated by other satellite systems that the Air Force is
    acquiring?
        General Jumper. I would agree that the acquisition issues I have
    been made aware of concerning SBIRS-High would fall into the category
    of ``acquisition fundamentals.'' The task for helping us solve our
    National Security Space system acquisition problems has been given to
    the new Under Secretary of the Air Force and Director of the National
    Reconnaissance Office, Mr. Peter B. Teets. Given Mr. Teets' space
    industry experience, I can think of no one better prepared to help us
    get our major National Security Space programs back on track. Mr. Teets
    has already begun this effort by making it a priority to reestablish
    program stability and management discipline within the Air Force space
    programs. In the past, increased management discipline was accomplished
    through the addition of oversight layers within the Air Force and OSD.
    Unfortunately, it appears the current levels and/or types of oversight
    were not enough to prevent the current SBIRS-High problems. Instead of
    adding additional oversight layers, Mr. Teets is taking a different
    approach by developing a space-focused process that will reduce the
    number of oversight staff layers while increasing the senior level
    space system decision maker insight. The resulting streamlined process
    will decrease the opportunity for unintentionally causing program
    instability, facilitate timely senior level decisions, and provide
    space-oriented expertise and direction when needed.

        115. Senator Allard. General Jumper, the National Security Space
    Commission last year reported on the vulnerability of our space-based
    systems, including their associated ground systems, to enemy attack. As
    the role of space expands in the military, it became increasingly
    important that we ensure the protection of these systems. What steps is
    the Air Force taking to protect our space-based assets?
        General Jumper. Protection of our space systems is a critical
    priority for us. Our adversaries could attack our systems by various
    means, to include physical attacks against our ground control nodes,
    interference with the space-to-ground communication links, and in the
    future, kinetic, or directed energy attacks against our satellites from
    either terrestrial or space platforms. No single approach will ensure
    protection against all potential threats. We'll need to ensure that
    protection requirements are enforced and that appropriate protection
    capabilities are included as our space systems go through their
    acquisition milestones.
        As prerequisites to our implementation of protection measures,
    we'll need to know where we might have vulnerabilities, and be able to
    detect and characterize attacks against any element of our space
    systems. Toward this end, the Air Force will use the 527 Space
    Aggressor Squadron in joint and service exercises to help identify
    potential vulnerabilities and guide protection investments and non-
    materiel countermeasures. We're also developing the Rapid Attack
    Identification and Reporting System (RAIDRS) to detect, characterize,
    and report attacks on our space systems.

                        COMMERCIAL ASSETS VULNERABILITY

        116. Senator Allard. General Jumper, are you working with industry
    to also assess the vulnerability of commercial assets used by the
    military, such as satellite communication systems?
        General Jumper. Last summer, the Air Force Scientific Board
    completed a study to assess availability and survivability issues
    associated with military use of commercial satellite communications.
    This study concluded that the use of commercial space assets was
    fundamentally a risk management problem. There are no ``silver bullet''
    solutions to the problem but there are strategies and investments that
    will reduce risk associated with using commercial assets. The study
    made five recommendations: (1) create a dependable surge capacity; (2)
    focus investment on mission robustness and flexibility rather than
    defense of specific systems; (3) develop an operational discipline that
    includes commercial space; (4) focus investment on cost effective
    technologies that improve availability and survivability of space
    systems; and (5) establish an architectural approach to space
    communications. To the extent these recommendations can be implemented,
    they will go a long way to reducing risks associated with the use of
    commercial systems and lead to a strong long-term relationship with
    commercial system owners/operators.

        117. Senator Allard. General Jumper, looking out into the future,
    could you please discuss your vision for accomplishing space control?
        General Jumper. To ensure that our national security space systems
    continue to provide the strategic advantage, we'll pursue a range of
    improvements to our space control capabilities. Key focus areas
    include:
        (1) Space situational awareness: We must improve our capabilities
    to track and characterize objects in space, to understand which objects
    are threats and what they are doing, to detect and characterize
    terrestrial threats to our systems, and to differentiate attacks from
    natural effects of the space environment. Space situational awareness
    is the critical enabler for timely defensive and offensive responses
    against space threats.
        To transform our space situational awareness capabilities, we'll
    pursue a spiral development program for Space-Based Space Surveillance
    (SBSS), while we sustain and upgrade key ground-based sensors. Evolving
    the existing ground-based network into space will enable much more
    timely access to objects of interest. Our transformation initiatives
    will also emphasize development of a space ``common operating picture''
    which integrates traditional space surveillance with additional ISR
    sources through enhanced command and control.
        (2) Defensive counterspace: Our counterspace strategy first
    emphasizes defense of vital U.S. space capabilities. We'll ensure that
    protection requirements are enforced and that appropriate protection
    capabilities are included as our space systems go through their
    acquisition milestones. We'll continue to support and equip the 527th
    Space Aggressor Squadron, which provides a credible ``red force'' space
    control threat to help our forces identify potential vulnerabilities to
    hostile actions and to develop effective protection and
    countermeasures. We're developing the Rapid Attack Identification and
    Reporting System (RAIDRS) to detect, characterize, and report attacks
    on our space systems.
        (3) Offensive counterspace: We also need to be able to deny
    adversaries their use of space systems and services for purposes
    hostile to U.S. national security interests. We're developing mobile/
    transportable capabilities to deny space-based communications and
    surveillance/reconnaissance information.
        (4) Space control infrastructure: We'll develop a space range to
    provide the opportunity to test, train, and exercise for space control
    in an operationally realistic environment.

        118. Senator Allard. General Jumper, the Air Force's fiscal year
    2003 budget includes a significant funding increase for R&D programs.
    What are your priorities for space-related R&D programs?
        General Jumper. My top priority is ensuring warfighters have the
    space-borne capabilities necessary to fight and win our wars. We need
    an upgraded missile surveillance and warning capability to replace our
    aging Defense Support Program constellation. If the SBIRS-High program
    cannot meet those requirements, we will deliver a system that can.
        The warfighter needs more MILSATCOM capability, too. Although we've
    made great strides in the last 10 years, we aren't finished. Right now,
    we're looking at cutting-edge areas such as laser communications,
    optical links, and the development of a network-centric architecture to
    deliver what the warfighter needs.
        Access to space and space control are critical to warfighting. We
    are delivering new launch capability in the Evolved Expendable Launch
    Vehicle and turning our attention to systems, tactics, and policies
    that can guarantee the security and performance of our space based
    assets.
        Space-based radar will be added to the multi-theater targeting and
    tracking architecture to provide world-wide, near continuous
    situational awareness of moving surface targets. It will add needed
    depth and persistence to the current airborne system and provide a
    unique capability to observe areas currently denied due to surface
    threats and terrain masking. SBR will be critical to decreasing the
    find fix target track cycle time.
        Finally, we're modernizing GPS with a more robust signal providing
    the warfighter with more accurate location and targeting information.
    These new systems will also give theater commanders more options to
    protect the signal from disruption by hostile forces, enabling our
    units to successfully continue the fight even when faced with a jamming
    threat.
                                     ______

                  Questions Submitted by Senator Jeff Sessions

           COST TO OPERATE OLDER SHIPS VERSUS CONSTRUCTING NEW SHIPS

        119. Senator Sessions. Admiral Clark, Spruance-class destroyers
    that are now 25 years old have performed strike missions and maritime
    interception operations superbly during Operations Desert Shield,
    Desert Storm, Desert Fox, Allied Force, and Enduring Freedom. Yet the
    Navy is decommissioning them prior to their 35-year service life is
    completed. I visited the U.S.S. O'Brien in Japan in January 2002
    shortly after she returned from combat operations in Operation Enduring
    Freedom. I also received briefings on the role U.S.S. Kitty Hawk played
    in the war. The Navy plans on decommissioning U.S.S. Kitty Hawk in
    2007. The retirement of the Spruance-class will generate requirements
    for additional new ships and brings the Navy below the Quadrennial
    Defense Review (QDR)-directed number of surface combatants. On Tuesday,
    Admiral Blair said that if the pace of operations and the requirement
    to maintain two carrier battle groups and two amphibious readiness
    groups in the Central Command's area of responsibility continues that
    his theater may not have the forces necessary to deter conflict on the
    Korean peninsula or other flashpoints. In fact, the U.S.S. Kitty Hawk
    battle group is scheduled to deploy again in support of Operation
    Enduring Freedom later this spring with her full air wing. How much
    would it take to keep these ships in service to keep the Navy at the
    QDR levels and maintain sufficient forces to meet presence requirements
    of the warfighting Commanders in Chief? I ask this question because it
    seems to me that the remaining ships and crews will have to make up for
    the missing surface combatants because the presence requirements for
    ships has not decreased.
        Admiral Clark. The Spruance decommissioning decision is driven by
    affordability (manpower and maintenance costs) and capability (older
    technology) concerns. This decision results in a force level that
    temporarily drops below the QDR level of 116 surface combatants until
    newer, more capable DDG's are commissioned.
        The cost to crew, maintain, and operate a Spruance buyback plan
    that maintains a surface combatant force level of 116 is about $1.2
    billion as articulated in the table.

    ----------------------------------------------------------------------------------------------------------------
                                                                                Fiscal Year
                           Total Savings                       ---------------------------------------------  Total
                                                                  2003     2004     2005     2006     2007
    ----------------------------------------------------------------------------------------------------------------
    Ship Operations...........................................     14.9     48.3     74.8     68.4     46.5    252.9
    Maintenance...............................................     23.9     41.0     87.1     81.3     67.0    300.3
    Manpower..................................................     13.6    117.8    192.5    201.2    134.6    659.7
                                                               -----------------------------------------------------
      Total...................................................     52.4    207.1    354.4    350.9    248.1  1,212.9
    ----------------------------------------------------------------------------------------------------------------

        120. Senator Sessions. Admiral Clark, it would be useful to hear
    your comments on lessons learned as we assess the future utility of
    some of the aging ships in the Navy. I would like to point out that
    this is an issue that Senator Kennedy and I are focusing on and we sent
    a letter to the Secretary of the Navy and you last week asking you to
    look into four focus areas for getting the most out of the ships we do
    have.
        Admiral Clark. The primary lesson learned is that significant
    investment in modernization is required to keep ships serviceable and
    retain them to the end of their full service life. In a fiscally
    constrained environment, Navy must balance between transforming and
    building the future Navy to meet emergent warfighting requirements, and
    operating the current force to meet existing missions, while remaining
    within the President's budget.
        Force Structure: New ship procurement decisions dominate force
    structure recapitalization, yet the retention or decommissioning of
    ships has the greatest near-term impact on force structure size and
    composition. The key element in decisions to extend or contract the
    service life of a ship class is affordability versus capability.
        Service Life Considerations: The service life of our warships has a
    significant impact on force structure. Extending service life by
    delaying decommissionings can maintain or increase force structure and,
    correspondingly, accelerating decommissioning can reduce force
    structure. The decision to extend or accelerate decommissioning of a
    ship class is based on a cost/benefit analysis focusing on the
    affordability of the platform and what warfighting capabilities it
    brings to the joint commander's tool box. In some cases, such as
    Ticonderoga (CG 47)-class cruisers and Perry (FFG 7)-class frigates, it
    is considered prudent to invest in conversion and modernization of
    ships to extend their service life. In other cases, such as Spruance
    (DD 963)-class destroyers, it is more economical to decommission the
    ships.
        Historical Service Life vs. Estimated Service Life: Sophisticated
    combat systems must keep pace with advancing threat technology. As the
    combat systems and the hull, mechanical, and electrical (HM&E) systems
    of a platform age both must be maintained and upgraded, but the combat
    systems upgrades tend to be more extensive and expensive. Additionally,
    as ships age, the cost of operating and maintaining the ships may
    increase as a function of the overall material condition of the vessel.
    For example, if a ship has deferred a number of maintenance actions
    over the course of its operating life, and has had a high operational
    tempo, the cumulative effects on the ship can lead to higher operating
    and maintenance costs. This must be considered in investment decisions.
    In making service life decisions, warfighting capability gained from an
    upgrade is balanced against the cost of the upgrade and the operations
    and maintenance cost of the ship. Unless modernized, a surface
    combatant's Historical Service Life (HSL) is shorter than the Estimated
    Service Life (ESL) established via current Navy policy and design
    specification requirements provided to shipbuilders. For destroyers,
    HSL is 20 years compared to an ESL of 35 years. In the case of
    frigates, HSL is 20-22 years compared to an ESL of 30 years.
        Cruiser Conversion: The Navy has made the commitment to extend the
    service of our primary air defense platforms through the conversion
    program for CG 47-class cruisers. The program will upgrade the Aegis
    combat systems and install warfighting improvements including Area Air-
    Defense Commander (AADC) capability, upgrades to the Aegis Baseline to
    accept Sea-Based Ballistic Missile Defense capability (pending Missile
    Defense Agency (MDA) approval and funding of development), land attack,
    and force protection. Additionally, service life extension features
    include Smart Ship upgrades, the all electric alteration, weight and
    moment adjustments, and other distributive systems improvements.
    Modernizing these ships will make them more capable to project theater-
    wide offense and defense while providing up to an additional 20 years
    of service life beyond the HSL of 17 years.
        Frigate HM&E and Self Defense Upgrades: In the fiscal year 2003
    budget submission, FFG 7 Class frigates will receive HM&E upgrades to
    reduce their operating costs and extend their service life.
    Additionally, the combat systems will be upgraded with selected ship
    self defense technology. These ships with their relatively small crew
    size and low operating costs provide affordable warfighting capability
    for the investment required.
        Amphibious Assault Ship Sustainment: The requirement for amphibious
    ships is driven by two factors, the Amphibious Ready Group (ARG)
    deployment cycle and Marine Corps lift requirements. Today's 12 ARGs
    are the minimum required to meet presence requirements and each ARG
    consists of an LHA/LHD, LPD, and LSD. Overall lift is currently below
    the 2.5 Marine Expeditionary Brigade (MEB) lift programmatic goal and
    the full requirement of 3.0 MEB lift. Austin (LPD-4) Class ships will
    be required to serve an average of 41.5 years, well beyond their
    original ESL of 30 years, in order to meet amphibious requirements
    until the LPD-17-class ships are delivered to the fleet. We are funding
    the LPD-4 Class Extended Sustainment program, which is designed to
    improve the dependability of HM&E systems and living conditions for the
    sailors and embarked marines. Additionally, it is expected that LHAs
    with their mid-life upgrade will be required to serve a median 42
    years, significantly beyond their ESL of 35 years, before being
    replaced by the LHA(R) ships currently being studied.
        Destroyer Decommissionings: DD 963 Class destroyers are expensive
    to maintain because of their large crew size and age while providing
    only limited warfighting capability. These ships received an earlier
    modernization with the introduction of the Vertical Launch System
    (VLS), which extended the combat system relevant life beyond the
    historical 20 years. However, while the ships still provide some
    warfighting capability with two 5 inch 54 cal. guns and an Anti-
    Submarine Warfare (ASW) suite, the higher manning requirements and
    operational costs do not justify additional funds for further
    modification or extended service life. New Burke (DDG 51) Class
    destroyers being introduced to the fleet provide substantially more
    combat capability and an ample number of VLS tubes to support current
    Tomahawk inventory. It is not cost effective to keep the DD 963 Class
    in the inventory. The currently structured decommissioning schedule
    will save the Navy about $1.25 billion over the FYDP that can be
    applied to transformational efforts such as electric drive, advanced
    networks and stealth technology bringing new warfighting capabilities
    to the fleet.

            USING AVERAGE AGE OF SHIPS TO MAKE INVESTMENT DECISIONS

        121. Senator Sessions. Admiral Clark, the Secretary of the Navy
    stated before this committee that because Navy ships have an average
    age of 16 years, they are not as high on the priority list for funding
    as other systems. If the Navy uses average age as criteria for
    investment decisions, doesn't that hide problem areas? For instance, in
    this budget request you have one less submarine than required by the
    2001 Quadrennial Defense Review, yet your unfunded requirements list
    does not include funds to correct this. You also propose
    decommissioning ships prior to the end of their planned service life.
    Would you explain your priorities for shipbuilding and why you are not
    asking to build more ships that have insufficient force levels?
        Admiral Clark. Procurement of new ships to maintain force structure
    is one of the Navy's top priorities. However, the fiscal year 2003
    budget preparation proved to be an exceptionally challenging process to
    balance the funding requirements of the war on terrorism, training of
    our sailors and marines and readiness of their equipment, with the need
    to re-capitalize our aging ship and aviation assets. We believe that
    the fiscal year 2003 budget request represents the best balance of
    available resources to meet the continued needs of our great Navy.
        Additionally, the Navy agrees that we must and can do more in
    future budgets to increase the shipbuilding procurement rate to support
    force structure requirements. To this end, the fiscal year 2003 budget
    has built a strong foundation to posture the Navy's shipbuilding
    programs for the future. For example, starting this year, we have
    properly funded shipbuilding programs to realistic, independent cost
    estimates, greatly reducing the likelihood that future budgets must
    fund prior year completion costs: The fiscal year 2003 budget request
    has stabilized surface combatant production across the Future Years
    Defense Program, providing for an improved transition to DD(X). The
    budget continues to support the development and construction of LPD-17,
    which has stabilized and remains on track.
        Finally, the Navy continues to work with our industry partners to
    make best use of shipyard resources to build the most affordable, and
    strongest Navy that our Nation's security demands.

                          ADEQUACY OF FORCE STRUCTURE

        122. Senator Sessions. General Shinseki, Admiral Clark, General
    Jones, and General Jumper, the Quadrennial Defense Review (QDR)
    described the force structure required to carry out the defense policy
    goals of: (1) assuring allies and friends; (2) dissuading future
    military competition; (3) deterring threats and coercion against U.S.
    interests; and (4) if deterrence fails, decisively defeating any
    adversary. The QDR further stated that as the ``transformation effort
    matures, Department of Defense will explore additional opportunities to
    restructure and reorganize the Armed Forces.'' Does your service's
    budget request support the QDR force structure? If not, what
    transformation efforts will enable you to go below the QDR force
    levels?
        General Shinseki. Yes. The QDR directed force structure did not
    change the current Army end strength of 1,035,000 with 480,000 in the
    Active component (417,000 Force Structure Allowance (FSA), 63,000
    transients, trainees, holdees, and students (TTHS)); 350,000 in the
    Army National Guard (385,000 FSA); and 205,000 in the Army Reserve
    (225,500 FSA). The FSA provides for 18 combat divisions in the Army
    today--10 Active and 8 National Guard. Our budget submission provides
    for this force and fully supports the levels outlined in the QDR
    report.
        The fiscal year 2003 budget adequately funds all of the Army's
    known Interim and Objective Force transformation requirements. First,
    the budget, and its associated FYDP, funds the procurement of six
    Interim Brigade Combat Teams and its associated equipment. Next, the
    Army is funding over $8 billion in the FYDP for science and technology,
    95 percent of which is oriented on the Objective Force. In order to
    fund these requirements, the Army has accepted risk by underfunding the
    modernization requirements of the current Legacy Force. Over the past 3
    years, we have terminated 29 programs to garner over $8.2 billion in
    savings. As the Army moves forward with transformation, we will have to
    make more tough funding decisions, and where possible, seek additional
    funding from the Office of the Secretary of Defense and Congress.
        Admiral Clark. The Quadrennial Defense Review Report listed the
    current force structure of the Navy and Marine Corps as a baseline from
    which the Department will develop a transformed force. The fiscal year
    2003 budget request supports maintaining this force structure with the
    following exceptions:
        Active Surface Combatants fall below the baseline level of 108
    across the FYDP:

    ------------------------------------------------------------------------
                                                    Fiscal Year
                                     ---------------------------------------
                                       2003    2004    2005    2006    2007
    ------------------------------------------------------------------------
    Active Surface Combatants.......     101      99      96      99     103
    ------------------------------------------------------------------------

        Attack submarines fall below the baseline level of 55 from fiscal
    year 2003 to fiscal year 2006:

    ------------------------------------------------------------------------
                                                    Fiscal Year
                                     ---------------------------------------
                                       2003    2004    2005    2006    2007
    ------------------------------------------------------------------------
    Attack Submarines...............      54      54      54      54      55
    ------------------------------------------------------------------------

        Navy's fiscal year 2003 budget request focuses on funding
    requirements in personnel and operational accounts to support our
    current readiness to conduct a full spectrum of joint military
    activities. Top priority on funding current readiness was a matter of
    choice justified by the ongoing war effort. Even so, high on the list
    of unaffordable requirements is an attack submarine refueling overhaul
    that would increase the inventory to 55 from fiscal year 2004 out, and
    additional DDG-51 procurement that would bolster the surface combatant
    force structure.
        We have also decided to divest ourselves of older, less capable
    ships by retiring them in order to free resources that can be used to
    fund transformational capabilities on the remaining ships and
    submarines of the fleet. The impact on force structure requirements of
    the improved capabilities brought by, for example, programs funded in
    the fiscal year 2003 President's budget such as Cooperative Engagement
    Capability (CEC) and Trident SSGN conversion is still being studied.
    CEC provides a revolutionary new capability, allowing surface and air
    platforms to share and fuse sensor information. This will allow Aegis
    ships to engage contacts beyond the sight of onboard sensors resulting
    in a dramatic enhancement in the total force capability to track in a
    jamming environment. The Trident SSGN program converts four Ohio class
    SSBNs to SSGNs. Available for operational use starting in 2007, these
    SSGNs provide unique Special Forces capabilities, including hosting the
    Advanced SEAL Delivery System (ASDS), and large-scale strike
    capabilities in one clandestine, survivable platform. SSGNs will also
    serve as a transformation ``bridge'' for submarine encapsulation of
    joint payloads and will provide the volume for experimentation and
    development of offboard sensors and vehicles.
        General Jones. Yes. Our fiscal year 2003 President's budget
    submission supports an Active Duty end strength of 175,000 and is fully
    funded. This is an increase of 2,400 over our fiscal year 2002 end
    strength. The additional 2,400 is the additional force structure
    required to activate the 4th Marine Expeditionary Brigade Anti-
    Terrorism (4th MEB (AT)). The 4th MEB (AT) provides designated
    supported commanders with rapidly deployable, specially trained, and
    sustainable forces that are capable of detecting, deterring, and
    defending designated facilities against terrorism, and conducting
    initial incident response in the event of chemical, biological,
    radiological, nuclear, or high yield explosive (CBRNE) terrorist
    attacks worldwide. This contingency response force gives our Nation a
    dedicated anti-terrorism force without degrading personnel readiness in
    our existing Marine Corps units.
        General Jumper. In the last decade, the Department of Defense has
    undergone three major QDR reviews beginning with the Bottom-Up Review.
    Since 1991, the Air Force reduced its force structure so that today it
    is little more than half of what it was in aircraft, people, and units.
    During this same period, the Nation's leaders have asked the Air Force
    to do more. Our estimates indicate the Air Force has been asked to do
    nearly four times what we were asked to do when these reviews assessed
    our requirements. Our budget supports the QDR force structure. It does
    not include adequate funding to sustain today's very high operations
    tempo associated with our global war on terror.
        In response to these demands, the Air Force formed the
    Expeditionary Aerospace Force (EAF) concept in 1999 to make itself more
    flexible and stable in order to stem the recruiting and retention
    downturn. Last summer, the Department asked the services to create and
    implement a capabilities-based recapitalization plan consistent with
    DOD and service goals for transformation. It is extremely important to
    adopt this capability-based approach when we make decisions about
    organization, concepts, and system procurement. Cost per unit is often
    used today as a measure of merit in making such decisions, but a more
    accurate measure of merit that captures the real value or capability of
    a particular system is cost per target engaged or, better yet, cost per
    effect desired. The Air Force is in the midst of building this
    recapitalization plan. The plan will result in a balanced sustainable
    portfolio of systems. It will incorporate the transformational
    character of air and space power to redefine our Nation's strategic and
    operational alternatives for military success around the world.
    Recognizing the necessity of change, the Air Force is continuing to
    transform itself to best serve the Nation's interests and demands.

                        OVERDUE ATTACK SUBMARINE REPORTS

        123. Senator Sessions. Admiral Clark, sections 123 and 124 of the
    Fiscal Year 2001 Authorization Act require the Secretary of Defense to
    submit two reports on attack submarines. The first report is a plan to
    maintain at least 55 attack submarines and the second is on production
    rates for Virginia-class submarines. Both reports are overdue by more
    than one year and are key for our deliberations regarding the Navy's
    new construction request. Has the Navy completed their portion of these
    reports and do you know when they will be submitted to the
    congressional defense committees?
        Admiral Clark. The Secretary of the Navy is continuing to work with
    the Office of the Secretary of Defense (OSD) to complete these reports
    for submission in support of the congressional review of the
    President's budget 2003 budget. The reports were initially drafted by
    the Navy during Congress' President's budget 2002 deliberations and the
    Department of Defenses' preparation of the President's budget 2003
    budget. The reports were revised to accurately reflect President's
    budget 2003 decisions. The reports are currently being reviewed by the
    Department of the Navy and will be forwarded to OSD for final approval
    and submittal to the congressional defense committees.

                      DEPLOYABLE JOINT COMMAND AND CONTROL

        124. Senator Sessions. Admiral Clark, the QDR stated the pressing
    need for a Deployable Joint Command and Control Center. The Secretary
    of Defense's testimony before this committee last week indicated that
    this budget request included $40 million for ``a program for new land-
    and sea-based joint command and control centers.'' What is the Navy's
    share of that $40 million fund and what is your vision on the future of
    Navy command and control ships?
        Admiral Clark. The $40 million in question (actually $39.8 million
    as submitted in the President's budget) represents RDT&E funding
    specifically added to the Navy's TOA to initiate the effort known as
    the Deployable Joint Command and Control (DJC2) system. DJC2 will be a
    joint program with the Department of the Navy as the Executive Agent,
    and is presently in the definition stage. The Joint Requirements
    Oversight Council approved the DJC2 Mission Needs Statement in February
    2002. DJC2 is envisioned to provide Joint Force Commanders with a
    deployable joint Command and Control (C2) system to fully command,
    control, and direct CINC and Joint Task Force (JTF) operations. DJC2
    will provide this capability for the envisioned Standing JTF
    headquarters staffs (about 250 personnel) in a set of collapsible
    shelters or transportable vans. The communications infrastructure,
    capability, and support functions are to be provided separately by the
    respective service component(s). DJC2 is envisioned to provide the
    land- and sea-based joint C2 functionality that can be easily relocated
    as tactical situations require, and provide this functionality when
    component commanders transition ashore from afloat. DJC2 functionality
    is intended to be present in the Joint Command and Control [JCC(X)]
    Mission System core.
        Navy command ships currently provide worldwide, forward deployed,
    and robust joint C\4\I capability without the limitations inherent with
    fixed shore sites. This capability is consistent with the QDR and its
    emphasis on forward deployed, robust command and control. The Navy's
    new JCC(X) program will provide up to four ships to replace today's
    command ship capability, which will reach their ship service life by
    the end of the decade. The JCC(X) ship with its integrated Mission
    System, provides the C\4\I, collaborative workspaces, Information
    Infrastructure, communications capability, as well as habitability
    spaces to support the Joint Forces Commander, complementary Component
    Commanders, coalition as well as providing for the Numbered Fleet
    Commander and staffs. The Navy leadership is currently assessing
    alternative platform approaches to meet the JCC(X) Mission Need
    Statement.
        The JCC(X) and DJC2 programs are separate, yet complementary
    efforts. While they both must be interoperable and support the CJTF HQ
    function, the JCC(X) Mission System also supports the operational and
    tactical functions associated with naval forces afloat and the Numbered
    Fleet Commander and staff. DJC2 plans to have its first variant
    available to support PACOM operations by 2005, while JCC(X) initial
    ship delivery will not be until 2011. JCC(X) will leverage on the DJC2
    development and support its functionality within the JCC(X) Mission
    System to provide the very necessary capability for the CJTF and the
    Component Commands and Staffs around the world, regardless of on land,
    at sea, or in the air.

                        ARMY AVIATION FLIGHT SIMULATORS

        125. Senator Sessions. General Shinseki, in your opening statement
    you said that the Army must ``fully modernize training ranges, combat
    training centers, and training aids, devices, simulators, and
    simulations to provide adequate and challenging training.'' This quote
    was repeated verbatim from Secretary White's testimony before this
    committee 1 month ago. I have been thoroughly impressed with the
    performance of Army aviation during Operation Enduring Freedom and can
    offer well-deserved praise to the professionals at the home of Army
    Aviation in Fort Rucker, Alabama. One item I observed during a recent
    visit to Fort Rucker was an urgent requirement for advanced simulators
    and simulator technology, specifically for Flight School 21 (XXI). Do
    you feel that the requirement for more advanced simulators is
    adequately addressed in this budget or should we be looking at an
    aviation cultural change that considers privately financed initiatives
    resulting in shared savings for simulators? If you agree that similar
    Army initiatives at Fort Carson, Colorado are applicable, then would
    you support a legislative change changing the contract length from 8
    years to 20 years to create the efficiencies you seek?
        General Shinseki. No, the requirement for advanced simulators and
    supporting technology is not adequately addressed in this budget.
    United States Army Aviation Center is pursuing several options to
    acquire advanced technology and simulators to meet its training
    requirement. One of those options includes using a service contract to
    satisfy this urgent training requirement.
        The cultural changes proposed closely resemble initiatives at Fort
    Carson, Colorado, U.S. Air Force Distributed Mission Training, and
    Wright-Patterson Air Force Base where corporate investment funds build,
    own, maintain the devices, and perform services in accordance with
    contractually established standards. This allows industry to make
    significant upfront investments that are recovered incrementally over
    the duration of the contract.
        A long-term contract under existing legal authority can
    significantly reduce the annual cost, allow amortization over a longer
    period, and realize efficiencies and savings to the government.
        Fort Rucker supports a long-term contract for Flight School XXI.

                         SPACE LAUNCH PRODUCTION POLICY

        126. Senator Sessions. General Jumper, the Air Force was designated
    by the Secretary of Defense as the Executive Agent for Space in 2001.
    In your opening statement, you said that this means that the Air Force
    is responsible for DOD-wide ``planning, programming, and acquisition of
    space systems.'' One of the fundamental goals of the National Space
    Policy is assuring reliable and affordable access to space through U.S.
    space transportation capabilities. The policy directs that U.S.
    government payloads be launched on space launch vehicles manufactured
    in the United States unless exempted by the President or his designated
    representative. One of the programs you identified in your opening
    statement that is designed to meet the future launch demands of
    national security, civil, and commercial payloads is the Evolved
    Expendable Launch Vehicle (EELV). The Atlas V program that is being
    proposed for the EELV utilizes a Russian-designed and Russian-built RD-
    180 engine for propulsion. It is my understanding that the EELV
    engineering and manufacturing contract was awarded in October 1998 and
    that the DOD agreed to allow a Russian engine to be used in the
    development only if a U.S. manufacturing capability was developed
    within 4 years of the contract being awarded. Those 4 years are up in
    October of this year. Can you tell me what progress has been made with
    developing a U.S. production capability?
        General Jumper. The license agreement necessary to begin the
    transfer of the manufacturing data from the Russian company (NPO
    Energomash) to the U.S. company (United Technologies, Pratt & Whitney)
    took 18 months to get through the U.S. Government approval cycle. The
    license agreement is currently awaiting approval by the Government of
    Russia. We anticipate approval in late spring, after which the data
    will begin to flow. The revised U.S. co-production schedule will
    provide the capability to produce U.S. built engines by 2008. We are
    managing the risk of relying on Russian built engines by stockpiling
    enough engines to launch all US Government Atlas V missions on
    contract.

        127. Senator Sessions. General Jumper, I understand that the first
    Atlas V launch is scheduled for fiscal year 2004 with a classified
    payload. Is it still U.S. policy to assure our access to space through
    space launch vehicles manufactured in the United States?
        General Jumper. The first Atlas V will fly this summer with a
    commercial payload. The first U.S. Government payload on an Atlas V,
    Wideband Gapfiller Satellite #2, will fly in November 2004 (fiscal year
    2005). A May 1995 DOD policy directive requires national security
    payloads to be launched on space launch vehicles manufactured in the
    United States. The same policy allows the use of engines manufactured
    in nations of the Former Soviet Union if we have sufficient quality and
    quantity of stocks to preclude a launch stand-down during transition to
    U.S. sources. The Atlas V RD-180 main engine is built in Khimky,
    Russia. Therefore, the Air Force requires Lockheed Martin to stockpile
    engines as an interim risk mitigation measure during the conversion to
    U.S. production.

                           PRECISION GUIDED MUNITIONS

        128. Senator Sessions. General Shinseki, Admiral Clark, General
    Jones, and General Jumper, members of this committee have received
    testimony from the regional and functional commanders in chief (CINCs)
    over the past month and many of us have held individual meetings with
    the CINCs to receive their views on the challenges facing their areas
    of operations. One of the consistent themes I have heard during these
    hearings and briefings has been the higher than expected expenditure
    rates for precision guided munitions during the war in Afghanistan and
    the increasing reliance our forces are having on these weapons. There
    have also been public comments by military leaders, including Admiral
    Natter, about the fact that we nearly ran out of precision weapons,
    particularly the Joint Direct Attack Munitions, during Operation
    Enduring Freedom. General Jones, I just asked you a question on Tuesday
    during our Subcommittee on Seapower hearing about Marine Corps
    requirements for Hellfire missiles. We spend a lot of money on
    expensive platforms and the training for their operators. I am
    concerned that we may not have enough munitions to equip these
    platforms. I am concerned that if we are faced with a substantial
    increase in demand for precision weapons that might accompany a major
    regional contingency, your Services may not have the stocks of weapons
    necessary to fight the battle the way they have become accustomed to.
    Do you feel that the fiscal year 2003 budget submission and the
    supplementals that have been granted since September 11 adequately fund
    the replenishment of our stocks of precision weapons?
        General Shinseki. The Army's fiscal year 2003 budget submission
    includes funding for 1,797 Longbow Hellfire missiles. The Army has also
    forwarded a fiscal year 2003 unfunded requirement list to Congress to
    procure an additional 1,000 K-Model Laser Hellfire missiles to replace
    missiles anticipated to be used in the global war on terrorism and
    those that will soon exceed shelf-life that must be used and replaced.
    The Army requested but did not receive any funding in the fiscal year
    2002 Anti-Terrorism/Force Protection Supplemental to conduct rocket
    motor retrofits on the Longbow and Laser Hellfire missiles to ensure
    that catastrophic damage does not occur to aircraft during missile
    launch. The Army will be able to begin replenishment of Hellfire
    missiles in accordance with the capabilities based requirements process
    if Congress grants the funding requested in the fiscal year 2003
    unfunded requirement list for Hellfire missiles.
        Admiral Clark. Yes, the replenishment of precision weapons stocks
    (Laser Guided Bomb Kits and Joint Directed Attack Munition Kits) is
    currently funded to appropriate levels. The fiscal year 2003 budget
    submission and supplemental funding provided by the DERF, PDM-2, and
    PBD-736 enable procurement of over 45,000 Laser Guided Bomb kits and
    58,000 JDAM kits across the FYDP.
        However, additional procurement of ancillary components (bomb
    bodies and fuzes) is required to prosecute the target sets for both
    guided and unguided weapons.
        General Jones. The fiscal year 2003 budget submission and
    supplementals granted since September 11, do not adequately fund the
    replenishment of our stocks of precision weapons. The fiscal year 2003
    budget focused on the shortfall in LGBs and JDAMs, highlighted by the
    expenditures in Operation Enduring Freedom, and did not adequately
    address the replenishment of Hellfire missiles. The fiscal year 2002
    supplemental funding helped the naval service increase precision
    weapons inventories for both JDAM and LGBs to address the global war on
    terrorism. Our efforts to secure additional funding for the Hellfire
    missile were not successful in the fiscal year 2002 Defense Emergency
    Relief Funding. This weapon is critical to our attack helicopter force
    and saw recent service with 15th MEU (SOC) augmentation of the U.S.
    Army during Operation Anaconda. The Hellfire inventory continues to age
    and will reach critical shelf life age in fiscal year 2008 (the weapons
    have been extended to 200 percent of design life to reach fiscal year
    2008). Additional funding for this weapon would assist us in fielding
    increased numbers of the new Blast Fragmentation Warhead variant
    (AGM0114M) of this weapon. Additionally, the Marine Corps is working
    with the Defense Threat Reduction Agency to evaluate a thermobaric
    warhead for this weapon to increase operational flexibility and address
    a more diverse target set. Any additional funding for Hellfire would be
    used to procure both blast fragmentation and thermobaric variants to
    support forward deployed forces.
        General Jumper. Yes. The Air Force Fiscal Year 2003 Budget
    Submission and supplementals adequately fund precision munitions. The
    Air Force has taken steps to assure that the 2003 budget submission and
    supplementals will replenish our expenditures of preferred munitions
    used in Operation Enduring Freedom. The Air Force took action to
    respond to immediate concerns with preferred munitions and also
    increased our investment in munitions across the FYDP by over $2
    billion. With respect to the JDAM, the Air Force invested in
    facilitization of the plants that produce this weapon. The contractor
    already significantly increased tailkit production, and is funded to
    continue to increase their monthly production of tailkits. The JDAM
    funds included in the fiscal year 2002 supplemental request will allow
    us to achieve near maximum production at a faster rate. In addition to
    these actions, the Air Force is currently assessing the impact of the
    latest wartime planning scenarios on munitions requirements. The
    results of this analysis will be used to determine future procurement
    needs.

              AIRCRAFT MAINTENANCE ON UNFUNDED REQUIREMENTS LISTS

        129. Senator Sessions. Admiral Clark, one of the items you have
    listed on your unfunded requirements list is a request for funds to
    correct, ``emerging deficiencies impacting aircraft mission capable
    rates.'' The description for this line item says, ``funding is required
    to preclude grounding three critical weapons systems as a result of
    unforeseen maintenance requirements.'' You list problems with the B-1B,
    B-2, and F-15 fleets. In fact, you say that the B-2 hot trailing edge
    damage has already degraded six aircraft and that these aircraft are
    ``en route to becoming non-flyable.'' Six B-2s represent almost one
    third of the total B-2 fleet. Your unfunded requirements list requests
    funding for eight center wing sections for EA-6B aircraft to restore
    these aircraft to full capability. Your line item description says,
    ``51 EA-6Bs are currently limited to 3 Gs.'' Secretary England has
    testified that your number one priority for funding is aircraft
    recapitalization. These problems sound pretty serious to me. Why are
    they on your unfunded list instead of a supplemental cost of war
    request?
        Admiral Clark. EA-6B Wing Center Sections (WCS) are included in the
    fiscal year 2002 Defense Emergency Response Fund Spring Supplemental
    Request and the fiscal year 2003 unfunded requirements list. This takes
    advantage of maximizing the WCS procurements in both fiscal years.
    Based on the amounts appropriated, we will optimize WCS production,
    thereby reducing the number of g-restricted aircraft in the fleet
    inventory.

        130. Senator Sessions. Admiral Clark and General Jumper, there have
    been many reports that we are flying our aircraft at a much higher
    operational tempo than planned. Can your services afford to wait to
    fund these aircraft fixes?
        Admiral Clark. The Navy EA-6Bs are currently flying 50 percent
    higher operational tempo than normal. We have requested additional
    funding to ensure the continued viability of the EA-6B, and we will
    process further requests should the need arise.
        General Jumper. The AF was aware of problems with the B-1, B-2, and
    F-15 but they were not severe enough to ground the aircraft until
    recently. Therefore, these problems did not make it into the fiscal
    year 2002 President's budget. The purpose of the $163.3 million in the
    UPL is to fund additional maintenance requirements that were not
    serious problems during the fiscal year 2003 President's budget
    development. Over the last 3 to 5 months, the B-1, B-2, and F-15 issues
    have risen to a level which cannot wait for correction within normal
    programmed maintenance schedules.
        The B-1 wing pivot shear bearing is an item that was designed to
    last for the life of the airframe. The B-1 System Program Office
    discovered unanticipated wear and has determined that some aircraft
    cannot wait until normal depot maintenance prior to repair. There is a
    potential of 2-3 B-1s being grounded by the end of fiscal year 2002.
        The B-2 hot trailing edge is a problem discovered last fall and is
    being investigated by structural engineers to determine the best course
    of action. The trailing edge will have a significant impact on B-2
    operations if not corrected immediately.
        F-15 horizontal stabilizer delamination issues have now exceeded
    normal Air Force organic maintenance capabilities. Air Combat Command
    believes these maintenance problems cannot wait until the fiscal year
    2004 President's budget. This problem will exceed depot level capacity
    in fiscal year 2003 if actions are not taken immediately.
        Since these problems have become serious operational issues, the AF
    recently added them to the top 5 of the fiscal year 2003 unfunded
    priority list.

               LITENING PODS FOR UNITED STATES AIR FORCE AIRCRAFT

        131. Senator Sessions. General Jumper, it is my understanding that
    many of the Marine Corps and Air National Guard aircraft flying in
    Afghanistan are equipped with Northrop Grumman Litening targeting pods
    which provide the pilots with greater operational capability for
    precision strike and nighttime navigation than those of some Air Force
    planes. Is the Air Force looking at this system to help our pilots and
    troops in the current conflict, and if so what is the status of Air
    Force plans to acquire Litening in the near future?
        General Jumper. The Litening Pod has a laser spot tracker. This
    feature enables the aircraft to identify targets that are laser-
    designated by special forces personnel in the current conflict. The
    current USAF targeting pod (LANTIRN) doesn't possess this attribute.
    The USAF's newly funded advanced targeting pod will possess this
    feature and many other critical capabilities (CID, J-series weapons
    coordinate generation, more powerful laser for standoff). Deliveries of
    this pod begin this fall. However, in support of the immediate need for
    more laser spot trackers, a Combat Mission Need Statement was approved
    in December 2001. Currently, the Air Force is requesting to reprogram
    money for an additional 24 Litening II pods as part of the Fiscal Year
    2002 Omnibus Reprogramming package.
                                     ______

                  Questions Submitted by Senator Susan Collins

                              SHIPBUILDING--DD(X)

        132. Senator Collins. Admiral Clark, as you stated, the DD(X)
    represents the future for the Navy and is expected to make a
    significant contribution in the Navy's ability to achieve affordability
    breakthroughs with dramatic reductions in fleet operations and support
    including personnel costs. DD(X) should allow the Navy to field a fleet
    of highly capable and affordable warships. Would you discuss the value
    that you believe DD(X) and its family of ships will provide the Navy
    team, and further would you provide details on the $961 million
    investment proposed in the fiscal year 2003 budget for this family-of-
    ships?
        Admiral Clark. Maritime Dominance in the 21st century requires a
    naval force capable of projecting power and defeating anti-access
    threats. U.S. naval forces will be required to project power forward,
    provide assured access in the littoral environment, and support a wide
    variety of joint and combined operations. Defeating and deterring
    future national threats will require a wide range of capabilities
    provided from a family of ships. These ships will be required to
    provide:

             Precision Strike and Volume Fires;
             Anti Access Littoral Missions; and
             Missile Defense.

        In order to accomplish these complex and challenging missions, the
    future surface naval force will consist of four elements:

             Advanced, multi-mission destroyers, DD(X), capable of
            providing precision strike and volume fires;
             Advanced cruiser, CG(X), providing sustained air
            superiority against air-breathing and ballistic threats;
             Agile Littoral Combat Ships (LCS) capable of defeating
            enemy littoral defenses including mines, small boats, and
            diesel submarines; and
             In-service Aegis equipped fleet.

        Transformation of the future naval force starts with the DD(X)
    technology development effort. Many of the cutting edge and future
    technologies that will assure maritime dominance are being developed
    under the DD(X) program for the future family of ships.
        The fiscal year 2003 budget request for DD(X) will provide funding
    for development of transformational systems. The DD(X) design agent
    will focus on the development of Engineering Development Models (EDMs)
    during fiscal year 2003 including:

             Advanced Gun System and Magazine;
             Integrated Power Systems;
             Radar Suite (Multi-Function Radar/Volume Search
            Radar);
             Total Ship Computing Environment;
             Advanced Vertical Launch System;
             Integrated Deckhouse and Apertures;
             Autonomic Fire Suppression System;
             Infrared Mock-ups;
             Hull Form Scale Model; and
             Integrated Undersea Warfare System.

        In fiscal year 2003, the design agent will also perform design
    studies to support the spiral design review/requirements revalidation
    and the integration/evolution of the overall DD(X) ship design in
    fiscal year 2005. Full funding is critical to achieve the innovation
    and transformational technologies that DD(X) will bring to the fleet.

        133. Senator Collins. General Jones, Admiral Clark stated the DD(X)
    represents the future for the Navy and is expected to make a
    significant contribution in the Navy's ability to achieve affordability
    breakthroughs with dramatic reductions in fleet operations and support
    including personnel costs. DD(X) should allow the Navy to field a fleet
    of highly capable and affordable warships. Do you have any comments to
    add since this family of ships will also fulfill requirements,
    specifically fire support, for the Marine Corps?
        General Jones. A credible Naval Surface Fire Support program is a
    critical component of forcible entry from the sea, and DD(X) is a vital
    component of that capability, essential to realizing the full potential
    of Expeditionary Maneuver Warfare. The systems envisioned for DD(X),
    which include the 155mm Advanced Gun System and the Advanced Land
    Attack Missile (ALAM), are essential elements of an expeditionary fire
    support system that will provide responsive, all-weather fire support
    ``from the sea'' in support of forces operating throughout the depth of
    the littoral battlespace.
        I am concerned, however, that DD(X) will be fielded with less
    warfighting capability and in fewer numbers than previously planned for
    DD21. The magazine capacity of DD(X) must be sufficient to provide
    sustained fires in support of Marine, joint, or coalition forces
    ashore, and there must be a sufficient number of ships available to
    sustain fires for extended periods of time. Additionally, there must be
    enough Vertical Launch System (VLS)/Advanced Vertical Launch System
    (AVLS) cells dedicated to the ALAM, which will provide the Landing
    Force Commander (LFC) with responsive, medium-range interdiction, and
    battlespace shaping fires throughout the duration of operations.
        In order to provide sustained fire support, DD(X) must be capable
    of rapid underway replenishment within the theater of operations.
    Sustainment is a key element in providing sustained fire support, and
    there must be sufficient numbers of ALAM and 155mm Long-Range Land
    Attack projectiles available to replenish the magazines and VLS/AVLS
    cells of DD(X).

                           AMPHIBIOUS LIFT CAPABILITY

        134. Senator Collins. Admiral Clark and General Jones, the fiscal
    year 2003 proposed budget would reduce our force structure by two
    amphibious warfare ships, one combat logistics ship, one mine warfare
    ship, and 42 active aircraft. What short- and long-term impacts do you
    anticipate this force structure reduction will have on the OPTEMPO and
    the PERSTEMPO of our fleet?
        Admiral Clark. The proposed fiscal year 2003 budget will reduce the
    force structure by 2 amphibious warfare ships, 1 combat logistics ship,
    1 mine warfare ship, and 42 active aircraft. This reduction in the
    number of ships and aircraft will have minor impact on personnel tempo
    (PERSTEMPO) and operations tempo (OPSTEMPO) for the remaining force.
    Planned and on-going operations are the primary drivers for PERSTEMPO
    and OPSTEMPO changes. The global war on terrorism is currently the
    primary worldwide operation causing increases in the PERSTEMPO and
    OPSTEMPO of naval forces.
        The current active amphibious fleet exceeds the 2.5 MEB AE lift
    threshold in all areas except that of vehicle square--currently at 2.07
    MEB AE. Vehicle square will be reduced to 2.01 MEB AE with the planned
    reductions in force structure.
        General Jones. These reductions should have little impact on the
    OPTEMPO and PERSTEMPO of marines. However, 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 only support two-
    thirds of this requirement in certain aspects of the lift footprint. We
    need to commit to redress this shortfall as a matter of urgent
    priority.
        We remain concerned that further schedule slippages in the LPD-17
    programs will directly impact our ability to maintain forward deployed
    naval capabilities sufficient to meet the challenges of both peace and
    war. In addition to LPD-17 development, it is critical to replace the
    aging LHA-1 Tarawa-class ships. Congressional support for amphibious
    shipping is vital to our continued success.
        Decommissioning one LSD 36 class ship and the remaining LST in
    fiscal year 2003 will result in the following amphibious ship lift
    reductions:

             Troops: 649;
             Vehicle (square feet): 27,500;
             Cargo (cubic feet): 4,800; and
             LCAC Spots: 2.

        The Marine Corps amphibious ship lift requirement is 3.0 MEB AE in
    order to support our warfighting and forward presence requirements. The
    current Navy amphibious shipbuilding plan results in an active
    amphibious force capable of lifting a fiscally constrained 2.5 MEB
    equivalents, which is not achieved until 2015 upon delivery of the
    twelfth and final LPD-17-class ship. Today, amphibious lift force
    structure can support only two-thirds of the 3.0 MEB AE requirement in
    certain aspects of the lift footprint. This reduced force structure,
    coupled with the decommissioning of active amphibious ships, adversely
    impacts Marine Corps warfighting and crisis response capabilities,
    thereby increasing operational risk.

                              WORKLOAD IMBALANCES

        135. Senator Collins. Admiral Clark, you testify that your fiscal
    year 2003 proposed priorities invest in current readiness for our naval
    forces. However, I am aware that there have been some deferred depot
    maintenance periods due to current operations (i.e., combating
    terrorism) on the Los Angeles-class submarines in fiscal year 2002,
    which will impact fiscal year 2003 and out-year workload schedules,
    placing the fleet ready submarines at risk to meet future missions as
    required by the Commanders in Chief. These delays not only adversely
    affect fleet readiness; they can also cause dramatic workload
    imbalances at our shipyards. I am concerned that continued shifts in
    the workload to future years will place undue stress on the fleet and
    the yards. I would like your commitment that your workload plans will
    be adjusted to maintain a stable workload and workforce at the
    shipyards.
        Admiral Clark. Ship depot maintenance plans are continuously
    updated to incorporate actual execution, operational impacts, and
    financial resources. Availabilities are deferred only after the risk to
    fleet readiness associated with deferring the work is determined and
    deemed acceptable.
        The Navy actively works to refine and schedule ship depot
    availabilities for effective shipyard execution. Keeping the shipyard
    workload level is essential to efficient operation and is a key'
    consideration in scheduling availabilities.
        A skilled and motivated shipyard workforce is essential to maintain
    the Navy's high state of material readiness. Recognizing that many in
    the public shipyard workforce are rapidly approaching retirement
    eligibility, a primary focus of the Navy's depot maintenance program is
    maintaining a stable workforce with the skills we need. We appreciate
    the support Congress has give the naval shipyard apprentice programs.

                        AVIONICS AND NAVIGATION SYSTEMS

        136. Senator Collins. Admiral Clark, the Multi-Mission Aircraft is
    scheduled to replace the aging P-3 platform in 2010 to 2012. Currently,
    the high OPTEMPO of the platform is rapidly diminishing its service
    life significantly. The P-3 platform, while it has been upgraded
    incrementally, has an average age of 25.5 years. Are there plans in
    this budget to continue upgrading the existing platforms' avionics and
    navigation systems to keep the P-3s viable, in order to bridge the
    procurement to its replacement in future years?
        Admiral Clark. Yes. The fiscal year 2003 President's budget (PB-03)
    contains funding for three P-3C modernization programs. Four P-3C Anti-
    surface warfare Improvement Program (AIP) kits and installations are
    funded in fiscal years 2003 and 2004 ($96.6 million). The AIP provides
    upgrades to sensor; command, control, communications, and intelligence
    (C\3\I); weapons; and survivability systems. A comprehensive
    Communications, Navigation, and Surveillance/Air Traffic Management
    (CNS/ATM) program is also funded across the fiscal year 2003 FYDP ($58
    million). This program will develop an open cockpit architecture that
    will support present and future CNS/ATM requirements and will begin to
    procure and install equipment needed to support CNS/ATM requirements.
    Finally, a Communications Improvement Program (CIP) is funded across
    the PB-03 FYDP ($31.8 million). The CIP provides a common configuration
    of VHF and UHF communications radios, a satellite communications system
    that is compliant with current bandwidth and transmission protocol
    requirements, and an Advanced Narrowband Digital Voice Terminal
    encryption device.
        These programs will combine to keep the P-3 a valuable warfighting
    tool and will allow it to be the bridge needed until its replacement,
    the Multi-mission Maritime Aircraft (MMA) reaches full operational
    capability.

                            DEFENSIVE WEAPON SYSTEM

        137. Senator Collins. General Jones, I have been told that a
    Defensive Weapon System (DWS) for the V-22 is required. I understand
    that the competition for that system has been completed for almost 2
    years, however the Corps has not executed the contract for this DWS. In
    reference to this program, could you tell me when the Corps plans to
    initiate that DWS program?
        General Jones. The General Dynamics, GAU-19 (.50 cal multi-barrel
    gatling) was announced as the winner of our gun competition in August
    2000. The events of the past 2 years forces us to prioritize the
    funding and engineering efforts for the V-22. We must ensure the V-22
    is a safe, flyable aircraft that is operationally capable, before we
    commit to acquiring the Defensive Weapon System. Our primary focus of
    effort, near term, is to return the aircraft to flying in the test
    mode. The V-22 program is following an ``event driven'' philosophy with
    regard to major program changes and decisions. Integrating the
    Defensive Weapons System at this early stage would cause additional
    delays and potential program event risks.

        138. Senator Collins. General Jones, even if production began
    immediately, will there still be 90 aircraft built before the weapon
    system is available?
        General Jones. No. If the Defensive Weapon System integration and
    production began today, we would be putting the gun system on the Lot
    11 aircraft first. This means there would be 107 aircraft built before
    this weapon system is available. However, we are anticipating that we
    would only retrofit approximately 70 of the 107 aircraft. The 37
    aircraft not requiring the Defensive Weapon System include projected
    attrition, basic training aircraft at the Fleet Replacement Squadron,
    and the Continued Development aircraft used by the test community.

        139. Senator Collins. General Jones, aren't the retrofit costs for
    the DWS continuing to grow with these delays?
        General Jones. Yes. The cost to outfit a V-22 with the Defensive
    Weapon System on a retrofit basis is approximately $900,000 more than a
    forward fit. The longer we delay the start of this Defensive Weapon
    System integration development effort, the more aircraft we will have
    to retrofit.

                             C-17 STRATEGIC AIRLIFT

        140. Senator Collins. General Jumper, I believe Congress authorized
    another multiyear procurement of 60 aircraft for the C-17 strategic
    airlifter. I think most people thought that would be 15 aircraft per
    year for 4 years, starting in fiscal year 2003. Why are there only 12
    C-17s in the fiscal year 2003 budget?
        General Jumper. Due to Air Force funding constraints, the Air Force
    requested and received congressional approval for a 6-year multiyear.
    The Air Force notified Congress during this request of the intent to
    buy 12 aircraft in fiscal year 2003. Since this contract is a multiyear
    procurement, Boeing will be able to maintain the optimum production
    rate of 15 aircraft per year. This funding approach will execute the 60
    aircraft follow-on multiyear within the Air Force Total Obligation
    Authority.

        [Whereupon, at 12:52 p.m., the committee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2003

                                  ----------

                            THURSDAY, MARCH 14, 2002

                                           U.S. Senate,
                                   Committee on Armed Services,
                                                        Washington, DC.

          ATOMIC ENERGY DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY

        The committee met, pursuant to notice, at 9:37 a.m., in
    room SH-216, Hart Senate Office Building, Senator Carl Levin
    (chairman) presiding.
        Committee members present: Senators Levin, Reed, Bill
    Nelson, E. Benjamin Nelson, Dayton, Warner, Inhofe, Allard,
    Collins, and Bunning.
        Committee staff member present: David S. Lyles, staff
    director.
        Majority staff member present: Madelyn R. Creedon, counsel.
        Minority staff members present: Judith A. Ansley,
    Republican staff director; L. David Cherington, minority
    counsel; Mary Alice A. Hayward, professional staff member;
    George W. Lauffer, professional staff member; Patricia L.
    Lewis, professional staff member; and Scott W. Stucky, minority
    counsel.
        Staff assistants present: Daniel K. Goldsmith, Andrew Kent,
    and Thomas C. Moore.
        Committee members' assistants present: Elizabeth King,
    assistant to Senator Reed; Richard Kessler, assistant to
    Senator Akaka; Peter A. Contostavlos, assistant to Senator Bill
    Nelson; Eric Pierce, assistant to Senator Ben Nelson; Margaret
    Hemenway, assistant to Senator Smith; Robert Alan McCurry,
    assistant to Senator Roberts; Douglas Flanders, assistant to
    Senator Allard; Kristine Fauser, assistant to Senator Collins;
    and Derek Maurer, assistant to Senator Bunning.

           OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

        Chairman Levin. Good morning, everybody. The committee
    meets this morning to receive testimony from Secretary of
    Energy Spencer Abraham on the budget request for the Department
    of Energy's (DOE) national security activities, which account
    for approximately two-thirds of the entire Department of Energy
    budget.
        We welcome a friend back to what was, for a time at least,
    his home away from home. We all know Spence well. We are
    delighted that he is the Secretary of Energy and that he is
    with us this morning.
        We have a number of important issues to discuss with
    Secretary Abraham, including the adequacy of the Department of
    Energy's environmental management (EM) budget; the progress of
    its programs to combat the proliferation of weapons of mass
    destruction; and DOE's plans, if any, for modifying existing
    nuclear weapons or developing new ones.
        Today, the United States is confronted by a wide range of
    threats to our security from a wide range of potential
    adversaries. In the past, our Nation has led efforts to reduce
    these threats to the United States and to our allies through
    diplomacy and, when necessary, through military action.
        The United States led by example in 1959 when we initiated
    the Antarctic Treaty to internationalize and demilitarize the
    Antarctic continent. We led by example when we signed the
    Nuclear Non-Proliferation Treaty (NPT) on the first day it was
    open for signature in 1968. We led by example in our efforts to
    reach an Intermediate Range Nuclear Forces (INF) Treaty and the
    Strategic Arms Reduction Treaties (START).
        We led by example, when we took our long-range bombers off
    nuclear alert status, when we unilaterally eliminated tactical
    nuclear weapons from the Army and the Marine Corps, and removed
    them from Navy surface ships and submarines.
        We have also led the way to increase the safety and
    security of nuclear weapons and materials. Through the
    Cooperative Threat Reduction (CTR) program in the Defense
    Department and the non-proliferation programs of the Department
    of Energy, the United States has secured tons of nuclear
    materials in the countries of the former Soviet Union.
        We have helped deactivate, dismantle, or destroy thousands
    of Russian nuclear weapons and delivery systems that once
    threatened our security. We have helped provide employment for
    hundreds of Russian scientists and engineers with expertise in
    building nuclear, chemical, or biological weapons and who
    otherwise might be tempted to sell that expertise to unfriendly
    nations, or even terrorist organizations. All of these efforts
    to reduce the dangers from nuclear, chemical, and biological
    weapons have directly contributed to our own national security.
        Today the United States has an opportunity to lead again by
    carrying out real reductions in the number of nuclear weapons
    in our arsenal and by reducing the incentives for other
    countries to build or keep nuclear weapons.
        In May 2000, President Bush recognized this opportunity for
    leadership when he said, ``America should rethink the
    requirements for nuclear deterrence. The premise of Cold War
    targeting should no longer dictate the size of our arsenal.''
        The United States has the opportunity to lead a safer
    world. The United States should be prepared to lead by example,
    because it is in our best interests and the best interests of
    the world.
        This would be an act of principled leadership, seizing the
    moment and beginning a new era of security, a new era of
    cooperation on proliferation and nuclear security.
        But I have to wonder if we are really providing the
    leadership needed to combat the proliferation of weapons of
    mass destruction and the means to deliver them. Are we setting
    an example for the rest of the world to reduce the threat of
    nuclear weapons or are we setting the opposite example?
        What kind of an example do we set for other nations when we
    say we are reducing our strategic nuclear stockpile to 1,700 or
    2,200 nuclear warheads, when what we really are doing is moving
    nuclear warheads from missiles and bombers to warehouses, where
    they could be quickly and easily brought back to service?
        What kind of an example are we setting when we say that we
    are studying ways to modify existing nuclear weapons, or even
    develop new nuclear weapons to give us new capabilities and
    options to use them, possibly in a preemptive manner in
    specific scenarios or against specific targets? Does that not
    signal to the world that there is a new and broader range of
    contingencies in which the United States would consider using
    nuclear weapons and, most significantly, that we are
    considering increasing rather than reducing our reliance on
    nuclear weapons?
        If we are unwilling to reduce our own nuclear weapons
    stockpile in a more meaningful way, and if we are looking at
    ways to make nuclear weapons more usable in future conflicts,
    does that not reduce our standing to persuade other countries
    to reduce their nuclear arsenals, or to forego the development
    of a nuclear capability, or to refrain from transferring
    nuclear weapons technology? ``Do as I say, not as I do'' has
    never been a very effective way to influence the behavior of
    other countries. It is not leadership by example. In my view,
    it is certainly not an approach that will make our Nation more
    secure when it comes to reducing the threat of nuclear weapons
    and the proliferation of weapons of mass destruction.
        I know, Secretary Abraham, that some of those issues are
    outside of your jurisdiction, but we will be glad to have your
    comments relative to any of them. I know there will be a number
    of questions relative to those issues since they are very
    prominent at this time.
        Senator Allard. Mr. Chairman?
        Chairman Levin. Senator Allard.
        Senator Allard. Mr. Chairman, I just visited with Senator
    Warner and he is going to be here momentarily. He had
    originally asked me to make his opening comments; now he has
    decided he is going to be here, so he'll make those opening
    comments.
        I have a few comments I would like to make as the ranking
    member of the Strategic Subcommittee.
        Chairman Levin. Sure.
        Senator Allard. I do not know exactly what your format is
    going to be this morning.
        Chairman Levin. We would be happy to either have those
    comments now or you can make them at your turn.
        Senator Allard. I will proceed now, if I may, Mr. Chairman.
        Chairman Levin. There are going to be a few of us, so I am
    going to call on each of us for an opening comment then.
        Senator Allard. That is fine, Mr. Chairman.
        Chairman Levin. Will that be all right with everybody?
        Secretary Abraham, please proceed.

        STATEMENT OF HON. SPENCER ABRAHAM, SECRETARY OF ENERGY;
     ACCOMPANIED BY DR. EVERETT BECKNER, DEPUTY ADMINISTRATOR FOR
    DEFENSE PROGRAMS, NATIONAL NUCLEAR SECURITY ADMINISTRATION; AND
     AMBASSADOR LINTON F. BROOKS, DEPUTY ADMINISTRATOR FOR DEFENSE
         NUCLEAR NON-PROLIFERATION, NATIONAL NUCLEAR SECURITY
                             ADMINISTRATION

        Secretary Abraham. Mr. Chairman, thank you. First, let me
    thank you and the members of the committee for having me here
    today. I last testified before the committee at the time--
    actually after my confirmation, but in what, I guess, we termed
    a confirmation-related hearing and I have appreciated, and I
    know our staff has and our team at DOE, working with your
    staffs as well as the members of the committee over the last
    year.
        Today I would like to just report a little bit on our 2003
    budget and would be glad to submit for the record my full
    testimony and make some comments here that might highlight a
    few of the important points of that.
        Chairman Levin. We appreciate that, and, of course, the
    full statement will be made part of the record.
        Secretary Abraham. Thank you. Before I begin I would just
    like to take a moment to express--although he is not here
    today, my appreciation and thanks to Gen. John A. Gordon, who
    heads up our National Nuclear Security Administration (NNSA).
        Upon my arrival at the secretary's post, General Gordon, of
    course, had already assumed his position as the administrator
    of NNSA. He has become a trusted friend and colleague during a
    very challenging time and I wanted the committee to know that I
    certainly appreciate him and I think we all at DOE appreciate
    the enormous contribution which he and his team are making to
    our national security.
        Two of those team members are here--with me today and--who
    have now been officially confirmed in their positions as deputy
    administrators at NNSA: Ambassador Linton F. Brooks, and Dr.
    Everett Beckner, who are respectively our deputy administrators
    for non-proliferation programs and defense programs. They are
    also very welcome and important additions to a very strong team
    that we have at the Department.
        This has been an eventful year for most every agency of the
    Federal Government, certainly for ours. A severe energy supply
    shortage confronted us our first day in office, as you all
    know, and heating oil, natural gas, and gasoline price spikes
    took place. Significant events have happened in the energy
    markets and, of course, the terrorist attacks of September 11
    all combined to make this an extremely challenging year for the
    men and women at the Department of Energy.
        I just want to comment here that certainly a lot of us in
    elected office, and I would join that group or be included in
    it, have from time to time raised concerns about the
    effectiveness of various government agencies. I was one who, as
    this committee noted when I appeared last year, had been
    critical of the actions at times of the Department of Energy. I
    am sure not every action that the Department takes will be
    viewed universally as ideal.
        But I would just like to pay special tribute to the folks
    at the Department. I have gotten to know a lot of them, career
    people who worked very hard for this country and who rose to a
    tremendous challenge this last year, both at our sites around
    the country in meeting some severe challenges, particularly
    after September 11, and the people at our headquarters. They
    really do a very good job, Mr. Chairman.
        Last October, I spoke to the Department's managers to
    address an issue that I think had been an overriding concern to
    some, which was whether or not this Department had a core
    mission and declarative mission. I spoke to them to emphasize
    that we do, and that that mission really is still very much
    wrapped around the topic of national security.
        Our national security mission has obviously appeared in the
    Department's national nuclear security activities, but it
    shapes our other programs as well.
        Our energy programs advance energy security, which is a
    critical part of national security. Our science programs
    contribute directly both to the technology base critical to
    today's military and to energy security as it looks over the
    horizon to sources that can increase our energy independence.
        Even our environmental management program, in my judgment--
    by cleaning up the legacy of the Cold War and protecting
    communities and restoring the environment, plays an important
    role in furthering the broader objectives of the Department's
    security mission.
        To ensure that everything we do at the Department is
    consistent with our mission in national energy security, we
    have initiated no-holds-barred reviews of most of our key
    programs. Those reviews have and will continue to help guide us
    as we change and improve the way the Department of Energy does
    business.
        As a result, in no small measure of reviews already
    completed, we have this year's budget submission. So let me
    talk about that briefly.
        Mr. Chairman, you and the members of this committee have
    oversight of, as you indicated, two-thirds of the DOE budget.
    Our budget for 2003, our submission request totals $21.9
    billion, which is an increase from last year of $580 million,
    and that is the largest amount ever requested for this
    Department. Not counting the fiscal year 2002 supplemental, in
    fact, our increase is nearly a billion, and covers critical
    needs related to national security, energy, and the
    environment.
        Mr. Chairman and members of the committee, our Department
    has enormous responsibilities for safety here at home and for
    our national defense. Under DOE's defense programs, we maintain
    our nuclear deterrent through our Stockpile Stewardship Program
    (SSP).
        We also play a critical role in non-proliferation, counter-
    terrorism, and homeland security, and we provide, of course,
    the power plants for our fleet of nuclear-powered submarines
    and aircraft carriers.
        Each of these areas sees budget increases in our 2003
    request. Overall, we are requesting just over $8 billion for
    NNSA, a $433 million increase over the 2002 level, signaling a
    major boost in support for security programs and a broader role
    for the agency in support of the administration's defense
    requirements.
        It also reflects a broadening scope of responsibilities for
    homeland security in the aftermath of September 11. For weapons
    activities, a subset of those programs, we are requesting $5.9
    billion, an increase of over $300 million from last year's
    level.
        Our budget supports a healthy Stockpile Stewardship
    Program, a comprehensive weapons certification program, and a
    robust infrastructure for nuclear weapons production.
        The highest priority of our stewardship program is ensuring
    the readiness of nuclear weapons through maintenance, design,
    life extension and manufacturing, and funding for the Directed
    Stockpile program will increase by 18 percent.
        We have also begun a concerted and, believe me, a much
    needed effort to address a serious maintenance and
    modernization backlog at our various facilities. After years of
    neglect, our scientists and engineers are forced to work in
    buildings where literally ceilings can fall in on them. This is
    a disgrace.
        Consequently, we are requesting a 23 percent increase over
    last year's appropriated level, a boost of about $46 million,
    which will provide $243 million for infrastructure
    modernization as part of a longer-term plan to get the
    facilities into appropriate condition.
        For non-proliferation-related activities, we are requesting
    over $1.1 billion, the highest amount at which these programs
    have ever been funded. When we came into office, we began
    working closely with the White House to review these non-
    proliferation programs with an eye toward a new comprehensive
    non-proliferation objective and program.
        Presidents Bush and Putin further shaped that agenda when
    they met and agreed to share information and expertise to
    counter bio-terrorism, improve protection and accounting of
    nuclear materials, and prevent illicit nuclear trafficking.
        Shortly after the Bush-Putin agreement, I met with my
    Russian counterpart, Minister of Atomic Energy Alexander
    Rumyanstev, to discuss how we could accelerate, perfect, and
    expand cooperative measures on material security and
    accountability. I believe our meeting was a major success. We
    agreed on the need for greater cooperation, improved steps for
    protection of dangerous materials, enhanced safeguards of
    fissile materials, and ways to boost safety and security in the
    peaceful use of nuclear energy. This administration is fully
    committed to the success of this deepening cooperation in this
    area.
        We are asking for $800 million to support our non-
    proliferation programs with Russia, an increase of $115
    million, 17 percent above the 2002 appropriated level.
        The Department is also on the cutting edge of homeland
    security and energy assurance. To that end, we have requested
    $283 million for non-proliferation research and development,
    and $27 million for an expanded energy security and assurance
    effort.
        Additionally, our outstanding naval reactors program, which
    supports the submarines and carriers now on station around the
    world, remains a critical part of our security mission. We are
    requesting over $700 million for this program, an increase of
    about $19 million.
        Finally, I know there have been concerns expressed about
    security for our facilities. Our 2003 request attempts to
    address this. For all safety and security programs, the request
    totals in excess of $1 billion.
        Let me also say a word about our EM programs. Mr. Chairman,
    EM is one of the Department's most important tasks. When I came
    into office last year, I was presented with the old plan for
    cleaning up our weapons sites, which called for a timetable of
    about 70 years to complete at a cost of up to $300 billion.
        I think this committee would agree with me that the
    citizens in the communities where these sites are located and
    the taxpayers deserve a better plan than that. At the time, the
    question seemed quite simple: Do we follow that course, or seek
    something better?
        Immediately upon their confirmations, I have asked our
    under secretary and our assistant secretary for environmental
    management to conduct a top-to-bottom review of our
    environmental management programs, with the goal of expediting
    cleanup in these various sites to try to reduce that time
    dramatically, from 70 years to something which would give the
    citizens in these communities a chance to see, in their own
    lifetimes, the completion of these programs.
        That report review is now complete. We propose in this
    budget a request of $6.7 billion for this program at this time
    in fiscal year 2003. That budget has two categories; one for
    basic funding at every site; and then an $800 million expedited
    cleanup account, out of which those sites who agree and come to
    an agreement with the Department to participate in a new
    approach would receive additional funds to begin to speed up
    the cleanup.
        This additional $800 million--this initial $800 million
    expedited cleanup account represents our current estimate of
    the number of agreements for accelerated cleanup that can be
    established with state and Federal regulators this year.
    However, we are ready to expand this account with more money in
    the fiscal year 2003 budget as we indicated in our budget
    document, should sufficient sites agree to move to expedited
    schedules to justify it.
        Mr. Chairman, the Department is strong and, I think,
    getting stronger. We have an extraordinarily talented and
    dedicated workforce, as I said, that has been ahead of the
    curve during a difficult and challenging year.
        As a department, I think we are poised to increase the
    contribution we make to the war on terrorism, to enhancing
    America's deterrents, to fulfill our environmental
    responsibilities, and to try to build a stronger foundation for
    energy security in the 21st century.
        Mr. Chairman, thank you very much. I appreciate the chance
    to be here.
        [The prepared statement of Secretary Abraham follows:]

                   Prepared Statement by Hon. Spencer Abraham

        Mr. Chairman and members of the committee, it is a pleasure to
    appear before you today to discuss the Department's fiscal year 2003
    budget request for defense related programs.
        On September 11, our Nation changed as did our national security
    challenges. The Department of Energy's $21.9 billion budget responds to
    that change--in our focus as an agency and in the way we do business.
    This budget meets these challenges through investment in our national
    defense and in an important component of that, our Nation's energy
    security addresses the new security challenges we face as a Nation
    after the events of September 11, as well as increased concern
    regarding our dependence on foreign oil and the security and
    reliability of our critical energy infrastructure. This budget request
    also reflects the results and recommendations of several government-
    wide and DOE internal policy reviews recently completed. The
    incorporation of these broad strategic and policy reviews into the
    fiscal year 2003 budget reflects our intention for serious reform in
    some important program areas and continue us on a course toward a
    comprehensive change in the way we do business.
      principles guiding the fiscal year 2003 department of energy budget
        Of the total fiscal year 2003 budget request of $21.9 billion for
    the Department, approximately 70 percent, or $15.4 billion, is for
    programs within the jurisdiction of this committee.
        In October 2001, I laid out for the Department's managers and
    employees a strong statement of mission and purpose and a series of
    principles to guide the Department's programs and operations. With an
    emphasis on measurable performance objectives and accountability, I am
    holding Department of Energy (DOE) managers responsible for ensuring
    the safety of our employees and the communities surrounding our
    facilities, respecting and observing the highest standards of security,
    and building a culture where merit determines promotion and diversity
    is viewed as key to recruiting and retaining the best people. My vision
    for excellence requires that we set priorities, discipline our focus,
    and measure everything we do by reference to our missions and
    priorities.
        To achieve this vision, the key is understanding our overarching
    mission. That mission, put simply, is national security. Our national
    security mission is readily apparent in the Department's National
    Nuclear Security Administration, but it is also inherent in our Energy
    and Science programs that advance the Nation's energy security, and in
    our Environmental Management programs that clean up our sites to ensure
    that legacies of the Cold War are resolved and meet our future
    responsibilities in a manner that protects the security and safety of
    the individual American taxpayer, our environment, and our future. An
    effort is underway to review DOE activities, including those at the
    national laboratories, to ensure they adhere to the Department's core
    mission and objectives.
        The Department is also addressing long-standing criticisms of DOE
    management and moving toward the administration's model as set forth in
    the President's Management Agenda. With an emphasis on measurable
    performance objectives and accountability, we are holding DOE managers
    responsible for making these changes. We have set priorities,
    disciplined our focus and will measure everything we do by reference to
    our missions and priorities.
        Last year's budget maintained the administration's flexibility to
    respond to government-wide policy reviews then underway, including the
    Department of Defense Nuclear Posture Review, the National Security
    Council reviews of U.S. deterrence requirements and nonproliferation
    programs, as well as an internal review of the Office of Environmental
    Management. These reviews are now complete, and the results and
    recommendations are reflected in the fiscal year 2003 budget request.
    We stand ready to work with you to address the recommendations from
    these reviews.
        In addition, we are implementing the President's Management Agenda.
    The President has called for an active but limited government, one that
    empowers States, cities, and citizens, ensures results through
    accountability, and promotes innovation through competition. The
    administration has targeted areas for improvement throughout the
    Federal Government. Our work to fully implement these initiatives will
    continue through fiscal year 2004 and beyond, but we have a path
    forward and are making changes now.
    Human Capital
        In order to eliminate unnecessary layers of management, direct
    personnel to high-priority missions, address skill imbalances, and
    achieve a 5-10 percent savings in management expenses through
    comprehensive, creative management reform, DOE will accelerate
    workforce planning and work with the Office of Personnel Management to
    conduct complex-wide organizational surveys to analyze and evaluate DOE
    field and headquarters redundancies, fragmentation and duplication of
    effort.
    Competitive Sourcing
        We are initiating formal competitive sourcing reviews under the
    provisions of Office of Management and Budget Circular A-76 on
    approximately 1,000 positions. In addition, line managers are planning
    other reviews that may lead to formal studies. The longer-term goal is
    to conduct reviews on 50 percent of the Department's inventory of
    Federal positions that are not inherently governmental.
    Improved Financial Management
        We will continue to build on the Department's unqualified audit
    opinion on the consolidated financial statements and work to integrate
    better financial, budget, and program information in order to provide
    costs information related to performance. Key to the success of this
    initiative is the completion of the Financial Management module of the
    Department's Corporate Management Information System (CMIP).
    E-Government
        To make better use of computer information systems to improve
    management, promote efficient use of resources, and make our systems
    provide more people friendly information, the Department will
    strengthen its Information Technology investment portfolio by linking
    investment control processes, using enterprise architecture, and
    improving security policies and capital planning.
    Budget and Performance Integration
        We have strengthened the Department's ability to measure
    performance by establishing the Program Analysis and Evaluation Office
    and developing a 5-year planning, programming, budgeting and evaluation
    process for the entire Department. Building on the integration of
    performance metrics into our fiscal year 2003 budget submission, we are
    improving the performance measures contained in our fiscal year 2003
    budget request and will continue to improve performance measures and
    their integration into the fiscal year 2004 budget. These improvements
    will provide clear, quantifiable outcomes to support budget requests.
        Now I will turn to the details of the Department's fiscal year 2003
    budget submission for defense related programs.

                    NATIONAL NUCLEAR SECURITY ADMINISTRATION

        The National Nuclear Security Administration (NNSA) is in its third
    year of implementation. Created by Congress to respond to the changing
    and complex set of challenges in the national security environment,
    this year the NNSA takes on a national security role in a way Congress
    could not have envisioned. The fiscal year 2003 budget request for
    programs within the NNSA totals $8.0 billion, a $433 million increase
    over the fiscal year 2002 appropriation, and includes:

             Weapons Activities ($5.9 billion)
             Defense Nuclear Nonproliferation ($1.1 billion)
             Naval Reactors ($708 million)
             Office of the NNSA Administrator ($348 million)

        The administration's national security strategy is transforming to
    meet the threats of the 21st century. The NNSA is intimately involved
    in the formulation of the administration's strategy through
    participation in the Strategic Review, Nuclear Posture Review and the
    review of nonproliferation programs. We have accelerated research and
    development into technologies to detect and deter weapons of mass
    destruction. We responded swiftly and comprehensively to the terrorist
    events of September 11, protecting our valuable national security
    assets and employees, and offering our unique capabilities to the
    national response. We have contributed directly to the homeland
    security needs of Governor Ridge with our technology and scientific
    staff. Work such as this will extend into fiscal year 2003 and beyond.
        While policies and priorities established by the administration and
    Congress will determine the scope of our work over the years to come,
    nuclear deterrence remains the cornerstone of our national defense
    strategy for the foreseeable future. The NNSA will also be deeply
    involved in arms reduction and nonproliferation activities, and will
    make significant contributions to the administration's new
    capabilities-based national security strategy that requires us to
    maintain our military advantages in key areas while developing new
    capabilities. The NNSA will continue to be involved in the Nation's
    homeland security efforts. The Naval Reactors program will continue to
    be responsible for all naval nuclear propulsion work.
        The NNSA faces major challenges during the next 5-year period in
    responding to evolving customer requirements while maintaining and
    improving the health of the Nation's national security enterprise. The
    expanded focus on international terrorism following the September 11
    attacks underscores the importance of maintaining a strong capability
    in the science and technology of national security.
        NNSA's ability to perform its national security functions depends
    upon renewing our internal capabilities. As we conduct our daily
    technical work of maintaining the reliability, safety, and security of
    the Nation's nuclear weapons and developing the scientific tools
    necessary to perform our work, we need to ensure that our national
    security enterprise remains capable. Both the physical and intellectual
    infrastructure of the national security enterprise were built during
    the era of underground nuclear testing, and have eroded to the point
    that we are no longer able to perform some essential tasks. It is
    imperative that we address these issues during the upcoming 5-year
    period. NNSA's program and budget planning emphasizes maintaining an
    adequate workforce of scientific, technical and business skills, and
    building a diverse, multi-talented leadership. We must be able to
    recruit, train, and develop quality employees throughout our
    organizations in a highly competitive employment environment. We must
    implement our plans to renew the physical infrastructure to ensure
    adequate capability and capacity as well as compliance with
    environment, safety, health and security standards.
        Another key element to NNSA's ability to perform its national
    security functions is an organizational plan to achieve greater
    effectiveness and efficiency. Last month, Under Secretary John Gordon
    submitted NNSA's ``Report to Congress on the Organization and
    Operations of the NNSA'' describing our accomplishments to date and our
    strategy for operating an integrated national security enterprise.

                               WEAPONS ACTIVITIES

        In spite of the many challenges we are facing, the NNSA has
    continued to meet the core Stockpile Stewardship mission--that is to
    maintain the safety, reliability, and performance of the nuclear
    stockpile to meet national security requirements.
        As stated earlier, the NNSA actively participated in the strategic
    reviews of national-security related activities conducted by the
    administration. Participation by NNSA ensured that the choices, plans,
    and requirements being developed were within the realm of the technical
    and production capabilities of the NNSA. It also increased the
    awareness of our issues and technical capabilities by the
    administration's national security senior management team.
        While there are many important points and conclusions in the
    Nuclear Posture Review (NPR) including the goals to reduce
    operationally deployed nuclear weapons to between 1,700 and 2,200 by
    calendar year 2012 and the maintenance of a ``responsive force'' for
    use as a hedge against unforeseen problems, several points are of
    particular relevance to the NNSA:

             First, nuclear weapons, for the foreseeable future,
            remain a key element of U.S. national security strategy. The
            NPR reaffirms that NNSA's science-based Stockpile Stewardship
            Program is necessary to assure the safety and reliability of
            the nuclear stockpile in the absence of nuclear testing. This
            includes basic surveillance of our aging weapons, systems
            refurbishment, chemistry and metallurgy of materials aging,
            detailed understanding of weapons physics, reestablishment of
            warhead advanced concepts teams, and development of additional
            diagnostic and predictive tools for long-term stewardship. The
            NPR revalidated the stockpile refurbishment plan previously
            developed and approved by the NNSA and the Department of
            Defense.
              The fiscal year 2003 budget request for Directed Stockpile
            Work is $1.2 billion, an increase of $190 million, or about 18
            percent over last year. Principally, this increase allows us to
            support life extension activities for the W80, W76, and B61
            warheads, including supporting research and development and
            additional hydrodynamic testing for assessment and
            certification. Also, $2.1 billion is requested for the 17
            scientific and engineering campaigns that provide the
            knowledge, technologies and capabilities to address current and
            future stockpile issues.
             Second, more than any previous review, the NPR's
            concept of a new triad emphasizes the importance of a robust,
            responsive research and development and industrial base. This
            calls for a modernized nuclear weapons complex, including
            contingency planning for a Modern Pit Facility, which will
            provide the Nation with the means to respond to new,
            unexpected, or emerging threats in a timely manner. The fiscal
            year 2003 budget request supports our industrial base in two
            key ways: a request of $1.7 billion for Readiness in Technical
            Base and Facilities, a 10 percent increase supporting the
            operations of weapons complex facilities; and, a $243 million
            request for the Facilities and Infrastructure Recapitalization
            program to continue this important multi-year initiative into
            its third year.
             Third, a study examining the aspects of reducing test
            readiness lead time below the 24 to 36 month requirement for a
            fully diagnosed test--the NPR states that the lead time needs
            to be shortened out of prudence, not because there is a current
            need to test. In fiscal year 2002, the NNSA and the DOD will
            study the optimum test readiness time that best supports the
            new triad as directed by the NPR. Pending the outcome of the
            study, the fiscal year 2003 request includes $15 million for
            Enhanced Test Readiness activities at the Nevada Test Site.
             Finally, the NPR calls for a stable, adequately funded
            Future Years Nuclear Security Program (FYNSP). The NNSA's costs
            will not be reduced in the immediate future as a result of NPR.
            Near-term costs are driven by restoring production capabilities
            and revitalizing the infrastructure, not by the number of
            warheads in the stockpile or even the number to be refurbished.
            In fact, we expect that cost savings from refurbishment of a
            smaller number of weapons will not be realized until about
            fiscal year 2010. The NNSA enterprise's capacity will be
            stretched, approaching maximum capacity while our systems are
            on the process line for refurbishment, thereby limiting our
            ability to dismantle significant numbers of weapons over the
            next 10 years. The FYNSP document is in final preparation and
            is expected to be provided shortly.

        Another result of the conduct of the NPR has been improved
    cooperation and coordination between the NNSA and DOD. The Nuclear
    Weapons Council is working, policy levels between the agencies are
    effective, and the DOD has offered strong support for needed programs
    in NNSA.
        In addition to the activities discussed above, the fiscal year 2003
    budget request for the Stockpile Stewardship Program will support:

             Assessment of manufacturing concepts for a Modern Pit
            Facility.
             Production of tritium in Tennessee Valley Authority
            reactors beginning in fiscal year 2003.
             Manufacture of a certifiable pit, and the capability
            to certify a pit by 2009 with the goal of achieving an earlier
            date of 2007.
             Maintenance of ability to conduct underground testing.
             Complete National Ignition Facility internal
            infrastructure required for ``first light'', eight beam,
            stockpile stewardship experiments in fiscal year 2004.

                          NONPROLIFERATION ACTIVITIES

        At $1.114 billion, the fiscal year 2003 budget request for
    nonproliferation related activities is the highest at which these
    programs have ever been funded.
        When I came into office I began working closely with the White
    House to review our cooperative assistance programs with Russia. It was
    important that nonproliferation programs were responsive to the new
    strategic environment being shaped by Presidents Bush and Putin. At the
    Crawford summit, the two Presidents called for improved cooperation
    with respect to the protection and accounting of nuclear materials, and
    the prevention of illicit nuclear trafficking.
        Shortly after the Bush/Putin summit, I met with Russian Minister of
    Atomic Energy Rumyanstev to accelerate and expand cooperative measures
    on materials security and accountability. This meeting with the Russian
    minister was a major success. Agreement was reached on the need for
    greater cooperation, improved steps for protection of dangerous
    materials, enhanced safeguards of fissile materials, and ways to boost
    safety and security in the peaceful use of atomic energy. The
    administration is fully committed to the success of this deepening
    cooperation.
        This commitment is reflected in the diversity of our programs to
    address non-proliferation concerns in Russia and indeed, throughout the
    world. NNSA uniquely integrates technical and policy expertise to guide
    and implement the full range of U.S. nonproliferation priorities and
    initiatives. Whether ensuring that former Russian weapons experts are
    able to put their skills to use on peaceful and commercial initiatives,
    reducing the footprint of Russia's ``closed'' nuclear cities, or
    leading on-the-ground programs to secure at-risk nuclear materials in
    Russia, North Korea, or elsewhere, NNSA is at the forefront of U.S.
    efforts to halt the proliferation of weapons of mass destruction and
    advance U.S. nuclear security interests. As a scientific organization
    and working closely with our national laboratories, NNSA brings to the
    table unique assets that have allowed us unprecedented access to
    foreign scientific communities. In Russia and other former Soviet
    states, for example, the great strides that have been made to secure
    nuclear materials and WMD expertise or improve reactor safety are made
    possible by the access NNSA has to its counterpart organizations in
    these countries.
        The administration's strategic review of NNSA's nonproliferation
    programs with Russia confirmed the importance of these programs and
    resulted in a significant policy change reflected in the fiscal year
    2003 budget request. In January 2002, the administration announced
    plans to proceed with a workable, technologically possible, and
    affordable approach to disposal of surplus U.S. plutonium. The United
    States plans to dispose of 34 metric tons of surplus weapons grade
    plutonium by turning the material into mixed oxide fuel (MOX) for use
    in commercial nuclear reactors. This decision follows a review by the
    administration of alternative technologies to dispose of surplus
    plutonium to meet the nonproliferation goals agreed to by the U.S. and
    Russia while making the program less costly and more effective.
        In September 2000, the U.S. and Russia signed the Plutonium
    Management and Disposition Agreement committing each country to dispose
    of 34 metric tons of surplus weapons-grade plutonium each, in rough
    parallel. With the U.S. decision, we will be able to move forward on
    meeting our obligations under this agreement.
        Previously the U.S. government endorsed a dual-track approach to
    dispose of the plutonium by turning some of the material into MOX
    reactor fuel and immobilizing the remaining plutonium for long-term
    storage. Eliminating immobilization from the disposition pathway saves
    nearly $2 billion in life cycle funding, decreases plutonium storage
    costs, and facilitates closure of the former nuclear weapons complex
    sites. Importantly, the MOX fuel technology is proven, having been used
    by European countries in their reactors for more than 20 years.
        The MOX conversion process is expected to cost $3.8 billion over 20
    years, including the construction of new disassembly and fuel
    fabrication facilities at the Savannah River Site in South Carolina.
    Construction of the facilities is set to begin in fiscal year 2004. The
    Department of State and the NNSA will work with their counterparts in
    Russia to achieve the disposition of Russian surplus weapons-grade
    plutonium through the MOX process. Bilateral cooperation and
    inspections will assure progress and compliance with the agreement. The
    fiscal year 2003 budget request for the Fissile Materials Disposition
    program, including both Operating and Maintenance and Construction
    funding, is $384 million.

                        SECURITY AND COMBATING TERRORISM

        The NNSA employees and assets responded aggressively and
    immediately in the aftermath of the terrorist attacks on September 11,
    2001. Specifically, the NNSA:

             Strengthened physical security at our sites to assure
            the safety and security of nuclear weapons, the weapons complex
            and its employees, special nuclear material and other high
            value assets in custody of NNSA.
             Provided technical assets and staff to aid in the
            recovery efforts in New York City and at the Pentagon.
             Worked closely with intelligence and law enforcement
            by providing NNSA experts in their facilities, on the working
            groups, on the White House Counter Terrorism Task Force, and in
            the Office of Homeland Security.
             Began studies to analyze the potential of high-energy,
            high-velocity attacks at key nuclear material and nuclear
            material storage locations.
             Established NNSA's Combating Terrorism Task Force to
            coordinate a systematic review of twelve key areas of NNSA
            security and operational responsibilities to recommend
            immediate improvements.
             Established a working group, drawing from all the work
            at NNSA facilities, to define what capabilities we can bring to
            bear on the problems at hand, and not just in the nuclear
            arena. NNSA has capabilities in many technical areas ranging
            from chemical/biological weapons to sensors, to aircraft and
            airport security. In the area of sensors, we have the best
            capability in the world and are working to promote greater
            integration across our research and development programs.
             Responded to the changed threat by joining with the
            DOD in an immediate review of the ``design basis threat.''
             The NNSA laboratories are being used to improve
            homeland security in ways that are not perhaps fully recognized
            by the public. The laboratories develop advanced technologies
            that detect chemical, biological and nuclear agents. These
            technologies help protect us today. Chemical and biological
            technologies and agents developed by the NNSA laboratories were
            used to help clean up the congressional office buildings of
            anthrax.

        In the aftermath of the September 11 attack, the NNSA efforts
    required substantial additional funding in order to achieve a safer
    security posture. This needs to be considered when making comparisons
    between the fiscal year 2003 request and the total fiscal year 2002
    available funds. The fiscal year 2002 emergency supplemental
    appropriation for terrorism related activities provided $357 million to
    the NNSA. Weapons Activities Safeguards and Security program received
    $106 million to hire and train additional protective force personnel,
    initiate physical security upgrades, and to address cyber-security
    infrastructure upgrades. The Secure Transportation Asset program
    received supplemental funding of $25 million to enhance security
    against the emerging threat.
        The Defense Nuclear Proliferation program account received $226
    million in supplemental funding to accelerate priority efforts in
    Nonproliferation Research and Development, International Nuclear
    Materials Protection and Cooperation, International Nuclear Safety and
    Cooperation, and additional Federal staffing.
        The fiscal year 2003 budget request continues to emphasize NNSA's
    security and nonproliferation programs. The Weapons Activities
    Safeguards and Security program request is $510 million. This allows
    for continued enhancements to protective forces and security systems.
    The National Center for Combating Terrorism at the Nevada Test Site is
    separately requested in fiscal year 2003 at $10 million.

                 FACILITIES AND INFRASTRUCTURE RECAPITALIZATION

        Improving the condition of the nuclear weapons complex facilities
    and infrastructure remains a priority effort. Your support for these
    efforts is both necessary and timely. The restoration, revitalization,
    and rebuilding of the physical infrastructure is key to the maintenance
    of mission-capable facilities which contribute to credible nuclear
    deterrence. Recently, the NPR validated the findings of the NNSA
    regarding the condition of the complex and our path forward.
        Currently, Defense Programs acts in a landlord capacity and manages
    the complex day-to-day through its Readiness in the Technical Base and
    Facilities activities. From internal studies, we have determined that
    the complex deteriorates by about $200 million annually. To arrest this
    deterioration and eventually begin to improve the condition of the
    weapons complex, the NNSA established the Facility and Infrastructure
    Recapitalization Program. The fiscal year 2003 budget request places a
    high priority on this activity, with a request of $243 million--a 23
    percent increase over the fiscal year 2002 level.
        The budget also includes a corporate facilities management program
    that complements the infrastructure spending and addresses a major
    concern regarding responsible fiscal accountability. We have instituted
    Ten-Year Comprehensive Site Planning, established industry standard
    performance measures, and accurate reporting measures that now provide
    for measuring progress.
        The recapitalization program will focus on working off maintenance
    backlogs, prioritized to reduce or eliminate the risk of unplanned
    operational downtime due to equipment failure, extend the expected
    effective life span of equipment, optimize facility efficiencies, and
    repair, renew and refurbish existing structures. Also, the program
    supports dismantlement and removal of deactivated facilities and
    infrastructure that are excess to current and future mission
    requirements, and infrastructure planning activities to prepare and
    develop necessary plans for the execution of outyear Facilities and
    Infrastructure Recapitalization Program projects.
        The condition of the nuclear weapons complex is poised for
    improvement across its eight sites. The response has been substantial.
    The NNSA will continue this initiative until the complex has restored
    lost capabilities, modernized other capabilities, and is sound, safe,
    and secure.

                                 NAVAL REACTORS

        The Naval Reactors program, which supports the nuclear powered
    submarines and carriers now on station around the world, remains a
    critical part of the national security mission. This program is
    requesting the smallest increase in the NNSA's fiscal year 2003 budget.
    We are requesting $707 million, an increase of about 3 percent. The
    increase will help to maintain the constant progress and consistent
    contribution to the Nation's nuclear deterrent force that we have come
    to rely upon from the Naval Reactors program. The small increase above
    inflation is primarily for work to bring the dry spent fuel storage
    facility in Idaho online while continuing Naval Reactors activities to
    ensure the safety and reliability of the 102 Naval reactor plants,
    upgrade and improve existing reactor plants, and develop new reactor
    plants.

                          OFFICE OF THE ADMINISTRATOR

        The budget request for the Office of the Administrator is 6 percent
    higher than the fiscal year 2002 appropriation--a $21.2 million
    increase. This account provides corporate direction and oversight of
    NNSA operations consistent with the principles of protecting the
    environment and safeguarding the safety and health of the public and
    the workforce of the NNSA. The fiscal year 2002 Energy and Water
    Development Appropriations Act consolidated the program direction funds
    from weapons activities and defense nuclear nonproliferation within the
    Office of the Administrator appropriation. The Naval Reactors program
    direction and the Secure Transportation Asset program direction retain
    separately funded program direction accounts. The increase in the
    Program Direction budget supports annual cost-of-living increases in
    salaries and benefits while support services and other related expenses
    remain at their fiscal year 2002 program levels.

                           NNSA ORGANIZATION STANDUP

        At the beginning of this testimony, I noted that management reforms
    are underway and they include the NNSA organization. Under Secretary
    Gordon approached an NNSA organization standup by implementing a two-
    phase plan. The first phase, essentially complete, focused on creating
    an integrated Headquarters organization, and defining the structural
    relationship between the Federal elements at Headquarters and the field
    locations. The second phase focuses on realigning our field structure
    and improving efficiencies through eliminating overlaps in
    responsibilities within the Federal structure and reducing unnecessary
    administrative burdens placed on those performing the mission.
        Last month, the Department submitted a ``Report to Congress on the
    Organization and Operations of the NNSA'' describing accomplishments to
    date, a plan for assigning roles and responsibilities to and between
    Headquarters and field organizational units, and the strategy for
    operating an integrated national security enterprise.
        The recently released report summarizes the first-ever NNSA
    Strategic Plan, provides a detailed plan for assigning roles and
    responsibilities between Headquarters and field elements, and discusses
    our objectives in fiscal year 2002 and beyond. We plan to eliminate a
    layer of management and oversight over the nuclear weapons complex by
    removing the Operations Offices from the NNSA chain of command and
    converting these offices to service centers providing support services
    such as procurement and human resources. Each of the eight NNSA
    contractors will report to eight site offices which will in turn report
    to the Administrator. This locates NNSA support, decision making and
    oversight close to the contractor, consolidates service functions, and
    allows staff reductions downstream.
        Contract and project management will rest with each NNSA site
    office. Integration of weapons production activities will be performed
    in Albuquerque, New Mexico. Headquarters staff will continue to be
    responsible for program planning, budgeting, policy development, and
    management of weapons research and development and nonproliferation
    activities.
        NNSA will launch a systematic re-engineering campaign to reduce the
    number of separate offices and layers of Federal management, reduce the
    overall number of Federal employees, and correct skills mismatches.
    Federal staff not performing core functions will be redeployed and
    retrained as necessary. We intend to use incentives to encourage
    higher-than-average attrition, career development, and retention of
    highly skilled employees to right-size and reinvigorate our staff.
        We will need your support in funding the Office of the
    Administrator Program Direction request of $348 million to implement
    the re-engineering campaign. Successful re-engineering cannot be
    accomplished without adequate resources to retain highly skilled
    employees, retrain employees with skills mismatches, recruit the right
    technical skills, and to cover the significant costs associated with
    separation incentives.
        NNSA has instituted an Administrative Workload Reduction Initiative
    using comprehensive input from the laboratories and plants, with task
    forces identifying specific improvement and reducing administrative
    burdens. As a result, NNSA contractors will be given clearer and more
    consistent expectations. They will also continue to comply with all
    environment, safety and health and security policies.
        When these changes are fully implemented, we will realize the goals
    set by Congress in establishing the NNSA. By clearly defining roles and
    responsibilities, we will increase accountability and reduce
    duplication. By reducing administrative burdens on the NNSA
    contractors, we will operate more efficiently and hold the contractors
    accountable for delivering on our expectations.

                            OTHER DEFENSE ACTIVITIES

        The fiscal year 2003 request for Other Defense Activities is $472
    million which is allocated as follows:

             Energy Security and Assurance ($27.7 million)
             Office of Security ($187.2 million)
             Intelligence ($41.6 million)
             Counterintelligence ($46.1 million)
             Independent Oversight and Performance Assurance ($22.6
            million)
             Defense Environment, Safety and Health ($99.9 million)
             Worker and Community Transition ($25.8 million)
             National Security Programs Administrative Support
            ($25.6 million)
             Office of Hearings and Appeals ($3.1 million)

        Of prime importance is $27.7 million requested for Energy Security
    and Assurance, an essential, expanded national security program to help
    reduce America's energy supply vulnerability from severe disruptions
    due to natural or malevolent causes. An additional $2 million is
    requested in the Departmental Administration account for Energy
    Assurance policy analysis in the Office of Policy and International
    Affairs. The program will work in close cooperation with the private
    energy sector by providing technical expertise to correct or mitigate
    disruption vulnerabilities, plan for response to and recovery from
    disruptions, and provide technical response support during energy
    emergencies. The tragic events of September 11 justify the need for
    this program aimed to protect our Nation's critical energy
    infrastructure.

                        SAFEGUARDS AND SECURITY CROSSCUT

        The Department's request for Safeguards and Security is $1.01
    billion. Excluding fiscal year 2002 supplemental appropriations that
    provided one-time funding of $108.5 million to bolster security in the
    aftermath of the September 11 attacks, the fiscal year 2003 request is
    7.0 percent higher than the fiscal year 2002 enacted level. The fiscal
    year 2003 request reflects both increased and decreased safeguards and
    security needs. In particular, increased requirements in the NNSA are
    reflected in a $61.1 million increase over fiscal year 2002 funding
    level, excluding supplemental appropriations, or a 13.6 percent
    increase. Reduced safeguards and security requirements in Environmental
    Management Defense Facilities Closure Projects are reflected in a 31.2
    percent decrease commensurate with the planned removal of special
    nuclear materials from the Fernald and Rocky Flats sites, and
    completion of security upgrades in Miamisburg this year.

                        DEFENSE ENVIRONMENTAL MANAGEMENT

        The budget request for Defense Environmental Management activities
    totals $6.7 billion, including privatization, essentially the same as
    the comparable fiscal year 2002 appropriation. The budget request is
    composed of two parts: a base budget request and a new Environmental
    Management Cleanup Reform appropriation request of $800 million. Should
    this new program be successful, the administration is prepared to
    request additional funds for it in fiscal year 2003. The request
    consists of:

             Defense Environmental Restoration and Waste Management
            ($4.6 billion)
             Defense Facilities Closure Projects ($1.1 billion)
             Defense Environmental Management Privatization ($158
            million)
             Environmental Management Cleanup Reform ($800 million)

        The Environmental Management (EM) program was created in 1989 to
    safely manage the cleanup of the environmental legacy from 50 years of
    nuclear weapons production and nuclear energy research at 114 sites
    around the country. The program manages the remediation of sites
    contaminated by defense and civilian activities, and receives
    appropriations in separate defense and non-defense accounts. The
    current cleanup program is projected to cost in the area of $220
    billion and take 70 years to complete. Costs have continued to increase
    annually while schedules slip. Consequently, EM completed a top-to-
    bottom review of the program to find ways to achieve greater risk
    reduction and cleanup more efficiently and cost effectively.
        The review indicates that the EM program has failed to
    significantly reduce the risk presented to the public and the
    environment by the Cold War's nuclear legacy. If the program continues
    along the present path, DOE will not accomplish the very goal EM was
    originally established to achieve, the cleanup of the former weapons
    complex and closure of sites with no continuing mission. The report
    describes the program's weaknesses and provides specific proposals for
    improving EM's performance. The goal is to quickly and markedly improve
    the program's performance in achieving cleanup and closure, and ensure
    that the Department is reducing risk to its workers, the public, and
    the environment. Over the next 18 months, the Department will pursue
    implementing proposals, many of which will require reaching new
    understandings with State and Federal regulators, as well as
    fundamental changes in how DOE conducts its business.
        Therefore, the EM fiscal year 2003 budget request has been
    structured to begin this process. But it is only a beginning and must
    be viewed as the first step in the transition between the program left
    by previous administrations and where the Department will head in
    fiscal year 2004 and beyond when the recommendations of the top-to-
    bottom review are implemented. An integral part of the reform is EM's
    commitment to the President's emphasis on performance-based budgeting.
        The budget request will allow the program to continue to protect
    worker and public health and safety and the environment; continue
    surveillance, maintenance, and support activities needed to maintain
    waste, materials, facilities, and sites in a safe and stable condition;
    fully protect nuclear materials from terrorist threats; support
    accelerated cleanup and closure of the Rocky Flats Environmental
    Technology Site in Colorado, Fernald Environmental Management Project
    in Ohio, and the Mound Site in Ohio; achieve the increased numbers of
    shipments to WIPP, critical to meeting cleanup and closure goals; and
    continue to make progress in completing cleanup projects in accordance
    with existing approaches and under existing agreements.
        A major new aspect of this budget request that will begin the
    immediate implementation of the recommendations of the top-to-bottom
    review, is the new Environmental Management Cleanup Reform
    appropriation. The new account is designed to enable the Department,
    the states, and the American taxpayer to begin realizing the benefits
    of alternative cleanup by making funds available to those sites that
    both demonstrate their ability to realign to a more risk-based approach
    and that provide to DOE specific proposals that achieve greater risk
    reduction, faster. This account will provide the stimulus necessary to
    encourage DOE sites and headquarters, contractors, and state and
    Federal regulators to quickly forge agreements to enable more effective
    cleanup approaches. Once agreement is reached, funds will be made
    available from the Cleanup Reform Appropriation to fund these new
    approaches or supplement existing funding from the base budget.
        Consistent with the recommendations from the review, the EM budget
    also reflects a refocusing of the Science and Technology program to
    address specific, short-term applied technology needs for cleanup and
    closure. Longer-term and more basic research and technology activities
    will be transferred to the Office of Science. In addition, the Savannah
    River Ecology Laboratory will also be transferred to the Office of
    Science. The fiscal year 2003 request also includes the transfer of
    safeguards and security responsibility for Argonne National Laboratory-
    West from the Office of Science to EM.

                         DEFENSE NUCLEAR WASTE DISPOSAL

        The Office of Civilian Radioactive Waste Management fiscal year
    2003 budget request is $527 million, an increase of $150 million above
    the comparable fiscal year 2002 appropriation. Within this total is
    $315 million requested for Defense related Nuclear Waste Disposal
    activities. The request supports my recommendation to President Bush
    that the Yucca Mountain site is scientifically sound and technically
    suitable for development as the Nation's long-term geological
    repository for nuclear waste. On February 15, 2002, after receiving my
    recommendation, President George W. Bush considered the Yucca Mountain
    site qualified for an application for the authorization of construction
    of a repository, and recommended the Yucca Mountain site to the U.S.
    Congress for this purpose. A repository at Yucca Mountain would help
    ensure America's energy and national security, homeland security,
    nuclear nonproliferation policy, secure disposal of nuclear waste, and
    ongoing efforts to clean up the environment at former nuclear weapons
    production sites.

                                   CONCLUSION

        Mr. Chairman and members of the committee, this concludes my
    prepared statement. I will be glad to answer any questions you may have
    at this time.

        Chairman Levin. Well, thank you very much, Secretary
    Abraham.
        That last subject that you discussed, the environmental
    cleanup money, I would like to pursue it with you for a bit.
    The cleanup account, the $800 million, which you indicated you
    believe would represent all of the expedited agreements that
    could be reached during the upcoming fiscal year, you also
    indicated that you are ready to expand that next year for any
    additional expedited agreements that can be reached for
    cleanup.
        This is an important new initiative, if it is funded.
        Secretary Abraham. Right.
        Chairman Levin. What commitments do you have from the
    Office of Management and Budget (OMB) that they will, in fact,
    pursue that course? Because unless there is a commitment to do
    that, it seems to me we are right back in the same boat, where
    we are holding out promises to people who have been waiting a
    long time for cleanup but not following through with the funds.
    What is the OMB commitment to you, if any?
        Secretary Abraham. First of all, let me just clarify. The
    $800 million account for fiscal year 2003 submission could be
    expanded in this year and we are prepared to amend that request
    to expand it if more sites reach agreements with us than we had
    estimated.
        Chairman Levin. Expanded through a supplemental
    appropriation?
        Secretary Abraham. I think it could be that approach. It
    could possibly be that during the course before the final
    appropriations for this account are completed for 2003 we would
    reach more agreements and then acquiesce to a higher amount
    than we requested. I think that is open in terms of how we
    might proceed.
        Chairman Levin. But specifically and briefly, since we are
    going to be on a 6-minute round here, what is the OMB
    commitment to this program?
        Secretary Abraham. In future years, and I think that is
    really what you are asking, the administration is prepared to
    support funding for states who reach agreements consistent with
    the performance schedules contained in those agreements in
    future years. That gives predictability to these various
    communities that they will know not only what their 2003 number
    will be, but what we are going to request in subsequent years,
    because this road map will be quite clear.
        Chairman Levin. When you say the administration, you are
    specifically referring to the OMB?
        Secretary Abraham. I am.
        Chairman Levin. Thank you. On the issue of new nuclear
    weapons or modifications to existing nuclear warheads, has the
    Department of Energy been told by the Defense Department to
    work on the development of any new nuclear weapons?
        Secretary Abraham. What we have done, Mr. Chairman, is the
    following. I think that in the context of the Nuclear Posture
    Review and the other reviews that have been conducted by the
    Department of Defense, the identification of a particular
    challenge has taken place. That is the challenge of these hard
    deeply buried underground types of facilities.
        It is my understanding that a number of agencies within our
    Department, as well as at the Department of Defense, have been
    asked to examine a full spectrum of options available to defeat
    hardened and deeply buried targets. This spectrum includes all
    options ranging from conventional munitions to modified nuclear
    warheads.
        We have been asked to study what the potential is for the
    modification of weapons in our system to try to accomplish that
    objective. The DOE is not developing a new warhead. There is
    currently no military requirement for one. Any requirement for
    such a new warhead would, of course, have to be established by
    DOD and approved by Congress.
        At this point, we are studying the issue. Others who have
    different tools available to them are studying it in the
    conventional weapons context. My understanding is, at the end
    of that process all the different options will be studied
    before any decision would be made as to which approach to
    pursue in the future.
        Chairman Levin. When you say there is no requirement for
    the development of a new nuclear weapon, would you include in
    that that there is no requirement to modify or develop a
    modified existing nuclear weapon?
        Secretary Abraham. No. At this point we are studying this
    challenge, and----
        Chairman Levin. Both? Both a modification and new one?
        Secretary Abraham. Right. Right.
        Chairman Levin. But beyond the study, there is no
    developmental work going on?
        Secretary Abraham. Not at this point. As I said, and we are
    not the only folks studying how to deal with this challenge.
    Others in other areas of our defense programs, not in our
    Department but in others, are doing the same. I think that at
    some point all the options will be considered and some
    decisions as to which to move to additional stages will occur.
        Chairman Levin. Will that be which if any?
        Secretary Abraham. I am sorry, which?
        Chairman Levin. You noted that the stages will be moved
    too.
        Secretary Abraham. If any, yes. Currently, I mean we are
    assisting in two engineering, research and development
    assessments basically to examine--that are broad--to examine
    the full range of options for destroying hardened and deeply
    buried targets.
        Chairman Levin. Is there any specific money in the fiscal
    year 2003 budget request that was submitted by your Department
    relative to that study and examination?
        Secretary Abraham. I believe so. Let me just consult, if I
    could quickly here, with Dr. Beckner. [Pause.]
        Over $10 million.
        Chairman Levin. That is a specified account for that
    examination? There is a provision in law that says you may not
    conduct or provide for the conduct of research and development
    which could lead to production by the United States of a low-
    yield nuclear weapon. That was a 1993 law, I believe. Are you
    complying with that law?
        Secretary Abraham. I believe we are, sir.
        Chairman Levin. You have a fiscal year 2003 plan for a
    robust nuclear earth penetrator. Would that require a nuclear
    test if it is going to be included in the stockpile?
        Secretary Abraham. At this time, no, not at all. I say
    again this is, I think, basically the same type of the study is
    the stage we are at. If at some stage that study were to be
    decided to be followed further, there would be a lot of
    additional steps involved.
        But as to whether--but we have not examined, nor is it even
    in the current discussion stages as to the issue of any kind of
    need for testing.
        Chairman Levin. Thank you. Before I call on Senator Inhofe,
    without objection, I have Senator Thurmond's statement to be
    inserted into the record at this time.
        [The prepared statement of Senator Thurmond follows:]

                  Prepared Statement by Senator Strom Thurmond

        Mr. Chairman, I am truly pleased to welcome our former colleague
    Secretary of Energy Spencer Abraham to the Senate Armed Services
    Committee to testify on the posture of the Department of Energy and the
    adequacy of the fiscal year 2003 budget request. Mr. Secretary, by all
    accounts you have had an outstanding year.
        Mr. Secretary, last year when you appeared before this committee,
    the Plutonium Disposition program was undergoing a National Security
    Council review that called into question the future of the entire
    effort. At your direction the Environmental Management program was
    undergoing a ``top to bottom'' review. Additionally, the Panel to
    Assess the Reliability, Safety, and Security of the United States
    Nuclear Stockpile detailed worrisome signs regarding our nuclear
    arsenal. Finally, the Nation, especially California, faced the most
    significant energy crunch since the 1970s. What a difference a year
    makes.
        This year, as a direct result of your efforts, the Plutonium
    Disposition program is on solid ground. In fact, the fiscal year 2003
    budget request fully funds the revised program, which calls for burning
    34 metric tons of surplus weapons-grade plutonium here in the United
    States and in Russia as mixed oxide fuel. Not only does the program
    eliminate the possibility that these nuclear materials can ever be used
    in weapons but it ensures that Russia will eliminate enough plutonium
    to make more than 4,200 nuclear weapons. Moreover, you will save the
    American taxpayers $2 billion over the life of the Plutonium
    Disposition program, reduce peak-year funding, accelerate the
    completion of the program by 3 years, and reduce technical risks.
        Since your last appearance before the committee your ``top to
    bottom'' review of the EM program has been completed. The outcome of
    the review, better known as the Accelerated Cleanup Initiative, is the
    most significant breakthrough in the history of the EM program. You
    stated over a year ago that the program had taken too long and cost too
    much. In fact, the baseline estimates for the EM program suggested that
    it would ultimately cost more than $200 billion and take more than 70
    years to complete cleanup throughout the DOE complex. You projected
    that they could cut costs and they could accomplish the job of cleaning
    up these legacy materials more quickly.
        Again your vision has become reality. Just this past week, you
    announced the first accelerated cleanup agreement. Officials from
    Washington State and the Department of Energy agreed to a new schedule
    that will accomplish the cleanup of the Hanford Site 35 to 45 years
    sooner and billions of dollars cheaper than previously planned. In my
    home state, I have been advised that the Department of Energy will soon
    sign a similar agreement that will eliminate threats to the environment
    and ultimately save the American taxpayer billions for the cleanup of
    the Savannah River Site. I look forward to joining you in the
    announcement of this agreement. Moreover, I am aware that officials
    from your Department are reaching out at DOE sites across the Nation to
    accomplish this same accelerated cleanup. I look forward to hearing
    your comments on the progress of this truly worthy initiative.
        At this time last year, the Nuclear Posture Review was still a work
    in progress. In the meantime, the Strategic Subcommittee of this
    committee held a second hearing with the Foster Panel and the
    conclusions were startling. Now that the Nuclear Posture Review is
    complete and has reaffirmed that nuclear weapons remain a vital element
    of the U.S. National Security Strategy, I am pleased that you are
    working to guarantee the safety and reliability of the U.S. nuclear
    stockpile. Moreover, I am especially heartened to know that you are
    pressing ahead to reverse the deterioration of the nuclear weapons
    infrastructure and restore lost production capabilities. I believe this
    is the right course, however, I remain concerned with the pace of
    progress, especially with regard to a Modern Pit Facility. I hope you
    will address your decision to defer progress on this crucial facility
    for fiscal year 2003.
        Finally, 1 year ago energy prices were soaring, and concerns were
    mounting that a new energy crisis was upon us. While the energy crunch
    has passed, you are continuing to work toward the development of a
    comprehensive national energy strategy. Although not directly within
    the jurisdiction of this committee, clearly energy is a national
    security issue.
        I am especially interested in the success of your Nuclear Power
    2010 initiative. When you announced this initiative, you identified the
    Department of Energy's Idaho National Engineering and Environmental
    Laboratory in Idaho, the Savannah River Site in my hometown of Aiken,
    South Carolina, and the Portsmith site in Ohio, in addition to a number
    of private sites, as locations that would be considered for co-location
    of an advanced technology nuclear power plant.
        I firmly believe that utilizing Department of Energy facilities
    would mitigate any number of problems associated with building new
    nuclear plants. To begin with, there is no need to secure new land. In
    addition to the fact that this is already Federal property, in general,
    DOE facilities are large isolated areas that are highly secure. Also,
    individuals living near these locations are usually supportive of
    nuclear initiatives. They know that having a nuclear facility nearby is
    not a safety issue. As such, we avoid the ``not in my backyard''
    syndrome. Finally, building new nuclear reactors on existing DOE
    facilities reduces the requirement for new infrastructure since
    companies would be ``leveraging'' against what already exists at these
    locations. This initiative is good government and I support it.
        Again, Mr. Secretary, welcome and congratulations on a truly
    remarkable year as Secretary of Energy. I look forward to your
    testimony.
        Thank you, Mr. Chairman.

        Chairman Levin. Senator Inhofe.
        Senator Inhofe. Thank you, Mr. Chairman.
        Mr. Secretary, thank you for your opening statement,
    because we went through quite an uncomfortable time with the
    Department of Energy in the previous administration. At that
    time, we had the opportunity to talk to a lot of people within
    the Department of Energy, and I share the statements that you
    made this morning about them.
        You have some really good people that are in there. I think
    some unfortunate things happened prior to Bill Richardson being
    Secretary of Energy that worsened those problems. So do you
    feel confident now that you can take full responsibility for
    what is happening at DOE and that there is a chain of command
    that is going to be more reliable than those in the past?
        Secretary Abraham. Well, from day one when I was in charge,
    we obviously are working very hard to try to do a couple of
    things to address this.
        We have begun to implement a number of management changes
    on a complex-wide basis. But also, because of the decision to
    create a semi-independent agency within the Department, the
    National Nuclear Security Administration, where General Gordon
    and I basically are working together to try to streamline the
    program systems that are operated as Congress, I think,
    intended so that we can bring up-to-date the effectiveness of
    the weapons development programs, and the various projects that
    are included under our non-proliferation agenda. I think we are
    making good progress on improving that by eliminating levels of
    management so that we really put program directors into an
    accountable position to produce their----
        Senator Inhofe. I know that is not the purpose of this
    hearing today, but I think it is important that we get that on
    the record, because I believe that is true, too. I appreciate
    it.
        In July 2001, we had Admiral Richard Mies, the Commander in
    Chief of the United States Strategic Command, testify. At that
    time, he talked about the difficulty in certifying the nuclear
    warheads with reasonable certainty--the words he used--by 2008,
    and in the years beyond that.
        He said that the answer depends on the success of the
    science-based Stockpile Stewardship Program. He also stated
    that the Department of Energy is required to certify, you are
    required to certify, the reliability and safety of the Nation's
    nuclear stockpile.
        Now, are you in a position to say that DOE has more
    confidence in our ability to certify warheads by the year 2008
    and beyond than Admiral Mies said you were at that time?
        Secretary Abraham. Well, much of the budget we have
    submitted is designed to support the science-based Stockpile
    Stewardship Program. One of its principal responsibilities,
    obviously, is to give us the capacity, for me to, along with
    the Secretary of Defense, to certify the reliability of the
    stockpile.
        That is, up to this point, the Secretaries of Energy and
    Defense have been able to do this annual certification. We have
    not quite finished the process for this year, but it is near
    completion. At this time, we have that capability, and I think
    we are confident that the investments we have been making give
    us the expertise for the foreseeable future to do that. Every
    year we make this assessment and, obviously, I do not think I
    have any more important responsibility in the job than to make
    sure that certification is accurate.
        Obviously, if we ever reached the point when we felt we
    could not certify the reliability of the stockpile, that would
    be a very serious situation for us.
        Senator Inhofe. I characterize this as a self-imposed
    moratorium on underground testing, and I would think at some
    point you are going to have to review that. I mean, out in the
    future, there has to be some date in the future where you lose
    confidence in the stockpile if no testing has taken place at
    all.
        Secretary Abraham. Well, if I could just sort of explain,
    the certification process is essentially an annual decision as
    to whether or not we have the ability to certify the
    reliability of the stockpile versus using tests as a way of
    doing that.
        It is very important obviously that we do that annually. So
    this is not a case where we will wait until 2008 and then make
    a decision as to whether we need to engage in testing. We do
    that every year and we are making, I think, progress in terms
    of the development of the science that allows us to continue
    for the foreseeable future.
        But, obviously, the stockpile will age and issues will come
    up. Every year through the program of surveillance we engage
    in, we do our best obviously to assess our ability to make that
    certification.
        Senator Inhofe. Yes, and I know that very likely something
    could happen in the future where it would become necessary
    again, but this is something that has been a little
    distressing.
        When we talk about the NPR, the Nuclear Posture Review, and
    the fact that we are going to be cutting our weapons down to
    about 2,000 from their current level and making changes inasfar
    as the Peacekeeper missile is concerned, and our commitment is
    related to the withdrawal from the ABM Treaty, which some of us
    on this panel think is long overdue, but nonetheless, it is
    going to happen on June 13. Since we currently have no defense
    capability against ballistic missiles, our primary defense
    against a nuclear attack would continue to be a nuclear
    deterrent, between now and the time that we do have something
    and that would be sometime in the future, certainly a few years
    from now.
        In the near term, is there a need to go beyond the modern
    facility that you have described to provide the Nation with the
    means to respond to new or unexpected threats in a timely
    manner?
        Can you explain why it is acceptable that we do not have a
    nuclear weapons manufacturing capability and the Russians do? I
    recognize this is a policy that was in place before you got
    there. They have that capability, and we do not. Do you have
    any thoughts about that?
        Secretary Abraham. Well, obviously, one of the programs in
    our stockpile system is designed to address exactly the issue
    of our capabilities at some future point to be able to
    manufacture certifiable plutonium pits.
        We will, I think, in this budget invest somewhere in the
    vicinity of $195 million in that program, which we right now
    are conducting at Los Alamos. The hope is to have a potentially
    certifiable pit in 2003 that will actually certify a pit for a
    particular weapon system by 2007.
        The need for a facility for production based on the current
    age and condition of the stockpile is a little further into the
    distance. But certainly we are in the planning stages of
    looking at what those needs would be, and obviously, because we
    do not have that production capability right now, it does have,
    I think, and I am sure, bearing on the decisions that are made
    with respect to the size of the stockpile some of these issues
    as to what happens when we take weapons out of the
    operationally deployable system.
        Senator Inhofe. Very good.
        Thank you very much.
        Chairman Levin. Thank you very much, Senator Inhofe.
        Senator Bill Nelson.
        Senator Bill Nelson. Thank you, Mr. Chairman.
        Mr. Secretary, first of all, I want to compliment you on
    the attention that the Department of Energy is giving to this
    very serious problem of nuclear proliferation, and that is a
    compliment that comes after having had the Baker-Cutler report
    presented to the Foreign Relations Committee. Both of those
    distinguished gentlemen came and said that there is simply
    nothing more important than doing this. You seem to be
    implementing it.
        The Baker-Cutler report was critical of the management of
    the Nuclear Cities Initiative (NCI). I noticed that you have
    combined that with the Initiatives for Proliferation Prevention
    (IPP). That is in a budgetary item that has a 31 percent
    reduction this year compared to last year. Do you want to
    comment on that?
        Secretary Abraham. Well, first of all, it is correct that
    the the programs are being merged. There is a fair amount of
    similarity in the way the programs were administered, and it
    was our conclusion that at the end of doing a fairly extensive
    interagency evaluation of non-proliferation programs, which the
    National Security Council conducted last year, that these
    programs would be more effectively managed if they were
    together.
        What we then have done is to try to identify what is an
    appropriate budget level for this cycle. Now, the reduction you
    referred to, I think, is largely a function of the fact that we
    received a fairly significant, approximately $15 million, boost
    for these programs in the supplemental.
        It actually allowed us to conduct some work that would
    probably have been included, at least in terms of the
    feasibility of including it in the 2003 budget, which we are
    going to be able to conduct during the remainder of the 2002
    budget year. So because of that, if you take the enacted level
    prior to the supplemental and what we are requesting, they are
    fairly similar numbers, I think, a couple million dollars
    difference.
        But what it reflects is, I think, the program's estimate of
    what can be done in the 2003 period, given the issues that
    relate to access and relate to effective use of the money.
        Senator Bill Nelson. How do you plan to increase its
    effectiveness and the effectiveness of its management?
        Secretary Abraham. Well, first of all, we do have now
    sitting actually behind me, over my right shoulder, Ambassador
    Linton Brooks, who is the head of our non-proliferation
    programs. He has, I think, brought with his arrival a kind of
    leadership to the program and I do not know if you would like
    to comment at all on----
        Senator Bill Nelson. Yes, I would like a comment, please.
        Secretary Abraham. Maybe he would like to just say some of
    the managerial changes that he is going to make.
        Senator Bill Nelson. I would like to know, how do you plan
    to improve the management and the effectiveness of this
    program?
        Ambassador Brooks. Senator, we first have focused on
    eliminating duplication by common procedures, common
    administrative support, and a common superior.
        Second, we have focused the Nuclear Cities Initiative more
    narrowly, concentrating on the City of Sarov, and concentrating
    on our core mission of taking technologists and putting them to
    work in technology. So we have dropped some of the work we did
    that was community development in the past.
        Third, thanks to the Secretary's leadership, we have
    reached an agreement with the Russian Federation on access to
    the closed cities. The first test of that was this week, and it
    passed with a group going in for this kidney dialysis effort.
        Finally, we are attempting to--we have had great success in
    the Initiatives for Proliferation Prevention with the United
    States' industry coalition, and we are bringing them more into
    the business of looking at the Nuclear Cities Initiative, since
    the whole idea of this program is not for the government to
    spend money for a long time, but for the government to provide
    seed money for genuinely commercial efforts.
        Secretary Abraham. If I could just add, I think we have
    also tried to do a couple--by bringing the programs together,
    obviously there is a certain amount of management overhead,
    because we have put a common manager in charge of both
    programs.
        We have also--we very honestly are trying to do what I
    think Congress has asked us to do, and that is to maximize the
    fraction of the money we spend in Russia versus programs here
    in our laboratories.
        That is one of the other changes where we are trying to get
    more of the resources to where I think Congress intends them to
    be spent, rather than here in the United States on studying and
    programs in our own facilities.
        Senator Bill Nelson. Well, bottom line, is it working?
        Secretary Abraham. Well, we are literally in the first year
    of implementation. I feel at this point comfortable with this
    approach, and I think we are already seeing some success. Some
    of the issues that Linton mentioned have already taken, I
    think, a very positive turn.
        Senator Bill Nelson. Not in the first year of us trying to
    stop proliferation in Russia, nor all of the activities of
    trying to keep the scientists from being spirited away to other
    activities outside of Russia. I mean, bottom line, what is your
    impression of the overall effort at trying to contain nuclear
    proliferation over there?
        Secretary Abraham. Well, in a broad sense, I would have to
    answer it this way: We had in November, and I alluded to it in
    my testimony, very successful meetings as a follow-on to
    Presidents Bush and Putin's meetings here.
        Our counterparts at the Russian Ministry of Atomic Energy,
    and mine in particular, have, as a consequence of that, begun
    working very closely together with us. We have eliminated a
    number of access problems, which had made some of the
    accountability on programs more difficult as well as impeded
    our ability to secure facilities.
        On that front, I think we are able literally at this point
    to project the completion of a number of the security and
    safeguard efforts at both Naval, as well as other facilities,
    completion dates 2 years or more earlier than had originally
    been planned as a result of the progress we are making, and, of
    course, as a consequence of more funding available for it.
        We have, I think, the potential to even expand further. One
    of the interesting things that grew out of our meetings in
    November was a joint agreement between my counterpart and me to
    become personally engaged in clearing up issues that might slow
    down the process.
        I think sometimes, I mean, we have bureaucracies working
    with bureaucracies and if there is an impasse, it sometimes
    takes a long time to resolve. We did not think this set of
    programs could afford to wait a long time to resolve. We made
    it very clear to our teams that if there were problems, we
    wanted them brought to our attention immediately, so we could
    solve those on a ministerial level, if necessary.
        Interestingly enough, since we sent that signal, on each we
    have had enormous success in resolving impasses at the line
    level, and I think our willingness to become engaged is moving
    these programs ahead very vigorously.
        We will be meeting again, it looks like in early May, and
    on this occasion it will be in the United States. I am
    optimistic that we may be able to further expand cooperative
    efforts across the board in these programs. But it is, as the
    budget request suggests, as high a priority right now I have at
    least in terms of the focus I have on these programs.
        Senator Bill Nelson. Thank you, Mr. Chairman. You have been
    generous with your time. The thrust of my questions is,
    obviously, concern about a terrorist exploding a dirty bomb.
    Where do they get that material from? We will find out if this
    program is working or not on the basis of what we see.
        Thank you.
        Chairman Levin. Thank you very much, Senator Nelson.
        Senator Warner.
        Senator Warner. Mr. Chairman, I will take my question
    period following my colleagues. I apologize, Mr. Secretary, I
    had to attend a meeting this morning on cyber-security, which
    is a matter of great importance to me.
        I thank Senator Allard for giving our opening comments, so
    I shall wait. Thank you.
        Chairman Levin. Senator Collins.
        Senator Collins. Thank you, Mr. Chairman.
        Welcome, Secretary Abraham. It is always a pleasure to have
    you before the committee.
        You testified that you inherited an EM program that would
    take 70 years to complete. I want to commend you for
    recognizing that communities across this Nation should not have
    to wait 70 years for completion of this program and for your
    commitments to expedite it, both in terms of the agreements you
    have reached and also additional funding.
        Could you further comment on the likelihood that the
    program could be restructured in such a way as to substantially
    reduce the 70 years needed to complete the cleanup?
        Secretary Abraham. I would be glad to, and I appreciate
    having the chance to. We, as I said, encountered a plan that,
    to me, seemed unrealistic, because we all know how government
    budgeting processes work, at least at the Federal level. The
    idea of a 70-year-long program to us seemed not only unfair to
    the communities, but also unrealistic. So what we have done is
    conduct a top-to-bottom management review of every site to
    determine how we can significantly shorten the timeframe for
    dealing with ameliorating the most serious public health and
    safety risks.
        What we are doing, now that we have completed that, is to
    sit down side-by-side with local community government
    officials, regulators, and so on, to propose our expedited
    cleanup plan, and we are listening to them now, in part as we
    did this study, we listened to them, as well, but to now try to
    come to an agreement on what ought to be the new set of
    priorities.
        We have already had success in the State of Washington
    where a letter of intent between the Department and the
    Washington State regulators related to the Hanford site,
    probably the largest challenge we have in the complex right
    now, was just reached. The agreement there involves a variety
    of changes to the plan that had been in place before. Just to
    put it in a numerical sense, it means moving far more resources
    into Hanford in the immediate year and in the immediate period
    of years to begin quickly cleaning this up.
        In the long-term sense, it means we now believe that we can
    finish the work at hand not in 2070 as had been planned, but
    somewhere in the timeframe of 2025 to 2035, or a 35- to 45-year
    shortening of the time frame. We believe that, percentage-wise,
    that kind of expedited cleanup can happen at virtually all of
    our sites.
        What it means, though, is two things. We have to take more
    responsibility, and I have issued clear direction to our
    managers that we have a lot of responsibility to make this
    happen. It also means there will be more resources in the short
    run so that we can more quickly clean up the problems, because
    a lot of these long-term costs were just maintenance and
    security at the site, because it was going to take so long.
        But, third, we also expect the sites to recognize that when
    the cleanup is done, they cannot expect as much budget as the
    previous year, because the work is completed. That is going to
    require some changing and thinking as well.
        When people look at our budget in the future, they are
    probably going to see, in the first few years, increases in
    environmental management costs. But then they are going to, and
    need to expect to, see these numbers come down. We cannot at
    the site level over here in Congress say, well, why are you not
    spending as much as last year? Well, the definition of what we
    are doing is to clean up a problem and end it, rather than to
    keep it going.
        Senator Collins. Thank you. Switching to another issue, all
    of us are aware, as a result of the events of September 11 and
    the security lapses that our national security labs have had,
    of terrorists possibly having access to either nuclear
    technology or knowledge from our national laboratories.
        Could you update us on the security improvements that have
    been made at our national labs since you took over the
    Department?
        Secretary Abraham. Well, one of our top priorities and in
    fairness, I think this was brought to light here in Congress
    before I got to the job, but it was immediately a top priority,
    was to try to increase our commitment, our investment in
    security. That is happening, as I mentioned.
        We are making requests for total security throughout the
    complex of over $1 billion in this budget. That, added to money
    we have gotten through the supplemental, will bring the amount
    we spend from this point forward through the end of the 2003
    fiscal year to a number that will exceed--almost be $1.3
    billion.
        Much of it is focused on cyber-security, a significant
    ramping up of expenditures there, because we see that as one of
    the challenges. We also are engaged in a very aggressive
    ongoing effort to continuously review the threats throughout
    our complex.
        While I will not get into, at least in an open session, all
    of the kinds of things we test on and that we try to prepare
    for in terms of those threats, the one thing that I have
    insisted happen is that we not simply make one evaluation, one
    budget request, and leave it there but, rather than that, we
    have an ongoing and frequent review of an analysis of needs,
    because we recognize since September 11 that perhaps some of
    the challenges and threats people were prepared to deal with in
    the past were not properly defined.
        That will change. It will change on an ongoing basis, so
    the request we are making is based on, at the time of the
    request, what we viewed as being the needs of the security
    efforts and it is entirely possible that I will update those as
    we move ahead here and continually reevaluate.
        Senator Collins. Thank you.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you very much, Senator Collins.
        Senator Dayton.
        Senator Dayton. Thank you, Mr. Chairman.
        Mr. Secretary, I want to begin by thanking you for your
    helpfulness to me and the people in northeastern Minnesota,
    which has been devastated by economic setbacks. Of all the
    high-level officials in the administration I have worked with
    in the last 15 months, you have been by far the most responsive
    and helpful, and I thank you very much for that. On behalf of
    my State, I thank you as well, sir.
        Regarding Yucca Mountain, which is a decision that all of
    us are going to face, I have read views from different people
    and even from the experts in this field, and some say that
    given the status of our technology relating to cask storage and
    to the need to cool these materials, the transportation
    concerns, that we ought to wait a couple of decades before we
    proceed on that measure.
        What would be the consequence of that delay in your nuclear
    cleanup efforts?
        Secretary Abraham. Well, it has a profound impact on about
    four fronts. One of the fronts is what you just mentioned. Part
    of what we will be ameliorating as we clean up sites relates to
    the availability of a permanent repository for that cleanup. So
    it will have an impact for us on our environmental cleanup.
        It also has an impact on our national security programs,
    because, in fact, our Naval reactors programs produce the waste
    that has to be stored. Right now, we have a temporary storage
    arrangement with the State of Idaho, but it is temporary, and
    while I am sure we could compel a State to continue to accept
    this waste, that is not an ideal way for us to proceed.
        There is, in addition, for our Department, at least as we
    look at it, an energy security issue, because the failure to
    reach a decision with regard to waste disposal puts in jeopardy
    facilities, I think, including perhaps one in your state, that
    right now are major suppliers of energy that literally have no
    capacity at a certain point, probably in a few years, to store
    anymore waste. If there is no alternative for them, then they
    will have to cease operations.
        It has a variety of implications, not just on our cleanup
    programs, but on national security and energy security, as
    well.
        Senator Dayton. Thank you. If Congress does approve the
    Yucca Mountain site, what in your estimation would be the
    timetable for when that site would be able to begin to receive
    shipments?
        Secretary Abraham. Well, one of the things that I think is
    perhaps not noted enough is exactly what the process would be
    after this year, assuming that Congress were to support the
    decision to move forward.
        That decision only moves us to a license seeking procedure
    before the Nuclear Regulatory Commission (NRC), which means
    that another team of independent experts will objectively
    decide whether or not what we believe can be done, which is to
    safely store the waste at the site that it, in fact, does meet
    the highly stringent standards.
        That process will take about 3 years to complete, if it
    does, and only then would we begin the construction of the
    facility, which would take about 3 years.
        So those who add these numbers up realize that we are
    talking about 2010 probably before the construction would be
    completed and it would be possible for us to actually begin the
    process of storage.
        Senator Dayton. What is your Department's plan for that
    interim period with regard to the nuclear waste that you have
    responsibility for?
        Secretary Abraham. Well, much of that has to weigh--I mean,
    we do not have an alternative. I mean, it has to be stored, and
    in many cases already is stored in temporary facilities. That
    is where it has to remain.
        But it is actually the problem we have across the country,
    which is that nuclear waste is being and obviously highly
    different site to site, but we have temporary storage
    facilities being used, in some cases, above ground, most cases,
    above ground; most cases--in some cases, not even in closed
    situations. That remains the only alternative at this point to
    the repository.
        For us, as well as for the nuclear reactor sites around the
    country, it is a temporary situation and in some of these
    situations, not necessarily in our complex, but over time, the
    effectiveness of that storage will deteriorate as the
    facilities, these temporary facilities age.
        Senator Dayton. You mentioned in your testimony that you
    had instructed the EM program to do a top-to-bottom review, and
    I commend you for initiating that. Can we receive a copy of
    that review, please?
        Secretary Abraham. Yes. We would be happy to and Assistant
    Secretary Roberson who headed that up, along with our Under
    Secretary Bob Card, are available to brief members, because it
    is, I think, very--I think the course we are on, is a far more
    appropriate one for the communities involved, and we would love
    to provide you that information.
        Senator Dayton. Oh, please send me one.
        Secretary Abraham. Yes, sir.
        Senator Dayton. Do not put it in the mail. I am still
    getting Christmas cards in the mail. I got a thank you note
    from our governor that was dated December 21. I received it on
    Wednesday, yesterday. [Laughter.]
        Shifting gears here, I want to follow up a bit on what
    Senator Nelson was going into with your counterpart, the
    Russian Minister of Atomic Energy, and again, I commend you for
    that initiative and I hope that you can make great strides
    ahead on both sides, because it seems to me that on the one
    hand we are justifiably concerned about these materials falling
    into the hands of other nations or terrorist organizations, and
    yet, it seems that you have inherited this, your
    administration.
        We have not made as much progress as some believe we could
    have and should have, given either the priority or the
    financial resources necessary just to seize this opportunity to
    clear this nuclear flotsam off of our planet before it falls
    into somebody else's hands. So both in terms of the scientific
    expertise, but also the materials themselves, I just hope you
    can accelerate those efforts.
        Secretary Abraham. But, we have three different programs
    that are--well, actually more than that, but three large areas
    of work.
        One is in the area of enriched uranium, where through the
    agreement with Russia, we are purchasing a substantial quantity
    of highly enriched uranium each year to be used in American
    nuclear reactors. That is taking dangerous material out of
    Russia and bringing it here for the purpose of fuel.
        Our Plutonium Disposition program, we have worked very hard
    on trying to move that program ahead, and I believe we now have
    a workable solution on our side and we are working with Russia,
    obviously, to make sure that it is possible to basically
    dispose of 34 metric tons of weapons grade plutonium on their
    side, as well as on our side.
        Then there are the security programs I have mentioned,
    which we think we will be able to substantially reduce the
    timeframe to complete those material protection programs so we
    can secure sites at least 2 years quicker than we had
    anticipated.
        Perhaps, as we have further meetings, we can even move
    ahead more quickly. We are clearly working on those which we
    believe to be our greatest problems first, and so there is a
    priority to how we do it.
        Senator Dayton. Well, by accelerating the time table, you
    are doing a great service to all of us. Thank you.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Dayton, very much.
        Senator Allard.
        Senator Allard. Mr. Chairman, thank you. I want to thank
    both you and Senator Warner for moving ahead on what I view as
    a very important hearing on our nuclear security programs. It
    is always good to see the Secretary of Energy here, my good
    friend, Spencer Abraham.
        Senator Warner. Senator, that was a request that you put to
    both Senator Levin and me to have this hearing.
        Senator Allard. Yes. I appreciate it.
        Senator Warner. We have had it for many years. I do not
    think there was any question it eventually would happen, but I
    appreciate your efforts.
        Senator Allard. Thank you. I would just state that through
    the Strategic Subcommittee on which I am the ranking
    Republican, which I view that as a privilege, I have an
    opportunity to work with the Chairman there, my good friend
    Jack Reed, and this is important to the committee and I think
    it is important to the country.
        About two-thirds of the funding for the Department of
    Energy comes through this subcommittee and our committee as a
    whole.
        One of the programs I am greatly interested in is EM. I
    appreciate the comments that my colleague from Maine made about
    that. I agree with her and I am glad to see that you are moving
    ahead to try and improve its programs so that we actually do
    reach goals and it is certainly, I think, important to the
    country that we do that.
        We have 50 years worth of cleanup, and I think the new
    budget will begin to address some of the concerns that we have.
        I think it is lucky for you and the Nation that we have
    good and dedicated people in these EM programs, particularly.
    But I think you are doing a good job in the Department of
    Energy. Certainly I do not have any criticism because of your
    effort to move forward in trying to improve what is happening
    in the Department.
        I think the scientists at our national labs are the best in
    the world, all the engineers and the craftsmen, and our cleanup
    at Naval reactor sites, and they all continue to meet the ever-
    increasing demands we place on them.
        Speaking of dedicated, I would like to take a moment to
    recognize Barbara Mazurowski at the Rocky Flats cleanup site
    that we have in Colorado.
        Rocky Flats, as of today, is still under budget and ahead
    of schedule. I think this is a tremendous accomplishment. I
    just wanted to publicly acknowledge them for all that they have
    accomplished in the last year or so.
        However, while Rocky Flats may be in my State, I think it
    is important to note how connected all these sites are within
    the DOE complex. Any major problem or hiccup at one site can
    send reverberations through the entire complex. No site is an
    island, and that is why it is so important for all States to
    work together with DOE, whether they are an ongoing mission or
    slated for closure. We must keep national objectives and needs
    at the forefront.
        We all care deeply about our individual sites and
    situations, but we must work together to make the DOE complex
    work for all of us.
        I just wanted to make a few brief comments from my opening
    statement. I would like to have the full statement be made a
    part of the record. Without any objection, I will assume it
    will become part of the record.
        Chairman Levin. You have that out of the corner.
    [Laughter.]
        Senator Allard. Thank you, Mr. Chairman.
        There are a couple of questions that I do want to ask. One
    of them has to do with the cost of some of the issues that may
    be facing us.
        From your perspective, do you believe that DOE is on track
    for a 2006 closure date at Rocky Flats? In relation to that, do
    you also have sufficient transportation resources to meet the
    critical path milestones leading to the 2006 closure date?
        Secretary Abraham. Yes, the answer to both questions is
    yes. I would just echo your point about the national
    significance of these programs. There is an interrelationship
    both between the sites, as you well know, but also a clear
    connection to national security objectives, which we have. I
    think you put it well in your comments.
        We are committed to finishing the job at Rocky Flats, and
    the budget request is consistent with the 2006 closure target.
        One point that you mentioned briefly but I just would
    briefly expand on is that when we began the expedited effort
    toward addressing Rocky Flats, which is what we are trying to
    do, as I have indicated today, in the rest of the complex, the
    plan for Rocky Flats was a 70-year plan, and the cost
    projection was $37 billion.
        It will be finished basically in about 10 years, not 70,
    and it will be completed in a timeframe--or at a cost of
    somewhere in the vicinity of $7 billion from the point that we
    moved to the faster schedule.
        It is a reflection of the commitment really of the people
    in the community, the leadership we had there, some of whom I
    have brought to Washington to help us make this work for the
    rest of the complex, but also the community's willingness to
    realize that the goal is cleaning things up and getting it
    done, and it has been the people in that broadly defined
    community there have been a key part of the asset base.
        Senator Allard. I appreciate your comments, Mr. Secretary.
        Now, last year, DOE undertook a review of the Plutonium
    Disposition program, and since then DOE has established a new
    program baseline. However, I understand that there are a few
    details to work out.
        I support you and the State of South Carolina in trying to
    come up with a workable agreement and want to offer my
    assistance in any way that I can to move forward with that
    agreement.
        I have a couple of questions in that regard. What is the
    status of your ongoing negotiation with the governor of South
    Carolina, and how long do you anticipate it might take to
    complete these negotiations?
        Secretary Abraham. I think just to back up one step and
    give a sense of perspective to this, I mean, we obviously view
    the Plutonium Disposition program as one of the most essential
    ingredients to our non-proliferation objectives that we have,
    because if we are not moving forward with our program, I think
    it undermines our ability to move the Russian program forward
    to reduce 34 metric tons of plutonium there.
        So it is a national priority, and it is a matter of
    national security that this work. To that end, as a result, we
    are doing our best to come up with a program that is workable,
    and I think we have one.
        At the same time, we appreciate South Carolina's concerns
    and I have expressed that to the governor on numerous
    occasions, which is how we have moved from a state of some
    impasse at one point to a very active, ongoing negotiations
    that I think is close to completion.
        We are doing our best within the limits that we have in
    terms of the kinds of agreements and support we can provide
    South Carolina to address their concerns. We have done a lot.
    We have done a lot more than they had prior to this.
        We have made it very clear what our budget projections will
    be. We have OMB concurrence with meeting those objectives, so
    that they know that the disposition of the plutonium, the
    construction of the facilities is going to be funded.
        The point is we have made a lot of progress, and I expect
    that the effort will be completed very soon and we are, in
    fact, engaged in discussions even today.
        Senator Allard. I appreciate your commitment to the whole
    complex and to the country in getting Environmental Management
    to work.
        Mr. Chairman, thank you.
        Chairman Levin. Senator Allard, your statement will be made
    part of the record.
        Senator Allard. Thank you.
        [The prepared statement of Senator Allard follows:]

                   Prepared Statement by Senator Wayne Allard

        Mr. Chairman and Senator Warner, thank you very much for holding
    this very important hearing on the Department of Energy's national
    security programs. As always, it is good to see Secretary Abraham.
        The Strategic Subcommittee, on which I have the privilege to be the
    ranking member and that my good friend Senator Reed chairs, is
    responsible for authorizing over two-thirds of the Department of
    Energy's budget. A large share of the programs we oversee are in the
    National Nuclear Security Administration (NNSA). These programs are
    vital to the our Nation and our allies.
        These important missions include ensuring that the nuclear
    stockpile is safe and reliable in the absence of underground testing;
    ensuring that Navy warships have safe and militarily effective nuclear
    propulsion plants to meet today's and tomorrow's ever increasing
    deployment demands; and ensuring that the surplus fissile materials do
    not fall into the wrong hands.
        A matter of tremendous importance and a priority for me and others
    with defense nuclear sites is our EM program. We all realize that it
    took us more than 50 years to create the environmental problems of the
    Department of Energy, and these problems will take a coherent policy of
    innovation, integration, and funding to overcome. I believe the new
    budget plan for accelerated cleanup is a great first step in ensuring
    that the facilities slated for cleanup and/or closure actually occur.
        Luckily for you and the Nation, there are good and dedicated people
    in these programs. The scientists at our national labs are the best in
    the world and the engineers and craftsmen at our cleanup and Naval
    Reactors sites continue to meet the ever-increasing demands we place on
    them.
        Speaking of a dedicated workforce, I would also like to take a
    moment to point out the tremendous job that Ms. Barbara Mazurowski, her
    DOE team, the contractor, and all the hard working and dedicated
    workers have done at the Rocky Flats site. Rocky Flats, as of today, is
    still under budget and ahead of schedule. This is a tremendous
    accomplishment and I just wanted to publicly acknowledge all that they
    have accomplished.
        However, while Rocky Flats might be in my state, it is important to
    note just how connected every site within the DOE complex is. Any major
    problem or ``hiccup'' at one site can send reverberations throughout
    the entire complex. No site is an island. That is why is it so
    important for all states with DOE sites, whether they have an on-going
    mission or are slated for closure, to keep the national objectives and
    needs at the forefront. We all care deeply about our individual sites
    and situations but we must work together to make the DOE complex work
    for all of us.
        Again, thank you for holding this hearing and I look forward to
    hearing Secretary Abraham's statement.

        Chairman Levin. Senator Reed.
        Senator Reed. Thank you, Mr. Chairman.
        Welcome, Mr. Secretary. As Senator Allard indicated, we
    serve together on the Strategic Subcommittee with
    responsibilities for oversight over the Department of Energy,
    and it is a very productive and cordial relationship, and we
    look forward to further hearings about the Department.
        Mr. Secretary, the National Nuclear Security Administration
    organizing legislation directed the Department to submit to
    Congress a detailed 5-year budget plan similar to that provided
    by the Department of Defense. This plan was to be submitted
    with the annual budget request.
        The DOE failed to submit a plan with the fiscal year 2002
    budget request, and there was no plan with the fiscal year 2003
    budget request. Could you give us an indication of where these
    plans are and when we might expect to get them?
        Secretary Abraham. Sure. Well, we are committed to
    fulfilling the request. We have been working with the Office of
    Management and Budget to finalize that effort. It is my
    understanding that the 5-year plan, as we call it, is at OMB
    now for final concurrence. Once it is finished, it would be
    made available obviously, as you have requested.
        Senator Reed. I think, again, Mr. Secretary, the direction
    in the legislation was that you would be looking ahead for 5
    years, as DOD does, and you would be doing it, not simply in
    sort of a cookie cutter fashion, but that you would be making
    real programmatic projections. So I would hope when the plan
    comes to us it is not simply this year's budget times one and a
    half and the inflation rate.
        Secretary Abraham. Let me say that I am well aware of what
    the committee and other members of Congress intended and that
    is why we are working with OMB to get their concurrence, so
    that we can provide the document as requested.
        Senator Reed. Thank you, Mr. Secretary.
        Mr. Secretary, the DOE is also required by statute to
    submit an annual Stockpile Stewardship Program that has been
    known as the Green Book. The Department failed to submit this
    plan in 2001. When can we expect a 2001 plan, and when can we
    expect a 2002 plan?
        Secretary Abraham. I am not sure, the term Green Book is
    not one that I am immediately familiar with, so let me consult
    with my experts here and see if we have a timeframe for you.
    [Pause.]
        Senator Warner. I have never heard of it either. Maybe take
    an extra minute to explain what it is.
        Senator Reed. I think I will, okay.
        Senator Warner. The Green Book is a social register in
    Washington. [Laughter.]
        Senator Reed. Yes. I am not referring to that. [Laughter.]
        Chairman Levin. I have never heard of that, Senator. You
    have more experience in that regard than I do, I think.
    [Laughter.]
        I am not going there either, I will tell you that.
    [Laughter.]
        Senator Warner. In the Army, there is a green book. But all
    I know about is the social register. [Laughter.]
        Secretary Abraham. My understanding, Senator, is that it is
    in the final stages and will be available to you soon.
        Senator Warner. What is it? I mean, take an extra minute to
    explain.
        Secretary Abraham. Why don't we let the Deputy
    Administrator.
        Dr. Beckner. Certainly. Yes, it is a planning document. It
    was originated well over 5 years ago. As you recall, it was one
    of the early documents developed to describe the Stockpile
    Stewardship Program, and it was specifically intended to show
    Congress the full range of work that was underway and planned
    and that is what you will get again this year.
        Senator Reed. Thank you very much. We will not get the
    social register. [Laughter.]
        We are sending the social register to Senator Warner. It
    looks like he might want to see that. [Laughter.]
        Mr. Secretary, we have talked about the reliability of the
    stockpile and we know how important that is, because if there
    are questions about that, then it raises to the forefront the
    issue of testing, which is a major issue.
        The National Ignition Facility, the NIF, is currently being
    built at Lawrence Livermore National Laboratory. This is a very
    sophisticated laser facility, it will be the most powerful
    laser in the world when it is completed. It is an essential
    element of the Stockpile Stewardship Program. It is the only
    facility that will be able to fully address the issue of the
    secondary part of a nuclear weapon system.
        Several years ago, the NIF was rightly criticized for
    technical and schedule delays, and now they are on schedule,
    moving forward. It is planned to begin operation in 2004 and
    become fully operational by 2008.
        I would note that the Department's fiscal year 2003 budget
    request reduces the funding that had been planned for the NIF
    research program. These reductions have the potential to
    prevent the NIF from being fully operational for as many as 3
    years. This delay would also increase the overall cost of the
    NIF.
        Why are we reducing these funds now when we are all
    beginning to recognize, one, the challenge of stockpile
    certification and, two, the alternatives to an effectively
    certified stockpile?
        Secretary Abraham. My understanding is that the budget
    request for NIF, which I think, for construction purposes, is
    about $214 million, will keep it on track for completion at the
    targeted dates.
        We have had it on our watch list. It one of the five
    programs that have been monitored more closely than any others
    in terms of timetables and cost overruns. It is my
    understanding that the earlier problems which had placed it in
    that condition are now being ameliorated and that we will meet
    our completion deadline, and that the $214.7 million or so that
    we have included in the budget is consistent with completion on
    the timetable that had been identified.
        Senator Reed. Again, it might be as much symbolic as
    substantive, but to the extent that we are not aggressively
    funding NIF, I would hate to see a situation develop in a few
    years where, because we do not have the NIF or we do not have
    the kind of associated research from it, we are in a whole
    series of decisions we do not want to be in.
        Secretary Abraham. Right. That is not our intention. I
    assure you, I mean, we are putting a huge investment into this
    program, and we intend to meet the timetable as we have
    established.
        Senator Reed. Thank you, Mr. Secretary. Mr. Secretary, the
    Department of Defense has transferred to DOE responsibility for
    eliminating the last three Russian plutonium production
    reactors; does DOE have a commitment from OMB to fund this
    program in the out-years?
        I am concerned that this expensive project will be funded
    out of current DOE non-proliferation programs. Essentially, do
    you have an additional responsibility without the funding?
        Secretary Abraham. Right.
        Senator Reed. The question is: Do you have the additional
    resources, not just this year, but going forward?
        Secretary Abraham. At least in terms of the role that we
    have assumed here, just as a starting point, the shifting of
    this program, I think was done in no small measure because of
    the belief that we have greater expertise to conduct this
    program, not to move it off somebody's budget.
        It will certainly be a funding priority for us. Our goal is
    not to hurt other programs, but this is a pretty key program. I
    mean whether it is in our Department or any others, it is going
    to be a funding priority that I would fight for, because we
    believe this is one of the two or three most, along with the
    Plutonium Disposition program on the Russian side, two or three
    most important priorities for funding.
        We have a number of issues that we are looking at or ways
    to seek additional assistance to be able to conduct the entire
    transition there from the plutonium reactors to alternative
    energy supply sources. We will keep the committee informed of
    progress on those fronts.
        Senator Reed. Thank you, Mr. Secretary.
        Thank you very much, Mr. Chairman.
        Chairman Levin. Thank you, Senator Reed.
        Senator Bunning.
        Senator Bunning. Yes, Mr. Chairman. I have an opening
    statement I would like to ask permission to be included in the
    record.
        Chairman Levin. It will be made part of the record.
        Senator Bunning. Thank you.
        [The prepared statement of Senator Bunning follows:]

                   Prepared Statement by Senator Jim Bunning

        Mr. Secretary, I would like to join my colleagues in expressing my
    personal appreciation for your hard work and the hard work of the
    Department of Energy. I believe your vision of excellence for DOE is
    consistent with the need to transform and to bring into greater focus
    many of our Government agencies since the attacks of September 11.
        I agree with your statement that key to achieving excellence is to
    understand our overarching mission, which is the national security of
    this great country. Let me just add that the greatest means of
    accomplishing this vision is not simply a larger budget and a good plan
    but the hard work and dedication of those individuals who will execute
    the plan and the budget. The people of this Nation are our most
    treasured resource.

        Senator Bunning. Hi, Spence. Good to see you, Mr.
    Secretary. I am going to get at some nasty things, but they are
    there, and I have to do it.
        Congress passed Public Law 105-204 in 1998. The intent of
    the bill was to ensure that the construction of DUF6 conversion
    facilities would be built at two sites, one at Paducah,
    Kentucky, and the other at Portsmouth, Ohio, by 2004 to clean
    up DOE's depleted uranium hexoflouride.
        The DOE has now decided not to select a contractor for this
    project and to delay the selection until October 2003 to study
    whether the two facilities are necessary. I know that OMB has
    refused to provide funding for this project.
        I believe that the two facilities are necessary to
    eliminate the hazardous waste at the site. If you have been to
    Paducah, you have seen 45,000 canisters sitting out in the
    weather, in fact, just sitting there rusting.
        The DOE's new tactic with the contractor selection process
    appears to make it impossible to finish construction of any
    kind on the DUF6 facility by 2004. Will the intent of Public
    Law 105-204 be followed by constructing two DUF6 facilities, or
    do you think construction of the DUF6 facilities will ever
    begin, and when do you think that might commence?
        Secretary Abraham. I will thank you for that question. I am
    happy to try to respond. You and I have talked about this.
        Senator Bunning. Yes, we have.
        Secretary Abraham. I think our general counsel has assessed
    that the language you refer to, which was report language,
    requires us only to prepare a plan for two facilities. That is
    the interpretation that we have made.
        But let us talk about what we want to get done here. First
    of all, we obviously are committed to and will deal with the
    waste, both at the facility in Paducah as well as the facility
    in Ohio.
        I have talked with virtually every member of the Kentucky
    delegation and every member of the Ohio delegation who has any
    connection to these communities, and the governors as well.
    Here is the message I have been given.
        Senator Bunning. OK.
        Secretary Abraham. We have two communities that believe
    they contributed mightily to this country's security with the
    work that was done when we engaged in gaseous diffusion uranium
    enrichment. Both communities want to have ongoing activities,
    even as the scaling back of and the ability for the technology
    of gaseous diffusion to be competitive has declined.
        The people who operated those facilities have been closing
    down most of that activity. Both communities want to have
    ongoing operations, not simply worker training programs and
    then be left without a future, and we want the same.
        The issue that has been raised, both by Kentucky's
    delegation and Ohio's, is can we not, in addition to cleaning
    up the problems, also have a new competitive technology-based
    uranium enrichment capacity in this country? Could it not be in
    our community, just as both communities would like to have a
    DUF6, as its called, facility?
        We decided that we would like to--that we share that view
    as well. The administration believes that having a competitive,
    from a technological point of view, domestic enrichment
    capability is important, and our view is that if that happens,
    that it should happen, and it should happen in one or the other
    of the communities that previously had enrichment, where there
    is a workforce that needs these opportunities.
        What we decided to do was to determine through the
    additional request for submission of plans here what the cost
    and implications would be, as opposed to having two DUF6
    facilities, of having one larger DUF6 facility and both sites
    considering that as one possibility, where we and the other
    site have an enrichment facility.
        We want to explore to determine what the costs are of going
    that route as opposed to simply building two of these cleanup
    facilities and never going forward with as--with an enrichment
    facility.
        Senator Bunning. Mr. Secretary, we have been studying this
    thing from time immemorial.
        Secretary Abraham. Right. Well----
        Senator Bunning. That is how we have built up the canisters
    for the last 45 years. So what you are telling me I have heard
    from the prior administration, and I thought we would hear a
    little more positive response from this administration.
        So I am dissatisfied that your attorneys do not feel that
    we have a commitment. If it is necessary, I am sure that we can
    write it into statutory language and make sure that DOE is
    bound to do it.
        Secretary Abraham. It is possible.
        Senator Bunning. Yes. I would go back and check your voting
    record on this bill.
        Secretary Abraham. I am sure you will.
        Senator Bunning. I marveled at the response you gave to
    Senator Collins, and to Senator Nelson, on the President's
    fiscal year 2003 budget in speeding up the cleanup at certain
    facilities.
        In so doing, you have slowed down the cleanup in other
    facilities by taking money away from Paducah, at least in the
    budget's $20 million, and adding it to somewhere else to speed
    up cleanup. You have slowed ours down now 15 to 20 years. Is
    Paducah less important in the scheme of things?
        Secretary Abraham. No, not at all. As a matter of fact,
    every facility in the complex has received a baseline
    commitment for environmental cleanup that is lower than the
    amount they had last year. In every single facility in the
    complex, including Paducah, we are in the process of attempting
    to get a joint agreement for expediting cleanup.
        If that joint agreement occurs, and my understanding is
    discussions are going on right now, then Paducah will, in fact,
    have a significant increase in the amount of money for
    environmental cleanup than it had in the 2002 budget.
        Senator Bunning. Well, members of the Senate are capable of
    helping themselves to increased funding, even though the
    administration might not be as willing to agree to that number.
    We have done this for the last 4 years, kept the funding level
    at a certain figure and with the full knowledge that maybe in
    10 to 15 years, we can actually get Paducah cleaned up.
        Secretary Abraham. Well, I would just ask the Senator to
    work with us as we try to expedite the cleanup in Paducah.
        Senator Bunning. I am trying.
        Secretary Abraham. Work with us to get an agreement with
    the community to do it faster with more money in a shorter
    period of time, which is what we want to accomplish as well.
        Now, what we decided to do with this budget was to make it
    very clear that if communities agree to a faster cleanup, that
    we are prepared to support that cleanup with even more money
    than I suspect the Senator would get through the normal
    appropriation process.
        Senator Bunning. Pardon me, Mr. Chairman. I just want to
    follow up on one question. Ben, would you give me some time?
        Senator Ben Nelson. Sure, absolutely.
        Senator Bunning. If that is the case, and we are going to
    clean it up, how can you move back the hexaflouride cleanup
    that is sitting there contaminating the site or do something
    with that, because that is part of the overall cleanup?
        Secretary Abraham. Right. Our concern, as I have expressed
    to you, both personally and here, is whether or not it is in
    the interests of the way we would approach that to create two
    separate facilities to perform that function, or if we can do
    it more effectively with one, at the same time building a
    uranium enrichment facility so that both communities have both
    cleanup as well as the potential to be part of an enrichment.
        Senator Bunning. You are not going to be able to move that
    stuff unless you take it to a storage facility. I mean, there
    is nothing you can do with it except to deal with it at
    Paducah, or move it to Portsmouth and deal with it.
        Secretary Abraham. Right.
        Senator Bunning. Or to store it somewhere else? It is a
    phenomenal problem along with the normal cleanup of the
    facility.
        Secretary Abraham. Right. I realize that, and if we ended
    up with one DUF6 facility, a larger facility doing all of the
    cleanup, we are capable, I believe, of dealing with the
    transportation issue. The Department has been moving materials
    for 30 years successfully without any harmful effects in that
    period.
        We will work with you, obviously, to keep you apprised of
    this effort. I mean, our goal is what I said, and I know we
    will be talking more about it.
        Senator Bunning. OK. I am going to save my other questions
    for our second round.
        Chairman Levin. Thank you.
        Senator Ben Nelson.
        Senator Ben Nelson. Thank you, Mr. Chairman.
        It is good to observe that my colleague from the other side
    has not lost any ability to throw a hard ball.
        Senator Bunning. Thank you. But it is a lot slower.
    [Laughter.]
        Senator Ben Nelson. Mr. Secretary, I appreciate very much
    your being here today and want to thank you for your appearance
    and your support last Friday of the renewable fuel standard
    effort as part of the energy bill, and to thank you for being
    here to talk about the committee's jurisdiction and a lot of
    the issues that are raised.
        Sometimes, the Department's role in our national defense is
    overlooked. But I can tell you that I know Admiral Ellis at
    Strategic Command does not overlook it and appreciates very
    much the cooperation and the good working relationship that he
    enjoys with you.
        Also, I want to thank you on a personal note. Many in this
    room really owe a great deal to your agency for the support in
    cleaning up the Hart Building, having been out of it for 90-
    some days.
        My question goes in a little different direction, and
    perhaps you can answer this or maybe it needs to be in
    classified form. But the national laboratories have developed
    significant technologies that detect chemical, biological, and
    nuclear agents.
        Is there a system in place right now that can be deployed
    to major parts of the United States to assist in homeland
    security, where they might be able to detect WMDs at an early
    time? Because, clearly, that would be extremely beneficial to
    homeland defense.
        Secretary Abraham. One of the--probably the second action
    we took at the Department, I think in response on September 11,
    after immediately moving to a security condition throughout the
    complex to address any threats we might face at our various
    facilities, was to launch really a two-pronged initiative
    within the laboratories.
        General Gordon and I asked the various labs to, both one,
    make available to us anything they thought was existing
    technology that could be applied to any of the issues we
    faced--that was one of the reasons that we were able to help
    with the Hart Building--and second, to give us a menu of
    potential research that might be conducted to assist in light
    of the new threats that were identified.
        By that, what I tried to convey was that undoubtedly over
    the period of many years a lot of great ideas had been hatched
    in our laboratories for different kinds of equipment, different
    kinds of detection gear, et cetera, some of which we probably
    did not proceed with, just because they may not have at the
    time appeared to be as relevant or needed as they might now. In
    response to that, we are considering and, in fact, enlarging
    some of our efforts.
        We also have made Director Ridge, from literally his first
    week in office, aware of the tools that he has at his disposal
    in our laboratories. I would be happy, of course, in a private
    briefing to give you a more specific rundown of that
    capability.
        He visited, in fact, the Department not too long ago, and
    we brought a number of these different types of equipment in
    for him to be able to personally observe, and ranging from the
    kinds of things you are referencing to a computer program we
    had developed prior to September 11 that allows us to monitor
    and be able to estimate what, if any, impact on our
    infrastructure in the country, what its resulting impacts would
    be on other infrastructure, so that we know what priorities to
    have and things of this sort. We are making that available to
    homeland security, and we will be glad to keep you apprised.
        Senator Ben Nelson. I think I will follow up with you on
    that suggestion.
        Secretary Abraham. That would be great.
        Senator Ben Nelson. In that regard, is there adequate
    funding in this budget to help pursue that kind of research
    and/or development of systems?
        Secretary Abraham. Right. Well, we believe there is. There
    is $283 million, I think, in non-proliferation research and
    development (R&D) here, most of it focused on proliferation
    detection work and on other chemical, biological, and other
    categories of this. It is, I think, a very reasonable request.
        As I said, we are sort of in a sense, challenging our
    facilities to identify new priorities that we might consider,
    if not in this budget, then in the future.
        Senator Ben Nelson. It might be classified, but with all
    the discussion about regime change in Iraq, where Saddam
    Hussein has already gassed his people, would we have the
    capacity or could we work with the military to be certain that
    any of our military forces who would enter that country might
    be able to have similar kinds of systems in place to have early
    detection if they are going to be placed in that kind of harm's
    way?
        Secretary Abraham. Without going into the areas----
        Senator Ben Nelson. Without going into detail.
        Secretary Abraham. --that I would be discomforted to
    discuss in a non-classified setting, I would just say that,
    obviously, we have a lot of tools available, which we work with
    the Department of Defense both to develop and to have in an
    operational state of readiness, and many of them are already
    finished and some are in the process of being planned for the
    future.
        Senator Ben Nelson. Thank you, Mr. Secretary.
        Thank you, Mr. Chairman.
        Chairman Levin. Thank you, Senator Nelson.
        Senator Warner.
        Senator Warner. Thank you, Mr. Chairman.
        Mr. Secretary, excellent hearing, and we thank you for this
    presentation.
        I will ask that my statement be incorporated in the record,
    Mr. Chairman.
        Chairman Levin. It will, of course, be incorporated.
        [The prepared statement of Senator Warner follows:]

                   Prepared Statement by Senator John Warner

        Thank you, Mr. Chairman. I, too, want to offer my welcome to our
    distinguished witness today.
        This is a very important annual hearing for our committee. Fully
    two-thirds of the Department of Energy's budget is related to defense
    or former defense missions and is, accordingly, within the jurisdiction
    of this committee. Maintaining a safe, secure, and reliable nuclear
    stockpile is of the utmost importance to the national security of our
    Nation, and, in my view, is DOE's top priority. Additionally, this
    committee has important oversight responsibilities for DOE's
    Environmental Management program which is responsible for cleaning up
    our former defense nuclear facilities.
        I want to begin my comments this morning by discussing the recent
    press stories on the Nuclear Posture Review (NPR), which was completed
    and delivered to Congress in January. In my view, the NPR represents a
    breakthrough in how we think about strategic forces and how we respond
    to strategic challenges. The new integrated triad--consisting of
    nuclear and precision conventional offensive forces, passive and active
    defenses, and a robust infrastructure--provides the flexibility needed
    to support President Bush's initiative to move to lower levels in our
    deployed nuclear weapons.
        The NPR is ``forward looking'' in its approach to a world no longer
    dominated by the mutual hostility of two Cold War superpowers. The NPR
    examines a world in which a number of nations are developing, or
    seeking to develop, weapons of mass destruction, and discusses a range
    of options for how the United States should respond to the growing
    threats we face. But one thing is clear--the NPR is not a targeting
    document, as was inferred in recent press coverage. The previous
    hearing this committee conducted on the NPR clearly supports this
    interpretation of the NPR.
        The NPR actually seeks to reduce our reliance on nuclear weapons by
    reducing the numbers of ``operationally deployed strategic nuclear
    warheads'' and increasing our conventional strike and missile defense
    capabilities. Those who seek to threaten the United States must receive
    the message loud and clear that we would use every weapon at our
    disposal to protect the American people.
        I would now like to move on to the fiscal year 2003 budget request
    for the Department of Energy atomic energy programs. The fiscal year
    2003 budget request provides $15.4 billion for defense programs within
    the Department of Energy--a $653 million or 4 percent increase over the
    amount appropriated in fiscal year 2002.
        Let me turn first to the nuclear weapons programs. I am encouraged
    by the new facilities and infrastructure recapitalization program,
    which is designed to address some of the major maintenance and repair
    backlogs at DOE nuclear weapon plants and laboratories. But General
    John Gordon has an enormous task ahead, as do you Mr. Secretary, to
    maintain our nuclear weapons stockpile in a safe, secure, and reliable
    manner and to reinvigorate the nuclear weapons program.
        I know we have made enormous strides in our efforts to ensure that
    our nuclear weapons are safe, secure, and reliable. However, I am
    concerned that we will not be able to provide these assurances to the
    American people indefinitely in the absence of underground nuclear
    testing. The Foster Panel report (February 1, 2001) pointed our that it
    would take 2 to 3 years--from the time the President makes the decision
    to resume nuclear testing--for DOE to be ready to conduct such a test.
    I repeat, 2 to 3 years. Is this simply too long a time to wait if we
    discover a problem that calls into question the safety and reliability
    of our nuclear stockpile?
        Our Nation continues to place heavy reliance on the development of
    a science-based stockpile stewardship program. The completion date
    remains indefinite. Whether this program alone can provide the
    necessary tools to certify our aging nuclear stockpile into the future
    remains to be proven. General John Gordon recently told this committee
    that we could achieve a successful stockpile stewardship program but
    still need to consider conducting an underground nuclear test. In fact,
    it may be throught our science-based programs that we discover a defect
    or design flaw that will lead to a requirement to resume testing.
        We should continue to invest in the science-based program, but we
    should not neglect the rest of the nuclear weapons program. Our test
    readiness should remain in as near to standby readiness as reasonably
    possible. Our ability to manufacture certified ``pits,'' including the
    preliminary design efforts on a modern pit facility, should be a
    priority. General John Gordon recently testified that ``we need to
    begin thinking seriously about a modern pit facility.'' We should make
    sure our nuclear weapon designers and technicians continue to be the
    best and the brightest.
        Another Department of Energy program which requires and deserves
    our attention is the EM program, which is responsible for the
    decommissioning and cleanup of the former defense nuclear facilities.
    The fiscal year 2003 budget request includes a new initiative designed
    to continue an aggressive schedule at the closure sites and accelerate
    cleanup across the complex including the four remaining major EM sites.
        I am encouraged by the bold initiative the DOE EM program is
    proposing and look forward to working with you and my colleagues to
    make sure this program to accelerate cleanup and reduce costs is
    successful.
        We have a lot of issues to cover today. I look forward to hearing
    Secretary Abraham's testimony.
        Thank you, Mr. Chairman.

        Senator Warner. The Chairman and I, we have been sitting
    here many years together, and every now and then we both flinch
    at the same moment. I think we had a little bit of a flinch
    when you said that you could force a State to take nuclear
    waste.
        Could you ask your lawyers to give us a little
    Constitutional brief on that?
        Secretary Abraham. Well, the point I was alluding to was
    that we have a responsibility for the disposition of certain
    weapons grade materials that we must dispose of, and we will be
    happy to provide you what I think is the authority that would
    ultimately allow that to be disposed of somewhere.
        Senator Warner. I think we would be interested in that,
    because if that were the case, you could force Yucca Mountain,
    and that would resolve many issues.
        Secretary Abraham. Well, that is covered by a separate act
    of Congress obviously.
        Senator Warner. I would just be interested in the reasoning
    on that.
        I want to go back to the question of our testing the safety
    and the effectiveness of the stockpile. That is a subject that
    has been of enormous interest to me.
        Now, to put it in context, the facts are: we have this very
    significant inventory of weapons; we had to have them go
    through the Cold War. It was as simple as that.
        Now, we have a worldwide situation where weapons of mass
    destruction of different types pose threats, not perhaps as
    great, but certainly in many ways comparable to those of the
    Cold War.
        Now, every time I have had a hearing on this and been
    present, I have always reminded the American public that, yes,
    we have a dislike for the concept of nuclear response, but it
    is a fact that it is a threat, that nations other than ours are
    struggling to obtain the science, the people to manufacture
    their own nuclear weapons, and that is a fact in this very
    troubled world we have today.
        Now, the inventory of our weaponry is distributed in
    various places across the United States. We ask the military
    and civilians to be in close proximity to these weapons. So
    equally important to maintaining a credible military
    effectiveness, if we ever had to use them, is the safety of
    these weapons and the communities which surround the military
    installations or bases where they are. So there is a broad
    range of people that justifiably should be very concerned about
    the safety of this stockpile.
        Now, go back in history, because there may be some people
    following this proceeding or reading this record that might not
    have the background that those of us who have been here these
    years have. President George H.W. Bush, as we refer to him now,
    affectionately, 41, made the decision to discontinue testing. I
    am not disputing it as a policy.
        President Clinton then decided in 1993 that he would
    continue the Bush policy. That is what we are operating under
    now, an executive order, not a law, but an executive order.
        In that period of time, we decided to go onto this science-
    based Stockpile Stewardship Program.
        As I just learned from our very able counsel here, Madelyn
    Creedon, the Green Book was first issued, was it 1990? When was
    it that the first one come out?
        Ms. Creedon. 1995.
        Senator Warner. 1995. It was wrapped in a green wrapper.
        Secretary Abraham. I see, of course.
        Senator Warner. Therefore internally, it was referred to as
    the Green Book.
        But in other words, we are at that fork in the road now. A
    year or two ago, when I was privileged to be Chairman of the
    committee, we had a very serious question confronting this
    Senate of the Comprehensive Test Ban Treaty. It was the lab
    directors, in my opinion, who gave that evidence that
    contributed to the Senate, I think quite properly, rejecting
    that treaty.
        Now, we have before us a budget request of $2.1 billion for
    the continuation of this program that was initiated in
    approximately 1993. It was envisioned at that time, well
    intentioned--I am not in any way being critical--that perhaps
    in a decade we would be at that point where we could make a
    finding that this program will, in fact, substitute for the
    actual testing; and therefore meet our requirements, military,
    first, that we have a credible weapons system, if necessary,
    and two, that the people handling it in the communities can
    rest and sleep safely.
        Well, we are now in 2002, and I would like to know where
    you believe we are in this program that was to have finished in
    a decade and reached that point at which the lab directors
    could certify this program as substitute for testing.
        I might add, we learned this morning, from Senator Reed and
    others, that the report referred to now as the Green Book, is a
    year late, yet you are asking Congress to authorize $2.1
    billion.
        What is the documentation that you predicate that request
    on, given that the Green Book, which states where we are in the
    program, is not available?
        Secretary Abraham. Well, first, as I said--or, I guess,
    actually as Dr. Beckner said, our intention is to have the
    Green Book available very soon.
        Second, obviously the programs we are seeking support for
    are ones which we can provide information to the committee on
    as to their status individually, program by program. They are,
    by and large, a continuation of various projects that are part
    of that effort, including the one which Senator Reed referred
    to, the NIF program and others.
        As to the timeframe in which--I do not think really there
    has been any change in status as to the projections. I think
    that the lab directors, as I recall their testimony, had
    indicated that they could not guarantee to us at that point
    that the program, once completed, that there would be a
    timeframe for its being able to predict with certainty the
    capabilities and reliability of the stockpile. That is why we
    are obviously trying to complete the work.
        Senator Warner. Well, let us be careful with that. It seems
    to me there are two phases, at least. One, the development of
    the program, so that someone can click a switch and it is now
    working to perform its mission.
        Secretary Abraham. Right.
        Senator Warner. Then once it begins to perform its mission,
    then we ascertain from whatever comes out the other end, that
    it is or is not a substitute, to some measure, for testing.
        Now, my first question was: How soon do you flip the switch
    so that this massive system, many billions of dollars, is now
    beginning to crank out some information that helps our Nation
    determine the credibility and safety of the stockpile?
        Secretary Abraham. At the risk of giving an imprecise
    answer?
        Senator Warner. If you want to, call on your associates.
        Secretary Abraham. Let me ask Dr. Beckner, here, to join
    me.
        Senator Warner. Sure, because I can understand how this is
    very complicated.
        Secretary Abraham. Because there are different programs
    that are in different timeframes.
        Dr. Beckner. I think the way to view this is that this
    really is a continuation of activities which you should view as
    being on the table for support as long as we have a nuclear
    weapons stockpile, and as long as we choose not to return to
    testing.
        It is not something that is just going to be in place one
    day and we can say, well, we now have a new process that
    clearly in any simple way gives us a substitute for testing. It
    is a combination of things. It is NIF. It is the hydro-dynamics
    facilities. It is the computing capability that we purchase
    with--in the ASCI program, and it is the people.
        Senator Warner. I recognize that. But at what point does
    the confluence of all these bits and pieces begin to provide
    data?
        Dr. Beckner. It is there now.
        Senator Warner. It is there now?
        Dr. Beckner. It is there now. Otherwise, you would not be
    getting this certification of the stockpile.
        Senator Warner. All right, I accept that. My time is
    running out.
        Dr. Beckner. It will be better next year, and it will be
    better the year after that. But it is what you are getting, it
    is what you are using today.
        Senator Warner. My recollection is that when the lab
    directors testified in connection with the Comprehensive Test
    Ban Treaty, it was not there then. Are you suggesting that what
    they said was not present 2 years ago is now in place?
        Dr. Beckner. No. I think what we are seeing is a continual
    improvement of our ability to deal with this problem. In
    particular, we do not have NIF operational. In particular, we
    do not have the computing facilities that we wish to have in a
    few more years and continue to acquire. It is just something
    that we are going to have to continue to develop as time goes
    on.
        Senator Warner. I am not questioning that we are going to
    continue. I do not doubt that Congress is going to go ahead and
    authorize this. But I am just wondering: What are the facts
    before us that lead Congress to believe that, at some point in
    time, these various components will be in place and will
    indicate, hopefully, that it is a credible substitute for
    actual testing?
        Dr. Beckner. Your best measure of that is the ability to
    continue to state that the stockpile remains certified as safe
    and reliable. You are getting that on an annual basis.
        Senator Warner. My time is up. I will have to return to
    this when I get another round.
        Chairman Levin. Well, as someone who supported the
    ratification of the Comprehensive Test Ban Treaty, first of
    all, I do agree with Senator Warner that the lab directors'
    testimony was partly responsible for the loss of that vote.
        I did not think that their testimony was particularly
    comprehensive. I did not think it took into consideration one
    critical fact, which is that there is a supreme national
    interest clause in the Comprehensive Test Ban Treaty, which
    allows for withdrawal at any time we needed to return to
    testing.
        Now what we are being told is we have certification under
    the Stockpile Stewardship Program that we can rely on,
    apparently even without a report. I am glad to hear it. I
    believe it. There is no reason to doubt it, in my judgment.
        But it just reinforces my belief that we really lost an
    opportunity there to lead the world towards lesser reliance on
    nuclear weapons. We lost some credibility to make the argument
    to other countries that they should not rely on nuclear weapons
    when we defeated a treaty that had a provision in it that would
    have allowed us to test, should the national interest require
    it. That is what we are being told now.
        The Stockpile Stewardship Program is working, or so we are
    told. I believe it. We are spending a lot of money on that
    program. If at any time that program does not lead to a
    certification as to the safety and reliability of our nuclear
    weapons, we can return to testing. It is exactly what we could
    have done had we ratified the Comprehensive Test Ban Treaty.
    But because of that testimony from the lab directors, it was
    used to defeat a treaty which had a withdrawal clause in it.
        So we are, effectively, in exactly the same place where we
    would have been had we ratified the treaty. The only difference
    is we took a step backward in terms of reducing the reliance on
    nuclear weapons in this world, and our credibility to argue to
    other countries that they should rely less on nuclear weapons.
        India and Pakistan test, and we just say, that is a
    terrible thing. Then we, ourselves, fail to ratify a treaty
    which would have given us some standing to make that argument.
        Let me change the subject to the Price-Anderson Act. Mr.
    Secretary, the Price-Anderson provisions of the Atomic Energy
    Act provide indemnity and insurance coverage for contractor
    operators of the DOE facilities as well as the Nuclear
    Regulatory Commission licensees. It does some other things as
    well.
        But the Department of Energy's authority to extend Price-
    Anderson coverage to DOE contractors expires in August. Without
    Price-Anderson authority, will the Department of Energy be able
    to sign any new site operating agreements, including
    environmental cleanup agreements?
        Secretary Abraham. I would have to take that question for
    the record for our legal counsel.
        Chairman Levin. Thank you.
        Secretary Abraham. But obviously it is one of the reasons
    why the administration and we have supported the extension of
    Price-Anderson and the energy legislation on the floor at this
    time.
        Chairman Levin. Right. There is an additional question
    relative to Price-Anderson, which I wish you would answer for
    the record as well. That is, is the Department trying to
    renegotiate some of the existing operating contracts at
    environmental sites sooner than normal. As a matter of fact, I
    think that is part of your program to speed up the cleanup at a
    number of sites. You need to renegotiate contracts.
        Without Price-Anderson authority, the DOE is, from what I
    can understand, not going to be able to pursue the very
    strategy which you have outlined here today. Is that correct,
    do you know, or would you rather answer that for the record?
        Secretary Abraham. Well, again, I do not want to prejudice
    our legal position by speculating on it. I would rather have
    legal counsel approve an answer for the record.
        Chairman Levin. That would be fine. That is an additional
    question then for the record, if you would answer that as well.
        Secretary Abraham. Glad to do it.
        [The information referred to follows:]

        Probably not, because of a lack of a contracting partner. In the
    absence of Price-Anderson indemnity authority it is unlikely that any
    non-governmental entity (i.e., a contractor) would sign any new site
    operating contract under which the contractor would have responsibility
    for handling of nuclear materials.
        If the Department's Price-Anderson authority is not renewed or
    extended before August 2002, the Department may have to re-evaluate
    some of its planned procurement actions and strategies. Termination of
    existing contracts in favor of a renegotiated or competed contract may
    have to be postponed pending renewal or extension of the Department's
    Price-Anderson indemnification authority.

        Chairman Levin. Can you give us some idea as to how many
    Russian nuclear scientists and former weapons scientists and
    engineers have been provided employment by your programs? Are
    you able to give us any kind of estimate?
        Secretary Abraham. I think we can. I am not sure if I can
    directly here. Perhaps I think we would have to provide that
    for the record.
        Chairman Levin. That would be fine.
        [The information referred to follows:]

        The Russia Transition Initiatives, which includes the Initiative
    for Proliferation Prevention and Nuclear Cities Initiative programs,
    have engaged over 11,000 former Soviet weapons scientists and engineers
    in commercially-focused projects. These weapons experts have been
    employed in applied research and development projects, as well as
    infrastructure development projects in the closed nuclear cities. In
    addition, the lab-to-lab cooperation under the Warhead Safety and
    Security Exchange Agreement has engaged a number of Russian scientists
    to complete technical projects in the areas of warhead safety and
    security, transparency, and counter-terrorism.

        Chairman Levin. I want to go back to a question which I had
    asked you before, relative to the law that prohibits the
    Secretary of Energy from conducting or providing for the
    conduct of research and development which could lead to the
    production of a low-yield nuclear weapon. That was a 1994
    provision in law.
        My question is this: How is the fiscal year 2003 budget
    request for a robust nuclear earth penetrator (RNEP) in
    compliance with that law, which you have indicated it is, since
    that law prohibits the Secretary of Energy from conducting the
    research that could lead to the production of a low-yield
    nuclear weapon?
        Secretary Abraham. Well, let me defer here, if I could, to
    Dr. Beckner, because we have talked about this, but he----
        Dr. Beckner. Yes. The present intent is to look at two
    existing weapons, the B61 and the B83 to be precise, as the
    device that would be incorporated into the RNEP, the so-called
    robust nuclear earth penetrator. Those are the only two that
    are presently going to be studied in conjunction with the Air
    Force, as directed by the Nuclear Weapons Council, and both of
    those weapons have yields substantially higher than 5 kilotons.
        Chairman Levin. But neither one of those are low-yield
    nuclear weapons?
        Dr. Beckner. They are not.
        Chairman Levin. Thank you.
        Senator Bunning.
        Senator Bunning. Thank you.
        I stayed because there are some things that I know that DOE
    is working on an agreement with U.S. Enrichment Corporation
    (USEC) to ensure the future production of domestic uranium.
    This agreement was supposed to coincide with the Russian
    uranium agreement that USEC struck with Tenex. Now that the
    USEC and Tenex deal has been signed, do you expect to come to
    an agreement with USEC any time soon?
        Secretary Abraham. We are, and have been, in fairly active
    negotiations for the last several months with USEC on
    discussions regarding their responsibilities or their
    continuing role, if one, as our executive agent.
        We have made progress, but despite the progress, there
    remains some significant issues that have not yet been
    resolved, and perhaps as you may have read, there have been
    some allegations made very recently that place in question
    USEC's activities as the agent in recent years.
        Senator Bunning. Not by you, but by others?
        Secretary Abraham. Correct.
        Senator Bunning. Right.
        Secretary Abraham. Obviously our negotiations are
    continuing. I think before they are completed, we will seek to
    resolve any issues that are raised by these allegations as
    well. Since they are a new set of matters, we intend to pursue
    those as part of this discussion.
        What I would note, though, also is that under the executive
    agency agreement that has existed and any that we would have,
    whether it was with USEC or anyone else, there remains, and we
    reserved to the government of the United States, the power to
    change the executive agent at any time.
        Senator Bunning. Let me ask you some defense-related
    things. Do we know what the operational life of a plutonium pit
    is?
        Secretary Abraham. Well, we do have, obviously, that
    ability, but I mean within ranges. I am not sure I would want
    to have that discussion in an open hearing.
        Senator Bunning. Not in an open hearing? You would answer
    anything about the plutonium and plutonium pits in a closed
    hearing?
        Secretary Abraham. Well, not anything. But I am not sure I
    would want to discuss capabilities of weapons and their design.
        Senator Bunning. Is it safe to assume that we will
    eventually need to replace the pits in our aging nuclear
    arsenal?
        Secretary Abraham. We are in the process of working on, in
    fact, exactly that type of program with respect to a particular
    weapon type at Los Alamos. Our hope is within the next year to
    have development of a pit for that particular weapon that is
    certifiable and to certify a pit by 2007.
        We obviously have, in our long-term plans, design work that
    we have already begun with respect to the need for a new pit
    production facility, but that----
        Senator Bunning. That was my next question.
        Secretary Abraham. But the need for that is not as
    immediate, but it is certainly part of our long-term planning
    to be----
        Senator Bunning. There is a plan?
        Secretary Abraham. Yes.
        Senator Bunning. For a modernized pit?
        Secretary Abraham. A modernized pit facility, yes. Well, we
    are in the process of putting that plan in----
        Senator Bunning. You are telling me it is about 2007, or
    is----
        Secretary Abraham. No. What I am telling you is that the
    project, which is already being undertaken----
        Senator Bunning. Underway.
        Secretary Abraham.--for one particular pit development
    program----
        Senator Bunning. OK.
        Secretary Abraham. --is aimed at being able to certify that
    pit in the year 2007.
        Senator Bunning. I did get the information you sought. You
    did not object to a unanimous consent----
        Secretary Abraham. I knew you would have it before----
        Senator Bunning.--on that public law that is now a problem.
        Thank you very much, Mr. Chairman.
        Chairman Levin. Thank you, Senator Bunning.
        Senator Warner.
        Senator Warner. Thank you, Mr. Chairman.
        Mr. Secretary, given the time, I am going to ask that some
    of my questions be included for response in the record. I am
    going to continue to press on on this issue of the stockpile,
    but I want to go over another subject, and that is as our
    Nation is gearing up under the leadership of our President for
    homeland defense, and a part of that is our ability to counter
    a dirty bomb.
        As you and I know, it is a hybrid of the technology that
    produced nuclear weapons years ago. Now, my understanding is
    that, quite properly, you together with your laboratory
    structure are examining and evaluating the threat to the United
    States of that--I will not call it a system--but that option if
    terrorists seized upon it.
        What can you tell us here about what is being done, and
    explain your views, if you can, of the degree of risk that is
    faced not only by our Nation, but others? First, you might just
    explain how you describe what a dirty bomb is.
        Secretary Abraham. Well, I think the most typical
    definition that is--at least the public definition has been--
    the idea of mixing radioactive materials in some fashion with
    explosives and in some way spreading----
        Senator Warner. Spreading it?
        Secretary Abraham. Yes, and while some would argue that it
    does not have the capacity to have the impact of a weapon, a
    properly defined weapon of mass destruction, obviously its
    impact in terms of terror, in terms of what it might do in
    terms of people----
        Senator Warner. Well, it is serious radiation, correct?
        Secretary Abraham. Right. I would just say in terms of our
    efforts to counter that, that first of all, our homeland
    security office really has the lead in terms of the development
    of those strategies, and it really is not in my jurisdiction.
    We provide the resources to support that effort.
        I personally have refrained from discussing some of the
    tactics we use or any of the tactics really that we use in
    terms of that support, in terms of public discussion for
    reasons that go to the heart of trying to maintain the ability
    to be successful in that, but I would be happy in a private
    setting to----
        Senator Warner. In other words, in a classified session. I
    think that is appropriate.
        Secretary Abraham. Right. Also to be joined by the homeland
    security----
        Senator Warner. I wanted to give the American public the
    reassurance that our government is doing everything it can to
    interdict that so it does not come to fruition. It seems to me
    it should be a worldwide problem. Would you share that view?
        Secretary Abraham. Well, it is. I think one of the reasons
    that not, not only are we pushing forward to expand and
    accelerate our non-proliferation programs with Russia, but also
    with other countries.
        We recently entered into a new agreement with Kyrgyzstan to
    help them. We have just this week signed a new agreement with
    Uzbekistan at the State Department, this week, to assist them
    in returning certain materials to Russia that were still there
    and to assist them in reducing the fuel used in their reactor
    from highly-enriched uranium (HEU) to low-enriched uranium
    (LEU).
        The challenge of this is one we are trying to deal with on
    a variety of fronts, and frankly, we are quite receptive to
    expanding the work that we do in this area. We have worked
    with--in fact, interestly on the very Monday following
    September 11, I traveled to Geneva to address the International
    Atomic Energy Agency's meeting and to try to raise the issue of
    nuclear terrorism and to put it more prominently on the agenda
    of that organization.
        I was back there again in November to meet with their
    executive committee to try to expand and perhaps more robustly
    address these issues. It is one of the issues that my Russian
    Atomic Energy Industry-Ministry counterpart and I have agreed
    to work on together on a broader international front.
        Senator Warner. Thank you, Mr. Secretary.
        At the moment, Congress has passed laws which prohibit the
    construction of a new nuclear weapon. We may have to revisit
    that at some point in time.
        But what can we do within the framework of existing law by
    way of putting in place an infrastructure that this President
    or a future president could utilize should a decision be made
    that we have to reenter production of a new design?
        Should we have people coming in that are skilled? How do we
    utilize their time now within the framework of that law such
    that, if that decision is made, we reduce the startup time
    required to proceed to do the research, the development, and
    testing as necessary?
        Secretary Abraham. Well, all right. Let me begin by
    reiterating what I said earlier. We are not in the stage, nor
    do we have any plans to move ahead with designing any new
    weapons.
        Senator Warner. That is clear. That should be in the
    record.
        Secretary Abraham. The issue that I think you are raising
    is whether we have, if that ever were something we were called
    on to do, do we have--would we over time lose the capabilities,
    because of adequacy of skills or facilities?
        We are trying to address the facilities issue obviously in
    this budget. It is one that I think every member of this
    committee has a lot of familiarity with, which is the
    deterioration of the actual physical plants across the complex
    where, while we have reduced the number of weapons
    manufacturing facilities, we have not done anything to make
    sure the ones that remain even are functional.
        As I mentioned, as I have said in speeches, people are
    literally at risk of having the plaster fall on them. So this
    budget, in a very substantial $243 million commitment, begins
    that infrastructure improvement.
        On the skills issue, there are a lot of challenges. I think
    the retention and recruitment of people with skills in this
    area remains and will, I think you know, always be something
    that the agency has to address.
        I do think, and I hate to act as though anything positive
    was wrought by the events of September 11, but I do think that
    the mission, the sense of mission in our Department now and the
    morale, the national security commitment has been, because of
    those events, as it has for Americans who are not even in
    government service, heightened tremendously. I think that will
    help us in terms of keeping talented people and recruiting
    them.
        We do think that some of the work that they are doing today
    on sub-critical experiments, on designing and working on
    replacement components, things of that sort, the disassembling
    and evaluating the components of warheads as part of the
    Stockpile Stewardship Program allows skills to be honed. We try
    to monitor that and obviously look to the lab directors and
    their programs to make sure that we are not losing the talent
    base that is needed. But it is something that is an ongoing
    challenge for the NNSA.
        Senator Warner. I thank you, Mr. Secretary. Part of that,
    of course, would be the Foster report. You are familiar with
    that, and what it says about the testing time frame. In other
    words, in your view, is the 2- to 3-year period the NNSA would
    need to prepare and conduct an underground nuclear test
    acceptable? Do you believe that we should follow the Foster
    Panel's recommendation to reduce the time to conduct a test to
    less than a year?
        Secretary Abraham. Well, I do not--we have not pinpointed
    an appropriate time frame. In fact, I have kind of resisted
    making--trying to be focused on time as much as on enhancing
    test readiness. That is the skill sets that are needed.
        Obviously, I think that--and again, let me just reiterate,
    there is no intention either in our Department or in any other
    to resume testing or any plan to do so.
        The question is, what would happen if we could not certify?
    I mean, obviously, the immediate issue is that we would then
    presumably need to make a decision on testing. But remember
    also that in the absence of the capability to certify, at least
    there also is brought into play the question of the
    effectiveness of our deterrent capabilities and the issue of
    duration between should we ever have such a point and the time
    duration between the recognition that we could not certify and
    the ability to test, is quite pivotal in my judgment to the
    question of whether or not there is credibility to our
    deterrent capabilities.
        I think we have tried to focus on the sorts of things that
    could enhance test readiness, not necessarily only in terms of
    time sort of focus but in terms of a skills focus.
        This is one area where we do have, I think, when we talk
    about the personnel side of the equation, where we have to make
    sure that people who are in the program--it has obviously been
    a fairly long period of time since any testing was conducted.
    We need to make sure the people, as they leave the program that
    we bring new people in. But are they properly capable and
    trained to conduct a test if that ever were called upon?
        That is one of the things--which I think that component of
    the Foster Panel's focus is one that we are trying to address,
    and what is addressed in our budget as well.
        Senator Warner. I will ask another question, Mr. Chairman,
    while you are waiting. I am going to go back and perhaps your
    associate would wish to deal with this.
        Some believe the science-based Stockpile Stewardship
    Program is an alternative to testing. In many ways, it has been
    portrayed that way before Congress. Is it simply a tool to
    assist the certification of the safety, security, and
    reliability of our nuclear stockpile? In fact, the program may
    provide information which would lead to testing. Do you agree
    with that?
        Dr. Beckner. Well, let us see.
        Senator Warner. Will that lead to a conclusion, I should
    say, that we need to resume testing?
        Dr. Beckner. That certainly could be the case. We use the
    program to evaluate all aspects of our understanding of nuclear
    weapons.
        In some cases, it leads you towards a resolution of
    problems. In some cases, it leads you to new problems. I think,
    as we stand here today, it is impossible to know at any time
    which way these things will go.
        What we are trying to do is to have a set of tools and a
    set of skilled people and a program structure which allows us
    to fully evaluate the situation at all times, so that we can
    assure the safety and reliability of the stockpile.
        It could lead us to testing. In fact, I would say you would
    not return to testing without a lot of evidence.
        Senator Warner. Yes, I think you want to say can lead us to
    the resumption of live testing. Is that not what you meant?
        Dr. Beckner. Yes, it is.
        Senator Warner. Because when you say continued testing, we
    are testing in a whole lot of ways, but this is not a popular
    subject. It is not easy to pose the questions nor to answer
    them, but the fact of the matter is the world looks to this
    Nation to be a leader in this area. We cannot ever allow the
    misconception that we no longer put full faith and credit in
    first, the deterrent capability of our stockpile of weapons,
    and then second, if ever a President had to make the decision
    to use it, that it would be effective.
        Dr. Beckner. Certainly.
        Secretary Abraham. Certainly.
        Senator Warner. I will put further questions into the
    record, Mr. Chairman. We have had a good hearing.
        Chairman Levin. I was just interested in your finishing
    that thought about how you would not recommend or be at a point
    where we would have to consider resumption of testing without
    evidence.
        Dr. Beckner. Let us see. We are responsible for making
    recommendations to the President, and to make such a
    recommendation, I would say we would require a very large
    amount of evidence. The details as to how you would arrive at
    that conclusion right now, I cannot walk those steps.
        Chairman Levin. Thank you.
        Dr. Beckner. But I do know that it would be a very grave
    and serious matter, and certainly not one we presently are
    contemplating. We just have to have that as one of the
    contingencies against which we plan.
        Chairman Levin. All set?
        Senator Warner. Yes. I think we have had a very good
    hearing, Mr. Chairman.
        Chairman Levin. Yes. Secretary Abraham, it is always good
    to see you.
        Secretary Abraham. Thank you.
        Chairman Levin. Thank you for very good, helpful testimony.
        We stand in recess.
        [Questions for the record with answers supplied follow:]

                   Questions Submitted by Senator Carl Levin

                                 PRICE-ANDERSON

        1. Senator Levin. Secretary Abraham, without Price-Anderson
    authority will DOE be able to sign any new site operating contracts?
        Secretary Abraham. Probably not, because of a lack of a contracting
    partner. In the absence of Price-Anderson indemnity authority, it is
    unlikely that any non-governmental entity (i.e., a contractor) would
    sign any new site operating contracts under which the contractor would
    have responsibility for the handling of nuclear materials.

        2. Senator Levin. Secretary Abraham, while existing contractors do
    not lose their Price-Anderson coverage when the authority expires, do
    these prime contractors lose the ability to provide Price-Anderson
    coverage to new subcontractors?
        Secretary Abraham. The Department's Price-Anderson authorization
    and implementing contract clause \1\ contains no restrictions on the
    ability of a prime contractor to flow down indemnification to its
    subcontractors. Under the definitions provided at 42 U.S.C. Sec. 2014,
    ---------------------------------------------------------------------------
        \1\See 48 C.F.R. (DEAR) 952.250-1.

            ``The term `person indemnified' means . . . the person with
            whom an indemnity agreement is executed or who is required to
            maintain financial protection, and any other person who may be
            liable for public liability, or . . . any other person who may
            be liable for public liability by reason of his activities
            under any contract with the Secretary of Energy or any project
            to which indemnification under the provisions of section 170
            d., has been extended or under any subcontract, purchase order,
            or other agreement, of any tier, under any such contract or
    ---------------------------------------------------------------------------
            project.''

        A subcontractor has Price-Anderson indemnification if its
    subcontract is ``under'' a contract or project to which Price-Anderson
    indemnification has been extended. Once the prime contractor's contract
    and, consequently, indemnification expire, the subcontractor's
    indemnification also expires, even if its contract continues with a
    follow-on contractor. Alternatively, as long as the prime contractor
    has Price-Anderson indemnification, even after expiration of the
    statutory authority, new subcontractors under that indemnified contract
    would, in our view, also be indemnified until that contract ended.

        3. Senator Levin. Secretary Abraham, what will the Department do if
    Price-Anderson authorities expire? Many contractors believe that the
    limited authority the DOE has under statutory authorities other than
    Price-Anderson does not provide adequate coverage. Will the Department
    be able to assure contractors bidding on new contracts that they will
    have Price-Anderson coverage?
        Secretary Abraham. The Department has used its authority under
    Public Law 85-804 to indemnify its contractors for claims arising from
    unusually hazardous or nuclear risks related to national defense
    activities in limited situations where Price-Anderson Act
    indemnification is unavailable or inapplicable.\2\ If the Department's
    Price-Anderson authority were to expire without renewal or extension,
    the Department likely would use its more limited Public Law 85-804
    authority where possible. That authority would not be adequate to cover
    all contractors and all circumstances covered by Price-Anderson, and it
    would not contain the assurances of prompt public protection that
    Price-Anderson affords. The Department could not assure bidders on new
    contracts that they would receive Price-Anderson coverage if Congress
    had not acted to extend the act at the time of the contract
    solicitation.
    ---------------------------------------------------------------------------
        \2\ National Defense Contracts Act, Public Law 85-804, 50 U.S.C.
    Sec. Sec. 1431-1435, implemented by Executive Order 10789, 3 C.F.R.
    Sec. 426 (1954-1958), and Federal Acquisition Regulation (FAR), 48
    C.F.R. Part 50 and Sec. 52.250-1.

        4. Senator Levin. Secretary Abraham, it appears that DOE is
    starting an effort to renegotiate or compete some of its existing
    operating contracts at environmental sites sooner than normal, and in
    some situations years before the contracts would otherwise expire.
    Without Price-Anderson authority will DOE be able to continue with this
    strategy?
        Secretary Abraham. If the Department's Price-Anderson authority is
    not renewed or extended before August 2002, the Department may have to
    re-evaluate some of its planned procurement actions and strategies.
    Termination of existing contracts in favor of a renegotiated or
    competed contract may have to be postponed pending renewal or extension
    of the Department's Price-Anderson indemnification authority.

        5. Senator Levin. Secretary Abraham, if the DOE enters into new
    contracts before the old contracts expire, and, thus, has to terminate
    existing contracts early, will the cost of termination exceed or equal
    any costs savings achieved in the new contracts?
        Secretary Abraham. The Department plans to use contracts that will
    afford powerful incentives for both cost savings and early completion
    of closure activities. Under the terms of the Federal Acquisition
    Regulation termination clause, \3\ the Government will incur the normal
    costs associated with termination for convenience.
    ---------------------------------------------------------------------------
        \3\ See 40 C.F.R. (FAR) 52.249-6, Termination (Cost Reimbursement).

        6. Senator Levin. Secretary Abraham, will there be any increased
    costs without Price-Anderson authorities if contracts are terminated
    early?
        Secretary Abraham. It is unlikely that such costs would exceed the
    normal costs of performing the contract or otherwise affect the
    effectiveness or efficiency of the follow-on contracts. In the event
    the Price-Anderson indemnification authorization has not yet been
    renewed or extended, and alternative indemnification under Public Law
    85-804 is not available or acceptable, it may be necessary for the
    Department to reconsider its approach to restructuring certain existing
    contracts.

            PROHIBITION ON DEVELOPMENT OF LOW YIELD NUCLEAR WEAPONS

        7. Senator Levin. Secretary Abraham, is the DOE complying with
    section 3136 of the National Defense Authorization Act for Fiscal Year
    1994 that prohibits the Secretary of Energy from conducting or
    providing ``for the conduct of, research and development which could
    lead to the production by the United States of a low yield nuclear
    weapon which, as of the date of enactment of this act, (October 1993)
    has not entered production?'' (Low yield nuclear weapons are defined as
    having a yield of less than 5 kilotons.)
        Secretary Abraham. The Department is in full compliance with
    section 3136 of the Fiscal Year 1994 National Defense Authorization
    Act. The Robust Nuclear Earth Penetrator feasibility study that the
    NNSA plans to undertake involves the potential modification of either
    the B61 or B83, both of which are existing warheads.
        The Nuclear Weapons Council voted in November 2001 to authorize the
    Air Force to lead a Phase 6.2/6.2A feasibility study, DOE participation
    was requested in January 2002.

                              ANNUAL CERTIFICATION

        8. Senator Levin. Secretary Abraham, there is an annual process to
    certify that the nuclear weapons stockpile is safe and reliable. This
    process involves the Secretaries of Defense and Energy, the three DOE
    weapons laboratory directors, and the Commander in Chief of the
    Strategic Command. The 2001 annual certification is late. When will the
    certification be made?
        Secretary Abraham. The certification of the safety, security, and
    reliability of the nuclear weapons stockpile is my greatest
    responsibility. Prior to my signature on the memo to the President, I
    reviewed the state of the stockpile in detail with the NNSA
    Administrator and his staff as well as the three laboratory directors.
    I signed the memo to the President on March 20, 2002. The materials are
    now at the Department of Defense for the Secretary of Defense to sign
    and transmit the package to the President.

        9. Senator Levin. Secretary Abraham, does the fact that the
    certification is late signify any problem with the stockpile?
        Secretary Abraham. No, the report being late is not indicative of
    any issues with the stockpile. Last year's report was not delivered to
    Congress until May 23, 2001.

                                    SECURITY

        10. Senator Levin. Secretary Abraham, are all the additional
    security costs identified following September 11 fully funded in the
    fiscal year 2003 budget request?
        Secretary Abraham. Since September 11, the Department has received
    $122 million in emergency response funding to meet heightened security
    requirements, including $117 million this fiscal year. Also, the
    administration has requested an additional $26.4 million in fiscal year
    2002 supplemental funding for Nuclear Weapons Incident Response and
    Energy Security and Assurance, and I fully support this level as
    adequate. Like other agencies, such as the Corps of Engineers, the
    Environmental Protection Agency, and the Department of the Interior,
    the DOE is assessing the long-term vulnerability of important public
    facilities. As completed, these assessments will be reviewed in the
    context of the Nation's overall vulnerabilities and appropriate
    resources will be requested at the appropriate time.
                                     ______

                   Questions Submitted by Senator John Warner

                      SCIENCE-BASED STOCKPILE STEWARDSHIP

        11. Senator Warner. Secretary Abraham, are we adequately funding
    the key weapons programs activities, namely the directed stockpile work
    and the science-based campaigns?
        Secretary Abraham. The President's fiscal year 2003 budget reflects
    a careful balance between our directed stockpile work and the science
    campaigns. The fiscal year 2003 request in directed stockpile work will
    allow the NNSA to maintain and refurbish the W80, W76, W87, and B61
    weapon systems that will compose a significant portion of the enduring
    nuclear deterrent of the United States. The President's fiscal year
    2003 budget request for our science campaigns will ensure that we have
    the necessary science and engineering tools needed to support the
    nuclear deterrent now and into the future without underground nuclear
    testing.

        12. Senator Warner. Secretary Abraham, has the Department of Energy
    properly allocated the funds to these programs, considering that the
    DOE spends almost twice as much on the science-based research as
    compared to the directed stockpile work?
        Secretary Abraham. The President's fiscal year 2003 budget reflects
    a careful balance between our directed stockpile work and the science
    campaigns. The President's budget for fiscal year 2003 requests an 18
    percent increase for directed stockpile work. This increase in funding
    will allow the NNSA to proceed with the stockpile life extension work
    on the W80, W76, W87, and B61 as approved by the Nuclear Weapons
    Council and validated by the Nuclear Posture Review.
        Campaigns support the development of the advanced experimental and
    computational tools needed to support the long term certification and
    life extension of the stockpile. The fiscal year 2003 budget requests
    for the science campaigns and the high energy density physics campaign
    are respectively 11.4 and 10.6 percent lower than their fiscal year
    2002 appropriated levels. These reductions reflect reduced funding
    required for the construction of the National Ignition Facility and
    priority shifts we have made to ensure the appropriate level of support
    for the directed stockpile work.
        Requests for the engineering and the readiness campaigns are
    increased by 7.9 and 13.8 percent respectively from their fiscal year
    2002 appropriated levels. The increase in the readiness campaigns
    directly contribute to the directed stockpile work by providing all the
    up-to-date processing, machining, and inspection equipment needed at Y-
    12 for the stockpile life extension work. Some of the technologies
    developed as part of the engineering campaign will support neutron
    generator qualification and the W76 life extension program work.
                                     ______

                 Questions submitted by Senator Strom Thurmond

              INFRASTRUCTURE PLAN FOR THE NUCLEAR WEAPONS COMPLEX

        13. Senator Thurmond. Secretary Abraham, Section 3008 of the
    National Defense Authorization Act for Fiscal Year 2002 requires the
    Secretary of Energy to prepare an infrastructure plan for the Nation's
    nuclear weapons complex. Although the report is not due for some time,
    what is your current assessment of the adequacy of the complex to
    support the current and future nuclear stockpile requirements?
        Secretary Abraham. Our nuclear weapons complex is very old, and in
    most cases, far below industry standards in areas of environment,
    safety, and health. The complex must be upgraded to ensure that the
    stockpile can be maintained in the outyears. Congress has provided $200
    million in fiscal year 2002 to start a multiyear, multi-billion dollar
    effort to begin a facilities and infrastructure recapitalization
    program. I believe with continued congressional support for this
    program and the other investments we have in the tools and facilities
    necessary for our Stockpile Stewardship Program, we should be able to
    recruit and retain the next generation of scientists and engineers who
    will be responsible for ensuring the safety, security, and reliability
    of our nuclear weapons without the need to return to underground
    nuclear testing.

                         INSTALLATION MEASUREMENT TOOLS

        14. Senator Thurmond. Secretary Abraham, the Department of Defense
    uses the Installation Status Report to identify the condition of its
    facilities. What are the Department of Energy's installation
    measurement tools?
        Secretary Abraham. In 1998, DOE adopted the Facility Condition
    Index (FCI) as its tool for measuring the condition of its facilities.
    The FCI was first articulated in the 1991 publication ``Managing the
    Facilities Portfolio--A Practical Approach to Institutional Facility
    Renewal and Deferred Maintenance,'' by the National Association of
    College and University Business Officers, and was developed by Coopers
    & Lybrand and Applied Management Engineering. It was considered in
    1998, and still is considered by DOE Federal Maintenance Managers, to
    provide the best and most reliably applied metric for assessing
    facility condition.
        The FCI is the ratio of the cost of deficiencies of a single
    facility or group of facilities to the facility's replacement plant
    value. The cost of deficiencies is the total dollar amount of existing
    maintenance and repair deficiencies obtained from a condition
    assessment inspection.
        Additionally, the Department of Energy collects annual required,
    actual, and deferred maintenance costs on a facility-by-facility basis
    in its corporate database, the Facilities Information Management
    System. The annual required maintenance cost identifies maintenance
    needs based on engineering/maintenance analysis independent of budget
    considerations. The annual actual maintenance cost captures all
    maintenance activities occurring during the current fiscal year.
    Deferred maintenance data is required for all Federal agencies by the
    Statement of Federal Financial Accounting Standard No. 6, and is
    reported in DOE's Annual Financial Statement. All the data referenced
    above is readily available to managers and can be used to track and
    trend maintenance activities and drive maintenance/facilities budgets
    and priorities.

                                SERVICE CENTERS

        15. Senator Thurmond. Secretary Abraham, the Department of Energy
    plans to eliminate a layer of management and oversight by establishing
    eight site offices collocated with the eight NNSA contractors. How will
    these eight offices differ from the field offices that the Department
    previously used to manage operations?
        Secretary Abraham. Each NNSA site office will have primary
    responsibility for day-to-day program and contract administration for
    its assigned facility. These duties include agreeing to the overall
    safety and security parameters within which the contractor is
    authorized to operate.
        Site office managers for their respective laboratories, production
    plants, and test site will have the additional responsibility of
    integrating NNSA activities at these sites with customers from other
    elements of the Department of Energy such as the environmental
    management and science programs, from other Federal agencies such as
    DOD, and from the private sector.
        The primary difference between the new NNSA site offices and the
    previous Federal offices located at these facilities is that the
    Federal manager in the new office will have full contracting authority
    for these facilities and will be expected to expeditiously resolve
    issues raised by the facilities manager or NNSA program officials. He
    or she will not be required to obtain concurrence from an intermediate
    ``headquarters'' organization such as an operations office.

                       RECRUITING AND RETAINING EMPLOYEES

        16. Senator Thurmond. Secretary Abraham, you testified that the
    Department of Energy is aggressively implementing a program to retain
    highly-skilled employees, retain employees with skills mismatches, and
    recruit those with the right technical skills. What programs does the
    Department have to recruit graduate students who will be the seed corn
    for developing and maintaining the U.S. nuclear weapons technology?
        Secretary Abraham. All of the National Nuclear Security
    Administration weapons program contractors have programs to recruit
    critical skilled employees from undergraduate and graduate-level
    student populations at our major colleges and universities and regional
    schools. Several have developed strategic relationships with selected
    universities, and they sponsor student programs aimed at building
    critical skills to match their needs as defined though their workforce
    planning. Our three weapons laboratories employ large numbers of
    postdoctoral research appointees who support on going research and
    become excellent candidates for future employment.

        17. Senator Thurmond. Secretary Abraham, in its recruiting efforts
    does the Department of Energy face the same anti-military sentiments on
    some university campuses as the Department of Defense?
        Secretary Abraham. Our contractors report that, with some limited
    exceptions, they have not been confronted with any expressed anti-
    military sentiments on any of the university campuses. Individual
    candidates have expressed negative views of the weapons program, or a
    preference for doing non-weapons work at a laboratory. One contractor
    reported that since the September 11, 2001, terrorist attacks, their
    recruiters have experienced an increased sense of patriotism and a
    desire by candidates to work on national security issues.

                              MODERN PIT FACILITY

        18. Senator Thurmond. Secretary Abraham, last year this committee
    expressed great concern about the lack of progress being made with
    regard to a Modern Pit Facility (MPF). The Panel to Assess the
    Reliability, Safety, and Security of the United States Nuclear
    Stockpile, the Foster Panel, provided striking evidence that we must
    take aggressive action in this regard. In fact, in both the 1999 and
    2000 reports of the Foster Panel, the most significant recommendation
    was that the United States must ``immediately begin conceptual design
    of an adequate pit production facility.'' In response to this
    compelling evidence, the committee included in the report accompanying
    the Fiscal Year 2002 National Defense Authorization Act the following
    guidance:
        ``The committee notes the panel's estimate that it will take 10 or
    more years to build an adequate pit production facility.'' Furthermore,
    the committee recommended ``an additional $10 million be available to
    select an architect-engineering organization to begin the conceptual
    design and report process, in order to keep the new pit production
    facility on schedule.'' Unfortunately, your fiscal year 2003 budget
    calls for the design of this facility to be ``deferred until fiscal
    year 2004 with the fiscal year 2003 funding used to continue
    manufacturing concepts.'' Do you disagree with the findings of the
    Foster Panel with regard to a MPF?
        Secretary Abraham. We believe the approach being taken on the MPF
    is a prudent one. The NNSA approach also has the endorsement of the
    Nuclear Weapons Council.
        NNSA is currently taking steps to proceed with an MPF including
    formal approval of mission need, Critical Decision-0 (CD-0), which is
    required to start conceptual design of an MPF. Following CD-0 approval
    by the Department in the spring of 2002, the NNSA will initiate a
    National Environmental Policy Act (NEPA) process to obtain a formal
    Record of Decision that is required to both select a site for an MPF
    and to proceed with a detailed facility design after completing
    conceptual design. The NNSA will expedite the NEPA process while
    simultaneously developing technology required to evaluate alternative
    conceptual designs for an MPF.

        19. Senator Thurmond. Secretary Abraham, 2 years ago, the Senate
    Armed Services Committee included $11 million for the conceptual design
    of the Modern Pit Facility. The DOE responded by including $4 million
    for ``pre-conceptual'' design work. The committee obviously felt that
    this was insufficient and included the additional language mentioned
    previously, as well as $10 million to select an architect-engineering
    organization to begin conceptual design and the report process for an
    MPF. This year DOE has ``deferred'' the design of the MPF. Do you
    believe the Senate Armed Services Committee is misguided in funding the
    immediate conceptual design of an MPF?
        Secretary Abraham. Although the Senate Armed Services Committee
    recommended an additional $10 million in fiscal year 2002 for the MPF,
    only $4 million was provided through appropriations. Based on this $4
    million funding level and consistent with direction provided by the
    Senate Armed Services Committee, the NNSA has completed pre-conceptual
    planning activities and is prepared to start conceptual design of an
    MPF following approval (spring 2002) of Critical Decision-0 mission
    need.

        20. Senator Thurmond. Secretary Abraham, last year, Mr. Stephen
    Guidice, of the Panel to Assess the Reliability, Safety, and Security
    of the United States Nuclear Stockpile, testified before the Strategic
    Subcommittee of the Senate Armed Services Committee on March 19, 2001.
    In that testimony, Dr. Guidice stated that:
        ``It will take 10 to 15 years to build a Modern Pit Facility to do
    this on whatever scale you choose. So our feeling was you need to get
    on with the conceptual design of what this plant is going to look like,
    and a lot of good work could be done at fairly low expense prior to
    final design of that plant before you get to high recourse levels of
    investment.''
        Do you disagree with this statement?
        Secretary Abraham. Pre-conceptual planning for a MPF was started in
    fiscal year 2001, consistent with the statement by Mr. Guidice. NNSA is
    currently taking steps to proceed with MPF conceptual design after
    formal approval of mission need, CD-0 in the spring of 2002. Following
    CD-0, the NNSA will initiate a NEPA process required to obtain a formal
    record of decision to both select a site for an MPF and proceed with
    more detailed facility design. To accelerate design, the NNSA will
    expedite the NEPA process while simultaneously developing technology to
    assure the robustness of a future facility designs and evaluating
    conceptual design alternatives for the facility.

        21. Senator Thurmond. Secretary Abraham, General Gordon highlighted
    the concerns of the committee with regard to an MPF in his recent
    testimony before the committee, stating:
        ``The Los Alamos production capacity will be insufficient to meet
    future requirements for pits. As a result of the NPR, we seek to
    accelerate planning and initial design work to establish an MPF.
    Relevant activities about to begin include the preliminary MPF design,
    associated technology development, and the initiation of the National
    Environmental Policy Act process.''
        How do you propose to accelerate the design of the MPF when the DOE
    has again deferred the conceptual design?
        Secretary Abraham. NNSA is currently taking steps to complete
    formal approval of mission need, CD-0, which is required to start
    conceptual design. Following CD-0 approval in the spring of 2002, the
    NNSA will initiate a NEPA process required to obtain a formal Record of
    Decision to both select a site for a Modern Pit Facility and to proceed
    with a detailed facility design. To accelerate design, the NNSA will
    expedite the NEPA process while simultaneously developing technology to
    evaluate conceptual design alternatives for the facility.

        22. Senator Thurmond. Secretary Abraham, in 1996 the DOE called for
    developing a contingency plan to establish a large scale pit
    manufacturing facility within 5 years. Does your research on the
    deterioration of nuclear components support your decision to delay the
    1996 plan?
        Secretary Abraham. Research to date on plutonium aging and pit
    lifetimes do not show significant deterioration that raises concern
    about the safety, security and reliability of the Nation's nuclear
    deterrent. The weapons laboratories are continuing to conduct
    experiments at the laboratories and the Nevada Test Site to further
    improve our understanding of the lifetime of nuclear components such as
    pits. At the same time the NNSA is proceeding, on a prudent pace,
    supported by the Nuclear Weapons Council, with plans to develop a MPF
    that will meet the needs of the nuclear weapons stockpile.

                        WEAPONS COMPONENT DETERIORATION

        23. Senator Thurmond. Secretary Abraham, do you have new evidence
    contradicting the concerns of the Foster Panel with regard to the
    ``worrisome signs of deterioration in some nuclear components?''
        Secretary Abraham. NNSA is aggressively monitoring the aging
    phenomenon through the core surveillance program and enhanced
    surveillance campaign. Plans are in place to closely monitor component
    performance and to increase the use of new diagnostic tools to aid in
    the understanding of the aging phenomenon. Under the core surveillance
    program, multiple weapons each year are disassembled, inspected, and
    subjected to multiple-test activities, including both laboratory and
    flight testing in order to verify safety and reliability. Component
    Evaluation Program Plan Committees have been formed for some of the
    critical components to optimize the surveillance testing of these
    components. The Enhanced Surveillance Program performs lifetime
    assessments on the components and develops diagnostic tools for better
    detection of degradation due to aging.
        A refurbishment program to replace some of the components of the
    weapons systems that have higher risk to safety or reliability has been
    instituted. These life extension programs (LEPs) have extremely high
    priority and management attention at NNSA, the design laboratories, and
    the production plants. As a direct result of input from the
    Surveillance Program and the Enhanced Surveillance Campaign, the
    strategy and tactics for the LEP implementation have been focused to
    address the concerns of an aging stockpile.

                     MIXED-OXIDE FUEL FABRICATION FACILITY

        24. Senator Thurmond. Secretary Abraham, last year you assured me
    that the Mixed-Oxide (MOX) plant was your top nonproliferation
    priority. Thank you for all you have with regard to moving this program
    forward. However, there are still a few matters that need to be
    resolved in order to guarantee the success of the program.
    Specifically, I have been informed that you are currently negotiating
    with the Governor of South Carolina to achieve a mutually satisfactory
    agreement for the DOE and South Carolina. While a number of my
    colleagues addressed this matter at today's hearing, it is my
    understanding that this agreement may require legislation. Would you
    please provide suggested legislative language, and could you
    accommodate this request immediately?
        Secretary Abraham. I believe the legislation you have introduced is
    more than adequate to address all of the concerns the State of South
    Carolina has raised regarding the Plutonium Disposition program and is
    acceptable to the administration. We hope that the Governor would join
    his own delegation in Congress and work to pass this legislation and
    withdraw his unnecessary lawsuit.

        NUCLEAR REGULATORY COMMISSION APPROVAL OF THE LEAD TEST ASSEMBLY

        25. Senator Thurmond. Secretary Abraham, you are no doubt aware
    that a MOX lead test assembly (LTA) program is needed before the NRC
    will approve the use of significant quantities of MOX fuel. The initial
    plan for the fabrication of these units--fabrication at LANL--was
    terminated by the DOE in May 2000, reportedly due to cost and schedule
    concerns. I have been informed that there is a possibility that there
    may be a lag between the MOX fabrication facility startup and large
    scale use of MOX. The potential startup delays would mean that large
    scale use of MOX fuel would not begin until 2012, 2013, or later.
    Consequently, the lag between MOX Fuel Fabrication Facility and full
    production requires maintaining the facility with no production for a
    number of years, a cost impact to the taxpayer of potentially $200
    million. Can you detail the current plan as well as the schedule of
    that plan?
        Secretary Abraham. The options for fabrication of MOX lead
    assemblies are still under consideration. One option the Department is
    currently examining is the early fabrication of MOX lead assemblies in
    Europe. The Department is meeting with European government officials to
    determine the necessary measures to pursue this option. Detailed plans
    will be developed if an agreement can be reached by all parties.
        If successful, lead assemblies will be fabricated and irradiated
    before the completion of the MOX Fuel Fabrication Facility, and the
    Department's contractor, DCS, should be able to obtain Nuclear
    Regulatory Commission approval for large-scale use of MOX fuel in the
    Duke energy reactors on the desired schedule.

        26. Senator Thurmond. Secretary Abraham, can you assure me that
    there will be no delay due to LTA approval delays?
        Secretary Abraham. I am optimistic that there will be no
    significant delays in Nuclear Regulatory Commission approval of the
    lead assemblies. However, it is simply not possible to guarantee that
    there will be no delays as the Nuclear Regulatory Commission exercises
    its statutory responsibilities to confirm the safety of the use of lead
    assemblies in licensed reactors.

                          DOE MANAGER FOR MOX FUEL LTA

        27. Senator Thurmond. Secretary Abraham, I believe it would be
    helpful and assuring to have a DOE manager to take charge of the MOX
    fuel LTA project on a full time basis to perform DOE activities,
    coordinate interagency activities, such as Department of State,
    Department of Defense, etc., as well as oversee contractor activities.
    I also believe a full-time manager could open and maintain dialog
    between the United States, France, and Belgium, initiate National
    Environmental Policy Act activities, and prepare an export license
    application to the Nuclear Regulatory Commission. Do you believe these
    activities could be better managed by a full time manager, and would
    you support creating such a position?
        Secretary Abraham. The Department has assigned a full-time
    engineering manager at headquarters with the primary responsibility for
    lead assembly activities. One of the priorities for this position
    involves coordinating lead assembly activities and maintaining
    communication between the various agencies and contractors involved in
    this effort.
                                     ______

                  Questions Submitted by Senator Wayne Allard

           SHIPPING OF PLUTONIUM AND OTHER SPECIAL NUCLEAR MATERIALS

        28. Senator Allard. Secretary Abraham, the National Nuclear
    Security Administration has responsibility for shipping many of the
    Environmental Management (EM) waste types including surplus plutonium.
    With the closure of sites like Rocky Flats and the proposed
    acceleration of cleanup at the four major EM sites, it is very
    important that the shipping of these wastes occurs on schedule. Delays
    in shipments may delay the closure of some of the EM sites creating
    increased costs and possible fines to the DOE for missing milestones.
    On the other hand, we don't want to delay shipments within the weapons
    program either, especially as the stockpile life extension program gets
    into full swing over the next several years. Can we be assured that the
    NNSA will keep the shipping of plutonium and other special nuclear
    materials from EM sites on schedule?
        Secretary Abraham. The NNSA and the Department's Office of
    Environmental Management are working together to develop shipping
    schedules that meet the requirements of both organizations. NNSA stands
    ready to support removal of materials from EM sites when the sites are
    prepared to ship and the receiver sites are available to accept the
    materials. The NNSA is conducting an in-depth review of the forecast
    and potential future requirements of the Secure Transportation Asset,
    developing strategies, and identifying resources required to meet both
    the short- and long-term mission requirements.

        29. Senator Allard. Secretary Abraham, has the NNSA prepared a
    realistic plan to keep up with the anticipated schedule of shipments
    within both Defense Programs and Environmental Management during the
    next several years?
        Secretary Abraham. The NNSA is updating it's shipping requirements
    and capacity model for the Secure Transportation Asset with the latest
    planned and potential requirements through fiscal year 2008. The NNSA
    is utilizing this model as the basis for developing strategies and
    resource requirements to make the necessary adjustments to meet all
    mission requirements.

           NEED FOR SIGNIFICANT FINDING INVESTIGATION TRACKING SYSTEM

        30. Senator Allard. Secretary Abraham, in a December 2001 report,
    the DOE Inspector General expresses his concern that the DOE has
    frequently failed to meet their internally established time frame for
    initiating and conducting investigations of nuclear weapon defects and
    malfunctions. One problem explained by the Inspector General was that
    there was no central manager or tracking system of the investigative
    process. If a notification of a weapon defect or malfunction was sent
    (often by e-mail), there was no disciplined plan for how the message
    recipient should respond or what happens to the request if it is
    forwarded on to others. At any point in the investigation, there is no
    central person who knows where or by whom in the process the defect or
    malfunction is being examined. This lack of discipline leads to lack of
    accountability and delays. In response to concerns raised by the
    Inspector General about the delays in the Significant Finding
    Investigation process, should the NNSA incorporate a central tracking
    system to make sure a weapon defect or malfunction is forwarded with
    adequate notification and, if necessary, conduct an investigation of
    the weapons surveillance program?
        Secretary Abraham. In line with the Inspector General
    recommendations, NNSA has directed the Sandia National Laboratories
    (SNL) to modify the Significant Finding Investigation (SFI) database to
    include: defect and malfunction discovery date, Significant Finding
    Notification (SFN) and SFI determination dates, expected closure date
    (when known), report date, expected impact, and any other information
    deemed necessary to manage the process. Also, direction has been given
    to all testing agencies to provide all pertinent SFN information to SNL
    for inclusion in the database. NNSA has directed SNL to be the agent
    for NNSA for SFI data. These modifications will allow NNSA to better
    track SFIs.
        In addition, all SFIs are reported on a monthly basis via the
    monthly SFI report. Again, in line with the Inspector General
    recommendations, we are actively reformatting the monthly report to
    include ``stoplight'' tables, 6-month action plans, explanations of
    unexpected delays, steps planned to resolve those delays, and expected
    closure dates, when known, for all SFIs over 1 year old. Implementation
    of these changes is expected in the July 2002 monthly report.

        [Whereupon, at 11:45 a.m., the committee adjourned.]