    [Senate Hearing 108-176]
    [From the U.S. Government Publishing Office]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2004

                                  ----------

                             THURSDAY, MAY 15, 2003

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 9:47 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Ted Stevens (chairman) presiding.
        Present: Senators Stevens, Burns, and Inouye.

                           NONDEPARTMENTAL WITNESSES

    STATEMENT OF CAPTAIN IKE PUZON, U.S. NAVY RESERVE
                (RETIRED), DIRECTOR OF LEGISLATION, THE
                NAVAL RESERVE ASSOCIATION

                   OPENING STATEMENT OF SENATOR CONRAD BURNS

        Senator Burns [presiding]. I am not the chairman of this
    subcommittee. I am just another one of the hired hands. And it
    is terrible that you get scheduled on a day where we have vote-
    a-rama. It is not fair to you, it is not fair to us, it is not
    fair to anybody. So we will all go out and eat worms.
        This is the first time that I have participated in this
    part of the Defense appropriations process, so I feel ill-
    equipped and ill-prepared, unwashed and uneducated about this
    whole thing. But I am going to start it. We will be having
    votes every 10 minutes and that is just not fair. But
    nonetheless, your testimony will be taken and I am sure it will
    be reviewed as this committee is pretty good about those
    things.
        I am Senator Conrad Burns and of course our chairman and
    our ranking member will be back as soon as they cast their
    votes. I have already voted on this first one, but you have to
    watch those lights pretty closely. You know, if you miss one
    vote, well, that shows up in a 30-second spot the next time you
    run for reelection.
        We thank you for your patience and your indulgence with the
    inconvenience of this. We would like to start off with Captain
    Ike Puzon, United States Navy Reserve, Retired. He is Director
    of Legislation for the Naval Reserve Association. Captain,
    thank you for coming this morning. We look forward to your
    testimony.
        Captain Puzon. Thank you, sir. On behalf of my colleagues,
    we thank you for being here, and if we can strike quick while
    no one else is here we will appreciate that.
        Senator Burns. Good.
        Captain Puzon. Thank you, sir, and the distinguished
    members of the Senate Appropriations Committee and the staff,
    for having us. It is an honor and a pleasure to be here before
    you representing 22,000 members of the Naval Reserve
    Association on behalf of over 86,000 members of the Naval
    Reserve, especially during these times of increased usage of
    the Guard and Reserve.
        I am sure you have already heard in the past several weeks
    and months what a magnificent job our Guard and Reserve has
    done, what their families have done, and what their employers
    have done in responding to the commitment that the Department
    of Defense has asked these members to do. It is still important
    to focus on the members today of these units in the Guard and
    Reserve and the Naval Reserve, as well as the active duty
    members.
        The challenges that our Reserve, Guard, and active
    components of the military face are gigantic, as you know,
    during these times of increased threat to our national
    security. It is encouraging that we have been so successful,
    but it is really no surprise because of the people.
        The focus of what we do next is blurred by constant
    deployments, constant recalls, increased usage of equipment and
    Guard and Reserve, and of course modern technology. In my mind,
    the center stage should always be the people, both Active,
    Reserve, and Guard, and also modern technology. I think in
    today's age--good morning, sir.
        Senator Stevens [presiding]. Good morning.
        Captain Puzon. All too often the technology charisma
    overrides the need for people.
        Senator Stevens. Yes, sir. Go ahead.
        Captain Puzon. Yes, sir, good morning.
        I recently studied for the Secretary of Defense in the 21st
    century and 2025 what technology would make a difference in
    2025. Of the group that I was with in the study, we always came
    back to was what people we would have in 2025.
        Naval Reserve, as you know, are people. They are training,
    they are responding, they are waiting, and they are deploying.
    What the Guard and Reserve and the Naval Reserve in particular
    provides has been discussed several times. Operational
    readiness, stand-alone missions, parallel capability, and surge
    capabilities have been talked about.
        Yet in current operations and performance I think we need
    to look at transforming our program and planning documents and
    our appropriations process and our vision in the Navy. That
    includes what I call, in a sports metaphor, an all-pro team of
    experts. These are expert warfighters. They are not just
    experts from a Reserve component, and they have proven that. We
    need to include them in all planning documents.
        This Reserve force is ready to go, it is ready to fight. It
    is ready and it is capable units and individuals. I like to
    talk to them and refer to them as all-pro military experts.
    Some call them ordinary people doing extraordinary work and
    extraordinary things. I just refer to them as an all-pro team
    ready to go when you need them.
        In some cases in the past, as you know, only Congress has
    recognized that the Naval Reserve needed equipment and
    personnel benefits to keep the force healthy and parallel. We
    are at that time again where you the Congress must provide that
    guidance. Due to affordability issues that you are very aware
    of and without a doubt have been in constant awareness of, the
    Congress must step in at this time and provide some guidance
    and vision for the Naval Reserve. Because of the cuts that are
    pending in 2004, fiscal year 2004, we will see this decrease in
    our force structure.
        [The statement follows:]

                    Prepared Statement of Captain Ike Puzon

        Chairman, Senator Inouye, and distinguished members of the
    subcommittee, on behalf of the 22,000 members of the Naval Reserve
    Association, and the 86,000 active Naval Reservists and the mirrored
    interests of all members of the guard and reserve components, we are
    grateful for the opportunity to submit testimony.
        A popular fad in the press is to write about the plight of the
    mobilized Reservist. These articles emphasize the anxiety of being away
    from work and or family. As was stated in Wall Street Journal, ``The
    activation of tens of thousands of military reservists is beginning to
    interrupt careers and disrupt workplaces on a scale not seen in more
    than a decade.'' \1\
    ---------------------------------------------------------------------------
        \1\ Massive Call-Up of Reservists disrupts Careers, Workplaces;
    Kemba J. Dunham, Kris Maher and Greg Jaffe, Wall Street Journal, Feb.
    18, 2003.
    ---------------------------------------------------------------------------
        In the press today, a climate of despair is painted about the
    Reservist. Focus is on the needless hardship for members of the Guard
    and Reserve, for their families and for their employers. The Naval
    Reserve Association would like to dispel this Myth. In defense of the
    Reservists, our indication is that there are a statistical few that
    complain about their circumstances. Portrayed as a predicament by the
    press, most Reservists, instead, view mobilization as an opportunity to
    serve their country. Reservists are serving their country in uniform
    proudly, and are not complaining. They do have concerns similar to
    anyone in or out of uniform, who is deployed quickly and unexpectedly.
        Reservists from any service have shown us time and time again that
    they'll volunteer when asked, despite the impact of their personal and
    professional life. This service beyond self is not appreciated by many
    on the Active side or in DOD. Recent documents show that the Reserve
    Components are not integrated into the Vision of future conflicts, and
    Homeland Security.
        Since 1990, the Active Duty services have grown languorous from a
    diet of contributory assistance, recall, and mobilization support. The
    number of contributory man-days has risen from 1 million in the late
    1980's to nearly 13 million a year over the past few years. Rather than
    confront budget appropriators, the Active Components have been content
    to fill their force shortfalls with Reserve manpower.
        If there is a raw nerve among Reservists, it is caused by how
    individuals are being utilized, and how often that individual and the
    unit is being called up. And, why aren't they being used. Pride and
    professionalism is a large factor in the profile of a Reservist, as it
    is with any member of the Armed Services. They want to be used how they
    have been trained, and they want to complement the Active Forces. Too
    often, they have been called up to do a marginal job, or stand weekend
    or night watches allowing active members time off. In situations like
    this, we often hear from our members that the active duty personnel of
    a particular command are not working overtime. The model used by the
    Navy calls for active duty personnel to be working a sixty hour work
    week before Reservists would be involuntarily recalled to active duty.
    Quite often, the requirement for recall is nothing more than to fill in
    the gaps in existing active duty manning. Recall and proper use of
    reservists needs constant monitoring and attention. We agree that
    transformation of legacy personnel manpower programs is overdue. But,
    Reserve Component involvement in personnel transformation is mandatory.
        Another raw nerve among Reservists is attempts by the Navy to deny
    individuals their full entitlements. Over and over, Reservists are
    asked to make a voluntary mid to long term commitment of combining
    drills with multiple sets of 29 day orders. There is an institutional
    bias to issuing Reservists one set of orders for longer than 30 days
    thereby denying them greater entitlements. We strongly believe that
    this is an injustice to the individual and his/her employer that
    Congress should question. Recent testimony by the Under Secretary of
    Defense indicates some entitlements may change, however, a continuum of
    entitlements for all Armed Services members is due in today's military.
        Over a year ago, Deputy Assistant Secretary of Defense for Reserve
    Affairs meet with the Military Reserve Associations and asked how
    frequently is it acceptable to recall Reservists? His hope was an
    answer measured in years that could be programmed into a formula.
    Reservists are not inventory numbers, but individuals, and they belong
    to warfighting units.
        In today's American way of war, the way a Reservist is used and
    recalled is vital to successful military operations, and essential to
    gaining the will of America. As Deputy Secretary of Defense Paul
    Wolfowitz has said, ``How we manage our Reserve Components will
    determine how well we as a nation are prepared to fight, today and
    tomorrow.'' \2\
    ---------------------------------------------------------------------------
        \2\ Remarks by Deputy Secretary of Defense Paul Wolfowitz, to the
    Reserve Officers Association 2002 National Conference, Philadelphia,
    PA, June 20, 2002.
    ---------------------------------------------------------------------------
        The question we are asking is: ``Are today's DOD legislative
    initiatives taking us in the right direction for a sound Military and a
    strong National Defense, and meeting the National Security Strategy?''
    The ultimate question for the Department of the Navy: ``What is your
    Vision for use and equipping of the Naval Reserve Force?'' We hope that
    DOD is learning lessons from the past to avoid repeating mistakes in
    the future, and the Naval Reserve Association stands ready to assist in
    turning lessons learned into improved policy. If current DOD and DoN
    planning and resource documents are used, there will not be a Naval
    Reserve Force in the next ten years. If there initiatives are followed,
    there will be a pool of people somewhere--if they stay--that the Navy
    can call upon to fill gaps created by the next asymmetric conflict. The
    Naval Reserve Force has shown, time and again, when engaged--they are
    the All Pros that are as professional or better than any force. The
    recent VFA deployment is only one such example.
        Our Key message for all to remember: One: Our nation needs a Naval
    Reserve Force--with Air and Surface assets to go fight and win our
    nations conflicts, it should be a center piece of our National Security
    Strategy. Two: As a nation, we must start now to recapitalize these
    forces, to remain relevant. Three: With the people and pay and benefits
    at the center, the Naval Reserve Force can play a key role in Homeland
    Security.
        Again, thank you for this opportunity. Details of specific concerns
    by our Association on DOD initiatives follow, we hope you can help
    address them:

                       DEPARTMENT OF DEFENSE INITIATIVES

    Roles and Missions
        A Pentagon study has highlighted that the Guard and Reserve
    structure, today, is an inherited Cold War relic. As a result, the
    Guard and the Reserve organization has become the focus of
    ``transformation.'' While it won't be denied that there could be a need
    for change, transformation for transformation sake could be
    disadvantageous. Visionaries need to learn lessons from the past,
    assimilate the technology of the future, and by blending each,
    implement changes that improve warfighting. Transformation is needed to
    move forward and ensure a Total Force that includes a strong Guard and
    Reserve.

                The Reserve Component as a worker pool
        Issue.--The view of the Reserve Component that has been suggested
    within the Pentagon is to consider the Reserve as of a labor pool,
    where Reservist could be brought onto Active Duty at the needs of a
    Service and returned, when the requirement is no longer needed. It has
    also been suggested that an Active Duty member should be able to rotate
    off active duty for a period, spending that tenure as a Reservist,
    returning to active duty when family, or education matters are
    corrected.
        Position.--The Guard and Reserve should not be viewed as a
    temporary-hiring agency. Too often the Active Component views the
    recall of a Reservist as a means to fill a gap in existing active duty
    manning. Voluntary recall to meet these requirements is one thing,
    involuntary recall is another.
        The two top reasons why a Reservist quits the Guard or Reserve is
    pressure from family, or employer. The number one complaint from
    employers is not the activation, but the unpredictability of when a
    Reservist is recalled, and when they will be returned.

                100 percent mission ownership
        Issue.--Department of Defense is looking at changing the reserve
    and active component mix. ``There's no question but that there are a
    number of things that the United States is asking its forces to do,''
    Rumsfeld said. ``And when one looks at what those things are, we find
    that some of the things that are necessary, in the course of executing
    those orders, are things that are found only in the Reserves.''
        Position.--America is best defended through a partnership between
    the government, the military and the people. The Naval Reserve
    Association supports the continued recognition of the Abrams Doctrine,
    which holds that with a volunteer force, we should never go to war
    without the involvement of the Guard and Reserve, because they bring
    the national will of the people to the fight. While a review of mission
    tasking is encouraged, the Active Component should not be tasked with
    every mission, and for those it shares, no more heavily than their
    Reserve counterparts. Historically, a number of the high percentage
    missions gravitated to the Reserve components because the Active Forces
    treated them as collateral duties. The Reserve has an expertise in some
    mission areas that are unequaled because Reservists can dedicate the
    time to developing skills and mission capability, and sharing civilian
    equivalencies, where such specialization could be a career buster on
    Active Duty.

                Augmentees
        Issue.--As a means to transform, a number of the services are
    embracing the concept that command and unit structure within the
    Reserve Component is unnecessary. Reservists could be mustered as
    individual mobilization augmentees and be called up because often they
    are recalled by skills and not units.
        Position.--An augmentee structure within the Naval Reserve was
    attempted in the 1950's/1960's, and again in the 1980's. In one word:
    Failure! Reservists of that period could not pass the readiness test.
    The image of the Selected Reservists, sitting in a Reserve Center
    reading a newspaper originates from the augmentee era. Some semblance
    of structure is needed on a military hierarchy. Early on, Naval
    Reservists created their own defense universities to fill the training
    void caused by mission vacuum.

                Combining Active and Reserve Appropriations
        Issue.--The fiscal year 2004 Defense budget request makes it clear
    that OSD intends to consolidate all pay and O&M accounts into one
    appropriation per service. These consolidations would require various
    legislative changes before they would become law. The rationale for the
    consolidations is to provide greater flexibility for the Active chiefs
    to move monies from the Reserve and Guard pay accounts to fund Active
    component pay and O&M shortfalls. Managing fewer appropriations would
    also make managing pay and O&M easier.
        Position.--The Naval Reserve Association strongly opposes the
    proposed consolidation of all Guard, Reserve and Active pay into one
    service pay appropriation. We similarly oppose the proposed
    consolidation of all Guard, Reserve and Active operations and
    maintenance accounts into one service O&M appropriation. While we
    support seeking efficiencies wherever possible, we view the proposed
    ``business'' consolidation as ill conceived, misrepresented as
    inefficient, and as an attempt to reduce Congressional oversight. We
    oppose it for a variety of other reasons, as well.
        Under current law, the Reserve chiefs are the directors for their
    respective Reserve pay and O&M appropriations. Public Law 90-168, as
    amended by the fiscal year 1997 NDAA, vested in the Reserve Chiefs full
    management and control of their respective Reserve financial resources.
    Consolidating Reserve and Active pay into one appropriation would
    divest the Reserve chiefs of this authority and preclude their
    executing the programs and responsibilities, and maintaining the
    readiness mandated by Congress.
        Much of the Guard and Reserve annual training occurs during the
    fourth quarter of a fiscal year, the same time frame when the Active
    components are most likely to run short of funds and to desire to use
    Reserve pay and O&M to fund their own shortfalls. Allowing the Active
    components the ``flexibility'' to use Reserve funds whenever they need
    to pay Active component bills means that somewhere a Reserve soldier
    will not be paid or a Reserve unit, Reservist will not be trained for
    mobilization or receive the specialized training needed for promotion,
    and ultimately retention. The Active Component will have flexible
    funding at the cost of Reserve Readiness.

                Inferred changes to DOPMA and ROPMA
        Issue.--It has been suggested within a DOD Roles and Missions study
    that promotions in the Reserve Component need not be tied to Active
    Duty promotion rates. It was further stated that allowing a skilled
    Reservist to remain at a certain mid-grade rank enlisted or officer
    rank longer would allow that individual to perform a vital mission
    longer.
        Position.--While NRA might support a change to the ``promote up or
    out'' policy; we in no way endorse having the Selected Reserve become
    an advancement wasteland.
        Issue.--Secretary Rumsfeld has also publicly stated that he has the
    Personnel & Readiness office looking at how DOD can get the benefit of
    people in a specific job longer, and how we can have people increase
    the number of total years they serve if they want to. He is willing to
    extending military careers beyond 60 years of age.
        Position.--While current policy permits individual waivers to
    retain certain skill sets, the Naval Reserve Association feels that
    authorizing changes to the length of tenure would have a negative
    impact and a rippling effect. History has shown time and again, if
    senior leaders are not encouraged to retire, there will be a retention
    collapse in the middle ranks, which erodes the long-term future of a
    component force. Few are so skilled, that a junior member can't fill
    the position with similar qualifications.

    Pay and Compensation
        Issue.--A premature release of information in the form of a Naval
    Reserve survey, revealed a DOD initiative to end ``two days pay for one
    days work,'' and replace it with a plan to provide 1/30 of a Month's
    pay model, which would include both pay and allowances. Even with
    allowances, pay would be less than the current system. When concerns
    were addressed about this proposal, a retention bonus was the suggested
    solution to keep pay at the current levels.
        Position.--Allowances differ between individuals and can be
    affected by commute distances and even zip codes. Certain allowances
    that are unlikely to be paid include geographic, housing, education
    benefits, travel and adjustments for missing Healthcare.
        The Naval Reserve Association holds reservations with a retention
    bonus as a supplemental source. Being renewed annually bonuses tend to
    depend on the national economy, deficit, and political winds. Further,
    would this bonus just be grandfathered to current Reservists, with some
    future generation forfeiting the bonus as an income source?
        As one Reservists said, ``With the nonreimbursed expenses for
    commuting and training, I could afford to drill at one days pay.''

    Healthcare
        Healthcare readiness is the number one problem in mobilizing
    Reservists. The governments own studies show that between 20-25 percent
    of Guardsmen and Reservists are uninsured.
        We applaud the efforts of the TRICARE Management Activity. TMA has
    a strong sense of which the customer is. They emphasize communications,
    and are proactive at working with the military associations. NRA would
    like to see a continued effort at:
      --Ensuring quality coverage for mobilized Reservist to provide
            continuity of healthcare.
      --Seeking consistency of how TRICARE is implemented for mobilized
            Reservists and families between regions, and
      --Establishing a TRICARE Health plan for uninsured drilling
            Reservists, similar to the successful SELRES Dental Program.

    Business Initiative
        Issue.--Many within the Pentagon feel that business models are the
    panacea to perceived problems with in military structure.
        Position.--Reservists have the unique perspective of holding two
    careers; many with one foot in business and one foot in the military.
    The Naval Reserve Association suggests caution rather than rush into
    business solutions. Attempted many times in the past, business models
    have failed in the military even with commands that proactively
    support.
        Among the problems faced are:
        Implementing models that are incompletely understood by director or
    recipient.
        Feedback failure: ``Don't tell me why not; just go do it!''
        The solution is often more expensive than the problem. Overburdened
    middle management attempting to implement. Cultural differences.
        While textbook solutions, these models frequently fail in business,
    too.
    Retirement: Age 55
        Issue.--A one sided debate is being held through the press on
    whether changes should be allowed to Guard and Reserve to lower the
    retirement payment age. At a recent Pentagon press conference, Thomas
    F. Hall, the Assistant Secretary of Defense for Reserve Affairs, said
    he has ``thought a lot about'' lowering reserve retirement age. Hall
    said it would be ``expensive'' and might encourage Reservists to leave
    the workforce at too young an age. The Defense Department is now
    studying the issue to be part of a report to Congress next year.
        Position.--Over the last two decades, more has been asked of
    Guardsmen and Reservists than ever before. The nature of the contract
    has changed; Reserve Component members would like to see recognition of
    the added burden they carry. Providing an option that reduces the
    retired with pay age to age 55 carries importance in retention,
    recruitment, and personnel readiness.
        Most military associations are hesitant to endorse this because
    they envision money would be taken out of other entitlements, benefits,
    and Guard and Reserve Equipment budgets. The Naval Reserve Association
    suggests an approach to this issue that would not be that
    ``expensive.''
        The Naval Reserve Association recommends for discussion/debate that
    Reserve Retirement with pay prior to age 60 be treated like taking
    Social Security retirement early--if you elected to take it at say age
    55, you take it at an actuarially reduced rate.
        Most of the cost projected by DOD is for TRICARE healthcare, which
    begins when retirement pay commences. Again, if one takes Social
    Security before reaching age 65 they are not eligible for Medicare. NRA
    suggests that TRICARE for Reservists be decoupled from pay, and
    eligibility remains at age 60 years. With Social Security as a model,
    Reservists understand the nature of offsetting payments. The real
    expense in this proposal would be the administrative startup costs and
    whatever would be lost in interest crediting in the retirement trust
    fund.
        Retention concerns should be set aside. Commissioned officers
    typically reach ROMPA limits at age 53. While enlisted are allowed to
    drill to age sixty, many in the Navy are limited by High Year Tenure
    policies that take them out of pay before then. When this happens, many
    submit their retirement without pay requests. By age 50, an enlisted
    has either already retired or is career.
        At a minimum, hearings should be held to broaden the debate.

                       DEPARTMENT OF THE NAVY INITIATIVES

    Temporary Recall of Reserve Officers (Three Years or Less)
        Issue.--To properly match the Reserve officer's exclusion from the
    active duty list as provided for by 10 U.S.C. 641(1)(D) with a
    corresponding exclusion from the authorized grade strengths for active
    duty list officers in 10 U.S.C. 523. Without this amendment, the active
    component would have to compensate within their control grades for
    temporary recalled Reserve officers who are considered, selected and
    promoted by RASL promotion selection boards. This compensation causes
    instability in promotion planning and a reduction in ``career'' ADL
    officer eligibility and promotion for each year a Reserve officer
    remains on ``temporary'' active duty. Therefore, Naval Reservists are
    temporarily recalled to active duty and placed on the ADL for
    promotional purposes. End result--failure of selection due to removal
    from RASL peer group.
        Position.--Strongly support grade strength relief for the small
    percentage of Reserve officers who would possibly be promoted while
    serving on temporary active duty. Granting relief is a Win-Win
    situation. By removing the instability in promotion planning for the
    active component, Reserve officers can be issued recall orders
    specifying 10 U.S.C. 641(1)(D) allowing them to remain on the RASL for
    promotion purposes.

    Equipment Ownership
        Issue.--An internal study by the Navy has suggested that Naval
    Reserve equipment should be returned to the Navy. At first glance, the
    recommendation of transferring Reserve Component hardware back to the
    Active component appears not to be a personnel issue. However, nothing
    could be more of a personnel readiness issue and is ill advised.
    Besides being attempted several times before, this issue needs to be
    addressed if the current National Security Strategy is to succeed.
        Position.--The overwhelming majority of Reserve and Guard members
    join the RC to have hands-on experience on equipment. The training and
    personnel readiness of Guard and Reserve members depends on constant
    hands-on equipment exposure. History shows, this can only be
    accomplished through Reserve and Guard equipment, since the training
    cycles of Active Components are rarely if ever--synchronized with the
    training or exercise times of Guard and Reserve units. Additionally,
    historical records show that Guard and Reserve units with hardware
    maintain equipment at or higher than average material and often better
    training readiness. Current and future war fighting requirements will
    need these highly qualified units when the Combatant Commanders require
    fully ready units.
        Reserve and Guard units have proven their readiness. The personnel
    readiness, retention, and training of Reserve and Guard members will
    depend on them having Reserve equipment that they can utilize,
    maintain, train on, and deploy with when called upon. Depending on
    hardware from the Active Component, has never been successful for many
    functional reasons. The NRA recommends strengthen the Reserve and Guard
    equipment in order to maintain--highly qualified trained Reserve and
    Guard personnel.

    Closure of Naval Reserve Activities
        Issue.--A proposal has been made, suggesting that a large number of
    Naval Reserve Centers and Naval Air Reserve Activities be closed, and
    that Naval Reservists could commute to Fleet Concentration Areas to
    directly support gaining commands and mobilization sites.
        Position.--The Naval Reserve Association is opposed to this plan
    for the following reasons.
      --The Naval Reserve is the one Reserve component that has Reserve
            Activities in every state. To close many of these would be
            cutting the single military tie to the civilian community.
      --The demographics of the Naval Reserve is that most of the
            commissioned officers live on the coasts, while most of the
            enlisted live in the hinterland, middle America. The Naval
            Reservists who are paid the least would have to travel the
            farthest.
      --The active duty concept of a Naval Reserve is a junior force, a
            structure based upon enlisted (E1-E3s) and officers (O1-O2's)
            billets that can't be filled because the individuals haven't
            left the fleet yet. When the Coast Guard ``transformed'' its
            Reserve force, it was a forced a restructuring that RIFFed many
            senior officer and enlisted leadership from the USCGR ranks,
            and caused a number of years of administrative problems.
      --If training at fleet concentration centers was correctly
            implemented, the Navy should bear the expense and burden of
            transportation and housing while on site. Additionally, at
            locations such as Naval Station Norfolk, the overlap of Active
            Duty and Reserve training has shown an increased burden on
            Bachelor Quarters and messing facilities. Frequently,
            Reservists must be billeted out on the economy. With these
            extra costs, training would prove more expensive.
      --Such a plan would devastate the Naval Reserves; retention would
            plummet, training and readiness would suffer.

    Replacement of Full Time Staff (TARs) with Active Duty ``Station
            Keepers''
        Issue.--Another suggested initiative would to the replacement of
    Full Time Staff (TARs) with Active Duty ``Station Keepers''.
        Position.--This has failed in the past, because the Active Navy
    doesn't commit its best or it's brightest to administer Reservists. It
    is not viewed as career enhancing, and those who complete the
    assignments tend to do poorly before competitive promotion boards. The
    assignments tend to often gravitate to unqualified second and third
    string players who are dead-ended in their careers, and Reservists
    retention, recruitment, readiness and morale tend to suffer.

                                   CONCLUSION

        The Four ``P's'' can identify the issues that are important to
    Reservists: Pay, Promotion, Points, and Pride.
      --Pay needs to be competitive. As Reservists have dual careers, they
            have other sources of income. If pay is too low, or expenses
            too high, a Reservist knows that time may be better invested
            elsewhere.
      --Promotions need to be fairly regular, and attainable. Promotions
            have to be through an established system and be predictable.
      --Points reflect a Reservist's ambitions to earn Retirement. They are
            as creditable a reinforcement as pay; and must be easily
            tracked.
      --Pride is a combination of professionalism, parity and awards: doing
            the job well with requisite equipment, and being recognized for
            ones efforts. While people may not remember exactly what you
            did, or what you said, they will always remember how you made
            them feel.
        If change is too rapid in any of these four, anxiety is generated
    amid the ranks. As the Reserve Component is the true volunteer force,
    Reservists are apt to vote with their feet. Reservists are a durable,
    and are the ``All Pro Team'' resource only if they are treated right.
    Current conditions about the world highlights the ongoing need for the
    Reserve Component as key players in meeting National Security Strategy,
    we can't afford to squander that resource.

        Senator Stevens. Thank you very much. I hate to interrupt
    you here now. We have been given a problem. There will be 30-
    plus votes on the floor today. They occur every 10 minutes. So
    we have to go back and forth to vote. We will have to limit you
    in time, and what we are going to try--Senator Inouye, Senator
    Burns, I do not know how long you are going to be here, but we
    are going to try to rotate so one of us is here at all times.
    But we will have to keep moving because it is going to be a
    difficult time.
        So I appreciate your courtesy. I do want to say this to
    everyone. I am going to say, whoever is here is going to say
    who is the next witness. For instance, the next one is Ms.
    Holleman, and after that is Mr. Butler. We want you to know who
    is coming up next so we can determine if that person is not
    here and call up the next person before the next witness.
        Is Mr. Holleman here now? Ms. Holleman. Pardon me.
        Captain Puzon. Thank you, sir.
        Senator Stevens. Thank you. I appreciate your courtesy.
        Good morning, ma'am.

    STATEMENT OF DEIRDRE PARKE HOLLEMAN, ESQ., CO-DIRECTOR,
                NATIONAL MILITARY AND VETERANS ASSOCIATION,
                AND NATIONAL LEGISLATIVE DIRECTOR, THE
                RETIRED ENLISTED ASSOCIATION

        Ms. Holleman. Good morning. Mr. Chairman, Mr. Burns, it is
    an honor for me to be here to testify on behalf of the National
    Military and Veterans Alliance. The alliance is an umbrella
    group made up of 26 military, retiree, veterans, and survivor
    associations, with almost 5 million members. Our concerns are
    many, but our time is brief, so I will just touch on a few
    issues.
        It is crucial that military health care is fully funded.
    These past few months have shown the important part the direct
    health care system plays in our military readiness. We must
    continue to be fully funded and the equipment and other
    supplies that have been used supporting our deployments in Iraq
    and Afghanistan must be replaced.
        Additionally, the purchased health care system is essential
    to provide the services necessary to maintain a satisfied,
    healthy, and vigorous military family, whether active duty and
    their families, retirees, or survivors. It also helps to
    promote necessary retention.
        In the last several years it has been this subcommittee's
    concerns and actions that stopped the constant funding
    shortfalls that have occurred for many years, and we are truly
    grateful. We ask that you continue to make sure that there is
    full funding in fiscal year 2004 for all parts of the defense
    health care budget.
        The alliance is also deeply concerned about the changes
    that are going to occur shortly in the Tricare resource sharing
    program. Through this program at the present time approximately
    3,500 health care professionals work at the Medical Treatment
    Facility (MTFs), treating approximately 2 million patients
    every year. With the advent of the Temporary National Economic
    Committee (TNECs), all these contracts will end and new ones
    will have to be negotiated, presumably through the MTFs. It is
    crucial that there is no break in services caused by this
    contractual change. The alliance asks that this subcommittee
    provide sufficient transitional funding and direction to this
    valuable program so this valuable program can continue without
    interruption.
        With all the improvements that the military health care has
    seen in the last few years, one program has been ignored,
    Tricare Standard. Over 3.2 million military retirees under the
    age of 65 and their families are covered by Standard. At this
    time very little thought is given to them. Tricare Standard
    beneficiaries should be contacted yearly and informed about
    their program and any recent changes that have occurred. No
    such contact occurs at this time.
        It is especially important for the TRICARE Management
    Activity (TMA) to contact grey-area retirees when they reach 60
    years old to tell them of their automatic qualification and
    benefits. They are not contacted now and often these retirees
    needlessly retain and pay for private health care insurance.
        Most importantly, we hope that Tricare Standard will start
    to help recruit providers and help beneficiaries find them. At
    this time there is no requirement to do either and therefore
    Standard is becoming a more and more illusory benefit. The
    alliance requests that both sufficient funding and direction
    are given to improve this important program.
        The Military and Veterans Alliance thanks you for having
    this hearing and listening to our concerns. Our written
    testimony deals with many additional areas. We hope that you
    will consider those points when finalizing your appropriations
    bills this year.
        Again, Mr. Chairman, thank you very much for your
    attention.
        Senator Stevens. Thank you for your courtesy. It is nice to
    see you here today.
        Ms. Holleman. Thank you.
        [The statement follows:]

               Prepared Statement of Deirdre Parke Holleman, Esq.

                                  INTRODUCTION

        Mister Chairman and distinguished members of the Committee, the
    National Military and Veterans Alliance (NMVA) is very grateful for the
    invitation to testify before you about our views and suggestions
    concerning defense funding issues.
        The Alliance was founded in 1996 as an umbrella organization to be
    utilized by the various military and veteran associations as a means to
    work together towards their common goals. The Alliance's organizations
    are: American Logistics Association, American Military Retirees
    Association, American Military Society, American Retiree Association,
    American World War II Orphans Network, AMVETS National Headquarters,
    Catholic War Veterans, Class Act Group, Gold Star Wives of America,
    Korean War Veterans Foundation, Legion of Valor, Military Order of the
    Purple Heart, National Association for Uniformed Services, National
    Gulf War Resource Center, Naval Enlisted Reserve Association, Naval
    Reserve Association, Non Commissioned Officers Association, Society of
    Medical Consultants to the Armed Forces, Society of Military Widows,
    The Retired Enlisted Association, TREA Senior Citizens League, Tragedy
    Assistance Program for Survivors, Uniformed Services Disabled Retirees,
    Veterans of Foreign Wars, Vietnam Veterans of America.
        The preceding organizations have almost five million members who
    are serving our nation, or who have done so in the past and their
    families.
        The overall goal of the National Military and Veteran's Alliance is
    a strong National Defense. In light of this overall objective, we would
    request that the committee examine the following proposals.

        CURRENT AND FUTURE ISSUES FACING UNIFORMED SERVICES HEALTH CARE

        The National Military and Veterans Alliance must once again thank
    this Committee for the great strides that have been made over the last
    few years to improve the health care provided to the active duty
    members, their families, survivors and Medicare eligible retirees of
    all the Uniformed Services. The improvements have been historic.
    TRICARE for Life and the Senior Pharmacy Program have enormously
    improved the life and health of Medicare Eligible Military Retirees
    their families and survivors. DOD's new Medicare Eligible Retiree
    Health Care Fund has been put into place. This addition should help
    stabilize funding for military health care in the future. Additionally,
    reducing the catastrophic cap, improving the TRICARE Prime Remote
    program and making other TRICARE improvements have improved the
    situation of numerous other TRICARE beneficiaries. It has been a very
    successful few years. But there are still many serious problems to be
    addressed:

    An Adequate Health Care Budget
        As always, the most pressing issue facing military health care is
    an adequate Defense Department Health Care Budget. This is again the
    Alliance's top priority. With the additional costs that have come with
    the deployments to Southwest Asia, Afghanistan and Iraq, we must all
    stay vigilant against future budgetary shortfalls that would damage the
    quality and availability of health care.

    Improving Tricare Standard
        While great steps forward have been made in health care for those
    uniform services' beneficiaries covered under TRICARE Prime and TRICARE
    for Life, TRICARE Standard has withered on the vine. TRICARE Standard
    has truly become the stepchild of military health care. The Alliance
    asks that this Committee financially support this final group of
    forgotten beneficiaries. Some improvements in the situation can be
    easily accomplished, others will indeed be difficult.
        There should be a requirement that all TRICARE Standard
    beneficiaries be contacted at least once a year with information of the
    changes in the program and benefits. The Alliance believes that there
    is no other health care plan in the country that does not contact its
    beneficiaries on at least an annual basis. The TRICARE Management
    Activity (TMA) is considering plans to improve communications between
    TRICARE Prime and its beneficiaries. Including TRICARE Standard in such
    a plan would be an easy improvement.
        An additional population needing to be contacted is the ``gray
    area'' Reservists when they reach age 60 and finally qualify for
    retirement pay. Too often, this group of retirees is unaware of the
    automatic enrollment, and individuals carry unneeded medical coverage.
    They should be informed of the TRICARE Standard as a benefit, and what
    it covers.
        NMVA requests appropriations funding to support TMA making these
    contacts.
        A much harder improvement in TRICARE Standard involves creating
    initiatives to convince health care providers to accept TRICARE
    Standard patients. TRICARE reimbursement rates are tied to Medicare
    reimbursement levels. It is well known that health care providers are
    dissatisfied with TRICARE reimbursement levels. The Alliance was
    pleased and relieved by the Administration's and Congress' recent
    corrections and improvements in Medicare reimbursement rates. This
    correction in the Medicare program will also be a great help to the
    TRICARE Program.
        Yet this is not enough. The history of low and slow payments in the
    past for TRICARE Standard as well as what still seems like complicated
    procedures and administrative forms makes it harder and harder for
    beneficiaries to find health care providers that will accept TRICARE.
    Any improvements in the rates paid for Medicare/TRICARE should be a
    great help in this area. Additionally, any further steps to simplify
    the administrative burdens and complications for health care providers
    for TRICARE beneficiaries hopefully will increase the number of
    available providers.
        The Alliance asks the Defense Subcommittee to include language
    encouraging continued increases in Medicare reimbursement rates.
        One key tool in making low-cost MTF care available to military
    beneficiaries has been the resource sharing program: putting civilian
    health care professionals and support personnel into military hospitals
    and clinics. Currently, there are 3,500 people working and providing
    services in MTFs serving approximately 2 million patients annually.
        The Alliance is concerned that a gap exists in the transition of
    this program from its current configuration to that of the new
    generation of T-Nex contracts. All current agreements must end with the
    current contracts, yet there is no clear guidance on how the Services
    will continue the resource share program, nor when the individual MTFs
    will be able to renew access to the current resources to implement this
    program.
        The National Military Veterans Alliance request that this committee
    provide transitional funding to insure uninterrupted service between
    contracts.

    Tricare Retiree Dental Plan (TRDP)
        The focus of the TRICARE Retiree Dental Plan (TRDP) is to maintain
    the dental health of Uniformed Services retirees and their family
    members. Several years ago we saw the need to modify the TRDP
    legislation to allow the Department of Defense to include some dental
    procedures that had previously not been covered by the program. Adding
    these procedures was necessary to fulfill the intent of the TRDP to
    maintain good dental health for retirees and their family members. With
    this modification the TRDP achieved equity with the active duty dental
    plan.
        With ever increasing premium costs, NMVA feels that the Department
    should assist retirees in maintaining their dental health by providing
    a government cost-share for the retiree dental plan. With many retirees
    and their families on a fixed income, an effort should be made to help
    ease the financial burden on this population and promote a seamless
    transition from the active duty dental plan to the retiree dental plan
    in cost structure. Additionally, we hope the Congress will enlarge the
    retiree dental plan to include retired beneficiaries who live overseas.
    The Alliance would appreciate this Committee's consideration of both
    proposals.

                     NATIONAL GUARD AND RESERVE HEALTH CARE

        First, we would like to thank the efforts by the office of
    Secretary of Defense and TRICARE Management Activity for revising
    Health Affairs Policy 96-018. The changes made to TRICARE Prime allow
    families of activated Guardsmen or Reservists to be eligible for
    TRICARE Prime when the military sponsor has active duty orders for more
    than 30 days. This revision also allows the family to enroll without
    enrollment fees or co-payments.
        Changes made to the TRICARE Prime Remote for Active Duty Family
    Members program allow the families of activated Reserve and National
    Guard, Prime Remote coverage, no matter where the sponsor lives as long
    as they resided with the service member before he or she left for their
    mobilization site or deployment location, and the family continues to
    reside there. We are very thankful for these improvements, however,
    additional changes are still needed.

    Mobilized Health Care--Medical Readiness of Reservists
        The number one problem faced by Reservists being recalled was
    medical readiness. The government's own studies indicate that between
    20-25 percent of Reservists are without healthcare plans. Further study
    will show that another group is under insured. Congress needs to
    recommend a healthcare coverage for Reservists that could bridge this
    medical gap.
        A model for healthcare would be the TRICARE Dental Program, which
    offers subsidized dental coverage for Selected Reservists and self-
    insurance for SELRES families. Reservists pay $8.14 per month for an
    individual's enrollment and $50.88 per month for a family enrollment.
    If mobilized to active duty for more than 30 consecutive days, the
    costs will be $8.14 for a single enrollment and $20.35 for a family
    enrollment. Members of the Individual Ready Reserve (Other than Special
    Mobilization Category) and their family members, and the family members
    of the Selected Reserve (not on active duty) will pay a new monthly
    rate of $20.35 for a single enrollment and $50.88 for a family
    enrollment.
        In an ideal world this would give universal dental coverage.
    Reality is that the services are facing some problems. Premium
    increases to the individual Reservist have caused some of the junior
    members to forgo coverage. Dental readiness has dropped. Mobilized
    members have been ``readied'' by tooth extraction rather than tooth
    filling. The Military services are trying to determine how best to
    motivate their Reserve Component members. It is hard to make dental
    coverage mandatory if the Reservist must pay even a portion of it.
        Position.--The National Military Veterans Alliance supports
    utilization of Guard and Reserve Dentists to examine and treat
    Guardsmen and Reservists who have substandard dental hygiene. The
    TRICARE Dental Program should be continued, because we believe it has
    pulled up overall Dental Readiness. Medical coverage plans should be
    explored to insure universal medical coverage for Guardsmen and
    Reservists; Reservists and their dependents should be allowed to join
    TRICARE.

    Some Options
        The Department of Defense has a model program extending FEHBP
    coverage to mobilized employees where basic employees premiums are
    paid. Other federal agencies can adopt this policy on an agency-by-
    agency basis but this policy is not uniform across all federal
    agencies.
        Position.--As an option to TRICARE standard, the Alliance would
    like to see the government pay equivalent premiums directly to private
    employers if these companies choose to extend health coverage to the
    Reservist as an option.

    Demobilized Health Care
        Under the revised transitional healthcare benefit plan, Guard and
    Reserve who were ordered to active duty for more than 30 days in
    support of a contingency and have more than six years total active
    federal service are eligible for 120 days of transition health care
    following their period of active service. Guard and Reserve members
    with less than six years service will get 60 days of continued medical
    care. Families were excluded from this coverage. An initial fix was a
    worldwide demonstration project, which permitted family members to be
    covered under this plan.
        Position.--While 75 to 80 percent of returning Reservists will have
    healthcare when they return to their employers, the balance will be
    without healthcare beyond the current 120 or 60-day limitation.
      --There should not be a demarcation at six years between 60 and 120
            days. The jobs performed by the Reserve Component members were
            identical; their demobilization healthcare coverage should be
            identical.
      --Demobilization transition TRICARE coverage for the post activated
            Reserve Component members should be expanded. A civilian is
            allowed up to 18 months of coverage under COBRA when
            transitioning between jobs. Military should be permitted the
            same.
        Further.--The National Military Veterans Alliance supports OSD
    efforts to ensure the quality of demobilization processing. Each
    returning Guardsman or Reservist should be given a benchmark separation
    physical to document their health as they return from the
    ``battlefields.''
        NMVA asks the committee for funding to support DOD's demobilization
    health care demonstration programs.

                     OTHER RESERVE/GUARD ISSUES (LONG-TERM)

    Age 55 Retirement Payment Age
        Over the last two decades, more has been asked of Guardsmen and
    Reservists than ever before. The nature of the contract has changed;
    Reserve Component members would like to see recognition of the added
    burden they carry. Providing an option that reduces the retired with
    pay age from 60 to 55 years carries importance in retention,
    recruitment, and personnel readiness. Some are hesitant to endorse this
    because they envision money would be taken out of other entitlements,
    benefits, and Guard and Reserve Equipment budgets. The National
    Military and Veteran's Alliance recommends that Reserve retirement with
    pay be allowed prior to age 60, but be treated like Social Security
    retirement offset, at lower payments when taken at an earlier age. If a
    Reservist elects to take retired pay at age 55, it would be taken at an
    actuarially reduced rate, keeping the net costs at zero.
        Most of the cost projected by DOD is for TRICARE healthcare, which
    begins when retirement pay commences. Again following the Social
    Security example, Medicare is not linked to Social Security payments.
    NMVA suggests that TRICARE for Reservists be decoupled from pay, and
    eligibility remain at age 60 years with Social Security as a model,
    Reservists understand the nature of offsetting payments. The only
    remaining expense in this proposal would be the administrative startup
    costs and adjustments to retirement accrual contributed to the DOD
    retirement accounts.

                Pay and Compensation For Guard and Reserve
        We are concerned about a recent DOD initiative to end ``two days
    pay for one days work,'' and replace it with a plan to provide 1/30 of
    a Month's pay model, which would include both pay and allowances. Even
    with allowances, pay would be less than the current system. When
    concerns were addressed about this proposal, a retention bonus was the
    suggested solution to keep pay at the current levels. Allowances differ
    between individuals and can be affected by commute distances and even
    zip codes. Certain allowances that are unlikely to be paid uniformly
    include geographic differences, housing variables, tuition assistance,
    travel, and adjustments to compensate for missing Healthcare.
        The National Military and Veterans Alliance holds reservations with
    a retention bonus as a supplemental source. Being renewed annually
    bonuses tend to depend on the national economy, deficit, and political
    winds. Further, would this bonus just be grandfathered to current
    Reservists, with some future generation forfeiting the bonus as an
    income source. The NMVA strongly recommends that the reserve pay system
    ``two days pay for one days work,'' be retained, as is.

                OTHER RESERVE/GUARD RECOMMENDATIONS (SHORT-TERM)

        Ensure adequate funding to equip Guard and Reserve at a level that
    allows them to carry out their mission. Do not turn these crucial
    assets over to the active duty force. In the same vein we ask that the
    Congress ensure adequate funding that allows a Guardsman/Reservist to
    complete 48 drills, and 15 annual training days per member, per year.
    This stems from the concern about a recent DOD plan, the ``Defense
    Transformation for the 21st Century Act of 2003'' that would
    potentially use some of these same ``Reserve'' dollars to fund
    involuntary 90-day pre-mobilization call up for training. This funding
    should come instead from the active duty budget, which will most
    directly benefit from this ``deployment standards'' training.
        The NMVA strongly recommends that Reserve Program funding remain at
    sufficient levels to adequately train and support the robust reserve
    force that has been so critical and successful during our Nation's
    recent major conflicts.

                                   CONCLUSION

        Mr. Chairman and distinguished members of the Subcommittee the
    Alliance again wishes to emphasize that we are grateful for and
    delighted with the large steps forward that the Congress has affected
    the last few years. The new health care programs for Uniformed Service
    retirees 65 years and over (TRICARE for Life and the Senior Pharmacy)
    and active duty members and their families (TRICARE Prime Remote and
    the reduction of the catastrophic cap) have been great successes. We
    are also very appreciative of recent changes that impact our ``citizen
    soldiers'' in the Guard and Reserve. But there is still work to be done
    to improve health care programs for all qualified beneficiaries, and
    benefits and mission funding for our Guardsmen and Reservists. We
    understand that all of these issues don't fall under the direct purview
    of your subcommittee. However, we are aware of the continuing concern
    all of the subcommittee's members have shown for the health and welfare
    of our service personnel and their families. Therefore, we hope that
    this subcommittee can further advance these suggestions in this
    committee or in other positions that the members hold. We are very
    grateful for the opportunity to speak on these issues of crucial
    concern to our members. Thank you.

        Senator Stevens. Next is Mr. Butler, Deputy Director of
    Legislation, National Association of Uniformed Services. Good
    morning.

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

        Mr. Butler. Good morning. Mr. Chairman, the National
    Association for Uniformed Services (NAUS) and the Society of
    Military Widows is very grateful for the invitation to testify
    before you about our views and suggestions concerning defense
    funding issues. There are several issues covered in my formal
    statement in detail. I would like to highlight a couple here
    today pertaining to survivors.
        First I would like to mention the age-62 survivor benefits
    program offset with Social Security. NAUS's primary survivor
    goal is the elimination of the age-62 Strategic Business Plan
    (SBP) offset. This would increase the annuity from 35 percent
    to the original 55 percent. Not only were many of the earliest
    enrollees not provided the full explanation of the social
    security offset, but the Federal Government provides a
    substantially higher annuity with no offset for Federal Civil
    Service survivors. We urge the committee to provide funding for
    the annuity increase and end the often devastating effects of
    the offset.
        On a related front, the National Defense Authorization Act
    for fiscal year 1999 provided a paid-up provision to the
    survivor benefit plan. The law states that, effective October
    1, 2008, if a retiree has paid into the program for 30 years
    and is 70 years old then the premium is paid up. NAUS
    recommends the appropriate funding to accelerate the paid-up
    provisions and change the effective date from October 1, 2008,
    to October 1, 2003, the 30th anniversary of the program.
    Without a change, enrollees who meet this criteria are being
    penalized after that date for 5 years.
        Also on the survivor front, NAUS strongly urges funding for
    S. 585. Currently, if the retired military sponsor who enrolls
    in the survivor benefits program dies of a service-connected
    disability, the surviving spouse is eligible for both the SBP
    annuity and dependency and indemnity compensation, or DIC, from
    the Department of Veterans Affairs. However, the SBP annuity is
    offset by the full amount of DIC. Each program's purpose is
    different. SBP's goal is to provide for the loss of the
    sponsor's earned retired pay and DIC's goal is to provide the
    surviving spouse compensation for the loss of their spouse due
    to injuries caused by his or her service to their country. We
    strongly urge funding to eliminate this offset.
        Finally, I would like to mention the retention of DIC on
    remarriage after age 55. All other Federal survivor benefits
    are retained if the beneficiary remarries after a certain age.
    The only exception is the military widow or widower receiving
    DIC. Many survivors do not remarry because they cannot afford
    to lose their DIC. As a matter of equity, a DIC survivor who
    marries after the age of 55 should retain his or her DIC status
    and benefits.
        We would like to see the funding made available to end the
    remarriage penalty. NAUS strongly supports the funding for this
    type of legislation and any legislation that takes care of
    those that we leave behind.
        Thank you, Mr. Chairman.
        Senator Stevens. Thank you for those suggestions and I
    think you are right about that 55-year-old. We will do our
    best, Mr. Butler.
        Mr. Butler. Thank you.
        [The statement follows:]

                    Prepared Statement of Benjamin H. Butler

                                  INTRODUCTION

        Mister Chairman and distinguished members of the Committee, The
    National Association for Uniformed Services (NAUS) is very grateful for
    the invitation to testify before you about our views and suggestions
    concerning the following defense funding issues:

    Survivor Benefits Program (SBP) Improvements

                Age 62 Survivor Benefits Program Offset
        The National Association for Uniformed Services primary survivor
    goal is the elimination of the age 62 Survivor Benefit Program annuity
    offset. This would increase the annuity from 35 percent to the original
    55 percent. Not only were many of the earliest enrollees not provided
    the full explanation of the benefits and the Social Security Offset,
    but the Federal Government provides a substantially higher annuity with
    no offset for federal Civil Service survivors annuities. We urge the
    committee to provide funding for the annuity increase, and end the
    often-devastating effects of the offset.

                30 Year Paid-Up Status

        A secondary goal is the acceleration of the paid-up provisions by
    changing the effective date from October 1, 2008 to October 1, 2003,
    the 30th anniversary of the program. Enrollees who have reached the age
    of 70 and have paid their SBP premiums for more that 30 years (360
    payments) are being penalized. We ask that you provide funding to allow
    those early enrollees to be allowed this relief.

                Survivor Benefits Program/Dependency and Indemnity
                        Compensation Offset

        The National Association for Uniformed Services strongly urges
    funding for S. 585. Currently, if the retired military sponsor, who
    enrolled in the Survivor Benefits Program, dies of a service-connected
    disability, the surviving spouse is eligible for both the SBP annuity
    and Dependency and Indemnity Compensation (DIC) from the Department of
    Veterans Affairs. However, the SBP annuity is offset by the full amount
    of the DIC annuity. Each program's purpose is different, SBP's goal is
    to provide for the loss of the sponsors earned retired pay, and DIC's
    goal is to provide the surviving spouse compensation for the loss of
    their spouse due to injuries caused by his/her service to the country.

    Defense Commissary Agency Funding and Staffing
        The active duty service member continues to rate the Commissaries
    as a top benefit of the Quality of Life and Family Program portion of
    the military pay and compensation package. The 2002 Active Duty Status
    of Forces Survey gave the Exchange and Commissaries a 67 percent
    satisfaction rating. And yet, the Commissaries and Exchanges are still
    under attack, during a time when our highly trained and motivated
    military forces are away from their home bases. How can we justify
    attacking their families' convenient access to high quality food at
    savings that approach 30 percent?
        Issue.--Why would the Department of Defense want to reduce the
    commissary benefit at its greatest time of need? The answer is money.
    DOD wants to reduce the subsidy for the commissary system that provides
    food and other essentials to troops and families around the world,
    which will end up in the military community losing the benefit.
        Position.--The National Association for Unformed Services strongly
    urges you to continue to provide the funding for the Commissary Subsidy
    to sustain the current services, which garnished a 67 percent approval
    rating, provided to the men and women protecting our nation.
    Commissaries are a key component of the military pay and compensation
    package. Any action that reduces the benefit means a diminished quality
    of life and more out of pocket costs.
        Issue.--The Defense Commissary Agency has already begun the process
    of eliminating 2,650 personnel positions and reducing its funding by
    $137,000,000 for fiscal year 2003.
        Position.--NAUS believes that a reduction of this size will degrade
    the quality of the benefit by eliminating smaller commissaries and
    reducing days and hours of operation.
        Issue.--The Department of Defense is planning the consolidation of
    the Armed Services three-exchange services into one single entity,
    though still retaining the ``look and feel'' of each store and
    maintaining the service culture to which the patrons are accustomed.
    The goal again, is to save money by elimination of redundant overheads,
    delivery systems, and the power of economy of scaling purchasing.
        Position.--NAUS does not endorse a consolidation, especially if
    consolidation is for consolidation's sake. Streamlining, improving
    internal operations and implementation of cost saving measures must not
    reduce the value of the benefit.
        NAUS supports funding for system studies, but not an accelerated
    consolidation.
        Summary.--We all understand the importance of saving scarce
    taxpayer's dollars. Every taxpayer dollar collected must be used wisely
    to keep down the amount of taxes the government collects; this is only
    common sense. Therefore, every government agency, department or system
    must be as efficient as possible. For example, the leaders of the
    commissary system have been and are continuing to make internal changes
    to improve efficiencies and reduce overhead operating costs. DOD should
    be setting goals, not mandating changes.

    Current and Future Issues Facing Uniformed Services Health Care
        The National Association for Uniformed Services would like to thank
    the Sub-Committee and the Full Appropriations Committee for its
    leadership in the past for providing the landmark legislation extending
    the Pharmacy benefit and TRICARE system to Medicare eligible military
    retirees, their families and survivors, making the lifetime benefit
    permanent, establishing the DOD Medicare Eligible Retiree Health Care
    Fund, reducing the catastrophic cap and making other TRICARE
    improvements. However, we must again urge that the Senate provides full
    funding of the Defense Health Program, especially now, while more
    activated reserve beneficiaries utilize the program.
        In addition to medical care we are concerned that the current
    funding within DOD for maintenance and infrastructure improvements is
    inadequate. This lack of funding has forced commanders to make band-aid
    fixes that in the long term require more costly repairs, or even
    acceleration of closing completely. One example is the Armed Forces
    Institute of Pathology, located on the grounds of the Walter Reed Army
    Medical Center and which Congress declared a national resource in 1976.
    This world-class national resource provides a broad range of patient
    care consultant activities, educational programs and research for the
    military medical system, the Department of Veterans Affairs and the
    civilian medical community nationally and internationally. It is housed
    in a building that is over 50-years old and deteriorating badly--like
    much of the Walter Reed complex that is in need of repair and
    maintenance.
        Mr. Chairman, the overall goal of the National Association for
    Uniformed Services is a strong National Defense. We believe that
    comprehensive, lifelong medical and dental care for all Uniformed
    Service beneficiaries regardless of age, status or location furthers
    this goal. In light of these overall objectives, we would request that
    the committee examine the following proposals:

                TRICARE Improvements supported by NAUS

        Our first and foremost goal is to increase the provider
    reimbursement rates to more realistic amounts. Without adequate
    reimbursement rates, the ability to maintain a viable, qualified list
    of medical providers is hindered. That directly affects the health of
    our service members and their families. Secondly, we ask that you
    provide funding to improve the TRICARE Standard Program, to include
    increased communication between the TRICARE Management Activity and the
    Standard beneficiary about the benefits of the program and assisting
    the Standard beneficiary in locating an available provider. Finally, we
    encourage the subcommittee to maintain the TRICARE Standard plan as the
    fee-for-service plan that was initially created and continue its
    efforts to eliminate the pre-authorizations now required.

                Medicare Part B Enrollment
        The law enacting the TRICARE for Life program requires Medicare
    Part B enrollment for participation in the TRICARE for Life program. In
    addition, Part B is required for all retirees reaching age 65 on or
    after 1 April 2001 for them to participate in the new pharmacy program
        Secondly, some 12,000 retirees residing overseas are required to
    participate in Part B Medicare in order to enroll in TRICARE for Life.
    Since they cannot use the Medicare benefits overseas, we recommend that
    this requirement be eliminated for all retirees residing overseas and
    that upon their relocation to the United States be allowed to enroll in
    Part B without the delayed enrollment penalty.
        Also, some retirees who lived near military installations did not
    enroll in Part B because they relied upon the promise of lifetime
    medical care at the hospitals and clinics located on the military
    bases, which have subsequently been closed. Many are in their 70's and
    80's now and cannot afford to pay the huge Part B delayed enrollment
    penalties.
        Position.--We recommend that those who relied on these hospitals
    and were 65 on or before 6 October 2000, the date TFL was enacted by
    NDAA for fiscal year 2001, be allowed to participate in TFL without
    enrolling in Part B Medicare or at the very least waive the delayed
    enrollment penalties.

                FEHBP

        The National Association for Uniformed Services has been a long
    time proponent of legislation that would provide military personnel the
    option of participating in the Federal Employees Health Benefit
    Program. Though confident that the TRICARE program and the TRICARE for
    Life program will be successful, because they are an outstanding value
    for most beneficiaries, in a few cases, the TRICARE/TRICARE for Life
    options may not be the best choice, or may not be available for the
    eligible beneficiary. For that reason, we believe the FEHBP option
    should be enacted. Providing the FEHBP, as an option would help
    stabilize the TRICARE program, provide a market based benchmark for
    cost comparison and be available to those for whom TRICARE/TRICARE for
    Life is not an adequate solution.
        Position.--NAUS strongly urges the committee to provide additional
    funding to support a full FEHBP program for military personnel as an
    option.

                Include Physician and Nurse Specialty Pay in Retirement
                        Computations
        Results of the 2002 Active Duty Survey show that pay and benefits
    are the most important factors impacting retention. Improving specialty
    pay/bonuses and including specialty pay/bonuses in retired pay
    calculations would aid retention. Therefore, prompt action to retain
    these and other highly skilled medical professionals is needed.
        Position.--The National Association for Uniformed Services requests
    funding to allow the military physicians and nurses to use their
    specialty pay in their retirement computations. The military services
    continue to lose top quality medical professionals (doctors and nurses)
    at mid-career. A major reason is the difference between compensation
    levels for military physicians and nurses and those in the private
    sector.

                Uniform Claims processing and Billing
        It has been the long term hope that part of the growing costs of
    medical treatment in both the Department of Defense and the Department
    of Veteran Affairs could be paid by billing private insurance companies
    and Medicare/Medicaid systems (DOD and VA Subvention). Numerous
    attempts to improve these financial streams have failed.
        Position.--In part this failure has been caused because the various
    systems do not share the same system for claims and billing. Since the
    dominant system of all medical claims in the country is clearly
    Medicare if DOD and the VA adopted the Medicare claims system ALL
    parties--Private Insurance Companies, DOD, the VA and Medicare/Medicaid
    would know what medical services, pharmaceuticals, laboratory services
    and the like have been provided. Such a uniform billing plan could also
    lead to improvements in allowing the VA to be a fully participating
    TRICARE network provider. This does not solve the other billing
    problems but at least it would put all the parties on the same sheet of
    music.

                DOD and VA Subvention
        The attempt of Medicare subvention (having Medicare pay for
    treatment of its beneficiaries at MTFs) with the DOD has been a huge
    disappointment. The Department of Defense has received no stream of
    payments. Medicare's required level of effort'' has never been reached
    by an MTF. But this goal should not be abandoned. The active duty
    member, his or her working spouse, the Veteran and the Military Retiree
    have all spent their working careers paying money into the Medicare
    system. The taxes have been paid but if they receive treatment in a MTF
    or a VA hospital or clinic the facility receives nothing from Medicare
    to help pay for that beneficiary's services.
        Position.--The financially strained medical systems of the VA and
    DOD should receive some of the support their patients have paid. Again,
    if DOD and the VA adopted Medicare's billing system it could support an
    effective attempt at subvention.

    Active and Reserve
        The most important element of military readiness is a high quality
    force. The quality force that we have fighting for us today is the
    result of over twenty years of effort. The National Association for
    Uniformed Services doesn't want to see these gains lost.
        We understand that DOD plans budget cuts, with the services again
    looking at end strength reductions especially in the Reserve Components
    at a time that we are fighting a war against multiple undefined
    terrorist factions.
        We request that you consider language in the appropriations bill to
    direct DOD to cease further reductions in both Active and Reserve
    components until the threats to our Nation are properly determined and
    a National Defense Strategy is clearly defined. We shouldn't forget the
    needs of our Soldiers, Sailors, Marines and Airmen in the field.
    Quality of life includes quality on the job. The National Association
    for Uniformed Services supports a 4.1 percent pay raise for all seven
    of the Uniformed Services. We further support targeted pay raise
    proposals for enlisted members in grades E-5 to E-9, and selected
    warrant officers.
        Additionally, NAUS feels that it is important to invest defense
    dollars for equipment procurement beyond the administration's budget.
    The service chiefs have provided non-funded requirements for both the
    active and Reserve components that will be needed by our people in the
    near future.
        We ask that funds be provided utilizing the National Guard and
    Reserve Equipment Account. While the Senate has pressured to reduce the
    NGREA, the services have failed in their responsibility to budget for
    Reserve equipment; until this is resolved we believe the NGREA should
    be used for this purpose.
        Reserve members were quick to step forward; some have already
    sacrificed their lives during this war as part of this nation's total
    force. In recognition, we ask for parity between active and reserve
    components when it comes to pay and compensation and retirement. We
    encourage this committee to support future hearings dealing with pay
    and compensation as these proposals are developed.
        NAUS believes that funding lifelong medical and dental care for all
    of the uniformed service beneficiaries, regardless of age, Active or
    Reserve status or location, supports the goal of mobilization
    readiness. But we would like to call attention to the ongoing need of
    funding TRICARE providers and, in turn, supporting the troubled TRICARE
    network.
        This is especially hard on the families of reservists who don't
    relocate when their warriors are mobilized. We hope the committee will
    support monies for military treatment facility subvention and
    utilization of veterans affairs hospitals as TRICARE providers.

    Transformation
        The Secretary of Defense's office is conducting a series of studies
    emphasizing transformation, relying on costly, undeveloped
    technologies, seeking dollar savings by reducing end strength in a
    flexible, adaptive fighting force.
        The first suggested legislation has been released entitled the
    ``Defense Transformation for the 21st Century Act of 2003.'' While
    Secretary of Defense Rumsfeld's staff has attempted to come up with new
    solutions to old problems, blanket implementation may result in
    unintended consequences.

    Issues Affecting Appropriations
        Increased cost to the retirement fund is NAUS's concern if the 75
    percent ceiling is lifted, and a unrestricted multiplier is allowed,
    permitting flag and general officers to be paid more in retirement than
    on active duty.
        NAUS is concerned with removing the pay limitations on retired pay
    for general and flag officers, which is currently held equal to level
    III of the Executive Schedule.
        Enhanced General Transfer Authority; transfer of funds: NAUS
    opposes granting authority to SECDEF to permit the transfer of 2.5
    percent of the total appropriations between funds (except MILCON) for
    military functions--five percent in times of war or emergency.
        This is too high a sum of money, undercuts the appropriations
    process, and creates a high risk to have authorized items stripped of
    funding to support a DOD project viewed as underfunded.
        Transfer of Funds to correct specific acquisition. NAUS feels there
    is no need to allow reprogramming of funds. This is a requested change
    from $10 million to $20 million, again reducing Congressional
    oversight.
        Another suggestion within the Transformation Act is allowing
    ``improved involuntary access'' to Reserve Component members for
    enhanced training prior to mobilization. Suggested language calls this
    ``up to 90 days of active duty for training,'' which indicates that
    this preparation for mobilization will come from reserve training funds
    rather than from the budget of the active duty, which will most
    directly benefit from this ``deployment standards'' training.
        NAUS requests that the A.T. funding be expanded beyond the 15 days
    of A.T. per guardsman and reservist, to allow for these additional
    periods of training, otherwise this unit training will strip away
    training dollars from individual reservists.

                                   CONCLUSION

        Mr. Chairman and distinguished members of the Sub-Committee, we
    want to thank you for your leadership and for holding these hearings
    this year. You have made it clear that the military continues to be a
    high priority and you have our continuing support.

        Senator Stevens. Next will be Mr. Duggan. But, Mr. Duggan
    will you wait? We will start you when the Senator comes back. I
    will go vote and someone else will be here.
        Senator Inouye [presiding]. Please forgive us for this
    vote-a-rama.
        Mr. Duggan. Yes, sir. Good morning, sir.
        Senator Inouye. The next witness will be Dennis ``Mike''
    Duggan, Deputy Director of the National Security, Foreign
    Relations Division of the American Legion.

    STATEMENT OF DENNIS M. DUGGAN, DEPUTY DIRECTOR,
                NATIONAL SECURITY, FOREIGN RELATIONS
                COMMISSION, THE AMERICAN LEGION

        Mr. Duggan. Good morning, sir, and thank you. Mr. Chairman,
    the American Legion, as the Nation's largest organization of
    wartime veterans, is extremely grateful for this opportunity to
    present its views regarding the Defense appropriations for
    fiscal year 2004. We have always valued your leadership in
    assessing and appropriating adequate funding for the defense
    establishment, including its military quality of life,
    readiness, and modernization or transformation.
        The stunning military successes in Iraq validate this
    committee's investing in our armed services and I am sure we
    are all appreciative of that. As we speak, thousands of
    soldiers, sailors, airmen, and marines, Active and Reserve
    components, continue to valiantly serve in the Persian Gulf and
    Afghanistan. All Americans are proud of what they have
    achieved, while cognizant of the fact that the war on terrorism
    does in fact continue.
        Americans expect us to support our troops and to support a
    strong national defense and we believe this fiscal year 2004
    bill does that.
        Mr. Chairman, our Armed Forces, as effective as they are,
    are spread thin and over 220,000 reservists have been activated
    for homeland security missions and the war on terrorism. Our
    reserve components are no longer reserve. They are on the front
    lines. The extent to which they are being used in larger
    numbers and over longer periods of time may well result,
    however, in reduced recruiting and retention. We do not know
    that at this stage.
        Some active component, reserve component shifts may be
    necessary and may improve force levels and strengthen the
    active capabilities. However, it appears that funding the
    increase of active duty end strengths is imperative. We believe
    that, the American Legion does, that the active duty end
    strengths need to be increased.
        We are also aware of a number of aging systems which the
    Armed Forces continue to keep in their active inventory which
    probably need replacing at this stage of the game, to include
    refueling tankers for one. Another, of course, that comes to
    mind is the CH, aging CH-46 Sea Knight, and there have been a
    number of accidents involving that and I just wonder if they
    just need to be replaced.
        We understand the CH-47 Chinooks have been pretty well
    upgraded, the Army version, with new engines and so forth. But
    the CH-46 Sea Knight may need replacing or at least greatly
    upgrading.
        The American Legion applauds the SASC, Senate Armed
    Services Committee, bill calling for a survey of military
    retirees by the Department of Defense (DOD) to determine the
    viability and the adequacy of the Tricare Standard benefit that
    was brought up by the last speaker. We do urge that Tricare
    reimbursement rates probably need to be increased and that the
    Defense health system as well be fully funded. Many care-
    eligible military retirees and their dependents remain forever
    grateful of the Tricare for Life program and the Senior Tricare
    Pharmacy Benefit as well for those over age 65.
        The American Legion applauds the raises in base pay and
    allowances for the active force. But family separation
    allowances, hostile fire pay, or imminent danger pays, we
    believe need to be increased, as does the rather archaic death
    gratuity benefits as well. The 6,000 bucks is not a whole heck
    of a lot for families that lose a loved one in action.
        Reserve benefits need to be increased consistent with the
    extent to which reservists are being mobilized to perform
    active duty missions. Retired reservists should be eligible for
    reservist pay and Tricare health care before the age of 60 and
    also reservists should have unlimited access to military
    commissaries.
        Just one last word, Mr. Chairman, and that has to do with
    the recently enacted combat-related special compensation for
    disabled military retirees. It flagrantly to a large extent
    leaves off our disabled reservists and guardsmen who have
    served 20 or more years and who are not even eligible to really
    apply for that special compensation.
        Mr. Chairman, we thank you again for this opportunity.
    Thank you, sir.
        [The statement follows:]

                     Prepared Statement of Dennis M. Duggan

        Mr. Chairman, The American Legion is grateful for the opportunity
    to present its views regarding defense appropriations for fiscal year
    2004. The American Legion values your leadership in assessing and
    appropriating adequate funding for quality-of-life, readiness and
    modernization of the Nation's armed forces.
        Once again, the United States is involved in two wars--the war
    against terrorism and Operation Iraqi Freedom. American fighting men
    and women are proving that they are best-trained, best-equipped and
    best-led military in the world. As Secretary of Defense, Donald
    Rumsfeld has noted, the war in Iraq is part of a long, dangerous global
    war on terrorism. The war on terrorism is being waged on two fronts:
    overseas against armed terrorists and the other here protecting and
    securing the Homeland. Indeed, most of what we as Americans hold dear
    are made possible by the peace and stability, which the armed forces
    provide.
        The American Legion adheres to the principle that this Nation's
    armed forces must be well manned and equipped, not to pursue war, but
    to preserve and protect peace. The American Legion strongly believes
    that past military downsizing was budget-driven rather than threat
    focused. Once Army divisions, Navy carrier battle groups, and Air Force
    fighter wings are eliminated from the force structure, they cannot be
    rapidly reconstituted regardless of the threat or emergency
    circumstances. Military recruitment has also been sporadic in the face
    of obvious quality-of-life concerns, frequent and lengthy deployments,
    and the recession, in spite of the patriotic American spirit which has
    followed the terrorist attacks of September 11th.
        The Administration's budget request for fiscal year 2004 totals
    $2.2 trillion and authorizes $379.9 billion for defense or about 16.6
    percent of the budget. The fiscal year 2004 defense budget represents a
    $14 billion increase in defense spending over the current funding
    level. It also represents 3.4 percent of our Gross Domestic Product,
    more than the 3.3 percent in the fiscal year 2003 budget. Active duty
    military manpower end strength is 1,388,100, only slightly changed from
    the 1.37 million of fiscal year 2002. Selected Reserve strength is
    863,300 or reduced by about 25 percent from its strength levels during
    the Gulf War of 12 years ago..
        Mr. Chairman, this budget must contain funding to fight the war on
    terrorism, sustain military quality of life and continue to transform
    the military. A decade of overuse of the military and it's under-
    funding, however, will necessitate sustained investments. This budget
    must also address increases in the military endstrength of the
    Services, accelerate ship production, and funding for the concurrent
    receipt of military retirement pay and VA disability compensation for
    disabled military retirees.
        If we are to win the war on terror and prepare for the wars of
    tomorrow, we must take care of the Department's greatest assets--the
    men and women in uniform. They are doing us proud in Iraq, Afghanistan
    and around the world.
        In order to attract and retain the necessary force over the long
    haul, the military continues to look for talent in an open market place
    and to compete with the private sector for the best young people our
    nation has to offer. If we are to attract them to military service in
    the active and reserve components, we need to count on their patriotism
    and willingness to sacrifice, to be sure, but we must also provide them
    the proper incentives. They love their country, but they also love
    their families--and many have children to support, raise, and educate.
    We have always asked 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 repeated unaccompanied deployments and
    sub-standard housing as well.
        The President's 2004 defense budget requests $98.6 billion for
    military pay and allowances, including $3.7 billion for a 2 percent to
    6.3 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 cost for
    those living off-base from 7.5 percent to 3.5 percent in 2004--so as to
    hopefully eliminate all out-of-pocket costs for the men and women in
    uniform by 2005.
        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, Marines and Coastguardsmen.
        The American Legion's National Commander has visited American
    troops in South Korea, as well as a number of installations throughout
    the United States. During these visits, he was able to see first hand
    the urgent, immediate need to address real quality of life challenges
    faced by service members and their families. He has spoken with
    families on Womens' and Infants' Compensation (WIC). Quality of life
    issues for service members, coupled with heightened operational tempos,
    play a key role in the recurring recruitment and retention woes and
    should come as no surprise. The operational tempo and lengthy
    deployments must be reduced. Military missions were on the rise before
    September 11 and deployment levels remain high and the only way, it
    appears, to reduce repetitive overseas tours and the overuse of the
    Reserves is to increase military endstrengths for the services.
    Military pay must be on par with the competitive civilian sector. If
    other benefits, like health care improvements, commissaries, adequate
    quarters, quality child care, and impact aid for education are reduced,
    they will only serve to further undermine efforts to recruit and retain
    the brightest and best this nation has to offer.

                        QUADRENNIAL DEFENSE REVIEW (QDR)

        Since the collapse of the Soviet Union in 1991, America has
    conducted three substantial assessments of its strategy and force
    structures necessary to meet the national defense requirements. The
    assessment by the first President Bush Administration (``Base Force''
    assessment) and the assessment by the Clinton Administration (``Bottom-
    Up Review'') were intended to reassess the force structure in light of
    the changing realities of the post-Cold War world. Both assessments
    served an important purpose in focusing attention on the need to
    reevaluate America's military posture; but the pace of global change
    necessitated a new, comprehensive assessment of the current defense
    strategy for the 21st Century. The current QDR was formatted before
    September 11, 2001.
        The American Legion has supported the force structure proposed by
    the Base Force Strategy: Maintaining 12 Army active duty combat
    divisions, 12 Navy aircraft carrier battle groups, 15 Air Force fighter
    wings and three Marine Corps divisions, and a total manpower strength
    of at least 1.6 million. The American Legion initially supported the
    theory behind the two-war strategy: if America were drawn into a war
    with one regional aggressor, another could be tempted to attack its
    neighbor, especially if this aggressor were convinced that America and
    its allies were distracted, lacked the will to fight conflicts on two
    fronts, or did not possess the military power to deal with more than
    one major conflict at a time. Determining the right size of U.S. forces
    for more than one major conflict would provide a hedge against the
    possibility that a future adversary might mount a larger than expected
    threat. It would also allow for a credible overseas presence that is
    essential in dealing with potential regional dangers and pursuing new
    opportunities to advance stability and peace. The American Legion has
    always believed that any such strategy should be capabilities-based
    rather than budget-driven.
        The two-war, nearly simultaneously, strategy was criticized as
    being too narrowly focused on preparing for two specific conflicts, was
    under-prepared for other contingencies and was never adequately
    resourced. We believe that for the strategy to be credible it must
    employ more robust force structures and continued increased budgeting
    to improve quality-of-life, readiness and modernization. The American
    Legion believes the ``win-win'' two-war Bottom-Up Review strategy was
    delusional. With growing worldwide commitments, America has a ``win-
    hold'' strategy, at best, with only 10 Army active combat divisions,
    three Marine divisions, 12 Navy carrier groups and eight National Guard
    Divisions to utilize.
        The reality of a two-war strategy appears to have arrived. Once
    again, we have fought in the Persian Gulf while keeping an eye on
    developments in North Korea. The armed forces have appeared to be over
    committed for too long with their many missions to include preparation
    for conventional warfare, peacekeeping in the Balkans, counterguerilla
    operations in the Philippines and Colombia as well as Homeland Security
    and the global War on Terrorism to include combat operations in Iraq
    and Afghanistan.
        The American Legion also believes America can no longer afford to
    become the world peace enforcer by dispatching forces on unbudgeted
    operations whether the United Nations passes or does not pass a
    resolution to do so. The American Legion believes Congress needs to
    remain involved in the decision-making process regarding the commitment
    of U.S. military forces. These forces should be deployed only when the
    vital national interests of America are clearly at stake, supported by
    the will of the American people and Congress, and a clear exit strategy
    exists. Congress needs to become involved in the policy of committing
    U.S. troops before troops are actively committed, not afterwards.
    Clearly, our war in Iraq has satisfied all these conditions. For that
    reason, the Armed Forces are deserving of congressional support for
    increased resourcing.

                           PROCUREMENT/TRANSFORMATION

        Only a few major systems currently in production would be funded in
    the fiscal year 2004 defense budget. The funding level for procurement
    is improved but needs to be sustained. The American Legion fully
    supports the Army's Transformation Program. Major development programs
    that The American Legion also supports include the Air Force F-22
    fighter and C-17, F/A-18Es for the Navy, and Joint Strike Fighters for
    the Air Force and Navy. Unquestionably, the Navy needs to upgrade its
    aging fleet and air arm as well as acquire more submarines. The
    American Legion strongly believes that the seven-ship rate of ship-
    building needs to be increased so that at least 8-10 ships are built
    annually.
        If left unadvised, omissions in DOD's modernization budget will
    have the following implications:
      --They will result in the continued deterioration of the defense
            industrial base.
      --The future technological superiority of American forces will be at
            risk thereby increasing the danger to servicemembers should
            they be called into combat. We are currently retiring ships and
            aircraft faster than they are being built.
      --The failure to replace and upgrade equipment in a timely manner
            will create a massive modernization shortfall in each of the
            military services and, possibly, lead to even more serious
            readiness problems in the long run.
        America's winning technology in the Persian Gulf War, like its
    victorious all-volunteer force, did not develop overnight, but had its
    genesis in the decade of the 1980's. The modernization of the Armed
    Forces since the end of the Persian Gulf War, unfortunately, has been
    delayed and curtailed. The 2004 budget request is designed to advance
    each of the transformational goals mentioned by the Secretary of
    Defense in his Congressional testimony last year. It accelerates
    funding both for the development of transformation programs as well as
    by funding modernization. Recognizably, transformation is a process,
    and is a process that must continue. The Chairman of the Joint Chiefs
    of Staff during fiscal year 1998 defense budget hearings called for
    procurement budgets of $60 billion annually, which for the first time
    was reflected in the fiscal year 2001 budget. Army procurement dollars
    alone have plummeted by almost 80 percent since the mid-1980's, and by
    67 percent for all the services. Trade-offs to maintain readiness
    within budget constraints have caused the Services to cancel a number
    of weapons systems and to delay others.
        A number of defense consulting firms have predicted that the armed
    forces are heading for a ``train wreck'' unless annual defense budgets
    called for procurement accounts in the $118 billion range, rather than
    in the $45-60 billion range.
        The American Legion urges Congress to preserve America's defense
    industrial base by continuing to fund research, development and
    acquisition budgets so as to retain its technological edge in the 21st
    Century and assure that military production can surge whenever U.S.
    military power is committed. Some of these capabilities, such as tank
    production and shipbuilding, need to be retained. Key industrial
    capabilities that preserve more of the defense industrial base need to
    be identified and retained.
        The American Legion opposes termination or curtailing of essential
    service modernization programs, diminution of defense industrial
    capabilities, and rejects the transfers of critical defense
    technologies abroad.
        The American Legion firmly believes with the continuing threat of
    nuclear proliferation, America should retain its edge in nuclear
    capabilities as represented by the TRIAD system, and the highest
    priority should be the deployment of a national missile defense.
    Although the development and deployment of advanced theater missile
    defenses to protect U.S. forward deployed forces is imperative, any
    dismantling of acquisition programs to defend the American people is
    imprudent. America should continue to march on deploying an anti-
    ballistic missile detection and interception system that is capable of
    providing a highly effective defense against limited attacks of
    ballistic missiles. The price of maintaining a strong defense is
    expensive in terms of tax dollars, but failure to do so could prove
    much more expensive in terms of human lives and real threats to
    freedom. The national security framework provides the umbrella that
    allows Americans to work and prosper without fear. A strong national
    defense does not inhibit a strong economy; it complements it. Congress
    and the military establishment must spend tax dollars prudently and
    effectively. DOD must ensure that all aspects of its procurement and
    manning levels are responsible and disciplined.

                                QUALITY OF LIFE

        The American Legion's major National Security concern is the
    enhancement of the quality of life issues for service members,
    Reservists, National Guardsmen, military retirees, and their families.
    During the 107th Congress, President Bush and Congress made marked
    improvements in an array of quality of life issues for military
    personnel and their families. These efforts are visual enhancements
    that must be sustained.
        In the fiscal year 2002 defense budget, the President and Congress
    addressed improvements to the TRICARE system to meet the health care
    needs of military beneficiaries; enhanced Montgomery GI Bill
    educational benefits; and the addressed homelessness throughout the
    veterans community. For these actions, The American Legion applauds
    your strong leadership, dedication, and commitment. However, major
    issues still remain unresolved: the issue of concurrent receipt of full
    military retirement pay and VA disability compensation without the
    current dollar-for-dollar offset needs to be resolved as well as the
    need to improve Survivor's Benefits.
        The American Legion will continue to argue that simple, equitable
    justice is one reason to authorize and fund concurrent receipt.
    Military retirees are the only Federal employees who must offset their
    retired pay with VA disability compensation. Also, proponents claim
    that the unique nature of military service, given their sacrifices and
    hardships, should merit these retirees receiving both military retired
    pay and VA disability compensation. For the past decade, many veterans'
    programs have been pared to the bone in the name of balancing the
    budget. Now, military retirees must pay premiums to TRICARE for full
    health care coverage for themselves and their immediate family members.
    Many veterans' advocates feel it is time that retirees receive
    compensation for these fiscal sacrifices.
        Often, VA service-connected disability compensation is awarded for
    disabilities that cannot be equated with disabilities incurred in
    civilian life. Military service rendered in defense and on behalf of
    the Nation deserves special consideration when determining policy
    toward such matters as benefits offsets. The American Legion believes
    it is a moral and ethical responsibility to award disability
    compensation to the needs of disabled veterans, given the sacrifices
    and hardships they incurred during honorable military service to the
    Nation. We are also aware that many of the disabled retirees receive
    retirement pay that is beneath established poverty levels and by
    definition in Title 38 are ``indigent'' veterans.
        Mr. Chairman, The American Legion and the armed forces owe you and
    this Subcommittee a debt of gratitude for your strong support of
    military quality of life issues. Nevertheless, your assistance is
    needed now more than ever. Positive congressional action is needed in
    this budget to overcome old and new threats to retaining the finest
    military in the world. Service members and their families continue to
    endure physical risks to their well being and livelihood, substandard
    living conditions, and forfeiture of personal freedoms that most
    Americans would find unacceptable. Worldwide deployments have increased
    significantly and the Nation is at war: a smaller armed forces has
    operated under a higher operational tempo with longer work hours,
    greater dangers, and increased family separations.
        Throughout the drawdown years, military members have been called
    upon to set the example for the nation by accepting personal financial
    sacrifices. Their pay raises have been capped for years, and their
    health care system has been overhauled to cut costs, leaving military
    families with lessened access to proper health care. The American
    Legion congratulates the Congress for their quality-of-life
    enhancements. The system, however, is in dire need of continued
    improvement.
        Now is the time to look to the force recruiting and retention
    needs. Positive congressional action is needed to overcome past years
    of negative career messages and to address the following quality of
    life features:
      --Closing the Military Pay Gap with the Private Sector.--The previous
            Chairman of the Joint Chiefs of Staff stated that the area of
            greatest need for additional defense spending is ``taking care
            of our most important resource, the uniformed members of the
            armed forces.'' To meet this need, he enjoined Members of
            Congress to ``close the substantial gap between what we pay our
            men and women in uniform and what their civilian counterparts
            with similar skills, training and education are earning.'' But
            11 pay caps in the past 15 years took its toll and military pay
            continues to lag behind the private sector at about 7.5
            percent. With U.S. troops battling terrorism in the Persian
            Gulf, The American Legion supports the proposed 4.1 percent
            military pay raise, without a 2 percent reduction.
      --Basic Allowance for Housing (BAH).--For those who must live off
            base, the provision of the Basic Allowance for Housing (BAH) is
            intended to help with their out-of-pocket housing expenses.
            Secretary of Defense Rumsfeld set a goal of entirely
            eliminating average out-of-pocket housing expenses. This
            committee has taken strong steps in recent times to provide
            funding to move toward lowering such expenses. Please continue
            to work to close the gap between BAH and the members' average
            housing costs.
      --Commissaries.--Several years ago, DOD had considered closing some
            37 commissary stores worldwide and reducing operating hours in
            order to resolve a $48 million shortfall in the Defense
            Commissary Agency. Such an effort to reduce or dismantle the
            integrity of the military commissary system would be seen as a
            serious breach of faith with a benefit system that serves as a
            mainstay for the active and reserve components, military
            retirees, 100 percent service-connected disabled veterans, and
            others. The American Legion urges the Congress to preserve full
            federal subsidizing of the military commissary system and to
            retain this vital non-pay compensation benefit. Furthermore,
            The American Legion fully supports the full-time usage of
            commissary stores by members of the Reserve Components, that
            the system not be privatized, and that DECA manpower levels not
            be further reduced.

                               RESERVE COMPONENTS

        The advent of smaller active duty forces reinforces the need to
    retain combat-ready National Guard and Reserve forces that are
    completely integrated into the Total Force. The readiness of National
    Guard and Reserve combat units to deploy in the War on Terrorism will
    also cost in terms of human lives unless Congress is completely willing
    to pay the price for their readiness. With only ten active Army
    divisions in its inventory, America needs to retain the eight National
    Guard divisions, in heightened readiness postures, as its life
    insurance policy.
        Reliance on National Guard and Reserve forces has risen 13-fold
    over the pre-Gulf War era. This trend continues even though both
    reserve and active forces have been cut back 30 percent and about 25
    percent, respectively, from their Cold War highs. Since the terrorist
    attacks on the American homeland on Sept. 11, more than 200,000 Guard
    and Reserve troops have been activated to support homeland defense and
    overseas operations in the War on Terror.
        National Guard and Reserve service today involves a challenging
    balancing act between civilian employment, family responsibilities, and
    military service. Increasingly, National Guard and Reserve families
    encounter stressful situations involving healthcare, economic
    obligations, and employer uncertainty. Benefit issues of particular
    concern in this arena include:
      --Review and upgrade the Reserve compensation and retirement system
            without creating disproportional incentives that could
            undermine active force retention;
      --Restore the tax deductibility of non-reimbursable expenses directly
            related to Guard and Reserve training;
      --Streamline the reserve duty status system without compromising the
            value of the compensation package;
      --Improve Reserve Montgomery GI Bill (MGIB) benefits proportional to
            the active duty program;
      --Allow reservists activated for 12 months or longer to enroll in the
            active duty MGIB:
      --Allow them to accrue for retirement purposes all points earned
            annually; and
      --Permit Guardsmen unlimited access to military commissaries.
        Growing concerns are that the Reserve Components, especially the
    National Guard, should not be overused in contingency or peacekeeping
    operations, as these servicemembers have regular civilian jobs and
    families as well. The National Guard also has state missions in their
    home states. The American Legion understands that retention rates and,
    therefore, strength levels are falling in those states which have
    deployed or scheduled to deploy Guardsmen overseas. Governors of these
    states continue to express concern that state missions will not be
    accomplished. The National Guard from 44 states have had a presence in
    35 foreign countries.
        The American Legion is also supportive of all proposed quality-of-
    life initiatives that serve to improve living and working conditions of
    members of the Reserve components and their families.

                     HEALTH CARE FOR MILITARY BENEFICIARIES

        Today, there are approximately 8.2 million beneficiaries in the
    military health care program. Military retirees and their dependents
    make up nearly one half of that number, and over 500,000 retirees have
    lost or will lose their access to military health care as a result of
    the closure of approximately 40 percent of military treatment
    facilities. Access to affordable health care, regardless of age, status
    or location, has represented a major concern among military retirees.
        The creation of TRICARE for Life and a TRICARE Senior Pharmacy
    benefit in Public Law 106-398 was an historic triumph for Congress and
    those 1.3 million Medicare-eligible military retirees and dependents.
    While TRICARE for Life came with its own funding stream in fiscal year
    2002, authorization must be budgeted to provide for the program for
    fiscal year 2004. The American Legion recommends that you continue to
    improve this important program by providing the necessary funding. The
    American Legion also applauds your work last year in eliminating
    TRICARE co-payments for active duty family members. We also salute the
    Department of Defense for reducing active duty time for Reservists to
    30 days for their families to be eligible for TRICARE.
        Although Congress enacted legislation to restore TRICARE to
    Medicare-eligible beneficiaries as a wraparound to Medicare (TRICARE
    for Life) and to improve TRICARE for active duty families, further
    improvements are still needed, especially for retired beneficiaries
    under age 65. TRICARE must be a consistent, reliable and equitable
    health care benefit for all uniformed services beneficiaries,
    regardless of age or geography.
        The fiscal year 2001 NDAA eliminated copays for active duty family
    members enrolled in Prime, and enacted TRICARE For Life (TFL) and
    TRICARE Senior Pharmacy (TSRx) for Medicare-eligibles. With TFL
    implementation complete Congress and DOD must turn their attention to
    improving serious shortcomings in healthcare benefits for TRICARE
    beneficiaries under the age of 65.
      --Low reimbursement rates are causing providers to refuse any TRICARE
            patients or reduce the number of TRICARE patients they will
            treat, limiting beneficiary access and choice. Solution:
            Increase statutory (Medicare) payment rates; require use of
            existing authority to raise TRICARE rates where necessary to
            ensure sufficient numbers of participating providers.
      --TRICARE is cumbersome to use and causes administrative hassles for
            providers and beneficiaries attempting to obtain authorization,
            expedite claim repayment, or move between regions. Solution:
            Improve TRICARE Prime enrollment procedures, portability, and
            beneficiary education. Decrease administrative burdens,
            eliminate non-availability statement requirements, streamline
            claims processing requirements with greater reliance on
            electronic claims technology, and eliminate unnecessary
            reporting requirements. Require TRICARE contractors to assist
            beneficiaries in finding TRICARE Standard providers.
      --Institute ``benefits plus benefits'' reimbursement methodology. TFL
            pays beneficiary expenses not covered by Medicare (``benefits
            plus benefits''). For TRICARE Standard beneficiaries with other
            health insurance (OHI), TRICARE seldom pays expenses not
            covered by other insurance (``benefits less benefits'').
            Solution: Restore TRICARE reimbursement policy to pay up to
            what TRICARE would have paid had there been no OHI coverage (as
            was the policy before 1993).
        Since the commencement of the first class of graduates of the
    Uniformed Services University of Health Sciences (USUHS) in 1980, over
    3,200 physicians continue to pursue careers as physicians in the Army,
    Navy, Air Force and the U.S. Public Health Service each year. The USUHS
    education process emphasizes primary care medicine and also provides
    special training in military medicine and combat stress courses not
    found in civilian medical school curricula. USUHS graduates have also
    proven themselves willing to accept operational overseas assignments
    often viewed as less than desirable by civilian medical school
    graduates.
        Both the fiscal year 1996 National Defense Appropriations Act and
    the National Defense Authorization Act prohibit the closure of USUHS.
    The Defense Authorization Act also provided a five year prohibition on
    reducing the staffing levels of USUHS below the levels established as
    of October 1, 1993. The American Legion urges the Congress to resist
    any efforts to circumvent the law to downscale or close the USUHS. The
    American Legion is convinced that the USUHS is an economical source of
    career medical leaders who serve this nation during peace and war and
    provide military health care consistency and stability. The American
    Legion urges the Congress to retain and fully fund USUHS as a continued
    source of career military physicians for the Army, Navy, Air Force and
    U.S. Public Health Service. The American Legion also supports the
    construction of an Academic Center to accommodate the USUHS Graduate
    School of Nursing.

                         OTHER MILITARY RETIREE ISSUES

        The American Legion believes strongly that quality-of-life issues
    for retired military members and families also are important to
    sustaining military readiness over the long term. If the Government
    allows retired members' quality-of-life to erode over time, or if the
    retirement promises that convinced them to serve are not kept, the
    retention rate in the current active-duty force will undoubtedly be
    affected. The old adage that you enlist a recruit, but you reenlist a
    family is truer today than ever as more career-oriented servicemembers
    are married or have dependents.
        Accordingly, The American Legion believes Congress and the
    Administration must place high priority on ensuring that these long-
    standing commitments are honored:
      --VA Compensation Offset to Military Retired Pay (Retired Pay
            Restoration).--Under current law, a military retiree with
            compensable VA disabilities cannot receive full military
            retirement pay and VA disability compensation. The military
            retiree's retirement pay is offset (dollar-for-dollar) by the
            amount of VA disability compensation awarded. We would like to
            thank the committee for providing funding for the authorized
            special compensation programs; however, The American Legion
            supports restoration of retired pay (concurrent receipt) for
            all disabled military retirees. The purposes of these two
            compensation systems are fundamentally different. Longevity
            retirement pay is designed primarily as a force management tool
            to attract large numbers of high quality members to serve for
            at least 20 years. A veteran's disability compensation is paid
            for an injury or disease incurred or aggravated during military
            service. Monetary benefits are related to the residual effects
            of the injury or disease or for the physical or mental pain and
            suffering and subsequently reduced employment and earnings
            potential. The American Legion also urges that disabled retired
            Reservists' and those retired under the early retirement
            authority be eligible for the authorized Special Compensation
            programs. What better time to authorize and fund concurrent
            receipt than during this period of War?
      --Social Security Offsets to the Survivors' Benefits Plan (SBP).--The
            American Legion supports amending Public Law 99-145 to
            eliminate the provision that calls for the automatic offset at
            age 62 of the military SBP with Social Security benefits for
            military survivors. Military retirees pay into both SBP and
            Social Security, and their survivors pay income taxes on both.
            The American Legion believes that military survivors should be
            entitled to receipt of full Social Security benefits which they
            have earned in their own right. It is also strongly recommended
            that any SBP premium increases be assessed on the effective
            date, or subsequent to, increases in cost of living adjustments
            and certainly not before the increase in SBP as has been done
            previously. In order to see some increases in SBP benefits, The
            American Legion would support a gradual improvement of survivor
            benefits from 35 percent to 55 percent over the next five-year
            period. The American Legion also supports initiatives to make
            the military survivors' benefits plan more attractive.
            Currently, about 75 percent of officers and 55 percent of
            enlisted personnel are enrolled in the Plan.
      --Reducing the Retired Reservist age from 60 to 55.--The American
            Legion believes that retirement pay should be paid sooner as
            many of these retirees will not live to their 60th birthday.
            Similarly, these retirees and their dependents should be
            eligible for TRICARE health care and other military privileges
            when they turn 55.
      --Military Retired Pay COLAs.--Servicemembers, current and future,
            need the leadership of this Subcommittee to ensure Congress
            remains sensitive to long-standing contracts made with
            generations of career military personnel. A major difficulty is
            the tendency of some to portray all so-called ``entitlement''
            programs, including military retirement, as a gratuitous gift
            from the taxpayer. In truth, military retired pay is earned
            deferred compensation for accepting the unique demands and
            sacrifices of decades of military service. The military
            retirement system is among the most important military career
            incentives. The American Legion urgently recommends that the
            Subcommittee oppose any changes to the military retirement
            system, whether prospective or retroactive, that would
            undermine readiness or violate contracts made with military
            retirees.
      --The SBP Veterans Dependency and Indemnity Compensation (DIC) Offset
            for Survivors.--Under current law, the surviving spouse of a
            retired military member who dies from a service connected
            disability and was also enrolled in SBP, the surviving spouse's
            SBP benefits are offset by the amount of DIC (currently $948
            per month). A pro-rated share of SBP premiums is refunded to
            the widow upon the member's death in a lump sum, but with no
            interest. The American Legion believes that SBP and DIC
            payments, like military retirement pay and disability
            compensation, are paid for different reasons. SBP is elected
            and purchased by the retiree based on his/her military career
            and is intended to provide a portion of retired pay to the
            survivor. DIC payments represent special compensation to a
            survivor whose sponsor's death was caused directly by his or
            her uniformed service. In principle, this is a government
            payment for indemnity or damages for causing the premature loss
            of life of the member, to the extent a price can be set on
            human life. These payments should be additive to any military
            or federal civilian SBP annuity purchased by the retiree. There
            are approximately 31,000 military widows/widowers affected by
            the offset under current law. Congress should repeal this
            unfair law that penalizes these military survivors.
      --Uniformed Services Former Spouses Protection Act (USFSPA).--The
            American Legion urges Congressional support for amending
            language to Public Law 97-252, the Uniformed Services Former
            Spouses Protection Act. This law continues to unfairly penalize
            active-duty armed forces members and military retirees. USFSPA
            has created an even larger class of victims than the former
            spouses it was designed to assist, namely remarried active-duty
            service members or military retirees and their new family. The
            American Legion believes this law should be rescinded in its
            entirety, but as an absolute minimum, the provision for a
            lifetime annuity to former spouses should be terminated upon
            their remarriage. This is consistent with most divorce decrees.
            Based on this current provision, monthly provisions for life
            are being granted to former spouses regardless of marital
            status, need, or child custodial arrangements. The time has
            come to cease lifetime annuities to former military spouses,
            should they remarry. Judicial determinations of appropriate
            support should be determined on a case-by-case basis and not be
            viewed as an ``entitlement'' by former spouses as exists under
            current law. The American Legion urges hearings on the USFSPA.

                                   CONCLUSION

        Thirty years ago, America opted for an all-volunteer force to
    provide for the national security. Inherent in that commitment was a
    willingness to invest the needed resources to bring into existence a
    competent, professional, and well-equipped military. The fiscal year
    2004 defense budget, while recognizing the War on Terrorism and
    Homeland Security, represents another good step in the right direction.
        What more needs to be done? The American Legion recommends, as a
    minimum, that the following steps be implemented:
      --Continued improvements in military pay, equitable increases in
            Basic Allowances for Housing and Subsistence, military health
            care, improved educational benefits under the Montgomery G.I.
            Bill, improved access to quality child care, impact aid and
            other quality-of-life issues. The concurrent receipt of
            military retirement pay and VA disability compensation needs to
            be authorized and funded. The Survivors' Benefit Plan needs to
            be increased from 35 to 55 percent for Social Security-eligible
            military survivors.
      --Defense spending, as a percentage of Gross Domestic Product, needs
            to be maintained at a minimum of 3.5 percent annually, which
            this budget still does not achieve.
      --The end strengths of the active armed forces need to be increased
            to at least 1.6 million for the Services.
      --The Quadrennial Defense Review strategy needs to call for enhanced
            military capabilities to include force structures, increased
            endstrengths and improved readiness which are more adequately
            resourced.
      --Force modernization needs to be realistically funded and not
            further delayed or America is likely to unnecessarily risk many
            lives in the years ahead.
      --The National Guard and Reserves must be realistically manned,
            structured, equipped and trained; fully deployable; and
            maintained at high readiness levels in order to accomplish
            their indispensable roles and missions. Their compensation,
            benefits and employment rights need to be continually improved.
        Although we realize that many of these recommendations must be
    authorized by the Armed Services Committee, The American Legion urges
    each member of this subcommittee to work with their colleagues on the
    Armed Services Committee and secure passage of these much needed
    improvements to quality of life for all components of our military,
    included those who have already served.
        Mr. Chairman, this concludes The American Legion's statement.

        Senator Inouye. Thank you very much, Mr. Duggan. I can
    assure you that Senator Stevens and I are equally concerned
    about the problems that families of reservists and guardsmen
    have experienced during the recent war, and we have begun
    discussions also on separation pay and on health programs. We
    are fully cognizant that the men and women who serve us in
    uniform and stand in harm's way are volunteers. And if we want
    them to continue signing up and staying in, we better make
    certain that life can be made comparably comfortable to those
    who are not in uniform. We will do our best, sir.
        Mr. Duggan. Yes, sir. Thank you, sir.
        Senator Inouye. Thank you very much.
        Our next witness is Dr. Wayne S. Sellman of the American
    Psychological Association. Dr. Sellman, welcome, sir.

    STATEMENT OF WAYNE S. SELLMAN, Ph.D., VICE PRESIDENT
                AND DIRECTOR FOR PUBLIC POLICY ISSUES, THE
                HUMAN RESOURCES RESEARCH ORGANIZATION; ON
                BEHALF OF THE AMERICAN PSYCHOLOGICAL
                ASSOCIATION

        Dr. Sellman. Good morning, Mr. Chairman. I am Steve
    Sellman. I am the Vice President and Director of Public Policy
    Issues for the Human Resources Research Organization, and I am
    former Director for Accession Policy in the Office of the
    Secretary of Defense. For the past 40 years I have been
    involved in military personnel management, policymaking, and
    research.
        You have been a great friend to the military and military
    psychology and it is a particular pleasure for me to be here
    before you today. I have prepared testimony on behalf of the
    American Psychological Association, which is a scientific and
    professional organization of more than 150,000 psychologists
    and affiliates.
        Although I am sure that you are aware of the large numbers
    of psychologists providing mental health services to military
    members and their families, you may be less familiar with the
    broad range of behavioral research conducted by the
    psychological scientists within the Department of Defense.
    Military behavioral scientists work on issues critical to
    national defense, particularly with support from the Army
    Research Institute, the Army Research Laboratory, the Office of
    Naval Research, and the Air Force Personnel Research
    Laboratory.
        I would like to address the proposed cuts in the
    President's fiscal year 2004 human-centered research budget for
    these laboratories within the context of the larger DOD science
    and technology, or S&T, program. The American Psychological
    Association joins the Coalition for National Security Research
    in urging the subcommittee to provide $11.4 billion for basic
    and applied defense research across DOD in fiscal year 2004.
    This figure for the S&T account also is in line with the
    recommendations of the Defense Science Board and the
    Quadrennial Defense Review.
        In terms of human-centered research, all of the military
    services conduct or sponsor science in the broad categories of
    personnel, training, and leader development, warfighter
    protection, sustainment and physical performance, and system
    interfaces and cognitive processing. There also are additional
    smaller human systems research programs funded through the
    Office of the Secretary of Defense, the Defense Advanced
    Research Projects Agency, the Marine Corps, and the Special
    Operations Command.
        Despite substantial appreciation for the critical role
    played by behavioral science in national security, total
    spending on this research is cut from $405 million appropriated
    in fiscal year 2003 to $377 million in the President's fiscal
    year 2004 budget. An August 2000 DOD report requested by your
    subcommittee in the face of continuing erosion of behavioral
    science funding found that this area of military research has
    historically been extremely productive, with particularly high
    return on investment and high operational impact.
        The American Psychological Association strongly encourages
    the subcommittee to restore planned fiscal year 2004 cuts to
    military behavioral science programs. There is more detail on
    the specific S&T accounts in my written statement, but the
    Army, Navy, and Air Force are facing cuts in their applied
    human-centered research programs. Psychological scientists
    address many critical and important issues and problems vital
    to our national defense with expertise in understanding and
    optimizing cognitive functioning, perceptional awareness,
    complex decisionmaking, and human-systems interfaces. In these
    dangerous times, such issues have unfortunately become even
    more mission-critical, and we urge you to support the men and
    women in uniform by reversing another round of psychological
    research cuts.
        Thank you very much.
        [The statement follows:]

                     Prepared Statement of Wayne S. Sellman

        Conflict is, and will remain, essentially a human activity in which
    man's virtues of judgment, discipline and courage--the moral component
    of fighting power--will endure--It is difficult to imagine military
    operations that will not ultimately be determined through physical
    control of people, resources and terrain--by people . . . Implicit, is
    the enduring need for well-trained, well-equipped and adequately
    rewarded soldiers. New technologies will, however, pose significant
    challenges to the art of soldiering: they will increase the soldier's
    influence in the battlespace over far greater ranges, and herald
    radical changes in the conduct, structures, capability and ways of
    command. Information and communication technologies will increase his
    tempo and velocity of operation by enhancing support to his decision-
    making cycle. Systems should be designed to enable the soldier to cope
    with the considerable stress of continuous, 24-hour, high-tempo
    operations, facilitated by multi-spectral, all-weather sensors.
    However, technology will not substitute human intent or the decision of
    the commander. There will be a need to harness information-age
    technologies, such that data does not overcome wisdom in the
    battlespace, and that real leadership--that which makes men fight--will
    be amplified by new technology. Essential will be the need to adapt the
    selection, development and training of leaders and soldiers to ensure
    that they possess new skills and aptitudes to face these challenges.--
    NATO RTO-TR-8, Land Operations in the Year 2020
        Mr. Chairman and Members of the Subcommittee, I'm Dr. Steve
    Sellman, Vice President and Director for Public Policy Issues at the
    Human Resources Research Organization, and former Director for
    Accession Policy in the Office of the Secretary of Defense. I am
    submitting testimony on behalf of the American Psychological
    Association (APA), a scientific and professional organization of more
    than 150,000 psychologists and affiliates. Although I am sure you are
    aware of the large number of psychologists providing clinical services
    to our military members here and abroad, you may be less familiar with
    the extraordinary range of research conducted by psychological
    scientists within the Department of Defense. Our behavioral researchers
    work on issues critical to national defense, particularly with support
    from the Army Research Institute (ARI) and Army Research Laboratory
    (ARL); the Office of Naval Research (ONR); and the Air Force Research
    Laboratory (AFRL). I would like to address the proposed cuts to fiscal
    year 2004 human-centered research budgets for these military
    laboratories within the context of the larger Department of Defense
    Science and Technology budget.

           DEPARTMENT OF DEFENSE (DOD) SCIENCE AND TECHNOLOGY BUDGET

        APA joins the Coalition for National Security Research (CNSR), a
    group of over 40 scientific associations and universities, in urging
    the Subcommittee to provide DOD with $11.4 billion for 6.1, 6.2 and 6.3
    level research in fiscal year 2004. This figure also is in line with
    recommendations of the independent Defense Science Board and the
    Quadrennial Defense Review, the latter calling for ``a significant
    increase in funding for S&T programs to a level of three percent of DOD
    spending per year.''
        As our nation rises to meet the challenges of a new century,
    including current engagements in Afghanistan and Iraq as well as other
    asymmetric threats and increased demand for homeland defense and
    infrastructure protection, enhanced battlespace awareness and
    warfighter protection are absolutely critical. Our ability to both
    foresee and immediately adapt to changing security environments will
    only become more vital over the next several decades. Accordingly, DOD
    must support basic Science and Technology (S&T) research on both the
    near-term readiness and modernization needs of the department and on
    the long-term future needs of the warfighter.
        Despite substantial appreciation for the importance of DOD S&T
    programs on Capitol Hill, and within independent defense science
    organizations such as the Defense Science Board (DSB), total research
    within DOD has remained essentially flat in constant dollars over the
    last few decades. This poses a very real threat to America's ability to
    maintain its competitive edge at a time when we can least afford it.
    APA, CNSR and our colleagues within the science and defense communities
    recommend funding the DOD Science and Technology Program at a level of
    at least $11.4 billion in fiscal year 2004 in order to maintain global
    superiority in an ever-changing national security environment.

              BEHAVIORAL RESEARCH WITHIN THE MILITARY SERVICE LABS

        In August, 2000 the Department of Defense met a congressional
    mandate to develop a Report to the Senate Appropriations Committee on
    Behavioral, Cognitive and Social Science Research in the Military. The
    Senate requested this evaluation due to concern over the continuing
    erosion of DOD's support for research on individual and group
    performance, leadership, communication, human-machine interfaces, and
    decision-making. In responding to the Committee's request, the
    Department found that ``the requirements for maintaining strong DOD
    support for behavioral, cognitive and social science research
    capability are compelling'' and that ``this area of military research
    has historically been extremely productive'' with ``particularly high''
    return on investment and ``high operational impact.'' Given such strong
    DOD support, APA strongly encourages the Committee to restore planned
    fiscal year 2004 cuts to military behavioral science programs and
    provide funding at fiscal year 2003 appropriated levels:
      --Increase the Army's overall 6.2 budget from $66.034 million to
            $69.099 million; and the Army's overall 6.3 budget from $63.508
            million to $74.634 million in fiscal year 2004.
      --Increase the Navy's overall 6.2 budget from $19.982 million to
            $24.554 million; and the Navy's overall 6.3 budget from $28.746
            million to $36.027 million in fiscal year 2004.
      --Increase the Air Force's overall 6.2 budget from $51.764 million to
            $55.249 million; and the Air Force's overall 6.3 budget from
            $31.641 million to $35.743 million in fiscal year 2004.
        Within DOD, the majority of behavioral, cognitive and social
    science is funded through the Army Research Institute (ARI) and Army
    Research Laboratory (ARL); the Office of Naval Research (ONR); and the
    Air Force Research Laboratory (AFRL). These military service
    laboratories provide a stable, mission-oriented focus for science,
    conducting and sponsoring basic (6.1), applied/exploratory development
    (6.2) and advanced development (6.3) research. These three levels of
    research are roughly parallel to the military's need to win a current
    war (through products in advanced development) while concurrently
    preparing for the next war (with technology ``in the works'') and the
    war after next (by taking advantage of ideas emerging from basic
    research).
        All of the services fund human-related research in the broad
    categories of personnel, training and leader development; warfighter
    protection, sustainment and physical performance; and system interfaces
    and cognitive processing. In addition, there are additional, smaller
    human systems research programs funded through the Office of the
    Secretary of Defense, the Defense Advanced Research Projects Agency
    (DARPA), the Marine Corps, and the Special Operations Command.
        Despite substantial appreciation for the critical role played by
    behavioral, cognitive and social science in national security, however,
    total spending on this research is cut from $404.984 million
    appropriated in fiscal year 2003 to $376.753 million in the
    Administration's fiscal year 2004 budget. Whereas basic research (6.1)
    increases by six percent, due to a substantial increase in the Navy's
    budget (Air Force 6.1 decreases slightly and Army 6.1 increases
    slightly), all three services propose cuts in their 6.2 and 6.3
    funding. Navy 6.2 human-related research decreases by over 18 percent,
    and 6.3 research declines by over 20 percent. Only small 6.2 and 6.3
    investments in behavioral research by OSD, DARPA, Special Operations
    Command, and the Marine Corps increase over fiscal year 2003 levels in
    the President's fiscal year 2004 budget.
        Behavioral and cognitive research programs eliminated from the
    mission labs as cost-cutting measures are extremely unlikely to be
    picked up by industry, which focuses on short-term, profit-driven
    product development. Once the expertise is gone, there is absolutely no
    way to ``catch up'' when defense mission needs for critical human-
    oriented research develop. As DOD noted in its own Report to the Senate
    Appropriations Committee:

        ``Military knowledge needs are not sufficiently like the needs of
    the private sector that retooling behavioral, cognitive and social
    science research carried out for other purposes can be expected to
    substitute for service-supported research, development, testing, and
    evaluation . . . our choice, therefore, is between paying for it
    ourselves and not having it.''

        The following are brief descriptions of critical behavioral
    research funded by the military research laboratories.

     ARMY RESEARCH INSTITUTE FOR THE BEHAVIORAL AND SOCIAL SCIENCES (ARI)
                       AND ARMY RESEARCH LABORATORY (ARL)

        ARI works to build the ultimate smart weapon: the American soldier.
    ARI was established to conduct personnel and behavioral research on
    such topics as minority and general recruitment; personnel testing and
    evaluation; training and retraining; and attrition. ARI is the focal
    point and principal source of expertise for all the military services
    in leadership research, an area especially critical to the success of
    the military as future war-fighting and peace-keeping missions demand
    more rapid adaptation to changing conditions, more skill diversity in
    units, increased information-processing from multiple sources, and
    increased interaction with semi-autonomous systems. Behavioral
    scientists within ARI are working to help the armed forces better
    identify, nurture and train leaders. One effort underway is designed to
    help the Army identify those soldiers who will be most successful
    meeting 21st century noncommissioned officer job demands, thus
    strengthening the backbone of the service--the NCO corps.
        Another line of research at ARI focuses on optimizing cognitive
    readiness under combat conditions, by developing methods to predict and
    mitigate the effects of stressors (such as information load and
    uncertainty, workload, social isolation, fatigue, and danger) on
    performance. As the Army moves towards its goal of becoming the
    Objective Force (or the Army of the future: lighter, faster and more
    mobile), psychological researchers will play a vital role in helping
    maximize soldier performance through an understanding of cognitive,
    perceptual and social factors.
        ARL's Human Research & Engineering Directorate sponsors basic and
    applied research in the area of human factors, with the goal of
    optimizing soldiers' interactions with Army systems. Specific
    behavioral research projects focus on the development of intelligent
    decision aids, control/display/workstation design, simulation and human
    modeling, and human control of automated systems.

                         OFFICE OF NAVAL RESEARCH (ONR)

        The Cognitive and Neural Sciences Division (CNS) of ONR supports
    research to increase the understanding of complex cognitive skills in
    humans; aid in the development and improvement of machine vision;
    improve human factors engineering in new technologies; and advance the
    design of robotics systems. An example of CNS-supported research is the
    division's long-term investment in artificial intelligence research.
    This research has led to many useful products, including software that
    enables the use of ``embedded training.'' Many of the Navy's
    operational tasks, such as recognizing and responding to threats,
    require complex interactions with sophisticated, computer-based
    systems. Embedded training allows shipboard personnel to develop and
    refine critical skills by practicing simulated exercises on their own
    workstations. Once developed, embedded training software can be loaded
    onto specified computer systems and delivered wherever and however it
    is needed.

                      AIR FORCE RESEARCH LABORATORY (AFRL)

        Within AFRL, Air Force Office of Scientific Research (AFOSR)
    behavioral scientists are responsible for basic research on manpower,
    personnel, training and crew technology. The AFRL Human Effectiveness
    Directorate is responsible for more applied research relevant to an
    enormous number of acknowledged Air Force mission needs ranging from
    weapons design, to improvements in simulator technology, to improving
    crew survivability in combat, to faster, more powerful and less
    expensive training regimens.
        As a result of previous cuts to the Air Force behavioral research
    budget, the world's premier organization devoted to personnel selection
    and classification (formerly housed at Brooks Air Force Base) no longer
    exists. This has a direct, negative impact on the Air Force's and other
    services' ability to efficiently identify and assign personnel
    (especially pilots). Similarly, reductions in support for applied
    research in human factors have resulted in an inability to fully
    enhance human factors modeling capabilities, which are essential for
    determining human-system requirements early in system concept
    development, when the most impact can be made in terms of manpower and
    cost savings. For example, although engineers know how to build cockpit
    display systems and night goggles so that they are structurally sound,
    psychologists know how to design them so that people can use them
    safely and effectively.

                                    SUMMARY

        On behalf of APA, I would like to express my appreciation for this
    opportunity to present testimony before the Subcommittee. Clearly,
    psychological scientists address a broad range of important issues and
    problems vital to our national security, with expertise in
    understanding and optimizing cognitive functioning, perceptual
    awareness, complex decision-making, stress resilience, and human-
    systems interactions. We urge you to support the men and women on the
    front lines by reversing another round of cuts to the human-oriented
    research within the military laboratories.
        Below is suggested appropriations report language which would
    encourage the Department of Defense to fully fund its behavioral
    research programs within the military laboratories:

                             DEPARTMENT OF DEFENSE

        Behavioral Research in the Military Service Laboratories.--The
    Committee recognizes that psychological scientists address a broad
    range of important issues and problems vital to our national security
    through the military research laboratories: the Air Force Office of
    Scientific Research, the Army Research Institute and Army Research
    Laboratory, and the Office of Naval Research. Given the increasingly
    complex demands on our military personnel, psychological research on
    leadership, decision-making under stress, cognitive readiness,
    training, and human-technology interactions have become even more
    mission-critical, and the Committee strongly encourages the service
    laboratories to reverse cuts made to their behavioral research
    programs. A continued decline in support for human-centered research is
    not acceptable at a time when there will be more, rather than fewer,
    demands on military personnel, including more rapid adaptation to
    changing conditions, more skill diversity in units, increased
    information-processing from multiple sources, and increased interaction
    with semi-autonomous systems.

        Senator Inouye. Doctor, as you well know, I have an in-
    house adviser on my staff and he keeps me apprised of all the
    issues involved in your association. I can assure you of our
    support.
        Dr. Sellman. Thank you, sir.
        Senator Inouye. Thank you.
        Our next witness is Rear Admiral Retired Richard D. West,
    President of the Consortium for Oceanographic Research and
    Education. Admiral West.

    STATEMENT OF REAR ADMIRAL RICHARD D. WEST, U.S. NAVY
                (RETIRED), PRESIDENT, CONSORTIUM FOR
                OCEANOGRAPHIC RESEARCH AND EDUCATION

        Admiral West. Thank you, Senator Inouye. Good morning, sir.
        Senator Inouye. Good morning.
        Admiral West. Thank you for the opportunity to appear
    before you and your committee this morning. I would like to
    talk about basic research within the United States Navy. As you
    know, I am Rear Admiral Dick West, President of the Consortium
    for Oceanographic Research and Education, commonly referred to
    as CORE. I appear on behalf of 71 member institutions,
    including Penn State, Texas A&M, Scripps Institution of
    Oceanography, Woods Hole Oceanographic Institute, the
    Universities of Alaska, Hawaii, Southern Mississippi, New
    Hampshire, Texas, South Carolina, and California. These
    institutions and other members represent the nucleus of
    American academic oceanographic research.
        I joined CORE in August of 2002 after retiring from the
    United States (U.S.) Navy as oceanographer and navigator in the
    Navy. Prior to this position, I was deputy director for the
    Ballistic Missile Defense Organization. As an oceanographer, I
    was a primary customer for the products from our Nation's
    oceanographic institutions.
        I come before you this morning to express concern about a
    specific direction within the Office of Naval Research (ONR).
    Since its founding in 1946, ONR has been one of the Nation's
    leading supporters of high-risk, cutting-edge basic research.
    The Office has supported the research of 50 Nobel laureates. It
    has participated in breakthrough discoveries in areas such as
    lasers, precision timekeeping, and molecular biology. It has
    served the Navy and all of DOD well.
        When we look at the last 50 years, we see a history of
    courageous investment and bold discoveries that have helped end
    the Cold War. However, when we look to the coming decades the
    future of naval research does not appear so bright. Most of the
    science that underlies today's Navy was high risk and cutting
    edge when conducted decades ago. None of the researchers then
    could have imagined how their research would have created the
    impressive technological edge we just had in Operation Iraqi
    Freedom.
        Today we are concerned that the ONR may be veering off
    course from its traditional support for high-risk, long-term
    basic research. We are concerned that the 6.1 account that is
    supposed to be for discovery-oriented basic research is being
    migrated to short-term, product-driven applied research. We
    firmly believe that applied research and advanced technology
    development are crucial parts of Research, Development, Test
    and Evaluation (RDT&E), but it is imperative there be basic
    research if we expect to have the scientific underpinnings for
    pioneering innovations in the 6.23 and more applied programs.
        It is because of the importance of basic science in the
    capabilities of the Navy After Next that we are concerned by
    ONR's statements that the Navy's basic research program will be
    ``integrated with more applied S&T to promote transitions of
    discoveries.'' This translates to a ``show me what you can do
    for me now'' and we fear that this message is going to the
    program managers and scientists.
        A focus on integrating discovery-oriented basic research
    with more application-driven research will have a negative
    influence by creating a risk-adverse atmosphere in both the
    universities and with the program management. Researchers are
    being discouraged from pursuing bold and innovative ideas,
    ideas that could take years to complete but provide those
    technical breakthroughs in the future, that one technology,
    that one technology answer, what we will need in the future.
        Instead, they are focusing on research that will result in
    products now. While the results will surely be high quality,
    they are unlikely to be the type of research that will result
    in breakthroughs in understanding and technology.
        We believe that a message needs to be sent to address
    research creep in the 6.1 account. While we believe greater
    investment in Navy S&T accounts is absolutely necessary, all
    the funding in the world may not lead to new discoveries if the
    6.1 account does not address basic research.
        Adding congressional attention to the discussion of Navy
    basic research should serve as a reinforcement to ONR to renew
    its commitment to the regime of research that has served this
    country so well. Working together, Congress and the research
    community must communicate to the Secretary, the Chief of Naval
    Operations (CNO), and the Commandant that basic research is
    essential to the fleet and is a congressional priority.
        If ONR is not given the ability and direction to pursue an
    aggressive regime of high-risk, cutting-edge basic research
    now, we could be shortchanging our fighting forces in the
    future.
        Thank you for this opportunity to bring this to your
    attention, sir.
        [The statement follows:]

                       Prepared Statement of Richard West

        Chairman Stevens, Ranking Member Inouye, and Members of the Defense
    Subcommittee of the Senate Appropriations Committee, I want to thank
    you for the opportunity to appear before you this morning and for the
    strong support you and your committee have shown for basic research
    within the United States Navy.
        I am Rear Admiral Dick West, President of the Consortium for
    Oceanographic Research and Education, commonly referred to as CORE. I
    appear on behalf of our 71 member institutions, including Penn State,
    Texas A&M, Scripps Institution of Oceanography and the Universities of
    Alaska, Hawaii, Southern Mississippi, New Hampshire, Texas, South
    Carolina, and California at San Diego. These institutions and our other
    members represent the nucleus of American academic oceanographic
    research.
        I joined CORE in August 2002 after retiring from the U.S. Navy as
    Oceanographer and Navigator of the Navy. As you know, the Oceanographer
    provides oceanographic, meteorological, geospatial information and
    navigation support to the fleet. Prior to serving as Oceanographer, I
    was the Deputy Director for the Ballistic Missile Defense Organization.
    Other shore assignments included Director, Surface Combat Systems
    Division on the CNO's Staff, Deputy Chief of Staff for Operations
    CINCSOUTH, and Commander, Operational Test and Evaluation Force. From
    1992-1993, as Commanding Officer of the Surface Warfare Officers
    School, I directed a large, advanced studies academic institution,
    providing a continuum of professional education and training to prepare
    naval officers to serve at sea. I served in Vietnam with the riverine
    forces and commanded ships during hostilities in the Arabian Gulf. As
    Oceanographer, I was the primary customer for the products from our
    nation's oceanographic institutions.
        Since its founding in 1946, the Office of Naval Research has been
    one of the nation's leading supporters of high-risk cutting edge basic
    research. The Office has supported the research of fifty Nobel
    laureates. It has participated in breakthrough discoveries in areas
    such as lasers, precision timekeeping, and molecular biology. Without
    question the past five decades have seen the ONR fulfill its mission,
    ``To plan, foster and encourage scientific research in recognition of
    its paramount importance as related to the maintenance of future naval
    power, forced entry capability, and the preservation of national
    security.''
        America's oceanographers were and continue to be active partners
    with the Office of Naval Research in providing today's and tomorrow's
    sailors and marines with the tools necessary to be the finest
    warfighters in the world. When we look back at the past fifty years, we
    see a history of courageous investment and bold discoveries that paved
    the path for the end of the Cold War. However, when we look to the
    coming decades, the picture does not seem so bright.
        Bold, high-risk, cutting-edge basic research has been a crucial
    component of the Navy's battlespace superiority for decades. For
    example, basic research into packet switching laid the foundation for
    what we know today as the Internet and has been the fundamental science
    behind the technology underlying net-centric warfare, an increasingly
    important asset to the Navy and Marine Corps.
        In the Iraqi theatre, ship-launched precision munitions played a
    crucial role in defeating Iraqi forces while limiting civilian
    causalities. Navy-supported basic research in precision timekeeping
    enabled the development of the highly accurate Global Positioning
    System (GPS). GPS is the backbone of the guidance system that allows
    commanders to launch and deliver fire-power to targets with previously
    unimaginable accuracy and lethality. Without the basic research decades
    ago into the fundamental physics necessary to develop the atomic clocks
    that are at the backbone of the GPS system, the Navy's ability to
    accurately strike targets would be severely compromised.
        As you may know, basic research supported by the Navy led to the
    development of the laser. This discovery led directly to the advent of
    small, easily handled lasers that allow soldiers, sailors, airmen and
    marines to accurately locate targets and provide coordinates for
    sailors and airmen to deliver munitions to targets.
        The research discussed above was high-risk and cutting edge when it
    was conducted decades ago. None of the researchers then could have
    imagined its application or importance in conflicts today. While such
    research was not focused on specific applications, without it and
    without the support that made it possible, our soldiers, sailors,
    airmen and marines would not have had the technological edge they
    enjoyed in Operation Iraqi Freedom.
        Today, we are concerned that ONR may be veering off course in a
    direction that departs from its traditional aggressive support for
    high-risk basic research. This concern is not so much with the level of
    funding in the 6.1, 6.2 and 6.3 accounts. Rather, it reflects a growing
    tendency to commit funding in the 6.1 account that is supposed to be
    used for discovery-oriented basic research to short-term applied
    research that is product-driven. Let me be clear, we firmly believe
    that applied research and advanced technology development are crucial
    parts of RDT&E, but it is imperative that there be robust basic
    research, if we expect to have the scientific underpinnings for
    pioneering innovations in the 6.2 and more applied programs.
        It is because of the importance of basic science in the
    capabilities of the Navy After Next, that we are concerned by ONR
    statements that the Navy's basic research program will be ``integrated
    with more applied S&T to promote transitions of discoveries.''
    Unfortunately, this statement could be interpreted as code for ``show
    me what you've done for me lately'' and program managers and scientists
    seem to be getting the message loud and clear.
        The focus on integration of discovery-oriented basic research with
    more application driven research could have a negative impact on naval
    basic research by creating a risk-averse atmosphere in both the
    universities and with program management and officers within the Navy.
    However, the greater risk is that researchers become discouraged from
    pursuing bold and innovative ideas and lines of research that could
    take years to complete and have practical application decades from now.
    Instead, researchers focus on pursuing research that they know will
    result in products. While the results will surely be high quality, they
    are unlikely to be the type of research that will result in
    breakthroughs in understanding.
        High-risk research offers the promise of transformational
    discoveries but it is prone to failure before it yields pioneering
    discoveries. On the other hand, it is only by pushing the boundaries,
    constantly taking risks, and looking for bold hypothesis that
    scientists foster the discoveries that may lead to the next laser,
    tomorrow's global positioning system, or the net-centric warfare of
    2030.
        CORE was particularly pleased to note your inclusion of language in
    the fiscal year 2003 Defense Appropriations report expressing
    discouragement at the low levels of Navy S&T investment and encouraging
    the Navy to resume its previously robust support for S&T. We believe
    that a similar message needs to be sent to address ``research-creep''
    in the 6.1 account.
        We are encouraging you today to provide clear instruction to the
    leadership of the Office of Naval Research to reaffirm the Navy's
    commitment to high-risk, cutting-edge, basic research. The past
    successes of such basic research provide a clear justification for
    renewing this investment in the Navy's future.
        We believe that this is a commitment that ONR can and should be
    willing to make. Often such issues as the character of research
    supported by ONR are eclipsed by more direct concerns like funding
    availability. While we believe greater investment in the Navy S&T
    accounts is absolutely necessary, all the funding in the world may not
    lead to new discoveries if the research funding in the 6.1 account is
    spent on applied research. Adding Congressional attention to the
    discussion of naval basic research should serve as a ``wake-up'' call
    for ONR and return it to the regime of research that has served
    America's sailors and marines well for decades.
        We ask you to recognize and impress a message upon the Navy and
    Marine Corps leadership. While the basic research ONR supports today
    will not deliver today's admirals and generals a product they can
    deploy, it may afford the lieutenants and captains under their command
    profoundly more robust weapons systems when they are combat commanders.
    It is because of an aggressive regime of basic research thirty years
    ago, when today's military leaders were being commissioned, that an
    effective and diverse suite of combat systems is available to prosecute
    their mission now. Working together, Congress and the research
    community must communicate to the Secretary, the Chief of Naval
    Operations and the Commandant, that basic research is essential to the
    fleet and is a Congressional priority. If ONR is not given the ability
    and direction to pursue an aggressive regime of high-risk cutting edge
    basic research now, the nation could be shortchanging our sons and
    daughters, the sailors and marines of the Navy After Next.
        Again, thank you for the opportunity to bring these important
    issues to your attention. I welcome the opportunity to answer any
    questions.

        Senator Inouye. Admiral West, we concur with you sir,
    because we believe that the proper underpinnings for research
    is basic research. And we believe the recent operation in Iraq
    demonstrated that, and we hope to convince our colleagues
    across the river that we should continue that.
        Thank you very much.
        Admiral West. We appreciate your support, sir. We are here
    to help.
        Senator Inouye. Our next witness is the chief executive
    officer of Sanaria, Incorporated, Dr. Stephen Hoffman,
    representing the American Society of Tropical Medicine and
    Hygiene. Dr. Hoffman.

    STATEMENT OF STEPHEN HOFFMAN, M.D., CHIEF EXECUTIVE
                OFFICER, SANARIA, INC.; ON BEHALF OF THE
                AMERICAN SOCIETY FOR TROPICAL MEDICINE AND
                HYGIENE

        Dr. Hoffman. Good morning, Mr. Ranking Member. I am Stephen
    Hoffman, Chief Executive Officer (CEO) of Sanaria, a company
    working to develop a malaria vaccine. I am a retired Captain in
    the U.S. Navy Medical Corps and past president of the American
    Society of Tropical Medicine and Hygiene. I am here this
    morning to present testimony on the Society's behalf. The
    American Society of Tropical Medicine and Hygiene is a
    professional society of 3,500 researchers and practitioners----
        Senator Inouye. Doctor, can you press that button?
        Dr. Hoffman. The American Society of Tropical Medicine and
    Hygiene is a professional society of 3,500 researchers and
    practitioners, dedicated to the prevention and treatment of
    infectious and tropical diseases. The collective experience of
    our members is in the areas of tropical infectious diseases,
    basic science, medicine, insect vector control, epidemiology,
    vaccinology, public health, biodefense, and bioterrorism
    defense.
        I am here today to encourage your support for infectious
    disease research at the Department of Defense. The Military
    Infectious Diseases Research Program has done an excellent job
    in its mission to develop new products to protect and maintain
    the health of our troops wherever they are deployed. Working
    with other U.S. public health agencies, DOD scientists at the
    U.S. Army Medical Research Institute for Infectious Diseases
    (USAMRIID), the Walter Reed Army Institute of Research (WRAIR),
    and the Naval Medical Research Center, the latter two working
    in the Inouye Building at Forest Glen very effectively, and DOD
    medical laboratories abroad are helping us to better
    understand, diagnose, and treat infectious and tropical
    diseases. These include viral diseases such as West Nile Virus,
    bacterial diseases such as tuberculosis, and parasitic diseases
    such as malaria.
        Infectious diseases are the second leading cause of death
    worldwide, accounting for over 13 million deaths. Twenty well-
    known diseases, including tuberculosis, malaria, cholera, and
    Rift Valley Fever, have reemerged or spread geographically
    since 1973, often in more virulent and drug-resistant forms.
    Over 30 previously unknown disease agents have been identified
    in this period for which therapy is not optimal or does not
    exist at all, including Human Immunodeficiency Virus (HIV),
    Ebola, Marburg, and the most recent threat, Severe Acute
    Respiratory Syndrome, or SARS.
        These naturally occurring diseases can strike our troops at
    any time and they are potential threats for biological warfare
    or bioterror attack. Historically, tropical diseases such as
    these have impaired military operations. For example, malaria
    had a large impact on U.S. service personnel serving in
    Southeast Asia. In some regions up to 60 percent of troops were
    reported to be infected.
        In the most recent conflict, suspicions of Iraqi supplies
    of anthrax, botulism, and plague led to fear of biological
    attacks. The successful administration of anthrax vaccine
    reduced the risk to American troops, but many suspected
    biological weapons have no proven treatments and further
    research is necessary to protect our military personnel.
        Military scientists have made significant accomplishments
    in the fight against these deadly illnesses, which I describe
    in my written statement. Suffice it to say that the Defense
    Department's medical research programs are second to none and
    they play a critical role in our Nation's infectious disease,
    biodefense, and bioterrorism defense efforts.
        The Society believes the military's overseas laboratories
    deserve special mention. The U.S. Army and Navy currently
    support medical research labs located in five developing
    countries--Thailand, Egypt, Indonesia, Kenya, and Peru--with
    substations in neighboring countries. These research
    laboratories serve as critical sentinel stations, alerting
    military and public health agencies to dangerous infectious
    disease outbreaks and increasing microbial resistance to drugs.
        The research stations are an important national resource in
    the ongoing battle against emerging disease and should be
    strengthened with increased funding and increased opportunities
    for collaborations with civilian scientists. The laboratories
    provide field sites for important research that cannot feasibly
    be conducted in the United States, including basic research,
    testing of new drugs and vaccines, and increasing our
    understanding of disease and the spread of disease.
        Therefore, Mr. Chairman, the American Society for Tropical
    Medicine and Hygiene urges you to support the military
    infectious disease research program and asks for $70 million in
    fiscal year 2004. The Society also recommends $35 million for
    the military HIV research program, which has become a world
    leader in the study of HIV genetic variation and in the
    development and testing of new vaccines.
        In conclusion, Mr. Chairman, our borders remain porous to
    infectious and tropical diseases, including the West Nile virus
    found here in Washington, D.C., and of course most recently
    Severe Acute Respiratory Syndrome (SARS). Other diseases still
    largely confined to the troops, like malaria, pose a major
    threat to our military and to American travelers. In all
    military operations in the last century where malaria was
    transmitted, including the Pacific theater in World War II,
    Vietnam, and Operation Restore Hope in Somalia, more casualties
    were caused by malaria than by combat injuries. Further
    research into infectious diseases can reduce the threat to
    American lives.
        Thank you, Mr. Chairman, for the opportunity to present the
    views of the American Society of Tropical Medicine and Hygiene.
        Senator Stevens [presiding]. Thank you, Doctor. This
    committee started the research on HIV at the Department of
    Defense and will continue to support it. I appreciate your
    courtesy. Thank you.
        Dr. Hoffman. Thank you.
        [The statement follows:]

                  Prepared Statement of Dr. Stephen L. Hoffman

        The American Society for Tropical Medicine and Hygiene (ASTMH)
    thanks the Subcommittee for the opportunity to present this testimony.
        The ASTMH is a professional society of 3,500 researchers and
    practitioners dedicated to the prevention and treatment of infectious
    and tropical diseases. The collective experience of our members is in
    the areas of tropical infectious diseases, basic science, medicine,
    insect vector control, epidemiology, vaccinology, public health,
    biodefense and bioterrorism defense.
        My name is Stephen L. Hoffman, I am a past president of ASTMH, a
    retired CAPT in the U.S. Navy Medical Corps, and currently the CEO of
    Sanaria, a company working to develop a malaria vaccine. I am here
    today to encourage your support for infectious disease research at the
    Department of Defense.

                 IMPACT OF INFECTIOUS DISEASES ON THE MILITARY

        Historically, tropical diseases have impaired military operations.
    For example, malaria had a large impact on U.S. service personnel
    serving in southeast Asia; in some regions up to 60 percent of troops
    were reported to be infected. During Desert Storm, potential exposure
    to the parasitic disease leishmaniasis led to banning American military
    personnel who had served in the Persian Gulf from donating blood to
    prevent infecting the U.S. blood supply.
        In the most recent conflict, suspicions of Iraqi supplies of
    anthrax, botulism, and plague led to fear of biological attacks. The
    successful research into anthrax vaccine reduced the risk to American
    troops. But, many suspected biological weapons have no proven
    treatments, and further research is necessary to protect our military
    personnel.

                THE MILITARY INFECTIOUS DISEASE RESEARCH PROGRAM

        A Presidential Executive Order issued September 30, 1999, entitled
    ``Improving Health Protection of Military Personnel Participating in
    Particular Military Operations,'' mandates that ``It is the Policy of
    the United States Government to provide our military personnel with
    safe and effective vaccines, antidotes, and treatments that will negate
    or minimize the effects of these health threats.''
        Many diseases are endemic to areas of military operations.
    Accordingly, the primary mission of the DOD's Military Infectious
    Diseases Research Program is to develop new products with which to
    protect and maintain the health of our troops in the theater. With
    worldwide deployment of our military personnel, it is imperative to
    protect them against infectious diseases that occur around the globe.
    Often our troops are exposed to new strains of infections that do not
    exist within our own borders.
        The Department of Defense (DOD) medical research programs are
    vitally important to maintain the health of our troops wherever they
    are deployed. Furthermore, the programs play a critical role in our
    nation's infectious disease, biodefense, and bioterrorism defense
    efforts. Working with other U.S. public health agencies, DOD scientists
    at the U.S. Army Medical Research Institute for Infectious Diseases
    (USAMRIID), the Walter Reed Army Institute of Research (WRAIR), the
    U.S. Naval Medical Research Center (NMRC), and DOD medical laboratories
    in Asia, Africa, and South America are helping us to better understand,
    diagnose, and treat infectious diseases, especially tropical infectious
    diseases.
        The Society believes the military's overseas laboratories deserve
    special mention. The U.S. Army and the Navy currently support medical
    research laboratories located in five developing countries, including
    Thailand, Egypt, Indonesia, Kenya, and Peru. These research
    laboratories serve as critical sentinel stations alerting military and
    public health agencies to dangerous infectious disease outbreaks and
    increasing microbial resistance to drugs. The research stations are an
    important national resource in the ongoing battle against emerging
    disease, and should be strengthened with increased funding and
    increased opportunities for collaborations with civilian scientists.
    The laboratories provide field sites for important research that cannot
    feasibly be performed in the United States, including basic research,
    testing of new drugs and vaccines, increasing our understanding of
    diseases and their spread. The overseas laboratories strengthen
    collaborations between U.S. and foreign countries, expanding our
    knowledge and understanding of infectious diseases, and providing
    hands-on training for both U.S. and local students and investigators,
    and for local health authorities.
                         a multitude of disease threats
        Infectious diseases are caused by a wide variety of viruses,
    bacteria, and parasites. For example,
      --Viruses cause West Nile Virus, dengue fever, yellow fever, Ebola,
            Marburg, HIV/AIDS, and the most recent threat, severe acute
            respiratory syndrome (SARS);
      --Bacteria cause cholera, tuberculosis, anthrax, plague, and
            botulism; and
      --Parasites cause malaria and leishmaniasis.
        Infectious diseases are the second leading cause of death
    worldwide, accounting for over 13 million deaths (25 percent of all
    deaths worldwide in 1999). Dozens of well-known diseases--including
    tuberculosis, malaria, and cholera--have reemerged or spread
    geographically since 1973, often in more virulent and drug-resistant
    forms. Over 30 previously unknown disease agents have been identified
    in this period for which therapy is not optimal or does not exist at
    all, including HIV, Ebola, Nipah virus, Marburg virus, hepatitis C, and
    the most recent threat, severe acute respiratory syndrome (SARS).
        Moreover, many of these same threats are potential agents for a
    biological warfare or bioterror attack. Research on these diseases
    stands to benefit the civilian population as well as the military.
               a history of success in tropical disease research
        Consistent with the standard set by our nation's armed forces and
    the men and women who selflessly serve in our military, it should come
    as no surprise to anyone that the Defense Department's medical research
    programs are second to none. As the leader in tropical and infectious
    disease research, DOD programs have been vital for the successful
    outcome of military campaigns. It was the DOD research program that
    developed the first modern drugs for prevention and treatment of
    malaria, which even today affects 2.4 billion people, or about 40
    percent of the world's population, and causes up to 2.7 million deaths
    each year or about 5 percent of all fatalities worldwide.
        Along with Venezuelan Equine Encephalitis, the DOD also developed
    or supported promising vaccines for prevention of Rift Valley Fever,
    Argentine Hemorrhagic Fever, Adenovirus disease in recruits, and
    plague. Two of these vaccines (plague and adenovirus) are no longer
    licensed in the United States.
        As a result of a significant outbreak in Saudi Arabia and Yemen,
    the first epidemic outside of Africa, Rift Valley Fever vaccine has
    become of interest to troops in the Middle East. Rift Valley fever is a
    deadly, fever-causing viral disease which can lead to hemorrhagic fever
    or encephalitis. It is commonly associated with mosquito-borne
    epidemics, and it can also be spread through contaminated meat. Spread
    of this disease to the United States is not out of the question, since
    mosquitoes capable of transmitting Rift Valley Fever are found in the
    United States. Further development of these vaccines is an important
    national priority.
        Other notable advances accomplished by military experts in tropical
    diseases working with corporate partners include the invention of
    hepatitis A vaccine at WRAIR and its ultimate licensure based on
    studies conducted at the U.S. Armed Forces Research Institute of
    Medical Sciences (AFRIMS) in Bangkok; the discovery (during WWII), and
    later licensure of Japanese encephalitis vaccine, based on studies
    conducted at AFRIMS and WRAIR; and the discovery and licensure of
    mefloquine and halofantrine for treatment and prevention of malaria.
    U.S. Navy scientists working at the Naval Medical Research Unit-2
    formerly in Taiwan developed intravenous therapy for cholera, and
    created the foundation for oral rehydration therapy for cholera and
    other diarrheal diseases, which has been hailed by some as the most
    important medical discovery of the 20th century.
        A significant accomplishment made by military scientists at WRAIR
    and their corporate partners is the discovery of the first prototype
    vaccine shown to be capable of preventing falciparum malaria. Novel
    vaccines, such as a DNA vaccine for malaria, are being developed under
    the leadership of scientists at the NMRC. Most recently, licensure has
    been awarded for Malarone, a new drug for prevention and treatment of
    malaria. Another anti-malarial drug, Tafenaquine, is in advanced field
    trials with a corporate partner. With the certainty that resistance to
    malaria drugs quickly appears, these drugs have a useful lifespan of
    only about ten years. Replacements must be sought continually.

               FURTHER DOD RESEARCH IN INFECTIOUS DISEASES NEEDED

        A January, 2000, unclassified report from the CIA's National
    Intelligence Council concluded that infectious diseases are likely to
    account for more military hospital admissions than battlefield
    injuries. ``The Global Infectious Disease Threat and Its Implications
    for the United States,'' labeled global infectious disease a threat to
    U.S. national security. The report also assessed the global threat of
    infectious disease, stating ``New and reemerging infectious diseases
    will pose a rising global health threat and will endanger U.S. citizens
    at home and abroad, threaten U.S. armed forces deployed overseas, and
    exacerbate social and political instability in key countries and
    regions in which the United States has significant interests.'' The
    recent SARS epidemic has clearly highlighted the ongoing threat of
    infectious diseases, and it has demonstrated the profound impact these
    infectious diseases can have, both in terms of health, psychology, and
    a nation's economy.

                                 ASTMH REQUEST

        ASTMH urges a strong national commitment to the DOD infectious
    disease research programs to accelerate the discovery of the products
    that protect American military personnel and citizens at home and
    abroad, and to improve global health and economic stability in
    developing countries. The DOD's Military Infectious Disease Research
    Program (MIDRP) has been a highly successful program. ASTMH urges the
    Subcommittee to make DOD infectious disease research a high priority in
    the DOD budget for fiscal year 2004, and to provide $70 million, up
    from the $42 million in the current budget, to take full advantage of
    the high-quality research opportunities.
        The Society also hopes this Subcommittee will continue to oversee
    the DOD's HIV Research Program as new agreements with the National
    Institute of Allergy and Infectious Diseases (NIAID) develop. The HIV
    Research Program, mandated by Congress in 1987 because of the
    significant risk of active-duty personnel in acquiring the HIV virus,
    is a world leader in the study of HIV genetic variation world-wide and
    in the development and testing of new vaccines to be used against HIV
    strains anywhere in the world. It is critical that the overseas
    collaborations and agreements facilitated by the current leadership
    from the Walter Reed Army Institute of Research be preserved to ensure
    the continued progress of current and planned clinical trials to test
    the efficacy of new vaccine products. ASTMH recommends $35 million for
    the HIV Research Program, up from approximately $23 million in the
    current budget.
        Finally the Society also supports the Global Pathogen Surveillance
    Act (S. 871) recently introduced by Senator Biden, which authorizes
    additional resources to increase the number of personnel and expand
    operations at the DOD overseas laboratories. The Society requests that
    the Subcommittee fully fund this initiative at the $18 million level
    authorized by the bill, if it is enacted into law during the upcoming
    year.

                                   CONCLUSION

        Our borders remain porous to infectious and tropical diseases,
    including most recently the West Nile Virus, which has been found here
    in Washington, DC. Other diseases still largely confined to the
    tropics, like malaria, pose a major threat to our military and to
    American travelers. In all military operations in the last century
    where malaria was transmitted, including the Pacific Theater in World
    War II, Vietnam, and Somalia, more casualties were caused by malaria
    than by combat injuries. And with global warming, the increasing
    resistance of insect vectors to insecticides, and the increasing
    resistance of the malaria parasite to antimalarial drugs, the range of
    malaria and other vector-borne diseases is expanding.
        The ASTMH urges you to provide strong support for the DOD Military
    Infectious Diseases Research Programs. Our nation's commitment to this
    research is critically important given the resurgent and emerging
    infectious disease threats that exist today. If we don't make these
    important programs a priority, the health of our troops, as well as the
    health of all Americans, will continue to be at risk; we will continue
    to experience increased health costs; and infectious diseases will
    flourish around the world, prolonging economic and political
    instability.
        Thank you for the opportunity to present the views of the American
    Society of Tropical Medicine and Hygiene, and for your consideration of
    these requests.

        Senator Stevens. The next witness is Karen Peluso, Director
    of the Neurofibromatosis Corporation in New England. Good
    morning.

    STATEMENT OF KAREN PELUSO, EXECUTIVE DIRECTOR,
                NEUROFIBROMATOSIS, INC., NEW ENGLAND

        Ms. Peluso. Good morning, Mr. Chairman. Thank you for the
    opportunity to appear before you today to talk about the
    importance of continuing the Army's neurofibromatosis (NF)
    research program.
        Neurofibromatosis is a genetic tumor disorder that causes
    tumors to grow anywhere on the nerves in or on our body. It can
    be disfiguring and debilitating. It can cause brain tumors,
    tumors of the spine, hearing loss, blindness, learning
    disabilities, and cancer.
        I was introduced to neurofibromatosis 20 years ago when my
    daughter was diagnosed with NF, and I was very fortunate at the
    time that my pediatrician was able to recognize the cafe au
    lait birthmarks on her body, which were an outward sign of NF.
    At that time I was very frustrated by the fact that I could not
    find any information. In fact, our pediatrician showed us his
    medical book, which had a very small paragraph which talked
    about neurofibromatosis. And myself with a group of other
    parents became an advocacy group to try to create awareness and
    promote research.
        1993 was a turning point in our quest to find a treatment
    and cure for NF when this subcommittee made an appropriation of
    $8 million for a 3-year study of neurofibromatosis. After that
    3 years, the results were astounding. The scientists were so
    enthusiastic about how studying NF would open new information
    regarding diseases that affect millions of people, like cancer
    and brain tumors and learning disabilities, not just the people
    who have neurofibromatosis. NF was also directly linked to
    military purposes as it can be used in studying wound healing
    and nerve regeneration after exposure to chemical toxins.
        Congress has given NF research strong partisan support and
    the Army's NF research has produced dramatic results every
    year. Now clinical trials have begun to use drugs to try to
    shrink these tumors.
        Twenty years later after I learned that my daughter has
    neurofibromatosis, I work in the office of Neurofibromatosis,
    Incorporated, in New England and every day our phone rings with
    new parents who have received the diagnosis of NF, and they are
    filled with the same fear that I had 20 years ago: How will
    this affect my child? What is going to happen to her? NF is so
    unpredictable.
        I can give them the good news and the bad news. The good
    news is that, thanks to the Army's innovative NF research
    program, great strides are being made and we are getting closer
    to a cure. But the bad news is we still do not have a
    treatment, we still do not have a cure, and we have to keep up
    this fight.
        That is why I am here today to respectfully ask that this
    committee make a recommendation of $25 million for the NF
    research program through the Army in fiscal 2004. We cannot
    stop our fight now, we have come so far and we are so close. I
    ask this subcommittee for your continued support and thank you
    for your past support.
        [The statement follows:]

                       Prepared Statement of Karen Peluso

        Thank you, Mr. Chairman, for the opportunity to appear before you
    today to present testimony to the Subcommittee on the importance of
    continued funding for Neurofibromatosis (NF), a terrible genetic
    disorder directly associated with military purposes and closely linked
    to many common ailments widespread among the American population.
        I am Karen Peluso, Executive Director of NF Inc.-New England, which
    is a participant in a national coalition of NF advocacy groups. I have
    been actively involved in creating awareness of NF and promoting
    scientific research in this area since 1982. I am here on behalf of the
    100,000 Americans who suffer from NF, including my daughter, as well as
    approximately 150 million Americans who suffer from diseases linked to
    NF, including some of the most common forms of cancer, congenital heart
    disease, hypertension, and learning disabilities.
        Mr. Chairman, I am requesting increased support, in the amount of
    $25 million, to continue the Army's highly successful NF Research
    Program (NFRP). The program's great success can be seen in the
    commencement of clinical trials only ten years since the discovery of
    the NF1 gene. Now, with NF in the expensive but critical era of
    clinical and translational research, scientists closely involved with
    the Army program have stated that the number of high-quality scientific
    applications justify a much larger program.
    What is Neurofibromatosis (NF)?
        NF is a genetic disorder involving the uncontrolled growth of
    tumors along the nervous system which can result in terrible
    disfigurement, deformity, deafness, blindness, brain tumors, cancer,
    and/or death. NF can also cause other abnormalities such as unsightly
    benign tumors across the entire body and bone deformities. In addition,
    approximately one-half of children with NF suffer from learning
    disabilities. It is the most common neurological disorder caused by a
    single gene. While not all NF patients suffer from the most severe
    symptoms, all NF patients and their families live with the uncertainty
    of not knowing whether they will be seriously affected one day because
    NF is a highly variable and progressive disease.
        Approximately 100,000 Americans have NF. It appears in
    approximately one in every 3,500 births and strikes worldwide, without
    regard to gender, race or ethnicity. It is estimated that 50 percent of
    new cases result from a spontaneous mutation in an individual's genes
    and 50 percent are inherited. There are two types of NF: NF1, which is
    more common, and NF2, which primarily involves acoustic neuromas and
    other tumors, causing deafness and balance problems.
        Most strikingly, research has shown that NF is closely linked to
    cancer, brain tumors, learning disabilities, and heart disease,
    potentially affecting over 150 million Americans in this generation
    alone.

    NF's Connection to the Military
        NF research is directly linked to military purposes because it is
    closely linked to cancer, brain tumors, learning disabilities, brain
    tissue degeneration, nervous system degeneration, deafness, and
    balance. Because NF manifests itself in the nervous system, this
    Subcommittee, in past Report language, has stated that Army-supported
    research on NF includes important investigations into genetic
    mechanisms governing peripheral nerve regeneration after injury from
    such things as missile wounds and chemical toxins. For the same reason,
    this subcommittee also stated that NF may be relevant to understanding
    Gulf War Syndrome and to gaining a better understanding of wound
    healing. Today, NF research now includes important investigations into
    genetic mechanisms which involve not just the nervous system but also
    other cancers.

    The Army's Contribution to NF Research
        Recognizing NF's importance to both the military and to the general
    population, Congress has given the Army's NF Research Program strong
    bipartisan support. After the initial three-year grants were
    successfully completed, Congress appropriated continued funding for the
    Army NF Research Program on an annual basis. From fiscal year 1996
    through fiscal year 2003, this funding has amounted to $110.3 million,
    in addition to the original $8 million appropriation. Between fiscal
    year 1996 and fiscal year 2002, 299 proposals were received, of which
    85 awards have been granted to researchers across the country and
    another 17 projects have been recommended for funding this year.
        The Army program funds innovate, groundbreaking research which
    would not otherwise have been pursued, and it has produced major
    advances in NF research, such as the development of advanced animal
    models and clinical trials. The program has brought new researchers
    into the field of NF, as can be seen by the nearly 60 percent increase
    in applications in the past year along. Unfortunately, despite this
    increase, the number of awards has remained relatively constant over
    the past couple of years.
        In order to ensure maximum efficiency, the Army collaborates
    closely with other federal agencies that are involved in NF research,
    such as NIH and the VA. Senior program staff from the National Cancer
    Institute (NCI) and the National Institute of Neurological Disorders
    and Stroke (NINDS), for example, have sat on the Army's NF Research
    Program's Integration Panel which sets the long-term vision and funding
    strategies for the program. This assures the highest scientific
    standard for research funding while ensuring that the Army program does
    not overlap with other research activities.
        Because of the enormous advances that have been made as a result of
    the Army's NF Research Program, research in NF has truly become one of
    the great success stories in the current revolution in molecular
    genetics, leading one major researcher to conclude that more is known
    about NF genetically than any other disease. Accordingly, many medical
    researchers believe that NF should serve as a model to study all
    diseases.

    Future Directions
        The NF research community is now ready to embark on projects that
    translate the scientific discoveries from the lab to the clinic. This
    translational research holds incredible promise for NF patients, as
    well as for patients who suffer from many of the diseases linked to NF.
    This research is costly and will require an increased commitment on the
    federal level. Specifically, increased investment in the following
    areas would continue to advance NF research and are included in the
    Army's NF research goals:
      --Clinical trials
      --Development of drug and genetic therapies
      --Further development and maintenance of advanced animal models
      --Expansion of biochemical research on the functions of the NF gene
            and discovery of new targets for drug therapy
      --Natural History Studies and identification of modifier genes--such
            studies are already underway, and they will provide a baseline
            for testing potential therapies and differentiating among
            different phenotypes of NF
      --Development of NF Centers, tissue banks, and patient registries.

    Fiscal Year 2004 Request
        Mr. Chairman, the Army's highly successful NF Research Program has
    shown tangible results and direct military application with broad
    implications for the general population as well. The program is now
    poised to fund translational and clinical research, which is the most
    promising yet the most expensive direction that NF research has taken.
    The program has succeeded in its mission to bring new researchers and
    new approaches to research into the field. Therefore, increased funding
    is now needed to take advantage of promising avenues of investigation,
    to continue to build on the successes of this program, and to fund this
    translational research thereby continuing the enormous return on the
    taxpayers' investment.
        In recent years, the program has granted its first two clinical
    trial awards but had to decline other clinical trial applications that
    scored in the ``Excellent'' range in the peer review process, solely
    because of limited funds. This is why scientists closely involved with
    Army program believe that the high quality of the scientific
    applications would justify a much larger program than is currently
    funded.
        I am here today to respectfully request an appropriation of $25
    million in your fiscal year 2004 Department of Defense Appropriations
    bill for the Army Neurofibromatosis Research Program. This is a $5
    million increase over the current level of funding as a step toward
    capitalizing on all of the research opportunities now available
        Mr. Chairman, in addition to providing a clear military benefit,
    the DOD's Neurofibromatosis Research Program also provides hope for the
    100,000 Americans like my daughter who suffer from NF, as well as the
    tens of millions of Americans who suffer from NF's related diseases
    such as cancer, learning disabilities, heart disease, and brain tumors.
    Leading researchers now believe that we are on the threshold of a
    treatment and a cure for this terrible disease. With this
    Subcommittee's continued support, we will prevail.
        Thank you for your support of this program and I appreciate the
    opportunity to submit this testimony to the Subcommittee.

        Senator Stevens. Thank you very much.
        Ms. Peluso. Thank you.
        Senator Stevens. Is there any money anywhere in the budget
    to your knowledge for that?
        Ms. Peluso. Pardon me?
        Senator Stevens. Any money anywhere in the budget for that
    NF, do you know?
        Ms. Peluso. Well, last year there was $20 million. Is there
    money in this year's budget? I am sorry, I do not know the
    answer to that, sir. Let me ask----
        Senator Stevens. We will find out.
        Thank you very much.
        Ms. Peluso. Thank you.
        Senator Stevens. Mr. Morris, Robert Morris, Chief Executive
    Officer of the Fort Des Moines Memorial Park and Education
    Center.

    STATEMENT OF ROBERT V. MORRIS, CHIEF EXECUTIVE OFFICER,
                FORT DES MOINES MEMORIAL PARK, INC.

        Mr. Morris. Good morning, Senator Stevens. As you are
    aware, Fort Des Moines is the only military installation that
    can boast of being the launching point for black commissioned
    officers, female commissioned officers, and female enlisted
    troops into the United States Army, and we are very pleased
    with the record of the descendants of Fort Des Moines in the
    Iraq War.
        Fort Des Moines has introduced a project called the
    National Education Project (NEP), which is timely since,
    according to the U.S. Census, the majority of Americans will be
    non-white by year 2055, as will be our Armed Forces. The
    project's mission is to educate America's youth with an
    accurate portrayal of black and female contributions to
    military history and their impact on equality in the greater
    society. This youth education will enhance understanding of,
    support for, and participation in America's armed forces.
        The NEP offers multiple multicultural, non-sexist academic
    lessons related to the military command integration that
    occurred at Fort Des Moines. The first U.S. Army officer
    candidate school opened to black Americans in 1917 and to women
    in 1942 as part of the First Women's Army Corps give the
    national historic site a unique place in history.
        The target audience for the academic lessons are K through
    12 who possess a limited knowledge of non-white and female
    contributions to the military and to the Nation. The curriculum
    and documentary programs will be distributed nationwide via
    Internet and educational television at no cost to the end
    users. The program includes a series of evaluation measures to
    ensure classroom usage and effectiveness.
        Our National Education Project, an unprecedented
    educational initiative, is a dynamic response to the
    diversifying needs of our Nation and our Armed Forces. To this
    end, we request a $2.1 million appropriation to develop and
    implement the project in the long-term interest of our national
    defense.
        As you are aware, Senator, we have had a number of the real
    pioneers in the military through race involved in our project,
    including General Hoisington, the first female general, and
    General Colin Powell, who served on our board for 3 years until
    he became Secretary of State. This we feel is a very unique
    opportunity to do something that has never been done.
        As you are aware, we have been here before and our park is
    almost complete. We will be open next July and we are looking
    forward to expanding our programming nationally.
        [The statement follows:]

                     Prepared Statement of Robert V. Morris

        As America's Greatest Memorial to Black and Female Soldiers, Fort
    Des Moines is the only military installation to hold the distinction of
    launching black and women commissioned officers and female enlisted
    troops into the United States Army.
        Set for dedication in July 2004, our five (5) acre park includes a
    20,000 sq. ft. museum, historic Chapel, reflecting pool and monument by
    noted sculptor Richard Hunt. In order to achieve sustained nation-wide
    outreach, Fort Des Moines has introduced a unique National Education
    Project (NEP) which is timely since, according to the U.S. Census, the
    majority of American's will be non-white by year 2055 as will our Armed
    Forces.
        The project's mission is to educate America's youth with an
    accurate portrayal of black and female contributions to military
    history and their impact on equality in greater society. This youth
    education will enhance understanding of, support for and participation
    in America's Armed Forces.
        The NEP offers multi-cultural, non-sexist academic lessons related
    to the military command integration that occurred at Fort Des Moines.
    The first U.S. Army officer candidate schools open to black Americans
    in 1917 and to women in 1942 as part of the first Women's Army Corps
    give our National Historic Site a unique place in history. The target
    audience for the academic lessons are k-12 youth who possess a limited
    knowledge of non-white and female contributions to the military and the
    nation. The curriculum and documentary programs will be distributed
    nation-wide via internet and educational television at no cost to the
    end users. The program includes a series of evaluation measures to
    insure classroom usage and effectiveness.
        Our National Education Project, an unprecedented educational
    initiative, is a dynamic response to the diversifying needs of our
    nation and our Armed Forces. To this end, we request a $2.1 million
    appropriation to develop and implement this great project in the long-
    term interest of our national defense.

        Senator Stevens. Well, thank you. We will do our best.
    Colin Powell did call me about this last year. I will talk to
    him about it again.
        Mr. Morris. Thank you very much.
        Senator Stevens. Thank you very much for your testimony.
        Next is Robert Washington, co-chairman of the Military
    Coalition.

    STATEMENT OF ROBERT WASHINGTON, SR., FLEET RESERVE
                ASSOCIATION; CO-CHAIRMAN, THE MILITARY
                COALITION HEALTH CARE COMMITTEE

        Mr. Washington. Good morning, Mr. Chairman.
        Senator Stevens. Good morning, sir.
        Mr. Washington. The Military Coalition is most grateful to
    the leadership and strong support of last year's significant
    improvements in military pay, housing allowance, and other
    personnel programs for the Active, Guard, and Reserve personnel
    and their families. As much as Congress accomplished last year,
    very significant inequities and readiness challenges remain to
    be addressed. The following recommendations are made.
        The coalition strongly recommends restoration and funding
    of service end strength consistent with long-term sustainment
    of the global war on terrorism and the war in Iraq. The
    coalition urges the subcommittee to fund the administration-
    proposed pay raises and restore full pay comparability. The
    coalition opposes privatization of commissaries and strongly
    supports full funding of the benefit to sustain the current
    level of service for all commissary patrons.
        The coalition is asking the subcommittee to use your
    considerable powers of influence and persuasion with the Ways
    and Means Committee to break the logjam that has stalled
    military tax relief bill legislation sorely needed to eliminate
    the tax inequities and penalty on active duty Guard and Reserve
    members and their families.
        The coalition urges the subcommittee to appropriate
    sufficient funds for DOD to communicate benefit information
    directly to Standard beneficiaries, develop a Standard
    beneficiary education program, assist Standard beneficiaries in
    finding providers who will accept new Tricare Standard
    patients, including interactive, online lists, and other means
    of communication, and to develop a program to enhance Tricare
    Standard provider recruitment; also to appropriate sufficient
    funds to institute a pilot project at several locations of
    varying characteristics to test the extent to which raising
    Tricare Standard rates increased the number of providers who
    are willing to accept new Standard patients.
        The coalition urges the subcommittee to appropriate
    sufficient funds to make the Tricare medical program available
    for members of the National Guard and Reserve components and
    their families prior to activation on a cost-sharing basis, in
    order to ensure medical readiness and provide continuity of
    coverage to members of the Selected Reserve.
        In conclusion, Mr. Chairman, I again thank you for the
    opportunity to present the coalition's views.
        Senator Stevens. Well, thank you for coming again. We
    appreciate your courtesy, Mr. Chairman.
        [The statement follows:]

                  Prepared Statement of Robert Washington, Sr.

        Mister Chairman and distinguished members of the subcommittee. On
    behalf of The Military Coalition, a consortium of nationally prominent
    uniformed services and veterans' organizations, we are grateful to the
    Subcommittee for this opportunity to express our views concerning
    issues affecting the uniformed services community. This testimony
    provides the collective views of the following military and veterans'
    organizations, which represent approximately 5.5 million current and
    former members of the seven uniformed services, plus their families and
    survivors.
        Air Force Association
        Air Force Sergeants Association
        Air Force Women Officers Associated
        AMVETS (American Veterans)
        Army Aviation Association of America
        Association of Military Surgeons of the United States
        Association of the United States Army
        Chief Warrant Officer and Warrant Officer Association, U.S. Coast
    Guard
        Commissioned Officers Association of the U.S. Public Health
    Service, Inc.
        Enlisted Association of the National Guard of the United States
        Fleet Reserve Association
        Gold Star Wives of America, Inc.
        Jewish War Veterans of the United States of America
        Marine Corps League
        Marine Corps Reserve Officers Association
        Military Chaplains Association of the United States of America
        Military Officers Association of America
        Military Order of the Purple Heart
        National Guard Association of the United States
        National Military Family Association
        National Order of Battlefield Commissions
        Naval Enlisted Reserve Association
        Naval Reserve Association
        Navy League of the United States
        Non Commissioned Officers Association
        Reserve Officers Association
        Society of Medical Consultants to the Armed Forces
        The Retired Enlisted Association
        United Armed Forces Association
        United States Army Warrant Officers Association
        United States Coast Guard Chief Petty Officers Association
        Veterans of Foreign Wars
        Veterans' Widows International Network
        The Military Coalition, Inc., does not receive any grants or
    contracts from the federal government.

                                PERSONNEL ISSUES

        Mr. Chairman, The Military Coalition (TMC) is most grateful to the
    leadership and members of this Subcommittee for their strong support
    leading to last year's significant improvements in military pay,
    housing allowances and other personnel programs for active, Guard and
    Reserve personnel and their families. But as much as Congress
    accomplished last year, very significant inequities and readiness
    challenges remain to be addressed.
        In testimony today, The Military Coalition offers its collective
    recommendations on what needs to be done to address these important
    issues and sustain long-term personnel readiness.

                              ACTIVE FORCE ISSUES

        Since the end of the Cold War, the size of the force and real
    defense spending have been cut more than a third. In fact, the defense
    budget today is just 3.2 percent of this Nation's Gross National
    Product--less than half of the share it comprised in 1986. But national
    leaders also have pursued an increasingly active role for America's
    forces in guarding the peace in a very-dangerous world. Constant and
    repeated deployments have become a way of life for today's
    servicemembers, and the stress is taking a significant toll on our men
    and women in uniform and their families, as well.
        Despite the notable and commendable improvements made during the
    last several years in military compensation and health care programs,
    retention remains a significant challenge, especially in technical
    specialties. While some service retention statistics are up from
    previous years' levels, many believe those numbers are skewed by post-
    9/11 patriotism and by Services' stop-loss policies. That artificial
    retention bubble is not sustainable for the long term under these
    conditions, despite the reluctance of some to see anything other than
    rosy scenarios.
        From the servicemembers' standpoint, the increased personnel tempo
    necessary to meet continued and sustained training and operational
    requirements has meant having to work progressively longer and harder
    every year. ``Time away from home'' has become a real focal point in
    the retention equation. Servicemembers have endured years of longer
    duty days; increased family separations; difficulties in accessing
    affordable, quality health care; deteriorating military housing; less
    opportunity to use education benefits; and more out-of-pocket expenses
    with each military relocation.
        The war on terrorism has only heightened already burdensome mission
    requirements, and operating--and personnel--tempos continue to
    intensify. Members' patriotic dedication has been the fabric that
    sustained this increased workload for now, and a temporarily depressed
    economy also may have deterred some losses. But the longer-term outlook
    is problematic.
        Personnel Strengths and Operations Tempo.--The Coalition has been
    dismayed and deeply disappointed at the Department of Defense's
    reluctance to accept Congress efforts to increase Service end strength
    to meet today's much-increased operations tempo. The Department's
    response is to attack the problem by freeing up resources to realign to
    core war-fighting skills. While the Department's transformation vision
    is a great theory, its practical application will take a long time--
    time we don't have after years of extraordinary optempo that is already
    exhausting our downsized forces.
        The Coalition strongly believes that earlier force reductions went
    too far and that the size of the force should be increased,
    commensurate with missions assigned. The force was already overstrained
    to meet its deployment requirements before 9/11, and since then our
    forces have absorbed major contingency requirements in Afghanistan and
    Iraq.
        Deferral of meaningful action to address this problem cannot
    continue without risking serious consequences. Real relief is needed
    now. With no evidence of declining missions, this can only be achieved
    by increasing the size of the force.
        The Military Coalition strongly recommends restoration and funding
    of Service end strengths consistent with long-term sustainment of the
    global war on terrorism and fulfillment of national military strategy.
    The Coalition supports application of recruiting resources as necessary
    to meet this requirement. The Coalition urges the Subcommittee to
    consider all possible manpower options to ease operational stresses on
    active, Guard and Reserve personnel.
        Pay Raise Comparability.--The Military Coalition appreciates the
    Subcommittee's leadership during the last five years in reversing the
    routine practice of capping servicemembers' annual pay raises below the
    average American's. In servicemembers' eyes, all of those previous pay
    raise caps provided regular negative feedback about the relative value
    the Nation placed on retaining their services.
        Unfortunately, this failed practice of capping military raises to
    pay for budget shortfalls reared its head again earlier this year when
    the Director of the Office of Management and Budget proposed capping
    2004 and future military pay raises at the level of inflation. The
    Coalition was shocked and deeply disappointed that such a senior
    officer could ignore 25 years of experience indicating that pay caps
    lead inevitably to retention and readiness problems. Not only was the
    proposal ill timed as troops massed for a war with Iraq--it's just bad,
    failed policy.
        The President rejected his senior budget official's advice for five
    of the seven uniformed services--but, unfortunately, the
    Administration's budget for fiscal year 2004 proposes to cap the pay of
    NOAA and USPHS officers at 2 percent. The Military Coalition strongly
    objects to this disparate treatment of members in those uniformed
    services. The Coalition urges the Subcommittee to intercede in their
    behalf with colleagues on the appropriate oversight committees for NOAA
    and USPHS personnel to ensure that these commissioned officers receive
    the same treatment as their fellow comrades-in-arms.
        Pay raise comparability with private sector wage growth is a
    fundamental underpinning of the all-volunteer force, and it cannot be
    dismissed without severe consequences for national defense.
        When the pay raise comparability gap reached 13.5 percent in 1999--
    resulting in a predictable readiness crises--Congress took responsible
    action to change the law. Largely because of your efforts and the
    belated recognition of the problem by the Executive Branch, the gap has
    been reduced to 6.4 percent as of 2003.
        Fortunately, the President rejected his budgeteers' advice, and has
    proposed an average 4.1 percent raise for fiscal year 2004, which would
    shrink the gap another full percentage point to 5.4 percent. Even at
    that rate, it would take another 5 years to restore full comparability.
    So this is no time to reinstitute pay caps.
        On the contrary, we urge the Subcommittee to consider that the law
    mandating increased military raises will expire in 2006, after which
    military raises will again be capped one-half percentage point per year
    below private sector wage growth (see chart below).

        The Military Coalition urges the Subcommittee to fund the
    Administration-proposed raise and restore full pay comparability on the
    quickest possible schedule. Further, the Coalition strongly urges the
    Subcommittee to fund equal raises to PHS and NOAA corps officers and
    not create--for the first time ever--separate pay tables within the
    uniformed services.
        Basic Allowance for Housing (BAH).--The Military Coalition supports
    revised housing standards that are more realistic and appropriate for
    each pay grade. As an example, enlisted members are not authorized to
    receive BAH for a 3-bedroom single-family detached house until
    achieving the rank of E-9--which represents only one percent of the
    enlisted force. TMC believes that as a minimum, this BAH standard
    should be extended to qualifying servicemembers in grades E-7 and
    above, immediately.
        The Coalition is most grateful to the Subcommittee for acting in
    1999 to reduce out-of-pocket housing expenses for servicemembers.
    Responding to Congress's leadership on this issue, the Department of
    Defense proposed a phased plan to reduce median out of pocket expenses
    to zero by fiscal year 2005. This aggressive action to better realign
    BAH rates with actual housing costs is having a real impact and
    providing immediate relief to many servicemembers and families who were
    strapped in meeting rising housing and utility costs.
        The Military Coalition urges the Subcommittee to fund adjustments
    in grade-based housing standards to more adequately cover members'
    current out-of-pocket housing expenses.
        Family Readiness and Support.--The family continues to be a key
    consideration in the readiness equation for each servicemember. The
    maintenance of family readiness and support programs is part of the
    cost of performing the military mission. We must ensure that families
    have the opportunity to develop the financial and readiness skills
    needed to cope with deployment situations. It is important to meet the
    childcare needs of the military community including National Guard and
    Reserve members. Overall family support programs must meet the needs of
    National Guard and Reserve members being called to active duty in ever-
    increasing numbers.
        The Military Coalition urges funding to improve education and
    outreach programs and increase childcare availability to ensure a
    family readiness level and a support structure that meets the
    requirements of increased force deployments for active duty, National
    Guard and Reserve members.
        Commissaries.--The fiscal year 2003 budget reduced Defense
    Commissary Agency funding by $137 million and envisioned eliminating
    over 2,600 positions from stores and headquarters staff by September
    30, 2003. While DeCA indicates there will be no loss in service to the
    customer, the Coalition is concerned that the size and scope of the
    reductions may negatively impact quality and service to customers,
    including additional store closings, reduced hours, longer cashier
    lines and reduced stock on store shelves. This would have a
    significantly adverse impact on the benefit, which is widely recognized
    as a valuable part of the servicemember's compensation package and a
    cornerstone of quality of life benefits.
        The Military Coalition opposes privatization of commissaries and
    strongly supports full funding of the benefit to sustain the current
    level of service for all commissary patrons.
        Tax issues.--The Coalition understands that tax matters fall under
    the purview of a different committee. But there are unique issues
    affecting active duty, National Guard and Reserve members, and their
    families, and we hope that members of the Subcommittee will use their
    significant powers of persuasion to convince their colleagues to
    address these needed changes quickly.
        The Coalition strongly urges that every effort be made to break the
    logjam over the military tax relief bill (H.R. 1664). Considerable
    congressional support exists for the changes envisioned by this
    legislation, but the bill is now stalled for a number of reasons--none
    of which concern the merits of the legislation. This legislation will
    immediately benefit thousands of military homeowners who have been
    unfairly (and inadvertently) penalized with capital gains tax
    liabilities incurred because they were forced to sell their homes after
    extended government-directed absences away from their principle
    residences. This legislation will also provide needed tax deductions
    for unreimbursed travel and per diem expenses incurred by drilling
    Guard and Reserve personnel, who are asked to train more to enhance
    their readiness skills to support contingency missions. And, very
    significantly, the military tax relief bill fully tax exempts the death
    gratuity benefit paid to survivors of military members killed on active
    duty--which will immediately eliminate the inexplicable tax these
    survivors have to pay now.
        The Military Coalition urges the Subcommittee to use their
    considerable powers of influence and persuasion with the Ways and Means
    committee to break the logjam that has stalled the military tax relief
    bill--legislation sorely needed to eliminate tax inequities that
    penalize active duty, Guard and Reserve members, and their families.
        The Coalition also supports legislation that would amend the tax
    law to let Federal civilian retirees and active duty and retired
    military members pay health insurance premiums on a pre-tax basis. Many
    uniformed services beneficiaries pay premiums for a variety of health
    insurance programs, such as TRICARE supplements, the active duty dental
    plan or TRICARE Retiree Dental Plan (TRDP), long-term care insurance,
    or TRICARE Prime enrollment fees. For most beneficiaries, these
    premiums and enrollment fees are not tax-deductible because their
    health care expenses do not exceed 7.5 percent of their adjusted gross
    taxable income, as required by the IRS. This creates a significant
    inequity with private sector and some government workers, many of whom
    already enjoy tax exemptions for health and dental premiums through
    employer-sponsored health benefits plans. A precedent for this benefit
    was set for other Federal employees by a 2000 Presidential directive
    allowing federal civilian employees to pay premiums for their Federal
    Employees Health Benefits Program (FEHBP) coverage with pre-tax
    dollars.
        Although we recognize that this is not within the purview of the
    Subcommittee, the Coalition hopes that Subcommittee members will lend
    their support to this legislation and help ensure equal treatment for
    all military and federal beneficiaries.
        The Coalition urges the Subcommittee to support legislation to
    provide active duty and uniformed services beneficiaries a tax
    exemption for premiums or enrollment fees paid for TRICARE Prime,
    TRICARE Standard supplements, the active duty dental plan, TRICARE
    Retiree Dental Plan, FEHBP and Long Term Care.
        Death Gratuity.--The current death gratuity amount was last
    increased in 1991 when it was raised from $3,000 to $6,000. This amount
    is insufficient to cover costs incurred by families responding to the
    death of an active member.
        The Military Coalition recommends funding to increase the military
    death gratuity from $6,000 to $12,000, and making the gratuity tax-
    free.

                             HEALTH CARE TESTIMONY

        The Military Coalition (TMC) is appreciative of Congress's
    exceptional efforts to honor health care commitments to uniformed
    services beneficiaries, particularly for active duty and Medicare-
    eligibles. However, much remains to be done. We wish to address certain
    chronic problem areas, and additional initiatives essential to
    providing an equitable and consistent health benefit for all categories
    of TRICARE beneficiaries, regardless of age or geography.
        While Congress has substantially eased cost burdens for Medicare-
    eligibles and for active duty families in TRICARE Prime and Prime
    Remote, we need to draw attention to the 3.2 million TRICARE Standard
    beneficiaries under the age of 65, many of whom face increasingly
    significant provider accessibility challenges.

                 ADEQUATE FUNDING FOR THE DEFENSE HEALTH BUDGET

        Once again, a top Coalition priority is to work with Congress and
    DOD to ensure full funding of the Defense Health Budget to meet
    readiness needs and deliver services, through both the direct care and
    purchased care systems, for ALL uniformed services beneficiaries,
    regardless of age, status or location. An adequately funded health care
    benefit is essential to readiness and the retention of qualified
    uniformed service personnel.
        The Subcommittee's oversight of the defense health budget is
    essential to avoid a return to the chronic underfunding of recent years
    that led to execution shortfalls, shortchanging of the direct care
    system, inadequate equipment capitalization, failure to invest in
    infrastructure and reliance on annual emergency supplemental funding
    requests as a substitute for candid and conscientious budget planning.
        While supplemental appropriations were not required last year, we
    are concerned that the current funding level only meets the needs of
    the status quo and does not address the growing requirement to support
    the deployment of forces to Southwest Asia and Afghanistan. Addressing
    funding for these increased readiness requirements; TRICARE provider
    shortfalls and other needs will require additional funding.
        The Military Coalition strongly recommends the Subcommittee
    continue its watchfulness to ensure full funding of the Defense Health
    Program, to include military medical readiness, TRICARE, and the DOD
    peacetime health care mission. The Defense Health Budget must be
    sufficient to provide financial incentives to attract increased numbers
    of providers needed to ensure access for TRICARE beneficiaries in all
    parts of the country.

                              TRICARE IMPROVEMENTS

        Access to care is the number one concern expressed by our
    collective memberships. More and more beneficiaries report that few, if
    any, providers in their area are willing to accept new TRICARE Standard
    patients. Enhanced benefits for our seniors and decreased cost shares
    for active duty beneficiaries will be of little consequence to
    beneficiaries who cannot find a TRICARE provider.
        Network and Standard Provider Availability.--Large numbers of
    beneficiaries continue to report increased difficulty locating
    providers who will accept new TRICARE patients, even though the
    Department of Defense indicates that the number of TRICARE providers is
    at near an all-time high.
        Clearly, there is a problem with how provider participation is
    measured and monitored. The current participation metric is calculated
    as the percentage claims filed on an assigned basis. Nowhere does DOD
    or its support contractors ask or track whether participating or
    authorized providers are accepting new patients. Since participation is
    fluid, providers are permitted to accept or refuse TRICARE patients on
    a day-by-day basis; therefore, beneficiaries often must make multiple
    inquiries to locate a provider who is taking patients on that day.
        Allegedly, current TRICARE contracts require Manage Care Support
    Contractors (MCSC) to help Standard patients find providers, but this
    is not the actual practice. Further, there is no such requirement in
    the new TRICARE Next Generation of Contracts (TNEX). MCSCs are under no
    obligation to recruit Standard providers or provide up to date lists of
    Standard providers, leaving beneficiaries on their own to determine if
    a provider is willing to accept Standard patients. We urge the
    subcommittee to fund a program to increase Standard provider
    recruitment by educating civilian providers about the TRICARE Standard
    benefit. We believe this issue is too critical to depend upon the
    ``chance'' that the civilian contractors will voluntarily elect to
    provide this service as a ``valued added product'' in all regions.
        Simply stated, Standard beneficiaries are neglected. No effort is
    made to reach out to them, to provide education about the extent of the
    Standard benefit, to directly communicate benefits information, or
    provide support to locate a provider. The Coalition adamantly believes
    DOD has an obligation to develop an education and communication program
    for Standard beneficiaries. DOD should direct MCSCs to assist Standard
    beneficiaries as well as Prime beneficiaries. Options should include
    providing interactive on-line lists of Standard providers, with
    indications of which ones are currently accepting new Standard
    patients. When a beneficiary cannot find a provider, the MCSC should
    help them do so.
        The Military Coalition urges the Subcommittee to appropriate
    sufficient funds for DOD to communicate benefits information directly
    to Standard beneficiaries, develop a Standard beneficiary education
    program, assist Standard beneficiaries in finding providers who will
    accept new TRICARE Standard patients, including interactive on-line
    lists and other means of communication and to developed a program to
    enhance TRICARE Standard provider recruitment.
        Provider Reimbursement.--Provider groups tell us that TRICARE is
    the lowest-paying program they deal with, and often poses them the most
    administrative problems. This is a terrible combination of perceptions
    if you are a TRICARE Standard patient trying to find a doctor.
        The Coalition is concerned that the war on terrorism and the war in
    Southwest Asia are straining the capacity of the military's direct
    health care system, as large numbers of medical corps members are
    deployed overseas. More and more TRICARE patients are turning to turn
    to the civilian sector for care--putting more pressure on civilian
    providers who already have absorbed significant fee cuts from TRICARE.
    Our deployed service men and women need to focus on their mission,
    without having to worry whether their family members back home can find
    a provider. Uniformed services beneficiaries their family members and
    survivors deserve the nation's best health care, not the cheapest.
        In order to achieve parity and encourage participation, both
    Medicare and DOD have the ability to institute locality-based rates to
    account for geographical variation in practice costs to secure
    sufficient providers. DOD has statutory authority (10 U.S.C. 1097 (b))
    to raise rates for network providers up to 115 percent of TRICARE
    Maximum Allowable Charge (TMAC) in areas where adequate access to
    health care services is severely impaired. To date, DOD has resisted
    using its authority to raise reimbursement levels.
        Raising TRICARE payment rates to competitive levels with other
    insurance is essential to solving the Standard access problem. There
    are cost implications of doing this, and the Coalition understands the
    preference in both the Executive and Legislative Branches to focus on
    administrative issues rather than payment levels. However, providers
    indicate that it is a money issue. They may be willing to accept low
    payments from Medicare out of a sense of obligation to seniors, the
    volume of patients, and because Medicare has a reliable electronic
    payment system. They are not so willing to accept low TRICARE payments.
        Other insurance programs pay providers rates that are significantly
    higher than Standard's. The Coalition doubts that access problems can
    be addressed successfully without raising rates. The only way to assess
    the merits is to institute a pilot project to test if raising TRICARE
    Standard payment rates improves access for beneficiaries.
        The Military Coalition urges the Subcommittee to appropriate
    sufficient funds to institute a pilot project at several locations of
    varying characteristics to test the extent to which raising TRICARE
    Standard rates increases the number of providers who are willing to
    accept new Standard patients.
        Healthcare for Members of the National Guard and Reserve.--Sec. 702
    of the fiscal year 2003 NDAA authorized further Prime eligibility for
    certain dependents of Reserve Component Members residing in remote
    areas whose sponsors are ordered to extended active duty of at least 30
    days. The Coalition is pleased that DOD recently announced its intent
    to implement Sec 702, as well as to extend the Prime benefit to Reserve
    Component dependents who reside within Military Treatment Facility
    (MTF) catchment areas.
        The Coalition is most appreciative that TRICARE Prime and TRICARE
    Prime Remote (TPR) benefits will now be standardized for ALL Reserve
    Component families when the sponsor is called to active duty for 30
    days, regardless of whether the family resides in a MTF catchment area
    or not. The Coalition is also pleased that DOD has waived for Reserve
    Component beneficiaries the TPR requirement that family members reside
    with their sponsor in an areas outside of MTF catchment areas.
        Health insurance coverage has an impact on Guard-Reserve (G-R)
    medical readiness and family morale. Progress has been made during
    transitional periods after call-ups, but more needs to be done to
    provide continuity of care coverage for reserve component members prior
    to activation.
        Health insurance coverage varies widely for members of the G-R:
    some have coverage through private employers, others through the
    Federal government, and still others have no coverage. Reserve families
    with employer-based health insurance must, in some cases, pick up the
    full cost of premiums during an extended activation. Although TRICARE
    eligibility starts at 30 days activation, many G-R families would
    prefer continued access to their own health insurance rather than being
    forced to find a new provider who accepts TRICARE. In other cases,
    disruption (and in some cases cancellation) of private sector coverage
    as a consequence of extended activation under TRICARE adversely affects
    family morale and military readiness and discourages some from
    reenlisting.
        In 2001, DOD recognized this problem and announced a policy change
    under which DOD would pay the premiums for the Federal Employee Health
    Benefit Program (FEHBP) for DOD reservist--employees activated for
    extended periods. However, this new benefit only affects about 10
    percent of the Selected Reserve. The Coalition believes this philosophy
    could be extended to pay health insurance premiums for activated G-R
    members who are not federal civilian employees.
        As a matter of morale, equity, and personnel readiness, the
    Coalition believes more needs to be done to assist reservists who are
    being called up more frequently in support of national security
    missions. They deserve options that provide their families continuity
    of care, without having to find a new doctor or navigate a new system
    each time the member is activated or deactivated.
        The Military Coalition urges the Subcommittee to appropriate
    sufficient funds to make the TRICARE medical program available for
    members of the National Guard and Reserve Component and their families
    prior to activation on a cost-sharing basis in order to ensure medical
    readiness and provide continuity of coverage to members of the Selected
    Reserve. In addition, to further ensure continuity of coverage for
    family members, the Coalition urges allowing activated Guard/Reserve
    members the option of having the Department of Defense pay their
    civilian insurance premiums during periods of activation.

                                   CONCLUSION

        The Military Coalition reiterates its profound gratitude for the
    extraordinary progress this subcommittee has made in funding a wide
    range of personnel and health care initiatives for all uniformed
    services personnel and their families and survivors. The Coalition is
    eager to work with the Subcommittee in pursuit of the goals outlined in
    our testimony.
        Thank you very much for the opportunity to present the Coalition's
    views on these critically important topics.

        Senator Stevens. The next witness is William Hawley, Dr.
    Hawley, of the Board of Directors of the Public Policy
    Committee for Lymphoma Research.

    STATEMENT OF WILLIAM HAWLEY, M.D., BOARD OF DIRECTORS,
                PUBLIC POLICY COMMITTEE, LYMPHOMA RESEARCH
                FOUNDATION

        Dr. Hawley. Good morning, sir. Mr. Chairman and members of
    the subcommittee, it is my pleasure to appear before you today
    on behalf of the Lymphoma Research Foundation and a half-
    million Americans suffering from lymphoma. The Lymphoma
    Research Foundation is the Nation's largest lymphoma-focused
    voluntary health organization devoted exclusively to
    eradicating lymphoma and serving those touched with this
    disease. To date the foundation has funded more than $9 million
    in lymphoma-specific research.
        Most people do not even realize that lymphoma is a cancer,
    let alone that it is the most common blood cancer in Americans.
    As I mentioned, over half-a-million Americans suffer from
    lymphoma. This year yet another 61,000 of us will be diagnosed
    and 25,000 will lose their lives to this very misunderstood
    disease.
        I say ``us'' because I am a survivor of non-Hodgkins
    lymphoma. Seven years ago I was the chief of cardiac surgery
    and department chairman at Integris Medical Center in Oklahoma
    when I was diagnosed with Flickler lymphoma, a low-grade
    indolent form of this incurable cancer. After over 30 years as
    a practicing surgeon, I was now a patient. It was a difficult
    adjustment, but I was determined to use my scientific
    background as a physician combined with my new role as a
    patient to help others suffering from this disease.
        Thanks to research, I am here today, able to stand before
    you and speak up for all my fellow patients, for those who will
    be diagnosed in the future, and for those who were not as
    fortunate and lost their lives in the battle with lymphoma
    years ago. I have taken leave from my medical practice to
    devote myself entirely to advocacy for lymphoma patients and I
    think I am now the busiest unpaid physician in this country. My
    fundamental goal is to advocate for both improved treatment and
    new options for patients. I do a great deal of outreach to
    patients with lymphoma and have found sharing the story of
    personal involvement with the disease to be very rewarding.
        As an advocate for my fellow patients, I am before you
    today to ask that you expand the congressionally-directed
    medical research program to include research on lymphoma,
    leukemia, and multiple myeloma. Specifically, I respectfully
    request that $25 million be provided for blood cancer research
    efforts at the Department of Defense.
        This subcommittee is to be commended for its leadership in
    funding special research programs, with a particular emphasis
    on cancer research. Over the past 2 years, this subcommittee
    funded a special $10 million research initiative on chronic
    myelogenous leukemia (CML) to date. We urge you to continue
    this funding and expand the initiative to include all other
    types of blood cancer research.
        Many of you are probably familiar with the development of
    Gleevec, originally developed as a treatment for chronic
    myelogenous leukemia, now approved for the treatment of a solid
    tumor gastrointestinal stromal tumor. Thanks to the investment
    in Gleevec, we now have a possible cure for CML today. A $25
    million investment would have the potential to enhance our
    understanding of blood cancers and contribute to the
    development of new treatments.
        While the causes of blood cancers remain unknown, evidence
    suggests that exposure to environmental carcinogens, radiation,
    pesticides, herbicides, viruses, and bacteria may play a role.
    It is therefore possible that any of our troops exposed to
    chemical or biological weapons may be at increased risk of
    developing lymphoma or other types of blood cancer. We know the
    link of Agent Orange to non-Hodgkins and Hodgkins malignant
    lymphoma.
        Advances in blood cancer research will also be of great
    benefit to those with other forms of cancer. Many chemotherapy
    agents used to treat solid tumors now were originally used to
    treat blood cancers. Lymphoma, for example, is often called the
    Rosetta Stone of cancer research because it has helped to
    unlock the mysteries of several other types of malignancy.
        The concept of cancer staging to define disease severity
    and target appropriate therapy began in lymphoma. The strategy
    of combining chemotherapy and radiation was first used in
    lymphoma and then applied to other malignancies. These are just
    a few of the great benefits that blood cancer research can
    bring to millions suffering from cancer throughout our Nation.
        On behalf of all the patients living with lymphoma or other
    blood cancers, the Lymphoma Research Foundation urges the
    subcommittee to include a blood cancer research initiative in
    the congressionally-directed medical research program. As a
    physician, I can tell you that the time for investment is now
    and, with your help, research-developed new treatments and
    cures can be found. As a patient, I say, please act quickly
    because so many lives hang in the balance.
        Thank you.
        Senator Stevens. Thank you very much, Doctor. I appreciate
    your courtesy.
        Dr. Hawley. Thank you.
        [The statement follows:]

                      Prepared Statement of William Hawley

        Mr. Chairman and Members of the Subcommittee, it is my pleasure to
    appear before you today on behalf of the Lymphoma Research Foundation
    (LRF), the nation's largest lymphoma-focused voluntary health
    organization devoted exclusively to funding research to cure all
    lymphomas and providing patients and healthcare professionals with
    critical information on the disease. LRF's mission is to eradicate
    lymphoma and serve those touched by the disease. To date, LRF has
    funded more than $9 million in lymphoma research.
        This is an exciting time for new approaches to research on lymphoma
    and other blood-related cancers and we are pleased to testify today to
    request that you expand the Congressionally Directed Medical Research
    Program to include research on these diseases. I am a physician and a
    survivor of non-Hodgkin's lymphoma (NHL), the most commonly diagnosed
    hematological cancer. I have taken a leave of absence from my medical
    practice, and during this time I am dedicating myself to advocacy for
    lymphoma patients. My fundamental goal is to advocate for both improved
    treatments and new options for patients currently living with the
    disease and those who may be diagnosed in the future.
        This Subcommittee is to be commended for its leadership in funding
    several special research programs, with a particular emphasis on cancer
    research. We realize that, at the time these programs were initiated,
    they were a departure from the national defense programs generally
    funded by the subcommittee. Over time, they have become model research
    programs that complement the research efforts of the National
    Institutes of Health and that are hailed by patient advocates because
    they allow consumer input in the planning of the research portfolio.
        The Lymphoma Research Foundation believes the current medical
    research efforts of the Department of Defense (DOD) are appropriate
    targets for funding, as they contribute to the national defense in
    critically important ways. We think that, at this time in our history,
    it is especially important that the DOD expand its research portfolio
    to support research into the blood cancers, including leukemia,
    lymphoma, and myeloma. I would like to provide some basic information
    about the blood cancers, as well as some compelling reasons for the
    expansion of the DOD research program to include blood cancer research.

    The Blood Cancers
        Each year, approximately 110,000 Americans are diagnosed with one
    of the blood cancers. More than 60,000 will die from these cancers in
    2003, and 700,000 Americans are living with these cancers. Taken as a
    whole, the blood-related cancers are the 5th most common cancer, behind
    lung, breast, prostate, and colorectal cancer.
        There have recently been some significant advances in the treatment
    of the blood cancers. In 2001, the targeted therapy called Gleevec was
    approved for treatment of chronic myelogenous leukemia, and now this
    drug is approved for use in gastrointestinal stromal tumor (GIST). In
    2002, a new radioimmunotherapy was approved for patients with
    refractory NHL, and a new treatment for multiple myeloma is expected to
    be approved this year. These treatments represent progress in the fight
    against the blood cancers, but there is much work still to be done.
        Although there are declines in the number of new cases and deaths
    associated with many forms of cancer, the trend is different for non-
    Hodgkin's lymphoma and multiple myeloma. The incidence of non-Hodgkin's
    lymphoma has nearly doubled since the 1970's, and the mortality rate
    from non-Hodgkin's lymphoma is increasing at a faster rate than other
    cancers. One can see that, despite scientific progress, there is much
    to be done to improve blood cancer treatments. We are pleased by any
    step forward, but our goal is still a cure of the blood cancers. We
    acknowledge that this is a scientifically difficult goal, but it must
    remain our objective.

    The Link Between Blood Cancers and Military Service
        The causes of the blood cancers remain unknown. With regard to
    Hodgkin's lymphoma and non-Hodgkin's lymphoma, immune system impairment
    and exposure to environmental carcinogens, pesticides, herbicides,
    viruses, and bacteria may play a role. The linkage between exposure to
    one particular herbicide--Agent Orange--and the blood cancers has been
    established by the Committee to Review the Health Effects in Vietnam
    Veterans of Exposure to Herbicides, a special committee of the
    Institute of Medicine (IOM). This panel was authorized by the Agent
    Orange Act of 1991 and has issued four reports on the health effects of
    Agent Orange. The committee has concluded that ``there is sufficient
    evidence of an association between exposure to herbicides'' and chronic
    lymphocytic leukemia (CLL), non-Hodgkin's lymphoma, and Hodgkin's
    lymphoma, and there is limited or suggestive evidence of an association
    between herbicide exposure and multiple myeloma.
        The IOM panel does not have responsibility to make recommendations
    about Veterans Administration (VA) benefits, but the VA has in fact
    responded to these reports by guaranteeing the full range of VA
    benefits to Vietnam veterans who have the diseases that have been
    linked to herbicide exposure, including CLL, Hodgkin's lymphoma, and
    non-Hodgkin's lymphoma.
        These benefits include access to VA health care. There are now,
    unfortunately, a number of Vietnam veterans who are receiving VA health
    care for treatment of CLL, non-Hodgkin's lymphoma, and Hodgkin's
    lymphoma, and DOD-sponsored research on these diseases has the
    potential to improve the survival and the quality of life for these
    veterans.

    Potential Risks of Blood Cancers in the Future
        We all acknowledge that we live in a very complicated age, where
    those in the military are at risk of exposure to chemical and
    biological agents. The evidence suggests that immune system impairment
    and exposure to environmental carcinogens, pesticides, herbicides,
    viruses, and bacteria may play a role in the development of Hodgkin's
    lymphoma and non-Hodgkin's lymphoma. It is therefore possible that, if
    our troops were exposed to chemical or biological weapons, they might
    be placed at increased risk of development of non-Hodgkin's lymphoma,
    Hodgkin's lymphoma, or one of the other blood cancers.
        We strongly recommend that we invest now in research to understand
    the potential links between pesticides, herbicides, viruses, bacteria,
    and the blood cancers. The enhanced investment now may contribute to a
    deeper understanding of these possible linkages and to the development
    of strategies to protect those who suffer such exposures. A greater
    commitment to the research and development of new blood cancer
    therapies is also critically important if we anticipate that there may
    be more individuals, including those in the military, who will suffer
    from these cancers as a result of service-connected exposure.

    The Current DOD Chronic Myelogenous Leukemia Program
        In fiscal year 2002 and fiscal year 2003, the Subcommittee funded a
    research program at DOD that funds research on one particular kind of
    leukemia, called chronic myelogenous leukemia, or CML. This form of
    leukemia has been much in the news because of the development of
    Gleevec, a drug that has been hailed as a possible cure for the
    disease. We applaud the Subcommittee for its commitment to a program of
    CML research. We would recommend that this program, which has received
    total funding of slightly less than $10 million over the last two
    years, be continued and that an initiative be launched that would fund
    all other types of blood cancer research.
        We believe that an investment of $25 million in a new Blood Cancer
    Research Program would have the potential to enhance our understanding
    of the blood cancers and their links to chemical, viral, and bacterial
    exposures and to contribute to develop of new treatments. There are
    several promising areas of therapeutic research on blood cancers,
    including research about ways to use the body's immune system to fight
    the blood cancers, research on the development of less toxic and more
    targeted therapies than traditional chemotherapy agents, and research
    that will allow physicians to diagnose the specific type and subtype of
    blood cancers.

    The Impact of Blood Cancer Research on Other Cancers
        An investment in blood cancer research will be beneficial to those
    diagnosed with these cancers, including members of the military. We
    also believe that advances in blood cancer research will be of benefit
    to those with other forms of cancer. Treatments for blood cancers are
    often also used in the treatment of solid tumors. For example, many
    chemotherapy agents that are now used in the treatment of a wide range
    of solid tumors were originally used in the treatment of blood cancers.
    The concept of cancer staging to accurately define disease severity and
    target appropriate therapy began in lymphoma and is now used in all
    cancers. The strategy of combining chemotherapy with radiation therapy
    began in the treatment of Hodgkin's disease and is now widely used in
    the treatment of many solid tumors. Many recently developed therapeutic
    interventions, like monoclonal antibodies that target and disable
    antigens on the cell surface thought to be responsible for cell
    proliferation began in the blood cancers but hold promise for breast,
    prostate, ovarian, and other forms of cancer. Work on vaccines for
    lymphoma has been in the forefront of vaccine research. As you can see,
    research on the blood cancers has had many positive benefits for cancer
    research overall.
        The Lymphoma Research Foundation urges the Subcommittee to consider
    the expansion of the Congressionally Directed Medical Research Program
    to include a Blood Cancer Research Initiative.
        We appreciate the opportunity to present this proposal to you and
    would be pleased to answer your questions.

        Senator Stevens. We will now hear from Master Sergeant
    Retired Morgan Brown, Legislative Assistant for the Air Force
    Sergeants Association. Good morning, sir.

    STATEMENT OF MASTER SERGEANT MORGAN D. BROWN, (RET.),
                LEGISLATIVE ASSISTANT, AIR FORCE SERGEANTS
                ASSOCIATION (AFSA)

        Sergeant Brown. Good morning, Mr. Chairman. On behalf of
    the 36,000 members of this association, I thank you for the
    opportunity to present the views of the enlisted men and women
    of the Air Force, Air National Guard, and Air Force Reserve. In
    my written testimony I provided a variety of issues, but since
    my time here is very brief I am going to restrict my comments
    just to the military survivor benefit program.
        Senator Stevens. We do ask the staff to go over completely
    these statements and your full statements are all being placed
    in the record.
        Sergeant Brown. Thank you, sir.
        Like our predecessor or previous veteran service
    organizations, we also strongly hope that the offset presently
    in place in the military survivor benefit plan is eliminated in
    this session of Congress. However, there are a couple other
    problems with the program. For instance, the DOD actuaries
    confirm that the 40 percent government subsidy intended by
    Congress has declined to a paltry 16.4 percent. That means
    retirees are now paying 24 percent more than you intended.
        I should point out that the DOD also continues to stress
    the government subsidy as an enticement to get retirees to sign
    up for this coverage. Clearly, this benefit has become more
    beneficial and less costly to the Government and more costly
    and less beneficial to the retirees and survivors that this
    program was created to protect.
        Legislation has already been introduced to correct the
    offset and we are hopeful that you will support your colleagues
    in implementing this change and providing the necessary funding
    for this important survivor program.
        We are also working to have the paid-up SBP provision start
    as soon as possible. Authorized by Public Law 105-261 and set
    to begin on October 1, this provision allows retirees who have
    paid into SBP for at least 30 years and have reached 70 years
    of age to stop making payments and still have their spouses
    covered. As a practical matter, any SBP enrollee who retired on
    or after October 1, 1978 would enjoy the full benefit of the
    paid-up provision. However, members who enrolled in SBP when it
    first became available in 1972 will have to continue paying
    premiums for up to 36 years to secure paid-up coverage if they
    survive that long. Acceleration of the SBP provision is needed
    to simply ensure some measure of fairness for these
    individuals.
        In closing, AFSA requests that the subcommittee appropriate
    the necessary funds to make these changes to the military SBP
    program a reality. Mr. Chairman, that is all I will cover today
    and I want to thank you for this opportunity to present what we
    believe should be among this committee's funding priorities for
    fiscal year 2004.
        Senator Stevens. I appreciate your courtesy. Thank you very
    much.
        [The statement follows:]

                     Prepared Statement of Morgan D. Brown

        Mr. Chairman and distinguished committee members, on behalf of the
    136,000 members of the Air Force Sergeants Association, thank you for
    this opportunity to offer our views on the military personnel programs
    that affect those serving our nation. AFSA represents active duty,
    Guard, Reserve, retired, and veteran enlisted Air Force members and
    their families. Your continuing effort toward improving the quality of
    their lives has made a real difference for those who devote their lives
    to service, and our members are grateful.
        Although military members do not serve their nation to gain wealth,
    we do owe them a decent standard of living. This is even more important
    today because America's is an all-volunteer force, and because this
    nation increasingly tasks military members and often separates them
    (for greater lengths of time) from their families. This testimony
    covers several issues in the areas of Military Pay and Compensation,
    Education, Heath Care, Military Shipment, Guard and Reserve, and
    Retiree/Survivor Programs. We simply ask this committee seriously
    consider providing the necessary funding for these important programs.

                         MILITARY PAY AND COMPENSATION

        Continue Enlisted Pay Reform.--We applaud your efforts in recent
    years to ensure that all military members get the minimum annual pay
    raise in accordance with congressional intent by formula (Employment
    Cost Index [ECI] plus one-half percent). AFSA supports further raises
    and targeting. However, we caution the committee on the perception
    among the force that might be created if the lowest ranking enlisted
    members receive below the congressional formula--so that dollars can be
    transferred to the higher ranking members. We support higher NCO pay
    raises, but believe that if a ``rob Peter to pay Paul'' approach is to
    be used, it should not be by taking pay away from the lowest ranking
    military members.
        Resist Efforts to Change the Military Pay Formula.--This committee
    was instrumental in protecting the troops by tying military pay growth
    to the growth of wages in the private sector (by focusing on the ECI).
    Recent Administration suggestions to tie future annual military pay
    raises to the Consumer Price Index (CPI) alarm military members with
    the prospect of significantly lower annual pay adjustments. AFSA urges
    this committee to resist Administration efforts to lower military pay
    raises by abandoning the current formula.
        Reform the Basic Allowance for Housing (BAH).--There is room for
    significant correction and improvement in the methodology used to
    determine BAH. Enlisted members most significantly feel the brunt of
    these problems. Currently, the only enlisted members whose BAH square-
    footage/dollar amounts are based on stand-alone dwellings are E-9s. The
    BAH amount for all enlisted grades below E-9 is based on apartments and
    townhouses.
        Provide those stationed in Korea the same tax advantages and
    special pays afforded to those stationed in ``hostile'' areas.--With
    the challenges and austere conditions servicemembers face in Korea, the
    daily threat from North Korea, and the risks inherent in the
    geopolitical situation relative to the Korean peninsula, it is only
    fair to provide equitable tax and pay for these members who, in a real
    sense, are serving on the tip of the sword. We urge this committee to
    take action on this now in recognition of those stationed in Korea.
        Reduce the threshold of eligibility for CONUS COLA from its current
    level of 108 percent of the national median.--Several large city areas
    (such as Washington, D.C.) do not receive CONUS COLA. We urge this
    committee to take another look at which municipalities receive CONUS
    COLA.
        Provide Guard and Reserve members equity in Career Enlisted Flier
    Incentive Pay (CEFIP).--It is unfair that members of the Guard and
    Reserve receive a fractioned CEFIP (based on a 1/30 formula for each
    day flying). CEFIP recognizes the extraordinary challenges and risks
    associated with military flight. As such, Guard and Reserve fliers
    should be paid on the same ``whole month'' basis as other military
    fliers.
        Establish a standard, minimum re-enlistment bonus for all re-
    enlistments.--Air Force enlisted members tell us that there ought to be
    a minimum re-enlistment bonus. Selective re-enlistment bonuses are paid
    to those with between 21 months and 14 years of service. Those who re-
    enlist after the 14-year point receive no re-enlistment bonus.
    Remember, an enlisted member can serve as long as 30 years. Because we
    want to keep leaders in critical skills and they must lead those who
    are receiving these, sometimes lucrative, bonuses, it would help morale
    to provide some type of re-enlistment bonus to all who re-enlist.
        Pay Hazardous Duty Incentive Pay (HDIP) to military firefighters.--
    Regardless of service, there is no military job inherently more
    hazardous than firefighters. Civilian firefighters who serve side-by-
    side with military firefighters already have this risk factored into
    their federal civilian wage scale. Military firefighters get no such
    additional compensation to recognize their extraordinary risk. At a
    cost of about $9 million per year to cover the military firefighters
    (those whose AFSA, MOS, or NEC is primarily as a firefighter) for all
    services, this would be an equitable, relatively inexpensive addition
    to those entitled to receive HDIP.

                               EDUCATION BENEFITS

        Provide an enrollment opportunity for those who turned down the
    Veterans Educational Assistance Program (VEAP) to enroll in the
    Montgomery G.I. Bill.--Over 100,000 currently serving military members
    (35,000 in the Air Force alone) turned down the VEAP program when it
    was offered to them. VEAP was a relatively poor, insufficient, poorly
    counseled educational program which preceded the Montgomery G.I. Bill
    (MGIB). In contrast, the MGIB is a much more realistic, more-beneficial
    program that would help these members in their transition back into
    civilian life after their time in the military. Unfortunately, many of
    those who turned down the VEAP program are now leaving service with no
    transitional education program. The CBO has set the worst-case cost for
    this offering at $143 million over a five-year period. We believe that
    these members, many of whom brought us through conflicts including the
    Wars in Iraq, Somalia, Bosnia, Kosovo, worldwide peacekeeping missions,
    conflicts not publically reported, and the worldwide war on terrorism
    deserve an opportunity to enroll in the MGIB.
        Increase the value of the MGIB to cover the costs of tuition,
    books, and fees at an average 4-year college or university.--Despite
    the extremely commendable, recent increases in the MGIB which will
    bring the value up to $985 per month for 36 months by October 1 of this
    year, more needs to be done. If this nation is going to have a program
    that sincerely intends to satisfy the purpose of the program, it
    certainly should mirror civilian industry by providing a comprehensive
    educational program and not an insufficient one. According to the
    ``College Report,'' an annual evaluative report published by the
    education ``industry,'' average monthly educational costs are
    approximately $1,400 at this time. This figure reflects the cost of
    books, tuition, and fees at the average college or university for a
    commuter student. Of course, that average cost will increase in the
    future due to inflation. We ask that you fully fund the already-
    authorized increase, but look toward further increases in the program.
    Payment for full books, tuition, and fees for a four-year degree with
    annual indexing to maintain the value of the benefit, at least, ought
    to be provided for those who make the military a career.
        Ensure that all MGIB enrollees have the same program with the same
    benefits.--Due to changes and additions to the law, only some MGIB
    enrollees may transfer a portion of their benefit to family members.
    Similarly, only some MGIB enrollees may pay more into the program to
    increase the value of their program. We urge this committee to exert
    its influence to standardize the MGIB so that this becomes an equal
    opportunity benefit.
        Allow members to enroll in the MGIB at any time during their first
    enlistment.--Regrettably, military members are given only one
    opportunity to enroll in the MGIB. That opportunity occurs very quickly
    during Basic Military Training when most would least appreciate the
    opportunity and can least afford it. Additionally, they must ``pay'' to
    have this educational benefit; to enroll in the MGIB they must agree to
    give up $100 per month for the first 12 months of their career. Many
    military members are surprised by this $1,200 fee and view it as an
    insincere military benefit offering because of the one-time irrevocable
    decision--when they are least prepared to take advantage of it. As long
    as the $1,200 payroll reduction for each MGIB enrollee is part of the
    program, we should provide young military members an opportunity to
    enroll at any time during their first enlistment.
        Provide military members and their families in-state tuition rates
    at federally supported state universities.--Military members are moved
    to stations around the world at the pleasure of the government. Yet,
    they are treated as visitors wherever they go. Fairness would dictate
    that, for the purposes of the cost of higher education, they be treated
    as residents so that they can have in-state rates at federally
    supported colleges and universities in the state where they are
    assigned. We would ask this committee to exert the necessary influence
    to require federally supported institution to consider military members
    assigned in their state as ``residents,'' for the purposes of tuition
    levels.
        Ensure full Impact Aid funding.--We ask this committee to closely
    scrutinize the funding levels for Impact Aid as presented in the
    Administration's fiscal year 2004 Budget Plan which has submitted
    levels that underfund needed Impact Aid by approximately $127 million.
    This is a nine percent reduction from fiscal year 2002 levels. 15
    million students in 1,331 school districts nationwide benefit from this
    program. Funding is used for a variety of expenses, including teacher
    salaries, text books, computers, after-school programs, tutoring,
    advanced placement classes, and special enrichment programs. This money
    is to compensate local school districts for the impact of military
    bases in their communities. Local schools primarily are funded through
    property taxes. However, those who reside on a military reservation do
    not pay into the property tax base. This becomes a burden on local
    schools if military dependent children attend local, off-base schools.
    We ask this committee to ensure that sufficient Impact Aid is provided
    so that the children of military members are not put at risk, or that
    the military member be required to pay tuition.

                                  HEALTH CARE

        Improve the dependant and retiree dental plans.--We often hear that
    the dependent dental insurance plan is a very, poor one. Additionally,
    retirees complain that the retiree dental plan is overpriced, provides
    inadequate coverage, and is not worth the investment. This is important
    because military retirees were led to believe they would have free/low
    cost, comprehensive, lifetime military dental care. We urge this
    committee to appropriate additional funding to improve the quality and
    adequacy of these two essential dental plans.
        Increase provider reimbursement rates to ensure quality providers
    in the TRICARE system.--Perhaps the greatest challenge this committee
    faces toward keeping the military health care system viable is
    retaining health care providers in the TRICARE networks. This challenge
    goes hand-in-hand with that which is faced by Medicare. If we do not
    allow doctors to charge a fair price for services performed, they will
    not want to participate in our program. If they do not participate, the
    program will fail. We urge this committee to consider increasing the
    CHAMPUS Maximum Allowable Charge to higher levels to ensure quality
    providers stay in the system.
        Provide for a waiver of the Medicare Part B late enrollment penalty
    to facilitate TRICARE For Life participation.--When Congress wisely
    created the TRICARE for Life (TFL) program, it significantly enhanced
    the quality of the lives of thousands upon thousands of military
    retirees, families, and survivors. It, in effect, eliminated the need
    for Medicare-eligible military retirees, family members, and survivors,
    to carry a Medicare supplement policy. One requirement for
    participation in TFL is that the member be enrolled in Medicare Part B.
    While the basic Part B enrollment cost is not onerous, many military
    retirees residing near bases declined Part B (some for many years). In
    order for these retirees, family members, and survivors who did not
    enroll in Part B when they were first eligible to participate in TFL,
    they must pay a substantial penalty in order to enroll in Part B. We
    urge this committee for a one-time enrollment period where those
    eligible for TFL who are not enrolled in Medicare Part B may do so
    without penalty.
        Upgrade the dental benefit programs for active duty, Guard, and
    Reserve members, retirees, and their families, especially in localities
    where inadequate facilities and/or insufficient providers are
    available.--While this committee has no control over the number of
    providers in a particular locality, it can enhance the programs to
    promote participation. This can be done by ensuring that providers are
    treated fairly in terms of reimbursement for the care they provide and
    by getting military beneficiaries to (i.e., providing travel
    reimbursement to) caregiver locations when dental care (especially
    specialized care) is needed.
        Make all TRICARE enrollment fees and co-payments, TRICARE For Life
    Medicare Part B payments, and military dental plan enrollment fees and
    premium payments tax exempt (pre-tax dollars).--In those cases where
    the military member, retiree, family member, or survivor has to pay co-
    payments for medical care, the exemption of the amount they must pay
    would be a great benefit enhancement. This would be particularly true
    for those who are older and on fixed incomes.
        Provide Guard and Reserve members and their families with a
    comprehensive TRICARE benefit.--This is critical to ensure the
    deployability of the member, and it is important that his/her family is
    protected when the military member is away from home serving his/her
    nation. We owe these patriots a comprehensive program.

                            GUARD AND RESERVE ISSUES

        Provide full payment of lodging costs to a lodging facility for the
    duration of a mobilization order when a Guardsman or Reservist is
    called to active duty by section 12301, 12302, or 12304 of Title 10.--
    This adjustment is needed because the payment of lodging per diem is
    not authorized for members on Temporary Duty (TDY) during periods of
    leave or a return to the Place from Which Called (or Ordered) to Active
    Duty (PLEAD). When per diem is not paid, the reservist who departs the
    area, however briefly, has to check out of lodging or pay lodging
    expenses out-of-pocket. For example, we are penalizing them if they
    want to briefly return home to address the concerns of the families
    from which they have been separated by the mobilization. This has an
    extremely negative financial impact, particularly for lower-ranking
    members. It also could have an impact on the retention of mobilized
    members following demobilization. Additionally, it is extremely
    disruptive to lodging facility contractors with the members' constantly
    checking in and out of quarters; this can cause financial problems for
    the facility managers who have an expectation of continuous occupancy
    for a finite period of time. Of special significance to this committee,
    there would be no/negligible cost to implementing this suggestion since
    all mobilization expenses are budgeted and set aside for the duration
    of mobilization orders.
        Reduce the earliest retirement age (with full annuity) for Guard
    and Reserve members from 60 to 55.--These members are the only federal
    retirees who have to wait until age 60 to enjoy retirement benefits.
    These citizens who fight for our nation deserve to have a better
    retirement program. Lowering the retirement age would more adequately
    reward their service, and provide for upward mobility in the force (ANG
    and Reserve members are primarily promoted by vacancy). Keep in mind
    that reserve retirement is significantly lower than that provided to
    active duty members. Reservists accumulate points based on their
    service and training. They must accumulate sufficient points in a given
    year for it to be a ``good year.'' They must achieve twenty (20) ``good
    years'' to qualify for retirement. The amount of their retired pay is
    based on the total points they have accumulated. AFSA believes that
    these members ought to be able to retire upon completion of their
    ``good years'' requirements. However, considering funding limitations,
    the least, fair thing that should be done is to provide them federal
    retirement equity by letting them retire as soon as age 55. We urge
    this committee to do so. Since DOD has conducted and contracted studies
    of reserve compensation in recent years, we believe there is little to
    be gained by the DOD study mandated in the fiscal year 2003 NDAA other
    than to delay serious consideration of the issue. We urge this
    committee to support the provisions in H.R. 742 and its pending Senate
    companion legislation. Introduced last year as S. 2250 by Sen. Jon
    Corzine, D-NJ, his staff tells us that he will soon reintroduce the
    measure.
        Reduce out-of-pocket expenses of those who serve.--We ask this
    committee to restore full tax-deductibility of non-reimbursed expenses
    related to military training and service for Guard and Reserve members.
    The cost of military service for a Guardsman or Reservist should not be
    financial.
        Enhance Air Reserve Technician (ART) retirement eligibility.--ARTs
    are both military members and civil servants. These unique patriot/
    citizens need unique retirement criteria recognizing their singular
    contribution to our military's success. We urge this committee to
    provide the funding that would allow Air Reserve Technicians eligible
    for an unreduced retirement at age 50 with 20 years of service, or at
    any age with 25 years of service, if involuntarily separated.
        Provide full Basic Allowance for Housing (BAH) to TDY Guard and
    Reserve members, and those activated (even if less than for 139
    days).--Guardsmen and Reservists are generally removed from their
    civilian employment when ``called up.'' Once deployed, their need to
    protect their family does not go away. Nor does their obligation to
    make their full house payments. This committee can greatly assist these
    military members by ensuring that they can continue to provide homes
    for their families through the provision of full BAH.
        Eliminate the Commissary Privilege Card (CPC) requirement and
    provide full, year-round commissary benefits for Guard and Reserve
    members.--At the present time, members of the Guard and Reserve are
    limited to 24 visits per year in military commissaries. Allowing full,
    year-round access is a benefit long overdue. The CPC (a card to track
    commissary visits) costs millions of dollars to administer each year.
    These military members are critical members of this military nation's
    team; it is time to treat them as such. We urge all members of Congress
    to provide them full, year-round commissary benefits.
        Expand the Soldiers and Sailors' Civil Relief Act (SSCRA) to fully
    protect Guard and Reserve members who are activated.--Since members of
    the Guard and Reserve are increasingly activated and sent away from
    their primary civilian occupation and their home, they must be
    adequately protected. Please expedite the protection of the rights of
    Guardsmen and Reservists by their full inclusion in the SSCRA.

                           MILITARY SHIPMENT PROGRAMS

        Improve the quality of the DOD household goods shipment program.--
    The Military Traffic Management Command developed a test program that
    was extremely successful. It protected the military member's goods,
    held carriers more accountable, and had extremely high satisfaction
    levels among military members. With that test project complete and time
    passing without DOD implementation of an enhanced household goods
    shipment program, it is time for Congress to act. Military members
    should not be faced with having their goods destroyed, lost, or stolen
    without adequate safeguards and/or compensation.
        Increase the household goods weight allowance for professional
    books, papers, and/or equipment to accommodate employment support for
    military spouses.--Currently, only the military member is entitled to
    an additional shipment weight allowance for professional books, papers,
    and/or equipment. In recent NDAA's DOD has been tasked by Congress to
    come up with ways to provide military spouses with education, training,
    and employment assistance. Providing spouses some consideration by
    giving them a shipment allowance to support their employment would be a
    good step forward. For example, a dependent spouse (of a military
    member who is being reassigned) who maintains supplies to support a job
    as a government-certified family in-home day care provider, should not
    have to sell, discard, or give away his/her supplies. Most likely they
    will perform the same job at the next assignment. Similarly, a spouse
    who is a message therapist, hairstylist, lawyer, etc., ought to be
    given a shipment weight allowance to make them more employable at the
    next military assignment location. This would be in keeping with the
    congressional mandate to help spouses in their employment efforts.
        Provide all military members being assigned to OCONUS locations the
    option of government-funded POV shipment or storage.--Currently, DOD
    will only store a POV for a member if DOD reassigns that member to a
    location where DOD will not ship the member's POV. AFSA believes that
    this shipment option should be extended to all members being stationed
    anywhere outside of the continental United States (CONUS). We believe
    that a significant part of such storage cost would be offset by DOD not
    having to ship the vehicle.

                              RETIREMENT/SURVIVORS

        Allow military members who are also receiving VA disability
    compensation to fully collect their military retired pay.--AFSA
    believes this is the right thing to do. Every member of this committee
    is aware of the arguments on this issue, so we will not restate them
    here.
        Uniformed Services Former Spouses Protection Act (USFSPA) Reform
    (Public Law 97-252).--The members of this association strongly urge
    this committee to conduct hearings on needed USFSPA changes, both to
    gather all inputs needed for appropriate corrective legislation and to
    guard against inadvertently exacerbating current inequities via well-
    intended, piecemeal legislative action initiated outside of this
    committee. A military member must serve 20 years to earn a lifetime
    retirement annuity. However, under the USFSPA, any and all former
    spouses of a military members have claim to a portion of the military
    member's eventual retirement pay. Such a former spouse could have been
    married to the military member only for a relatively short period of
    time; yet he/she will have a lifetime annuity if the military member
    goes on to retire. Our members have clearly communicated that this
    anachronistic statute, specifically targeted at military members, is
    not needed to protect former spouses. Provisions in law that apply to
    all other U.S. citizens should apply to the former spouses of military
    members. In that sense, full repeal of the USFSPA would be the fair
    thing to do.
        Reduce or Eliminate the Age-62 SBP Reduction.--Before age 62, SBP
    survivors receive an annuity equal to 55 percent of the retiree's SBP-
    covered retirement pay. At age 62, however, the annuity is reduced to a
    lower percentage, down to a floor of 35 percent. For many older
    retirees, the amount of the reduction is related to the amount of the
    survivor's Social Security benefit that is potentially attributable to
    the retiree's military service. For member who attained retirement
    eligibility after 1985, the post-62 benefit is a flat 35 percent of
    covered retired pay. Although this age-62 reduction was part of the
    initial SBP statute, large number of members who retired in the 1970s
    (or who retired earlier but enrolled in the initial SBP open season)
    were not informed of the reduction at the time they enrolled. As such,
    many still are very bitter about what they view as the government
    changing the rules on them mid stream. Thousands of retirees signed up
    for the program believing that they were ensuring their spouses would
    receive 55 percent of their retired pay for life. They are ``stunned''
    to find out that the survivor reduction attributed to the retiree's
    Social Security-covered military earning applies even to widows whose
    Social Security benefit is based on their own work history.
    Additionally, the DOD actuary has confirmed that the 40-percent
    government subsidy for the SBP program, which has been cited for more
    than two decades as an enticement for retirees to elect SBP coverage,
    has declined to less than 17 percent! Clearly, this benefit has become
    more beneficial and less costly for the government, and more costly and
    less beneficial for the retirees and survivors the program was created
    to protect. We urge you to step in and correct some of these
    inequities.
        Accelerate the SBP provision so that enrollees aged 70 who have
    paid into the SBP for at least 30 years be considered ``paid-up''.--The
    paid-up SBP initiative enacted in 1998 set an implementation date of
    2008. We urge this committee to change that implementation date to
    ``this year.'' As a practical matter, any SBP enrollee who retired on
    or after October 1, 1978, would enjoy the full benefit of the paid up
    provision. However, members who enrolled in SBP when it first became
    available in 1972 will have to continue paying premiums for up to 36
    years to secure paid-up coverage--if they survive that long.
        In conclusion, Mr. Chairman, we thank you for this opportunity to
    present the views of the Air Force enlisted community. As you work
    toward your appropriations decisions, the Air Force Sergeants
    Association and its 136,000 members urge you to ensure sufficient
    funding to provide for the integrity of the entire DOD. Now, more than
    ever, this funding and this nation's commitment to the members of our
    Armed Forces should ensure, without delay, the full benefits,
    entitlements and medical treatment that they have so rightfully earned.
    On behalf of all AFSA members, we appreciate your efforts and, as
    always, are ready to support you in matters of mutual concern.

        Senator Stevens. Our next witness is Dr. Steve Elliot
    Koonin, Provost at CAL Tech--oh, pardon me. I missed Joyce
    Raezer, Director, Government Relations, National Military
    Family Association.

    STATEMENT OF JOYCE WESSEL RAEZER, DIRECTOR, GOVERNMENT
                RELATIONS, NATIONAL MILITARY FAMILY
                ASSOCIATION

        Ms. Raezer. Thank you, Mr. Chairman.
        The National Military Family Association (NMFA) endorses
    the testimony of the Military Coalition. Our statement expands
    on a few issues of special importance to active duty military
    families and their Guard and Reserve counterparts.
        We thank this subcommittee and Congress for providing the
    pay and benefit improvements necessary to retain the quality of
    force that is protecting our homeland and waging war against
    terror. NMFA is especially appreciative for the $150 increase
    in monthly family separation pay included in the fiscal year
    supplemental, 2003 supplemental appropriations. When the
    service member is away from home on military orders, the family
    endures both emotional and financial costs. We encourage you to
    continue funding this high level in family separation pay in
    fiscal year 2004 for all service members on orders away from
    their families. Whether a service member is deployed to Iraq,
    on a ship in the Pacific, or on an unaccompanied tour in Korea,
    to the family away is away.
        Although many headlines and news programs now feature
    service members coming home, we must not forget that many
    service members still are deployed in far-flung locations
    around the world. Others are working long hours at their home
    station to support their deployed colleagues. Others are just
    now leaving for deployments of indeterminant length.
        I visited a community in Germany just last week where
    almost all of the 950 service members in that community had
    only just left for the Gulf the week before. They need to know
    their families will have the support services they need,
    especially when those families are so far from home themselves.
        As they deal simultaneously with new deployments, continued
    long-term employments, and the return of many of the units who
    were engaged in the fighting in Iraq, military families and
    their support programs will be taxed as never before. Because
    family readiness is linked to mission readiness, the costs of
    ensuring family readiness prior to deployment, during
    deployment, and in that critical period following the
    deployment must be factored into the costs of the mission.
    Adequate funding and staffing of family support is necessary to
    ensure a smooth reentry into home and community for the
    returning service members, even as program staff also must
    continue to assist with ongoing deployment issues and the
    normal routine of military life.
        Programs provided by military chaplains, the new parent
    support program, mental health programs, and support for family
    readiness groups are essential during deployments and will be
    just as vital in easing service members' return and reunion.
    Mission costs must also include the resources needed to help
    our Guard and Reserve members and their families adjust to the
    service members' transition back to civilian life, especially
    when no military installation support services are available.
        NMFA also asks that you help to ensure that military
    children's schools have the funding they need to provide a
    quality education in a safe environment, as well as the extra
    help military children need in dealing with the deployment of a
    parent to a dangerous location. DOD schools must be
    sufficiently funded to perform their mission of educating
    military children to the highest standards found in stateside
    civilian school districts.
        NMFA also requests that you not only continue, but
    increase, the DOD funding to supplement impact aid for civilian
    schools educating military children. For families with school-
    aged children, the schools are on the front line of family
    support during times of high operations tempo and deployment
    stress. The military has made significant progress in
    partnering with school districts to improve the education of
    military children and to support both the schools and children
    during deployments. Please help to ensure that the schools have
    the resources they need to fulfil their obligation to all
    children in their charge.
        Service members look to the Nation to understand that their
    families often drive retention decisions. The families' quality
    of life is a readiness requirement. Quality of life is not just
    about pay. It is about having a safe, well-maintained place to
    live. It is about access to quality health care without
    bureaucratic complexities. It is about a quality education for
    their children. It is about meeting the aspirations of a spouse
    for a career and a couple for a secure retirement. It is
    respect for a job well done.
        Senator Stevens. I must say thank you. I have got 2 minutes
    to make my vote. Thank you very much.
        Ms. Raezer. You are welcome.
        [The statement follows:]

                   Prepared Statement of Joyce Wessel Raezer

        Mister Chairman and Distinguished Members of this Subcommittee, the
    National Military Family Association (NMFA) is, as always, appreciative
    of the enhancements in quality of life that you have provided for
    uniformed service families. We are particularly grateful for the
    increase in Family Separation pay included in the Supplemental. We
    anticipate permanent authority for the increase and strongly request
    adequate funding for fiscal year 2004.
        NMFA endorses the provisions included in the testimony provided by
    The Military Coalition, of which we are a member. In this statement we
    expand on that testimony with specific emphasis on the needs of
    families.

    Family Readiness
        Since 9/11 active duty members and their National Guard and Reserve
    peers have engaged in numerous duty assignments from homeland security
    to armed conflict. At the same time, members have continued to serve in
    various far-flung areas of the globe. The main message is, that they
    are gone! Separations produce economic strain, psychological strain and
    high levels of stress in the family. The lifeline of the military
    family, the military community, is also feeling the strain. Family
    services are important to an installation not pressured by high
    Perstempo or conflict-related deployments. They are a critical
    necessity when families are left behind. Family center personnel,
    military chaplains, installation mental health professions and Morale,
    Welfare and Recreation programs all provide needed assistance to
    families. When spouses find themselves as the sole head of the family
    and as the single parent, the services available to assist them and
    their children with these challenges are truly lifelines. E-mail, video
    teleconferencing centers, and special family activities ease the
    strains and pains of separation. But none of these services are without
    cost. Just as the deployed servicemember's readiness is dependent on
    proper training, food, shelter, clothing and weapons systems, the
    readiness of the family is dependent on accessing needed services. Both
    must be adequately funded to assure a force ready to successfully carry
    out its assigned mission.
        NMFA applauds the Office of Military Community and Family Policy in
    the Office of the Secretary of Defense (OSD) for its creation of a
    Joint Family Support Contingency Working Group to promote better
    information-sharing and planning among OSD and the military Service
    headquarters family support staff, including the Reserve Components.
    NMFA appreciates the invitation to participate in this working group,
    an innovative concept that grew out of the successful collaboration in
    the operation of the Pentagon family assistance center after the attack
    on the Pentagon. The working group recognized that most military
    families live off-base and is encouraging new ways of helping families
    that are not all centered on the installation. NMFA has long promoted
    additional outreach into the civilian community by installation
    personnel so that family members unable to get to an installation can
    still receive needed assistance. The possibility of further incidents,
    which could again restrict access to installations, makes this outreach
    even more imperative.
        One new vehicle for communicating with family members and helping
    them access assistance when needed, wherever they are located, is being
    tested by the Marine Corps Community Services (MCCS). The new program,
    ``MCCS One Source,'' provides 24 hours a day, 7 days a week, telephone
    and online family information and referral, situational assistance, and
    links to military and community resources. Since February 1, this
    service has been available to active duty and Reserve Marines and their
    family members. The Army has also made this service available to
    solders and families at select installations. Employee Assistance
    Programs such as ``One Source,'' provide an accessible source of
    information for servicemembers and families and, if properly
    coordinated with other support services, should allow Service family
    support professionals to devote more time and attention to supporting
    unit volunteers and to assisting families with more complex problems.
        A program offered by Army Chaplains, ``Building Strong and Ready
    Families'' is targeted at improving relationship skills and assisting
    initial-entry soldiers and their families with making the transition
    into the military culture. NMFA is very grateful that a clarification
    on the use of appropriated funds to pay the expenses of soldiers and
    their families to participate in these command-sponsored, chaplain-lead
    training opportunities was included in the fiscal year 2003 Defense
    Appropriations Act and requests, that if permanent authority has not
    been granted, such clarification of the use of appropriated funds be
    included again in this year's Act.
        One very necessary improvement needed in the family support arena
    is closer collaboration between all the various helping individuals and
    agencies who assist in the development and maintenance of strong
    emotional and mental health in both individuals and families of the
    military community. As was seen in the Fort Bragg, North Carolina,
    domestic violence cases during the summer of 2002, not all military
    family members or servicemembers make use of the counseling and support
    services available to them. While the TRICARE mental health benefits
    are rich by the standards of many other plans, the program does not
    have a preventive care component. For TRICARE to pay for services,
    there must be a medical diagnosis, thus discouraging many family
    members from seeking care. Many members and their families also believe
    that seeking counseling services through military programs may harm
    their careers or that these services are only intended for families
    identified as having problems. The authors of the Fort Bragg
    Epidemiological Consultation Report who examined the domestic violence
    incidents, noted that the various agencies that could provide support
    to the service members and families do not often coordinate their
    activities. NMFA strongly believes that better coordination and
    communication among all installation ``helping agencies'' as well as
    with those in the civilian community is imperative to help families
    deal with stress and promote better mental health. NMFA also believes
    that TRICARE must cover preventive mental health services just as it
    covers medical preventive services such as well-baby checks,
    immunizations, PAP smears and mammograms. An emphasis on emotional
    health rather than treatment may also make beneficiaries more likely to
    seek appropriate services in a timely manner.
        A significant element of family readiness is an educational system
    that provides a quality education to military children, recognizes the
    needs of these ever moving students and responds to situations where
    the military parent is deployed and/or in an armed conflict. Since
    approximately 80 percent of military children attend civilian public
    schools, the DOD Impact Aid supplement is vital to both these children
    and the school systems that educate them. No less than the stay at home
    spouse, children are affected by the absence of a parent and experience
    even higher levels of stress when their military parent is in a war
    zone shown constantly on television. Addressing the needs of these
    children and their classmates is imperative to lowering the overall
    family stress level, and to achieving an appropriate level of family
    readiness. But it does not come without cost to the local school
    system.
        This Subcommittee has consistently supported the needs of the
    schools operated by the DOD Education Activity (DODEA). These schools
    are located on military installations in the United States and in
    overseas locations. The commitment of this Subcommittee to the
    education of these military children has resulted in higher test
    scores, minority student achievement, parent involvement programs and
    partnership activities with the military community. It is significant
    to note that the Commander of USAREUR states that over half of the
    military members assigned to USAREUR are deployed away from their
    permanent duty sites. Imagine the challenges facing a school system in
    a foreign country where half of the student body has an absent parent!
    Your continued commitment to and support of these schools is strongly
    requested.
        Military child care is another important element in family
    readiness. Sergeant Major of the Army Jack Tilley noted that during
    2002, twenty-seven percent of enlisted soldier parents reported lost
    duty time due to a lack of child care. Deployments increase the need
    for child care. Families, where the parents were previously able to
    manage their work schedules to cover the care of their children, must
    now seek outside child care as one parent deploys. Guard and Reserve
    families most often do not live close enough to a military installation
    to take advantage of either the Child Development Center or Family Day
    Care homes. Since 2000, DOD has had the authority to increase the
    availability of child care and youth programs through partnerships with
    civilian agencies and other organizations. The Services set up pilot
    programs to take advantage of this authority and obtain more care for
    children off the installations; however, less than 10 percent of DOD
    child care is provided off-base. NMFA is concerned that current funding
    levels for the Military Child Development System may not be adequate to
    meet both the routine demands for child care and to meet the increased
    need due to deployments. We request additional funds to ensure the
    provision of the high quality child care servicemembers and their
    families need.
        Finally, the ability of a military spouse to be employed and to
    have career progression affects both the family's finances and the
    self-sufficiency of the spouse when the member deploys. Studies after
    the Persian Gulf War showed that spouses who were employed handled the
    stressors of the deployment better than those who were not employed.
    NMFA anxiously awaits the DOD report on the status of its spouse
    employment programs requested by Congress in the fiscal year 2002 NDAA.
    While we do not expect DOD to create a jobs program for every military
    spouse, it does need to facilitate the transition of mobile military
    spouses into already existing opportunities and to target efforts where
    spouses are having the greatest difficulty accessing educational
    programs or employment. Sixty-three percent of military spouses are in
    the labor force. Eighty-seven percent of junior enlisted spouses (E-1
    to E-5) are in the labor force. Very obviously, the financial health of
    the military family is significantly dependent upon the employment of
    the spouse. Family financial health is without question a family
    readiness issue.
        NMFA applauds the various initiatives to meet the needs of families
    wherever they live and whenever they need them and requests adequate
    funding to ensure continuation of current programs and implementation
    of new ones. However, we are also very aware that the ``bedrock''
    family support programs must not be shunted aside in order to fund only
    the new initiatives. Since there appears little chance that the
    increase in family separations will come to an end, the higher stress
    levels caused by such separations require a higher level of community
    support.

    National Guard and Reserve Families
        As of May 6th, 224,528 National Guard and Reserve members were on
    active duty. While many of the challenges faced by their families are
    similar to those of active component families, they must face them with
    a less-concentrated and mature support network and, in many cases,
    without prior experience with military life. Unlike active duty units
    located on one installation with families in close proximity, reserve
    component families are often miles from the servicemember's unit.
    Therefore, unless they pay for their own travel expenses, families are
    often unable to attend unit pre-deployment briefings. NMFA constantly
    hears the frustrations family members experience when trying to access
    information and understand their benefits. The lack of accurate benefit
    information and unrelenting communication difficulties are common
    themes among Guard and Reserve families.
        DOD has developed several key initiatives that address the needs of
    Guard and Reserve families. NMFA applauds this effort, but there is
    still much to be done. For example, the OSD Reserve Affairs office
    maintains an excellent website. Its Family Readiness Toolkit and
    Deployment Guide provide practical information; however, many families
    report it is difficult to use. Guard and Reserve families ask for
    standardized materials that are appropriate to all services, so that if
    an Army Reserve family happens to live close to a Navy installation
    they would understand how to access services there. The establishment
    of a joint Family Readiness program would facilitate the understanding
    and sharing of information between all military family members.
        NMFA thanks the state family readiness coordinators and unit
    volunteers for helping to provide family members with basic
    information. Unfortunately, some units do not have adequate programs
    because of the lack of volunteers and paid family readiness
    coordinators, whose sole job is to support the family. Additional
    family readiness staffing and support for unit level volunteers could
    ensure information is forwarded to families who are unable to attend
    unit briefings. Guard and Reserve unit volunteers, even more than many
    of their active duty counterparts, are stressed because of the numbers
    of families they must assist and the demands placed upon them. At a
    minimum, NMFA requests funding for child care to enable these dedicated
    volunteers to more efficiently perform their expected tasks. Funding to
    enable families to attend pre-deployment briefings would help
    strengthen the ties between the units and the families and the families
    with each other and assist in assuring that accurate information is
    provided directly to the family members.
        In addition to being geographically separated from the
    servicemember's unit, families are often geographically separated from
    each other. NMFA suggests that DOD also strengthen and perhaps
    formalize partnerships with national organizations such as the American
    Red Cross and U.S. Chamber of Commerce to enlist their assistance
    through their local chapters in setting up community-based support
    groups for military family members. The groups could include not only
    spouses and significant others of all deployed members, no matter what
    unit or Service the member is attached to, but also the parents of
    servicemembers. Involving local community leaders in setting up these
    support groups would address two of the most common concerns expressed
    by some of these isolated families: the feeling that they are the only
    families in town going through the strain of deployment, and the
    sentiment that people not associated with the military do not
    appreciate their sacrifices.
        Through our contact with Guard and Reserve families and family
    support personnel over the past year, NMFA has heard wonderful stories
    of individual states, units and families caring for and supporting each
    other. NMFA is aware of leadership involvement at all levels to help
    ease the challenges faced by servicemembers and families. NMFA is
    especially proud of the efforts of The National Committee for Employer
    Support of the Guard and Reserve (ESGR) as an advocate for the reserve
    component member facing employment issues. ESGR is encouraging
    employers to set up their own family support programs and provides
    information to employers and to their employees about the legal rights
    of reserve component members. By providing this information in the
    workplace, ESGR is helping civilian communities gain a better
    understanding of the valuable role the Guard and Reserve play in the
    defense of our nation.
        Compensation issues continue to be of paramount concern among Guard
    and Reserve families. Many members have taken a significant pay cut
    upon activation. Families who initially financially prepared for a six
    month activation now are faced with the devastating monetary
    consequences of a one or two year loss in income. Some small business
    owners and single practice professionals are facing the loss of their
    businesses. NMFA is aware of the disaster the previous income
    replacement program created, but believes that attention must be
    directed to these problems or retention of these individuals may become
    extremely problematic. In addition, some Guard and Reserve members
    experienced problems with pay processing upon activation. This delay in
    receiving the paycheck led to overdue payments on bills, and occasional
    threats to foreclose on mortgages or to turn the family over to a
    collection agency. Pay and personnel systems for activated Guard and
    Reserve members must work in coordination so families do not have to
    deal with bill collectors.
        The cost of meeting unique family readiness needs for National
    Guard and Reserve families must be calculated in Guard and Reserve
    operational budgets and additional resources provided. DOD should
    partner with other organizations and explore new means of communication
    and support to geographically dispersed Guard and Reserve families.

    Health Care
        After a rocky start over several years, the TRICARE system is
    providing most of the promised benefit for most families, particularly
    those enrolled in Prime. Changes made in the Prime Remote program for
    active duty families and ensuring access to Prime and Prime Remote for
    the families of Guard and Reserve members, who have orders for 30 days
    or more, have gone a long way to providing a truly uniform benefit for
    all families of those on active duty.
        NMFA is also pleased to report the continuation of the partnership
    established between the DOD Office of Health Affairs, the TRICARE
    Management Activity (TMA) and the beneficiary associations. This
    collaboration benefits both beneficiaries and the Department. NMFA
    appreciates the information received in these meetings and the
    opportunity for dialogue with those responsible for managing DOD health
    care policies and programs. Through this medium, NMFA and other
    organizations have been able to raise areas of concern, provide
    feedback on the implementation of new programs and benefits and to help
    provide better information to beneficiaries about their health care
    benefit.
        However, despite these improvements, NMFA remains apprehensive
    about several issues: funding, beneficiary access to health care, the
    implementation of a new generation of TRICARE contracts and the ability
    of National Guard and Reserve families to have reasonable access to
    care and continuity of care.

                Funding
        The fiscal year 2004 budget request includes what DOD believes to
    be an accurate level of funding for the Defense Health Program.
    However, NMFA urges this Subcommittee to continue its efforts to ensure
    full funding of the entire Defense Health Program, to include meeting
    the needs for military readiness and of both the direct care and
    purchased care segments of TRICARE. NMFA is particularly pleased with
    the allocation of funds by TMA and the Services to support the new
    Family Centered Obstetrical Care initiative. While the increased funds
    for this program may well have been driven by the impending loss of
    DOD's ability to force military family members to receive obstetrical
    care in Military Treatment Facilities (MTFs), it has nonetheless been a
    remarkable achievement. Many MTFs have instituted significant and
    substantial improvements to their obstetrical programs and more are
    constantly coming on line every day. NMFA assumes this initiative will
    continue to be funded in a robust manner and hopes that the spirit of
    Family Centered care, the innovations created by the program and the
    funding provided will move into other specialties within the MTFs.

                Access
        Although recent TRICARE surveys highlight improvements in
    beneficiary access to care, NMFA continues to field calls on almost a
    daily basis from beneficiaries with access issues. Servicemembers and
    families enrolled in Prime are promised certain standards for access to
    care in providing appointments, wait times at a provider's office and
    geographic availability. Yet the calls we receive tell another story.
    Even servicemembers are told by the direct care system, ``Call back
    next month, there are no more appointments this month.'' Family members
    are routinely not informed that they can request an appointment with a
    provider in the civilian sector if access standards cannot be met in
    the direct care system. However, IF the member or family member
    mentions the words, ``access standards,'' appointments that fall within
    the guidelines magically appear. NMFA was also made aware that some in
    the direct care system were telling family members that accepting
    appointments outside of the access standards was a way for them to
    ``support the war in Iraq'' since medical personnel from the facility
    had been deployed. TRICARE was designed so that care could be provided
    in a timely manner within the civilian network when it was not
    available in the direct care system. There is no reason, including the
    deployment of medical personnel, that access standards should not
    always be met.
        When family members enrolled in Prime attempt to access care within
    the civilian network they utilize the Managed Care Support Contractors
    web pages or the Prime Booklet's list of providers. However, they often
    feel as if they are ``letting their fingers walk through the yellow
    pages,'' as they hear, telephone call after telephone call, ``The
    doctor is not accepting any new TRICARE Prime patients.'' Lists of
    providers must show who is and who is not accepting new patients. This
    information is of prime importance to families arriving at a new duty
    station. To their credit some, but not all, of the Managed Care Support
    Contractors are providing this information.
        As TRICARE Prime has improved, those who have remained in TRICARE
    Standard often feel as if they are unwanted stepchildren. Managed Care
    Support Contractors are required in the current contracts to assist
    Standard beneficiaries in finding a provider who accepts TRICARE.
    However, most Standard beneficiaries are not aware of this provision,
    because no one is required to communicate with them. When new Managed
    Care Support contracts came on line, contractors mailed brochures to
    all eligible beneficiary households, but other than giving basic
    information on the various choices with the TRICARE program, the
    information was basically geared to enrollment in Prime. Contractors
    are required to communicate regularly with Prime enrollees, but not
    with Standard beneficiaries. In fact, most of the literature regarding
    Standard states that it is the same as the old CHAMPUS program. No
    mention is made of prior authorizations, which vary from Region to
    Region, or of other region specific ``rules of the road.''
        In many areas Standard beneficiaries have more difficulty than
    Prime enrollees in finding providers. While Standard beneficiaries can
    certainly utilize Prime network providers (if they know where to find
    such a list), many have remained in Standard because there is no Prime
    network where they live or they have elected to have a broader choice
    of providers. Managed Care Support Contractors on the other hand are,
    understandably, more interested in establishing and maintaining their
    Prime networks. Anecdotal evidence provided to NMFA appears to indicate
    that many providers are unaware that they may remain TRICARE providers
    even if they decline to become Prime network providers. In addition,
    many providers also complain of the ``new rules of the road'' on prior
    authorizations and paper work, which were not required when they were
    CHAMPUS providers. Low reimbursement rates and claims processing
    continue to be cited by providers as reasons they do not seek to become
    authorized TRICARE providers.
        TRICARE Standard is an option in the TRICARE program and those who
    are forced or desire to use that option should be supported as fully as
    those who chose to enroll in Prime. Contractors must make significant
    efforts to recruit Standard providers.
        DOD and the contractors must be ever vigilant in identifying areas
    where sufficient numbers of providers in certain specialties refuse to
    accept TRICARE because of the reimbursement rates. DOD has the
    authority (and has used it in Alaska and recently in Idaho) to increase
    reimbursement rates to ensure a proper mix and number of providers.
    Contractors must continue their strong effort to improve claims
    processing and education of providers and their support staffs on the
    unique requirements of the TRICARE claims process.

                TNEX and other contracts
        The next round of TRICARE Contracts (TNEX) would appear to place
    significantly new levels of authority and responsibility on local MTF
    Commanders. NMFA is concerned that this may actually increase the
    differences in how a beneficiary accesses care rather than make it more
    uniform. Currently, Managed Care Support Contractors in some Regions
    have total responsibility for making appointments, and in all Regions
    they have the responsibility for making appointments within the
    civilian network. The new contracts would appear to leave this
    responsibility to the local MTF Commander, either to arrange all of the
    appointments or to opt into an as yet unknown national appointment
    contract. All current Managed Care Support Contractors are required to
    have a health information line. The new contracts leave the decision to
    have one and/or which one to have up to the local MTF Commander.
        TNEX also appears to blur lines of authority and accountability
    rather than strengthening them. Beneficiaries need a clear line of
    command and accountability for their problems with accessing care to be
    fixed and for their concerns about quality of care to be appropriately
    addressed.
        If changes are made in how beneficiaries access care from the
    current method, beneficiaries need to be educated and informed BEFORE
    the fact.
        Beneficiaries may not only face new ways of accessing care, but new
    ``rules of the road'' as a national contract is awarded for the retail
    pharmacy benefit. The implementation of the new TRICARE mail order
    pharmacy program contract (TMOP) was not without some significant
    problems. Fortunately, most were transitory and have been or are being
    addressed. However, a problem facing some beneficiaries could have been
    avoided with proper education and information. TMOP is now tied into
    both the retail pharmacies and the MTF pharmacies, so all pharmacy
    providers are aware of prescriptions being filled at all other venues
    in real time. Under the previous contractor such real time checking was
    not done. If a provider ordered a new medication for a beneficiary and
    wanted the medication started immediately, yet the beneficiary was to
    be on the medication for a long time, the beneficiary probably used
    both the retail and mail order pharmacy on the same or similar dates.
    Under TMOP the mail order request of the beneficiary will be denied
    until 75 percent of the retail prescription is consumed. This is not a
    problem with receiving the medication in a timely manner, nor is it a
    new DOD regulation, but it was a new wrinkle to beneficiaries that
    caused concern and could have been avoided.

                Guard and Reserve Health Care
        While the ``rules of the road'' for using TRICARE, particularly
    Prime, seem now to be well understood by most active duty and retired
    family members, it is another story for National Guard and Reserve
    families. Since many of these families do not live near an
    installation, most of their information comes in printed form, on the
    web or via telephone. In addition, many live in areas where providers
    are unaware of TRICARE, as there are few if any other uniformed service
    beneficiaries in the area. Lead Agents and TRICARE contractors
    routinely conduct TRICARE briefings for members of units about to
    mobilize; unfortunately, in most cases, families (those who will
    actually have to navigate the system) live too far away to attend. If
    the servicemember and family live in a different TRICARE Region from
    the one where the unit is located, the information provided in the unit
    setting may not be the same for the Region in which the family actually
    lives. Decisions to enroll in Prime, use Standard or remain with an
    employer provided plan need to be family decisions based on full and
    accurate information provided to servicemembers AND their families.
        NMFA has long believed that the approach to meeting the health care
    needs of Guard and Reserve members and their families must be flexible
    enough to ensure access to care and continuity of care. We believe S.
    852, recently introduced by Senators DeWine, Daschle, Smith and Leahy,
    addresses most of these issues. Provisions included in the legislation
    would authorize Guard and Reserve members to enroll in TRICARE when not
    on active duty and subsidize the cost of the program at approximately
    the same level as the Federal Employee Health Benefits Program (FEHBP)
    is for Federal Civilians. This would allow those who currently have no
    insurance in civilian life to have access to an affordable program and
    would provide continuity in both program and care when the member is
    activated. Alternatively, the legislation would authorize DOD to pay
    the premiums of an employer provided private sector plan up to the
    level of what TRICARE would cost DOD if it were provided to the member
    and his/her family. This would allow those with civilian provided
    coverage to continue with their current plan and providers.
        Funding must be adequate to meet readiness needs, provide for both
    the purchased care segment of TRICARE and the direct care system to
    include the Family Centered Obstetrical Care initiative. Access
    standards were part of the promise DOD made to families when they
    enrolled in TRICARE Prime. These access standards must be met either in
    the MTF or the civilian network. Civilian networks must be robust
    enough to support MTFs in meeting the access standards. Recruitment of
    TRICARE Standard providers and education of Standard beneficiaries
    should be as much a part of the TRICARE program as are these endeavors
    for Prime providers and enrollees. The new round of contracts must
    provide standardized ways to access health care across all Regions and
    beneficiaries should have a clear picture of who can solve their access
    problems and quality of care concerns. Families of Guard and Reserve
    members should have flexible options for their health care coverage
    that address both access to care and continuity of care. In addition,
    accurate and timely information on their options and such things as
    transitional health care must be provided to the families as well as
    the servicemember.
        NMFA thanks this Subcommittee and Congress for your advocacy for
    pay and benefit improvements necessary to retain the quality force that
    now protects our homeland and wages war against terror. Your actions
    have helped to rebuild military members' trust and to ease the crisis
    in recruiting and retention. We ask you to remember that mission
    readiness is tied to servicemember readiness, which is tied to family
    readiness. The stability of the military family and community and their
    support for the forces rests on the Nation's continued focus on the
    entire package of quality of life components. Military members and
    their families look to you for continued support for that quality of
    life. Please don't let them down.

        Senator Stevens. Thank you for your patience, Doctor.
        Yes, sir.

    STATEMENT OF STEVEN ELLIOT KOONIN, Ph.D., PROVOST AND
                PROFESSOR OF THEORETICAL PHYSICS,
                CALIFORNIA INSTITUTE OF TECHNOLOGY; ON
                BEHALF OF THE ASSOCIATION OF AMERICAN
                UNIVERSITIES AND THE NATIONAL ASSOCIATION
                OF STATE UNIVERSITIES AND LAND-GRANT
                COLLEGES

        Dr. Koonin. Thank you, Mr. Chairman. It is a pleasure to be
    able to testify to you today. I am Steven Koonin. I am the
    Provost and a professor of theoretical physics at the
    California Institute of Technology. I am also a former member
    of the Defense Science Board, on which I served for 4 years. My
    remarks today are on behalf of the Association of American
    Universities, which represents 60 of America's most prominent
    public and private research universities. My testimony is also
    submitted on behalf of the National Association of State
    Universities and Land Grant Colleges. Together these two
    associations include public and private universities and
    colleges in every State that perform the science and technology
    research funded by the DOD.
        DOD is the third largest Federal sponsor of university-
    based research. Nearly 350 universities and colleges conduct
    DOD-funded research and development. Universities play the
    largest role in basic defense research, receiving more than 53
    percent of 6.1 funding. They also receive substantial funding
    for applied defense research under the 6.2 program element.
        With that background, I would like to bring to your
    attention two issues important to universities related to the
    fiscal year 2004 budget proposal for defense spending. The
    first of these is to urge your support for an appropriation of
    $11.4 billion, or 3 percent of the overall fiscal year 2004
    budget proposed for DOD science and technology programs. This
    request is consistent with recommendations contained in the
    Quadrennial Defense Report and are made by the Defense Science
    Board (DSB) as well as experts such as Mr. Pete Aldridge. All
    of these have called for a DOD S&T budget that reflects 3
    percent of the overall DOD budget.
        Within defense S&T, the organizations I am representing
    also request that $2.3 billion be appropriated for 6.1 research
    and $4.6 billion be appropriated for competitive merit-based
    6.2 research. There is growing concern that, while funding for
    overall defense S&T has been increasing in recent years, much
    of this growth has been in the 6.3 account, with much less
    growth in the 6.1 and 6.2 accounts.
        In fact, if one looks closely at the trends over the past
    20 years, 6.1 funding has declined in constant dollars and has
    significantly decreased as a share of total S&T, from over 20
    percent in fiscal year 1983 to approximately 14 percent
    currently. We encourage the committee to reverse this downward
    trend in investments in the basic ideas that are going to lead
    to tomorrow's advances in defense technology.
        The second matter that I would like to bring to your
    attention concerns the administration's budget proposal to
    transfer funding or to devolve certain critical joint multi-
    disciplinary DOD S&T programs, including the University
    Research Initiative, from the Office of the Secretary of
    Defense to the services. This proposed devolvement is a matter
    over which our universities have great concerns. Such a move
    could damage the unique nature and design of these programs and
    could inhibit the types of cross-service integration and
    coordination of S&T research that these programs have been
    specifically designed to promote.
        We are also concerned that, if moved out of the Office of
    the Secretary of Defense (OSD) and into the services, the
    services could direct these funds to service-oriented needs
    rather than to the broader long-term research needs that cut
    across the services. For these reasons, we urge your
    subcommittee to consider carefully the implications of
    devolvement of S&T programs from the OSD.
        Let me conclude by thanking the committee, the
    subcommittee, for its ongoing support of defense S&T. We hope
    that you will continue the progress that has been made in the
    past few years in supporting the critical S&T programs that
    make such an important contribution to our national security.
        Thank you.
        Senator Stevens. Thank you very much, Doctor. We do support
    very strongly the university research. The other item you
    mentioned, though, is the Armed Services Committee. I hope you
    are taking that message to them. That is a legislative
    recommendation.
        Dr. Koonin. Thank you.
        Senator Stevens. Thank you for your testimony.
        [The statement follows:]

                 Prepared Statement of Dr. Steven Elliot Koonin

        Mr. Chairman and members of the subcommittee: Thank you for the
    opportunity to testify today. My name is Steven Koonin, and I am the
    Provost and a Professor of Theoretical Physics at the California
    Institute of Technology. I am also a former member of the Defense
    Science Board (DSB) where I served for four years.
        My remarks today are submitted on behalf of the Association of
    American Universities (AAU), which represents 60 of America's most
    prominent public and private research universities. This testimony is
    also submitted on behalf of the National Association of State
    Universities and Land-Grant Colleges (NASULGC). These two associations
    include public and private universities and colleges in every state
    that perform the science and technology research that is funded by the
    Department of Defense.
        I want to specifically thank this subcommittee and you, Mr.
    Chairman, for the ongoing support that you have shown for science and
    technology research programs in the Department of Defense. As you know,
    basic and applied research are funded under program elements 6.1 and
    6.2 in the Research, Development, Testing and Evaluation (RDT&E)
    section of the Department of Defense appropriation. The Army, Navy, Air
    Force and the ``Defense-wide'' account under the Office of the
    Secretary all receive separate appropriations for these programs.
        Why do universities care about Defense Science and Technology
    (S&T)? Today, DOD is the third largest federal sponsor of university-
    based research (after the National Institutes of Health and the
    National Science Foundation). Nearly 350 universities and colleges
    conduct DOD-funded research and development. Universities play the
    largest role in basic defense research, receiving more than 53 percent
    of program element 6.1 funding. They also receive substantial funding
    for applied defense research provided under program element 6.2.
        With this as background, I would like to bring to your attention
    two issues of importance to universities related to the fiscal year
    2004 budget proposal for the defense spending. These are: (1) continued
    growth in support for DOD Science and Technology (S&T) Programs, with
    particular emphasis on basic 6.1 and applied 6.2 research, and (2)
    concerns the university community has related to the proposed
    ``devolvement'' of certain S&T programs from the Office of the
    Secretary of Defense (OSD) to the individual services.

    Increasing Support for Defense Basic and Applied Research
        On behalf of the AAU and NASULGC, I urge your support for an
    appropriation of $11.4 billion, or 3 percent of the overall fiscal year
    2004 Budget proposed for the Department of Defense (DOD) for science
    and technology (S&T) programs (6.1 basic research, 6.2 applied
    research, and 6.3 advanced technology development) in the Army, Navy,
    Air Force, and Defense-Wide. This request is consistent with
    recommendations contained in the Quadrennial Defense Report and made by
    the Defense Science Board (DSB), as well as experts such as Pete
    Aldridge, Under Secretary Acquisition, Technology, and Logistics, who
    have all called for a DOD S&T budget that reflects 3 percent of the
    overall DOD budget.
        Within defense S&T, the AAU and NASULGC request that $2.3 billion
    be appropriated for 6.1 basic research and $4.6 billion be appropriated
    for competitive merit based 6.2 applied research. There is growing
    concern that while funding for overall Defense S&T has been increasing
    in recent years, much of this growth has been in the 6.3 account with
    much less growth in 6.1 basic research and 6.2 applied research. In
    fact, if one looks closely at the trends, over the last 20 years
    funding for 6.1 basic research has declined in constant dollars and has
    significantly decreased as a share of total S&T (from over 20 percent
    in fiscal year 1983 to approximately 14 percent in fiscal year 2003
    (See Attachments #1 and #2). We encourage the Committee to reverse this
    downward trend in investments in the basic ideas that are going to lead
    to tomorrow's advances in defense technology.
        I need not tell the members of this subcommittee that successful
    U.S. national defense policy is critically dependent on technological
    superiority. New dangers, such as high technology terrorism,
    information warfare, and the proliferation of weapons of mass
    destruction, now face the military and require new and more
    sophisticated technologies. The knowledge required to generate these
    technologies is dependent upon the long-term, high-risk, defense
    oriented fundamental research that is conducted at U.S. universities.
        Through their research, university-based scientists and engineers
    are helping to prepare the U.S. military to be ready for the new
    threats it faces in the 21st century, including nuclear, chemical,
    biological, and other asymmetric threats such as terrorism and cyber
    attacks. Past university-based basic and applied research discoveries
    that have made major contributions to the nation's military and defense
    efforts include inertial navigation, radar, the global positioning
    system (GPS), precision guidance, advanced materials, and reduced radar
    cross-section technology.
        Indeed, the DOD's past investments in basic and applied research
    helped the U.S. military to rewrite the rules of war in Afghanistan and
    Iraq, with new technologies such as advanced laser-guided and precision
    weapons, the Predator Unmanned Aerial Vehicle that circles and watches
    for enemy activity, and the Rapid Multilingual Support Device that
    helps to issue instructions and orders in targeted languages. These
    investments were also critical in the development of the thermobaric
    bomb that was rushed into use against al Queda and Taliban forces holed
    up in Afghanistan's mountains and caves. Because of the past
    investments made in basic and applied research, this weapon could be
    developed and successfully deployed in only 67 days.
        In addition to supporting new technologies, DOD's investment in
    basic and applied research also plays a critical role in advancing
    knowledge and in supporting and training a cadre of defense oriented
    scientists and engineers that work not only at our universities, but
    also in industry and the DOD's own national laboratories. DOD research
    also provides students with hands-on research training experiences,
    ensuring that we will have a long lasting supply of highly qualified
    scientists and engineers to go on to work in academia, industry, and
    federal laboratories in the future.
        Finally, DOD sponsored university research is concentrated in
    fields where advances are most likely to contribute to national
    defense. DOD accounts for 70 percent of federal funding for university
    electrical engineering, 40 percent of computer sciences funding, 41
    percent of metallurgy/materials engineering funding, and 29 percent of
    ocean sciences funding. DOD also sponsors fellowships and provides a
    significant amount of support for graduate students in critical defense
    fields such as computer science and aerospace and electrical
    engineering (See Attachment#3 for an illustration of the amount of
    research support that DOD provides to key engineering sub-disciplines).
    Concerns Regarding the Proposed Devolvement of DOD S&T Programs
        The second matter that I would like to bring to your attention
    concerns the Administration's budget proposal to transfer funding, or
    ``devolve,'' certain critical, joint, and multidisciplinary DOD S&T
    Programs--including the University Research Initiative (URI)--from the
    Office of the Secretary of Defense (OSD) to the services.
        The proposed devolvement of S&T programs is a matter over which our
    universities have great concerns. Specifically, such a move could
    damage the unique nature and design of these programs and could inhibit
    the types of cross-service integration and coordination of S&T research
    that these programs have been specifically designed to promote. We are
    also concerned that if moved out of OSD, and into the services, that
    the services could direct these funds to service-oriented needs rather
    than to the broader, long-term research needs that cut across the
    services. For these reasons, we urge your subcommittee to consider the
    implications of devolvement of S&T programs for the OSD.
        The advantage that these S&T programs have enjoyed by being housed
    within the OSD is that they have been insolated from the short-term
    strategic demands that so often drive spending within the individual
    services. As a result, they have able to maintain their focus on the
    long-term S&T needs of the entire DOD. Moreover, because the services
    have competed with each other for funding from OSD for programs such as
    the URI, it has been ensured that the service most capable of meeting
    the DOD's long-term S&T needs was, in fact, awarded the funding.
        Programs such as the URI, from which researchers at Cal Tech and
    many public and private academic institutions have received funding,
    were specifically designed to support the development of new knowledge
    and to build a critical mass of experts to address long-term defense
    research needs that transcend the specific and immediate interests of
    the individual services.
        As a result, URI has been able to successfully support exciting new
    advances in critical strategic research to the DOD in areas such as
    nanoscience, smart materials and structures, information technology,
    human centered systems, synthetic materials and processes, and compact
    power systems. Over the past five years, funding provided by the URI
    program has supported 859 graduate fellowships, 1,131 instrumentation
    projects, and 166 new awards to research teams from institutions
    located in most every state in the nation.
        The university community believes that these programs, and the
    goals for which they were established, have been well served by being
    housed within OSD. To ensure that these programs meet their stated
    objectives and best ensure that they continue to provide the knowledge
    required to properly equip, train and protect the soldiers, sailors,
    airmen and marines of the future, we ask that the subcommittee take a
    serious look at the implication of devolving these programs to the
    services.

                                   CONCLUSION

        In conclusion, let me again thank the subcommittee for its ongoing
    support of Defense S&T. We hope that you will continue the progress
    that has been made in the past few years in support for the critical
    S&T programs which make such an important contribution to our national
    security.
        Thank you again for permitting me to testify today.

                                 [Attachment 1]

                                 [Attachment 2]

                                 [Attachment 3]

        Senator Stevens. George Dahlman, Vice President for Public
    Policy of the Leukemia and Lymphoma Society, please.

    STATEMENT OF GEORGE DAHLMAN, VICE PRESIDENT, PUBLIC
                POLICY, THE LEUKEMIA & LYMPHOMA SOCIETY

        Mr. Dahlman. Thank you, Mr. Chairman, for this opportunity
    to testify before you on behalf of the Leukemia and Lymphoma
    Society. During its 53-year history, the society has been
    dedicated to finding a cure for the blood cancers, the
    leukemias, lymphomas, and multiple myeloma. A great deal of
    progress has been made in the treatment of blood cancers and
    over the last 2 decades there have been impressive strides in
    the treatment and particularly in lymphoma and in childhood
    leukemia.
        But despite these advances, they pose a continuing risk to
    Americans. In 2003 more than 100,000 will be diagnosed with a
    blood-related cancer. Almost 700,000 Americans are currently
    living with a blood cancer and some 60,000 this year will die
    from them. Taken together, the blood cancers are fifth among
    cancers in incidence and second in mortality.
        Why are these diseases important to the Department of
    Defense? They are important for a couple of reasons. First,
    research on blood-related cancers has special relevance to the
    Armed Forces because these are the cancers that appear among
    individuals with chemical and nuclear exposure. Higher
    incidences of leukemia have long been substantiated in extreme
    nuclear incidents in both military and civilian populations and
    recent studies have proven that individuals exposed to chemical
    agents like Agent Orange in the Vietnam War cause an increased
    risk of lymphoid malignancies.
        As a matter of fact, a recent report by the Institute of
    Medicine found that Agent Orange is also connected to chronic
    lymphocytic leukemia, CLL, and the VA is now covering veterans
    with that disease. So the Vietnam era defoliant itself is
    credited with causing lymphomas, chronic myelogenous leukemia,
    as well as CLL.
        Consequently, in the current environment DOD medical
    research needs to focus on the broader area of blood cancer
    research as it affects our military and domestic preparedness.
    Soldiers in the field, the domestic first response personnel,
    and the civilian population all face blood cancer risks from
    chemical or nuclear exposures. And as our Nation is
    contemplating the threat of biological, chemical, or nuclear
    terrorism, we need to better understand and prepare for the
    malignancies that would inevitably result from these events.
        Secondly, research into blood cancers, as has been
    mentioned by colleagues, has traditionally pioneered treatments
    in other cancers. Chemotherapy and bone marrow transplants are
    two striking examples of treatments that were first developed
    in the blood cancers and now are applied to other malignancies.
    Their relevance and the opportunity was recognized over the
    last 2 years when Congress appropriated $9.25 million for a
    program of chronic myelogenous leukemia through the
    congressionally-directed medical research program.
        Since that program was launched, 11 proposals have been
    recommended for funding and the quality of the proposals has
    been rated very high and that there is more room for additional
    research with more funding.
        Unfortunately, $9.25 million does not go very far in
    medical research and, recognizing that, a bipartisan group of
    Members of Congress have requested that the program funding be
    increased to $25 million and that the program be expanded to
    all the blood cancers, the leukemias, the lymphomas, and
    myelomas, and that it provide the research community with the
    flexibility to build on this pioneering field.
        DOD research on the other forms of blood-related cancer
    addresses the importance of preparing for civilian and military
    exposure to the weapons being developed by hostile nations and
    to aid in the research for more effective treatment for all who
    suffer from these diseases.
        I would like to conclude by saying that the Leukemia and
    Lymphoma Society, along with our partners the Lymphoma Research
    Foundation and the Multiple Myeloma Research Foundation,
    strongly endorses and enthusiastically supports and
    respectfully urges the committee to include funding of $25
    million in the fiscal year 2004 defense appropriations bill.
        Thank you very much.
        Senator Stevens. Well, thank you very much. I am sure you
    know we try our best on those diseases that you mentioned, and
    we will again do our best.
        Mr. Dahlman. Thank you.
        Senator Stevens. Thank you.
        [The statement follows:]

                      Prepared Statement of George Dahlman

    Introduction
        I am pleased to appear before the Subcommittee today and testify on
    behalf of The Leukemia & Lymphoma Society (LLS).
        During its 53-year history, the Society has been dedicated to
    finding a cure for the blood cancers--leukemia, lymphoma, and myeloma.
    The Society has the distinction of being both the largest private
    organization dedicated to blood-related cancers and the nation's second
    largest private cancer organization.
        Our central contribution to the search for a cure is providing a
    significant amount of the funding for basic and translational research
    in the blood cancers. In 2003, we will provide almost $40 million in
    research grants. In addition to our role funding research, we provide a
    wide range of services to individuals with the blood cancers, their
    caregivers, families, and friends through our 60 chapters across the
    country. Finally, we advocate responsible public policies that will
    advance our mission of finding a cure for the blood cancers.
        We are pleased to report that impressive progress is being made in
    the treatment of many blood cancers. Over the last two decades, there
    have been steady and impressive strides in the treatment of the most
    common form of childhood leukemia, and the survival rate for that form
    of leukemia has improved dramatically.
        And two years ago, a new therapy was approved for chronic
    myelogenous leukemia, a form of leukemia for which there were
    previously limited treatment options, all with serious side-effects.
    Let me say that more clearly, if three years ago your doctor told you
    that you had CML, you would have been informed that there were limited
    treatment options and that you should get your affairs in order. Today,
    those same patients have access to this new therapy, called Gleevec,
    which is a so-called targeted therapy that corrects the molecular
    defect that causes the disease, and does so with few side effects.
        The LLS funded the early research on Gleevec, as it has contributed
    to research on a number of new therapies. We are pleased that we played
    a role in the development of this life-saving therapy, but we realize
    that our mission is far from complete. Many forms of leukemia, lymphoma
    and myeloma present daunting treatment challenges. There is much work
    still to be done, and we believe the research partnership between the
    public and private sectors--as represented in many of the Pentagon
    research programs--is an integral part of that effort and should be
    strengthened.

    The Grant Programs of The Leukemia & Lymphoma Society
        The grant programs of the Society are in three broad categories:
    Career Development Grants, Translational Research Grants for early-
    stage support for clinical research, and Specialized Centers of
    Research. In our Career Development program, we fund Scholars, Special
    Fellows, and Fellows who are pursuing careers in basic or clinical
    research. In our Translational Research Program, we focus on supporting
    investigators whose objective is to translate basic research
    discoveries into new therapies.
        The work of Dr. Brian Druker, an oncologist at Oregon Health
    Sciences University and the chief investigator on Gleevec, was
    supported by a translational research grant from the Society. Dr.
    Druker is certainly a star among those supported by the LLS, but our
    support in this field is broad and deep. Through the Career Development
    and Translational Research Programs, we are currently supporting more
    than 400 investigators in 33 States and ten foreign countries.
        Our new Specialized Centers of Research grant program (SCOR) is
    intended to bring together research teams focused on the discovery of
    innovative approaches to benefit patients or those at risk of
    developing leukemia, lymphoma, or myeloma. The awards will go to those
    groups that can demonstrate that their close interaction will create
    research synergy and accelerate our search for new therapies,
    prevention, or cures.

    Impact of Hematological Cancers
        Despite enhancements in treating blood cancers, there are still
    significant research opportunities and challenges. Hematological, or
    blood-related, cancers pose a serious health risk to all Americans.
    These cancers are actually a large number of diseases of varied causes
    and molecular make-up, and with different treatments, that strike men
    and women of all ages. In 2003, more than 100,000 Americans will be
    diagnosed with a form of blood-related cancer and over 60,000 will die
    from these cancers. For some, treatment may lead to long-term remission
    and cure; for others these are chronic diseases that will require
    treatments on several occasions; and for others treatment options are
    extremely limited. For many, recurring disease will be a continual
    threat to a productive and secure life.
        A few focused points to put this in perspective:
      --Taken together, the hematological cancers are fifth among cancers
            in incidence and second in mortality.
      --Almost 700,000 Americans are living with a hematological malignancy
            in 2003.
      --More than 60,000 people will die from hematological cancers in
            2003, compared to 40,000 from breast cancer, 30,200 from
            prostate cancer, and 56,000 from colorectal cancer.
      --Blood-related cancers still represent serious treatment challenges.
            The improved survival for those diagnosed with all types of
            hematological cancers has been uneven. The five-year survival
            rates are:

    ------------------------------------------------------------------------
                                                                    Percent
    ------------------------------------------------------------------------
    Hodgkin's disease............................................         83
    Non-Hodgkin's lymphoma.......................................         53
    Leukemias (total)............................................         45
    Multiple Myeloma.............................................         29
    Acute Myelogenous Leukemia...................................         14
    ------------------------------------------------------------------------

      --Individuals who have been treated for leukemia, lymphoma, and
            myeloma may suffer serious adverse events of treatment,
            including second malignancies, organ dysfunction (cardiac,
            pulmonary, and endocrine), neuropsychological and psychosocial
            aspects, and quality of life.

    Trends
        Since the early 1970s, incidence rates for non-Hodgkin's lymphoma
    (NHL) have nearly doubled.
        For the period from 1973 to 1998, the death rate for non-Hodgkin's
    lymphoma increased by 45 percent, and the death rate for multiple
    myeloma increased by more than 32 percent. These increases occurred
    during a time period when death rates for most other cancers are
    dropping.
        Non-Hodgkin's lymphoma and multiple myeloma rank second and fifth,
    respectively, in terms of increased cancer mortality since 1973.
        Recent statistics indicate both increasing incidence and earlier
    age of onset for multiple myeloma.
        Multiple myeloma is one of the top ten leading causes of cancer
    death among African Americans.
        Despite the significant decline in the leukemia death rate for
    children in the United States, leukemia is still one of the two most
    common diseases that cause death in children in the United States.
        Lymphoma is the third most common childhood cancer.

    Causes of Hematological Cancers
        The causes of hematological cancers are varied, and our
    understanding of the etiology of leukemia, lymphoma, and myeloma is
    limited. Chemicals in pesticides and herbicides, as well as viruses
    such as HIV and EBV, play a role in some hematological cancers, but for
    most cases, no cause is identified. Researchers have recently published
    a study reporting that the viral footprint for simian virus 40 (SV40)
    was found in the tumors of 43 percent of NHL patients. These research
    findings may open avenues for investigation of the detection,
    prevention, and treatment of NHL. There is a pressing need for more
    investigation of the role of infectious agents or environmental toxins
    in the initiation or progression of these diseases.
    Importance To The Department of Defense
        The Leukemia & Lymphoma Society believes this type of medical
    research is particularly important to the Department of Defense for a
    number of reasons.
        First, research on blood-related cancers has significant relevance
    to the armed forces, as the incidence of these cancers is substantially
    higher among individuals with chemical and nuclear exposure. Higher
    incidences of leukemia have long been substantiated in extreme nuclear
    incidents in both military and civilian populations, and recent studies
    have proven that individual exposure to chemical agents, such as Agent
    Orange in the Vietnam War, cause an increased risk of contracting
    lymphoid malignancies. In addition, bone marrow transplants were first
    explored as a means of treating radiation-exposed combatants and
    civilians following World War II.
        The connection of blood cancers to military exposures was further
    illustrated in a recent report by the Institute of Medicine, finding
    that Agent Orange exposure is connected to cases of chronic lymphocitic
    leukemia (CLL). Immediately after the determination, the Veterans
    Administration announced that it will cover the medical expenses of
    veterans with CLL. The Vietnam-era defoliant is now credited with
    causing lymphomas, chronic myelogenous leukemia (CML) as well as CLL.
        Consequently, in the current environment DOD medical research needs
    to also focus on the broader area of blood cancer research as it
    affects our military and domestic preparedness. Soldiers in the field,
    domestic first-response personnel, and the civilian population all face
    blood cancer risks from chemical or nuclear exposures, such as a
    ``dirty bomb.'' Higher incidences of leukemia have long been
    substantiated in extreme nuclear incidents in both military and
    civilian populations. As our nation is contemplating the threat of
    biological, chemical or nuclear terrorism, we need better understanding
    of, and preparation for, the hematological malignancies that would
    inevitably result from such events.
        Secondly, additional funding would expedite the cure for other
    cancers. Research in the blood cancers has traditionally pioneered
    treatments in other malignancies. This research frequently represents
    the leading edge in cancer treatments that are later applied to other
    forms of cancer. Chemotherapy and bone marrow transplants are two
    striking examples of treatments first developed in the blood cancers.
        From a medical research perspective, it is a particularly promising
    time to build a DOD research effort focused on blood-related cancers.
    That relevance and opportunity were recognized over the last two years
    when Congress appropriated a total of $9.25 million to begin initial
    research into chronic myelogenous leukemia (CML) through the
    Congressionally Directed Medical Research Program (CDMRP). As members
    of the Subcommittee know, a noteworthy and admirable distinction of the
    CDMRP is its cooperative and collaborative process that incorporates
    the experience and expertise of a broad range of patients, researchers
    and physicians in the field. Since the CML program was launched, eleven
    proposals were recommended for funding. The review panel found the
    overall quality of the proposals was high and quality research from
    this CMLRP would benefit from additional funding. Additionally,
    innovative projects that have a high probability of finding new targets
    for the development of future therapies and new medicines to treat CML
    were recommended for funding.
        Unfortunately, $9.25 million does not go very far in medical
    research. Recognizing that fact and the opportunity this research
    represents, bipartisan members of Congress have requested that the
    program be modestly increased to $25 million and be expanded to include
    all the blood cancers--the leukemias, lymphomas and myeloma. This would
    provide the research community with the flexibility to build on the
    pioneering tradition that has characterized this field.
        DOD research on the other forms of blood-related cancer addresses
    the importance of preparing for civilian and military exposure to the
    weapons being developed by several hostile nations and to aid in the
    march to more effective treatment for all who suffer from these
    diseases. This request clearly has merit for inclusion in the fiscal
    year 2004 legislation.
        The Leukemia & Lymphoma Society strongly endorses and
    enthusiastically supports this effort and respectfully urges the
    Committee to include this funding in the fiscal year 2004 Defense
    Appropriations bill.
        We believe that building on the foundation Congress initiated over
    the last two years would both significantly strengthen the CDMRP and
    accelerate the development of cancer treatments. As history has
    demonstrated, expanding its focus into areas that demonstrate great
    promise; namely the blood-related cancers of leukemia, lymphoma and
    myeloma, would substantially aid the overall cancer research effort and
    yield great dividends.

        Senator Stevens. Joan Goldberg, National Coalition for
    Osteoporosis and Bone Diseases. Good morning.

    STATEMENT OF JOAN GOLDBERG, EXECUTIVE DIRECTOR,
                AMERICAN SOCIETY FOR BONE AND MINERAL
                RESEARCH; ON BEHALF OF THE NATIONAL
                COALITION FOR OSTEOPOROSIS AND RELATED BONE
                DISEASES

        Ms. Goldberg. Good morning. Thank you.
        Mr. Chairman and members of the committee, I am
    representing the American Society for Bone and Mineral
    Research, also the National Coalition for Osteoporosis and
    Related Bone Diseases, which includes the National Osteoporosis
    Foundation, the Pagett Foundation, and Osteogenesis Imperfecta,
    as well as my own society. Together we represent over 44
    million Americans who have bone diseases or are at risk for
    them, along with more than 5,000 scientists dedicated to
    improving the prevention, diagnosis, treatment, and
    understanding of bone diseases and disorders.
        Bone health, as you know, is integral to overall health.
    Our bones support our muscles, protect our vital organs, and
    store the calcium that is essential for bone density or mass,
    end strength. What makes bones healthy? It is a complex
    interaction involving many nutritional, hormonal, behavioral,
    genetic, and environmental factors--what we eat and drink, the
    type and duration of our exercise, our family history. These
    are some of the pieces of the puzzle that fit together when we
    address bone health.
        Bone health is a critical component to consider when
    evaluating military readiness and performance. Why is bone
    health so critical to our military? Stress fractures occur in
    up to 15 percent of military recruits. Stress fractures are
    most common in legs and feet, but they also occur in the ribs
    and upper extremities. For healing to occur, recruits need to
    rest for approximately 3 months. Not only do these fractures
    delay military readiness and performance, but they represent a
    high cost, over $10 million a year.
        Our recent engagement in Iraq highlights some additional
    considerations when it comes to bone health. For example,
    soldiers routinely carried packs that weighed 70 to 90 pounds
    over rough terrain for miles on end in often a harsh climate.
    For many, a fracture could spell an exit from the combat
    theater as quickly as a shrapnel injury.
        It is vitally important to understand how to prevent stress
    fractures in recruits and in combat to reduce suffering,
    minimize the time it takes to ready soldiers for combat, and to
    prevent fractures in training situations and in combat, to
    reduce the significant costs associated with the fractures.
        The DOD has learned a great deal from research to improve
    soldiers' bone health, but there is much more to be learned.
    Recent research has examined the effects of impact forces such
    as running and gait pattern on bone formation and strength. We
    have also looked at the effect of specific nutritional regimens
    and the effects of weight management behaviors. Ongoing
    research is helping us to address the role and the effect of
    non-steroidal inflammatory medication such as ibuprofen on bone
    health and performance, the role of nutrition on bone quality,
    the role of electrical fields to speed bone repair, the role of
    new diagnostic tools.
        But additional topics are also critical to our
    understanding and to recruits' military health. They include
    novel approaches, such as the possible use of low frequencies
    to build high-quality bone, the exploration of how different
    types of physical training affect bone at the cellular level,
    and investigations aimed at identifying the best training and
    nutritional regimens in terms of exercise type and duration,
    intensity, and nutrient amounts of vitamin D, of protein,
    etcetera, to optimize fitness, bone health, and prevent injury.
        Mr. Chairman, stress fractures compromise the health,
    military readiness, and performance of our recruits and our
    troops. A strong, well-trained military proved to be crucial on
    Iraq and will continue to be a vital component of our future.
        We thank you for maintaining the 2003 funding for the bone
    health and military readiness program. We also know there are
    many worthy projects in need of funding, especially in the
    Army's bone health and military medical readiness program.
    Without additional support, not only are these in jeopardy, but
    so are our future results that will save money, prevent
    additional fractures, and further healing.
        We respectfully request that you consider a $10 million
    appropriation for fiscal year 2004 to help maintain an
    aggressive and sustained bone research program. Thank you for
    your commitment to the military's health and safety and thank
    you for your attention and consideration.
        Senator Stevens. Thank you very much. Again, we will do our
    best. That is an area of great interest to the committee. Thank
    you.
        Ms. Goldberg. Thank you.
        [The statement follows:]

                      Prepared Statement of Joan Goldberg

        Mr. Chairman and Members of the Committee, this testimony is
    submitted by Joan Goldberg, Executive Director of the American Society
    for Bone and Mineral Research (ASBMR), representing the National
    Coalition for Osteoporosis and Related Bone Diseases, which includes
    the National Osteoporosis Foundation, the Paget Foundation for Paget's
    Disease of Bone and Related Disorders, the Osteogenesis Imperfecta
    Foundation, and the ASBMR.
        Together we represent over 44 million Americans who have bone
    diseases or are at risk for them, along with the more than 5,000
    scientists dedicated to improving the diagnosis, treatment and
    understanding of bone diseases and disorders.
        Bone health is integral to overall health. Our bones support our
    muscles, protect vital organs, and store the calcium essential for bone
    density or mass, and strength. What makes bones healthy? It's a complex
    interaction involving many nutritional, hormonal, behavioral, genetic
    and environmental factors. What we eat and drink, the type and duration
    of our exercise, our family history--these are some of the pieces of
    the puzzle that fit together when addressing bone health.
        Bone health is a critical component to consider when evaluating
    military readiness and performance. Why is bone health so critical to
    our military? Stress fractures occur in up to 15 percent of military
    recruits. Stress fractures are most common in the legs and feet, but
    also occur in the ribs and upper extremities. For healing to occur,
    recruits often need to stop running or marching for weeks. Not only do
    these fractures delay military readiness and performance, but they
    represent a cost of over $10 million per year. Our recent engagement in
    Iraq highlights some additional considerations when it comes to bone
    health. For example, soldiers routinely carried packs that weighed 70-
    90 pounds over rough terrain for miles on end in a harsh climate. For
    many, a fracture often spelled an exit from the combat theater as
    quickly as a shrapnel injury.
        It is vitally important to understand how to prevent stress
    fractures in recruits and in combat to reduce suffering, minimize the
    time it takes to ready soldiers for combat, prevent fractures in
    training situations and in combat, and reduce the significant costs
    associated with these fractures.
        The DOD has learned a great deal from research to improve soldiers'
    bone health, but there is more to be learned. Recent research has
    investigated: the effects of impact forces, such as running, on bone
    formation; the effect of specific nutritional regimens on bone health;
    and the effects of weight management behaviors on bone health.
        Ongoing research will help address: the role of and effect of non-
    steroidal inflammatory medications on bone health and performance; the
    role of remodeling and nutrition on bone quality; the role of
    electrical fields to speed bone repair; and the role of new diagnostic
    tools.
        Additional topics critical to our understanding and our recruits'
    military health include: novel approaches, such as the possible use of
    low frequencies to build high quality bone; explorations of how
    different types of physical training affect bone at a cellular level;
    and investigations aimed at identifying the best training and
    nutritional regimen in terms of exercise duration and intensity, and
    nutrient amounts, to optimize fitness levels and bone health and to
    prevent injury.
        Mr. Chairman, stress fractures compromise the health, military
    readiness and performance of our recruits and troops. A strong and
    well-trained military proved to be crucial in Iraq and will continue to
    be a vital component of our country's future. We thank you for
    maintaining 2003 funding for the Bone Health and Military Medical
    Readiness Program of the U.S. Army Medical Research and Materiel
    Command located in Fort Detrick, Maryland. We know there are many
    worthy projects in need of funding, especially in the Army's Bone
    Health and Military Medical Readiness Program. Without additional
    support not only are these in jeopardy--and future results that will
    save money, prevent additional fractures, and further healing--but we
    risk losing researchers who are dedicated to bone health and these
    projects in particular.
        We respectfully request that you consider an appropriation of $10
    million to maintain an aggressive and sustained DOD bone research
    program in fiscal year 2004. Thank you for your commitment to the U.S.
    military's health and safety.

        Senator Stevens. Our next witness is Retired Major General
    Paul Weaver, for Juvenile Diabetes Research Foundation. Good
    morning, sir.

    STATEMENT OF MAJOR GENERAL PAUL A. WEAVER, JR., USAF
                (RETIRED), ON BEHALF OF THE JUVENILE
                DIABETES FOUNDATION INTERNATIONAL

    ACCOMPANIED BY:
            CATHY LEE WEAVER
            JULIA WEAVER

        General Weaver. Good morning, Mr. Chairman.
        That is number eight, sir.
        Senator Stevens. You do not need to testify if you bring
    her.
        Go ahead.
        General Weaver. Sir, I would like to thank you for the
    opportunity to appear before you today on behalf of the
    Juvenile Diabetes Research Foundation (JDRF) International in
    support of $10 million in funding for the Technologies in
    Metabolic Monitoring (TMM), better known as the Julia Weaver
    Fund Initiative. As you know, I have had the privilege of
    appearing before this subcommittee numerous times in the past
    in my capacity as the Director of the Air National Guard. But I
    am before you today as a civilian who retired after 35 years of
    military service, to thank you for the funding you have
    provided for the TMM, Julia Weaver Fund Initiative, and to
    respectfully request your continued support.
        I also want to thank Senator Inouye for bestowing the title
    of ``the Julia Weaver Fund'' to the TMM program in honor of my
    4-year-old daughter, who is here with my wife Cathy Lee and
    myself. One month after my retirement from military service,
    sir, my wife and I took our 2\1/2\-year-old daughter then,
    Julia, to the emergency room at Mary Washington Hospital in
    Fredericksburg, Virginia, a day that truly changed our lives.
    Prior to that day, we had been told that Julia had the flu.
        Her condition continued to worsen. On New Year's Day
    morning, we noticed a severe degradation of her overall health.
    She had lost 10 pounds in one week and was losing mental
    awareness of her surroundings. We proceeded to the emergency
    room at Mary Washington Hospital, where we were told after her
    blood was tested that she had diabetic ketoacidosis. Simply
    put, she had juvenile diabetes.
        The attending physician stated that her condition was grave
    and that he was not sure that she was going to make it. Julia,
    whom we call our ``Precious,'' was transported by helicopter
    ambulance to the pediatric intensive care unit at Walter Reed
    Army Medical Center. As the chopper lifted off, I could never
    explain the feeling in our hearts that we may never see our
    little girl alive again.
        She was in intensive care for approximately 2 days and then
    moved to a regular ward after her condition became stable. The
    great medical staff of Walter Reed saved her life, and for that
    my wife and I will be eternally grateful.
        My daughter's daily regimen with juvenile diabetes consists
    of having her finger pricked six to eight times a day and
    receiving two to four shots a day. I made a commitment to God
    that if I could ever do anything to help cure diabetes I
    certainly would do it. So I am here, sir, before you today to
    help my daughter and the many other children and adults with
    diabetes who endure four to six finger pricks a day and try to
    regulate and maintain their blood glucose levels.
        Anyone who has a loved one with the disease or has the
    disease him or herself knows the difficulties of controlling
    ever-fluctuating glucose levels within insulin and diet. With
    our current technology, it is extremely difficult to maintain
    tight control of glucose levels over long periods of time and
    devastating complications such as blindness, kidney failure,
    amputation, heart disease, and nerve damage are often the
    inevitable result of a lifetime with this disease.
        Largely as a result of these complications, diabetes costs
    our economy in excess of $132 billion per year and its
    financial impact is so severe that one out of every four
    Medicare dollars is spent on individuals with this disease.
        Technologies that would noninvasively monitor diabetics'
    metabolism, coupled with an ability to provide information
    remotely or wirelessly, would allow individuals with the
    disease to monitor their blood sugar levels accurately,
    constantly, and noninvasively, which would ultimately improve
    the control of fluctuations in their blood glucose levels and
    potentially reduce the severe debilitating complications.
        Sir, in this way this technology could offer a significant
    and immediate quality of life of 17 million Americans who
    suffer from this disease and relieve much of the economic
    burden of this disease on our Nation.
        More broadly, sir, however, the development of wireless,
    remote, noninvasive technologies that could measure the state
    of metabolism in an individual would have a significant
    application in protecting the men and women of our Armed
    Forces. The subcommittee is undoubtedly aware of the risks that
    our men and women of the Armed Forces face while in harm's way,
    but may not be aware of the risks just due to everyday medical
    problems. Technologies for metabolic monitoring could
    potentially determine health status and accurately communicate
    this information. This technology could be used to track key
    personnel in remote areas and monitor their metabolic changes
    to determine and prevent distress due to stress or illness.
        Furthermore, it would provide an ability to respond quickly
    in the field by providing technology able to deliver antidotes
    and drug treatments that may be required by sick or injured
    personnel, as well as nutritional supplements.
        The Technologies in Metabolic Monitoring, the Julia Weaver
    Fund, sir, is helping to develop better technologies that will
    benefit those with diabetes while at the same time benefiting
    the men and women of our Armed Forces. The program was
    established in 2001 by Congress, JDRF, the Department of
    Defense, National Institutes of Health, and the National
    Aeronautics and Space Administration (NASA).
        Mr. Chairman, JDRF and I thank you, Mr. Chairman and
    members of the subcommittee, for your generous funding for this
    program, which has allowed us to prosper to a truly unique and
    successful initiative. Sir, I respectfully ask that you
    continue your support for this initiative by providing $10
    million in fiscal year 2004.
        Sir, I understand that this subcommittee is faced with
    difficult choices and limited resources. But think about the
    return that you are getting on this investment in medical
    research. Seventeen million people in this country have it;
    $132 billion per year.
        Senator Stevens. General, I have got to stop you. I
    understand and we have supported you and we will continue to
    try to support you. We appreciate very much your testimony.
        General Weaver. Thank you, Mr. Chairman.
        [The statement follows:]

            Prepared Statement of Major General Paul A. Weaver, Jr.

        Mr. Chairman and Members of the Subcommittee, thank you for the
    opportunity to appear before you today on behalf of the Juvenile
    Diabetes Research Foundation International and in support of $10
    million in funding for the Technologies in Metabolic Monitoring/Julia
    Weaver Fund (TMM/JWF) Initiative.
        As you know, I have had the privilege of appearing before this
    Subcommittee numerous times in the past in my capacity as the Director
    of the Air National Guard. But I am before you today as a civilian, who
    retired after 35 years of military service, to thank you for the
    funding you have provided for the TMM/Julia Weaver Fund Initiative and
    to respectfully request your continued support. I also want to thank
    Senator Inouye for bestowing the title ``Julia Weaver Fund'' to the TMM
    program in honor of my four year old daughter who is here with my wife
    Cathylee and me today.
        One month after my retirement from military service, my wife and I
    took our two and a half year old daughter Julia to the emergency room
    at Mary Washington Hospital in Fredericksburg, Virginia, a day that
    truly changed our lives. Prior to that day, we had been told Julia had
    had the flu. Her condition continued to worsen. On New Years Day
    morning, we noticed a severe degradation with her overall health. She
    lost 10 pounds in one week and was losing mental awareness of her
    surroundings. We proceeded to the emergency room at Mary Washington
    Hospital where we were told, after her blood was tested, that she had
    diabetic ketoacidosis--simply put she developed juvenile diabetes. The
    attending physician stated that her condition was grave and that he was
    not sure she was going to make it. Julia, whom we call ``The
    Precious'', was transported by helicopter ambulance to the Pediatric
    Intensive Care Unit at Walter Reed Army Medical Center. As the chopper
    lifted off, I could never explain the feeling in our hearts that we may
    never see our little girl alive again.
        She was in the Intensive Care Ward for approximately two days and
    then moved to a regular ward after her condition became stable. The
    great medical staff at Walter Reed saved her life and for that, my wife
    and I will be eternally grateful. My daughter's daily regimen with
    juvenile diabetes consists of having her finger pricked 6-8 times a day
    and receiving 2-4 shots a day. I made a commitment to God that if I
    could ever do anything to help find a cure for diabetes, I would do it.
        So I am here before you today to help my daughter and the many
    other children and adults with diabetes who must endure four to six
    finger pricks a day to try to regulate and maintain their blood glucose
    levels. Anyone who has a loved one with this disease, or has the
    disease him or herself, knows the difficulties of controlling ever-
    fluctuating glucose levels with insulin and diet. With our current
    technology, it is extremely difficult to maintain tight control of
    glucose levels over long periods of time and devastating complications,
    such as blindness, kidney failure, amputation, heart disease, and nerve
    damage, are often the inevitable result of a lifetime with this
    disease. Largely as a result of these complications, diabetes costs our
    economy in excess of $132 billion per year, and its financial impact is
    so severe that one out of four Medicare dollars is spent on individuals
    with the disease.
        Technologies that would non-invasively monitor diabetes metabolism,
    coupled with an ability to provide information remotely (or
    wirelessly), would allow individuals with the disease to monitor their
    blood sugar levels accurately, constantly, and non-invasively, which
    could ultimately improve the control of fluctuations in their blood
    glucose levels and potentially reduce the severity of debilitating
    complications. In this way, this technology could offer a significant
    and immediate improvement in the quality of life of 17 million
    Americans who suffer from this disease and relieve much of the economic
    burden of this disease on our nation.
        More broadly, however, the development of wireless, remote, non-
    invasive technologies that could measure the state of metabolism in an
    individual would have a significant application in protecting the men
    and women of the armed forces. The Subcommittee is undoubtedly aware of
    the risks that our men and women of the armed forces face while in
    harm's way, but may not be aware of their risk due to everyday medical
    problems. Technologies for metabolic monitoring could potentially
    determine health status and accurately communicate this information.
    This technology could be used to track key personnel in remote areas
    and monitor their metabolic changes to determine and prevent distress
    due to stress or illness. Furthermore, it would provide an ability to
    respond quickly in the field by also providing technology able to
    deliver antidotes and drug treatments that may be required by sick or
    injured personnel, as well as nutritional supplements.
        The Technologies in Metabolic Monitoring/Julia Weaver Fund
    Initiative is helping to develop better technologies that will benefit
    those with diabetes, while at the same time benefiting the men and
    women of the armed forces. This program was established in 2001 by the
    direction and with the support of Congress and close involvement of
    JDRF and several agencies including the Department of Defense (DOD),
    the National Institutes of Health (NIH) and NASA. Now in its third
    year, the program has high-level recognition in the metabolic
    monitoring community as a program that will foster innovation.
        Just to demonstrate how this program has grown over the past three
    years, in fiscal year 2001 the U.S. Army Medical Research and Materiel
    Command (USAMRMC), which manages this initiative, received 16
    applications and supported 5 novel metabolic monitoring research
    projects and a highly successful workshop. In fiscal year 2002, the
    program received $2.5 million in appropriations and was expanded to
    include academic, industry, civilian and defense researchers. As a
    result, 48 applications were received and following a highly
    competitive review, an additional 12 novel metabolic monitoring
    research projects received seed grants for one year. These grants
    should allow researchers to generate enough data to be well placed to
    seek funding from other established research sources. The USAMRMC is
    currently accepting applications for the $4.3 million in fiscal year
    2003 funding as provided by this Subcommittee.
        JDRF and I thank you Mr. Chairman and Members of this Subcommittee
    for your generous funding for this program, which has allowed it to
    prosper into a truly unique and successful initiative. The attached
    research summaries demonstrate the high level of innovation that has
    been pursued with these funds. I respectfully ask that you continue
    your strong support for this initiative by providing $10 million in
    fiscal year 2004. This funding would allow the USAMRMC to capitalize on
    the opportunities provided by the fiscal year 2002 and 2003 funding. In
    addition, it will enable the USAMRMC to expand this initiative in order
    to support more of the high-quality research, in particular to support
    promising military-academia-industry partnerships and continue to
    stimulate communication between these groups.
        I understand that this Subcommittee is faced with difficult choices
    and limited resources, but think about the return that you are getting
    on the investment in this medical research. Diabetes currently affects
    about 17 million people and cost this country $132 billion per year.
    One out of every four Medicare dollars is spent on caring for people
    with diabetes. Continued and substantial funding for the Technologies
    in Metabolic Monitoring/Julia Weaver Fund Initiative could help to
    ultimately save the United States billions of dollars in health care
    costs, improve the quality of life for those with diabetes, and better
    protect the lives of our men and women in the armed forces in the
    field.
        I thank you for the opportunity to appear before you today. You
    give my family and I great hope that the daily burden of diabetes will
    some day be eased as a result of the innovation arising from the TMM/
    Julia Weaver Fund Initiative.

                      FISCAL YEAR 2001 RESEARCH SUMMARIES

        Interstitial Metabolic Monitoring During Hemorrhagic Shock is a
    plan to assess variations in interstitial concentrations of potassium,
    lactate, pyruvate, glucose, calcium, and magnesium with the progression
    of hemorrhagic shock. A method of microdialysis in an animal model is
    used to provide continuous monitoring of tissue composition in skeletal
    muscle and liver. Parameters are compared to their corresponding serum
    concentrations and to hemodynamic parameters, cardiac contractility,
    tissue levels of Na+, K+, ATPase and vascular smooth muscle membrane
    potentials. The effects of fluid resuscitation in both early and late
    stages of shock are being examined to evaluate the hypothesis that
    decompensation results from potassium-mediated vasodilation and/or loss
    of cardiac contractility.
        Non-Intrusive Method of Measuring Internal Metabolic Processes is
    developing a mathematical model describing the non-intrusive transfer
    and collection of cortisol from cutaneous capillaries, a membrane based
    microvolume cortisol assay, and a prototype sampling system to enable
    transfer of sample to the detection membrane. After developing this
    system they will evaluate the performance of the prototype sample
    collection/sample detection system.
        The Warfighter's Stress Response: Telemetric and Noninvasive
    Assessment proposes to provide evidence for a noninvasive, objective
    assessment of operational performance under highly stressful training
    situations by developing baseline psychological and biological profiles
    that predict superior performance under highly stressful training
    situations. To accomplish this, the investigators plan to develop and
    further refine models that characterize stress-induced psychological
    and biological responses that are associated with superior performance
    under highly stressful training situations and to develop and further
    refine a telemetric device for the measurement of Heart Rate
    Variability.
        Integration and Optimization of Advanced, Non-invasive, Ambulatory
    Monitoring Technologies for Operational Metabolic Monitoring is
    developing a wireless monitoring platform that can accept information
    from a variety of physiologic, environmental, and appropriate external
    sensors that can be coupled to mathematical models that permit feedback
    to the individual on the status of their physiological status.
        Measurement of IGF-I During Military Operational Stress via a
    Filter Paper Spot Assay is studying the Insulin-like Growth Factor-I
    (IGF-I) to test the hypothesis that the filter paper blood spot method
    will be an inexpensive and field-expedient method for monitoring the
    metabolic and health status of soldiers during field and combat
    situations. The aim of this study is to determine whether the filter
    paper blood spot collected in a field environment can accurately
    measure IGF-1 and IGF-I binding protein-3 (IGFBP-3) and subsequent
    changes during stressful training.

                      FISCAL YEAR 2002 RESEARCH SUMMARIES

        Metabolic Rate Monitoring and Energy Expenditure Prediction Using a
    Novel Actigraphy Method, (Principle Investigator, Daniel S. Moran) has
    proposed to develop a new, simple, non-invasive method based on
    actigraphy data for monitoring metabolic rate and predicting energy
    expenditure.
        Portable Physical Activity Monitors for Measuring Energy Metabolism
    in ROTC Cadets, (Principle Investigator, Kong Y. Chen) has proposed to
    develop and validate non-invasive, portable techniques for monitoring
    detailed physical activity, to accurately predict EE, and to determine
    specific PT-related energy costs and physiological responses in ROTC
    cadets for short and long-term periods.
        Skin Bioengineering: Non-invasive, Transdermal Monitoring,
    (Principle Investigator, Richard H. Guy) has proposed to develop and
    optimize a novel, non-invasive, iontophoretic approach for metabolic
    monitoring via the skin.
        Fluorescent Polymer Implant for Continuous Glucose Monitoring and
    Feedback, (Principle Investigator, Ralph Ballerstadt) has proposed
    develop and characterize a minimally invasive near-infrared fluorescent
    polymer sensor designed for transdermal glucose monitoring in
    interstitial fluid in dermal and subdermal skin tissue. The sensor is
    designed to be implanted by injection just beneath the superficial
    layers of the skin. Simple and inexpensive instrumentation can be used
    to interrogate the fluorescent properties of the sensor that will vary
    in response to local glucose concentrations. The concept of the
    proposed implant device is one of most promising technologies currently
    pursued in glucose-sensor research.
        Towards Miniturized, Wireless-Integrated, and Implantable Glucose
    Sensors, (Principle Investigator, Diane J. Burgess) has proposed to
    develop autonomous sensory devices, using low-power CMOS
    microelectronics architecture interfaced with an inductively coupled
    power supply and with logic and communication functions, thus allowing
    for total implantation. Integrate a glucose oxidase-based
    electrochemical sensor with the above microelectronic device and
    further equip it with recently developed coatings geared to improve
    sensor stability.
        Implantable Multi-Sensor Array for Metabolic Monitoring, (Principle
    Investigator, David A. Gough) has proposed to develop a disc version of
    the multi-sensor array and demonstrate its feasibility as a tissue
    implant in hamster and pig models with signals conveyed by wire, and to
    develop preliminary signal processing and data management strategies.
        Improved Metabolic Monitoring and Hyperspectral Methods for Wound
    Characterization, (Principle Investigator, Stuart Harshbarger) has
    proposed to provide new tools and methods for monitoring metabolic
    activity in the region of a wound, and to improve the ability to
    predict the healing response of the wound to external stimuli such as
    dietary intake and patient metabolic activity.
        Evaluation and Refinement of a System and a Method for the Use of
    Hyperspectral Imaging for Metabolic Monitoring, (Principle
    Investigator, James Mansfield) has proposed to refine a prototype HSIMM
    system and to characterize its ability to quantify local changes in
    cutaneous hemoglobin saturation during a variety of types of metabolic
    stress. The relationship of these changes to several factors
    influencing cutaneous physiology will also be determined.
        Non-Invasive Monitoring of Insulin-like Growth Factor-I During
    Differential Physical Training Programs in Warfighters, (Principle
    Investigator, Bradley C. Nindl) has proposed to non-invasively monitor
    insulin-like growth factor-I (IGF-I) during physical training in
    Warfighters by employing a novel, patented method of sampling
    interstitial fluid (ISF) via a non-invasive, continuous vacuum pressure
    via micropores in the stratum corneum.
        A Minimally-Invasive Dual-Analyte Miniturized Continuous Sensor for
    Glucose and Lactate, (Principle Investigator, W. Kenneth Ward) has
    proposed to develop a miniature (300  m) wire sensor for continuous and
    simultaneous amperometric monitoring of interstitial glucose and
    lactate.
        A Hydrogel-Based, Implantable, Micromachined Transponder for
    Wireless Glucose Measurement, (Principle Investigator, Babak Ziaie) has
    proposed to develop a hydrogel-based, implantable, micromachined
    transponder for wireless glucose measurement.

        Senator Stevens. The next witness is General, Major General
    Retired Robert McIntosh, Executive Director, Reserve Officers
    Association.

    STATEMENT OF MAJOR GENERAL ROBERT McINTOSH, USAFR
                (RETIRED), EXECUTIVE DIRECTOR, RESERVE
                OFFICERS ASSOCIATION OF THE UNITED STATES

        General McIntosh. Mr. Chairman, on behalf of the members of
    the Reserve Officers Association----
        Senator Stevens. Thank you for bringing her in here,
    General.
        General Weaver. Yes, Mr. Chairman.
        Senator Stevens. We all like to see your daughter. Thank
    you.
        Yes, go ahead.
        General McIntosh. On behalf of the members of the Reserve
    Officers Association (ROA) from each of the uniformed services,
    I thank you for your generous support in the past and for the
    opportunity to present the association's views and concerns
    relating to the Reserve components in the National Defense
    Appropriations Act for fiscal year 2004.
        While the transformation process proposed by the Department
    of Defense is visionary and bold, ROA is concerned about a
    number of its provisions. We believe that there are
    appropriations implications that have not been directly
    addressed in the appropriations process, that there is a lack
    of specificity regarding operating authority, and that there is
    a ``one size fits all'' approach to some problems that are
    raised on these difficult and complex budgeting issues.
        In the interest of time, I will only cover two of our
    concerns. The first is the address of the integrity of Reserve
    component appropriations. The fiscal year 2004 defense budget
    request was predicated in part upon a major change in the way
    the services' active duty and Reserve component appropriations
    are structured. Assuming congressional acquiescence, the
    Department combined the personnel appropriations into a single
    appropriation for each service. This was ostensibly done to
    enhance funding efficiencies in management.
        Unfortunately, it also undermines the Reserve chiefs'
    authority as their component's funding directors and impairs
    their accountability for preparing their components for
    mobilization. It also, in our view, seriously compromises and
    diminishes the Congress' constitutionally mandated
    responsibility to provide oversight to the Armed Forces. It is
    not in our view a good idea.
        In the recent DOD transformation proposal, the Department
    has requested authority to call reservists to active duty for
    training for up to 90 days in preparation for mobilization.
    This training would take place before issuance of mobilization
    orders and thus would be in addition to, not a part of,
    congressionally-mandated limitations on activation authorities.
        Family and employer support could suffer. ROA believes that
    any such training, particularly of significant length, should
    be a part of the mobilization process and start the clock for
    tour length and associated benefits. The question of when this
    training begins is also significant. If it begins before the
    mobilization process, it is a Reserve cost, which could
    jeopardize other essential training. After mobilization, it is
    an active duty cost that could deter gaining commanders from
    including the Reserve component assets in war plans. The 90-day
    activation for training proposal as written is in our view not
    a good idea.
        In conclusion, our Reserve forces have consistently
    demonstrated their worth as combat multipliers and as a
    critical link to the civilian community. They are the litmus
    test and enabler of the Nation's resolve. With your continued
    support, they will continue to perform in a superb manner as
    essential elements of the total force.
        We thank you, Senator.
        [The statement follows:]

             Prepared Statement of Major General Robert A. McIntosh

        Mr. Chairman and Members of the Subcommittee: On behalf of the
    members of the Reserve Officers Association from each of the uniformed
    services, I thank you for the opportunity to present the association's
    views and concerns relating to the Reserve components and the National
    Defense Appropriations Act for fiscal year 2004.
        To say that this is an extraordinary year, a year like no other in
    recent history has become a truism that belies the harsh reality of
    September 11th and its aftermath in Afghanistan and now Iraq. So much
    has changed so obviously in our outlook, our way of living, and our
    approach to doing the nation's business that it is requires no further
    enumeration.
        In the National Defense Authorization Act for fiscal year 1991, the
    Congress stated that ``the overall reduction in the threat and the
    likelihood of continued fiscal constraints require the United States to
    increase the use of the Reserve components of the Armed Forces. The
    Department of Defense should shift a greater share of force structure
    and budgetary resources to the Reserve components of the Armed Forces.
    Expanding the Reserve components is the most effective way to retain
    quality personnel as the force structure of the Active components is
    reduced . . . The United States should recommit itself to the concept
    of the citizen-soldier as a cornerstone of national defense policy for
    the future.'' One can argue about the reduction of the threat, but the
    increased use of the Reserve components is clearly upon us.

    Greater Reliance on Reserve Components
        The 50 years of reliance on a large, Cold War, standing military
    have ended. Confronted with sizeable defense budget reductions, changes
    in the threat, and new missions, America's military answer for the
    future must be a return to the traditional reliance on its Minutemen--
    the members of the Reserve components. Can America's Reservists fulfill
    their commitment to the Total Force--can they meet the challenge?
        Operations Desert Shield and Desert Storm proved that the Reserve
    components were ready and able. During the Gulf War, more than 265,000
    Reservists were called to active duty. Of the total mobilized, 32
    percent were from the National Guard and 67 percent from ``the
    Reserve.'' More than 106,000 Reservists were deployed to Southwest
    Asia. About 20 percent of the forces in the theater were members of the
    Reserve components.
        In Bosnia and Kosovo, more than 48,000 Reservists have again
    demonstrated their readiness and their capability to respond to their
    nation's call. For the past several years, the Reserve components have
    provided approximately 12.5 million support days to the Active
    components annually. That equates to some 35,000 support-years
    annually, the equivalent of two Army divisions. Thus far, Operation
    Iraqi Freedom has seen nearly 230,000 Reservists called to active duty.
    The demobilization has already begun for many; but many Reservists will
    continue to serve on active duty in the theater of operations and here
    in the United States and overseas.
        A strong, viable Reserve force is an inseparable part of America's
    military, a cost-effective augmentation to the Active force and the
    marrow of the mobilization base. Ultimately, mobilizing Reserve forces
    is the litmus test and the enabler of public support and national will.
    The early and extensive involvement of the Guard and Reserve in the
    Gulf War was instrumental in achieving the strong public support of the
    military and our national objectives. However transformation plays out,
    our Reserve forces will continue to have a major role.

    Reserve Components' Cost-Effectiveness
        ROA has long maintained that a proper mix of Active and Reserve
    forces can provide the nation with the most cost-effective defense for
    a given expenditure of federal funds. Reservists provide 55 percent of
    the Total Force, but cost only 8.0 percent of the fiscal year 2004 DOD
    budget. They require only 23 percent of active-duty personnel costs,
    even when factoring in the cost of needed full-time support personnel.
    We need only consider the comparable yearly personnel (only) costs for
    100,000 Active and Reserve personnel to see the savings. Over a 4-year
    period, 100,000 Reservists cost $3 billion less than 100,000 Active
    duty personnel. If the significant savings in Reserve unit operations
    and maintenance costs are included, billions more can be saved in the
    same period. ROA is not suggesting that DOD should transfer all
    missions to the Reserve, but the savings Reservists can provide must be
    considered in transformation-driven force-mix decisions. It is
    incumbent upon DOD to ensure that the services recognize these savings
    by seriously investigating every mission area and transferring as much
    structure as possible to their Reserve components.

    Transformation Concerns
        While the transformation process proposed by the Department of
    Defense is visionary and bold, ROA is concerned about a number of its
    provisions. We believe that there are appropriations implications that
    have not been directly addressed in the appropriations process; that
    there is a lack of specificity regarding operating authority; and that
    there is a one-size-fits-all approach to some problems that raises more
    difficulties than it resolves. Here we will mention only three:
      --Integrity of Reserve Component Appropriations.--The fiscal year
            2004 defense budget request was predicated in part upon a major
            change in the way the services' active duty and Reserve
            component appropriations are structured. Assuming congressional
            acquiescence, the department combined the personnel
            appropriations into a single appropriation for each service.
            This was ostensibly done to enhance funding efficiency and
            management. Unfortunately it also undermines the Reserve
            chiefs' authority as their components' funding directors, and
            impairs their accountability for preparing their components for
            mobilization. It also, in our view, seriously compromises and
            diminishes the Congress's constitutionally mandated
            responsibility to provide oversight to the Armed Forces. It is
            not a good idea.
      --Term Limits.--The Department of Defense very recently requested
            sweeping changes in the way it manages its workforce. No doubt
            much of what was requested needs doing, but we are asked to
            take a great deal on faith, and at least some of the changes
            requested appear to us to be flawed. One proposal would
            eliminate the congressionally established term limits for
            specific key officials in the department's leadership. ROA is
            concerned that eliminating such defined tour lengths (minimum
            and maximum) will have a very negative impact on the ability of
            Reserve component senior leaders to speak their minds freely
            and to contribute meaningfully during the policy-making
            process. In other words, the proposal to eliminate
            congressionally mandated tour lengths for the Reserve component
            chiefs would have a chilling effect on their ability to
            represent the needs of the people they command--the Reserve
            forces. The removal of minimum tour lengths would open the door
            for early dismissal or retirement when what was expressed by
            Reserve component leaders was not necessarily the desired
            department solution. The proposal to eliminate mandated tour
            lengths for Reserve component chiefs is not a good idea.
      --Skill Training.--In the same proposal, the department has requested
            authority to call reservists to active duty for training for up
            to 90 days in preparation for mobilization. This training would
            take place before issuance of mobilization orders, and thus
            would be in addition to, not a part of, congressionally
            mandated limitations on activation authorities. Family and
            employer support could suffer. ROA believes that any such
            training, particularly of significant length, should be a part
            of the mobilization process and start the clock for tour length
            and associated benefits. The question of when this training
            begins is also significant. If it begins before the
            mobilization process, it is a Reserve cost, which could
            jeopardize other essential training; after mobilization, it is
            an active duty cost that could deter gaining commanders from
            including Reserve component assets in their war plans. The 90-
            day activation for training proposal, as written, is not a good
            idea.
        I will now address service-specific issues.

                                  ARMY RESERVE

        We thank the Congress for its support of the Army and its approval
    of the Army's Reserve component fiscal year 2003 budget request. These
    funds will significantly improve the quality of life and training
    capabilities of the Army Reserve and the Army National Guard as they
    meet the challenges of the 21st century. While the Army is undergoing a
    major transformation it is also engaged in the Global War on Terrorism
    and in a major ground conflict in Iraq. While current operations
    receive the major share of resources and attention we must also fund
    the legacy force, modernization and fielding of equipment, the
    education and training of today's and tomorrow's leaders, family
    support programs to support the spouses and families left behind, the
    evolving needs of homeland defense, and needed maintenance and repair
    and recapitalization of the facility infrastructure.
        For fiscal year 2004 the expected Army's total obligation authority
    (TOA) for its Active, Guard, and Reserve components is $93.9 billion,
    an increase of $3 billion over fiscal year 2003 but still only 24
    percent of the total $379.9 billion defense budget. The fiscal year
    2004 budget request, as have previous budgets, critically underfunds
    the Army Reserve personnel, operation and maintenance, equipment
    procurement, and military construction accounts. These resourcing
    shortfalls will adversely affect readiness and training and ultimately
    the quality of life, the morale, and the retention of these highly
    motivated and patriotic citizen-soldiers.
        The Army Reserve's projected share of the Army budget request in
    the fiscal year 2004 DOD budget request is $5.3 billion or 5.8 percent
    of the entire $94 billion Army request--a tremendous force structure
    and readiness bargain for the investment. Separated into the Reserve
    Personnel, Army (RPA) and the Operation and Maintenance, Army Reserve
    (OMAR) accounts, the request is for approximately $3.62 billion RPA and
    $1.9 billion OMAR. With the large number of Army Reservists mobilized
    and receiving pay from the active duty pay accounts, initial
    projections suggest that the fiscal year 2004 RPA account, with a few
    exceptions, will adequately fund the majority of the RPA accounts.
    However the OMAR, MILCON, and equipment accounts still require
    considerable plus-ups to fully fund known requirements--requirements
    that were identified during the development of the president's budget,
    but because of insufficient funding fell below the line and were not
    resourced.
        Critical/executable funding shortfalls identified in the RPA and
    OMAR areas alone are expected to exceed $248 million. Not included in
    this $248 million shortfall is the Army Reserve's estimate that it will
    require $1 billion to modernize and transform its aging equipment
    inventory. Also not included in the overall shortfall of funding is the
    estimated $1 billion backlog in required Army Reserve military
    construction.

    Reserve Personnel, Army (RPA)
        The fiscal year 2004 requested end strength for the Army Reserve is
    205,000. Reliance on the Guard and Reserve for involvement in real
    world operations and domestic contingencies increased considerably
    during the last decade and significantly in response to the events of
    September 11 at the World Trade Center and at the Pentagon. The Army
    Reserve is a full partner in the Army's real world operations, the war
    against terrorism, and the ongoing war in Iraq. Adequate RPA funding to
    support the training of the Reserve to enable it to support the Army
    and our national military strategy remains critical. The most visible
    funding shortfall for RPA in the fiscal year 2004 $3.62 billion RPA
    budget request is funding for professional development training.
        Professional Development Education.--Funding for this program
    provides formal professional education programs of varying lengths
    which qualify Reservists for promotion and train them to meet the
    challenges of leadership and the ever evolving modernization and Army
    transformation. Without the required funding Army Reservists will not
    be educationally qualified for promotion and possibly be denied
    continuation in the Army. The fiscal year 2004 $108.7 million program
    has been funded at $72.4 million leaving an executable/critical
    shortfall $36.3 million

    Operations and Maintenance, Army Reserve (OMAR)
        The fiscal year 2004 DOD budget request for the Army Reserve
    Operations and Maintenance (OMAR) account is $1.9 billion. We believe
    there is at least a $212.6 million executable/critical OMAR shortfall
    in the fiscal year 2004 budget request that will force the Army Reserve
    to compensate by further reducing equipment and facility maintenance,
    and supply purchases.
        Currently the expected OMAR appropriation is experiencing serious
    resourcing shortfalls in force protection and anti-terrorism,
    environmental programs, secure communications, network service, BASOPS,
    depot maintenance, and family support programs. Some critical
    shortfalls are shown below:

                            [In millions of dollars]
    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Force Protection/Anti-Terrorism............................       36.5
    Environmental Programs.....................................       22.8
    Secure Communications......................................       23.9
    Network Service/Data Center................................        9.0
    BASOPS to 95 percent.......................................       93.8
    Depot Maintenance..........................................       22.7
    Family Support Programs....................................        3.9
                                                                ------------
          Total................................................      212.6
    ------------------------------------------------------------------------

    Secure Communications
        There are insufficient resources to fund Army Reserve secure
    communications needed to secure DOD's integrated world-wide common-user
    network for exchanging secure and non-secure data, voice and video
    information. The Army Reserve $49.4 million program is underfunded by
    $23.9 million or 48 percent of its validated requirement. The $49.4
    million program has been funded at $25.5 million (52 percent) leaving
    an executable/critical shortfall of $23.9 million.

    Army Reserve Base Operations (BASOPS)
        BASOPS programs provide essential services at Army Reserve
    controlled installations (including two of the Army's power projection
    platforms) and USAR regional support commands. Services include the
    operation of utilities; real estate leases; municipal services, to
    include pest control, refuse handling operations, snow and ice removal,
    public works management, master planning, fire and emergency services,
    real property exchanges; information management; logistics services,
    including maintenance of material transportation, supply, laundry and
    dry cleaning and food services.
        This shortfall could adversely affect physical security, logistical
    support and the Army Reserve's ability to make payments for leases and
    utilities. The Army's goal is to fund the program at the 95 percent
    level. The $340.3 million program has been funded at $229.5 million (68
    percent) leaving an executable/critical shortfall of $93.8 million at
    the 95 percent funding level.

    Army Reserve Fiscal Year 2004 Depot Maintenance
        The Army has insufficient TOA to fully resource all depot level
    maintenance required to meet wartime readiness levels. The lack of
    funding will exacerbate the degradation of aging equipment and
    negatively affect USAR unit readiness, specifically the tactical
    wheeled vehicle fleet, and hinder the USAR's ability to provide combat
    support/combat service support (CS/CSS) to Active Army combat forces.
    Failure to fund this requirement delays the deployment of forces from
    CONUS to the theater of operation as well as limits the Army Reserve's'
    ability to respond to civil authorities in support of homeland
    security. The $77.7 million program has been funded at $55.0 million
    (71 percent) leaving an executable/critical shortfall of $22.7 million.

    OMAR Summary
        ROA urges the Congress to add $212 million to support these
    neglected and critically underfunded Army Reserve OMAR programs.
    National Guard and Reserve Equipment Request (USAR)
        The Office of the Secretary of Defense in its February 2002
    ``National Guard and Reserve Equipment Report for fiscal year 2003'',
    states that the Army Reserve has 93 percent of its Equipment Readiness
    Code A (ERC A) equipment items on-hand for all of its units. Currently
    the Army Reserve is short $1.75 billion of mission essential equipment
    and a large portion of the equipment is nearing, or already past, its
    Economical Useful Life (EUL). Realistically, the equipment on hand
    (EOH) includes substituted equipment--some that is not compatible with
    newer equipment in the Active Army, Army National Guard, and Army
    Reserve equipment inventory and may not perform as required.
    Substituted equipment continues to cause equipment compatibility
    problems that degrade Army Reserve readiness and its ability to support
    its CS and CSS mission.
        The greatest source of relief to Army National Guard and Army
    Reserve equipment shortfalls is the National Guard and Reserve
    Equipment Appropriation (NGREA) that funds equipment requirements
    identified by the services but not resourced due to funding shortfalls
    in the FYDP. Since 1981 the Army Reserve has received, through the
    oversight of Congress, over $1.5 billion in equipment through the
    NGREA. Without the appropriation the Army Reserve would still be
    struggling to reach 50 percent EOH. The NGREA works, and works well.
        ROA urges the Congress to continue the NG&REA and to fund a minimum
    $200 million of the Army Reserve's $866 million fiscal year 2004
    Equipment Modernization Requirement.

                               AIR FORCE RESERVE

        In the past three decades, Air Force Reserve members have seen the
    lines blur between their being a part time force and a full time force
    as they have increased their mission areas and proven that their
    knowledge, experience, and diversity are important contributors to our
    nation's security. The Air Force Reserve has built a force that can
    reshape itself into quick responders or peace maintainers.
        The Air Force Reserve is the fourth largest major command in the
    Air Force and provides 20 percent of the Air Force capability for only
    3.25 percent of the total Air Force budget. These remarkable numbers
    are possible in part to the command leading the way in leveraging the
    costs of forces by partnering with active duty in associate units, in
    which reservists share flying and maintenance responsibilities by
    augmenting active duty forces without additional physical structure.
        The mobilizations for Operation Enduring Freedom and Operation
    Noble Eagle have shown us that many of the problems, which occurred
    during Desert Shield/Desert Storm, were not peculiar to that effort
    because they are reoccurring. The increased utilization of Reservists
    underscores the need to reduce policy differences between active and
    reserve, reduce the reservist out-of-pocket costs and maintain their
    readiness.
        From 1953 to 1990 the Air Force Reserve contributed forces to 11
    contingency and real world operations during that 38-year period
    compared to over 50 operations in 11 years from 1991 to now.
        The ROA urges the Congress of the United States to appropriate
    funds for the following:

                                 MISSION SUPPORT
                              [Dollars in millions]
    ------------------------------------------------------------------------
                  Requirement                Cost          Description
    ------------------------------------------------------------------------
    AFR BMT Increases.....................   $10.0  Adds 275 BMT and 3-level
                                                     technical training
                                                     quotas due to projected
                                                     increase in non-prior
                                                     service recruits.
                                                     Current accession
                                                     quotas do not sustain
                                                     force requirements--
                                                     brings BMT total to
                                                     2,434 annual accessions
                                                     across FYDP.
    AFR Recruit Advertising...............     4.3  Past and current AFRC
                                                     advertising budget has
                                                     not kept pace with
                                                     increases in marketing
                                                     costs or with other
                                                     services.
    AFR BMT Increase (Long Haul)..........     0.8  Adds 1,566 BMT and 3-
                                                     level tech training
                                                     quotas doe to projected
                                                     increases in non-prior
                                                     recruits. Current
                                                     accession quotas do not
                                                     sustain force
                                                     requirements--brings
                                                     BMT total to 4,000
                                                     annual accessions
                                                     across FYDP.
    AFR Security Forces Manpower..........    14.5  Provides Long Haul
                                                     growth of 588 total
                                                     authorized (548 enl.
                                                     AGRs, 38 civilian, 2
                                                     off. AGRs); plus 576 A/
                                                     B MoBags, weapons,
                                                     LMRs, vehicles and
                                                     other FP equip. 12 of
                                                     the AGRs require no
                                                     equipment.
    ------------------------------------------------------------------------

        According to Lieutenant General James E. Sherrard, Chief of Air
    Force Reserve, ``The first bombs fell from Reserve aircraft on 7
    October, day one of Operation Enduring Freedom. Of the 75,000 members
    in the command, 13,000 were activated with an additional 20,000
    positions filled through volunteerism.'' As part of this, approximately
    4,500 reservists continue to serve in a second year of mobilization.
    Now as our country faces the challenges of Iraq, the Air Force Reserve
    has contributed 13,000 members as of 20 March 2003.
        The ROA urges the Congress of the United States to appropriate
    funds for the following:

                                  MODERNIZATION
    ------------------------------------------------------------------------
                Aircraft                   Location           Description
    ------------------------------------------------------------------------
    C-5.............................  Wright-Patterson    Modernize C-5s for
                                       AFB OH.             Avionics
                                      Lackland AFB TX      Modernization
                                      Westover AFB MA      Program (AMP) and
                                      Dover AFB DE         Reliability
                                      Travis AFB CA        Enhancement Re-
                                                           engining Program
                                                           (RERP) to
                                                           increase
                                                           operational
                                                           ability and
                                                           reduce
                                                           maintenance
                                                           costs.
    C-17............................  March ARB, CA.....  Replace C-141s
                                                           being phased-out
                                                           of service by
                                                           fiscal year 2006.
    WC-130J.........................  Keesler AFB, MS...  Complete upgrade
                                                           of aircraft for
                                                           the ``Hurricane
                                                           Hunters'' mission
                                                           and continue as a
                                                           Reserve mission.
    C-40............................  Scott AFB, IL.....  Replace C-9s being
                                                           phased out of
                                                           service by fiscal
                                                           year 2006.
    ------------------------------------------------------------------------

        In 2002, the Air Force Reserve Command simultaneously met their
    mission requirements in Aerospace Expeditionary Force (AEF) rotations,
    global exercises, ongoing operations and readiness training. While
    balancing these demands, specialty missions for weather, aerial spray
    and firefighting were also completed.
        The ROA urges the Congress of the United States to appropriate
    funds for the following:

                                    EQUIPMENT
                              [Dollars in millions]
    ------------------------------------------------------------------------
                  Requirement                Cost          Description
    ------------------------------------------------------------------------
    C-130J Radar..........................   $50.0  Upgrade will correct
                                                     display inconsistencies
                                                     range, minimize startup
                                                     attenuation errors, and
                                                     add capability to
                                                     increase range distance
                                                     for identification of
                                                     hazards for 10
                                                     aircraft.
    C-17 Aircrew Training System..........    20.0  Procures aircrew
                                                     training system for
                                                     March ARB.
    F-16 LITENING II AT Upgrade               16.2  LITENING II is a multi-
     Modification.                                   sensor pod providing a
                                                     precision strike
                                                     capability.
    F-16 LITENING II AT POD Procurement...    14.4  Additional targeting
                                                     pods are needed for the
                                                     Air Force Reserve to
                                                     support ONE, OEF, local
                                                     training, pod
                                                     replacement and future
                                                     contingencies.
    F-16 Color Display....................    16.0  Hi-definition color
                                                     multifunction displays
                                                     will enable the F-16 to
                                                     display more precise,
                                                     informative pictures
                                                     improving
                                                     interpretation,
                                                     situational awareness,
                                                     and increasing visual
                                                     acuity for target
                                                     recognition with
                                                     electro-optical weapons
                                                     and targeting systems.
    A-10 Targeting Pods...................    48.0  Additional targeting
                                                     pods are needed for the
                                                     AFRC to support ONE,
                                                     OEF, local training and
                                                     future contingencies.
    ------------------------------------------------------------------------

                                 NAVAL RESERVE

        The Naval Reserve has mobilized over 17,500 Selected Naval
    Reservists in direct support of Operations Noble Eagle, Enduring
    Freedom, and, most recently, Operation Iraqi Freedom. The majority of
    these Naval Reservists have been recalled individually based on
    specific skills. They include significant numbers of law enforcement
    officers and augmentees to combatant commands. Entire units of the
    naval coastal warfare commands were activated. Medical, supply, mobile
    construction force, intelligence and other specialties have been
    heavily tasked. Naval Reserve pilots are maintaining the flow of
    personnel and materiel to the theater of operations.
        Funding for fiscal year 2003 enabled the Naval Reserve to resource
    peacetime contributory support, bonuses, a substantial pay raise, real
    property maintenance, base operating support, and recruiting
    advertising/support. It is clearly evident that Congress has given full
    recognition to the significant and well-recognized compensating
    leverage offered by today's Naval Reserve, which represents 19 percent
    of the Navy, yet expends only 3 percent of the budget.
        Although funding levels appropriated for fiscal year 2003 and
    proposed for fiscal year 2004 sufficiently provide for the operation,
    maintenance, and training of the Naval Reserve, continued Naval Reserve
    force structure reductions represent a disturbing trend. Whether
    structural reductions are accomplished in a good-faith effort toward
    transformation or simply to provide a financial offset for a higher
    priority active program, the net effect is a reduction in the
    capability of the Naval Reserve to provide both peacetime contributory
    support and a war time surge capability.
        Structural reductions in the fiscal year 2004 budget include the
    decommissioning of VFA-203, all eight NMCB augment units, one naval
    construction force support unit and one of four Naval Reserve fleet
    hospitals. Additionally, the Navy budget for fiscal year 2005 calls for
    the decommissioning of VAW-78, as part of the elimination of much of
    CAG-20, and the conversion of 3 of 7 VP squadrons to augment units. The
    Navy has indicated that it intends to deconstruct the entire Reserve
    helicopter wing in fiscal year 2005, to include decommissioning the
    only two currently mobilized combat search air rescue (CSAR) squadrons,
    HCS-4 and HCS-5, in the entire Navy.
        ROA strongly urges the Congress to hold the line against these
    major structural reductions. As a policy, it appears that the Navy is
    embarking on the complete deconstruction of the Naval Reserve force
    structure. ROA requests that the Congress hold hearings with the
    objective of discovering the Navy's strategy, goals and anticipated
    benefits of this deconstruction. Moreover, ROA strongly urges the
    Congress to provide full funding as described below for the hardware
    procurement and modernization required to maintain the Naval Reserve as
    a viable and cost-effective force multiplier.

    Equipment Modernization
        Over the past years, much of the progress made in improving the
    readiness and capability of Naval Reserve units has been the direct
    result of congressional action. Specifically, the willingness of the
    Congress to designate new equipment for the Naval Reserve in the
    National Guard and Reserve Equipment Appropriation (NGREA) and to
    earmark funding for the Naval Reserve in the traditional procurement
    appropriations was instrumental in maintain equipment currency and
    operational readiness. In fiscal year 2004, the Navy included
    additional funding in its budget request to support Naval Reserve
    equipment modernization. Specifically, funding for one C-40A aircraft,
    C-130T aircraft upgrades naval coastal warfare boats and equipment
    upgrades and Naval Construction Force equipment procurement was
    included in the budget submission to Congress. Although a major step in
    the right direction, additional funding is urgently required to support
    Naval Reserve equipment modernization unfunded requirements that exceed
    $350 million in fiscal year 2004 alone.
        As the number one equipment funding priority of the Naval Reserve,
    the Boeing C-40A transport aircraft, which is replacing the Naval
    Reserve's 27 C-9B and DC-9 aircraft, is of vital importance to
    operational commanders, because the Naval Reserve provides 100 percent
    of the Navy's organic lift capability in support of Naval Component and
    Fleet Commanders logistics requirements. The average age of Naval
    Reserve C-9 aircraft is nearly 30 years. Aircraft obsolescence is being
    reached because of deficiencies in the avionics suite, power plant, and
    the overall aging of the airframe. In addition, existing C-9 engines do
    not meet current international environmental and noise abatement
    requirements that eventually could result in the exclusion of C-9
    aircraft from airspace in specific regions of the world. Finally, the
    cost of maintaining the C-9 fleet increases annually as the aircraft
    get older. The Navy has contracted for seven C-40A's and six have been
    delivered. The balance of the Naval Reserve's requirement is for an
    additional 20 C-40s.
        Equipment modernization is a critical priority for the Naval
    Reserve. ROA strongly urges the Congress to provide $330 million to
    support the vital and continuing Naval Reserve unfunded equipment needs
    in fiscal year 2004.

    Marine Corps Reserve
        With over 20,000 Marine Corps Reservists mobilized for Operations
    Iraqi Freedom, Enduring Freedom and Noble Eagle, over 50 percent of the
    Marine Corps Reserve have been recalled under the partial mobilization
    declared by the President. As we write, the 1st Marine Expeditionary
    Force is streaming toward Baghdad, with approximately 15,000 Marine
    Corps Reservists in the CENTCOM Area of Responsibility (AOR) and in the
    battle. Marine Corps Reservists are integrated at every level of joint
    operations, force structure and forward support, in theater and in the
    United States. Marine Corps Reservists are in every theater of the war
    on terrorism. In Guantanamo Bay, Cuba, they continue guarding Al Qaeda
    detainees and in Afghanistan securing the heartland of the Taliban.
    Every Marine, whether Active or Reserve, is first and foremost a Marine
    and a rifleman.
        ROA urges the Congress to maintain Selected Marine Corps Reserve
    end-strength at 39,600 (including 2,261 Active Reservists).

    Funding Shortfalls
        The request to support the Marine Corps Reserve appears to be
    underfunded in the Aircraft Procurement, Navy (APN), Operation and
    Maintenance, Marine Corps Reserve (O&MMCR), Reserve Personnel, Marine
    Corps (RPMC) and Procurement, Marine Corps (PMC) appropriations.
    Maintaining the necessary funding to pay, educate, and train our Marine
    Reservists, and to enable the units of the Marine Forces Reserve to
    conduct appropriate training and operations with current fleet
    compatible equipment is the vital first step to combat readiness and
    sustainability.
        Additional O&MMCR funds are needed for initial issue of equipment,
    replenishment and replacement of equipment, exercise support, and
    organizational and depot maintenance. Only by equally equipping and
    maintaining both the Active and Reserve forces will Total Force
    integration be truly seamless. Foremost is the maintenance of aging
    equipment. The Marine Corps Reserve armored vehicles' age, coupled with
    increased use, contribute to this requirement. The Initial Issue
    Program also continues to be a top priority. This program provides
    Reserve Marines with the same modern field clothing and personal
    equipment issued to their Regular Marine counterparts: improved load
    bearing equipment, all purpose environmental clothing systems (APECS)/
    3rd generation Gortex, small arms protective inserts, outer tactical
    vests, light weight helmets, modular general purpose tent systems,
    modular command post systems, and lightweight maintenance enclosures.
    Modern equipment continues to be critical to the readiness and
    capability of the Marine Corps Reserve. Although the Marine Corps
    attempts to implement fully the single acquisition objective philosophy
    throughout the Marine Corps Total Force (Active and Reserve), there are
    some unfilled Reserve equipment requirements that have not been met
    because of funding shortfalls.
        To achieve the readiness necessary to quickly mobilize and augment
    the Active Marine Forces in time of national emergency, Marine Forces
    Reserve units must be equipped in the same manner as their Active force
    counterparts. The top modernization requirement of Marine Corps Reserve
    continues to be Engineering Change Proposal 583 (ECP-583), which will
    make its F/A-18A aircraft compatible with the F/A 18 Cs utilized by the
    Active force. As part of a complete modernization to achieve complete
    Force interoperability and support compatibility, this initiative will
    upgrade the aircraft to state of the art avionics and weapons systems.
    A safe and consistent fielding of the V-22 Osprey tilt rotor flight
    system is critical to the future readiness of Marine Corps aviation.
    Reserve CH-46Es will not be replaced for at least another 10 years at
    the current planned production rate. Further, until the V-22 is fielded
    to the Reserve, the Marine Corps Reserve will not be able to take full
    advantage of the skills of V-22-trained Marines who separate from the
    Active forces. The increasing cost of CH-46E maintenance and this
    potential loss of V-22 expertise can be avoided by earlier fielding of
    the V-22 across the Total Force. As current operations in Iraq
    highlight, the CH-53 helicopter night vision system is critical to
    success. This system provides an improved night and adverse weather
    capability for this helicopter, a mainstay of forward deployed combat
    operations. It provides aircrews and embarked ground force commanders
    video displays with infrared imagery overlaid with flight information
    and navigational data.
        With network-centric warfare, it is vital that Marine Corps Reserve
    units and individual Reservists be able to communicate securely and
    robustly. Two major shortfalls are in the area of radio communications:
    the PRC 117 multi-band radio for counterintelligence HUMINT Equipment
    Program (CIHEP) and the PRC 148 handheld radio. The full purchase of
    the PRC 148 will enable the consolidation of a half a dozen radio
    systems into one Marine Corps-wide system.

           AVIATION EQUIPMENT FUNDED THROUGH AIRCRAFT PROCUREMENT NAVY
                                  APPROPRIATION
                              [Dollars in millions]
    ------------------------------------------------------------------------
                                                                     Number
                            Item                            Cost      Req.
    ------------------------------------------------------------------------
       MARINE CORPS RESERVE FISCAL YEAR 2004 UNFUNDED
                       EQUIPMENT NEEDS

    F/A-18A ECP-583 (16 USMCR aircraft).................     $69.0        36
    CH-53E Helicopter Night Vision System (HNVS) ``B''        45.0  ........
     Kits...............................................

       MARINE CORPS RESERVE FISCAL YEAR 2004 UNFUNDED
           OPERATIONS AND MAINTENANCE REQUIREMENTS

    Initial Equipment Issue (Reserves)..................      13.5  ........
    Depot Level Maintenance Program.....................       7.5  ........

     FISCAL YEAR 20O4 RESERVE PROCUREMENT, MARINE CORPS
                            (PMC)

    PRC 117 Multi Band Radio for Counterintelligence           2.1        59
     HUMINT Equipment Program (CIHEP)...................
    PRC 148 Handheld Radio..............................       4.0       527

      FISCAL YEAR 2004 RESERVE PERSONNEL, MARINE CORPS
                           (RPMC)

    Active Duty for Special Work (ADSW) for Marine for         9.1       125
     Life Program--funds 125 Reserve Marines............
    ------------------------------------------------------------------------

        ROA recommends that the Congress appropriate $150.2 million for
    these critical unfunded Marine Corps Reserve priorities.

                                  COAST GUARD

        We are aware that this committee is not responsible for the direct
    funding of the Coast Guard or the Coast Guard Reserve. Nevertheless, a
    fully funded Coast Guard is vital to ensuring the security and safety
    needs of America through the performance of its traditional core
    missions and its increased homeland security posture. Similarly,
    funding for the Department of Defense and the Department of the Navy
    remains constrained. The Coast Guard transferred from the Department of
    Transportation to the Department of Homeland Security on March 1, 2003.
    Therefore, it is vital to be farsighted as we cross into the 21st
    century to ensure a continued robust sea power.

    Homeland Security
        The Coast Guard's homeland security efforts prior to September 11th
    were directed toward executing and enhancing maritime safety and
    security, environmental protection, and homeland defense in addition to
    other normal peacetime missions. Through the NAVGUARD Board and other
    mechanisms, the Coast Guard worked closely with the Department of the
    Navy to address domestic force protection for naval assets. Jointly,
    they were also preparing for the future by developing a methodology to
    conduct initial domestic Port Vulnerability Assessments to identify
    critical infrastructure and high-risk activities in our ports and to
    target their limited resources against the greatest threats. In
    addition, the Coast Guard promoted the concept of Maritime Domain
    Awareness in cooperation with members of the National Security Council.
    They were also planning for the establishment of domestic active-duty
    Maritime Safety and Security Teams that will possess specialized law
    enforcement and force protection capabilities to meet emerging port
    security requirements in normal and heightened threat conditions.

    Deepwater Capability
        Beginning in 2002, the Coast Guard has undertaken the Integrated
    Deepwater System Program in order to recapitalize its aging and
    technologically obsolete cutters and aircraft over the next twenty
    years. The Deepwater Program will provide the Coast Guard with the
    capabilities it needs to operate effectively and efficiently in the
    coming decades. From the Coast Guard's perspective, ``deepwater''
    refers to any operation that requires an extended on-scene presence or
    long transit to the operating area. They can be conducted in port, near
    the coast or offshore.
        The Coast Guard's current fleet has high personnel and maintenance
    costs. Some ships have been in service for more than 50 years. The
    continued protection of the public, at a lower cost, requires further
    investment to enable the Coast Guard to design more capable and less
    labor-intensive ships and aircraft. Without the necessary investment,
    operations and maintenance costs will continue to increase rapidly and
    performance will continue to erode. Adequate investment in the
    Deepwater Program will sustain the Coast Guard's capability for
    providing services critical to America's public safety, environmental
    protection, and national security for the next 40 years--through the
    replacement of assets that are at, or fast approaching, the end of
    their service lives.
        The Integrated Deepwater System Program will also strengthen the
    Coast Guard's already close relationship with the Navy. The Coast
    Guard's National Security Cutter, as well as other major cutters
    acquired through the Deepwater program, will be readily available to
    support critical Department of Defense operations such as maritime
    surveillance and interception, convoy escort, search and rescue, and
    enforcement of maritime sanctions. Such options allow Navy ``high end''
    ships to be more effectively employed in higher threat/combat
    operations.
        The Reserve Officers Association urges the Congress to fully
    support the Coast Guard's Integrated Deepwater System Program, its new
    start authority, and the Navy's acquisition of assets for the Deepwater
    program. In addition, the ROA strongly urges the Congress to examine
    the desirability and feasibility of accelerating the Deepwater Program
    in order to achieve the desired acquisition objectives within ten years
    instead of the current estimated completion period of twenty years. The
    Coast Guard Reserve The events of 11 September and their aftermath have
    affected the Coast Guard Reserve more, perhaps, than the other Reserve
    components. The Coast Guard Reserve was the first Reserve component
    mobilized. On the afternoon of 11 September, the Secretary of
    Transportation exercised his unique domestic recall authority and
    authorized the largest recall of Coast Guard Reservists in history. By
    week's end, over 1100 reservists were on duty throughout the nation
    helping to ensure the security of the nation's seaports and waterways.
    Eventually nearly one third of the entire Selected Reserve (SELRES) was
    mobilized, proportionally far more than any other Reserve Component.
    Without its Reserve, the Coast Guard could not have surged so rapidly
    to increase the physical security of our vital ports and waterways.

    Coast Guard Selected Reserve End Strength
        ROA strongly urges congressional approval to increase the
    authorized and appropriated end strengths of the Active and Reserve
    Coast Guard. Specifically, the Coast Guard Reserve should be increased
    from 9,000 to 10,000 in fiscal year 2004.

    Coast Guard Reserve Funding
        It is estimated that the administration has requested $115 million
    for the support of reserve training and support for fiscal year 2004.
    With the consolidation of the Operating Expenses (OE) and the Reserve
    Training (RT) appropriation accounts, visibility is lost on the amount
    of support provided to the Coast Guard Reserve. Given the present
    procedures for reimbursement for operating expenses and direct payments
    by the Coast Guard Reserve, this is the minimum needed to fund a
    training program and to increase the force from 9,000 to 10,000. Given
    the events of September 11th and the national priority on homeland
    defense, we need a strong and vibrant Coast Guard Reserve, perhaps more
    than ever before. Providing the adequate funding will help ensure
    qualified and experienced members are available and prepared for the
    next surge requirement.
        As noted above, ROA objects to the loss of visibility of the amount
    of support provided to the Coast Guard Reserve. ROA believes that the
    Congress, in its capacity of providing constitutional oversight of the
    execution of the Budget of the United States, must have the ability to
    sufficiently review the documented Coast Guard Reserve program.

                                   CONCLUSION

        Thank you for the opportunity to represent the Reserve Officers
    Association's views on these important subjects. Your support for the
    men and women in uniform, both Active and Reserve is sincerely
    appreciated. I'll be happy to answer any questions that you might have.

        Senator Burns [presiding]. General McIntosh, did you--in
    your testimony did you give us any--how would you solve this
    problem of the 90-day callup training period?
        General McIntosh. I think if in law it was tied to starting
    the mobilization clock, in other words if it was under a
    partial mobilization contingency that was the reason they had
    to be called for training, then the 2-year, maximum of 2 years
    for recall under partial mobilization, that clock should start
    the day they show up for training. And we believe that the 90
    days should tie to the use of those forces in an actual
    contingency or conflict.
        Senator Burns. Okay, thank you very much. We will make note
    of that and we thank you for your testimony. Sorry you have to
    be handed off through this. This is a terrible way to run a
    hearing, I will tell you. We thank you.
        Now we will call Rodney Lester, CRNA with the American
    Association of Nurse Anesthetists. In other words, you put
    people to sleep.

    STATEMENT OF RODNEY C. LESTER, CRNA, Ph.D., PRESIDENT,
                AMERICAN ASSOCIATION OF NURSE ANESTHETISTS

        Dr. Lester. Yes, sir.
        Senator Burns. You would run out of work up here because we
    do it naturally.
        Thank you for coming today.
        Dr. Lester. Senator Burns, good morning and thank you for
    the opportunity to testify today. We appreciate it. My name is
    Rodney Lester. I am a Certified Registered Nurse Anesthetist
    (CRNA) and President of the American Association of Nurse
    Anesthetists (AANA). In addition, I recently retired from the
    Army after 5 years of active duty and 24 years as a reservist.
        The AANA represents more than 30,000 CRNAs, including the
    516 who are on active duty. Currently there are more than 360
    CRNAs deployed in the Middle East providing anesthesia care.
    That includes both active and reserve components.
        To ensure modernization military medical readiness, we must
    have anesthesia providers that can work independently and be
    deployed at a moment's notice. For this reason, the AANA is
    concerned over the recently proposed rule to include
    anesthesiologist's assistants (AAs) as authorized providers
    under the Tricare program. Before the rule was published, there
    should have been full congressional review of the AA's safety
    record, cost effectiveness, and limited scope of practice.
        AAs are trained to assist the anesthesiologist in providing
    anesthesia care and cannot act independently. Immediate and
    independent action is required when providing anesthesia. AAs
    are not recognized anesthesia providers in any branch of the
    military and do not practice in all 50 States. There are only
    five States that have separate licensure for AAs. If most of
    the country does not recognize the AA practice, why should
    Tricare have AAs providing anesthesia care to our military and
    their dependents?
        Since the introduction of AAs to the health care system 30
    years ago, there are two schools in the country and only about
    700 AAs practicing. This is in contrast to nurses, who have
    been providing anesthesia care since prior to the Civil War.
    Today we have 85 nurse anesthesia schools, with over 30,000
    CRNAs practicing. AAs will not lower the anesthesia provider
    vacancy rate within the DOD.
        AANA urges members of the subcommittee and the full
    committee to contact the DOD to urge their reconsideration of
    the AA proposal.
        Incentives for recruitment and retention of CRNAs in the
    military are essential to make sure that the armed services can
    meet their medical manpower needs. We would like to thank this
    committee for funding the critical skills retention bonus,
    CSRB, for fiscal year 2003. Sixty-six percent of the 516 active
    duty CRNAs enjoy this benefit.
        In addition, we would like to thank this committee for its
    continued support in funding the incentive special pay (ISP)
    for CRNAs in the military. As you know, there continues to be a
    considerable gap between civilian and military pay, which was
    addressed in the fiscal year 2003 Defense Authorization Act
    with an ISP increase authorized from $15,000 to $50,000. The
    AANA is requesting that this committee fund that increase in
    the ISP at $50,000 for all services, enabling them to recruit
    and retain CRNAs.
        In conclusion, the AANA believes that the recruitment and
    retention of CRNAs in the military service is of critical
    concern in maintaining the military's ability to meet its
    wartime and medical mobilization needs. The funding of the CSRB
    and an increase in ISP will assist in meeting these challenges.
    Also, we believe that the inclusion of AAs in the Tricare
    system would not improve military medical readiness of any of
    the services and therefore should not be approved.
        I thank the committee members for their consideration of
    these issues and would be happy to answer any questions.
        [The statement follows:]

                     Prepared Statement of Rodney C. Lester

        The American Association of Nurse Anesthetists (AANA) is the
    professional association representing over 28,000 certified registered
    nurse anesthetists (CRNAs) in the United States, including 516 active
    duty CRNAs in the military services. The AANA appreciates the
    opportunity to provide testimony regarding CRNAs in the military. We
    would also like to thank this committee for the help it has given us in
    assisting the Department of Defense (DOD) and each of the services to
    recruit and retain CRNAs.

                  BACKGROUND INFORMATION ON NURSE ANESTHETISTS

        The practice of anesthesia is a recognized specialty within both
    the nursing and medical professions. Both CRNAs and anesthesiologists
    administer anesthesia for all types of surgical procedures, from the
    simplest to the most complex, either as single providers or in a ``care
    team setting.'' Patient outcome data has consistently shown that there
    is no significant difference in outcomes between the two providers.
    CRNAs and anesthesiologists are both educated to use the same
    anesthesia procedures in the provision of anesthesia and related
    services.
        In the administration of anesthesia, CRNAs perform the same
    functions as anesthesiologists and work in every setting in which
    anesthesia is delivered including hospital surgical suites and
    obstetrical delivery rooms, ambulatory surgical centers, health
    maintenance organizations, and the offices of dentists, podiatrists,
    ophthalmologists, and plastic surgeons. One of the differences between
    CRNAs and anesthesiologists is that prior to anesthesia education,
    anesthesiologists receive medical education while CRNAs receive a
    nursing education. However, the anesthesia part of the education is
    similar for both providers, and both professionals are educated to
    perform the same clinical anesthesia services.
        Today CRNAs administer approximately 65 percent of the anesthetics
    given to patients each year in the United States. They are masters
    prepared and meet the most stringent continuing education and
    recertification standards in the field, helping make anesthesia 50
    times safer now than 20 years ago according to the Institute of
    Medicine's 1999 Report, ``To Err is Human.''

                       NURSE ANESTHETISTS IN THE MILITARY

        Nurse anesthetists have been the principal anesthesia providers in
    combat areas in every war in which the United States has been engaged
    since World War I. Military nurse anesthetists have been honored and
    decorated by the United States and foreign governments for outstanding
    achievements, resulting from their dedication and commitment to duty
    and competence in managing seriously wounded casualties. In World War
    II, there were 17 nurse anesthetists to every one anesthesiologist. In
    Vietnam, the ratio of CRNAs to physician anesthetists was approximately
    3:1. Two nurse anesthetists were killed in Vietnam and their names have
    been engraved on the Vietnam Memorial Wall. During the Panama strike,
    only CRNAs were sent with the fighting forces. Nurse anesthetists
    served with honor during Desert Shield, Desert Storm, and ``Operation
    Enduring Freedom.'' Military CRNAs provide critical anesthesia support
    to humanitarian missions around the globe in such places as Bosnia and
    Somalia. Currently, there are approximately 364 nurse anesthetists
    deployed in the Middle East for the military mission for ``Operation
    Iraqi Freedom'' and ``Operation Enduring Freedom.''
        Data gathered from the U.S. Armed Forces anesthesia communities'
    reveal that CRNAs have often been the sole anesthesia providers at
    certain facilities, both at home and while forward deployed. For
    decades CRNAs have staffed ships, isolated U.S. Bases, and forward
    surgical teams without physician anesthesia support. The U.S. Army
    Joint Special Operations Command Medical Team and all Army Forward
    Surgical Teams are staffed solely by CRNAs. Military CRNAs have a long
    proud history of providing independent support and quality anesthesia
    care to military men and women, their families and to people from many
    nations who have found themselves in harms way.
        When President George W. Bush initiated ``Operation Enduring
    Freedom,'' CRNAs were immediately deployed. With the new special
    operations environment new training was needed to prepare our CRNAs to
    ensure military medical mobilization and readiness. Brigadier General
    Barbara C. Brannon, Assistant Surgeon General, Air Force Nursing
    Services, testified before this Senate Committee on May 8, 2003, to
    provide an account of CRNAs on the job overseas. She stated, ``Lt. Col
    Beisser, a certified registered nurse anesthetist (CRNA) leading a
    Mobile Forward Surgical Team (MFST), recently commended the seamless
    interoperability he witnessed during treatment of trauma victims in
    Special Forces mass casualty incident.''
        In the most recent mission, ``Operation Iraqi Freedom,'' CRNAs were
    deployed on both ships and ground. For example, Lt. Col. Steven
    Hendrix, CRNA was in the Delta Force, U.S. special operations forces
    that rescued Private Jessica Lynch.
        This committee must ensure that we retain and recruit CRNAs for now
    and in the future for the ever-changing military operation deployments
    overseas.

                  INCLUSION OF AAS UNDER THE DOD HEALTH SYSTEM

        The U.S. Department of Defense has proposed authorizing
    anesthesiologist assistants (AAs) as providers of anesthesia care under
    the TRICARE health plan for military personnel and dependents, in a
    proposed rule published in the Federal Register April 3 (68 FR 16247,
    4/3/2003). In addition, the Director of Anesthesia Services of the
    Veterans Affairs (VA) Department is apparently in the process of adding
    AAs as a new anesthesia provider as well. There has been no
    congressional review about adding these new providers, and no
    assessment of their safety record or cost-effectiveness.
      --There are only two AA schools in the entire country (Ohio and
            Georgia) since AA introduction to the healthcare system over 30
            years ago;
      --AAs are not required to have any healthcare training or experience
            before they enter AA training. This differs from Certified
            Registered Nurse Anesthetists (CRNAs) who must have a
            bachelor's degree, be a registered nurse and have at least one
            year of acute care training prior to beginning the program;
      --AAs have a very limited scope of practice, as they are required by
            law to administer anesthesia only under the close supervision
            of an anesthesiologist. Since AAs must work under the close
            supervision of an anesthesiologist, they cannot act
            independently and quickly in an emergency situation. Immediate
            and independent action is required when providing anesthesia,
            especially for those patients in the TRICARE and VA systems.
            AAs cannot be deployed in military situations without
            anesthesiologists; by contrast, CRNAs are predominantly the
            anesthesia provider in military situations & need not be
            anesthesiologist supervised.
      --Only five states provide separate licensure for AAs (Alabama,
            Georgia, New Mexico, Ohio, and South Carolina). Some
            anesthesiologists in these states actually have opposed AA
            recognition. If most of the country does not specifically
            recognize their practice, why would TRICARE and the VA allow
            AAs to administer anesthesia to our nation's veterans and
            military families?
      --The scope of training for AAs is severely limited. For example, the
            Emory program in Georgia does not provide clinical instruction
            in the administration of regional anesthesia. The AA curriculum
            is characterized by training that allows them to ``assist'' the
            anesthesiologist in technical functions. By contrast, nurse
            anesthetists are capable of high-level independent function and
            receive instruction in the administration of all types of
            anesthesia including general and regional anesthesia, conscious
            sedation, and monitored anesthesia care. The ability to make
            independent judgments and provide multiple anesthetic
            techniques are critical to meeting an array of patient and
            surgical needs.
      --The use of AAs is bad healthcare policy. This attempt to introduce
            AAs into federal programs sets the stage for anesthesiologists
            to control the entire anesthesia market since they will have
            substantial control of AA practice, including education,
            accreditation, certification, practice, payment, and
            employment. This degree of control is intended to eliminate any
            chance of competition in the anesthesia market and to allow
            only anesthesiologists to bill for anesthesia services, even if
            provided by a technical assistant.
      --The AA certification examination process emphasizes employability
            over thorough testing: The National Commission for
            Certification of Anesthesiologist Assistants (NCCAA) allows AA
            students to take the AA certification examination up to 180
            days before graduation. Scores can be released immediately
            after the NCCAA has received documentation of the student's
            graduation. Given that an AA student can take the exam six
            months before he or she graduates (i.e., after only 18 months
            of being in an AA program), the rigors of the exam appear
            questionable. How can an AA (with no required healthcare
            training prior to entering an AA program) be tested when six
            months remain in an AA's education? Nurse anesthetists are not
            eligible to take their certification exam until they have
            graduated from their nurse anesthesia program.

                            COMPARE ANESTHESIOLOGISTS, CRNAS, AND ANESTHESIOLOGIST ASSISTANTS
    ----------------------------------------------------------------------------------------------------------------
                                  Issue                                 Anesthesiologists      CRNAs         AAs
    ----------------------------------------------------------------------------------------------------------------
    Educated in all aspects of anesthesia?...........................                  Yes          Yes           No
    Authorized to practice in all 50 states?.........................                  Yes          Yes           No
    Serves in U.S. military settings?................................                  Yes          Yes           No
    May practice without anesthesiologist supervision?...............                  N/A          Yes           No
    Mandatory prior healthcare experience before anesthesia training?                  Yes          Yes           No
    Recertified every 2 years?.......................................                   No          Yes          Yes
    ----------------------------------------------------------------------------------------------------------------

        AAs may not be the solution to address anesthesia vacancies in
    these programs since they need to practice under the direct supervision
    of an anesthesiologist. Including AAs under TRICARE would indeed add to
    the current anesthesia provider problem within the military, because
    there is a current shortage of anesthesiologists in the military to
    supervise the AAs, to say nothing of the additional cost.
        AANA urges this subcommittee and full committee members to contact
    the DOD to urge their reconsideration of this DOD proposal.

         CRNA RETENTION AND RECRUITING HOW THIS COMMITTEE CAN HELP DOD

        In all of the Services, maintaining adequate numbers of active duty
    CRNAs is of utmost concern. For several years, the number of CRNAs
    serving in active duty has consistently fallen short of the number
    authorized by DOD as needed providers. This is further complicated by
    the shortage of CRNAs in the nation. A letter dated March 14, 2002 from
    the Asst. Secretary of Defense for Health Affairs, William
    Winkenwerder, Jr., MD, to the former AANA President, Debbie A.
    Chambers, CRNA, MHSA, stated that, ``The Nurse Anesthetist specialty
    has been identified by the Department as a critical wartime shortage
    for the last several years.''
        Recruitment of nurse anesthetists for the military becomes
    increasingly difficult when the civilian sector faces such critical
    shortages, too. Currently, the number of nurse anesthetist vacancies
    increased 250 percent from 1998-2001, according to CRNA managers'
    surveys. Health professions staffing firms report CRNA recruitment
    rising by up to ten-fold from 1997-2000, making nurse anesthesia the
    second most recruited health professional specialty. In addition, this
    is compounded by the impact of baby boomers retiring. As the number of
    Medicare-eligible Americans climbs, it compounds the number of surgical
    procedures requiring anesthetics. Indeed, among those retiring
    Americans are CRNAs themselves.
        In addition, the AANA cited a decline in anesthesiology resident
    positions, as well as an increase in office-based surgery and surgery
    in places other than hospitals as driving the increased need for CRNAs.
    Additionally, with managed care continuing to pursue cost-cutting
    measures, coverage plans are recognizing CRNAs for providing high-
    quality anesthesia care with reduced expense to patients and insurance
    companies. The cost-efficiency of CRNAs helps keep escalating medical
    costs down.
        This Committee can greatly assist in the effort to attract and
    maintain essential numbers of nurse anesthetists in the military by
    their support of increasing special pays.

    Critical Skills Retention Bonus
        Last year on May 8, 2002, Brigadier General Barbara C. Brannon,
    Assistant Surgeon General, Air Force Nursing Services, testified before
    this Senate Committee requesting the expansion of the critical skills
    retention bonus, authorized in the fiscal year 2001 Defense
    Authorization Act, to health professionals with critical skills.
    Brigadier General Brannon stated:

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

        In the fall of 2002, CRNAs were designated as health professions
    with critical skills in the military, and were given a $10,000 critical
    skills retention bonus (CSRB) to stay in the military for an additional
    year after their service obligation. Brigadier General Brannon thanked
    this committee for their help in granting a CSRB to CRNAs in her recent
    testimony to this committee on April 30, 2003:

        ``The TriService Health Professions Special Pay Working Group
    Identified Certified Registered Nurse Anesthetists as critically manned
    and therefore eligible for the retention bonus. The program was
    enthusiastically welcomed with 66 percent of the eligible CRNAs
    applying for a CSRB in exchange for a one year service commitment.''

        The AANA also thanks this committee for their hard work. The CSRB
    for fiscal year 2003 was funded by this committee, and is assisting
    each of the service branches to both retain and recruit CRNAs. We hope
    you will continue to fund the CSRB for fiscal year 2004.
        The AANA thanks the committee for funding the Critical Skills
    Retention Bonus (CSRB) for fiscal year 2003 to ensure the retention of
    CRNAs in the military services. We hope you will support continued
    funding for CSRB for fiscal year 2004.

    The Incentive Special Pay for Nurses
        According to a March 1994 study requested by the Health Policy
    Directorate of Health Affairs and conducted by DOD, a large pay gap
    existed between annual civilian and military pay in 1992. This study
    concluded, ``this earnings gap is a major reason why the military has
    difficulty retaining CRNAs.'' In order to address this pay gap, in the
    fiscal year 1995 Defense Authorization bill Congress authorized the
    implementation of an increase in the annual Incentive Special Pay (ISP)
    for nurse anesthetists from $6,000 to $15,000 for those CRNAs no longer
    under service obligation to pay back their anesthesia education. Those
    CRNAs who remain obligated receive the $6,000 ISP.
        Both the House and Senate passed the fiscal year 2003 Defense
    Authorization Act Conference report, H.Rept. 107-772, which included an
    ISP increase to $50,000. The report included an increase in ISP for
    nurse anesthetists from $15,000 to $50,000. There had been no change in
    funding level for the ISP since the increase was instituted in fiscal
    year 1995, while it is certain that civilian pay has continued to rise
    during this time. The AANA is requesting that this committee fund the
    new increase for the ISP at $50,000 for all the branches of the armed
    services to retain and recruit CRNAs now and into the future.
        There still continues to be high demand and low supply of CRNAs in
    the health care community leading to higher incomes widening the gap in
    pay for CRNAs in the civilian sector compared to the military. The
    fiscal year 2002 AANA Membership survey measured income in the civilian
    sector by practice setting. The median income in a hospital setting is
    $110,200, MDA group $100,534, and self-employed CRNA $130,000 (includes
    Owner/Partner of a CRNA Group). These median salaries include call pay,
    overtime pay, and bonus pay. These salaries are still higher than the
    median salary of $74,000 across all military service branches.
        In civilian practice, all additional skills, experience, duties and
    responsibilities, and hours of work are compensated for monetarily.
    Additionally, training (tuition and continuing education), health care,
    retirement, recruitment and retention bonuses, and other benefits often
    equal or exceed those offered in the military.
        Rear Admiral Nancy Lescavage, Director of the Navy Nurse Corps, and
    Commander of the Naval Medical Education and Training Command testified
    before this Senate Committee at the April 30, 2003 hearing:

        ``The increase of the maximum allowable compensation amount for
    Certified Registered Nurse Anesthetist Incentive Special Pay (CRNA ISP)
    and the Nurse Accession Bonus (NAB) in the fiscal year 2003 National
    Defense Authorization Act will further enhance our competitive edge in
    the nursing market.''

        Salaries in the civilian sector will continue to create incentives
    for CRNAs to separate from the military, especially at the lower grades
    without a competitive incentive from the military to retain CRNAs.
    Therefore, it is vitally important that the Incentive Special Pay (ISP)
    be increased to $50,000 to ensure the retention of CRNAs in the
    military
        AANA thanks this Committee for its support of the annual ISP for
    nurse anesthetists. AANA strongly recommends the continuation and an
    increase in the annual funding for ISP from $15,000 to $50,000 for
    fiscal year 2004, which recognizes the special skills and advanced
    education that CRNAs bring to the DOD health care system.

    Board Certification Pay for Nurses
        Included in the fiscal year 1996 Defense Authorization bill was
    language authorizing the implementation of a board certification pay
    for certain non-MD health care professionals, including advanced
    practice nurses. AANA is highly supportive of board certification pay
    for all advanced practice nurses. The establishment of this type of pay
    for nurses recognizes that there are levels of excellence in the
    profession of nursing that should be recognized, just as in the medical
    profession. In addition, this pay may assist in closing the earnings
    gap, which may help with retention of CRNAs.
        While many CRNAs have received board certification pay, there are
    many that remain ineligible. Since certification to practice, as a CRNA
    does not require a specific master's degree, many nurse anesthetists
    have chosen to diversify their education by pursuing an advanced degree
    in other related fields. But CRNAs with master's degrees in education,
    administration, or management are not eligible for board certification
    pay since their graduate degree is not in a clinical specialty. Many
    CRNAs who have non-clinical master's degrees either chose or were
    guided by their respective services to pursue a degree other than in a
    clinical specialty. Many feel that diversity in education equates to a
    stronger, more viable profession. CRNAs do utilize education and
    management principles in their everyday practice and these skills are
    vital to performance of their duties. To deny a bonus to these
    individuals is unfair, and will certainly affect their morale as they
    work side-by-side with their less-experienced colleagues, who will
    collect a bonus for which they are not eligible. In addition, in the
    future this bonus will act as a financial disincentive for nurse
    anesthetists to diversify and broaden their horizons.
        AANA encourages DOD and the respective services to reexamine the
    issue of awarding board certification pay only to CRNAs who have
    clinical master's degrees.

                                   CONCLUSION

        In conclusion, the AANA believes that the recruitment and retention
    of CRNAs in the Services is of critical concern. The efforts detailed
    above will assist the Services in maintaining the military's ability to
    meet its wartime and medical mobilization through the funding of the
    Critical Skills Retention Bonus and an increase in ISP. Also, we
    believe that the inclusion of Anesthesiologists Assistants (AAs) in the
    TRICARE system would impair the military medical readiness capability
    of the services, and should not be approved. In addition we commend and
    thank this committee for their continued support for CRNAs in the
    military.

        Senator Burns. Thank you very much, Dr. Lester. Would you
    tell me, just real briefly, the difference in training between
    a CRNA and an AA?
        Dr. Lester. A CRNA is based--first, to be a CRNA you have
    to be a registered nurse first and to have critical care
    experience.
        Senator Burns. AA does not?
        Dr. Lester. No, sir. They have to have a bachelor's degree
    and may be required to have some basic science courses, but
    there is no requirement in any of their programs, their two
    programs, that they have any medical background at all prior to
    entering the AA training program.
        Senator Burns. Do you know if my State of Montana is one of
    those States that you mentioned, one of the five?
        Dr. Lester. I do not believe so.
        Senator Burns. No?
        Dr. Lester. I do not believe so.
        Senator Burns. The reason I ask you the question is that
    this has come up in conversation. I have a daughter that is a
    medical doctor. She is a family physician, but she used to
    deliver babies until the insurance became prohibitive and so
    she decided to drop that part of her practice. And this kind of
    came up in a conversation.
        So I appreciate your testimony today and thank you for
    coming forward.
        We would like to call Dr. John Sommerer, Chief Technology
    Officer for the Applied Physics Lab at Johns Hopkins
    University, Coalition for National Security Research. Dr.
    Sommerer, thank you for coming this morning.

    STATEMENT OF JOHN SOMMERER, Ph.D., CHIEF TECHNOLOGY
                OFFICER, APPLIED PHYSICS LAB, JOHNS HOPKINS
                UNIVERSITY; ON BEHALF OF THE COALITION FOR
                NATIONAL SECURITY RESEARCH

        Dr. Sommerer. Thank you, Senator. My name is John Sommerer
    and I am the Chief Technology Officer (CTO) for the Johns
    Hopkins University Applied Physics Lab. I am here today on
    behalf of the Coalition for National Security Research, a
    broadly based group of over 50 scientific, engineering,
    mathematical, behavioral societies, universities, and
    industrial associations committed to a stronger defense science
    and technology base.
        First, I would like to thank this committee for your strong
    support of defense science and technology. Without the
    appropriated funding levels for the past few years, we would
    not be working on some very important national security
    technology today.
        This year we have concerns in three areas of the S&T budget
    that your committee should consider. First, its overall
    investment level. The budget request is $600 million less than
    last year's appropriations. Various studies and recommendations
    suggest that to remain competitive DOD should invest about 3
    percent of its budget every year in science and technology, or
    about $11.4 billion total. That proposition has been repeatedly
    endorsed by the administration.
        In order to continue important research already in
    progress, about $11 billion will be required, which would move
    closer to the administration's goal of 3 percent. We urge your
    support in achieving this goal within the next several years.
        Second, we want to express some concern with DOD's plan to
    transfer the S&T programs presently under Office of Secretary
    of Defense management to the individual services. The purpose
    of such a move appears to be to remove OSD staff from the day-
    to-day program management of individual programs and allow a
    better focus on long-term planning and oversight, and we agree
    with such management efficiencies. But our concern is what
    happens to the science and technology products that need a
    broader management perspective than that provided by the
    individual services.
        We urge caution to ensure that these programs will continue
    to address the fundamental cross-cutting technologies
    originally intended and we would suggest that OSD retain
    oversight of the University Research Initiative and other
    critical research initiatives until management plans are in
    place to ensure that critical work remains on track.
        Finally, in the area of basic research, let me urge that
    DOD's 6.1 basic research program be provided stable funding
    over many years. I cannot derive a specific number for you, but
    we do know that it must be gradually increased each year as the
    national needs for technology change. We also know that lack of
    stability in this account significantly impedes the progress of
    research as well as the transition of that research to
    practical application.
        In closing, Senator Burns, let me cite some of the Applied
    Physics Laboratory's (APL) science and technology work that is
    making a difference in national security. We saw during
    Operation Iraqi Freedom the tremendous military advantages
    offered by precision guided weapons. As it turns out, the road
    to that capability started in the very office where I work
    every day. One of my predecessors, Dr. Frank McClure, invented
    satellite navigation there in 1958.
        Notwithstanding the genius of his vision, it took many
    years of research in areas as diverse as computing,
    electronics, atomic clocks, and space physics to come to
    fruition. Satellite navigation now makes it possible for our
    military forces to reliably hit a target whose coordinates are
    known day or night, in any weather.
        Today the Applied Physics Laboratory continues to advance
    the concept of precision engagement, but the challenge now
    focuses on rapidly identifying the targets, locating them, and
    engaging them before they can move. In one project we are
    developing the capability for groups of uninhabited air
    vehicles to operate in a coordinated way to locate, confirm,
    and relay coordinates, all without operator intervention.
        Another S&T program is developing the propulsion technology
    to enable next-generation strike weapons to reach targets in
    minutes after launch rather than the hours now taken by our
    most advanced cruise missiles.
        Thank you for this opportunity to discuss the Department of
    Defense science and technology program. It would be a pleasure
    to welcome you, other members of the committee, and your staff
    to APL to see first-hand some of the exciting research being
    done with the support of DOD and this subcommittee.
        I would be happy to answer any questions, sir.
        [The statement follows:]

                    Prepared Statement of Dr. John Sommerer

        Good morning Mr. Chairman and Members of the Subcommittee. I am
    here to testify today on behalf of the Coalition for National Security
    Research, a broadly based group of scientific, engineering,
    mathematical and behavioral societies, universities and industrial
    associations committed to a stronger defense science and technology
    base.
        There are three issues of primary importance in looking at the
    defense Science and Technology (S&T) budget this year: overall
    investment levels, appropriate balance among the accounts, and the
    department's proposal to devolve--or transfer--programs currently under
    the Office of the Secretary (OSD) to the services.
        On funding, we urge the subcommittee to approve robust and stable
    funding for Department of Defense (DOD) basic (6.1), applied (6.2) and
    advanced technology development (6.3) elements in fiscal year 2004.
    Specifically, CNSR joins many other organizations in urging the
    subcommittee to increase the S&T program to $11.4 billion in fiscal
    year 2004, or 3 percent of the overall departmental budget, as
    recommended by the Defense Science Board, the Quadrennial Defense
    Review, the House and Senate Armed Services Committees and numerous
    departmental officials. These programs are the foundation of the
    Department's Research, Development, Test and Evaluation (RDT&E)
    activity. They feed our procurement needs, enhance our readiness and
    modernization efforts, provide technologies to protect our forces, and
    contribute to the most technologically advanced, best trained, lethal,
    fighting force in the world. As we have seen in numerous recent news
    reports, investments made in innovative research over the last 30 years
    have yielded impressive and flexible technological results and tools to
    address the current challenges we face. I want to express deep
    appreciation for the Committee's past support and for the fiscal year
    2003 funding approved for these programs.
        With consideration of the fiscal year 2004 budget, it is important
    to recognize the critical role DOD S&T plays in ensuring the future
    national security of the United States and the safety and effectiveness
    of our soldiers, sailors, airmen, and marines. Simultaneously, these
    defense science programs contribute to the research enterprise of the
    country and to the education of tomorrow's scientists, engineers and
    policy makers. The Department provides a critical investment in several
    disciplines--including engineering, physical, math, computer and
    behavioral sciences--vital to our future national security.
        As you are aware, previous investments in defense science and
    technology have led to breakthrough developments in areas such as
    thermobaric bombs, distributed networking, advanced materials, global
    navigation, precision guidance, and stealth technology that have
    equipped America's men and women in uniform with the finest
    technologies in the world.
        As we have seen in recent operations in Iraq and Afghanistan,
    research in remotely-operated mini-robots, unmanned air, land and sea
    vehicles, remote medicine, chemical and mechanical sensors, large scale
    battlefield simulations and advanced data memory systems protect the
    warfighters of the future by removing them from harm's way, providing
    on-site emergency medical care, identifying dangerous environments,
    improving training and speeding data availability and usability.
        The support of this subcommittee is critical to ensuring that we
    maintain a viable S&T base to meet our future security needs on land,
    in the air, and at sea.
        A second issue related to funding, I would like to mention deals
    specifically with support for the department's most basic and
    innovative research programs. Diversion of funds from 6.1 accounts to
    meet shortages in other accounts undermines the long-term goal of
    defense transformation and future capabilities development. As our
    nation's leaders address future challenges and the transformation of
    our national defense, long-term 6.1 projects must again become a
    centerpiece of the department's S&T program and must remain focused on
    real frontiers of discovery.
        The final issue on which I want to touch briefly concerns the
    department's plans to transfer about $500 million in S&T programs from
    the Office of the Secretary of Defense (OSD) to the services. CNSR
    supports the Department of Defense's goal of moving resources from the
    ``bureaucracy to the battlefield'' and plans by OSD to focus activities
    on long term strategic planning. Nevertheless, we are concerned that
    some proposals for implementation of this worthy goal will negatively
    impact transformation efforts, the long term technological superiority
    of the United States military, and the science and engineering
    workforce on which it relies.
        The fiscal year 2004 budget request to Congress for the department
    would transfer--or devolve--a group of critical, joint,
    multidisciplinary programs from OSD to the services. Given the results
    of previous, similar reorganization proposals, we believe such a move
    could damage the unique nature and design of these programs and would
    inherently inhibit cross-service integration and coordination, while
    placing additional burdens on the services and offering very little
    benefit toward stated goals.
        CNSR is confident that an increased focus on long-term strategic
    needs of the armed services would highlight the important role S&T
    programs, like the University Research Initiative, play in training the
    needed scientific and engineering workforce required by this nation,
    and in assuring that the latest technology is always available to meet
    changing threats and evolving challenges. Given the long-term nature of
    basic research, any damage to the programs, though it may not be easily
    spotted in the near term, will result in the loss of the U.S.
    technology lead and will require an even greater corrective investment
    in the future.
        In order to continue moving toward stated overall investment goals
    for S&T and to carry out strategic decisions most effectively, OSD--as
    the most appropriate entity to facilitate jointness--will need
    controlling authority over basic research programs and budgets. OSD
    should retain current oversight and management of the University
    Research Initiative and other critical research initiatives until
    management plans are detailed and tested.
        I have provided some additional information below to highlight some
    examples of the results of DOD S&T investments, which have both
    national security and domestic applications. Thank you for your time,
    Mr. Chairman. I would be happy to answer any questions.
        The Applied Physics Laboratory of the University of Washington,
    Seattle, has developed under U.S. Navy sponsorship, a high resolution,
    imaging sonar for underwater mine detection and identification in poor
    visibility waters such as those commonly encountered in ports and
    harbors. The unique sonar, based on acoustic technology that mimics the
    optical lens and retina of the human eye, produces a picture-like
    image. One version of the sonar is designed to be the eyes' of the
    unmanned, autonomous, underwater vehicles being developed for mine
    clearance and special operations. A hand-held version enables a diver
    to easily and accurately distinguish between mines and false targets
    such as mine-like debris, and to identify specific mine types in zero-
    visibility water. It is intended to assist Special Forces and Explosive
    Ordnance Disposal teams and has been used in Bahrain.
        In response to the need to deter and counter the use of biological
    and chemical weapons of mass destruction, the Applied Physics
    Laboratory of the Johns Hopkins University is working under DARPA
    sponsorship to develop and test new technologies that will protect both
    military and civilian populations. Advanced Time-of-Flight Mass
    Spectrometer instruments are being tested to rapidly detect a broad
    range of biological pathogens and chemical warfare agents. Background
    Environmental Characterization and Biosurviellance networks are being
    tested to measure anomalous behavior that could signal the terrorist
    use of biological and chemical warfare agents. These developments will
    give us the capability to deal with today's threat spectrum and future
    emerging threats.
        The University of South Carolina, through its DEPSCoR supported
    Industrial Mathematics Institute (IMI), has developed algorithms and
    software that enable the rapid display, querying and registration of
    Digital Terrain Maps. This software is of potential value in mission
    planning, autonomous and semi-autonomous navigation, rapid targeting
    and post battlefield assessment.
        A DOD-funded researcher at the University of California at
    Berkeley, using a pair of Plexiglas wings he called ``Robofly,'' for
    the first time provided a comprehensive explanation of how insects fly.
    The research could lead to the development of tiny flying devices that
    could be dispatched in swarms to spy on enemy forces.
        Improved energy efficiency throughout the Defense Department and
    its mission activities--testing, training, operations, facilities--has
    the potential to save the federal government, and in turn the taxpayer,
    millions per year. Fuel cells are among the most promising sources of
    clean energy needed for numerous civil and military devices. The
    development of efficient electrocatalysts is essential to the
    improvement of fuel cell performances. Researchers at the University of
    South Carolina, supported by DOD S&T funding, are applying theoretical
    and computational methods to the understanding of electrocatalysis,
    focusing on the electron reduction of oxygen on platinum electrodes.
        No one foresaw the enormous range of applications and whole
    industries that have evolved from the Defense-sponsored discovery of
    lasers. The basic concepts leading to the development of the laser were
    discovered in a microwave research program at Columbia University
    funded by the three Services. Lasers were combined with transistors and
    the billion-dollar fiber optic industry resulted. Fiber optic
    communications, compact disk players, laser printers, procedures to
    reattach eye retinas and new cancer surgeries all exist because of
    these breakthroughs, the result of Defense Basic Research.
        In response to threats due to inadequate or outdated mission
    terrain mapping tools, the Georgia Institute of Technology developed
    Falcon View, a laptop-mapping software. Designed for the U.S. Air
    Force, U.S. Special Operations Command and the U.S. Navy, Falcon View
    integrates aeronautical charts, satellite images and other data to
    provide detailed, up-to-date data imagery to flight crews conducting
    mission planning using relatively simple laptop computers. The system
    is credited with reducing typical mission planning time from seven
    hours or more down to twenty minutes.
        DARPA and ONR-sponsored researchers at Duke University Medical
    Center and the Massachusetts Institute of Technology have tested a
    neural system in animals that utilizes implanted electrodes to assist
    brain signals in controlling robotics. Scientists transmitted the brain
    signals over the Internet, remotely controlling a robot arm 600 miles
    away. The recording and analysis system could form the basis for a
    brain-machine interface that would allow paralyzed patients to control
    the movement of prosthetic limbs. The finding also supports new
    thinking about how the brain encodes information, by spreading it
    across large populations of neurons and by rapidly adapting to new
    circumstances.
        In the late 1960's, DOD-initiated research to explore linking
    computers in different geographical locations to improve communication
    between their users. The research produced the world's first packet-
    switched network, the ARPANET, which connected major universities. As a
    result, more and more people gained access to more powerful computers.
    Innovation in network design and improved research spawned a new breed
    of information scientists who expanded the network to every corner of
    the country and the world. Electronic mail, which was considered
    earlier to be of minor interest to users, has become the most used
    service of computer networks. Through ARPANET, Defense Basic Research
    made it possible to launch the National Information Infrastructure.

        Senator Burns. Dr. Sommerer, you hit on an area that I
    worked very hard on over on the Commerce Committee, which is
    R&D and the work that we have done especially in science and
    technology. I have made many speeches and there has been one
    invention in the last 50 years that has completely been the
    bridge to everything that we have ever done electronically
    since. I do not think there are very many people in the world
    that understand how big the invention of the transistor was to
    electronics and everything that we do now, especially with the
    smart equipment that we are using now. That could never have
    been done had that invention never happened.
        The ramifications it has had in the last--well, I guess it
    will be 50 years.
        Dr. Sommerer. Yes, sir.
        Senator Burns. Gosh, that was--I remember when it happened.
    I am getting pretty damned old here.
        But the ramifications that that has had have been enormous.
    So your end of this world is a very important one to us and we
    appreciate your testimony today and we thank you for coming.
        Dr. Sommerer. Thank you, sir.
        Senator Burns. You bet.
        We now call Captain Robert C. Hurd, Headquarters Liaison to
    Congress, the United States Naval Sea Cadet Corps. Thank you
    for coming, Captain.

    STATEMENT OF CAPTAIN ROBERT C. HURD, USN (RETIRED),
                HEADQUARTERS LIASION TO CONGRESS, UNITED
                STATES NAVAL SEA CADET CORPS

        Captain Hurd. Well, thank you for having me, sir. The Naval
    Sea Cadet Corps is a congressionally-chartered youth
    development and education program sponsored by the Navy League,
    supported by the Navy and Coast Guard, with over 10,000 cadets,
    run by 2,000 adult volunteers. Our goals are development of
    young men and women ages 11 through 17 by promoting interest
    and skill in seamanship and aviation, instilling a sense of
    patriotism, courage, self-reliance, confidence, and those
    qualities which mold strong moral character and self-discipline
    in a drug-free and a gang-free environment.
        Cadets attend boot camp and in the following summers they
    train on board Navy and Coast Guard ships or, in specific areas
    of advanced disciplines, ashore. They drill one weekend a month
    and they take Navy correspondence courses, the basis for
    accelerated promotion of a cadet who decides to enlist in the
    Navy or the Coast Guard.
        There are now 466 ex-Sea Cadets attending the U.S. Naval
    Academy. Annually between 400 and 600 ex-cadets enlist in the
    services, pre-screened, highly motivated, and well prepared.
    Prior Sea Cadet experience has been proven to be an excellent
    indicator of a potentially high career success rate. Navy
    annual accession recruiting costs average over $11,000 per
    person, which, applied to the number of Sea Cadet accessions,
    represents a significant financial benefit to the Navy.
        Whether or not they choose a service career, all Sea Cadets
    carry forth learned values of good citizenship, leadership, and
    moral courage that will ultimately benefit themselves and our
    country.
        The major difference between this and all the other
    federally-chartered military youth programs is that Sea Cadets
    pay for all their own expenses, including their uniforms, their
    travel, insurance, and training costs, which can run $400 to
    $500 a year. We are also particularly sensitive to the fact
    that no young person be denied access to the program because of
    his or her social or economic background.
        Federally funded at only half of the $2 million requested
    to fill the unfunded Navy budget requirement for the past 3
    years, all of these funds are used to help offset cadets' out
    of pocket costs and to conduct background checks for the adult
    volunteers. With the Federal funding received, training
    participation has increased by over 30 percent, 37 percent.
    However, for a variety of reasons the current level of funding
    can no longer sustain this program. They include inflation,
    all-time high cadet enrollment, base closures, reduced base
    access due to the terrorism alerts, reduced afloat training
    opportunities due to the Iraq War, and nonavailability of
    previously provided space A transportation, on-base open bay
    berthing, and transportation.
        It is therefore considered to be a matter of extreme
    importance to us that the full requested $2 million be
    authorized and appropriated for fiscal year 2004 and we
    respectfully request your consideration and support to this
    end. Unfortunately, time precludes my sharing stories with you
    about, such as the State of Washington recently honoring an 11-
    year-old Sea Cadet for singlehandedly putting out a major
    restaurant fire, or for the Ohio unit fulfilling a World War II
    veteran's dying wish to be buried in uniform, which the cadets
    purchased and then followed through by providing military
    graveside honors for the family, or the post-9/11 story of the
    Sea Cadets volunteering to be buried in the rubble of Ground
    Zero so that the body-sniffing dogs could maintain their
    proficiency by seeking them out.
        These and many more stories like them are the stories that
    you do not read about in the press, and we really think our
    kids are worthy of all the support we can give them.
        Thank you for this opportunity to speak to you today, sir.
        [The statement follows:]

                  Prepared Statement of Captain Robert C. Hurd

                                    REQUEST

        Funded in fiscal year 2001, fiscal year 2002 and again in fiscal
    year 2003, continued Congressional appropriation in the Navy Recruiting
    Budget (Operations and Maintenance Navy--Title II, Budget Activity 3)
    is essential to expand the Naval Sea Cadet Corps into more communities.
    Unlike all other federally chartered military youth groups, the Sea
    Cadets themselves pay almost all program costs, including uniforms,
    training costs, insurance and transportation to/from training. Funding
    to offset Cadet out-of-pocket training costs at a level commensurate
    with that received by other federally chartered military related youth
    programs, as well as adult volunteer training costs, is needed to
    increase program access by America's youth, regardless of economic or
    social background, and develop the fine citizens our country needs and
    deserves.
        Request fiscal year 2004 authorization and appropriation of the
    full requested amount of $2 million for the Naval Sea Cadet Corps.

                                   BACKGROUND

        At the request of the Department of the Navy, the Navy League of
    the United States established the Naval Sea Cadet Corps in 1958 to
    ``create a favorable image of the Navy on the part of American youth.''
    On September 10, 1962, the U.S. Congress federally chartered the Naval
    Sea Cadet Corps under Public Law 87-655 as a non-profit civilian youth
    training organization for young people, ages 13 through 17. A National
    Board of Directors, whose Chairman serves as the National Vice
    President of the Navy League for Youth Programs, establishes NSCC
    policy and management guidance for operation and administration. A
    full-time Executive Director and small staff in Arlington, Virginia
    administer NSCC's day-to-day operations. These professionals work with
    volunteer regional directors, unit commanding officers, and local
    sponsors. They also collaborate with Navy League councils and other
    civic, or patriotic organizations, and with local school systems.
        In close cooperation with, and the support of, the U.S. Navy and
    U.S. Coast Guard, the Sea Cadet Corps allows youth to sample military
    life without obligation to join the Armed Forces. Cadets and adult
    leaders are authorized to wear the Navy uniform, appropriately modified
    with a distinctive Sea Cadet insignia.
        There are currently over 338 Sea Cadet units with a program total
    of 11,577 participants (2,107 adult Officers and Instructors and 9,470
    Cadets (about 33 percent female). This is an all time high enrollment
    for the program.

                                NSCC OBJECTIVES

        Develop an interest and skill in seamanship and seagoing subjects.
        Develop an appreciation for our Navy's history, customs, traditions
    and its significant role in national defense.
        Develop positive qualities of patriotism, courage, self-reliance,
    confidence, pride in our nation and other attributes, which contribute
    to development of strong moral character, good citizenship traits and a
    drug-free, gang-free lifestyle.
        Present the advantages and prestige of a military career.
        Under the Cadet Corps' umbrella is the Navy League Cadet Corps
    (NLCC), a youth program for children ages 11 through 13. While it is
    not part of the federal charter provided by Congress, the Navy League
    of the United States sponsors NLCC.
        NLCC was established ``. . . to give young people mental, moral,
    and physical training through the medium of naval and other
    instruction, with the objective of developing principles of patriotism
    and good citizenship, instilling in them a sense of duty, discipline,
    self-respect, self-confidence, and a respect for others.''

                                    BENEFITS

        Naval Sea Cadets experience a unique opportunity for personal
    growth, development of self-esteem and self-confidence. Their
    participation in a variety of activities within a safe, alcohol-free,
    drug-free, and gang-free environment provides a positive alternative to
    other less favorable temptations. The Cadet Corps introduces young
    people to nautical skills, to maritime services and to a military life
    style. The program provides the young Cadet the opportunity to
    experience self-reliance early on, while introducing this Cadet to
    military life without any obligation to join a branch of the armed
    forces. The young Cadet realizes the commitment required and routinely
    excels within the Navy and Coast Guard environments.
        Naval Sea Cadets receive first-hand knowledge of what life in the
    Navy or Coast Guard is like. This realization ensures the likelihood of
    success should they opt for a career in military service. For example,
    limited travel abroad and in Canada may be available, as well as the
    opportunity to train onboard Navy and Coast Guard ships, craft and
    aircraft. These young people may also participate in shore activities
    ranging from training as a student at a Navy hospital to learning the
    fundamentals of aviation maintenance at a Naval Air Station.
        The opportunity to compete for college scholarships is particularly
    significant. Since 1975, 141 Cadets have received financial assistance
    in continuing their education in a chosen career field at college.

                                   ACTIVITIES

        Naval Sea Cadets pursue a variety of activities including
    classroom, practical and hands-on training as well as field trips,
    orientation visits to military installations, and cruises on Navy and
    Coast Guard ships and small craft. They also participate in a variety
    of community and civic events.
        The majority of Sea Cadet training and activities occurs year round
    at a local training or ``drill'' site. Often, this may be a military
    installation or base, a reserve center, a local school, civic hall, or
    sponsor-provided building. During the summer, activities move from the
    local training site and involve recruit training (boot camp),
    ``advanced'' training of choice, and a variety of other training
    opportunities (depending on the Cadet's previous experience and
    desires).

                               SENIOR LEADERSHIP

        Volunteer Naval Sea Cadet Corps officers and instructors furnish
    senior leadership for the program. They willingly contribute their time
    and effort to serve America's youth. The Cadet Corps programs succeed
    because of their dedicated, active participation and commitment to the
    principles upon which the Corps was founded.
        Cadet Corps officers are appointed from the civilian sector or from
    active, reserve or retired military status. All are required to take
    orientation, intermediate and advanced Officer Professional Development
    courses to increase their management and youth leadership skills.
    Appointment as an officer in the Sea Cadet Corps does not, in itself,
    confer any official military rank. However, a Navy-style uniform,
    bearing NSCC insignia, is authorized and worn. Cadet Corps officers
    receive no pay or allowances. Yet, they do derive some benefits, such
    as limited use of military facilities and space available air travel in
    conjunction with carrying out training duty orders.

                      DRUG-FREE AND GANG-FREE ENVIRONMENT

        One of the most important benefits of the Sea Cadet program is that
    it provides participating youth a peer structure and environment that
    places maximum emphasis on a drug and gang free environment. Supporting
    this effort is a close liaison with the U.S. Department of Justice Drug
    Enforcement Administration (DEA). The DEA offers the services of all
    DEA Demand Reduction Coordinators to provide individual unit training,
    as well as their being an integral part of our boot camp training
    program.
        Among a variety of awards and ribbons that Cadets can work toward
    is the Drug Reduction Service Ribbon, awarded to those who display
    outstanding skills in he areas of leadership, perseverance and courage.
    Requirements include intensive anti-drug program training and giving
    anti-drug presentations to interested community groups.

                                    TRAINING

        Local Training Local training, held at the unit's drill site,
    includes a variety of activities supervised by qualified Sea Cadet
    Corps officers and instructors, as well as Navy and Coast Guard
    instructors.
        Cadets receive classroom instruction in basic military
    requirements, seamanship, water safety, core personal values, social
    amenities, drug/alcohol abuse, cultural relations, Navy history,
    customs and traditions and other nautical skills. Training may be held
    aboard ships, small boats or aircraft, depending upon the availability
    of a platform. Cadets also learn about civilian and military career
    opportunities during special career counseling sessions such as fire
    fighting and law enforcement.
        Special presentations by military and civilian officials are part
    of the local training as are educational tours, briefings and
    attendance at special events. Participation in parades, social work and
    other civic activities are encouraged as part of the whole-person-
    training concept.
        During the Cadets' first several months, they receive basic
    indoctrination to the Sea Cadet program at their local training site in
    preparation for summer recruit training.
        The Navy League Cadet Corps training program teaches younger Cadets
    the virtues of personal neat-ness, loyalty, obedience, courtesy,
    dependability and a sense of responsibility for shipmates. In
    accordance with a Navy-oriented syllabus, this education prepares them
    for the higher level of training they will receive as Naval Sea Cadets.

                                SUMMER TRAINING

        First-year Sea Cadets attend a two-week recruit training period at
    the Navy's Recruit Training Command or at a regional recruit training
    site. Instructed by Navy or NSCC Recruit Division Commanders, Cadets
    receive a condensed version of the basic training which Navy enlistees
    receive. Recruit training occurs at a number of regional sites to
    handle the overflow from the Recruit Training Command, Great Lakes and
    to reduce travel costs to the Cadet as well as the adult volunteer
    staff.
        A Cadet who successfully completes recruit training is eligible for
    advanced training in various fields of choice. Cadets can experience
    the excitement of ``hands-on'' practical training aboard Navy and Coast
    Guard vessels, ranging from tugboats and cutters to the largest
    nuclear-powered aircraft carriers. Female Cadets may also train aboard
    any ship that has females assigned as part of the ship's company.
        Qualified Cadets choose from such Sea Cadet advanced training as
    basic/advanced airman, SEAL training, amphibious operations,
    leadership, submarine orientation and training in occupational
    specialties, including health care, music, master-at-arms and
    construction.
        The Cadet Corp programs excel in quality and diversity of training
    offered, with more than 7,250 training orders carried out for the 2002
    summer training program. Cadets faced a myriad of challenging training
    opportunities designed to instill leadership and develop self-reliance,
    enabling them to become familiar with the full spectrum of Navy and
    Coast Guard career fields.
        The positive results of federal funding for both 2001 and 2002,
    were that for each summer the NSCC has experienced increased recruit
    training attendance of about 1,500 cadets per summer over those years
    in which federal funding was not available.
        While recruit training acquaints cadets with Navy life and Navy
    style discipline, advanced training focuses on military and general
    career fields and opportunities, and also affords the cadets many
    entertaining, drug free, disciplined yet fun activities over the
    summer. The popularity of the training continues to grow not with just
    overall numbers but also as evidenced with over 500 cadets performing
    multiple two week training sessions during the summer of 2002.
    Advanced training highlights for 2002
        With federal funding available in 2002, the NSCC's focus was
    continuing and/or expanding many of the initiatives started in 2001
    with a few new advanced training opportunities added.
        They included:
      --Continued keeping Cadet costs for summer training at a reduced
            price of only the deposit ($25 or $50, same as 2001) plus
            transportation.
      --Accommodated 9/11 required adjustments through training relocations
            and/or alternate arrangements to maintain cadet training
            opportunity and quotas at above 2001 levels.
      --Maintained expanded recruit training and advanced training
            opportunity with a grand total of over 7,500 orders issued, a
            record high.
      --Expanded adult professional development participation.
      --Increased total cadet participation in summer and winter training
            evolutions to over 6,000 cadets.
      --Added two classes in legal (JAG) training.
      --Expanded SEAL Orientation under the sponsorship of the UDT-SEAL
            Association and Museum Association with the sponsorship of the
            Okeechobee County, Florida Sheriff's Department. Maintained
            SEAL Orientation training at NAB, Little Creek, VA.
      --Maintained East and West Coast sailing training at NAS, Pensacola,
            and NAB, Coronado, with expanded classes at each.
      --Nearly doubled class size for seamanship training at the State
            University of New York Maritime Academy at Fort Schuyler, and
            for the second summer in a row maintained seamanship training
            aboard USNS merchant ships, homeported on the West Coast.
      --Continued 2001 initiative for Honor Guard training in Texas.
      --Maintained expanded YP training on the Great Lakes at participation
            levels above 2001.
      --Placed 4 cadets onboard USCG Barque Eagle for two, three week
            underway orientation cruises.
      --Maintained placement of cadets aboard USCG stations, cutters, and
            tenders for what many consider among the best of the training
            opportunities offered in the NSCC.
      --Once again filled all quotas for the popular, merit based,
            International Exchange program, with 72 cadet participants and
            20 escorts for 2002.
      --Kept all quotas filled to all the NSCC Petty Officer Leadership
            Academies, (POLA) graduating over 270 cadets at 10 training
            sites.
      --Maintained SCUBA training opportunities with two classes in 2002.
      --Increased MAA and police science from 4 classes to 5.
      --Maintained placement of cadets onboard USN ships under local orders
            as operating schedules and opportunity permitted.
      --As was the case in 2001 and all prior years, once again enjoyed
            particularly outstanding support from members of the United
            States Naval Reserve, whose help and leadership remains
            essential for summer training.

                             INTERNATIONAL EXCHANGE

        NSCC operates an international exchange program with Naval Sea
    Cadet units in Australia, Belgium, Bermuda, Canada, Hong Kong, Japan,
    Korea, the Netherlands, South Africa, Sweden, and the United Kingdom.
    Each summer, outstanding Cadets are selected to serve as young
    ambassadors and train with their global counterparts. The NSCC
    continued in 2002 its' redesigned, highly competitive, merit based, and
    very low cost to the cadet, International Exchange Program and placed
    cadets in Australia, Korea, Hong Kong, United Kingdom, Sweden,
    Netherlands, and Bermuda to train with fellow cadets in these host
    nations. The NSCC and Canada maintained their traditional exchanges in
    Nova Scotia and British Columbia, and the NSCC hosted visiting cadets
    in Norfolk for two weeks of U.S. Navy style training.

                           NAVY LEAGUE CADET TRAINING

        In 2002, over 1,185 Navy League Cadets and escorts attended
    orientation training at 15 different sites. This diversity in location
    made training accessible and reasonably available to each Cadet who
    wished to attend. Over 373 League Cadets and escorts attended advanced
    training at several sites. The advanced program was developed in
    recognition of the need to provide follow-on training for this younger
    age group to sustain their interest and to better prepare them for the
    challenges of Naval Sea Cadet Corps training. Navy League Cadets who
    attend recruit orientation training are exceptionally well prepared for
    Sea Cadet ``boot camp.'' The number of NLCC Cadets who participated in
    summer training was a third higher than normal. Again, this was
    directly attributable to the federal funding received.

                                TRAINING GRANTS

        Through contributions from Douglas and Christine Peterson, the
    Donner Foundation, and the federal funds, every Cadet who desired to
    attend summer training had that opportunity. Approximately 1500 more
    Cadet orders were written than in previous years. This milestone is a
    direct result of funds received for NSCC/NLCC to participate in the
    Corps' summer training.

                                  SCHOLARSHIPS

        The Naval Sea Cadet Corps Scholarship program was established to
    provide financial assistance to deserving Cadets who wished to further
    their education at the college level. Established in 1975, the
    scholarship program consists of a family of funds: the NSCC Scholarship
    Fund; the Navy League Stockholm Scholarship; the San Diego Gas &
    Electric Fund; grants from the Lewis A. Kingsley Foundation; and the
    NSCC ``named scholarship'' program, designed to recognize an
    individual, corporation, organization or foundation. Under this latter
    program two new funds have been established to commence scholarships.
    The estate of June Howell has forwarded funds to establish a
    scholarship in the name of her parents--Harry and Rose Howell. Also,
    from the estate of Robert C. Hutton, an aviation orientation
    scholarship has been established. Since the inception of the
    scholarship program, 149 scholarships have been awarded to 141 Cadets
    (includes some renewals) totaling over $160,000.

                               SERVICE ACCESSIONS

        The Naval Sea Cadet Corps was formed at the request of the
    Department of the Navy as a means to ``enhance the Navy image in the
    minds of American youth.'' To accomplish this, ongoing presentations
    illustrate to Naval Sea Cadets the advantages and benefits of careers
    in the armed services, and in particular, the sea services.
        While there is no service obligation associated with the Naval Sea
    Cadet Corps program, many Sea Cadets choose to enlist or enroll in
    Officer training programs in all the Services.
        Annually, the NSCC conducts a survey to determine the approximate
    number of Cadets making this career decision. This survey is conducted
    during the annual inspections of the units. The reported Cadet
    accessions to the services are only those that are known to the unit at
    that time. There are many accessions that occur in the 2-3 year
    timeframe after Cadets leave their units, which go unreported. For
    example, for the year 2000, with about 83 percent of the units
    reporting, the survey indicates that 510 known Cadets entered the armed
    forces during the reporting year ending 31 December 2000. Of these, 30
    ex-Sea Cadets were reported to have received appointments to the U.S.
    Naval Academy. Further liaison with the USNA indicates that in fact,
    there are currently 466 Midshipmen with Sea Cadet backgrounds--almost
    10 percent of the entire Brigade. Navy accession recruiting costs have
    averaged over $11,000 per person, officer or enlisted, which applied to
    the number of Sea Cadet accessions represents a significant financial
    benefit to the Navy. Equally important is the expectation that once a
    more accurate measurement methodology can be found, is, that since Sea
    Cadets enter the Armed Forces as disciplined, well trained and
    motivated individuals, their retention, graduation and first term
    enlistment completion rates are perhaps the highest among any other
    entry group. USNA officials are currently studying graduation rates for
    past years for ex-Sea Cadets as a group as compared to the entire
    Brigade. Their preliminary opinion is that these percents will be among
    the highest. It is further expected that this factor will be an
    excellent indicator of the following, not only for the USNA, but for
    all officer and enlisted programs the Sea Cadets may enter:
      --Extremely high motivation of ex-Cadets to enter the Service.
      --Excellent background provided by the U.S. Naval Sea Cadet
            experience in preparing and motivating Cadets to enter the
            Service.
      --Prior U.S. Naval Sea Cadet Corps experience is an excellent pre-
            screening opportunity for young men and women to evaluate their
            interest in pursuing a military career. This factor could
            potentially save considerable tax-payer dollars expended on
            individuals who apply for, then resign after entering the
            Academy if they decide at some point they do not have the
            interest or motivation.
      --U.S. Naval Sea Cadet experience prior to entering the Service is an
            excellent indicator of a potentially high success rate.
        Data similar to the above has been requested from the United States
    Coast Guard Academy and the United States Merchant Marine Academy.
        Whether or not they choose a service career, all Sea Cadets carry
    forth learned values of good citizenship, leadership and moral courage
    that will benefit themselves and our country.

    Program Finances
        Sea Cadets pay for all expenses, including travel to/from training,
    uniforms, insurance and training costs. Out-of-pocket costs can reach
    $400-$500 each year. Assistance is made available so that no young
    person is denied access to the program, regardless of social or
    economic background.
        Federally funded at the $1,000,000 level (of the $2,000,000
    requested) in fiscal years 2001, 2002, and 2003, all of these fund were
    used to offset individual Cadet's individual costs for summer training,
    conduct of background checks for adult volunteers and for reducing
    future enrollment costs for Cadets. In addition to the federal fund
    received ($1 million), NSCC receives under $700,000 per year from other
    sources, which includes around $226,000 in enrollment fees from Cadets
    and adult volunteers. For a variety of reasons, this current level of
    funding can no longer sustain this program:
      --All time high in number of enrolled Sea Cadets (and growing).
      --General inflation of all costs.
      --Some bases denying planned access to Sea Cadets for training due to
            increased terrorism threat level alerts and the associated
            tightening of security measures--requiring Cadets to utilize
            alternative, and often more costly training alternatives
      --Reduced availability of afloat training opportunities due to the
            Navy's high level of operations related to the Iraq war.
      --Reduced training site opportunities due to base closures.
      --Non-availability of open bay berthing opportunities for Cadets due
            to their elimination as a result of enlisted habitability
            upgrades to individual/double berthing spaces.
      --Lack of available ``Space Available'' transportation for group
            movements.
      --Lack of on-base transportation, as the navy no longer ``owns''
            busses now controlled by the GSA.
        Because of these factors, Cadet out-of-pocket costs have
    skyrocketed to the point where the requested $2,000,000 alone is
    insufficient to handle cost increases, not to mention the impact if, as
    in past years, only $1,000,000 is approved and appropriated.
        It is therefore considered a matter of urgency that the full amount
    of the requested $2,000,000 be authorized and appropriated for fiscal
    year 2004.

        Senator Burns. Thank you. Thank you, Captain Hurd. Not only
    are the kids good kids, but they have got a great advocate,
    too.
        Captain Hurd. Thank you, sir.
        Senator Burns. Thank you for coming today.
        Captain Hurd. Thank you.
        Senator Burns. We now call Dennis Achgill, Director of
    Public Affairs, American Society of Mechanical Engineers. I may
    have to run here. Does anybody know where Stevens is?
        Thank you for coming today, by the way, and I apologize for
    the conditions under which you have to testify.

    STATEMENT OF DENNIS ACHGILL, DIRECTOR OF PUBLIC
                AFFAIRS, AMERICAN SOCIETY OF MECHANICAL
                ENGINEERS

        Mr. Achgill. Thank you very much. I appear before you today
    as a representative of a committee of the American Society of
    Mechanical Engineers (ASME) International, concerned with
    Federal funding of research and development. ASME International
    has 125,000 members, including 20,000 students.
        Mechanical engineers are a major part of the Nation's
    technology base, a base that is essential for the Nation's
    defense. The DOD's science and technology program contains
    elements incorporating significant mechanical engineering
    research. DOD has been the dominant source of Federal research
    funding, 70 percent and 66 percent respectively, for the
    electrical and mechanical engineering disciplines. Therefore,
    we appreciate the opportunity to appear before your
    subcommittee to present our views on the importance of the S&T
    accounts.
        In accordance with the recommendations of the Defense
    Science Board, the Quadrennial Defense Review, and the
    President's Commission on the Future of the U.S. Aerospace
    Industry, and based on the President's fiscal year 2004 budget
    request for the Department of Defense, we urge the members of
    this subcommittee to provide 3 percent of the total DOD budget,
    or $11.4 billion, for the Department's core science and
    technology programs for fiscal year 2004.
        During the past decade funding for the defense S&T programs
    has been below this threshold and essentially flat in constant
    dollars. As a result, the job market for engineers in the
    defense sector has shrunk, leaving little incentive for young
    engineers to seek defense-related career opportunities. The
    defense industry has thus had great difficulty in attracting
    and retaining the best of the best engineering and scientific
    talents of this Nation.
        In addition, universities are having difficulty attracting
    postgraduate students who rely on S&T funding for their
    support. Doctoral engineering enrollments are at a 10-year low.
    Students from overseas who study in the United States are
    increasingly returning to their home countries for more
    attractive opportunities.
        Continued unabated, the repercussions of a stagnant defense
    investment in research will inevitably extend to the commercial
    sector as well. Without question, America's civil aviation
    industry has benefited greatly from technological advances in
    defense. The situation facing the United States could be a
    technologically deficient military together with a subpar civil
    aviation industry. Obviously, neither scenario is in the best
    interests of the Nation.
        The valuable contributions of our engineers and scientists
    have been a constant and powerful force over the past century.
    These contributions could not have been made without the vision
    and support of Members of Congress like yourselves who promote
    the continued strengthening of this Nation's investment in the
    DOD science and technology programs. Your continued support in
    strengthening defense-related engineering sciences is essential
    for meeting the future needs of the country.
        Therefore, we urge the members of this subcommittee to
    continue to provide a robust and stable investment in the
    science and technology programs of the Department of Defense to
    ensure our national security and protect our homeland while
    educating the future defense science and engineering workforce.
    It will take a great deal of continued attention to Defense R&D
    to ensure that the best engineering and scientific minds are
    once again willing to apply their talents to meeting the future
    defense needs of the Nation.
        Thank you for this opportunity to offer our views. I will
    be pleased to respond to any questions.
        [The statement follows:]

                      Prepared Statement of Dennis Achgill

        The Department of Defense (DOD) Task Force of the ASME Inter-
    Council Committee on Federal Research and Development (ICCFRD) of the
    American Society of Mechanical Engineers (ASME International) is
    pleased to provide the following comments on the fiscal year 2004
    budget request for the Department of Defense.

                                    FINDINGS

        The Department of Defense (DOD) Basic Research (category 6.1),
    Applied Research (category 6.2) and Advanced Technical Development
    (category 6.3) accounts provide the fundamental building blocks for
    Defense Science and Technology (S&T) programs.
        The President's proposed fiscal year 2004 budget request for the
    DOD S&T Program is $9.93 billion, 7.8 percent lower than the fiscal
    year 2003 appropriated levels. Basic Research and Applied Research are
    down $109 million (7.7 percent) and $618 million (14.4 percent),
    respectively. Advanced Technology Development has increased $186
    million (3.7 percent), mostly because of increases to classified
    programs. Individually, the Army and Navy are experiencing cuts of 27
    percent and 21 percent after accounting for programs devolved from the
    Office of the Secretary of Defense (OSD). The Air Force budget is up
    3.5 percent, but mostly due to increases to a classified 6.3 program.
        In the 2001 Quadrennial Defense Review, DOD set an S&T funding goal
    of 3 percent of the department's Total Obligational Authority (TOA) as
    part of its transformation objectives. For the last two years, that
    goal has been achieved only after Congress added more than $1 billion
    to the President's request in each of those years. The 3 percent goal
    was recently reaffirmed by the Principal Deputy Under Secretary of
    Defense for Acquisition, Technology and Logistics and three senior
    officers representing the three services at a March 31st hearing before
    the Senate Armed Services, Emerging Threats and Capabilities
    Subcommittee. This reaffirmation is in contradiction to a barely
    greater than inflation growth in fiscal year 2004 President's budget
    Request (PBR) over the fiscal year 2003 PBR and a Future Years Defense
    Plan that shows a gradual decline in the percent of TOA budgeted to
    S&T.
        Defense agencies have historically been the largest source of
    federal funding for engineering research in our industry, as well as at
    the nation's universities. The universities are significant
    collaborators with industry and are the source for young engineering
    talent for the defense sector, both public and private. Federal funding
    for defense basic and applied research has also provided the majority
    of financial support for graduate level education in defense related
    fields. DOD has been the dominant source of federal funding, 70 percent
    and 66 percent respectively, for the electrical and mechanical
    engineering disciplines. DOD also funds more than 40 percent of
    academic research in the aerospace and materials engineering fields.
    After a decade of defense S&T funding cuts but steady population
    growth, it should be no surprise that doctoral engineering enrollments
    are at a ten year low. Foreign students who were once counted on to
    remain in the United States after graduation are increasingly returning
    to their home countries for more attractive opportunities. As a result
    of an overall decline in engineering enrollments for much of the past
    decade, federal defense laboratories and the defense industry have had
    great difficulty in attracting and retaining the best-of-the-best
    engineering and scientific talents of this nation. This problem has
    only become more critical with the increased focus on security and the
    concomitant need to employ citizens in sensitive technology areas.
        Nearly a decade of funding declines accompanied by dramatic budget
    instability and a pattern in which advanced technology demonstration
    programs, designed to accelerate the insertion of research efforts,
    were stretched out, delayed and cancelled, resulted in a waste of
    valuable resources, and has been a deterrent to attracting a generation
    of highly skilled, highly motivated engineers and scientists, the folks
    who transform ideas into reality. The decline in support has led to the
    loss of irreplaceable research facilities and infrastructure to reduce
    federal and corporate overhead costs. In the academic institutions,
    many aerospace and other defense related programs of study were
    discontinued, thereby weakening the important contributions that these
    universities make to the U.S. defense technology base. As research and
    development budgets were reduced, the job market for engineers in the
    defense sector shrunk, leaving little incentive for young engineers to
    seek defense-related career opportunities. The recent budget increases
    by the administration and the Congress for DOD S&T must be sustained to
    reverse these alarming trends.
        The Department of Defense and defense industry now have a workforce
    whose average age is increasing at an alarming rate and will continue
    to do so until our intellectual resources are replenished. Just as our
    country's recent and prolonged economic expansion was largely the
    outcome of technological advances that were created by the world's
    premier group of talent--U.S. technologists--so has our recent and
    prolonged success in military engagements been the outcome of
    technological advances made by this national treasure. A February 2003
    report by the Presidents Council of Advisors on Science and Technology
    (PCAST) stated, ``Federal support for science and engineering students
    enhances economic growth.'' Strengthening defense-related engineering
    sciences is essential for meeting the future needs of the DOD and our
    economy.
        The President's Commission on the Future of the United States
    Aerospace Industry has documented the workforce and funding issues
    above and recommended in its November 2002 Final Report ``that DOD's
    annual science and technology (6.1-6.3) funding must be sufficient and
    stable to create and demonstrate the innovative technologies needed to
    address future national security threats. An amount no less than three
    percent of DOD Total Obligational Authority, ``fenced'' from budget
    cuts, would be sufficient.''
        In 1998, the Defense Science Board recommended that the
    department's science and technology budget be about 3.5 percent of the
    total budget. The 2001 Quadrennial Defense Review stated that, ``A
    robust research and development effort is imperative to achieving the
    Department's transformation objectives. DOD must maintain a strong
    science and technology (S&T) program that supports evolving military
    needs and ensures technological superiority over potential
    adversaries.'' The review further called ``for a significant increase
    in funding for S&T programs to a level of three percent of DOD spending
    per year.'' Unfortunately, the current year budget takes a step back
    from the progress made last year and the out-year budget projections of
    the department project a declining percentage of TOA devoted to S&T.
        S&T budgets within the services have also typically experienced
    great fluctuations, as the services have struggled to maintain long-
    term, stable funding for basic research. Given the long-term nature of
    basic research, any damage to the programs, though it may not be easily
    spotted in the near term, will result in the loss of the U.S.
    technology lead and will require an even greater corrective investment
    in the future.
        The fiscal year 2004 budget request to Congress for the department
    would transfer--or devolve--a group of critical, joint,
    multidisciplinary programs from the Office of the Secretary of Defense
    (OSD) to the services. In order to continue moving toward stated
    overall investment goals for S&T and to carry out strategic decisions
    most effectively, the OSD--as the most appropriate entity to facilitate
    jointness--will need controlling authority over basic research programs
    and budgets. OSD should retain current oversight and management of
    critical research initiatives until management plans are detailed and
    tested.

                                RECOMMENDATIONS

        The Task Force supports the findings and recommendations of the
    Quadrennial Defense Review and the Defense Science Board Task Force to
    provide 3 percent of the total Defense Department Budget, or $11
    billion for the DOD basic (6.1), applied (6.2) and advanced technology
    development (6.3) accounts, which make up the S&T program.
        DOD S&T programs provide critical investments in scientific
    disciplines vital to ensuring future security--including engineering,
    mathematics, and physical, computer, and behavioral sciences. We
    strongly concur with the recommendations made in the February 2003
    report by the Presidents Council of Advisors on Science and Technology
    for a balanced portfolio of physical and life sciences achieved by a
    healthy increase to engineering and physical science budgets such as
    DOD's for fiscal year 2004, and beyond. Supporting DOD S&T will ensure
    that the best engineering and scientific minds are once again available
    and willing to apply their talents to meet the future defense needs of
    this nation.
        Thank you for the opportunity to offer our views.

        Senator Stevens [presiding]. We do not have any questions,
    Mr. Director, but I am sure that you know we work very hard to
    support engineering and research, particularly the nanoresearch
    area. I appreciate the briefing that the people involved in the
    Mechanical Engineers' Society gave us on nanoengineering and
    technology and the nanotechnology concepts.
        We appreciate your testimony. We will do our best to see to
    it we increase that funding.
        Mr. Achgill. Thank you very much, Senator.
        Senator Stevens. Thank you.
        Fran Visco--pardon me. First is Chris Hudgins, the Public
    Policy Associate, National Prostate Cancer Coalition.

    STATEMENT OF CHRIS HUDGINS, PUBLIC POLICY ASSOCIATE,
                NATIONAL PROSTATE CANCER COALITION

        Mr. Hudgins. Thank you, Mr. Chairman. Mr. Chairman,
    distinguished members of the subcommittee: I would like to
    thank you for the opportunity to share my remarks here today.
    My name is Chris Hudgins and I am part of the public policy
    team at the National Prostate Cancer Coalition.
        Since its inception in 1996, the National Prostate Cancer
    Coalition has been dedicated to eradicating a disease which
    will afflict over 220,000 men this year and claim nearly 29,000
    lives. You may be surprised to see someone who is only 25 years
    old here today talking about what once was thought to be an old
    man's disease.
        Senator Stevens. Be careful now. I had it.
        Mr. Hudgins. Well, that is why it was once thought, sir.
        Unfortunately, I know all too well the story of prostate
    cancer and its effect on America's families. In 2000 my
    grandfather was diagnosed with prostate cancer. This was quite
    shocking to me because I had always thought of him as a strong
    and powerful man. He had served his country as a marine during
    World War II and during the occupation of Japan. He returned
    home and began a career in academics and eventually rose to the
    level of president, first at Meredith College in Raleigh, North
    Carolina, and later at the University of Richmond in Virginia.
    Then he was crippled by a silent killer.
        Thanks to the availability of the prostate-specific antigen
    (PSA) blood test and the digital rectal exam, both of which are
    recommended by the National Prostate Cancer Coalition, my
    grandfather was able to catch the disease in its early stages
    when it was the most treatable. After having a radical
    prostatectomy, my grandfather fully recovered and has returned
    to his post as chancellor of the University of Richmond.
        Now the focus turns to the other men in my family. As you
    may be aware, a person with one close family member with
    prostate cancer is twice as likely to develop the disease. My
    father, much like the majority of the baby boom generation, is
    now in his early fifties. I say this because he, along with 22
    million men, in the next 10 years will be in the target age
    group for increased risk of prostate cancer.
        Since my grandfather's diagnosis, I have encouraged him to
    keep a close eye on his PSA level. This is not only because I
    love him, but because if he is diagnosed then my and my
    brother's risk of the disease will increase fivefold.
        As our Nation welcomes home the soldiers who fought so
    bravely in Iraq, I cannot help but think of my grandfather
    returning home from Japan in 1947. I believe our Nation has a
    responsibility to protect America's soldiers on the battlefield
    and long after the fighting has ended. Veterans like my
    grandfather and the approximately 2.2 million men currently
    serving in active or reserve duty must know that their
    government is doing everything it can to protect them from
    prostate cancer.
        Therefore, to effectively fight prostate cancer the
    National Prostate Cancer Coalition requests that you allocate
    at least $100 million in fiscal year 2004 for the prostate
    cancer research program conducted by the Department of
    Defense's congressionally-directed medical research program.
    Since its inception in 1998, the prostate cancer research
    program has been the most efficient Federally-directed prostate
    cancer research program because it builds sound accountability
    mechanisms into its fundamental operation. The program is also
    focused on non-duplication of effort, fostering the science of
    projects that are unique and are not receiving funding from
    other sources.
        The prostate cancer research program has engaged survivors
    of prostate cancer into its accountability practices from its
    outset. This consumer input helps drive the program to become
    more ambitious and creative in seeking out new areas of
    research because it maintains its focus on what is important to
    survivors, advocates, and researchers.
        The prostate cancer research program offers awards such as
    the idea development and new investigator grants that seek
    innovative and revolutionary studies that deviate from previous
    research. The goal is to stimulate venture research projects
    that reward sometimes speculative but promising ideas that can
    lead to huge returns on investments. Other grant awards focus
    on researching the disproportionate impact of prostate cancer
    on African American men.
        While the prostate cancer research program's award
    mechanisms continue to stimulate exciting new research, the
    program is unable to fund its clinical trials awards
    appropriately. At least $100 million is needed to allow the
    program to resume sound clinical trials, which are paramount in
    translating research from the lab into new patients for
    treatments.
        On behalf of our community of advocates, families,
    researchers, physicians, and others touched by the disease, I
    would like to thank you and the committee once again for your
    time and leadership. Together we can eliminate prostate cancer
    as a threat to grandfathers, fathers, brothers, and families
    like mine.
        Thank you, Mr. Chairman.
        [The statement follows:]

                      Prepared Statement of Chris Hudgins

        Mr. Chairman and distinguished members of the subcommittee, I would
    like to thank you for the opportunity to share my remarks. My name is
    Chris Hudgins, and am part of the public policy team at the National
    Prostate Cancer Coalition (NPCC). Since its inception in 1996, NPCC has
    been dedicated to eradicating prostate cancer through awareness,
    outreach, and advocacy.
        You may be surprised to see someone who is only 25 years old
    talking about what was once thought to be an ``old man's disease.''
    Unfortunately, I know all to well the story of prostate cancer and its
    effects on America's families. I was introduced to the disease a few
    years before I began my employment with the NPCC. In 2000, my
    grandfather was diagnosed with prostate cancer. This was quite shocking
    to me because I had always thought of him as a strong and powerful man.
    He had served his country as a Marine during World War II and during
    the occupation of Japan. He returned home and studied at five different
    institutions. After serving in administrative capacities throughout the
    southeast for various colleges, universities and the Tennessee
    Department of Education, he rose to level of President, first at
    Meredith College in Raleigh, NC and later at the University of
    Richmond. Then, he was crippled by a silent killer.
        As you can imagine, this was a particularly stressful time for me
    and my family. While, at the time of my grandfather's diagnosis, I had
    heard of the disease I was not aware of how prevalent prostate cancer
    had become among men. I now know that prostate cancer will affect about
    220,000 men and their families this year, and 28,900 men will lose
    their battle with the disease. It's unfathomable to think that so many
    people will be subjected to the anguish my family has experienced.
        Thanks to the availability of the prostate specific antigen (PSA)
    and the digital rectal exam (DRE), both of which are recommended by
    NPCC, my grandfather was able to catch the disease early when it is the
    most treatable. After having a radical prostatectomy, my grandfather
    fully recovered and has returned to riding his Harley-Davidson around
    the University of Richmond campus. Now the focus turns to the other men
    in my family.
        As you may be aware, a person with one close family member with
    prostate cancer is twice as likely to develop the disease. My father,
    much like the majority of the baby-boom generation, is now in his early
    fifties. I say this because he, along with about 22 million men in the
    next ten years, is in the target age group for increased risk of
    prostate cancer. Since my grandfather's diagnosis, I have encouraged my
    father to keep a close eye on his PSA. This is not only because I love
    him but also because if he is diagnosed then my and my brother's risk
    of the disease increases five fold.
        While my grandfather--and my family--benefited from early
    detection, others are not so lucky. In the past few years, I have had
    the advantage of learning about the risks of prostate cancer and how
    early detection can save lives, but the truth is I am in the minority.
    We must focus on those individuals who do not have the benefit of this
    knowledge. We must also continue important research in prostate cancer
    to develop new treatments until a cure is found. That's why, Mr.
    Chairman, we all need your help.
        As the nation prepares to bring home the soldiers that fought so
    bravely in Iraq, I can't help but think of my grandfather returning
    home from Japan in 1947. I believe our nation has a responsibility to
    protect America's soldiers on the battlefield and long after the
    fighting has ended. Men like my grandfather, veterans exposed to
    defoliants, who may bear a disproportionate risk of prostate cancer,
    and those who are about to return from the Middle East, must know that
    their government is doing everything they can to protect them from
    prostate cancer. As President Franklin Delano Roosevelt stated at the
    dedication of the National Institutes of Health in 1940, ``we cannot be
    a strong nation unless we are a healthy nation.''
        While I cannot predict the impact of prostate cancer among our men
    in uniform, I can offer some estimates. We know that about 85 percent
    of individuals serving in active or reserve duty are men, approximately
    2.2 million. If one applies the average risk to this group, over
    350,000 men will be diagnosed with the disease in their lifetimes.
    That's more than the number of American servicemen lost in both World
    Wars.
        The Department of Veterans Affairs (VA) estimates that there will
    be nearly 25 million veterans living in the United States by September
    2003. Of these, 94 percent will be male, 81 percent will be age 45 or
    older and 17 percent will be minorities. The Veterans Health
    Administration also estimates that nearly 50,000 new cancer cases are
    diagnosed in VA patients each year--the second leading killer of
    veterans. It's easy to see the impact prostate cancer could have on
    America's servicemen.
        To effectively fight prostate cancer, NPCC requests that you
    allocate at least $100 million in fiscal year 2004 for the Prostate
    Cancer Research Program (PCRP) conducted by the Department of Defense
    through the extramural Congressionally Directed Medical Research
    Program (CDMRP). The PCRP is a model program, and it offers ``awards to
    fill gaps in ongoing research and complement initiatives sponsored by
    other agencies.'' The program has received $85 million in funding in
    fiscal year 2002 and fiscal year 2003, but without at least $100
    million, PCRP cannot appropriately conduct clinical trials research in
    which cutting-edge treatments can be offered to patients who need them
    most.
        Since its inception in fiscal year 1997, the PCRP has been the most
    efficient federally directed prostate cancer research program because
    it builds sound accountability mechanisms into its fundamental
    operation. Its research is dedicated to increase evidence-based
    medicine, and it subjects itself to regular reviews of this effort. The
    program is also focused on non-duplication of effort, fostering the
    science of projects that are unique and are not receiving funding from
    other sources. The PCRP has engaged survivors of prostate cancer into
    its accountability practices from its outset. Several of NPCC's friends
    and colleagues have the honor of sitting on the Prostate Cancer
    Integration Panel, joining other consumers and a diverse group of
    scientists in the oversight of the CDMRP program and its projects. This
    consumer input helps drive the program to become more ambitious and
    creative in seeking new areas of research, because it maintains its
    focus on what is important to survivors, advocates and researchers.
        The CDMRP prostate cancer program is clear-cut in its mission,
    process, goals and results; it is easy to see where--and how
    efficiently--every dollar the PCRP receives is spent. Among the
    research resources funded by the federal government, the CDMRP is the
    only program to offer organ site-specific research grants. Each grant
    awarded through the PCRP is 100 percent dedicated to prostate cancer.
    The impact on solving the problem of prostate cancer is not subjected
    to the complex--and too often fuzzy--calculations of organ site
    relevance that other agencies weigh when considering research
    opportunities.
        As stated in its annual report, the PCRP has ``challenged the
    scientific community to design innovative prostate cancer research that
    would foster new directions, address neglected issues and bring new
    investigators into the field.'' Cornerstones of the program's research
    efforts are the ``Idea Development'' and ``New Investigator'' grants.
    Both of these awards seek innovative and revolutionary studies that
    deviate from previous research. Their goal is to stimulate ``venture
    research'' projects that reward sometimes speculative but promising
    ideas that can lead to huge returns on investments.
        The PCRP also offers grants to explore why certain populations
    suffer higher disease incidence. Grants such as the ``Historically
    Black Colleges and Universities (HBCU) Collaborative Partnership'' and
    the ``Health Disparity Training'' awards focus on researching the
    disproportionate impact of prostate cancer on African-American men and
    encouraging HBCU scientists to enter the prostate cancer research
    field.
        In fiscal year 2003, the PCRP has added several new awards. Perhaps
    the most exciting new grant is the ``Exploration-Hypothesis Development
    Award'' which allows researchers to explore ``innovative, untested,
    potentially groundbreaking concepts in prostate cancer.'' Unlike
    similar grants awarded by the PCRP to new and innovative research
    ideas, the award is centered on new approaches without requiring any
    preliminary data. Such awards contrast other agencies' grant processes
    that tend to favor research in which ``proof-of-principle'' has already
    been established. The program is also offering the ``Physician Research
    Training Award'' which is designed to draw new scientists into the
    field and train them for a career in prostate cancer research. Also
    awarded for the first time in fiscal year 2003 are the prostate cancer
    consortium awards. These large awards, which can be up to $10 million,
    are focused on bringing together leading researchers and clinicians to
    concentrate on specific areas of prostate cancer research to accelerate
    advances in the field.
        Unfortunately, the PCRP is not always able to make awards to
    worthwhile projects. In fiscal year 2002, the program received nearly
    700 proposals but was only able to recommend 150 for funding compared
    to the over 300 for breast cancer research. Despite funding fewer than
    25 percent of proposals received over the last five years, the program
    is still producing exceptional results. Data from more than 450
    research projects have been published in scientific journals, and over
    25 projects have received a patent or licensing.
        As I mentioned, funding for the PCRP must return to its fiscal year
    2001 level of $100 million to allow the program to conduct needed
    clinical research appropriately. While many advancements are being
    made, we must capitalize on discoveries by translating them and testing
    them on patients. Clinical trials research conducted through the CDMRP
    breast cancer program has already produced a revolutionary new drug
    called Herceptin, which impacts a specific pathway in the growth of
    cancer cells. Studies have already shown that Herceptin, when used
    correctly, increases survivorship of breast cancer patients by one-
    third. Once prostate cancer research is afforded the same opportunity,
    who knows what kinds of new treatments may become available to men.
        Dr. William G. Nelson, a prominent prostate cancer research
    professor at Johns Hopkins University School of Medicine once stated,
    ``It's nice to be able to cure rats and mice, but curing humans is what
    we're all about--you can't do that without clinical trials.'' We
    believe Dr. Nelson's statement speaks for itself. That's why funding
    must increase to at least $100 million in fiscal year 2004.
        Mr. Chairman, we also ask that you provide at least $10 million in
    funding for the Uniformed Services University of the Health Sciences
    (USUHS) and Walter Reed Army Medical Center (WRAMC) program called the
    Center for Prostate Disease Research (CPDR).
        The CPDR is the intramural prostate cancer research program at DOD.
    Among other achievements, the CPDR has helped determine the
    effectiveness of the prostate specific antigen (PSA) screening exam. A
    recent CPDR study found a significant increase in five-year survival
    rates of those diagnosed with the disease and a decreased chance of
    losing life to the disease, both attributed to the implementation of
    PSA screening. NPCC supports early detection through screening and
    believes that the PSA test along with the DRE saves lives.
        On behalf of our community of advocates--families, researchers,
    physicians, and others touched by the disease, I would like to thank
    you and the Committee once again for your time and leadership. The
    investments we make today can greatly reduce medical costs and save
    lives tomorrow. Together, we can eliminate prostate cancer as a threat
    to grandfathers, fathers, brothers, and families like mine.

        Senator Stevens. Well, thank you very much. It may interest
    you to know my grandfather, my father, and my oldest brother
    all died of prostate cancer, and I have had it, and you have a
    point. But there is a limit to what we can do to increase
    Federal funding for this research. You should do more to raise
    money in the private sector.
        Mr. Hudgins. All right. Thank you for your leadership in
    the past, Mr. Chairman.
        Senator Stevens. They really have--there should be--I think
    I may put a matching funds requirement on the money in this
    year's prostate cancer research and say that it can only be
    made available if it is matched by private funds.
        Mr. Hudgins. Okay. Thank you very much.
        Senator Stevens. Thank you.
        Fran Visco, please.

    STATEMENT OF FRAN VISCO, J.D., PRESIDENT, NATIONAL
                BREAST CANCER COALITION

        Ms. Visco. Thank you, Mr. Chairman. I am Fran Visco, a 16-
    year breast cancer survivor and the president of the National
    Breast Cancer Coalition. As you know, the coalition is an
    organization of more than 600 organizations from around the
    country and over 70,000 individuals, all dedicated to
    eradicating breast cancer through action and advocacy. I am
    here on their behalf to thank you and the committee for its
    leadership in the breast cancer research program.
        Since 1992 this program has set the standard for biomedical
    research in this country and in other countries. It has created
    new models of research. It has created new mechanisms to
    attract scientific ideas, innovative, cutting edge ideas from
    around the world. It is a model that has been copied, not just
    by other programs within the DOD and the National Cancer
    Institute, but also other countries. It has created new
    collaborations and partnerships for the military with the
    leaders in the scientific community around the world, and the
    Army itself has copied the program and used what is happening
    in this program in many of its other areas of endeavor.
        This year the program itself submitted its annual report
    September 30, 2002, and it is their report on all of the
    congressionally-directed medical research programs. We have
    also submitted testimony on behalf of the coalition, and 65 of
    your colleagues in the Senate have written to you and to Mr.
    Inouye asking for continuation of the program.
        All of those materials lay out the reason why this program
    must continue. It is not duplicative. It fills gaps. It is
    creating new relationships for the Army and it is creating hope
    and real progress for women and their families.
        So I am here to urge you to continue this program and again
    to thank you for the incredible leadership that you have shown,
    and I am available to answer any questions you have. I wanted
    to point out another thing of this program that truly is a
    model, and that is the meeting that is called the Era of Hope.
    Every 2 years the breast cancer research program conducts a
    meeting where everyone who has been funded by the program must
    report on their research to the American public. This is
    probably the only time that the taxpayers learn what is
    happening, specifically and directly what is happening with
    their tax dollars. It again is a wonderful model that is being
    replicated elsewhere.
        So for all of these reasons, we urge you to continue this
    program and thank you for your support to date.
        [The statement follows:]

                        Prepared Statement of Fran Visco

        Thank you, Mr. Chairman and members of the Appropriations
    Subcommittee on Defense for your exceptional leadership in the effort
    to increase and improve breast cancer research. You and your Committee
    have shown great determination and leadership in searching for the
    answers by funding the Department of Defense (DOD) Peer-Reviewed Breast
    Cancer Research Program (BCRP) at a level that has brought us closer to
    eradicating this disease.
        I am Fran Visco, a breast cancer survivor, a wife and mother, a
    lawyer, and President of the National Breast Cancer Coalition. On
    behalf of NBCC, and the more than 3 million women living with breast
    cancer, I would like to thank you for the opportunity to testify today.
        The DOD BCRP's decade of progress in the fight against breast
    cancer has been made possible by this Committee's investment in breast
    cancer research. To continue this unprecedented progress, we ask that
    you support a $175 million appropriation for fiscal year 2004. The
    program was cut back from $175 million to $150 million two years ago as
    part of an across-the-board cut in Congressionally directed health
    programs. However, there continues to be excellent science that goes
    unfunded which is why we believe that the BRCP should be appropriated
    $175 million for fiscal year 2004.
        As you know, the National Breast Cancer Coalition is a grassroots
    advocacy organization made up of more than 600 organizations and tens
    of thousands of individuals and has been working since 1991 toward the
    eradication of this disease through advocacy and action. NBCC supports
    increased funding for breast cancer research, increased access to
    quality health care for all women, and increased influence of breast
    cancer activists at every table where decisions regarding breast cancer
    are made.

               OVERVIEW OF THE DOD BREAST CANCER RESEARCH PROGRAM

        In the span of only ten years, the DOD Peer-Reviewed Breast Cancer
    Research Program has established itself as model medical research
    program, respected throughout the cancer community for its innovative
    and accountable approach. The groundbreaking research performed through
    the program has the potential to benefit not just breast cancer, but
    all cancers, as well as other diseases. Biomedical research is being
    transformed by the BCRP's success.
        This program is both innovative, and incredibly streamlined. It
    continues to be overseen by a group of distinguished scientists and
    activists, as recommended by the Institute of Medicine (IOM). Because
    there is no bureaucracy, the program is able to quickly respond to what
    is currently happening in the scientific community. It is able to fill
    gaps, with little fuss. It is responsive, not just to the scientific
    community, but also to the public.
        Since its inception, this program has matured from an isolated
    research program to a broad-reaching influential voice forging new and
    innovative directions for breast cancer research and science. The
    flexibility of the program has allowed the Army to administer this
    groundbreaking research effort with unparalleled efficiency and skill.
        In addition, an inherent part of this program has been the
    inclusion of consumer advocates at every level, which has created an
    unprecedented working relationship between advocates and scientists,
    and ultimately led to new avenues of research in breast cancer. Since
    1992, more than 600 breast cancer survivors have served on the BCRP
    review panels. Their vital role in the success of the BCRP has led to
    consumer inclusion in other biomedical research programs at DOD. In
    addition, this program now serves as an international model.
        It is important to note that the DOD Integration Panel that designs
    this program has a plan of how best to spend the funds appropriated.
    This plan is based on the state of the science--both what scientists
    know now and the gaps in our knowledge--as well as the needs of the
    public. This plan coincides with our philosophy that we do not want to
    restrict scientific freedom, creativity and innovation. While we
    carefully allocate these resources, we do not want to predetermine the
    specific research areas to be addressed.

                          UNIQUE FUNDING OPPORTUNITIES

        Developments in the past few years have begun to offer breast
    cancer researchers fascinating insights into the biology of breast
    cancer and have brought into sharp focus the areas of research that
    hold promise and will build on the knowledge and investment we have
    made. The Innovative Developmental and Exploratory Awards (IDEA) grants
    of the DOD program have been critical in the effort to respond to new
    discoveries and to encourage and support innovative, risk-taking
    research. The IDEA grants have been instrumental in the development of
    promising breast cancer research. These grants have allowed scientists
    to explore beyond the realm of traditional research and have unleashed
    incredible new ideas and concepts. IDEA grants are uniquely designed to
    dramatically advance our knowledge in areas that offer the greatest
    potential.
        IDEA grants are precisely the type of grants that rarely receive
    funding through more traditional programs such as the National
    Institutes of Health, and academic research programs. Therefore, they
    complement, and do not duplicate, other federal funding programs. This
    is true of other DOD award mechanisms as well.
        For example, the Innovator awards are structured to recognize
    talented individuals, rather than projects, from any field of study by
    providing funding and freedom to pursue creative, potentially
    breakthrough research that could ultimately accelerate the eradication
    of breast cancer. In the area of training, the DOD BCRP has launched
    innovative programs such as Physician-Scientist Training Awards, which
    are intended to support the training of new breast cancer clinical
    research physicians.
        Also, Historically Black Colleges and Minority Universities/
    Minority Institutions Physicians' Training Awards (``Minority
    Institution'' awards) are intended to provide assistance at an
    institutional level. The major goal of this award is to support
    collaboration between multiple investigators at an applicant Minority
    Institution and a collaborating institution with established investment
    in breast cancer research, for the purpose of creating an environment
    that would foster breast cancer research, and in which Minority
    Institute faculty would receive training toward establishing successful
    breast cancer research careers.
        These are just a few examples of innovative approaches at the DOD
    BCRP that are filling gaps in breast cancer research. It is vital that
    these grants are able to continue to support the growing interest in
    breast cancer research--$175 million for peer-reviewed research will
    help sustain the program's momentum.
        The DOD BCRP also focuses on moving research from the bench to the
    bedside. A major feature of the awards offered by the BCRP is that they
    are designed to fill niches that are not offered by other agencies. The
    BCRP considers translational research to be the application of well-
    founded laboratory or other pre-clinical insight into a clinical trial.
    To enhance this critical area of research, several research
    opportunities have been offered. Clinical Translational Research
    Awards, for investigator-initiated projects that involve a clinical
    trial within the lifetime of the award, make up the majority of the
    BCRP's translational research portfolio. The BCRP expanded its emphasis
    on translational research by offering 5 different types of awards that
    support work at the critical juncture between laboratory research and
    bedside applications.

                            SCIENTIFIC ACHIEVEMENTS

        The BCRP research portfolio is comprised of many different types of
    projects, including support for innovative ideas, infrastructure
    building to facilitate clinical trials, and training breast cancer
    researchers.
        One of the most promising outcomes of research funded by the BCRP
    was the development of Herceptin, a drug that prolongs the lives of
    women with a particularly aggressive type of advanced breast cancer.
    This drug could not have been developed without first researching and
    understanding the gene known as HER2-neu, which is involved in the
    progression of some breast cancers. Researchers found that over-
    expression of HER-2/neu in breast cancer cells results in very
    aggressive biologic behavior. Most importantly, the same researchers
    demonstrated that an antibody directed against HER2-neu could slow the
    growth of the cancer cells that over-expressed the gene. This research
    led to the development of the drug Herceptin. This research was made
    possible in part by a DOD BCRP-funded infrastructure grant. Other
    researchers funded by the BCRP are currently working to identify
    similar kinds of genes that are involved in the initiation and
    progression of cancer. They hope to develop new drugs like Herceptin
    that can fight the growth of breast cancer cells.
        Several studies funded by the BCRP will examine the role of
    estrogen and estrogen signaling in breast cancer. For example, one
    study examined the effects of the two main pathways that produce
    estrogen. Estrogen is often processed by one of two pathways; one
    yields biologically active substances while the other does not. It has
    been suggested that women who process estrogen via the biologically
    active pathway may be at a higher risk of breast cancer. It is
    anticipated that work from this funding effort will yield insights into
    the effects of estrogen processing on breast cancer risk in women with
    and without family histories of breast cancer.
        One DOD IDEA award success has supported the development of new
    technology that may be used to identify changes in DNA. This technology
    uses a dye to label DNA adducts, compounds that are important because
    they may play a role in initiating breast cancer. Early results from
    this technique are promising and may eventually result in a new marker/
    method to screen breast cancer specimens.
        Another DOD BCRP IDEA award has generated a new vaccine targeted
    against ductal carcinoma in situ (DCIS), a malignant, non-invasive
    lesion that can develop into an invasive breast cancer. The vaccine is
    being tested on mice that develop spontaneous mammary tumors that over
    express the HER-2/neu protein. Mice treated with the vaccine show a
    markedly decreased rate of tumor development when compared to that
    generated for the prevention of tumor formation in women at risk for
    the development of HER-2/neu expressing tumors.
        Investigators funded by the DOD have developed a novel imaging
    technique that combines two-dimensional and novel three-dimensional
    digital mammographic images for analysis of breast calcifications.
    Compared to conventional film screen mammography, this technique has
    greater resolution. Ultimately, this technique may help reduce the
    number of unnecessary breast biopsies.
        Despite the enormous successes and advancements in breast cancer
    research made through funding from the DOD BCRP, we still do not know
    what causes breast cancer, how to prevent it, or how to cure it. It is
    critical that innovative research through this unique program continues
    so that we can move forward toward eradicating this disease.

                            FEDERAL MONEY WELL SPENT

        The DOD BCRP is as efficient as it is innovative. In fact, 90
    percent of funds go directly to research grants. The flexibility of the
    program allows the Army to administer it in such a way as to maximize
    its limited resources. The program is able to quickly respond to
    current scientific advances, and is able to fill gaps by focusing on
    research that is traditionally under-funded. It is also responsive, not
    just to the scientific community, but also to the public. This is
    evidenced by the inclusion of consumer advocates at both the peer and
    programmatic review levels. The consumer perspective helps the
    scientists understand how the research will affect the community, and
    allows for funding decisions based on the concerns and needs of
    patients and the medical community.
        Since 1992, the BCRP has been responsible for managing $1.2 billion
    in appropriations, which has resulted in 2,837 awards for fiscal year
    1992-2000. The areas of focus of the DOD BCRP span a spectrum and
    include basic, clinical, behavioral, environmental sciences, and
    alternative therapy studies, to name a few. The BCRP benefits women and
    their families by maximizing resources; the program offers awards that
    fill existing gaps in breast cancer research. Scientific achievements
    that are the direct result of the DOD BCRP are undoubtedly moving us
    closer to eradicating breast cancer.
        The outcomes of the BCRP-funded research can be gauged, in part, by
    the number of publications, abstracts/presentations, and patents/
    licensures reported by awardees, to date. There have been 2300
    publications in scientific journals, 1800 abstracts and 30 patents/
    licensure applications.
        The federal government can truly be proud of its investment in the
    DOD BCRP.

                       POSITIVE FEEDBACK ON THE DOD BCRP

        The National Breast Cancer Coalition has been the driving force
    behind this program for many years. The success of the DOD Peer-
    Reviewed Breast Cancer Research Program has been illustrated by two
    unique assessments of the program. The Institute of Medicine (IOM),
    which originally recommended the structure for the program,
    independently re-examined the program in a report published in 1997.
    Their findings overwhelmingly encourage the continuation of the program
    and offer guidance for program implementation improvements.
        The 1997 IOM review of the DOD Peer-Review Breast Cancer Research
    Program commended the program and stated that, ``the program fills a
    unique niche among public and private funding sources for cancer
    research. It is not duplicative of other programs and is a promising
    vehicle for forging new ideas and scientific breakthroughs in the
    nation's fight against breast cancer.'' The IOM report recommends
    continuing the program and establishes a solid direction for the next
    phase of the program. It is imperative that Congress recognizes the
    independent evaluations of the DOD Breast Cancer Research Program, as
    well as reiterates its own commitment to the Program by appropriating
    the funding needed to ensure its success. The IOM report has laid the
    groundwork for effective and efficient implementation of the next phase
    of this vital research program, now all that it needs is the
    appropriate funding.
        The DOD Peer-Reviewed Breast Cancer Research Program not only
    provides a funding mechanism for high-risk, high-return research, but
    also reports the results of this research to the American people at a
    biennial public meeting called the ``Era of Hope.'' The 1997 meeting
    was the first time a federally funded program reported back to the
    public in detail not only on the funds used, but also on the research
    undertaken, the knowledge gained from that research and future
    directions to be pursued. The transparency of the BCRP allows
    scientists, consumers and the American public to see the exceptional
    progress made in breast cancer research.
        At the 2002 Era of Hope meeting, all BCRP award recipients from
    fiscal years 1998-2000 were invited to report their research findings
    and many awardees from previous years were asked to present
    advancements in their research. Scientists reported important advances
    in the study of cancer development at the molecular and cellular level.
    Researchers presented the results of research that elucidates several
    genes and proteins responsible for the spread of breast cancer to other
    parts of the body, and, more importantly, reveals possible ways to stop
    this growth. The meeting, which marked the 10th Anniversary of the
    program, also featured grant recipients who are working towards more
    effective and less toxic treatments for breast cancer that ``target''
    the unique characteristics of cancer cells and have a limited effect on
    normal cells.
        The DOD Peer-Reviewed Breast Cancer Research Program has attracted
    scientists with new ideas and has continued to facilitate new thinking
    in breast cancer research and research in general. Research that has
    been funded through the DOD BCRP is available to the public.
    Individuals can go to the Department of Defense website and look at the
    abstracts for each proposal.

               COMMITMENT OF THE NATIONAL BREAST CANCER COALITION

        The National Breast Cancer Coalition is strongly committed to the
    DOD program in every aspect, as we truly believe it is one of our best
    chances at finding cures and preventions for breast cancer. The
    Coalition and its members are dedicated to working with you to ensure
    the continuation of funding for this program at a level that allows
    this research to forge ahead.
        In May of 1997, our members presented a petition with over 2.6
    million signatures to the Congressional leaders on the steps of the
    Capitol. The petition called on the President and the U.S. Congress to
    spend $2.6 billion on breast cancer research between 1997 and the year
    2000. Funding for the DOD Peer-Reviewed Breast Cancer Research Program
    was an essential component of reaching the $2.6 billion goal that so
    many women and families worked to gain.
        Once again, NBCC is bringing its message to Congress. Just last
    week, many of the women and family members who supported the campaign
    to gain the 2.6 million signatures came to NBCC's Annual Advocacy
    Training Conference here in Washington, D.C. More than 600 breast
    cancer activists from across the country joined us in continuing to
    mobilize behind the efforts to eradicate breast cancer. The
    overwhelming interest in, and dedication to eradicate this disease
    continues to be evident as people are not only signing petitions, but
    are willing to come to Washington, D.C. from across the country to
    deliver their message about our commitment.
        Since the very beginning of this program, in 1993, Congress has
    stood in support of this important investment in the fight against
    breast cancer. In the years since then, Mr. Chairman, you and this
    entire Committee have been leaders in the effort to continue this
    innovative investment in breast cancer research.
        NBCC asks you, the Defense Appropriations Subcommittee, to
    recognize the importance of what you have initiated. What you have done
    is set in motion an innovative and highly efficient approach to
    fighting the breast cancer epidemic. What you must do now is continue
    to support this effort by funding research that will help us win this
    very real and devastating war against a cruel enemy.
        Thank you again for the opportunity to submit testimony and for
    giving hope to the 2.6 million women living with breast cancer.

        Senator Stevens. Thank you. I think we started this
    research 11 years ago.
        Ms. Visco. Yes.
        Senator Stevens. Twelve years ago. And every year we have
    put the money up for this research and prostate cancer research
    in increasing amounts. But I have not seen a similar response
    from the private sector. While we are going to continue to
    support research for prostate cancer and breast cancer, I am
    going to urge Congress to start requiring matching funds at
    least of some amount to come forward from the private sector.
        We cannot continue to increase the amount of money that
    comes out of the defense bill for this research when the more
    money we put up the less you get from the private sector. I
    think that trend has to stop and we have to see a strong
    response from the private sector for us to continue our support
    for these research--particularly when it is requested from this
    subcommittee for money from the defense account.
        Now, we have many women in the armed services now and they
    deserve to have the military proceeding to deal with one of
    their major concerns, which is breast cancer. We will continue,
    but I do think that the research that we are doing with defense
    dollars, it benefits the whole society, but the society ought
    to respond more to the demands for this research money as it
    has in the past.
        Ms. Visco. Mr. Chairman, we would be happy, the National
    Breast Cancer Coalition would be happy, to work with your staff
    to give you information on what is being done now in the
    community outside of the government, so we can work from there.
    We would be happy to work with you in that regard.
        Senator Stevens. I would like to see that. I would like to
    see to it that the organizations that are asking for taxpayers'
    money are reaching out and trying to raise non-taxpayers' money
    to continue this research.
        Ms. Visco. Yes, sir. We will give you that information.
        Senator Stevens. Thank you very much.
        Our next witness is Martin B. Foil, member of the Board of
    Directors, National Brain Injury Research and Treatment and
    Training Foundation.

    STATEMENT OF MARTIN B. FOIL, JR., MEMBER OF THE BOARD
                OF DIRECTORS, NATIONAL BRAIN INJURY
                RESEARCH, TREATMENT AND TRAINING FOUNDATION

        Mr. Foil. Thank you, Senator Stevens, Mr. Chairman. It is
    good to be back. We appreciate everything that you and your
    folks here on the committee have been doing.
        My name is Martin Foil. I am the father of a man with a
    severe brain injury. I am happy to be here on behalf of the
    wonderful men and women in our armed services. Really, I know
    we are all proud of what they did and their valiant performance
    in Operation Iraqi Freedom.
        I am privileged to come here today to request $5 million in
    funding for the Defense Veterans Head Injury Program (DVHIP),
    which provides treatment and services to thousands of military
    people injured annually. As you know, the DVHIP is a component
    of the military health system, providing direct care at
    treatment facilities in veterans hospitals throughout the
    Nation. While there is a research component, it provides mainly
    state-of-the-art medical care and rehabilitation to our
    personnel who sustain concussions and more severe brain injury.
    Our goal is to get them back to work as soon as possible.
        Since the war on terrorism began, DVHIP has treated some 40
    troops injured in Operation Enduring Freedom in Afghanistan and
    Iraqi Freedom. On two occasions, President Bush has visited a
    few of these soldiers who were being treated at our lead site
    at Walter Reed. My written testimony includes examples of
    military personnel who have recently received care under the
    full spectrum of the DVHIP program from acute care to
    rehabilitation to community reentry and, more importantly,
    return to work.
        Some highlights of the program include collaborating with
    leading researchers on battlefield biomarkers for mild brain
    injury and injury recovery. The goal here is to see if they
    need to be taken back from the front line or if they are going
    to be well in a few hours or a few days. Working with the U.S.
    Army Aeromedical Laboratory at Fort Rucker, we are working and
    implementing phase two of the paratrooper's helmet study at
    Fort Bragg, a very interesting study. We have also been asked
    to assist in evaluation of potential concussions as a result of
    blast injuries, particularly those from land mines.
        I respectfully request your support for the $5 million from
    the DOD appropriations bill under health affairs operations and
    maintenance for fiscal year 2004. This funding request is
    supported by Senators Reed, Kennedy, Hagel, Allen, Rockefeller,
    and Boxer, and the Congressional Brain Injury Task Force.
        Indeed, we are all grateful for your support over the
    years. We hope you again support our efforts to provide the
    best care for our brave men and women in uniform.
        Thank you, sir.
        [The statement follows:]

                   Prepared Statement of Martin B. Foil, Jr.

        Dear Chairman Stevens, Senator Inouye and Members of the Senate
    Appropriations Subcommittee on Defense: My name is Martin B. Foil, Jr.
    and I am the father of Philip Foil, a young man with a severe brain
    injury. I serve as a volunteer on the Board of Directors of the
    National Brain Injury Research, Treatment and Training Foundation
    (NBIRTT) \1\ and Virginia NeuroCare in Charlottesville, Virginia
    (VNC).\2\ Professionally, I am the Chief Executive Officer and Chairman
    of Tuscarora Yarns in Mt. Pleasant, North Carolina.\3\
    ---------------------------------------------------------------------------
        \1\ NBIRTT is a non-profit national foundation dedicated to the
    support of clinical research, treatment and training.
        \2\ VNC provides brain injury rehabilitation to military retirees,
    veterans and civilians through an innovative and cost effective day
    treatment program.
        \3\ I receive no compensation from this program. Rather, I have
    raised and contributed millions of dollars to support brain injury
    research, treatment, training and services.
    ---------------------------------------------------------------------------
        On behalf of the thousands of military personnel that receive brain
    injury treatment and services annually, I respectfully request that $5
    million be added to the Department of Defense (DOD) Health Affairs
    budget for fiscal year 2004 under Operation and Maintenance for the
    Defense and Veterans Head Injury Program (DVHIP).
        I appreciate the opportunity to provide testimony regarding this
    important program which is a collaborative effort among DOD, Department
    of Veterans Affairs (DVA), the Henry M. Jackson Foundation for the
    Advancement of Military Medicine and the Uniformed Services University
    of the Health Sciences (USUHS).

    The Defense and Veterans Head Injury Program (DVHIP)
        Established in 1992, the DVHIP is a component of the military
    health care system that integrates clinical care and clinical follow-
    up, with applied research, treatment and training. The program was
    created after the Gulf War to address the need for an overall systemic
    program for providing brain injury specific care and rehabilitation
    within DOD and DVA. The DVHIP seeks to ensure that all military
    personnel and veterans with brain injury receive brain injury-specific
    evaluation, treatment and follow-up. Over time, the research conducted
    by the DVHIP has come to define optimal care for military personnel and
    veterans with brain injuries. A multi-center clinical care and clinical
    research program, the program's motto is ``working for a cure.''
        The DVHIP has been proactive since its inception, developing
    numerous innovative programs that enable patients to have a variety of
    treatment options at each site. Clinical care and research is currently
    undertaken at seven DOD and DVA sites and one civilian treatment
    site,\4\ allowing single and multi-center trials to be conducted
    informing future clinical care and treatment strategies. In addition to
    providing treatment, rehabilitation and case management at each of the
    8 primary DVHIP traumatic brain injury (TBI) centers, the DVHIP
    includes a regional network of additional secondary veterans hospitals
    capable of providing TBI rehabilitation, and linked to the primary lead
    centers for training, referrals and consultation. This is coordinated
    by a dedicated central DVA TBI coordinator and includes an active TBI
    case manager training program.
    ---------------------------------------------------------------------------
        \4\ Walter Reed Army Medical Center, Washington, DC; James A. Haley
    Veterans Hospital, Tampa, FL; Naval Medical Center San Diego, San
    Diego, CA; Minneapolis Veterans Affairs Medical Center, Minneapolis,
    MN; Veterans Affairs Palo Alto Health Care System, Palo Alto, CA;
    Virginia Neurocare, Inc., Charlottesville, VA; Hunter McGuire Veterans
    Affairs Medical Center, Richmond, VA; Wilford Hall Medical Center,
    Lackland Air Force Base, TX.
    ---------------------------------------------------------------------------
        The DVHIP is a model program of efficient and effective
    collaboration between DOD and DVA.

    DVHIP Stands Ready to Treat Troops and Veterans Sustaining Brain
            Injuries
        Head injury is a leading combat concern in modern warfare.
    Neurotrauma (traumatic brain and spinal cord injuries) accounts for
    almost 25 percent of combat casualties. In addition, secondary brain
    injuries--resulting from stroke, cerebral ischemia, seizures, ionizing
    radiation, low blood pressure due to loss of blood volume, nerve
    agents, cyanide, toxic concentrations of oxygen, neurotoxicity due to
    central nervous system (CNS) malaria or treatment with antimalaria
    agents, and other CNS traumas, have a significant impact on the health
    and readiness of military personnel. Many of the currently feared
    terrorist threats would involve secondary brain injuries, particularly
    those involving chemical or biological neurological insults.
        The DVHIP sites have provided clinical care for over 40 casualties
    from the War on Terrorism to date. Thorough evaluation, referral for
    appropriate clinical supports, prompt discharge to home or military
    unit, and focus on returning service members to active duty have been
    the primary goals of the clinical care provided to these war fighters.
    Additional service members have been identified who were promptly
    discharged back to their units. These individuals will be actively
    followed to ensure that they receive specialized clinical care and
    follow-up as needed.
        The DVHIP is prepared to provide a full continuum of care for
    military personnel injured during any and all future hostilities.
    Examples of Military Personnel Injured, Treated and Returning to Work
        The following are examples of injured active duty military
    personnel who recently received care provided by the DVHIP:
      --On April 11, 2003, President Bush visited soldiers being treated at
            Walter Reed Army Medical Center (WRAMC) who were injured during
            Operation Iraqi Freedom. At least 2 patients were under the
            care of DVHIP staff.
      --On January 16, 2003, President Bush visited WRAMC and saw five
            soldiers who had been injured during Operation Enduring Freedom
            in Afghanistan, one of whom sustained a brain injury along with
            a fractured skull and other broken bones. The Washington Post
            reported on the President's visit and noted that some 200
            troops have been injured in Afghanistan. The soldier with the
            brain injury was treated by DVHIP staff.
      --Another soldier treated at WRAMC was featured on the front page of
            WRAMC's publication Stripe, on January 17, 2003. A photo showed
            First Sgt. Colin Robert Rich, A Company, 1st Battalion 504th
            Parachute Infantry Regiment, receiving a visit from Secretary
            of the Army Thomas E. White. Sgt. Rich had been shot in the
            head on December 28, 2002 while serving in Afghanistan. Stripe
            reported that Sgt. Rich explained to the Secretary that the
            round went through his Kevlar helmet, ``which decelerated it
            enough that it didn't blow my head up. It ricocheted and it did
            shatter the skull.'' Rich added, `` `Love your Kevlar', sir,
            that's my motto.'' Rich received initial acute care at a
            hospital in Germany within 15 hours of being shot and arrived
            at WRAMC on January 4 where he was cared for by DVHIP staff
            before being discharged home on January 16, 2002.
      --In June of 2002, a 32 year old female Air Force Tech Sgt. customer
            service and unit deployment manager fell asleep while driving
            and rear-ended a stationary 18-wheeler at highway speed. She
            sustained a severe brain injury and remained in a coma for 7
            days at Memorial Hermann Hospital in Houston, Texas. She was
            transferred to the Veterans Affairs Palo Alto Health Care
            System for inpatient rehabilitation by the DVHIP on July 11,
            2002. Her admission evaluation revealed multiple neurological,
            physical and cognitive symptoms.\5\ By August 13, 2002 she was
            discharged with improved neurological, physical and cognitive
            abilities and returned home to San Antonio with her husband and
            two young children. She received outpatient therapy at Warm
            Springs Rehabilitation Hospital in San Antonio through the end
            of the year. On November 20, 2002 she was evaluated by the
            medical board at Wilford Hall Medical Center (WHMC) and showed
            mild residual symptoms.\6\ The board recommended trial of duty,
            initially half days with close supervision. She was evaluated
            six months post injury by DVHIP staff at WHMC on February 5,
            2003 and underwent a driving re-evaluation on February 7, with
            full driving privileges recommended. She began her trial of
            duty on February 11, 2003 and anticipates going to the NCO
            academy if her recovery continues as anticipated.
    ---------------------------------------------------------------------------
        \5\ Her symptoms included mild dizziness, headaches, continued
    diminished rapid toe and finger movements on the right, abnormal gait
    but walking unassisted, difficulties with fluency, naming, reading and
    word-finding difficulties. Greatest cognitive impairments continued in
    the areas of memory and problem solving--modified independent level of
    function in bathing and dressing due to wearing a brace for the
    vertebral fracture. Independent in all other area of basic self-care.
        \6\ Improved speech, persistent mild facial numbness, mild
    disequilibrium without vertigo, walking independently, continued
    weakness in verbal memory but effective use of compensatory techniques;
    able to care for 4 year-old and 10-month old children at home.
    ---------------------------------------------------------------------------
      --Sgt. MF, a 39 year old Army Recruiter was involved in a motorcycle
            accident in July 2002, resulting in a traumatic brain injury.
            His initial evaluations showed a very serious brain injury to
            the right and left sides of the brain with a sub-dural hematoma
            and massive swelling. He underwent major surgery to remove part
            of the bleed and resulting damage to the right side of the
            brain. He received his acute care in Louisville, Kentucky, and
            was subsequently transferred to McGuire Veterans Hospital in
            Richmond, Virginia, for post-acute rehabilitation and then to
            Virginia NeuroCare (VNC) in October 2002 for community re-entry
            rehabilitation. He was discharged to the Medical Holding
            Company Unit at his Army station of origin on March 8, 2003. MF
            stated that he was very satisfied with his care throughout his
            entire recovery and rehabilitation. He stated that the DVHIP
            staff at the Richmond VA and Virginia NeuroCare took a one-on-
            one interest in him and he was pleased with his rehabilitation
            experience.
        At VNC, Sgt. MF was particularly appreciative of the opportunity to
    live independently in a transitional apartment. He reported that the
    therapy program was good, and he appreciated the fact that the program
    was tailored to individual needs. His volunteer placement at the local
    Army Recruiting Station during the final phase of his rehabilitation at
    VNC was a positive experience that led him to believe he would get his
    life back.
        These are just a few examples of what DVHIP does for hundreds of
    military personnel each year--from being ready to care for injured
    troops in the acute care setting to neuro-rehabilitation involving the
    entire patient to full community integration.
    DVHIP Support for Families after Brain Injury
        Every military commander and soldier knows the importance of taking
    care of their families so that they may focus on performing their
    critical duties. This is especially important in times of conflict, as
    demonstrated during Operation Iraqi Freedom. When soldiers sustain
    brain injuries in conflict, taking care of families is even more
    important. This is because the impact of brain injury on the family is
    particularly traumatic, in that not only life and death are at stake,
    but there are also significant disruptions to family systems for months
    or years thereafter as the rehabilitation and recovery process ensues.
        On May 3, 2003, Deputy Commander Lt. General Doug Brown of Special
    Operations had the opportunity to observe first hand the support
    services provided to families of our soldiers and veterans when he was
    visiting a soldier undergoing rehabilitation at Tampa VAMC for a brain
    injury from shrapnel sustained during Operation Iraqi Freedom. General
    Brown participated in the program's family support group and listened
    to the stories of the families and survivors. General Brown expressed
    his appreciation for the treatment and services offered and the
    importance and usefulness of the family support group.
        Support groups have been provided by the DVHIP since the program's
    inception in 1992. Family support groups provide a great deal of
    support, education, and information to families. The family support
    program at the Tampa VA also holds bi-annual reunions in which former
    patients and families come from around the country.

    Educating Care Providers
        On April 30, and May 1, 2003, DVHIP and the WRAMC Department of
    Psychology, Neuropsychology Postdoctoral Fellowship held the first
    joint sponsored brain injury conference, entitled ``Innovative Concepts
    In Traumatic Brain Injury: Neurobiological and Neurobehavioral
    Aspects.'' The presenters, David A. Hovda, Ph.D. from UCLA and Jeffrey
    T. Barth, Ph.D. from UVA are both internationally recognized
    scientists-practitioners in the area of brain injury. The conference
    targeted both experienced health-care professionals and postgraduate
    trainees and residents the areas of neurology, neuropsychology,
    neurosurgery, psychiatry, and physical medicine and rehabilitation, as
    well as other professionals with an interest in learning about the
    neurobiological and neurobehavioral aspects of traumatic brain injury.
    With this audience in mind the conference presented a balance of both
    an overview of the basics of the biomechanical aspects of TBI as well
    as cutting edge research. The two-day conference was attended by over
    70 professionals and trainees from the DOD and VA throughout the
    National Capital Area and a story on the conference appeared in the May
    2, 2003 edition of Stripe.
        Education of corpsmen and other military medical providers on
    concussion care continues to be one of the primary objectives at the
    DVHIP at Camp Pendleton. Additionally, standardized educational
    programs are being developed this year by the DVHIP educational core in
    order to reach a greater number of medical providers. DVHIP plans to
    make these educational materials available on its website to enhance
    this outreach and provide information to providers in austere locations
    where travel for on-site training would not be possible.

    Additional DVHIP Accomplishments and Ongoing Research Initiatives
        Provided successful rehabilitation and return to work and community
    re-entry for active duty military personnel and veterans.
        Established the War on Terrorism Brain Injury Registry to identify
    individuals with brain injury and examine clinically relevant issues in
    the management of brain injury sustained in theatre.
        Ongoing studies are being conducted with Army paratroopers and
    cadets and U.S. Marines at Fort Bragg, West Point, and Camp Pendleton.
    These studies are investigating brief evaluation instruments for use on
    the battlefield to determine which injured service members require
    immediate treatment and which can return to duty. The goal of these
    studies is to preserve our nation's fighting strength while conserving
    medical resources for those injured and requiring treatment.
        Completed enrolling patients in a research protocol on functional
    rehabilitation versus cognitive rehabilitation for severe brain injury.
        A randomized controlled study of sertraline for post concussive
    syndrome is being carried out in all DVHIP military and VA sites.
        Started new randomized controlled trial of valproate for brain
    injury related agitation at James A. Haley Veterans Hospital, Tampa,
    Florida.
        A new DVHIP website is currently under construction. The website
    will provide information to individuals with brain injury, their
    families and caregivers, as well as to clinicians, researchers and the
    general public.
    Fiscal year 2004 Goals
        Expand clinical capacity to meet the need to care for an increasing
    number of injured military personnel and veterans.
        Improve rehabilitation and treatment program for active duty
    service members with mild cognitive impairment following possible
    chemical or biological exposure.
        Establish a multi-center trial to provide the first evidence on the
    effectiveness of cognitive rehabilitation and stimulant medication
    early in recovery from severe brain injury.
        Conduct the study of enhanced protection from parachute injury by
    field testing approved novel helmet configurations at Fort Bragg.
        Develop return to duty guidelines through analysis of data
    collected in the West Point sports concussion study and the Fort Bragg
    concussion study.
        Examine biomarkers in mild brain injury and injury recovery in
    collaboration with Ron Hayes, Ph.D. at the Evelyn F. and William L.
    McKnight Brain Institute at the University of Florida.
        Examine the utility of mobile transcranial Doppler ultrasonography
    to identify cerebral blood flow alterations in mild brain injury and
    recovery patterns.
        Report to the U.S. Army the findings from the War on Terrorism
    Brain Injury Registry regarding incidence of closed head injury and the
    impact of early wound closure in penetrating brain injury.
        Extend outcomes research through the evaluation of long-term work
    and duty status in DVHIP rehabilitation trial participants.
        Disseminate evidence based guidelines on pharmacological management
    of neurobehavioral consequences of brain injury.
        Expand the DVHIP Registry to include patients from additional DVA
    and DOD medical facilities. Broaden the spectrum of care for military
    personnel and veterans who have sustained brain injuries by using the
    DVHIP Registry to identify individuals in need of additional treatment
    and support.
        Expand the content and services of the DVBIC website. Future
    website applications will include enhanced educational materials and
    the capability to make referrals and gain access to care.

    Conclusion
        As a part of the military health program, the DVHIP is in a unique
    position to help prevent, treat, and provide education regarding brain
    injury and to lead efforts to better the lives of active duty and
    retired military personnel affected by brain injury. The DVHIP stands
    ready to assist in the care of troops injured in any and all potential
    hostilities.
        I respectfully urge your support for $5 million for the DVHIP in
    the fiscal year 2004 Defense Appropriations bill in the DOD Health
    Affairs budget under Operation and Maintenance to continue this
    important program.

        Senator Stevens. Thank you very much for appearing again.
    We appreciate your concern.
        Mr. Foil. Always a pleasure to be here, sir.
        Senator Stevens. We will do our best.
        Next, Captain Marshall Hanson, U.S. Naval Reserve, Acting
    Chair of Associations for America's Defense. Good morning, sir.

    STATEMENT OF CAPTAIN MARSHALL HANSON, USNR (RETIRED),
                ACTING CHAIR, ASSOCIATIONS FOR AMERICA'S
                DEFENSE

        Captain Hanson. Good morning, Mr. Chairman. The
    Associations for America's Defense (A4AD) thanks you for the
    opportunity to testify today.
        A4AD first met in March of 2002 because it felt that
    certain defense issues were not being addressed in the MSO
    community. At the initial meeting were Enlisted Association of
    the National Guard of the United States (EANGUS), Marine Corps
    Reserve Officer's Association (MCROA), Naval Reserve
    Association (NRA), Naval Enlisted Reserve Association (NERA),
    National Association of Uniformed Services (NAUS), The Retired
    Enlisted Association (TREA), Veterans of Foreign Wars (VFW),
    and the Center for Strategic Policy. Military Order of World
    Wars (MOWW), the Navy League, and ROA have since joined.
    Collectively we represent over 2.5 million members.
        A4AD looks at national defense, equipment, force structure,
    funding, and policy issues. We are submitting what we feel are
    the top equipment requirements for the active and Reserve Armed
    Forces in our written statement.
        In the President's budget, DOD has made clear its intent to
    consolidate all pay and operations and maintenance (O&M)
    accounts into one appropriation per service. A4AD strongly
    opposes the proposed consolidation. While we support seeking
    efficiencies, we view the proposed business consolidation as
    ill-conceived and as an attempt to reduce congressional
    oversight.
        Further, the Defense Transformation for the 21st Century
    Act of 2003 recommends amending Title 10 to allow the Secretary
    of Defense (SECDEF) to transfer 2\1/2\ percent of appropriated
    funds for military functions. A4AD is opposed to this degree of
    authority. Two-and-a-half percent is too high a sum of money
    and allows a high risk that items authorized by Congress could
    be stripped of funding to support a DOD project viewed as
    underfunded.
        We further disagree with an increase of the $10 million
    limit to $20 million to allow reprogramming of acquisition
    funds.
        The United States is still at war, as evidenced by this
    week's bombing in Riyadh. While Secretary of Defense Rumsfeld
    claims that there are no plans for reduction, subtle pressures
    are to be found encouraging personnel cuts. Defense planners
    within each service see the writing on the wall with money
    being moved by DOD from personnel to research and weapons
    systems and they are going to preemptively recommend select
    personnel cuts to save portions of their programs starting in
    fiscal year 2005 and 2006.
        It should be remembered that it is a mixture of legacy
    forces and 21st century technology that has brought a swift
    victory against Saddam. The presence of troops on the ground is
    enabling us to capture members of the Iraqi regime. While the
    vision of joystick warfare, with operators removed from the
    battle site, is a subject of magazine articles, it is the blood
    and sweat of our young men and women who capture and win the
    battlefield.
        The Senate authorization has agreed to the President's
    fiscal year 2004 numbers. The House has included increases.
    A4AD supports full funding for end strengths proposed by the
    House. We also solicit your input and backing for maintaining
    or increasing end strengths in future budgets.
        A core of military and veterans associations are now
    looking beyond just personnel matters to the broader issues of
    national defense. As a group, we will continue to meet in the
    future and we hope to provide your committee with our inputs.
        Thank you for your ongoing support for the Nation, the
    armed services, and the fine young men and women who defend our
    country. I stand by for questions.
        Senator Stevens. I do not have any questions. Thank you
    very much for presenting your statement. We appreciate your
    comments and will do our very best to follow through on them.
    We appreciate your concern.
        Captain Hanson. Thank you.
        [The statement follows:]

                 Prepared Statement of Captain Marshall Hanson

                                  INTRODUCTION

        Mister Chairman and distinguished members of the Committee, The
    Associations for America's Defense (A4AD) are very grateful for the
    invitation to testify before you about our views and suggestions
    concerning current and future issues facing the defense appropriations.
        Founded in 2002, the Association for America's Defense is a
    recently formed adhoc group of Military and Veteran Associations that
    have concerns about National Security issues that are not normally
    addressed by The Military Coalition, and the National Military Veterans
    Alliance. The participants are members from each. Among the issues that
    are addressed are equipment, end strength, force structure, and defense
    policy. Collectively, we represent about 2.5 million members.
      --Enlisted National Guard Association of the United States
      --Marine Corps Reserve Association
      --Military Order of World Wars
      --National Association for Uniformed Services
      --Naval Enlisted Reserve Association
      --Naval Reserve Association
      --Navy League of the United States
      --Reserve Officers Association
      --The Retired Enlisted Association
      --Veterans of Foreign Wars
        Collectively, the preceding organizations have over two and a half
    million members who are serving our nation, or who have done so in the
    past. The number of supporters expands to beyond five million when you
    include family members and friends of the military.
        A4AD, also, cooperatively works with other associations, who
    provide input while not including their association name to the
    membership roster.

                    CURRENT AND FUTURE ISSUES FACING DEFENSE

        The Associations for America's Defense would like to thank this
    Committee for the stewardship that it has demonstrated on issues of
    Defense. Its pro-defense and non-partisan leadership sets the example.
        In keeping with this, A4AD would like to submit what its membership
    feel are the top equipment requirements for the Armed Forces. Over the
    last six months, A4AD has compiled this list to provide the committee
    with a consolidated listing which does not favor a particular service
    and is a compilation from numerous sources. Both Active and Reserve
    requirements are provided for the major four of the uniformed services.
    The services are not listed in priority order.
    Top Equipment Requirements:
                Air Force Active:
        F/A-22's
        Tanker Modernization
        Space-Based Infrared System SBIRS
                Air Force Reserve:
        C-17's (replaces aging C-141)
        F-16 Upgrades; sensor, targeting pods, displays
        A-10 Targeting Pods
        C-40's Medivac (replaces aging C-9A)
                Air Guard:
        C-17's
        KC-135 Re-engine
        Litening II targeting pods
                Army Active:
        Recapitalize The M1A1 & M2 force
        AH-64 and CH-47 Aviation Upgrades
        Objective Force Future Combat Systems
                Army Reserve:
        Light Medium Tactical Vehicles (LMTV)
        Medium Tactical Vehicles (MTV)
        High Mobility Multi-Purpose Wheeled Vehicle (HMMWV)
        IHFR Radio
                Army Guard:
        UH-60 Black Hawks
        AH-64 Apaches
                Active Marine Corps:
        JSF Joint Strike Fighter
        V-22 Osprey Program
        AAAV Program
                Reserve Marine Corps (and Active):
        F/A-18 ECP-583 Upgrade
        CH-53E HNVS ``B'' Kits (Forward Looking Infrared)
        Initial Issue equipment
                Active Navy:
        Littoral Combat Ship
        F/A-18 E/F Procurement
        DD(X)
                Naval Reserve:
        C-40A's Airlift Aircraft (replace aging C-9B)
        LITTORAL SURVEILLANCE SYSTEM, LSS
        F/A-18 ECP-560 Upgrades
        Language delaying decommissioning of Navy's Coastal Patrol Craft
    (PCs) and Aviation Squadrons
        Equipment requirements on the above equipment list were purposely
    broken out by Active and Reserve requirements.
    Maintaining the Reserve Equipment List
        Issue.--The Active Duty leadership has fallen short of fulfilling
    the Congressional mandate of responsibility for funding Reserve as well
    as Active Duty equipment through budgetary planning. The active
    solution seems to be suggesting that Reserve equipment should be
    returned to the Active Duty. This would be a mistake.
        Position.--The overwhelming majority of Reserve and Guard members
    join the RC to have hands-on experience with equipment. The training
    and personnel readiness of Guard and Reserve members depends on
    constant hands-on equipment exposure. Historical records show that
    Guard and Reserve units maintain hardware and equipment at or higher
    than average material readiness and often have better training
    readiness.
        In Operation Iraqi Freedom, Reserve and Guard units have proven
    their readiness. Current and future war fighting requirements will need
    these highly qualified units when the Combatant Commanders require
    fully ready units. The personnel readiness, retention, and training of
    Reserve and Guard members will depend on them having Reserve equipment
    that they can utilize, maintain, train on, and deploy with when called
    upon.
        Depending on Active Component hardware has never been successful
    for many functional reasons. History shows that this can only be
    accomplished through Reserve and Guard equipment, since the training
    cycles of Active Components are rarely, if ever, synchronized with the
    training or exercise times of Guard and Reserve units. The A4AD
    recommends strengthening the appropriations for Reserve and Guard
    equipment in order to maintain highly qualified trained Reserve and
    Guard personnel.
        We ask this committee to provide appropriations against unfunded
    equipment requirements. To appropriate funds to Reserve equipment would
    help emphasize to the Active Duty that it is exploring dead-ends by
    suggesting the transfer of Reserve equipment away from the Reservists.

                Not Combining Active and Reserve Appropriations:

        Issue.--The fiscal year 2004 Defense budget request makes it clear
    that OSD intends to consolidate all pay and O&M accounts into one
    appropriation per service. These consolidations would require various
    legislative changes before they could become law. The rationale for the
    consolidations is to provide greater flexibility for the Active chiefs
    to move monies from the Reserve and Guard pay accounts to fund Active
    component pay and O&M shortfalls. Managing fewer appropriations would
    also make managing pay and O&M easier.
        Position.--The Associations for America's Defense strongly opposes
    the proposed consolidation of all Guard, Reserve and Active pay into
    one service pay appropriation. We similarly oppose the proposed
    consolidation of all Guard, Reserve and Active operations and
    maintenance accounts into one service O&M appropriation. While we
    support seeking efficiencies wherever possible, we view the proposed
    ``business'' consolidation as ill conceived, misrepresented as
    inefficient, and as an attempt to reduce Congressional oversight. We
    oppose it for a variety of other reasons, as well.
        Under current law, the Reserve chiefs are the directors for their
    respective Reserve pay and O&M appropriations. Public Law 90-168, as
    amended by the fiscal year 1997 NDAA, vested in the Reserve chiefs full
    management and control of their respective Reserve financial resources.
    Consolidating Reserve and Active pay into one appropriation would
    divest the Reserve chiefs of this authority and preclude their
    executing the programs and responsibilities, and maintaining the
    readiness mandated by Congress.
        Much of the Guard and Reserve annual training occurs during the
    fourth quarter of a fiscal year, the same time frame when the Active
    components are most likely to run short of funds and may desire to use
    Reserve pay and O&M to fund their own shortfalls. Allowing the Active
    components the ``flexibility'' to use Reserve funds whenever they need
    to pay Active component bills means that somewhere a Reserve soldier or
    sailor will not be paid, a Reserve unit will not be trained for
    mobilization, or Reservist will not receive the specialized training
    needed for promotion, and ultimately retention. The Active Component
    will have flexible funding at the cost of Reserve Readiness.

                Opposition to: Proposed Revision to authorization on
                        Appropriations Funding
        Issue.--The Defense Transformation for the 21st Century Act of 2003
    recommends under Title IV, Subtitle A, Section 411, that Section 2214
    of title 10 be amended to ``enhance General Transfer Authority and
    allow authority to SECDEF to permit the transfer of 2.5 percent of the
    total appropriations or funds appropriated to the Department of Defense
    for that fiscal year of working capital funds of DOD for military
    functions (except MILCON); increasing to five percent in times of war
    or emergency.
        Position.--A4AD is opposed to this degree of authority. Two and a
    half percent of $400 billion is $10 billion. This is the same amount
    that the Bush Administration asked for in funding, without detailing
    utilization, which Congress turned down. This is too high a sum of
    money, and permits a high risk that items authorized by Congress could
    be stripped of funding to support a DOD project viewed as under funded.
        Issue.--The Defense Transformation for the 21st Century Act of 2003
    recommends under Title IV, Subtitle A, Section 412, that Section 2214
    of title 10 be amended to permit the transfer of funds to correct
    specific acquisition.
        Position.--This requested change from a $10 million to a new $20
    million limit of reprogramming of funds provides too much
    ``flexibility'' to the Secretary of Defense, reducing Congressional
    oversight.

                Maintaining or Increasing End Strength

        Issues.--The United States is at War. While Secretary of Defense
    Rumsfeld has publicly opposed increases, and claims there are no plans
    for reduction, subtle pressures are to be found encouraging personnel
    cuts. It has been reported that Secretary of Defense Rumsfeld throttled
    down on the troop presence in Iraq, even though the commanders in the
    field wanted more. The Chairman of the Joint Chiefs of Staff, Air Force
    General Richard Myers, is already on record saying that, ``leaner
    forces contributed to tactical surprise, success in Iraq.'' The
    Presidential budget suggested an 1,100 person cut in the Navy and a
    1,900 (2.2 percent) person cut in the Naval Reserve, as a start. DoN
    planners are suggesting another 11 percent cut in the Naval Reserve for
    fiscal year 2005.
        Position.--It should be remembered that it is a mixture of legacy
    forces and 21st century technology is what brought us swift victory
    against Saddam's regime. The presence of troops on the ground is
    enabling us to capture members of the Iraqi regime. While the vision of
    a ``joy stick'' warfare, with operators removed from the battle site,
    is the subject of magazine articles; it is the blood and sweat of our
    young men and women who capture and win the battleground. We are
    decades away from bucolic warfare.
        A4AD has continuing concerns about the mismatch between reducing
    active duty and reserve force strengths and the increasing mission
    requirements. While retention remains at record highs, and military
    members seem ready and willing to make personal sacrifices on behalf of
    their country in the War on Terrorism, this luxury of manpower will not
    last. The Navy, the first service to suffer manpower cuts, set record
    deployment lengths during Iraqi Freedom. The President/DOD should not
    be even implying cuts while the U.S.A. is at war.
        A4AD believes the Administration and Congress must make it a high
    priority to maintain if not increase end strengths of already
    overworked military forces, even though DOD seems to want to work these
    forces even harder. End strengths need to be closely examined by both
    the House and Senate as a first step in addressing this situation.
        Full funding for proposed end strengths is sought by A4AD. We also
    solicit your input and support for maintaining or increasing end
    strength in future debates.

                The 4 percent solution
        Issue.--Despite increases in the Defense budget, demands will be
    outstripping the availability of dollars. As money begins to be
    reprogrammed into Research and Development, the active duty programs
    will be stressed by perceived shortfalls. Resulting covetous possession
    will distort long term planning as planners seek to preserve favorite
    programs, surrendering the vulnerable and obsolete as a means to
    maintain the ``strong''. Such acquisitiveness will stifle innovation,
    and eradicate retention.
        Position.--A4AD urges the President of the United States and
    members of Congress to continue to increase defense spending to a
    minimum of 4 percent of Gross Domestic Product. The Armed Forces are an
    instrument of National Security and Defense, and are in affect an
    insurance policy to this Country; as demonstrated by events since 9-11-
    2001. Americans should be willing to invest as much into defense as we
    do into the personal insurance policies.

                                   CONCLUSION

        A core of military and veteran associations are looking beyond
    personnel issues to the broader issues of National Defense. As a group,
    we will continue to meet in the future, and hope to provide your
    committee with our inputs.
        Thank you for your ongoing support of the Nation, the Armed
    Services, and the fine young men and women who defend our country.

        Senator Stevens. Steven Garrett, the Deputy Legislative
    Director of the Retired Enlisted Association.

    STATEMENT OF STEVEN L. GARRETT, DEPUTY LEGISLATIVE
                DIRECTOR, THE RETIRED ENLISTED ASSOCIATION

        Mr. Garrett. On behalf of The Retired Enlisted Association
    (TREA), I would like to thank the committee for allowing us to
    testify today. TREA is an association that focuses its
    attention on the issues related to senior active duty personnel
    and especially military retirees. I will focus my testimony on
    these concerns.
        Understanding the differences between the duties of the
    appropriators and the authorizers, I will do my best to stay
    within the boundaries of this committee's jurisdiction. In
    short, I will emphasize the need for funding currently
    authorized programs, areas TREA would like the committee to
    keep in mind, and finally a few extraneous issues.
        As I am sure you are aware, the 2003 National Defense
    Authorization Act (NDAA) includes the combat-related special
    compensation provision, and TREA would like to emphasize that
    this measure is a welcome step in the right direction and we
    anticipate continued progress. In the meantime, we ask for the
    proper appropriation to fund this new entitlement.
        The basic allowance for housing was also authorized an
    increase. Here again, we request that it receive the necessary
    funding from this committee.
        Thirdly, TREA would like to join Congress and the rest of
    the country in its appreciation for the sacrifices of the Guard
    and the Reserve and ask that these vital components be fully
    funded so that they will be ready to act as quickly as we call
    on them.
        A couple of issues to keep in mind. It is with great
    emphasis that TREA encourages the members of this committee to
    stay current with issues, issues of concurrent receipt,
    survivor benefit plan, and health care, with regard to further
    base realignment and closures, or BRAC. These closures have
    significant impact on the beneficiaries using Tricare that
    needs to be taken into consideration if Congress deems BRAC
    necessary. We are working these issues with the authorizing
    committee and it is our goal that they will be authorized and
    brought before your committee in the near future.
        Before closing, I would like to mention a quick concern.
    TREA is cautious of the DOD request the assume more control of
    its spending. It concerns us that this authority may come at
    the expense of personnel and retirement issues. We urge this
    committee to scrutinize this proposal with this thought in
    mind.
        In addition to the above statements, I ask that you look
    carefully at the written statements of the Military Coalition
    and the National Military Veterans Alliance. These groups
    represent veterans and retiree communities in a very positive
    manner, and as an active member of both organizations TREA
    requests that you give them close attention.
        Again, I thank the committee for the opportunity to present
    our issues and concerns and we look forward to working with you
    to improve the quality of life for veterans, retirees, and
    their families.
        [The statement follows:]

                    Prepared Statement of Steven L. Garrett

        On behalf of The Retired Enlisted Association I would like to thank
    the committee for allowing me to testify today. The Retired Enlisted
    Association is an association whose members are enlisted military
    retirees and their families.

                     HEALTH CARE FOR MILITARY BENEFICIARIES

        Today, there are approximately 8.2 million beneficiaries in the
    military health care program. Military retirees and their dependents
    make up nearly one half of that number, and over 500,000 retirees have
    lost or will lose their access to military health care as a result of
    the closure of approximately 40 percent of military treatment
    facilities. Access to affordable health care, regardless of age, status
    or location, has represented a major concern among military retirees.
        The creation of TRICARE for Life and a TRICARE Senior Pharmacy
    benefit in Public Law 106-398 was an historic triumph for Congress and
    those 1.3 million Medicare-eligible military retirees and dependents.
    While TRICARE for Life came with its own funding stream in fiscal year
    2002, authorization must be budgeted to provide for the program for
    fiscal year 2004. The Retired Enlisted Association recommends that you
    continue to improve this important program by providing the necessary
    funding. The Retired Enlisted Association also applauds your work last
    year in eliminating TRICARE co-payments for active duty family members.
    We also salute the Department of Defense for reducing active duty time
    for Reservists to 30 days for their families to be eligible for
    TRICARE.
        Although Congress enacted legislation to restore TRICARE to
    Medicare-eligible beneficiaries as a wraparound to Medicare (TRICARE
    for Life) and to improve TRICARE for active duty families, further
    improvements are still needed, especially for retired beneficiaries
    under age 65. TRICARE must be a consistent, reliable and equitable
    health care benefit for all uniformed services beneficiaries,
    regardless of age or geography.
        The fiscal year 2001 NDAA eliminated copays for active duty family
    members enrolled in Prime, and enacted TRICARE For Life (TFL) and
    TRICARE Senior Pharmacy (TSRx) for Medicare-eligibles. With TFL
    implementation complete Congress and DOD must turn their attention to
    improving serious shortcomings in healthcare benefits for TRICARE
    beneficiaries under the age of 65.
      --Low reimbursement rates are causing providers to refuse any TRICARE
            patients or reduce the number of TRICARE patients they will
            treat, limiting beneficiary access and choice. Solution:
            Increase statutory (Medicare) payment rates; require use of
            existing authority to raise TRICARE rates where necessary to
            ensure sufficient numbers of participating providers.
      --TRICARE is cumbersome to use and causes administrative hassles for
            providers and beneficiaries attempting to obtain authorization,
            expedite claim repayment, or move between regions. Solution:
            Improve TRICARE Prime enrollment procedures, portability, and
            beneficiary education. Decrease administrative burdens,
            eliminate non-availability statement requirements, streamline
            claims processing requirements with greater reliance on
            electronic claims technology, and eliminate unnecessary
            reporting requirements. Require TRICARE contractors to assist
            beneficiaries in finding TRICARE Standard providers.
      --Institute ``benefits plus benefits'' reimbursement methodology. TFL
            pays beneficiary expenses not covered by Medicare (``benefits
            plus benefits''). For TRICARE Standard beneficiaries with other
            health insurance (OHI), TRICARE seldom pays expenses not
            covered by other insurance (``benefits less benefits'').
            Solution: Restore TRICARE reimbursement policy to pay up to
            what TRICARE would have paid had there been no OHI coverage (as
            was the policy before 1993).
        Since the commencement of the first class of graduates of the
    Uniformed Services University of Health Sciences (USUHS) in 1980, over
    3,200 physicians continue to pursue careers as physicians in the Army,
    Navy, Air Force and the U.S. Public Health Service each year. The USUHS
    education process emphasizes primary care medicine and also provides
    special training in military medicine and combat stress courses not
    found in civilian medical school curricula. USUHS graduates have also
    proven themselves willing to accept operational overseas assignments
    often viewed as less than desirable by civilian medical school
    graduates.
        Both the fiscal year 1996 National Defense Appropriations Act and
    the National Defense Authorization Act prohibit the closure of USUHS.
    The Defense Authorization Act also provided a five year prohibition on
    reducing the staffing levels of USUHS below the levels established as
    of October 1, 1993. The Retired Enlisted Association urges the Congress
    to resist any efforts to circumvent the law to downscale or close the
    USUHS. The Retired Enlisted Association is convinced that the USUHS is
    an economical source of career medical leaders who serve this nation
    during peace and war and provide military health care consistency and
    stability. The Retired Enlisted Association urges the Congress to
    retain and fully fund USUHS as a continued source of career military
    physicians for the Army, Navy, Air Force and U.S. Public Health
    Service. The Retired Enlisted Association also supports the
    construction of an Academic Center to accommodate the USUHS Graduate
    School of Nursing.

                         OTHER MILITARY RETIREE ISSUES

        The Retired Enlisted Association believes strongly that quality-of-
    life issues for retired military members and families also are
    important to sustaining military readiness over the long term. If the
    Government allows retired members' quality-of-life to erode over time,
    or if the retirement promises that convinced them to serve are not
    kept, the retention rate in the current active-duty force will
    undoubtedly be affected. The old adage that you enlist a recruit, but
    you reenlist a family is truer today than ever as more career-oriented
    servicemembers are married or have dependents.
        Accordingly, The Retired Enlisted Association believes Congress and
    the Administration must place high priority on ensuring that these
    long-standing commitments are honored:
      --VA Compensation Offset to Military Retired Pay (Retired Pay
            Restoration).--Under current law, a military retiree with
            compensable VA disabilities cannot receive full military
            retirement pay and VA disability compensation. The military
            retiree's retirement pay is offset (dollar-for-dollar) by the
            amount of VA disability compensation awarded. We would like to
            thank the committee for providing funding for the authorized
            special compensation programs; however, The Retired Enlisted
            Association supports restoration of retired pay (concurrent
            receipt) for all disabled military retirees. The purposes of
            these two compensation systems are fundamentally different.
            Longevity retirement pay is designed primarily as a force
            management tool to attract large numbers of high quality
            members to serve for at least 20 years. A veteran's disability
            compensation is paid for an injury or disease incurred or
            aggravated during military service. Monetary benefits are
            related to the residual effects of the injury or disease or for
            the physical or mental pain and suffering and subsequently
            reduced employment and earnings potential. The Retired Enlisted
            Association also urges that disabled retired Reservists' and
            those retired under the early retirement authority be eligible
            for the authorized Special Compensation programs. What better
            time to authorize and fund concurrent receipt than during this
            period of War?
      --Social Security Offsets to the Survivors' Benefits Plan (SBP).--The
            Retired Enlisted Association supports amending Public Law 99-
            145 to eliminate the provision that calls for the automatic
            offset at age 62 of the military SBP with Social Security
            benefits for military survivors. Military retirees pay into
            both SBP and Social Security, and their survivors pay income
            taxes on both. The Retired Enlisted Association believes that
            military survivors should be entitled to receipt of full Social
            Security benefits which they have earned in their own right. It
            is also strongly recommended that any SBP premium increases be
            assessed on the effective date, or subsequent to, increases in
            cost of living adjustments and certainly not before the
            increase in SBP as has been done previously. In order to see
            some increases in SBP benefits, The Retired Enlisted
            Association would support a gradual improvement of survivor
            benefits from 35 percent to 55 percent over the next five-year
            period. The Retired Enlisted Association also supports
            initiatives to make the military survivors' benefits plan more
            attractive. Currently, about 75 percent of officers and 55
            percent of enlisted personnel are enrolled in the Plan.
      --Reducing the Retired Reservist age from 60 to 55.--The Retired
            Enlisted Association believes that retirement pay should be
            paid sooner as many of these retirees will not live to their
            60th birthday. Similarly, these retirees and their dependents
            should be eligible for TRICARE health care and other military
            privileges when they turn 55.
      --Military Retired Pay COLAs.--Servicemembers, current and future,
            need the leadership of this Subcommittee to ensure Congress
            remains sensitive to long-standing contracts made with
            generations of career military personnel. A major difficulty is
            the tendency of some to portray all so-called ``entitlement''
            programs, including military retirement, as a gratuitous gift
            from the taxpayer. In truth, military retired pay is earned
            deferred compensation for accepting the unique demands and
            sacrifices of decades of military service. The military
            retirement system is among the most important military career
            incentives. The Retired Enlisted Association urgently
            recommends that the Subcommittee oppose any changes to the
            military retirement system, whether prospective or retroactive,
            that would undermine readiness or violate contracts made with
            military retirees.
      --The SBP Veterans Dependency and Indemnity Compensation (DIC) Offset
            for Survivors.--Under current law, the surviving spouse of a
            retired military member who dies from a service connected
            disability and was also enrolled in SBP, the surviving spouse's
            SBP benefits are offset by the amount of DIC (currently $948
            per month). A pro-rated share of SBP premiums is refunded to
            the widow upon the member's death in a lump sum, but with no
            interest. The Retired Enlisted Association believes that SBP
            and DIC payments, like military retirement pay and disability
            compensation, are paid for different reasons. SBP is elected
            and purchased by the retiree based on his/her military career
            and is intended to provide a portion of retired pay to the
            survivor. DIC payments represent special compensation to a
            survivor whose sponsor's death was caused directly by his or
            her uniformed service. In principle, this is a government
            payment for indemnity or damages for causing the premature loss
            of life of the member, to the extent a price can be set on
            human life. These payments should be additive to any military
            or federal civilian SBP annuity purchased by the retiree. There
            are approximately 31,000 military widows/widowers affected by
            the offset under current law. Congress should repeal this
            unfair law that penalizes these military survivors.
      --Uniformed Services Former Spouses Protection Act (USFSPA).--The
            Retired Enlisted Association urges Congressional support for
            amending language to Public Law 97-252, the Uniformed Services
            Former Spouses Protection Act. This law continues to unfairly
            penalize active-duty armed forces members and military
            retirees. USFSPA has created an even larger class of victims
            than the former spouses it was designed to assist, namely
            remarried active-duty service members or military retirees and
            their new family. The Retired Enlisted Association believes
            this law should be rescinded in its entirety, but as an
            absolute minimum, the provision for a lifetime annuity to
            former spouses should be terminated upon their remarriage. This
            is consistent with most divorce decrees. Based on this current
            provision, monthly provisions for life are being granted to
            former spouses regardless of marital status, need, or child
            custodial arrangements. The time has come to cease lifetime
            annuities to former military spouses, should they remarry.
            Judicial determinations of appropriate support should be
            determined on a case-by-case basis and not be viewed as an
            ``entitlement'' by former spouses as exists under current law.
            The Retired Enlisted Association urges hearings on the USFSPA.

                                   A CONCERN

        TREA is cautious of the DOD request to assume more control of its
    spending. It concerns us that this authority may come at the expense of
    personnel and retirement issues. We urge Congress to scrutinize this
    latest proposal.

                                   CONCLUSION

        In addition to the above statements I ask that you all look
    carefully at the written statements of The Military Coalition and The
    National Military Veterans Alliance. These groups represent veterans
    and retirees communities in a very positive manner, and as an active
    member of both organizations, TREA requests that you give each close
    attention. Again, I thank the Committee for the opportunity to present
    our issues and concerns, and we look forward to working with you to
    improve the quality of life for veterans and retirees and their
    families.

        Senator Burns [presiding]. Mr. Garrett, thank you for your
    testimony. We are playing tag up here again.
        Mr. Garrett. Sure, sure.
        Senator Burns. I want to just say thank you. We enlisted
    your help a little bit with regard to people that had taken
    early retirement and some miscommunications as far as the
    benefits they receive and how they receive those, and we got
    some great information from your organization. Now we are
    pursuing making some changes in that so that people are ensured
    they get their benefits whenever they took early retirement.
        And we thank you for your testimony today.
        Mr. Garrett. Yes, sir.
        Senator Burns. Thank you very much.
        Now we call Joseph Barnes, National Executive Secretary of
    the Fleet Reserve Association. Thank you for coming today, sir,
    and let us apologize for the conditions in which you have to
    offer your testimony.

    STATEMENT OF JOSEPH L. BARNES, NATIONAL EXECUTIVE
                SECRETARY, FLEET RESERVE ASSOCIATION

        Mr. Barnes. Not a problem, Senator. Thank you very much.
    The Fleet Reserve Association (FRA) appreciates the opportunity
    to present its views on the 2004 defense budget. The
    association thanks the distinguished subcommittee for its
    leadership, support, and strong commitment to important quality
    of life programs benefiting service members, their families,
    and military retirees.
        My statement today addresses several priority issues. FRA
    recommends continued progress towards closing the military pay
    gap by 2006 and beyond by funding higher than civilian level
    pay increases. The Senate Armed Services Committee endorsed at
    least a 3.7 percent pay increase for all uniformed services
    personnel and FRA requests the appropriations necessary to
    implement this increase on January 1, 2004.
        FRA strongly recommends full funding for the Defense health
    program and adequate appropriations to revitalize the Tricare
    Standard program. The association also believes Tricare should
    be available for reservists and their families on a cost-
    sharing basis. Bob Washington, FRA's Director of Legislative
    Programs, earlier addressed other health care concerns on
    behalf of the association and the Military Coalition.
        FRA supports benchmarking the Montgomery GI Bill (MGIB)
    education benefits to the cost of an average 4-year college
    education. Noteworthy is the fact that a significant percentage
    of Navy enlisted personnel have no education benefits and they
    should be afforded an opportunity to enroll when reenlisting.
        The military survivor benefit plan provides an annuity to
    surviving spouses equal to 55 percent of covered retired pay.
    This amount is reduced to 35 percent when the beneficiary
    begins receiving social security. FRA believes that the program
    should be funded at the intended 40 percent level rather than
    at the current level, which is less than 17 percent.
        Additional issues addressed in our statement include:
    continuing support for an increase in end strengths to ease
    both operational and personnel tempos; funding for spouse
    employment opportunities, which are integral to the well-being
    and retention of service members; and supplemental impact aid
    funding for school districts with large numbers of military-
    sponsored students.
        FRA strongly supports funding to maintain the commissary
    benefit at the current level and restates its continued
    opposition to privatization. The benefit is an integral part of
    the total compensation package. In addition, limitations on
    access for Guard and Reserve personnel should be lifted due to
    the increased reliance on these service members.
        Finally, FRA advocates retention of the full final month's
    retired pay by the retiree's surviving spouse and the extension
    of the dislocation allowance to retiring service members. If
    authorized, the association asks for your support for these
    proposals, which have also been endorsed by the entire Military
    Coalition. Thank you again, Senator, and I stand ready to
    answer any questions you may have.
        [The statement follows:]

                     Prepared Statement of Joseph L. Barnes

                                  INTRODUCTION

        Mr. Chairman and other distinguished Members of the Subcommittee:
    The Fleet Reserve Association (FRA) is grateful for the opportunity to
    address the panel on military personnel programs. First, however, the
    Association extends sincere gratitude to the Subcommittee for its
    outstanding efforts these past four years in enhancing life in the
    military for the Nation's service members and their families. The
    result has been nearly miraculous. Recruiting and retention is at its
    highest since the advent of the all-volunteer force. The ``magic'' spun
    by this subcommittee has enriched quality of life for the men and women
    who serve or will serve or have retired from the Armed Forces of the
    United States.
        With 135,000 members strong, FRA presents a well-deserved salute to
    the Subcommittee for, among others, providing ``targeted'' pay
    increases for NCOs and Petty Officers in the grades of E5 thru E9 and
    funding the Tricare for Life health care program for military retirees
    65 years of age or older. The Subcommittee's commitment to service
    members, their families, and retired military veterans is unmatched.
    Thanks for doing a superb job.

                        FISCAL YEAR 2004 DEFENSE BUDGET

        FRA is acutely aware of the estimated deficits facing the United
    States in 2004 and succeeding years. Defense build-up is critical to
    this country that now plays a major role in keeping the United States,
    as well as other world nations, free from intrusion by an enemy or
    enemies. The cost of doing business defense-wise leaves little for
    societal and environmental programs.
        FRA supports a strong defense, first and ever more. However, it is
    a people-oriented organization whose mission is to provide loyalty,
    protection, and service to its members. To serve its members
    effectively, the Association has a duty to apprise Congress of the
    resolutions adopted by them in convention.
        For fiscal year 2004, FRA is seeking support from the Subcommittee
    for the issues and programs addressed in this statement. For the past
    12 months the Association, as in almost 76 of its 79 years, renewed its
    commitment to serve as the premier ``watchdog'' organization for its
    members as well as the enlisted men and women serving in the Navy,
    Marine Corps, and Coast Guard. From that group, as well as other
    sources dedicated to enhancing quality of life for the Nation's Sea
    Services personnel, FRA offers the below recommendations for
    consideration and, hopefully, the Subcommittee's endorsement.

                            QUALITY OF LIFE PROGRAMS

        The following recommendations are divided into six (6) major
    categories. They are: Pay and Allowances, health care, education,
    retirement, military construction, and other issues.
        Overworked U.S. troops will accept the strain of current
    deployments--for a while--as long as they believe their families are
    cared for back home.\1\
    ---------------------------------------------------------------------------
        \1\ Attributed to the military's top enlisted members before a
    House panel Mar 5. 2003 as reported by Navy Times, Mar 17, 2003.
    ---------------------------------------------------------------------------
    Pay and allowances
                Compensation
        Recommendation.--That Congress holds fast to its commitment of
    closing the military pay gap by 2006 through the utilization of higher-
    than-civilian-pay increases to military basic pay and not permit
    military pay to again fall behind that of the civilian community. To
    accomplish the task Congress needs to react before 2006 in repealing
    the law authorizing the capping of annual military pay increases below
    that of civilian wages. Additionally, to continue its promise to erase
    the disparity in housing allowances that cause service members to pay
    higher out-of-pocket costs to reside in the civilian community.
        Pay and allowances continue as the top retention choice of military
    personnel since the beginning of the all-volunteer force. This is
    substantiated once again in a recent survey conducted by FRA on its web
    site. More service members are married than ever before in the history
    of the Nation's military. Societal and economical customs demand higher
    incomes for military personnel, the same as for their civilian brothers
    and sisters. Congress in its wisdom has adopted higher pays for all
    uniformed members and ``targeted pays'' for both mid-grade officers and
    noncommissioned officers to meet that demand in the military. Further,
    Congress has committed itself to closing the pay gap between military
    and civilian pay levels.
        For fiscal year 2004, the basic pay increase is currently locked in
    law at 3.7 percent, 0.05 percent higher than the latest ECI figure [37
    USC, 1009(c)]. BHA (Basic Housing Allowance), also locked in law, is in
    for an increase in fiscal year 2004 of four (4) percent. However, the
    Administration's budget calls for a mix of basic pay increases
    beginning at 2 percent for personnel in the grade of E1 to a high of
    6\1/4\ percent for those in grade E9. With the exception of pay grades
    E1 and O1, all other grades are set to receive at least a 3.7 percent
    increase. FRA is delighted with the Department of Defense for
    piggybacking on the Association's 1999 Pay Study and again recommending
    ``targeted'' increases for mid-grade and senior noncommissioned and
    petty officers (NCOs/POs).
        FRA supports the Administration's recommendations on pay and
    housing allowance increases and urges the Subcommittee to appropriate
    the necessary funds to affect the authorized increases. However, if
    Congress believes a higher increase should go to E1s and O1s, the
    Association suggests no reduction in the design to target pay increases
    for NCOs and POs who, until recently, have been slighted since the
    advent of the AVF.
        FRA also urges Congress not to buy the Administration's suggestion
    to change the current Employers Cost Index (ECI) to the Consumer Price
    Index (CPI) as a measure to determine future military pay increases.
    One may recall that it was only a few years ago when the then incumbent
    Administration urged Congress to adopt the ECI. DOD noted at the time
    that the ECI was a much superior indicator in matching civilian wages
    to military pay. In the event the Administration's suggestion prevails,
    the Association requests that no funds be appropriated to support the
    administration of such a change.

                Pay Raise for USPHS and NOAA Personnel
        Recommendation.--FRA urges the funding of comparable basic pay
    raises in 2004 for Public Health Service (PHS) and National Oceanic and
    Atmospheric Administration (NOAA) Commissioned Officers.
        Both agencies are an integral part of the seven uniformed services
    and should receive the same consideration as for other commissioned
    officers in the Armed Forces. FRA is particularly concerned for
    officers in the PHS who provide health care to members of the U.S.
    Coast Guard, identical to the care provided by officers of the Armed
    Services Medical Corps to members of the Army, Navy, Marine Corps and
    Air Force.

                Reserve Compensation
        Recommendation.--Support the restoration of tax deductions for
    expenses expended by reservists in performing military training.
        With the United States resolve to maintain worldwide peace, the
    role of the reservist is more important than ever. Due to extensive
    mobilization of the reserves, some individuals/units more than once and
    for undesignated periods of time, it behooves Congress to improve
    benefits for reserves so that their numbers will meet that which the
    military services need to support the active forces. One of the
    benefits would be to allow reservists to deduct non-reimbursable
    expenses associated with performing monthly drills. It is the
    Association's fervent hope the Senate will act on the bill as soon as
    possible.

                Dislocation Allowance
        Recommendation.--Amend 37 USC, Sec. 407, to authorize the payment
    of dislocation allowances to members of the armed forces retiring or
    transferring to an inactive duty status such as the Fleet Reserve or
    Fleet Marine Reserve who perform a ``final change of station'' move.
        Moving households on government orders can be costly. Throughout a
    military career, service members endure a number of permanent changes
    of station (PCS). Often each move requires additional expenses for
    relocating to a new area far removed from the service members' current
    location.
        Dislocation allowances are authorized for military-ordered moves.
    To aid service members in defraying these additional costs, Congress in
    1955 adopted the payment of a special allowance-termed ``dislocation
    allowance''--to recognize that duty station changes and resultant
    household relocations reflect personnel management decisions of the
    armed forces and are not subject to the control of individual members.
        Odd as it may appear, service members preparing to retire from the
    Armed Services are not eligible for dislocation allowances, yet many
    are subject to the same additional expenses they experienced when
    effecting a permanent change of station during the 20 or more years of
    active duty spent earning the honor to retire. In either case, moving
    on orders to another duty station or to retire are both reflective of a
    management decision.
        FRA recommends appropriating the necessary funds to affect payments
    of this allowance.

    Health Care
                Tricare
        Recommendation.--FRA strongly recommends continuation of full
    funding for the Defense Health Program, to include military medical
    readiness, TRICARE, and the DOD peacetime health care mission.
    Additionally, FRA urges the distinguished Subcommittee to provide
    appropriations to revitalize the Tricare Standard Program and make the
    Tricare program available for reservists and families on a cost-sharing
    basis.
        Funds need to be appropriated for the Defense Health Budget to meet
    readiness needs and deliver services through both the direct care and
    purchased-care systems for all uniformed services beneficiaries,
    regardless of age, status and location. Congressional oversight of the
    Defense Health Budget is essential to avoid a return to the chronic
    under-funding of past years that led to shortfalls, shortchanging of
    the direct care system, and reliance on annual emergency supplemental
    funding requests. Even though supplemental appropriations for health
    care were not needed last year, FRA is concerned that the current
    funding level only meets the needs to maintain the status quo.
    Addressing Tricare shortfalls will require additional funding.
        Access to care is of major concern to the FRA membership.
    Beneficiaries report that some health providers in their areas are not
    willing to accept new Tricare Standard patients. The Association
    believes further distinction must be made between Tricare Standard and
    Prime in evaluating the Tricare program. Our members report increased
    problems and dissatisfaction with the Standard benefit.
        There are a number of persistent problems with Tricare Standard, a
    new name for an old program once known as CHAMPUS. First, many
    beneficiaries have difficulty in locating Health Providers who'll
    accept Tricare Standard. The paperwork is extensive and the payments
    are insufficient. In a FRA survey administered in early February 2003,
    15 of 55 service members (27 percent) attending a military course of
    instruction complained of the difficulty in obtaining health care
    providers for their family members. (The remaining 40 were enrolled in
    Tricare Prime.)
        Reservists are rightfully concerned with continuity of health care
    for their families when called to active duty. Until recently, there
    was no single coverage for reservists and no coverage for some. Now,
    reservists called to active duty in excess of 30 days may enroll their
    families in Tricare Prime and have access to either Military Treatment
    Facilities (MTF) or civilian providers. To maintain permanence of
    health care, many reservists and families would just as soon keep their
    current health care coverage. To improve readiness in the reserves,
    increase morale, and ease concern for families when reservists are
    mobilized, Congress should direct and fund DOD to implement a program
    whereby the reservists' current health insurance premiums are paid by
    Tricare.

    Education
                MGIB
        Recommendation.--FRA continues to support increased benefits for
    participation in the Montgomery GI Bill (MGIB) and to authorize certain
    service members the opportunity to enroll or reenroll in the MGIB.
        FRA advocates the creation of a benchmark for the MGIB so that its
    benefits will keep pace with the cost of an average four year college
    education. Even with the forthcoming October 1 increases in basic
    rates, a MGIB student looking forward to completing the 2003-2004
    academic year will have to pay out-of-pocket about one-third the cost
    of a four year course of education in a public college or university.
    If married, the shortfall in benefits will place a heavier financial
    burden on the student.
        The Reserve MGIB has failed to maintain a creditable rate of
    benefits with those authorized in Title 38, Chapter 30. Other than
    cost-of-living increases, only two improvements in benefits have been
    legislated since 1985. In that year MGIB rates were established at 47
    percent of active duty benefits. This October 1, the rate will fall to
    27 percent of the Chapter 30 benefits. In support of Guard and Reserve
    personnel, being mobilized in increasing numbers, FRA seeks the support
    of Congress is enhancing the MGIB rates for those who choose to
    participate in the program.
        Approximately 40 percent of the Navy's enlisted force has no
    educational benefits. It seems ironic that an individual enlisting in
    the military services is eligible to enroll in the MGIB while another
    seeking to reenlist does not have the opportunity. Allowing service-
    members to enroll in the MGIB upon reenlisting in the Armed Forces
    should be the norm.

    Retirement
                Survivor Benefit Plan (SBP)
        Recommendation.--To adopt and fund Senate Bill, S. 451, to amend
    the Survivor Benefit Plan (SBP) [10 USC, 1451(a)] to authorize the
    repeal of the post-62 annuity over a period of 5 years [35 percent to
    40 percent in October 2004, to 45 percent in October 2005, to 50
    percent in October 2006] and to 55 percent in October 2007. Further to
    change the date 2008 to 2004 [10 USC, 1452(l)] at which time the
    retiree, attaining the age of 70 years who has paid 30 years of SBP
    premiums, will be fully insured for the covered amount without further
    payments to the Plan.
        The Survivor Benefit Plan (SBP) provides an annuity to surviving
    spouses equal to 55 percent of the deceased member's covered military
    retirement pay with a reduction to 35 percent when the surviving spouse
    attains the age of 62. SBP also offers annuities to spouses and
    children, children only, former spouses, former spouses and children,
    and insurable interests.
        Two-thirds of the total military retired community is in the
    enlisted grades, most are earning retirement pay in the E6 and E7 pay
    grades. At the time of their retirement, few are financially able to
    afford SBP coverage at the full amount of their retirement pay. On
    retirement, the typical service member may lose nearly 70 percent of
    the income received while on active duty. As a result, they opt for the
    basic amount that provides a miniscule annuity for a surviving spouse.
        The Plan is perplexing adding to the confusion of what constitutes
    a ``social security offset'' when the Social Security Administration
    (SSA) has nothing to do with computing the SBP annuity? And the
    question: Why is there a sharp annuity loss suffered at age 62 for some
    and not for others? Why isn't Congress adhering to its original intent
    to cover 40 percent of the costs of the program? Why, if the SBP is
    patterned after the Federal Employees' plans, is FERS subsidized at 33
    percent and 48 percent for CSRS? Additionally, FERS annuitants receive
    50 percent of the employees' retired pay and CSRS annuitants 55 percent
    with no reduction in the annuity at age 62.
        Mr. Chairman. Let's fix the program before our retired service
    members are paying 100 percent for participating in a program that was
    adopted to replace a previous plan where the participants were required
    to carry 100 percent of the costs.

    Authorize Surviving Spouses a Full Month's Payment of Retired Pay for
            Month in Which Retirees Die
        Recommendation.--In consideration of service to the Nation and the
    trauma surrounding the death of a retired service member, the surviving
    spouse would be entitled to receive and retain the final retired pay
    check/deposit covering any month in which the member was alive for any
    24-hour period.
        Current regulations require survivors of deceased military retirees
    to return any retirement payments received for the month in which the
    retiree dies. Upon the demise of a retired service member entitled to
    retired pay, the surviving spouse or beneficiary is to notify the
    Defense Department of the death. The Department's financial arm then
    stops payment on the retirement check or electronic deposit and
    subsequently recalculates the payment to cover the actual days in the
    month the retiree was alive. In other cases where the death is not
    reported in a timely manner, any payments made for the days the retiree
    was not alive will be recouped.
        Retirement and its related activities are most agonizing if not an
    arduous experience for many military retirees and families
    transitioning to an unfamiliar civilian-lifestyle. For the average
    retiree, and most likely the one who is enlisted, will suddenly
    discover finances will be a principal concern. On leaving active duty,
    the retiree's income will drop 60-to-70 percent of what was earned
    while in uniform. The enlisted retiree, unlike his or her active duty
    counterpart, will receive no death gratuity and, in the case of many of
    the older enlisted retirees, would not have had the financial resources
    to purchase adequate insurance to provide a financial cushion for their
    surviving spouses.
        Death is a most traumatic experience for survivors. It is a most
    painful time when the surviving spouse must accept the task of
    arranging for the deceased members' funeral services. The additional
    cost involved constitutes a major output of scarce family dollars only
    amplified by the loss of retirement income when needed the most. A
    final month's retirement payment will go far in helping to soothe the
    strain on the survivor's financial obligations.
        To aid in reducing the cost of the proposal, survivor benefit
    payments may be forfeited for the month in which the retiree dies and
    the survivor receives the retiree's final month's check. In the event
    the retiree's final month's retirement check is less than the SBP
    annuity, the survivor would receive the one most favorable.

    Military Construction
                Housing
        Recommendation.--To make every effort to eliminate substandard
    family and bachelor housing, now referred to as inadequate by DOD, and
    expedite the construction of new housing to accommodate the Nation's
    service members and families. Also, to provide enhanced child care
    programs to relieve the tension of spouses or working spouses with
    children whose service member husbands or wives are deployed.
        In a recent appearance before the House Appropriations Subcommittee
    on Military Construction, the Armed Services four top enlisted chiefs
    voiced concern for the quality and availability of housing and child
    care. Both are ever-most in the minds of service members deployed or
    serving outside the United States without their families.
        Although there is a threat of base closures in the immediate
    future, apparently the larger military installations, such as Norfolk
    Naval Bases, Camp Pendleton, etc., are not at risk. There is no reason
    not to authorize and appropriate additional funding for both housing
    and child care.
        Both the Navy and Marine Corps have unfunded housing priorities.
    For example, the Navy has reduced its fiscal year 2004 Family Housing
    request by 17 percent and the Corps needs $165 million of which $63
    million is for family housing. This raises the question of whether the
    Navy and Marine Corps will meet their 2007 target of ridding both
    services of ``inadequate'' housing. Congress is encouraged to purge the
    Navy and Marine Corps of ``substandard housing'' (the name it was
    before DOD changed it to ``inadequate'') by authorizing and
    appropriating additional funding to accomplish the task.
        At the same time FRA seeks increased funds for family housing it
    cannot ignore the need for bachelor quarters. The Association endorses
    the requests of the Navy's and Marine Corps' top enlisted chiefs in
    their statements of February 26, 2003 before the House Appropriations
    Subcommittee on Military Construction. (Available upon request to FRA
    at 703-683-1400 or fra@fra.org.)

                Facilities
        Recommendation.--To provide for additional funding to accommodate
    the construction and modernization of installation facilities at Naval
    and Marine Corps bases, to include physical fitness and MWR centers.
        The value of having adequate facilities cannot be over-stated. The
    backlog of maintenance to many of the work-stations and other buildings
    continues to grow along side the need to replace those structures that
    are beyond repair. It's shameful as well as wasteful to require our
    service members to labor in dilapidated buildings on weapons systems
    and other equipment costing the taxpayers millions of dollars. Again,
    the Navy and Marine Corps have priorities that should be funded so more
    secure, cleaner, and healthier work places are available for Sailors
    and Marines enabling them to perform at their best.
        Additionally, community support facilities require congressional
    attention. Physical fitness centers are much in demand. Not only are
    they places to relieve tension but to build body strength and improve
    health, both important to maintaining physical readiness.

    Other Issues
                End Strengths
        Recommendation.--FRA believes this honorable Subcommittee is aware
    of the need for greater strength authorizations and funding to ease
    both operational and personnel tempos imposed upon a force not
    sufficient in numbers to sustain the current demands for manning
    operational commitments. Although Congress, under the provisions of the
    fiscal year 2003 NDAA, did allow and fund a small increase in the
    active component strength of the Marine Corps, it only authorized
    increases for the Navy, if needed, but without funding. FRA recommends
    Congress give greater credence to its instincts and authorize
    appropriations for additional manpower.
        Since 1995, when it was obvious the downsizing of strengths in the
    Armed Forces was causing increased operational and personnel tempos,
    FRA has annually requested increases in military manpower. It will do
    so again this session of Congress.
        In an appearance before the Senate Armed Services Committee last
    year, the Chairman, Joint Chiefs of Staff, avowed the Armed Forces will
    defeat terrorism ``no matter how long it takes or where it takes us.''
    On January 31, 2003, The Washington Times reported Defense Secretary
    Rumsfeld as alerting his commanders ``that troops will deploy for
    longer periods because of the war on terrorism and potential conflict
    with Iraq.'' Missing from both statements was the promise to succeed
    only if the Forces had adequate manpower to accomplish the mission.
        Previously, a Navy Times editorial of December 12, 2001, warned not
    to overextend the military: ``Time and again, America's armed forces
    have shown they'll do what it takes to serve their country. But history
    offers a warning: Work them too hard, keep them away from home too
    long, overlook their welfare and eventually they will walk.''
    Additionally, The Washington Times of January 31, 2003, noted that a
    retired Navy Admiral commenting on high military deployment rates
    stated, . . . ``the chances of keeping a marriage together for 20 years
    at the current op tempo is approaching zero.''
        These warnings are not to be ignored. It doesn't take a rocket
    scientist to resolve the question of how the Department of Defense
    (DOD) can justify no need of increased manpower when the strength of
    the Forces has been reduced by one-third while the optemp has
    accelerated dramatically. Operational levels involving uniformed
    members of the Army, Navy, Marine Corps, Air Force, and Coast Guard
    have escalated significantly over the past decade to a point where the
    United States does not have adequate numbers of military personnel to
    fully accommodate the many commitments ordered by the Department of
    Defense and area commanders.
        Early in 2002, it was reported the Army had told the Pentagon it
    needs 20,000 to 40,000 additional troops in fiscal year 2003, the Air
    Force 8,000 to 10,000, and the Navy and Marine Corps an additional
    3,000 each. However, the Secretary of Defense was not favorable to an
    increase in manpower. Congress, in its decision, authorized an increase
    but because of a shortage of funds provided no money to pay the
    additional manpower.
        There are numerous defense officials, both civilian and military,
    complaining uniformed personnel are doing more with less, over
    deployed, overworked, and stretched too thin. However, our service
    members are serving magnificently, but the question is: For how long
    and if they have to face a determined foe? Operation Iraqi Freedom is
    no guideline to justify further reductions in military manpower.

                Spousal Employment
        Recommendation.----The Association urges Congress to continue its
    support of the military's effort to affect a viable spousal employment
    program and to authorize sufficient funds to assure the program's
    success.
        Today's all-volunteer environment requires the services to consider
    the whole family. It is no longer adequate to focus only on the morale
    and financial well-being of the member. Now, his or her family must be
    considered, too. One of the major considerations is spousal employment
    which could be a stepping-stone to retention of the service member--a
    key participant in the defense of this Nation.
        In recent years, the Armed Forces have become concerned with the
    plight of military spouses who lose employment when accompanying their
    service member husbands or wives to new duty locations. Studies have
    concluded that many military families suffer significant financial
    setbacks. Some losses are substantial. Worse, yet, is the lack of equal
    or even minimal employment opportunities at the new duty locations.
        The services are continuing to test new programs to assist spouses
    in finding full or temporary employment to include counseling and
    training. Other initiatives will help spouses find ``portable''
    employment in companies with customer-service jobs that can be done at
    remote locations. FRA salutes these efforts and encourages the military
    departments to continue the march.

                Impact Aid to School Districts with Concentrations of
                        Military Sponsored Students
        Recommendation.--To continue to provide funds to school districts
    heavily impacted with military personnel-sponsored children.
        The President's Budget request contains a provision to reduce funds
    earmarked for distribution to school districts heavily impacted with
    children of military personnel (and civilian employees hired by the
    service department concerned). The reduction is to be the amount that
    would be appropriated for children, known as B students, whose parents
    reside in the civilian community and not on the military installation.
        FRA cannot urge this Subcommittee in any stronger terms to support
    full funding of impact aid. Previous attempts by former Administrations
    to terminate these payments have met with failure and rightfully so.
    Impacted schools could not operate efficiently nor provide adequate
    tutoring to service members' children with less money. Many of these
    schools either closed their doors to these children or threatened to do
    so if funds were cut.
        At this time in history FRA believes it to be utterly foolish if
    the Nation forgets the damage the President's request, if adopted, will
    do to our service members' morale. There are 240,000 school children,
    whose uniformed service parents live off of military installations,
    depending on receiving a quality education from local educational
    facilities. It will not happen unless the funds are provided.

                Commissaries
        Recommendation.--To oppose privatization of commissaries and
    strongly support full appropriations to fund the current level of
    service for all commissary patrons. Additionally, to authorize
    unrestricted access to commissaries to Reservists.
        The fiscal year 2003 budget reduced Defense Commissary Agency
    funding by $137 million and envisioned eliminating over 2,600 positions
    from stores and headquarters staff by September 30, 2003. While surveys
    indicate there has been no significant loss in service to the customer,
    FRA cautions that further initiatives be evaluated with regard to
    potential negative impacts on quality and service to customers,
    including additional store closings, reduced hours, longer cashier
    lines and reduced stock on store shelves. The benefit is widely
    recognized as a valuable part of the service member's compensation
    package and a cornerstone of quality of life benefits. As in the past,
    FRA opposes any effort to privatize commissaries and strongly supports
    full funding of the benefit in fiscal year 2004 and beyond.
        As in previous years, FRA once again seeks full access to
    commissaries for selected reservists. The process involved in issuing
    (annually), checking, and accounting for the current cards required of
    the reservist to shop in the commissary is costly and unnecessary.
    Reservists are part of the Total Force. They should receive the same
    consideration as their active duty comrades-in-arms.

                                   CONCLUSION

        FRA is grateful for the opportunity to present its goals for fiscal
    year 2004. If there are questions or the need for further information,
    I will be pleased to respond.

        Senator Burns. Thank you very much, Mr. Barnes. We
    appreciate your testimony.
        We are looking into some of these health care issues that
    you are looking into and of course right now, you know, we have
    got budget problems and we are trying to cover too many bases
    with too few dollars. It is just like I asked--I met a lady on
    the street in Billings the other day and I asked her about her
    husband and she said, well, he retired. And I said, well, that
    is pretty great. And she says, it is not worth a darn; it is
    half as much money and twice as much husband. She said, that is
    a bad equation. So thank you very much for your testimony. We
    appreciate that very much.
        Mr. Barnes. Thank you, Senator.
        Senator Burns. We now call Dr. James A. Fabunmi. I am sorry
    about that. I just killed that name, I know. I just slaughtered
    it. The president of the Science and Technology Workforce for
    America's Security. We appreciate you, and how do you pronounce
    your last name, sir?

    STATEMENT OF JAMES A. FABUNMI, Ph.D., PRESIDENT, THE
                AMERICAN HERITAGE DEFENSE CORPORATION

        Dr. Fabunmi. ``FAH-bune-mee.'' And I might say that you did
    the best that I hear every day, so do not feel apologetic. That
    is fine.
        Senator Burns. Okay, thank you very much. I appreciate your
    patience and your goodwill.
        Dr. Fabunmi. Good afternoon, sir. Mr. Chairman and members
    of the committee. Thank you for allowing me to present this
    testimony before you today. I appreciate the opportunity to
    present you some new ideas on how to broaden the base of
    production of science and technology workforce for America's
    security.
        I represent the American Heritage Defense Corporation, a
    nonprofit corporation registered in the District of Columbia
    for the specific purpose of developing and implementing
    programs that enhance the quality and quantity of American
    citizens trained in the fields of science and technology. As
    the committee knows, these are challenging times in the history
    of our great Nation. There are serious threats from abroad to
    our national defense, economic, and homeland security. Yet
    American technological prowess, which has helped ensure our
    military and economic security during the past 50 years, is in
    serious jeopardy because of the increasing shortages of
    American-educated scientists and engineers, who are the bedrock
    of our technological enterprise.
        The committee may be aware of recent reports by the Council
    on Competitiveness, the National Science Board, and others that
    pinpoint some critical factors that correlate highly and
    positively with economic and military strength. They include:
    the size of the labor force dedicated to research and
    development and other technically oriented work; the amount of
    investment directed at research and development; the resources
    devoted to higher education; and the degree to which national
    policy encourages investment, innovation and commercialization.
        The committee may also be aware that there are innovative
    economies of other countries that have made great strides in
    developing high-value products and services. These innovative
    economies are ramping their capacities to educate, train, and
    deploy scientific and engineering talent. Their pool of
    scientists and engineers is increasing briskly. The quality of
    patents by foreign investors--inventors is strong. Global
    access to capital is growing.
        On the other hand, the source of the innovative capacity of
    our Nation is thinning. A quarter of the current science and
    engineering workforce, whose research and innovation produced
    the American technological superiority of the past decades, is
    more than 50 years old and will retire by the end of this
    decade.
        The Department of Defense has historically been the largest
    source of Federal funding for engineering, research, and
    development in this country. Universities are significant
    collaborators with industry and are the source for young
    science and technology talent for the defense sector, both
    public and private. In particular, Federal funding for defense
    basic and applied research and development has provided the
    majority of financial support for graduate education in the
    physical sciences and engineering.
        The American Heritage Defense Corporation believes that it
    is in our national defense and homeland security interest to
    significantly increase our national investment in science and
    engineering workforce education. Indeed, on April 10, 2002, the
    Director of Defense Research and Engineering, the Honorable
    Ronald M. Sega, said, and I quote: ``The quality of our science
    and technological workforce and the management of the
    laboratory infrastructure in which they work are very important
    factors in the overall research and engineering equation.''
    They are critical elements in our transformation. Our science
    and technological workforce has been downsized considerably in
    the past 12 years. This has left us with a very knowledgeable
    workforce, but one that is also reaching retirement age. We are
    at a critical point that requires a focused effort to bring
    stability to the workforce that will attract and retain talent.
        There are four key components to the development of a top-
    grade science and technology workforce. These are: knowledge of
    the basic disciplines of math and science; discovery of new
    knowledge in mathematics and science; applications of
    mathematics and science to new and future engineering systems;
    and the practice and design and production of useful and
    marketable products and services.
        The first component, as well as some degree of the second
    component, is available at most accredited institutions across
    the country and could be strengthened through various
    educational and basic research programs sponsored by the
    National Science Foundation and the Department of Defense. The
    third and fourth components by and large are found only at
    institutions that have developed and maintained longstanding
    relationships with government and industrial laboratories, but
    clearly laboratories evolved in the development of systems for
    the Department of Defense.
        The American Heritage Defense Corporation believes that the
    broadening of access to these four components by students at
    institutions across the country is a significant and necessary
    step to address the current shortage of American science and
    technological workforce. The American Heritage Defense
    Corporation has proposed the Science and Technology Workforce
    for America's Security program to offer specific approaches to
    broadening the base of production of a high-quality scientific
    and technological workforce. These approaches leverage on the
    internship opportunities available to students at government
    and industrial laboratories to create a structured integration
    of the two missing components into the education of American
    citizens enrolled in science and engineering programs
    throughout the country.
        It is recommended that the committee appropriate funds
    which would enable the Department of Defense to provide a grant
    of $3.5 million in fiscal year 2004 to the American Heritage
    Defense Corporation and an amount of $5 million each in fiscal
    year 2005 and fiscal year 2005 also to the American Heritage
    Defense Corporation, for a 3-year demonstration program to
    assist the Director of Defense Research and Engineering in
    implementing the proposed Science and Technology Workforce for
    America's Security program.
        The requested amounts are estimated to provide seed funds
    for organizing and promoting the program and to support 30
    students in the first year and 50 students in each of the
    subsequent 2 years of the 3-year effort.
        I thank you very much for the opportunity to appear before
    you and I will be very happy to respond to any of your
    questions.
        [The statement follows:]

                   Prepared Statement of Dr. James A. Fabunmi

        Honorable Chairman and Members of the Committee, good afternoon and
    thank you for allowing me the privilege of appearing before you today.
    I appreciate the opportunity to present testimony before you in support
    of efforts to broaden the base of production of top grade Science and
    Technology Workforce for American Security (STWAS). I appear before you
    as the President of the American Heritage Defense Corporation (AHDC), a
    non profit Corporation registered in the District of Columbia for the
    specific purpose of developing and implementing programs that enhance
    the quality and quantity of American citizens, trained in the fields of
    Science and Technology.

                                    SUMMARY

        As the Committee knows, these are challenging times in the history
    of our great nation. There are serious threats from abroad to our
    national defense, economic and homeland security. Yet, American
    technological prowess, which has helped ensure our military and
    economic security during the past 50 years, is in serious jeopardy
    because of the increasing shortages of American educated scientists and
    engineers who are the bedrock of our technological enterprise. The
    committee may be aware of recent reports by the Council on
    Competitiveness, the National Science Board, and others that pinpoint
    some critical factors that correlate highly and positively with
    economic and military strengths. They include the size of the labor
    force dedicated to research and development and other technically
    oriented work; the amount of investment directed at research and
    development; the resources devoted to higher education; and the degree
    to which national policy encourages investment in innovation and
    commercialization.
        The committee may also be aware that there are innovative economies
    of other countries that have made great strides in developing high-
    value products and services. These innovative economies are ramping
    their capacities to educate, train, and deploy scientific and
    engineering talent. Their pool of scientists and engineers is
    increasingly briskly; the quality of patents by foreign inventors is
    strong, and global access to capital is growing. On the other hand, the
    source of the innovative capacity of our nation is thinning. A quarter
    of the current science and engineering workforce, whose research and
    innovation produced the American technological superiority of the past
    decades, is more than 50 years old and will retire by the end of this
    decade. The Department of Defense has historically been the largest
    source of federal funding for engineering research and development in
    this country. Universities are significant collaborators with industry
    and are the source for young science and technology talent for the
    defense sector, both public and private. In particular, federal funding
    for defense basic and applied research and development has provided the
    majority of the financial support for graduate education in the
    physical sciences and engineering.
        The AHDC believes that it is in our national defense and homeland
    security interests to significantly increase our national investment in
    science and engineering workforce education. Indeed, on April 10, 2002,
    the Director of the Defense Research and Engineering (DDRE), the
    Honorable Ronald M. Sega, said and I quote: ``the quality of our
    Science and Technology (S&T) workforce and the management of the
    laboratory infrastructure in which they work are very important factors
    in the overall research and engineering equation. They are critical
    elements in our transformation. Our S&T workforce has been downsized
    considerably in the last twelve years. This has left us with a very
    knowledgeable workforce, but one that is also reaching retirement age.
    We are at a critical point that requires a focused effort to bring
    stability to the workforce that will attract and retain talent.''
        There are four key components to the development of top grade S&T
    Workforce. These are: (1) Knowledge of the basic disciplines of
    Mathematics and Science; (2) Discovery of new knowledge in Mathematics
    and Science; (3) Applications of Mathematics and Science to new and
    future engineering systems; and (4) Practice of design and production
    of useful and marketable products and services. The first component as
    well as some degree of the second component is available at most
    accredited Institutions across the country and could be strengthened
    through various educational and basic research programs funded by the
    National Science Foundation and the Department of Defense. The third
    and fourth components by and large are found only at Institutions that
    have developed and maintained long-standing relationships with
    government and industrial laboratories, particularly laboratories
    involved in development of systems for the Department of Defense. The
    AHDC believes that the broadening of access to these four components by
    students at Institutions all across the country is a significant and
    necessary step to address the current shortage of American S&T
    workforce.
        The AHDC has proposed the STWAS program to offer specific
    approaches to broadening the base of production of high quality
    scientific and technological workforce. These approaches leverage on
    the internship opportunities available to students at government and
    industrial laboratories, to create a structured integration of the two
    missing components into the education of American citizens enrolled in
    science and engineering programs throughout the country. It is
    recommended that the Committee appropriate funds, which will enable the
    Department of Defense to provide a grant of $3.5 million in fiscal year
    2004 to the American Heritage Defense Corporation (AHDC), and amounts
    of $5 million each in fiscal year 2005 and fiscal year 2006, also to
    the American Heritage Defense Corporation (AHDC) for a 3-year
    demonstration program to assist the Director, Defense Research and
    Engineering (DDR&E) in implementing the proposed STWAS program. The
    requested amounts are estimated to provide seed funds for organizing
    and promoting the program and to support 30 students in the first year,
    and 50 students in each of the subsequent two years of the three-year a
    pilot effort.

                       SHORTAGE OF AMERICAN S&T WORKFORCE

        According to the Bureau of Labor Statistics, Aerospace Engineering
    degrees granted to United States citizens dropped by half from 1991 to
    2000. 54 percent of United States Aerospace workers over the age 45
    will leave the field during the next six years while 6 million
    Aerospace jobs vital to the United States Economy and National Security
    will open up with no Americans being trained to fill them. The
    Electronics Engineering Times reports that in 2000, the United States
    imported 90,000 engineers and computer scientists, while graduating
    65,000 engineers and 15,000 computer scientists. Indeed, on April 10,
    2002, the Director of the Defense Research and Engineering (DDRE), the
    Honorable Ronald M. Sega, said and I quote: ``the quality of our
    Science and Technology (S&T) workforce and the management of the
    laboratory infrastructure in which they work are very important factors
    in the overall research and engineering equation. They are critical
    elements in our transformation. Our S&T workforce has been downsized
    considerably in the last twelve years. This has left us with a very
    knowledgeable workforce, but one that is also reaching retirement age.
    We are at a critical point that requires a focused effort to bring
    stability to the workforce that will attract and retain talent.''
        In a discussion of whether or not there is a shortage of S&T
    Workforce, it is important to clarify what the real issues are. While
    an unemployed scientist or engineer may wonder what is meant by
    ``shortage'', it is apparent that such a scientist or engineer is
    unlikely to be a graduate of the Massachusetts Institute of Technology.
    There are different grades of S&T Workforce, and it is safe to assume
    that when Industry or Government Agencies go out to recruit S&T
    Workforce, they are most likely seeking top grade S&T Workforce, and
    not just anyone with a college degree in science or engineering. Every
    time the debate comes up regarding the need for the Federal government
    to increase investments in the development of S&T workforce, there will
    always be opposing viewpoints that point to unemployed S&T
    professionals as if to indicate that there is instead a surplus in this
    particular labor category. The reality though is that a college degree
    in science or engineering does not automatically imply that one has
    acquired the competence to contribute productively to industry or
    government workforce. I want to clarify at this point that the issue of
    concern is the base of production of top grade S&T workforce.

                     COMPONENTS OF TOP GRADE S&T EDUCATION

        There are four key components to the development of top grade S&T
    Workforce. These are: (1) Knowledge of the basic disciplines of
    Mathematics and Science; (2) Discovery of new knowledge in Mathematics
    and Science; (3) Applications of Mathematics and Science to new and
    future engineering systems; and (4) Practice of design, production and
    maintenance of useful and marketable products and services.
        The first component as well as some degree of the second component
    is available at most accredited Institutions across the country and
    could be strengthened through various educational and basic research
    programs funded by the National Science Foundation and the Department
    of Defense. The third and fourth components by and large are found only
    at Institutions that have developed and maintained long-standing
    relationships with government and industrial laboratories, particularly
    laboratories involved in development of systems for the Department of
    Defense. In his book ``Rescuing Prometheus'', the technology historian
    Thomas P. Hughes stated that institutions that currently produce top
    tier aerospace professionals evolved from the 1960's era risk reduction
    projects in support of Air Defense, Ballistic Missile Offense and Space
    Exploration programs. These institutions have developed and maintained
    long-standing relationships with government and industrial research and
    development laboratories. In 1998 for example, according to a
    Department of Defense report, out of $1.9 Billion invested by DOD in
    Engineering Development funding, $763.9 Million or 40 percent went to
    the Massachusetts Institute of Technology (MIT) and its affiliated
    laboratories. It is therefore no surprise that the probability of
    producing a top grade S&T workforce from MIT is significantly higher
    than that of most other institutions. Unfortunately, there is a limit
    to the number of students that can attend MIT at any given point in
    time.

                             PROPOSED STWAS PROGRAM

        Having identified the four key components needed to enhance the
    quality of S&T Workforce preparation, and recognizing that it is not
    practical to replicate MIT on every campus in the country, the American
    Heritage Defense Corporation (AHDC) has come up with an alternative
    approach to achieving the same ends in a manner that is measurable, and
    cost effective. These approaches leverage on the internship
    opportunities available to students at government and industrial
    laboratories, and will create a structured integration of the third and
    fourth components (see preceding section) into the education of
    American citizens enrolled in science and engineering programs
    throughout the country.
        At the present time, internship opportunities that are offered to
    S&T graduate (and in some instances undergraduate) students are treated
    as little more than extracurricular programs for the students during
    their summer and/or winter breaks. These programs are not particularly
    coordinated with the degree requirements of the students, and nobody is
    particularly accountable for the impact of these programs on the
    quality of preparation of the participating students. Most
    significantly, these programs do not necessarily evolve into on-going
    relationships between the faculty at the Institutions and the S&T
    personnel at the government and/or industry laboratories.
        The STWAS program aims to: (1) leverage national defense and
    homeland security research and development efforts for the training of
    future generations of American S&T workforce; (2) immerse American
    students in environments where the most exciting systems are being
    developed, prototyped and demonstrated; (3) focus the best and
    brightest American students on America's security needs; and (4) create
    a mechanism for the initiation, development and maintenance of
    relationships between Academia, Industry and Government Laboratories,
    centered around the educational needs of American S&T students.
        The basic concept of STWAS is that internship opportunities for
    American S&T students at government and/or industry laboratories and
    centers should be coordinated with their degree programs, and
    facilities should be established at or near their campuses to enable
    them to continue the work that they have started during their on-site
    visits to the laboratories and centers. It requires a dedicated
    organization such as the AHDC to catalyze this process and take over
    the responsibility of putting in place the necessary human and material
    infrastructure for implementing such a program. The AHDC will: (1)
    recruit and obtain necessary clearances for participating students; (2)
    provide full support (tuition, fees, salary) to the students; (3)
    collaborate with Universities to establish on or near campus facilities
    for telecommuting with government and industry laboratories and
    centers; and (4) organize an alliance between Academia, Industry and
    Government to promote and expand the STWAS program into a nationwide
    activity.

                     THE AMERICAN HERITAGE DEFENSE ALLIANCE

        The strategy for corporate development of AHDC hinges on the
    formation of the American Heritage Defense Alliance (AHDA) with
    participation from governmental, industrial, academic and philanthropic
    organizations. These organizations will be stakeholders and will assist
    in accomplishing the mission of AHDA to create, fund and operate
    Engineering Centers for expediting national defense and homeland
    security and to accelerate the production of higher quality American
    engineers in sufficient quantities for the defense and advancement of
    the United States of America. AHDC shall have the following classes of
    members: (1) Alliance Members: One representative from each of the
    organizations participating in AHDA provided such organization is in
    good standing as determined by the Alliance Committee of AHDC; (2) Ex-
    Officio Members: The Chair of AHDC; the President; the Treasurer; the
    Secretary and other officers of AHDC that are from time to time
    recommended for membership by the Executive Committee, provided such
    other officers shall be approved for ex-officio membership by the
    simple majority of the members of AHDC; (3) Professional Members: No
    more than three members in office at any one time, who are experts in
    matters of National Defense and Homeland Security of the United States
    of America and workings of Federally Funded Research and Development
    Centers. Nominations for membership in this class shall be from the
    Alliance Committee and subject to approval by a simple majority of the
    members of AHDC; (4) Life Members: The Principal Founder of AHDC and
    others elected by the members of AHDC, provided that the number of such
    life members shall never be greater than twenty-five at any one time.

                           RECOMMENDED APPROPRIATIONS

        It is recommended that the Committee appropriate funds, which will
    enable the Department of Defense to provide a grant of $3.5 million in
    fiscal year 2004 to the American Heritage Defense Corporation (AHDC),
    and amounts of $5 million each in fiscal year 2005 and fiscal year
    2006, also to the American Heritage Defense Corporation (AHDC) for a 3-
    year demonstration program to assist the Director, Defense Research and
    Engineering (DDR&E) in implementing the proposed STWAS program. The
    requested amounts are estimated to provide seed funds for organizing
    and promoting the program and to support 30 students in the first year,
    and 50 students in each of the subsequent two years of the three-year a
    pilot effort.
        Honorable Chairman and Members of the Committee, thank you for the
    privilege of addressing you and representing the AHDC. If you have
    further questions, I would be happy to entertain them. If I cannot
    address them at this hearing, I will have your questions researched
    further and respond directly to you at a later date.

        Senator Burns. Well, thank you very much and your entire
    statement will be made part of the record and it will be read
    and perused, I know, many times. I appreciate your coming today
    and your recommendations will be well taken, I think, because
    that is an area where we continue to have a lot of support here
    in the Congress.
        So thank you very much for coming today.
        Dr. Fabunmi. Thank you, sir.

                         ADDITIONAL SUBMITTED STATEMENT

        [Clerk's Note.--Subsequent to the hearing, the subcommittee
    has received a statement from the Ovarian Cancer National
    Alliance which will be inserted in the record at this point.]

           Prepared Statement of the Ovarian Cancer National Alliance

        On behalf of the Ovarian Cancer National Alliance, I would like to
    take this opportunity to share some remarks on the unique value and
    effectiveness of the DOD Ovarian Cancer Research Program (OCRP). As
    Congress is charged with the important task of allocating defense
    funding to meet the growing needs of our military to adequately protect
    American lives from unknown threats here and abroad--it is worth noting
    the critical role the DOD plays, through medical research, in
    protecting Americans from other serious and under-recognized threats
    like ovarian cancer.
        As you may know, ovarian cancer is the deadliest of gynecologic
    cancers, because the vast majority of cases are not detected until
    advanced stage, when survival is only about 25 percent. However, when
    detected early, ovarian cancer survival improves to 90 percent. This
    toll is harsh on the 25,400 women and their families who each year
    receive a diagnosis of ovarian cancer. A growing number are women in
    the military and dependents of military families--whose service to our
    country is compromised when they must battle this terrible cancer too!
        In order to adequately improve women's chances of surviving this
    devastating disease, the Alliance is requesting an appropriation of $15
    million, specifically earmarked for the DOD Ovarian Cancer Research
    Program (OCRP) in fiscal year 2004. Because the OCRP suffered several
    cutbacks over the past two years, and because this program is so modest
    to begin with, the designation of $15 million is critical to the
    continued health and success of the life-saving research supported by
    this initiative.
        The DOD Ovarian Cancer Research Program, like the breast and
    prostate cancer programs in the DOD budget, augments the important
    funds spent on cancer research by the National Cancer Institute. As in
    the funds spent at NCI, the DOD cancer research proposals must be peer-
    reviewed and meet standards of scientific excellence.
        There are however, several unique aspects of the DOD Ovarian Cancer
    Research Program. The DOD ovarian program promotes ``innovative''
    approaches to research that will lead to a better understanding and
    control of the disease. The program encourages projects and idea awards
    that propose new ways of examining prevention, early detection and
    treatment and bring new investigators into ovarian cancer research.
    Proposals that address the needs of minority, elderly, low-income,
    rural and other underserved women are highly encouraged. And finally,
    since their inception nearly ten years ago, the DOD programs have
    actively involved consumers on all Scientific Peer Review and
    Integration (Program Design) panels. Consistent with DOD's support of
    consumer involvement, two Alliance leaders serve on the Integration
    Panel and based on our recommendations, over a dozen ovarian cancer
    advocates serve on the Scientific Review Panel. At NCI, a formal
    program designed to involve consumers in decision-making was recently
    established, and is drawing on the successful experience of the DOD
    programs.
        For the past 6 years, the DOD OCRP has been dedicated to supporting
    research that will improve the outcome for women with ovarian cancer.
    Its successes to date are impressive. There have been 69 publications
    in scientific journals, 119 abstract at professional meetings and over
    20 new investigators recruited into the field.
        A distinguishing feature of the DOD OCRP has been program project
    grants. Several multi-year ovarian cancer project grants were awarded
    to cancer centers in Pittsburgh, Minnesota and Indiana. As result of
    these program project grants, these cancer centers have greatly
    enhanced their ovarian cancer research capabilities--and have already
    begun to develop some breakthrough findings in the areas of prevention
    and early detection. Two cancer centers, Fred Hutchinson in Seattle and
    Fox Chase in Philadelphia, funded by the DOD OCRP, went on to win major
    grants from NCI through the SPORE program (Specialized Program of
    Research Excellence). Particularly with the Hutchinson, the DOD grant
    enhanced their capacity to compete successfully for important NCI
    funding. Through this program, researchers have identified several new
    biomarkers that are promising as markers for early detection. They have
    also identified an agent in oral contraceptives that help protects
    against ovarian cancer--and that could result in an urgently needed way
    of preventing ovarian cancer. The only caveat is--if the program
    continues to receive reduced funding from the DOD, these researchers
    will not be able to continue their important work.
        With a strong track record and a growing core of investigators who
    are contributing vital knowledge that could improve prevention, early
    detection, and ultimately survival from ovarian cancer, the DOD OCRP is
    making a difference in women's lives.
        On behalf of the entire ovarian cancer advocacy community--
    patients, family members, caregivers, clinicians and researchers--we
    thank you for your leadership and support of the Ovarian Cancer
    Research Program. We very much hope we can continue to count on you to
    provide $15 million for this program, so that the life saving research
    it supports will continue.

             DEPARTMENT OF DEFENSE OVARIAN CANCER RESEARCH PROGRAM

        Over the last six years, Congress has appropriated funds for the
    Department of Defense (DOD) Ovarian Cancer Research Program (OCRP).
    Modeled after the very successful breast cancer research program first
    included in the DOD budget in 1992, the OCRP is a component of the DOD
    Congressionally Directed Medical Research Program (CDMRP). Currently
    funded at $10 million, the annual appropriation reached as high as $12
    million in 2000 and 2001. Each year, the DOD OCRP funding is considered
    for renewal by Congress or the program terminates
        Overall, the OCRP has received a total of $71.7 million, which has
    supported 62 awards--out of 575 proposals submitted. Because the
    program has received $37 million worth of proposals ranked excellent or
    outstanding that have NOT been funded, ovarian cancer advocates and
    Congressional leaders are requesting a funding increase--to $15 million
    for fiscal year 2004.
        With ovarian cancer research neglected and underfunded for too
    long, restoring recent cuts in Department of Defense's Ovarian Cancer
    Research Program is critically important. This program strengthens the
    federal government's commitment to ovarian cancer research and supports
    innovative and novel approaches that offer promise of better
    understanding the cause and prevention of ovarian cancer.

             THE DOD OCRP HAS AN OUTSTANDING RECORD OF ACHIEVEMENTS

        69 publications in scientific journals.
        119 abstracts/presentations at professional meetings.
        Over 20 new investigators recruited into ovarian cancer research.
        2 patent applications filed.
        The commitment to a serious, sustained ovarian cancer research
    effort by several new institutions that prior to their DOD grant, did
    little in ovarian cancer. With the award of multi-year project grants,
    the University of Pittsburgh, University of Minnesota, Indiana
    University, University of South Florida, the Medical University of
    South Carolina and Fred Hutchinson Cancer Center in Seattle have
    dramatically increased the ovarian cancer research infrastructure and
    the capacity for breakthrough findings that will improve women's
    survival from this deadliest of women's cancers.
        Two cancer centers--Fred Hutchinson in Seattle and Fox Chase in
    Philadelphia--funded by the OCRP went on to win major grants from NCI
    through the SPORE program (Specialized Program of Research Excellence).
    Particularly with the Hutchinson, the DOD grant enhanced their capacity
    to compete successfully for important NCI funding.
        A top ovarian cancer researcher from Duke University identified the
    hormone progestin as a key agent in oral contraceptives' activity in
    reducing the risk of ovarian cancer. This finding has significant
    implications for preventing ovarian cancer.
        Several new bio-markers have been identified that have the
    potential to improve early detection.
        Three new agents that inhibit tumor growth, spreading and new blood
    vessel formation (angiogenesis) have been discovered--a development
    that could result in new and more effective treatments.

                    ADDITIONAL INFORMATION ABOUT THE PROGRAM

        The DOD ovarian cancer research program augments the important
    funds spent on cancer research by the NCI. As with the funds spent at
    NCI, the DOD cancer research proposals must be peer-reviewed and meet
    standards of scientific excellence.
        There are however, important differences between the NCI and DOD
    cancer research programs. In considering the DOD research programs,
    Congress each year ``earmarks'' or designates a specific dollar figure
    for each cancer. By contrast, at NCI funding levels for particular
    cancers are not specified, and Congress does not play a role in
    determining allocations by cancer. In another important area of
    difference, the DOD program promotes ``innovative'' approaches to
    cancer research. And finally, since their inception ten years ago, the
    DOD programs have actively involved consumers on all scientific peer
    review and Integration (Program Design) panels--a process that has only
    recently been implemented at NCI.
        A unique feature of the DOD Ovarian Cancer Research Program is that
    it promotes innovative research that will lead to a better
    understanding and control of ovarian cancer. The program also
    encourages projects and idea awards that propose new ways of examining
    prevention, early detection and treatment, and also bring new
    investigators into ovarian cancer research. Proposals that address the
    needs of minority, elderly, low-income, rural and other under-
    represented populations are strongly encouraged. Overall, the DOD OCRP
    is fostering the development of a sustained commitment to ovarian
    cancer.
        All proposals are evaluated in a two-tiered review system. At the
    first level, a multi-disciplinary panel rates each proposal on the
    basis of scientific merit. Final decisions are made by an Integration
    Panel, based not only on scientific merit, but also on the programmatic
    goal of innovative ideas. Consistent with DOD's support of consumer
    involvement, four Ovarian Cancer National Alliance leaders have served
    on the Integration Panel, and over a dozen Alliance-nominated advocates
    on Scientific Review Panels.
        The Ovarian Cancer National Alliance is a consumer-led umbrella
    organization uniting ovarian cancer survivors, women's health activists
    and health care professionals in a coordinated effort to focus national
    attention on ovarian cancer. The Alliance is working at the national
    level to increase public and professional understanding of ovarian
    cancer and to advocate for increased research for more effective
    diagnostics, treatments and a cure.

                             CONCLUSION OF HEARING

        Senator Burns. This concludes the hearing of the
    subcommittee, the scheduled hearings on the fiscal year 2004
    budget request. The subcommittee will stand in recess subject
    to the call of the Chair. By the way, the record will remain
    open and I will let the chairman close that because no
    subordinate will ever close the chairman's record.
        This meeting stands recessed.
        [Whereupon, at 12:15 p.m., Thursday, May 15, the hearings
    were concluded, and the subcommittee was recessed, to reconvene
    subject to the call of the Chair.]