[Senate Hearing 108-]
[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 [email protected].)

            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.]
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