- DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2004

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

DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2004

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WEDNESDAY, APRIL 2, 2003

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

DEPARTMENT OF DEFENSE

Department of the Navy

STATEMENT OF HANSFORD T. JOHNSON, ACTING SECRETARY OF
THE NAVY
ACCOMPANIED BY:
ADMIRAL VERNON E. CLARK, USN, CHIEF OF NAVAL OPERATIONS
GENERAL MICHAEL W. HAGEE, USMC, COMMANDANT OF THE MARINE CORPS

OPENING STATEMENT OF SENATOR DANIEL K. INOUYE

Senator Inouye [presiding]. I have just received word that
the chairman of the committee is occupied at this moment
getting prepared for the supplemental appropriations debate.
So I will open the proceedings, and I thank all of you for
being here this morning. We have some new faces, new Navy and
Marine Corps leaders with us here today. For the first time, we
have with us our Acting Secretary of the Navy, Mr. Hansford
Johnson, and General Michael Hagee, Commandant of the Marine
Corps. I look forward to working closely with both of you.
I would like to take a moment to recognize and commend the
men and women of the Navy and Marine Corps for their selfless
service in the war in Iraq and the global war on terrorism.
They are doing courageous and valiant work in the Gulf at this
very moment and obviously, all of us are extremely proud of
their service and their commitment to our Nation, and we wish
them and their families the very best as they continue with
this difficult and honorable mission.
We are here today to discuss the Navy and Marine Corps
fiscal year 2004 budget request. Again, we face challenges as
we attempt to strike the appropriate balance between the needs
of today and the transformation of tomorrow's fleet. This
committee has demonstrated its commitment to our naval forces
year after year. As always, we will want to hear from you about
what is included in the budget for the men and women serving in
the Department, but we are also interested in discussing the
planned size of the naval fleet and the Marine Corps aviation
programs.
With that, I look forward to hearing your remarks today and
extend to you the apologies of my chairman, and we assure you
that we will continue working with you as we maintain the
finest Navy and the most courageous Marine forces in the world.
Senator Cochran.

STATEMENT OF SENATOR THAD COCHRAN

Senator Cochran. Mr. Chairman, thank you very much. I am
pleased to join you in welcoming our distinguished panel of
witnesses before the committee today. Secretary Johnson,
Admiral Clark, Commandant Hagee, thank you very much for your
cooperation with our committee. We are looking forward to your
presentation about the budget request for the next fiscal year
and your observations about how we can be helpful to ensure
that our Navy and Marine Corps remain well-supplied and well-
funded with the resources that you need in order to do your
part to protect the security of our great Nation, and to
continue to successfully wage the war against terror. I think
your accomplishments to date have been truly outstanding in
every way. You have reflected credit on our country and we
thank you for your service.
Senator Inouye. Thank you very much. May we begin with the
testimony of the Secretary?

STATEMENT OF SECRETARY JOHNSON

Secretary Johnson. Thank you, Senator Inouye, Senator
Cochran. It is an honor to appear before you today and update
you on the Department of the Navy and discuss our 2004 budget.
Today in the Persian Gulf and around the world, our Nation
is served by the most professional and capable naval force in
the world. You should take immense pride as you did in your
comments, Senator Inouye, with how you helped fund this force
and prepare it to do what they are doing today. On behalf of
each sailor and Marine, I thank you for your continuing strong
support.
The Navy and Marine Corps, alongside their Army, Air Force
and Coast Guard partners, are on station in every corner of the
world, taking the fight and global war on terrorism to the
enemies, determining aggression against our Nation and our
allies and representing U.S. interests abroad.
Today, over 68 percent of our ships are underway, including
seven deployed carrier groups. Sixty-six percent of Marine
operating forces are deployed. The Navy-Marine Corps team's
successes are reflective of this strong sustained support that
you and the Congress have provided.
As well as on the home front, our dedicated civilian and
contractor employees, the great American moms and dads, wives,
husbands and children who support these forward deployed
defenders of freedom, we are eternally grateful for the hard
work and sacrifice that they are making for our Nation each
day.
Our people remain our most precious asset. Our ships,
submarines, aircraft and ground combat assets are of no value
without them. The 2004 budget sustains the tremendous progress
we made in personnel and readiness accounts. We have kept faith
with our people by requesting targeted pay raises and further
reduction of the out-of-pocket housing expenses. Recruiting
goals are being met and retention remains strong. In sum, our
Navy-Marine Corps team is well-trained, highly motivated, and
meeting the Nation's call.
Having made great strides in our current readiness and
personnel programs, we must now turn to recapitalization and
modernization. Two-thirds of our Department's top line
increases for 2004 is dedicated to increased procurement.
Eleven billion four hundred million dollars is dedicated to
shipbuilding. This provides for the construction of seven new
ships, two SSBN to SSGN conversions, and the first ship in the
cruiser conversion program. Shipbuilding, while not at the
optimal ten ships per year, represents a significant increase
and a step in the proper direction.
I am also pleased to report that the budget funds 100 new
aircraft, it sustains the MV-22 program, continues development
of the joint strike fighter, and continues a procurement
process for the advanced amphibious assault vehicle. Moreover,
we are pressing ahead with innovative ways to ensure that we
are not locked into purchasing platforms whose electronic
sensor and weapons systems are obsolete upon delivery.
We are moving forward to procure ships not as a total
package, but in the phased approach, the sea frame or hull
followed by the weapons and followed by electronics. This new
strategy will allow us to acquire our systems in the right way
and insert them at the right time in the construction process.
The budget reflects careful balancing of competing demands
and risks. This is most evident in our decision to accelerate
the retirement of the oldest, least capable and most
maintenance-intensive ships. We are convinced that by selecting
near-term divestment of platforms least relevant to our future
is the fastest and most efficient way to recapitalize and
modernize, and transform the Navy and Marine Corps without
compromising our ability to accomplish the ongoing missions.
In total, the retirement of legacy systems and application
of transformational business practices will result in savings
of $1.9 billion. More importantly, the budget builds the
concept of transformation into our recapitalization and
modernization.
This commitment to transformational platforms includes the
next generation aircraft carrier, the CVN-21, the DDX, which is
the centerpiece of the Navy's future family of ships, and the
Littoral combat ship, LCS, which is the newest member of our
family of ships and is designed from the outset as a focused
mission ship that uses reconfigurable mission modules to
counter the most challenging threats in Littorals.
In aviation, we continue to move forward with the joint
strike fighter, the advanced Hawkeye upgrade program, and this
year we are introducing the EA-18G, which will replace the EA-
6B Prowler, which is our most maintenance-intensive aircraft in
the fleet today.
Force Net is a future architecture that will enable
netcentric warfare throughout our forces.

PREPARED STATEMENT

We have made some difficult choices in the 2004 budget
request. We have carefully crafted it to sustain advances made
in personnel, quality of life and readiness, to balance the
risk while divesting legacy systems and concepts to invest in
shipbuilding, aircraft procurement and transformational
technologies, all to achieve the total force that the future
demands.
We look forward to working with you as we move forward.
Thank you, sir.
[The statement follows:]
Prepared Statement of Hansford T. Johnson

NAVY-MARINE CORPS TEAM: NATIONAL SEAPOWER--AROUND THE WORLD, AROUND THE
CLOCK

INTRODUCTION

The Navy-Marine Corps Team continues to provide extraordinary
service and value to our Nation. Throughout the past year our Naval
Forces have distinguished themselves around the globe, and our Sailors
and Marines operating in the air, on and under the sea, and on the
ground--including our space cadre--remain at the leading edge of the
Global War on Terrorism. They have demonstrated the full effect of
their lethal power, from the blue water to the littorals and well
beyond, engaging and destroying the enemy in areas that previously
would have been considered sanctuaries from sea-based forces. At a time
of great consequence for our Nation, our Navy and Marine Corps not only
have ``answered the call,'' but have done so while improving our combat
readiness and retaining our Sailors and Marines at historic rates.
Our successes in the Global War on Terrorism, while significant,
have not been achieved in isolation. We have worked alongside, in
partnership, with our sister Services to realize the true potential of
joint, interoperable forces in the new environment of 21st Century
warfare. The superior operational and personnel readiness levels we
have been able to sustain are directly reflective of the strong,
sustained support of the Congress. In fiscal year 2004, we seek your
support for the President's budget request to sustain the gains made to
date, improve those areas where shortfalls remain, and continue
transforming the Navy and Marine Corps for the 21st Century.
In the balance of this statement we will describe the significant
accomplishments the Navy and Marine Corps have realized during the past
year, the improvements in our warfighting readiness and capabilities
that are supported by the President's fiscal year 2004 budget request,
and some details of our plans to transform and prepare for the
challenges of the future. In assessing our request, it is important to
note that our focus is on improving our ability to operate as an agile,
lethal and effective member of a broader, networked joint warfighting
force. To that end, we have given priority to the following overarching
goals:
--Successfully prosecuting the Global War on Terrorism while
sustaining our current readiness;
--Recapitalizing, modernizing and transforming our Navy and Marine
Corps to meet the challenges of the future;
--Fully networking our forces at sea and ashore to operate seamlessly
in a joint and coalition environment;
--Continuing to invest in our Sailors and Marines; and
--Sustaining the quality of our operational training.
In pursuing these principal objectives, we had to make some
difficult tradeoffs within our proposed program. However, our fiscal
year 2004 budget request is the best balance possible among important,
but often competing priorities.

CONTEXT FOR THE FISCAL YEAR 2004 BUDGET REQUEST: SUCCEEDING IN A TIME
OF GREAT CONSEQUENCE

Last year, our Navy and Marine Corps forces built on the historic
response of our Sailors and Marines following the September 11, 2001
attacks on our Nation. Today, our forces continue leading the way on
the front lines of the Global War on Terrorism. More than half of our
Navy operating forces and over sixty percent of the Marine Corps
operating forces are currently deployed around the globe. Since the
beginning of Operation ENDURING FREEDOM more than 90,000 Sailors and
Marines and 100 Navy ships have deployed in support of ongoing
operations. Nine of our 12 aircraft carriers and half of our 12
Amphibious Ready Groups have seen action in this worldwide conflict.
Additionally, over 5,000 members of the Naval Reserve and 15,000
members of the Marine Corps Reserve have been activated in support of
these operations.
Even after the effective defeat of the Taliban and the liberation
of Afghanistan, our Naval Forces, whether sea-based or on the ground,
continue their missions. For example, Marines from the 4th Marine
Expeditionary Brigade (Anti-Terrorism) provide support and security for
the U.S. State Department and the U.S. Embassy in Kabul, while others
serve in Tactical Air Operations Detachments in support of air and
Naval Special Warfare operations in Afghanistan.
While the Global War on Terrorism remains our principal focus, the
Navy-Marine Corps team still operates extensively, as in the past,
representing U.S. interests throughout the world. In Southwest Asia, we
maintained continuous carrier presence, conducting combat operations
over Iraq in support of Operation SOUTHERN WATCH. At the same time,
naval task forces continued Maritime and Leadership Interdiction
Operations supporting United Nations economic sanctions against Iraq
for the eleventh straight year. In addition to these operational
commitments, over 2,000 Marines participated in EAGER MACE 2002, an
amphibious assault exercise in Kuwait in late September 2002.
During May through August 2002, over 1,400 Sailors, Marines, and
Coast Guardsmen participated in the eighth annual Cooperation Afloat
Readiness and Training (CARAT) exercise with countries including the
Philippines, Thailand, Singapore, Indonesia, Malaysia and Brunei.
Marines from the Third Marine Expeditionary Force participated with all
CARAT nations in landing force operations as well as providing a Marine
Security Element to advise and assist the armed forces of the
Philippines in their efforts against global terrorism.
In the Mediterranean, Navy ships, including surface combatants,
submarines and patrol craft operated with friends and allies in over 60
exercises with NATO and Western European nations to enforce United
Nations sanctions in the Federal Republic of Yugoslavia. Marines from
the 24th Marine Expeditionary Unit (Special Operations Capable)
demonstrated their capability to offload and move inland to reinforce
Kosovo Forces' security requirements.
Our ability to sustain the preceding breadth of capabilities, from
combat operations to peacetime coalition-building exercises, came as a
result of difficult choices we made--choices that have proven wise by
the manner in which history unfolded last year. As you recall, in last
year's budget we placed great emphasis on fixing some of the chronic
problems that had been threatening our long term ability to man,
operate and sustain the fleet we have today. We made a conscious
decision to give the highest priority to our personnel and current
readiness accounts. Within our critical procurement accounts we
undertook a major effort to make the foundations for our shipbuilding
programs healthy, even at the expense of being able to procure only
five new ships in fiscal year 2003. While Congressional support for
supplemental appropriations did much to decrease our maintenance
backlog and fill our spare parts bins, we fully recognize our fiscal
year 2003 plan devoted fewer resources toward recapitalization than
either the Department or the Congress would have wished. Having made
that difficult prioritization we committed to translating a healthy
procurement base in fiscal year 2003 into earnest recapitalization in
fiscal year 2004. We have kept that promise.

FISCAL YEAR 2004 BUDGET: BUILDING FROM A SOLID FOUNDATION

The Department's fiscal year 2004 budget request reflects an
increase of $3.5 billion above the amount provided in the fiscal year
2003 Defense Appropriations Act. It also reflects the Department's
commitment to get the most out of every dollar provided by the American
taxpayers. We do not come to the Congress with ``hat in hand,'' but
rather with a responsible request, optimally balanced across an entire
department of competing priorities. In this budget request we have
proposed an additional $1.9 billion for our priority programs with
funds identified through our own rigorous cost savings and divestiture
initiatives.
Together, these sources of additional funds have enabled us to
``turn the corner'' in our most pressing recapitalization efforts. Two-
thirds of our top line increase is dedicated toward increased
procurement. This budget request reflects two more new construction
ships and five more aircraft than appropriated by Congress last year.
It increases our funding for transformational R&D initiatives by a half
billion dollars while consolidating the critical gains in personnel and
current readiness achieved in last year's budget. The following
represents the priority funding in fiscal year 2004 for the Department
of the Navy:
--We propose 7 new construction ships and 100 new aircraft;
--We propose significant transformational capabilities, including the
next-generation aircraft carrier (CVN-21), the next-generation
destroyer (DD(X)), the Littoral Combat Ship (LCS), two more
SSBN-to-SSGN conversions, the Joint Strike Fighter (JSF), the
V-22 Osprey, the Advanced Amphibious Assault Vehicle (AAAV) and
the Advanced Hawkeye (E-2C) Program;
--The Administration proposes a range of military pay increases from
2.0 percent up to 6.25 percent, targeted by rank and years of
service, and additional reductions in out-of-pocket housing
costs from 7.5 percent to 3.5 percent;
--We propose sustained funding for our key operational readiness
accounts, including an increase by over $200 million for
aviation depot maintenance;
--We implement Navy-Marine Corps Tactical Aviation Integration, a
process that will maximize our combat power, optimize the core
capability of Naval aviation forces, and introduce 200 modern
aircraft across the fiscal year 2004-fiscal year 2009 program;
--We improve the quality of our operational training through our
Training Resource Strategy, and provide $61 million in fiscal
year 2004 toward this end.
Highlights of our fiscal year 2004 budget request are provided in
the sections below.

Current Readiness
The fiscal year 2004 budget request builds upon the best successive
two years in readiness budgets in more than a decade. It funds an
OPTEMPO of 54.0 days per quarter for our deployed forces. This level
supports the Global Naval Forces Presence Policy in terms of Carrier
Battle Group (CVBG) and Amphibious Ready Group (ARG) availability as
required by national security policy. However, accelerated deployment
timelines and increased OPTEMPO will cause current year execution to
run ahead of the existing plan.
Funding for ship maintenance will achieve more than 96 percent of
the fiscal year 2004 notional goal. This reflects a virtually identical
posture as compared to last year, both in terms of percent
accomplishment and quantity of backlog remaining. The aggregate level
of funding for ship maintenance declines from fiscal year 2003 to
fiscal year 2004, due in part to the positive effects of the additional
maintenance funding provided in supplemental appropriations in the
previous year, and in part to the accelerated retirement of our oldest,
least capable, and most maintenance-intensive ships.
Accelerating the retirement of these ships was one of the most
difficult decisions we made in building this year's budget. While
aggregate warfighting capability is a better metric than the number of
ships in our inventory, we recognize that below a certain threshold
numbers do matter. However, our analyses indicate that the near-term
inactivations we are proposing provide an acceptable level of risk
without compromising our ability to accomplish our mission, and that
the fastest and most efficient way to recapitalize and transform the
Fleet is to pursue vertical cuts in our least capable type-model
series, both in ships and in aircraft, and apply those savings toward
procuring new ships and aircraft.
The growing sophistication of potential threats, increasing
complexity of modern warfare, advances in training technology, and the
development of new weapons and tactics require more capable training
facilities and methodologies. Under the leadership of Fleet Forces
Command, the Department has produced the Training Resource Strategy
(TRS), a multi-year plan to improve inter-deployment training for
CVBGs, ARGs and Marine Expeditionary Units (MEUs). The Department is
committed to implementing and fully funding these improvements.
The training technology, range and facility improvements programmed
via the TRS will ensure the long-term combat readiness and
effectiveness of our deploying forces and produce a training capability
superior to that existing today. The fiscal year 2004 budget will
ensure deploying forces are fully prepared for the challenges of armed
conflict in the 21st Century.

Personnel Readiness
Our ships, submarines and aircraft have no ``asset value'' to the
nation until manned by trained, educated, and motivated people. Sailors
and Marines--along with our civilian workforce--remain the strong and
steady foundation of our naval capabilities. The families of our
service members also are vital to our readiness. It is a fact that we
recruit Sailors and Marines, but we retain families, and we recognize
that the effectiveness of our forces is dependent in large measure on
the support they receive from their loved ones.
Over the past two years we realized significant gains in the
manpower arena that translated directly into increased personnel
readiness. In the process of maintaining an increased readiness posture
while transforming Anti-Terrorism/Force Protection positions, Navy
operated just below the Congressionally-allowed maximum end-strength
flexibility in fiscal year 2002. Doing so permitted us to sustain CVBG
and ARG manning readiness near 100 percent. Our ability to surge deploy
forces around the globe in response to recent events is testimony to
the success of our personnel readiness posture. Over the course of
fiscal year 2003 and 2004, we anticipate end-strength will decrease
slightly to reflect force structure changes.
Active Duty.--The Navy and Marine Corps met recruiting and
accession goals in 2002, and continue to attract America's finest young
men and women to national service. The Marine Corps notched its seventh
year of meeting monthly and annual recruiting goals. Navy achieved its
recruiting goals for a fourth consecutive year. Both Services are well
positioned for success in meeting 2003 officer accession requirements.
The Sailors and Marines entering active duty truly represent our
country's best and brightest. In 2002, 92 percent of Navy's enlisted
accessions were high school graduates (up from 90 percent in 2001),
while the Marine Corps accessions of high school graduates rose 1.3
percent to 97.5 percent.
Retention rates in 2002 remained at record levels, with 58 percent
of eligible first-term Sailors deciding to ``stay Navy.'' The Marine
Corps met retention goals in 2002 in record time, achieving its highest
occupational specialty match to date while also experiencing its
highest officer retention rate in 18 years. Sailors and Marines have a
sense of purpose and the desire to serve during this critical juncture
in our nation's history. We provide them unique opportunities to grow
professionally and personally, to achieve and be recognized, and to
lead. They see improvements to their quality of service, and they
appreciate the outstanding compensation and benefits provided to them
and to their families. Our recruiting and retention success is
reflected in the fully manned and operationally capable CVBGs and ARGs
currently on station around the globe.
We are fully committed to providing the finest education and
training for these bright young minds, as befits their place as future
leaders of the Navy and Marine Corps. Graduation from ``Battle
Stations'' or the ``Crucible'' is but the first step toward achieving
the technologically advanced force required to conduct naval warfare in
the 21st Century. Our ``Revolution in Training'' is establishing a
career-long learning continuum, ensuring the continuous personal and
professional development of every service member.
Successful as we are in attracting and retaining the best, we must
not lose focus on people programs. Our immediate goals include:
--Increase Navy recruit high school graduation rates from 92 percent
to 94 percent. Maintain Marine Corps recruit high school
graduation rates between 97 percent and 98 percent;
--Increase the percentage of enlisted Navy recruits with previous
college experience or technical/vocational training;
--Continue the Training Transformation started by Navy Task Force
EXCEL (Excellence through Commitment to Education and
Learning), and Marine Corps training continuum synchronization,
including partnering with industry and academia to impart
individual training and education;
--Continue to develop a live, virtual and constructive training
environment both within the Department and for use in
conjunction with the Joint National Training Capability; and
--Explore innovative manning initiatives such as the Optimum Manning
program, which relies on new technologies and creative
leadership to reduce ship manning.
Congressional support for a targeted pay raise in fiscal year 2004,
which recognizes and reaffirms the value of our career force, is
critical to staying the course. So, too, is continuing the reduction of
out-of-pocket housing expenses and the extension and enhancement of
essential special pay and bonus authorities. Selective Reenlistment
Bonus remains an important tool for retaining our critical skill
personnel.
Reserves.--Our reserve community remains an integral part of our
Navy and Marine Corps team, with 88,000 Naval Reservists and 40,000
Selected Marine Corps Reservists serving today. The seamless
integration of the reserve and active components as a Total Force in
the Global War on Terrorism has been a resounding success. The
dedicated service, invaluable resources, and selfless sacrifices to
duty each of these ``citizen Sailors and Marines'' provides on a daily
basis are integral to operational success. We have recalled over 26,000
Navy and Marine Corps Reservists as of mid-March 2003. These patriots
have provided force protection, staff augmentation, intelligence, and
warfighting skills to the Nation's war efforts.
The Naval Reserve constitutes 19 percent of the Navy's Total Force,
with an additional 69,000 Sailors serving as Individual Ready
Reservists (IRRs). In 2002 the Naval Reserve met both its officer and
enlisted recruiting goals, the result of significant recruiting program
efforts. These reserve forces provide our inter-theater airlift, harbor
defense, Naval embarked advisory teams, and Naval Coastal Warfare
capabilities. In addition, a large portion of the Navy's port cargo
handling support, Mobile Construction Battalions, intelligence, and
medical capabilities are resident in the reserves.
The Selected Marine Corps Reserve comprises nearly 25 percent of
the Marine Corps' warfighting capability, with an additional 58,000
Marines serving as Individual Ready Reservists (IRRs). The Marine Corps
Reserve's contribution to the Global War on Terrorism continues with
individuals and units mobilized to provide a wide variety of support.
The additional mobilization of hundreds of Individual Mobilizations
Augmentees and IRRs provided a critical surge of ready expertise and
staff augmentation to warfighting commands, both Joint and Marine.
Civilian Personnel.--The civilian workforce, currently totaling
approximately 186,000, forms an essential role as part of our Total
Force. Hard-working and dedicated civilian employees can be found in
every major command, working alongside our Sailors and Marines,
performing the vital work of the Department. We continually refine and
shape this vital work force for current and future missions. Twenty-one
civilian occupational groups are targeted specifically for intensive
active management. These include science and engineering, logistics,
contracting, human resources, and financial management. Just as it is
essential to recruit and retain the very best Sailors and Marines, it
also is essential to recruit and retain the best and brightest
civilians. We are in a competition for talent, and your support for a
flexible set of civilian human resource management tools that will
reward unconventional thinking will enhance our efforts to hire,
develop, and retain this quality work force. The National Security
Personnel System that is being considered would provide these tools in
our competition for talent.

Shipbuilding
The fiscal year 2004 budget request provides funding for seven new
construction ships, the final two of four planned SSBN-to-SSGN
conversions, and the first ship in our Cruiser Conversion program. In
all, our shipbuilding program includes $11.4 billion, a significant
increase above last year. Additionally, we invest more than $1.5
billion for Research and Development (R&D) in transformational
shipbuilding programs such as CVN-21, DD(X), LCS and SSGN, discussed
later in this statement. The seven new ships include:
--Three ARLEIGH BURKE Class (DDG-51) destroyers. These ships are
being procured as part of a multi-year procurement (MYP) of 10
DDG-51 ships over the period fiscal year 2002 through fiscal
year 2005. In addition to the cost savings from this MYP, the
Navy and its two principal DDG builders successfully negotiated
a workload swap arrangement in June 2002 in which General
Dynamics' Bath Iron Works will transfer LPD-17 ship
construction work to Northrop Grumman Ship Systems in exchange
for additional DDG-51 work. This arrangement will optimize
production efficiencies and stabilize workload at all shipyards
building DDG-51 and LPD-17 Class ships.
--One VIRGINIA Class (SSN-774) fast attack submarine. The fiscal year
2004 ship marks the initial year of a seven-ship, five-year MYP
that will achieve significant savings while increasing
submarine procurement to two per year starting in fiscal year
2007. The first VIRGINIA Class submarine (SSN-774) will deliver
in June 2004.
--One SAN ANTONIO Class (LPD-17) amphibious transport dock. The
fiscal year 2004 budget provides full funding to procure the
sixth ship of this class. The program is on track, and
represents an urgently needed contribution to the Marine Corps'
amphibious lift requirements.
--Two LEWIS AND CLARK Class (T-AKE) auxiliary cargo and ammunition
ships. Fiscal year 2004 funding procures the fifth and sixth
ships of this class to continue recapitalization of our support
fleet. Delivery of the lead ship is expected in fiscal year
2005.
Beginning in fiscal year 2004, the Cruiser Conversion Program will
provide selected TICONDEROGA Class Aegis-equipped cruisers with
essential land attack, force protection, and Area Air Defense Commander
capabilities, extending their mission-relevant service life to 35-plus
years.
Beyond the new construction ships and conversions, the fiscal year
2004 budget request provides additional incremental funding for LHD-8,
service life extension for three Landing Craft Air Cushioned, and
initial R&D efforts on the LHA Replacement (LHA(R)), scheduled for
procurement in fiscal year 2007. In LHA(R) the Department is pursuing a
far more capable replacement for aging amphibious ships such as the
LHA. While the initial stages of design move forward, LHA(R) will offer
many improvements over the LHA it will replace, and will set the stage
for further development toward a new design that could offer
capabilities such as concurrent flight operations of helicopters and
fixed wing aircraft.

Aircraft
The Department's fiscal year 2004 budget maximizes the return on
aviation investment, primarily through the use of MYP arrangements for
the F/A-18E/F (both airframe and engine), the E-2C, and the MH-60S. We
also have agreed to enter a joint MYP contract with the Air Force to
procure KC-130Js to replace the Marine Corps' fleet of KC-130F/Rs. In
all, the fiscal year 2004 budget procures 100 new aircraft, including:
53 tactical, fixed wing aircraft (42 F/A-18E/F, 2 E-2C and 9 MV-22); 28
helicopters (13 MH-60S, 6 MH-60R and 9 UH-1Y /AH-1Z); 16 trainer
aircraft (15 T-45 and 1 T-39); and 3 support aircraft (2 UC-35 and 1 C-
40A).
The F/A-18E/F Super Hornet is the Navy's principal tactical
aviation recapitalization program until we get to the JSF. The fiscal
year 2004 budget includes $3.0 billion for 42 planes, which constitutes
the final installment of an fiscal year 2000-fiscal year 2004 MYP
contract. Deliveries remain ahead of schedule, and the first squadron
of F/A-18E/F recently conducted combat operations aboard USS ABRAHAM
LINCOLN (CVN-72). Of note, a variant of the F/A-18 airframe, the EA-
18G, has been selected as the Navy platform to replace the aging EA-6B
Prowler. By using a common airframe, the EA-6B follow-on will deliver
at lower cost while providing growth potential for improved future
electronic warfare systems. The Marine Corps expects to fly the EA-6B
(ICAP III) until approximately 2014 to 2015 before transitioning to a
new Electronic Attack aircraft.
Based on successful flight testing results, the Department felt
confident to continue the minimum sustaining rate for the V-22 Osprey
program and has requested nine MV-22s along with two CV-22s requested
by the Air Force. Additionally, fiscal year 2004 funding supports key
elements of the Department's helicopter master plan. We have requested
procurement of 13 MH-60S platforms (organic mine countermeasures,
combat search and rescue, special operations and logistics missions)
and 6 MH-60R platforms (tactical support missions for surface
combatants and aircraft carriers). Together, these will continue
replacing the Department's aging fleet of H-46, SH-3, SH-60B and SH-60F
helicopters. Fiscal year 2004 will mark the first year of procurement
in the AH-1Z/UH-1Y program. These aircraft improve many capabilities
for the Marine Corps, including increased payload, range and time on
station, improved sensors and lethality, and 85 percent component
commonality.

Weapons
The fiscal year 2004 budget request supports the Department's
objective to develop, upgrade and replace weapons and weapon systems to
ensure we maintain our warfighting edge.
Our precision guided munitions inventory will continue to improve
in fiscal year 2004 as the Tactical Tomahawk (TACTOM) system ramps up
to full rate production. TACTOM will accelerate the transition of our
land attack missile inventory from the older Tomahawk Land Attack
Missile to the newer, more capable, less costly TACTOM. The budget
request sustains the maximum Department of the Navy production rate for
the Joint Direct Attack Munition of 1,000 units per month while
procuring over 5,000 Laser Guided Bomb kits. Production of the Joint
Standoff Weapon (JSOW) baseline variant (dispenser) increases in fiscal
year 2004, and the JSOW unitary variant (penetrator) enters full rate
production.
Several land attack R&D efforts central to future littoral warfare
continue in fiscal year 2004. Advanced naval gun technologies will
enhance fire support to Marines operating ashore. Evolving toward a
fiscal year 2005 ``shoot-off,'' either the Extended Range Guided
Munition or the Autonomous Naval Support Round will enhance the range
and accuracy of Navy 5-inch guns. The Advanced Gun System will provide
the next generation of surface combatants with a modular, large caliber
gun system including an automated magazine handling system.

Key Warfighting ``Core Competencies''
While the fiscal year 2004 budget request devotes a significant
amount of resources toward recapitalizing and transforming to meet
future requirements, it also provides solid support for our
longstanding naval ``core competencies'' of Anti-submarine Warfare
(ASW), Mine Warfare (MIW), Ship Self Defense (SSD) and Air Defense
(AD).
ASW.--ASW remains a challenging mission area, particularly in the
shallow water littoral regions populated by modern, quiet submarines.
The fiscal year 2004 budget request supports numerous improvements in
ASW. The Improved Extended Echo-Ranging is incorporated into the USQ-
78B Acoustic Processor, which will improve large area acoustic search
capability on our Maritime Patrol Aircraft. Further enhancements to our
capability for large area search will be provided by acquiring the
Automatic Periscope Detection and Discrimination system. Additionally,
the capability for our surface combatants to survive attacks from
threat torpedoes will be enhanced through the Surface Ship Torpedo
Defense effort. The success of the Acoustic Rapid COTS Insertion (A-
RCI) program in providing significant improvement in ASW sensor
processing for our submarine force has spawned similar efforts in
submarine combat control, communications, and upgrades to the surface
fleet's SQQ-89 combat suite. These programs validate the Navy's
decision to use commercially available technology to deliver superior
performance at less cost.
MIW.--The Navy continues to make advances in MIW capabilities, and
our emphasis on organic capabilities to counter the growing mine threat
is enhancing our ability to ``get to the fight.'' The fiscal year 2004
budget continues the development and acquisition of the Long-Term Mine
Reconnaissance System (LMRS), which is on track for an fiscal year 2005
IOC on LOS ANGELES Class submarines. LMRS will provide a clandestine
reconnaissance capability for mines and mine-like objects. The fiscal
year 2004 budget also includes funding for the development and
acquisition of the Remote Mine-hunting System (RMS), a surface ship--
launched and recovered semi-submersible vehicle. RMS has an fiscal year
2005 IOC with near-term fielding planned for DDGs 91-96. RMS also is a
strong candidate for future deployment on the Littoral Combat Ship
(LCS). To meet the Department's goal of an organic mine warfare
capability by fiscal year 2005, the fiscal year 2004 budget continues
the development and integration of five Organic Mine Subsystems into
the MH-60S platform.
SSD.--We continue to invest in upgrading our Ship Self Defense
programs. Fiscal year 2004 funding covers the spectrum from electronic
countermeasures to missiles to guns. The Surface Electronic Warfare
Improvement Program (SEWIP) is a spiral development effort initiated to
provide a robust, full spectrum electronic warfare system following
cancellation of the Advanced Integrated Electronic Warfare System in
fiscal year 2002. SEWIP will build on the legacy SLQ-32 system to field
capabilities against next-generation threats. The current budget
expands procurement of the Close-in Weapons System, Block 1B. The
internationally-procured Rolling Air Frame Missile will provide ship
self-defense against missiles as part of a layered defense.
Additionally, we are pursuing installation of minor caliber guns on our
deploying ships to improve our ability to counteract a small boat
threat in the 0 to 8,000 yards range. We soon will install stabilized
minor caliber guns on two DDGs.
AD.--The fiscal year 2004 budget requests funds to develop the
Extended Range Active Missile (ERAM). ERAM will enable over-the-horizon
engagements against the most advanced anti-ship and land attack cruise
missiles, and represents an important step in projecting area defense
landward from the sea.

Maneuver Warfare
The fiscal year 2004 budget supports the continued development and
fielding of all equipment used by the Marine Corps' maneuver forces.
This year we identify approximately $340 million for R&D and
procurement of the Advanced Amphibious Assault Vehicle (AAAV). Last
year we procured the first AAAV, which will serve as a full-up system,
live-fire test vehicle. We will procure 186 systems over the remainder
of the fiscal year 2004-fiscal year 2009 program. Scheduled for IOC in
fiscal year 2008, the AAAV will provide a unique combination of
offensive firepower, nuclear-chemical-biological protection, and high
speed mobility on land and on sea.
The fiscal year 2004 budget will fund the next 60 Lightweight 155
mm (LW155) Howitzers. These units will provide significant improvements
in Marine Corps fire support over the current M198 system. Compatible
with all United States and NATO 155 mm rounds, the smaller footprint of
the LW155 will reduce strategic sealift requirements while providing
improved accuracy and greater lethality.

C\4\I, Space and Network Initiatives
The Department's Command, Control, Communication, Computers, and
Intelligence (C\4\I) and space programs are an integral part of network
centric operations, enhancing the combat capability of our Naval Forces
and serving as critical enablers of a transforming Navy and Marine
Corps. Our concept of Information Technology for the 21st Century (IT-
21) is providing a common backbone for C\4\I systems to be linked
afloat, ashore, and to the Internet. IT-21 combines satellite and line-
of-sight communication paths with commercial IT hardware and software
to establish secure and unclassified Internet Protocol network
connectivity for ashore and mobile Naval forces. This is a critical
first step toward transformational network centric operations.
Our next major objective is to integrate the successes of IT-21 and
incorporate them across the full spectrum of naval operations to
achieve significant improvement in knowledge management and operational
performance. This full dimensional approach, called FORCEnet, will
provide the operational construct and architectural framework for naval
warfare in the information age. We will address FORCEnet in greater
detail later in this statement.
Support from space is essential to many Navy and Marine Corps
operations today, and grows increasingly important as the force becomes
more network centric. The fiscal year 2004 budget supports the
Department's expanding efforts in space, including assured, high data
rate satellite communications, precision navigation and targeting,
intelligence, surveillance and reconnaissance systems and environmental
support.
The fiscal year 2004 budget continues critical enhancements that
will provide our forces with a common tactical picture. Cooperative
Engagement Capability (CEC) will provide real time exchange of fire
control quality data between battle force units and will permit a
single, identical tactical picture. The Block 2 version will reduce
cost, size and weight, with procurement beginning in fiscal year 2006.
The Naval Fires Control System and Joint Fires Network will use
existing fire control infrastructure to serve as the nerve center for
surface land attack by automating shipboard land attack battle
management duties, incorporating improved land attack weapons systems,
and utilizing battlefield digitization.
The Navy/Marine Corps Intranet (NMCI) serves as the principal
element of the IT-21 effort ashore and is a key enabler of IT
transformation. Business Case Analyses conducted over the last two
years have demonstrated that the NMCI strategy, characterized by having
a single private sector entity provide IT services under a long-term
commercial seat management contract is, in fact, a sound business
decision compared to the way IT requirements previously were satisfied.
Last year Congress approved a two-year extension to the base
performance period of the original NMCI contract, extending coverage
through fiscal year 2007. Fiscal year 2004 funding of $1.6 billion
continues user seat roll-out and cutover to the NMCI architecture.
Progressing toward a target end-state of 365,700 seats.

Missile Defense Initiatives
The Department of the Navy is poised to contribute significantly in
fielding initial sea-based missile defense capabilities to meet the
near-term ballistic missile threat to our homeland, our deployed
forces, and our friends and allies. We are working closely with the
Missile Defense Agency (MDA) to upgrade six DDGs in calendar year 2004
and another six in calendar year 2005 for ICBM surveillance and
tracking duties. We also are supporting MDA's procurement of up to 20
Standard Missile interceptors to provide a limited at-sea capability to
intercept ballistic missiles in the ascent and mid-course phases of
flight. Finally, USS LAKE ERIE (CG-70) will be assigned to MDA to
facilitate a more robust testing program for missile defense. Our sea-
based missile defense programs experienced tremendous success on the
test range during 2002, and we look forward to building on these
successes to accelerate development of this vital capability for our
Nation.

Shore Infrastructure
The Department remains dedicated to maintaining and improving the
quality of our support to Sailors and Marines. Maintaining and
improving an aging infrastructure, while recapitalizing our operating
forces, requires disciplined choices and innovative approaches.
The fiscal year 2004 housing program continues the Department's
course toward the goal of eliminating inadequate family housing by
2007. The Navy's three-pronged strategy of improving allowances to
service members, privatizing, and continuing traditional military
construction is proving very successful. Increased Basic Allowance for
Housing (BAH) is spurring local communities to provide necessary
housing on the open market. Recent analysis shows we have reduced the
total requirement for government furnished housing by over 9,500 units.
Public/Private housing ventures are allowing us to achieve more
with less commitment of resources. In fiscal year 2003 we will
privatize over 10,400 homes in five locations; in fiscal year 2004 we
are increasing this by another 7,000 units. Where BAH and privatizing
do not apply we are renovating or replacing our inventory.
We are building on our successes in Family Housing to help achieve
our Homeport Ashore Program. Three bachelor housing pilot projects are
being considered that could increase the number of spaces in San Diego,
Norfolk and Camp Pendleton.
The fiscal year 2004 Military Construction and Sustainment program
reflects difficult but necessary trade-offs between shore
infrastructure and fleet recapitalization. The Department remains
committed to achieving a 67-year recapitalization rate by fiscal year
2008. In pursuing that goal we will explore innovative solutions to
provide safe, efficient installations for our service members,
including design-build improvements, more efficient facilities and BRAC
land sales via the GSA Internet.

Business Practices
We have embarked on a mission to improve the business practices of
the Department. Every dollar saved by working smarter or by ending
outdated methods of operations is another dollar that can be used for
our Sailors and Marines to equip, train or fight.
Information is key to improving the way we do business. Better
information makes for better decision making, both on the battlefield
and at the budget table. We have four pilot programs in place utilizing
enterprise resource planning, or ERP, which aim to improve the quality
of information available to our decision makers. These pilot projects
will eliminate dozens of incompatible computer databases and the
business processes that once supported those databases. Even more
importantly, ERP should produce financial and managerial information
that is more complete, more accurate and more timely. Our focus now is
on converging these pilots to achieve even greater synergy of
management information across a broader spectrum of the Department, and
working with the Department of Defense Comptroller to ensure these
efforts are advancing the uniform business management architecture
under development.
In addition to better information, we need flexible and innovative
tools to help manage the Department. Some of these tools, like
strategic sourcing, are being used already. Competition helps achieve
the best quality support to the Sailor and Marine at the lowest
possible cost by introducing the discipline of the marketplace. The
acquisition process still needs considerable reform. We owe it to every
Sailor and Marine to ensure that today's technology arrives in their
hands today, not tomorrow. It still takes too long from lab to live
fire. Finally, the Navy and Marine Corps need better tools to recruit
and manage the civilians who support our warfighter.
This year's budget request includes reforms that will allow us to
continue to improve business practices. These proposed reforms include
increasing Operations and Maintenance appropriations from one-year to
two-year money and consolidating Military Personnel accounts from ten
to four accounts. These initiatives would allow more effective
management and execution of these programs.

NAVAL POWER 21: A TRANSFORMATIONAL VISION FOR THE 21ST CENTURY

Fundamentally, our Navy and Marine Corps exist to control the seas,
assure access, and project power beyond the sea. Our vision, Naval
Power 21, is built upon three pillars:
--We assure access. We assure sea-based access worldwide for military
operations, diplomatic interaction, and humanitarian relief
efforts.
--We fight and win. We project power to influence events at sea and
ashore both at home and overseas.
--We are transforming continually to improve. We are transforming
concepts, organizations, doctrine, technology, networks,
sensors, platforms, weapon systems, training, education and our
approach to people.
Although the Navy and Marine Corps team remains the greatest
maritime force in the world, the emerging challenges of the 21st
Century demand a joint, netted, power projection force that offers
modern and ever-evolving combat capability. Together, under the
supporting service visions of Seapower 21 and Marine Corps Strategy 21,
we will provide funding for a full array of transformational
initiatives in our R&D, investment and operational programs. Evidence
of the scope and magnitude of these changes is highlighted by our
transformation: from a single new class of destroyer to a family of
surface combatants tailored for the full range of 21st Century
missions; from a Cold War force of 18 SSBNs to a 21st Century force of
14 SSBNs and 4 SSGNs; from evolutionary aircraft carrier improvements
to the revolutionary promise of CVN-21; from no ballistic missile
defense (BMD) capability to limited sea-based BMD capability; and from
competing Navy and Marine Corps tactical aviation to an integrated
Naval tactical aviation.

Transformational Capabilities to Assure Access and Project Power
The Navy and Marine Corps continue to meet the imperative of
transformation. Our ``way ahead'' for the future capitalizes on
transformational ideas that facilitate our recapitalization goals. The
fiscal year 2004 budget request includes funding for initiatives in
shipbuilding, aviation and C\4\I that promise dramatic improvements in
assuring access and projecting power.
In shipbuilding, we are fulfilling the President's stated goal to
``skip a generation'' of technology by restructuring our previous two-
step (CVNX-1 and CVNX-2) evolutionary acquisition approach into a
single transformational ship design that accommodates continuous
evolution through the life of the class. The new design, named CVN-21,
sustains the original development and construction schedule from CVNX-
1, but accelerates many critical technologies previously planned for
the second step ship, CVNX-2. CVN-21 will feature a new propulsion
plant, a greatly expanded electrical generation and distribution
system, a new/enlarged flight deck, an improved sortie rate generation
over CVNX-1, an electro-magnetic aircraft launching system (EMALS), a
new advanced arresting gear, improved weapons and material handling
systems, and improved survivability features--all with 800 fewer crew
members. In support of this technology acceleration we have added
significant funding across the fiscal year 2004 to fiscal year 2009
program while providing $1.5 billion in fiscal year 2004 alone.
The centerpiece warship of our future surface combatant ``family of
ships,'' the DD(X), is on track to move to an initial construction
contract award in fiscal year 2005. Fiscal year 2004 funding of $1.05
billion will enable further development of key electric drive, power
grid, and combat system components. Through a spiral development
acquisition process, DD(X) will be the principal technology engine that
will feed the entire family of ships.
The fiscal year 2004 budget requests approximately $160 million in
R&D to begin moving out with the next member of our future surface
combatant ``family of ships,'' the Littoral Combat Ship (LCS). A
networked, lethal, small, fast, stealthy, and highly maneuverable ship,
LCS will be designed from the keel up as a focused mission ship capable
of employing manned and unmanned mission modules to counter some of the
most challenging anti-access threats our naval forces may encounter
close to shore--mines, quiet diesel submarines and swarming small
boats. Last year, we continued experimenting with a range of innovative
hull forms, and the Congress supported us so we could get the program
moving this year, avoiding a critical one-year delay. The fiscal year
2004 effort will be aimed at defining requirements, improving our
knowledge base for selecting an LCS design, and beginning mission
module development.
The fiscal year 2004 budget request contains nearly $1.2 billion
for SSBN-to-SSGN conversion. This effort will provide a near-term
transformational capability to the Nation by removing four OHIO Class
submarines from their strategic mission, refueling their reactors to
permit an additional 20 years of operation, and converting them into
conventional strike platforms capable of carrying more than 150
Tomahawk missiles and deploying over 60 special operations forces.
Funding to commence the first two conversions was provided in fiscal
year 2003; this year's request supports the conversion of the third
submarine and the advance procurement and planning for the final
overhaul in fiscal year 2005.
The fiscal year 2004 budget provides $2.2 billion to continue
development of the Joint Strike Fighter (JSF), a stealthy, multi-role
fighter aircraft designed to be an enabler for Naval Power 21. JSF
replaces the Navy's F-18A/C Hornet variants and the Marine Corps' AV-8B
Harrier and F/A-18C/D Hornet while complementing the Navy's F/A-18E/F
Super Hornet. JSF offers dramatic improvements in affordability and
supportability. It has completed all major milestones to date on time,
and remains on track to IOC for the Marine Corps in 2010 and for the
Navy in fiscal year 2012.
A critical enabler of transformational intelligence, surveillance
and reconnaissance, the E-2C Advanced Hawkeye Program will provide a
robust overland capability against current and future cruise missile-
type targets. The fiscal year 2004 budget invests over $350 million for
continued development. IOC is planned for fiscal year 2008 with a total
procurement of 66 systems.
As the Global War on Terrorism has demonstrated, unmanned
technology will play an ever-increasing role in the battleground of the
21st Century. The Department's fiscal year 2004 budget invests more
than $300 million across a series of Unmanned Aerial Vehicle (UAV)
programs, including Tactical UAVs, Maritime Surveillance UAVs and an
Unmanned Combat Air Vehicle (UCAV) initiative, developed in partnership
with the U.S. Air Force. Beneath the sea, we will invest more than $80
million in Unmanned Undersea Vehicles (UUVs) that are being developed
to enhance capabilities in minefield reconnaissance and other submarine
missions.

Transformational Organizations and Operational Concepts
Beyond pure technology, transformation also includes revolutionary
methods for achieving dramatically greater utility out of our existing
assets. The Department's initiative to integrate its tactical aviation
capabilities is one such transformational story. Navy and Marine Corps
Tactical Air Integration will maximize forward deployed combat power
and optimize the core capability of naval aviation forces. Its positive
impact will be felt across the Department's entire tactical aviation
enterprise, from leaner, more capable fighting formations to
streamlined procurement requirements (tactical and training) to
manpower savings. In total, this innovative program promises to save
$975 million over the fiscal year 2004-fiscal year 2009 program and
provide approximately $19 billion in cost avoidance from fiscal year
2007-fiscal year 2012.
To support the ability of forward based naval forces to respond to
a host of scenarios, the Navy and Marine Corps are exploring more
robust strike capabilities for the ARG/MEU team. The Expeditionary
Strike Group pairs the traditional ARG with surface combatants and an
SSN so the force has greater capability to conduct independent
operations in the ``deter'' and ``swiftly defeat'' scenarios outlined
in our defense strategy.
FORCEnet is the Department of the Navy's catalyst for operational
transformation. In the realm of network centric warfare and operations,
it will enable orders of magnitude increases in combat power to ensure
decisive influence and warfighting success across the full spectrum of
military operations in the information age. FORCEnet is not a system.
It is the architecture by which we will integrate our sensors,
networks, decision aids, weapons and warfighters into a networked,
distributed combat system, scalable across the entire range of conflict
from seabed to space and sea to land. Leveraging powerful network
infrastructure ashore, including NMCI and the various constituents of
IT-21, with legacy and developing tactical networks at sea, including
those as diverse as CEC, Joint Fires Network and the E-2C Advanced
Hawkeye Program, FORCEnet will bring a dramatically expanded
``toolbox'' of capabilities to the joint warfare commander. Through
FORCEnet the Navy and Marine Corps will transform to a joint, netted,
distributed and forward stationed force.

Transformational Initiatives for our People
Sea Warrior is the process of developing 21st Century Sailors.
Curriculum Mapping is the Marine Corps equivalent. These initiatives
identify the knowledge, skills, and abilities needed for mission
accomplishment; apply a career-long training and education continuum;
and employ a responsive, interactive career management system to ensure
the right skills are in the right place at the right time.
Modern Naval Forces are manned by streamlined teams of Sailors and
Marines who fight and manage some of the most complex systems in the
world. We need Sailors and Marines who are highly educated and expertly
trained. They must be creative thinkers and life-long learners, and it
is for them that we undertook the Revolution in Training. They also
deserve a human resource management and detailing system that provides
information and choice, both to the Sailor and gaining commands, so
that informed career decisions can be made. To this end, we are moving
toward an interactive and incentivized distribution system that
includes team detailing, web job listings, an information call center,
and comprehensive and extensive engagement of our detailers with
individual Sailors to help shape their careers.
At sea, we are exploring two initiatives that promise a revolution
in the way we man our ships. First, we have begun an ``Optimal Manning
Experiment'' on board USS MILIUS (DDG-69) and USS MOBILE BAY (CG-53) to
develop a more efficient model for the shipboard manning requirements
of the 21st Century. Also, we have begun a crewing experiment, entitled
``Sea Swap,'' in which we will deploy two destroyers for 18 months
consecutively, rotating the entire crews at six-month intervals. This
initiative will realize significant operational savings by avoiding
multiple six-week transits to and from the deployed operating areas.

Transformational Initiatives for Doing Business
Our ability to recapitalize and transform stems in large measure
from a vigorous divestiture program that forced us to make hard choices
across every facet of the Department's operations. We looked hard at
older systems with their limited capabilities and high infrastructure
costs (maintenance, parts, training, etc.) and ultimately decided to
accelerate retirement of 11 ships and 70 aircraft. We reorganized and
then reduced the Secretary of the Navy Headquarters Staff by 25
percent. We divested ourselves from more than 50 systems and eliminated
70,000 legacy IT applications from an original baseline of 103,000. In
the aggregate, these difficult decisions yielded $1.9 billion for
reinvestment in higher priorities.
In addition to divestiture initiatives, we are transforming the way
we manage the entire Department's internal affairs. Perhaps nowhere is
this more evident than in our shipbuilding programs. Instead of locking
ourselves into ``pre-ordained obsolescence'' through rigid designs for
hull, combat and information systems that take years to execute, we are
capitalizing on computer-aided, design-build strategies in which we
harvest commercial, ``state-of-the art'' technologies and insert them
at the optimum time as the construction process moves from hull to
combat system suite to information systems. We have undertaken some
remarkable initiatives within our acquisition community that have
stabilized key industrial bases, expanded our ability to capitalize on
the best commercial practices, and laid a strong foundation for
controlling the costs of our major acquisition programs.
We are working with industry as partners across the full breadth of
our shipbuilding programs. The tri-partite agreement between Navy,
General Dynamics and Northrop Grumman stabilized both our DDG-51 and
LPD-17 programs, avoided a ``second lead ship'' challenge for the LPD
program, and produced savings sufficient to purchase a third DDG in
fiscal year 2004 and fiscal year 2005. We are working with the software
industry to open all Navy architectures. These efforts are intended to
lead to the development of a truly open architecture that can be shared
between all of our current and future combatant ships. Finally, we have
imposed a discipline on ourselves that severely limits change during
the critical phases of our major shipbuilding programs. This discipline
also has been implemented in the JSF program through a configuration
steering board. By controlling the scope and timing of change, we hope
to implement necessary changes in our programs in a planned fashion
where we know what it will cost and how we will install it in the most
economical manner.
Through these transformational business initiatives and others, our
Department will emerge with an optimal force structure; a healthy
industrial base and an efficient and appropriately sized
infrastructure.

THE WAY AHEAD: POSITIONING TODAY'S NAVY AND MARINE CORPS FOR TOMORROW'S
CHALLENGES

Although the Global War on Terrorism is closer to the beginning
than the end, our Navy and Marine Corps, as members our nation's joint
battle force, have disrupted terrorist networks and freed the people of
Afghanistan. Our Nation can take pride that, in 2002, the Navy-Marine
Corps Team continued its record of combat excellence, improved
operational readiness and retained our magnificent people at historic
rates.
Much has been accomplished, but much remains to be done. The
Department's fiscal year 2004 budget request positions today's Navy and
Marine Corps to support tomorrow's joint warfighting environment by
sustaining hard-fought advances in personnel and operational readiness,
investing in critical shipbuilding and aircraft programs, fueling
transformational capabilities, and building a global, agile and fully
networked force. As our Navy and Marine Corps Team confronts a future
with challenges already visible on the horizon, we thank you for your
terrific support of our Naval Forces, and urge your continued support
for the course upon which we have embarked to fight and win our
nation's wars while preparing to meet the demands of an uncertain
tomorrow.

Senator Stevens [presiding]. Yes, sir. Who is next, Admiral
Clark?

STATEMENT OF ADMIRAL VERNON E. CLARK

Admiral Clark. Thank you, Chairman Stevens, Senator Inouye,
Senator Cochran. Good morning. I am privileged to be here this
morning to talk about our Navy and to talk about it in the
context of the Navy-Marine Corps team. Mr. Chairman, I like to
tell folks that the man sitting at the other end of the table
is my number one joint partner, and I am extremely pleased and
honored to be able to serve along General Mike Hagee, and
especially at a time like this with what the Marine Corps is
accomplishing in the theater of operations.
This morning, Mr. Chairman, 54 percent of my Navy is
forward deployed. As Secretary Johnson just talked about, they
are forward deployed, they are at the tip of the spear, and
they are doing what they are supposed to be doing and that is
carrying out the orders of the President of the United States.
And of course, most of them are engaged in Operation IRAQI
FREEDOM. They are striking the enemy. They are providing close
air support for Marines and Army troops, for coalition
partners. They are clearing the sea lanes. They are providing
supplies and logistics and are protecting our joint coalition
forces at sea and on land. They remain ready, they are ready,
and they are part of a very effective joint combined force.
On the night before hostilities commenced, I passed a note
to Secretary Rumsfeld and I said to him, Mr. Secretary, I have
never seen our Navy as ready as it is today. And I never have.
And I would just want to say to this committee that I am
extraordinarily appreciative of the partnership that has been
crafted by the leaders of America who have put the resources in
place to see to it that we have the kind of ready Navy that we
have today. And I can tell you that earlier in my career, I
have not seen a time that we would have been able to surge this
force forward with the kind of readiness statistics that we are
realizing today, and I believe that the return on investment is
showing itself on the battlefield and on the oceans in
Operation IRAQI FREEDOM.
Of course as Senator Inouye said, today we are here to talk
about the 2004 investment strategy. What we are seeing in Iraqi
Freedom is the return on investment from previous investments.
Today we are here to talk about the 2004 investment plan.
I would like to focus on two areas, two areas for
investment.
Number one, people. Secretary Johnson talked about the
things that are going on in our Navy. Seventy-seven thousand of
our sailors are deployed in the theater of operations and about
10,500 reserves, and they are taking the fight to the enemy. I
just want to say that Congress' attention to their pay, to
allowances, to housing, to infrastructure and the things, the
tools that allow them to do the job, have made a difference,
and the quality of life and quality of work for our sailors and
families is good and improving.
I just want to also say that our sailors are responding to
the signals that they are receiving from the citizens of the
United States and from the Congress. We are enjoying as I sit
here this morning, the best retention, the best manning that I
have ever witnessed in my career. Three straight years now of
record retention, never better in our 227-year history of our
institution. Last month, first-term retention in my Navy was 79
percent, and for this fiscal year it has been 76 percent. Never
in our history have we had anything like this.
I want to say that at the heart of our readiness is our
manpower readiness, the readiness of our people. It did not
happen by accident, it happened because of actions by leaders
of America. Our ships and squadrons are fully manned. They have
been able to surge forward on a moment's notice.
Most noteworthy, the response by the United States Marine
Corps and Amphibious Task Force East and West are great
indicators of how ready the Navy and the Marine Corps team were
at the time and are now in the battlefield.
But I would like to say that numbers alone is not enough,
and we have struck out on programs committed to the growth and
the development of our people, of our skilled work force, and
it is making a difference. We are focusing on something called
sea warrior, I detailed it my written testimony. It is about a
21st century revolution, and it is about new and innovative
techniques in growing and developing people. It is about
getting the right skills in the right place and at the right
time.
And so, my conclusion of all this is that the unprecedented
success that we are realizing in the battle for people has been
spearheaded by the incredible readiness postures that we
realize today. The challenge for us is to sustain the gains
that we have achieved in the past couple of years in readiness
and manpower, while focusing on the second thing I want to talk
to you about, and that is, it is time to focus on our future
and that is modernizing and transforming the force.
That leads us to capital investments in hardware, ships,
airplanes, submarines. Programs that needed to mature, that
were not where we wanted them to be. And I want to say that
this committee specifically helped us deal with the very
difficult problem in prior year shipbuilding costs, you helped
us fix it, and it is paying dividends this morning. Building
approaches to improve the industrial base. We are grateful for
the way this committee has helped us put ourselves on a solid
foundation so that we can move forward with transforming the
United States Navy.
Our strategy for the future is detailed in our vision for
the Navy, Sea Power 21, and again, it is detailed in my written
testimony which is a matter of record and I will not go into
detail with it this morning, except to say this: It is about
the commitment to being on the offense. I call that sea strike,
projecting offensive power.
It is happening this morning with long range tac air, and
Tomahawks launched a thousand miles or more. And it is about
the United States Marine Corps and what they are doing
projecting power. It is about sea shield, and that is
projecting defensive power, a new strategic capability,
tracking missiles over land. This morning we are operating in
concert with the United States Army on those missiles that have
been launched on our forces. The capability that we have seen
in testing over the last year in missile defense is, in fact,
in place on the battlefield providing tracking, and in
partnership with the United States Army.
And of course we cannot forget that it is about clearing
the Littoral, of mine threats, and the humanitarian assistance
that is going on right now, and has been seen on television.
One of the reasons it is happening is because the mine warfare,
the people executing the mine warfare function and application
have been performing superbly.
And then it is about sea basing. I call that projecting
American sovereignty from the sea, going where we need to go,
where we want to go. The operational independence that comes
from operating from the maritime domain. And so, the Marine
Corps and the Navy are committed to exploiting the maritime
battle space to the advantage of U.S. joint and combined forces
in the future. This year's investment strategy is committed to
building toward that vision of tomorrow.
Starting with the family of ships for the 21st century. The
Secretary mentioned it, DDX, the heart of the family of ships.
And the Littoral combatant ship that is designed to deal with
the kind of threats that we are facing in the first part of the
21st century, designed to deal with the asymmetric threats that
are going to come after us. Built with plug and play technology
from the beginning, built and conceived for unmanned vehicles,
unmanned air vehicles, unmanned surface vehicles, unmanned
underwater vehicles. That is the family of ships spiraling to
CGX.
And of course the Secretary mentioned EA-18G, a very
important development in this program. And the new carrier. And
there is an exciting future detailed for the Navy and the
Marine Corps with the family of ships there, the replacement
LHA and maritime preposition forces for the future, and the
importance of LPD-17 that is now a healthy robust program, with
the first ship soon to be launched here in a couple months.
Submarine programs, the exciting Virginia class and the new
SSGN.
So the challenge for us is figuring out how to find the
resources, and of course that is what this committee is all
about. And I just want you to know that we are trying to do our
part. We are trying, we are working to find resources and make
sure that we are putting resources in the right place to make
our readiness what it needs to be today and for the future.
We are challenging our people to innovate and to find
deficiencies, and to get as much combat readiness as we can out
of every dollar that is given to us by the taxpayers of the
United States of America. And I would just say that the biggest
example of that is Navy-Marine Corps tac air integration. This
is a story that, you know, we could talk about for 30 minutes,
but the bottom line is this program, this partnership between
the Navy and Marine Corps will save billions of dollars and
make us more combat ready in the future.
So Mr. Chairman and committee members, in summary, your
Navy is ready today. It is forward deployed, it is on scene,
and it is carrying out in concert with the other services and
our coalition partners Operation IRAQI FREEDOM. We are focused
on the future while prepared for today, and the young men and
women of our Nation's Navy are serving on the point today with
distinction, and I am extremely proud of them.

PREPARED STATEMENT

I thank you again for your continued support and for your
roles as leaders of America in helping us create today's Navy,
and I look forward to your questions.
[The statement follows:]

Prepared Statement of Admiral Vernon E. Clark

Mr. Chairman and members of the Committee, I appreciate the
opportunity to appear today. The investment you've made in America's
Navy has been vital to the nation's security and your Navy's ability to
project more power, more protection and more freedom to the far corners
of the earth. I speak for the entire Fleet in thanking you for your
exceptional and continuous support.

I: Your Navy Today--Enhanced Capabilities for the Joint Force
This is a time of tremendous challenge and accomplishment for our
Navy. Our men and women have been waging the Global War on Terrorism
for well over a year and now they are in combat in Operation Iraqi
Freedom (OIF). They are on the front lines of the first wars of the
21st Century, serving with determination and distinction, leading the
defense of America away from our own shores and our own homes.
Today, there are 164 ships on deployment, over half of the Navy;
this includes seven of twelve aircraft carriers, and nine of our twelve
big deck amphibious ships (LHA/LHD). They are deployed in support of
the nation's interests in the Persian Gulf, the Mediterranean, the
Indian Ocean and the Western Pacific. Still others are preparing for
deployment or continuing operations like strategic deterrent and
counter-drug patrols in support of other national imperatives.

Our Navy is ready for these missions today and is preparing for the
difficult future challenges that lie ahead. After all, this new century
is fraught with profound dangers: rogue nations in possession of
weapons of mass destruction, potential conflict between regional
competitors, widely dispersed and well-funded terrorist organizations,
and failed states that deliver only tyranny and despair to their
people.
We frequently talk about the asymmetric challenges such enemies
might present, assuming these advantages belong only to potential
adversaries. Your Navy possesses asymmetric strengths all its own: its
persistence, precision, independence and agility are but a few.
More importantly, our naval strengths are critical to our joint
combat effectiveness. Our forward deployed, combat ready naval forces--
sustained by naval and civilian shipmates around the world--are proving
every day the unique and lasting value of sovereign, lethal forces
projecting offensive and defensive power from the sea.
There are numerous recent examples of the enhanced capability our
Navy brings to the joint force.
--In Operation Iraqi Freedom, the ABRAHAM LINCOLN, CONSTELLATION,
KITTY HAWK, THEODORE ROOSEVELT and HARRY S. TRUMAN battle
groups are providing persistent and credible combat power to
the joint force commander. The USS NIMITZ is speeding to the
Central Command's area of responsibility and is ready to
conduct combat operations. The CARL VINSON stands watch in the
Western Pacific. Our widely dispersed Tomahawk equipped ships
and submarines and our carrier-based aircraft--in combination
with land-based Air Force tankers and bombers and our Marine
Corps and Army ground forces--are delivering precise, time-
sensitive strikes ashore and conducting decisive combat
operations deep inland in OIF.
--The Navy's Military Sealift Command (MSC), is actively providing
combat logistics support to U.S. Navy ships; is prepositioning
joint military supplies and equipment at sea; and is providing
sealift and ocean transportation of defense cargo. MSC's high
quality shipping, augmented by charters, continues its sealift
of the Army's 4th Infantry Division. MSC is also delivering
fuel and aviation support equipment and supplies to deployed
Army and Air Force units. All eight of our Fast Sealift Ships
and nineteen of our twenty new large, medium speed roll-on/
roll-of ships are employed. Over half of our ready reserve
ships have been activated, and when combined with other
chartered shipping, MSC has more than 130 ships committed to
the sealift of the joint team, and nearly 210 ships under their
control. This includes the eleven of our fifteen deployed
Maritime Prepositioning Ships (MPS) that have offloaded
supplies and equipment for our Marine force. In all, 95 percent
of all equipment and supplies needed by U.S. forces in time of
crisis moves by sea on MSC controlled ships.
--Working alongside the Marine Corps, our Amphibious Ready Groups,
including 7 big decks (LHA/LHD) in the Persian Gulf area, are
supporting over 60,000 Marines ashore in OIF. Permanently
installed command, control, communications, computers,
intelligence, surveillance and reconnaissance (C\4\ISR) suites
and information technologies on these ships are enhancing the
entire joint team's knowledge superiority picture. Troops
ashore are supported with sustained logistic support and we are
hosting, operating and maintaining Marine aircraft--all from
the security our ships enjoy in the maritime domain. Most
importantly, these ships fully utilize the vast maneuver area
of the world's oceans, leveraging our asymmetric advantage and
improving our ability to bring decisive power to the point of
attack.
--The AEGIS cruiser USS LAKE ERIE (CG 70) completed three medium
range ballistic missile defense tests last year, successfully
acquiring, tracking and hitting target ballistic missiles in
the mid-course or ascent phases with a Standard Missile 3 (SM-
3) in all three tests. LAKE ERIE and the AEGIS destroyer USS
JOHN PAUL JONES also supported three successive Missile Defense
Agency intercontinental class ballistic missile tests; the
AEGIS system performed exactly as predicted in each of these
tests, acquiring the targets immediately and passing high
fidelity digital track data to national nodes ashore. These
cruisers' and destroyers' organic AEGIS Weapons System and
their SPY-1 multi-function, phased array radars, demonstrate
the capability and capacity to conduct a sea based missile
defense against those ballistic missiles that can target our
homeland, allies, forward operating bases, and joint forces
ashore. They could also provide important surveillance and
cueing of intercontinental class weapons directed at our
homeland.
--The USS FLORIDA (SSBN 728), an Ohio-class fleet ballistic missile
submarine, successfully launched two Tomahawk missiles,
confirming the ability to launch a Tomahawk from a
configuration similar to the tightly packed cluster of Tomahawk
All-Up-Rounds (AUR) we will use in the SSGN. This experiment
was conducted in support of the SSGN program's Sea Trial
experiment, Giant Shadow, which also explored how a network of
forces, including special warfare forces, and various unmanned
aerial, underwater and ground vehicles and sensors could be
used to provide surveillance, collect real-time intelligence,
and develop and launch a time critical strike in support of the
joint force commander. This included the first vertical launch
of a UUV, testing of nuclear-biological-chemical sensors, and
the insertion of SEALs from one of the submarines we will
convert to an SSGN.
These examples represent the return on investment the American
people have made in our Navy: an agile, connected fleet that enhances
deterrence, sustains our access, conducts precision strikes, exercises
joint command and control, enhances knowledge superiority, responds to
crisis, projects, sustains and operates with the joint force ashore,
and leverages the priceless advantage of our command of the seas. It is
why we are a critical component of the nation's joint defenses in
peace, in crisis, and in conflict.
None of the foregoing would be possible without the energy,
expertise, and enthusiasm of our active and reserve Sailors, and our
Marine and civilian shipmates in the Department of the Navy. After all,
it is people that put capability to practice, and it is their dedicated
service that makes these capabilities ready--around the world and
around the clock.

II: A Culture of Readiness--A Commitment to Transformation
This century's dangerous and uncertain strategic environment places
a premium on credible combat forces that possess speed of response,
immediate employability, and the flexible force packaging that brings
the right capability to bear at the right time. It demands forces that
can pair this capability with readiness, both today and in the future.
Readiness is the Navy's watchword. Readiness is the catalyst that
brings combat power, speed of response, and the ability to disrupt an
enemy's intentions in both crisis and conflict. Readiness brings
capability to bear wherever and whenever it is needed. We are making
readiness a key element of our Navy's culture.
The forces we've placed forward today are the most ready force in
our history; properly manned, superbly trained and well provisioned
with ordnance, repair parts and supplies so they can provide both
rotational deployment and surge capability. Our operational forces are
ready earlier and are deploying at a higher state of readiness than
ever before.
A greater percentage of our ships are underway today than at any
time in the last dozen years. Our ability to do so is the direct result
of two things: the investment of the American people and the
extraordinary commitment and accomplishment of our men and women in the
Navy this past year. We made a concerted effort in last year's budget
request to improve our current readiness and reduce our immediate
operational risk and I am proud to report to you today that this force
is ready to fight and win!
At the same time, it is apparent that the 21st century sets the
stage for tremendous increases in precision, reach, and connectivity,
ushering in a new era of joint operational effectiveness. We clearly
will be able to integrate sea, land, air, and space through enhanced
network technology to a greater extent than ever before. And in this
new, unified battlespace, the sea will provide the vast maneuver area
from which to project direct and decisive power.
To navigate the challenges ahead and realize the opportunities, we
developed this past year a clear, concise vision--Sea Power 21--for
projecting decisive joint capabilities from the sea. It is a vision
that stresses our asymmetric strengths of information dominance,
advanced technology, and highly skilled and motivated professionals.
Sea Power 21 advances American naval power to a broadened strategy
in which naval forces are fully integrated into global joint operations
across this unified battlespace and against both regional and
transnational aggressors. It provides the transformational framework
for how we will organize, align, integrate, and transform our Navy to
meet the challenges that lie ahead.
It also includes the transformed organizational processes that will
accelerate operational concepts and technologies to the fleet; shape
and educate the workforce needed to operate tomorrow's fleet; and
harvest the efficiencies needed to invest in the Navy of the future.
The capabilities needed to fulfill this broadened strategy are
grouped into three core operational concepts: Sea Strike, Sea Shield,
and Sea Basing, which are enabled by FORCEnet. The triad of transformed
organizational processes that supports these concepts is: Sea Warrior,
Sea Trial, and Sea Enterprise.

Together, these concepts will provide increased power, protection,
and freedom for America.
--Sea Strike is the projection of precise and persistent offensive
power. Sea Strike operations are how the 21st century Navy will
exert direct, decisive and sustained influence in joint
campaigns. Sea Strike capabilities will provide the Joint Force
Commander with a potent mix of weapons, ranging from long-range
precision strike, to clandestine land-attack in anti-access
environments, to the swift insertion of ground forces.
--Sea Shield is the projection of layered, global defensive
assurance. It is about extending our defenses beyond naval
forces, to the joint force and allies and providing a defensive
umbrella deep inland. Sea Shield takes us beyond unit, fleet
and task force defense to provide the nation with sea-based
theater and strategic defense.
--Sea Basing is the projection of operational independence. Sea
Basing will use the fleet's extended reach of modern, networked
weapons and sensors to maximize the vast maneuver space of the
world's oceans. It is about extending traditional naval
advantages to the joint force with more security, connectivity,
and mobility from netted forces at sea.
--FORCEnet is the enabler of our knowledge supremacy and hence, Sea
Strike, Sea Shield, and Sea Basing. It is the total systems
approach and architectural framework that will integrate
warriors, sensors, networks, command and control, weapons, and
platforms into a networked, distributed force and provide
greater situational awareness, accelerated speed of decision,
and greatly distributed combat power.
Our transformed organizational processes are:
--Sea Warrior is our commitment to the growth and development of our
Sailors. It serves as the foundation of warfighting
effectiveness by ensuring the right skills are in the right
place at the right time.
--Sea Trial is a continual process of rapid concept and technology
development that will deliver enhanced capabilities to our
Sailors as swiftly as possible. The Commander, U.S. Fleet
Forces Command is leading this effort and developing new
concepts and technologies, such as the Joint Fires Network and
High Speed Vessels.
--Sea Enterprise is our process to improve organizational alignment,
refine requirements, and reinvest the savings to buy the
platforms and systems needed to transform our Navy. It is the
means by which we will capture efficiencies and prioritize
investments. Sea Power 21 is dedicated to a process of
continual innovation and is committed to total jointness. It
extends American naval superiority from the high seas,
throughout the littorals, and beyond the sea. It both enhances
and leverages persistent intelligence, surveillance and
reconnaissance capabilities and precision weaponry to amplify
the nation's striking power, elevate our capability to project
both defense and offense, and open the door to the afloat
positioning of additional joint capabilities, assets and
forces.
Sea Power 21 will extend the advantages of naval forces--speed of
response, agility, immediate employability, and security--to the
unified, joint warfighting team. It will increase our deterrence,
crisis control and warfighting power. It will ensure our naval forces
are fully integrated into global joint operations to bring more power,
more protection, and more freedom to America.
We will put our Sea Power 21 vision into practice through a new
Global Concept of Operations (CONOPs) to distribute our combat striking
power to a dispersed, networked fleet. This will optimize our flexible
force structure and create additional, scaleable, independent operating
groups capable of responding simultaneously around the world. This
distribution of assets will take us from 19 strike capable groups to 37
strike capable groups with the full implementation of the Global
CONOPs.

--Carrier Strike Groups will remain the core of our Navy's
warfighting strength. No other force package matches their
sustained power projection ability, extended situational
awareness, and survivability.
--Expeditionary Strike Groups will augment our traditional Amphibious
Ready Group/Marine Expeditionary Unit team with strike-capable
surface combatants and submarines to prosecute Sea Strike
missions in lesser-threat environments. When combined with a
Carrier Strike Group, the resulting Expeditionary Strike Force
will possess the full range of our netted, offensive and
defensive power. We will deploy at least one pilot ESG this
year.
--Missile-Defense Surface Action Groups will increase international
stability by providing security to allies and joint forces
ashore from short and medium range ballistic missile threats.
--Our future SSGN forces--specially modified Trident submarines--will
provide large volume clandestine strike with cruise missiles
and the capability to support and insert Special Operations
Forces.
--An enhanced-capability Combat Logistics Force and Maritime
Prepositioned Force will sustain a more widely dispersed and
capable Navy/Marine Corps team.
It is our intention to continue to nurture this culture of
readiness and invest in this vision in the years ahead.

III. Our Fiscal Year 2004 Budget Request
This past year the Navy improved its current readiness by properly
funding our current readiness accounts, deepening the growth and
development of our people, and developing innovative operational
concepts and capabilities.
This year, we intend to:
--Sustain our current readiness gains to support the war on terror;
--Deepen the growth and development of our people into the 21st
Century, high-technology personnel force that is our future;
and
--Invest in our bold new Navy vision--Sea Power 21--to recapitalize
and transform our force and improve its ability to operate as
an agile, lethal and effective member of our joint, networked
warfighting team.
At the same time, we will continue to actively harvest the
efficiencies needed to fund and support these priorities in both fiscal
year 2004 and beyond. Our Navy budget request for fiscal year 2004
supports this intent and includes:
--7 new construction ships, two more SSBN-to-SSGN conversions, one
cruiser conversion and 100 new aircraft;
--Investment in accelerated transformational capabilities, including
the next-generation aircraft carrier (CVN-21), the
transformational destroyer (DD(X)) and Littoral Combat Ship
(LCS), the Joint Strike Fighter, the Advanced Hawkeye (E-2C
RMP) Upgrade Program and the EA-18G Electronic Attack aircraft;
--An 4.1 percent average pay increase in targeted and basic pay
raises, and a reduction in average out-of-pocket housing costs
from 7.5 percent to 3.5 percent;
--Investment in housing and Public Private Venture that will help
eliminate inadequate family housing by fiscal year 2007 and
enable us to house shipboard Sailors ashore when their vessel
is in homeport by fiscal year 2008;
--Continued investment in key operational readiness accounts that
includes an increase in aviation depot maintenance funding,
improvement in our annual deferred maintenance backlog for our
ships, submarines and aircraft carriers, and sustained funding
for our ordnance, ship operations and flying hours accounts;
--Navy-Marine Corps Tactical Aviation Integration, a process that
will maximize our forward-deployed combat power, optimize the
core capability of naval aviation forces, introduce 200 modern
aircraft across the fiscal year 2004-fiscal year 2009 program
and save billions of dollars;
--Divestiture of aging, legacy ships, systems and aircraft, producing
nearly $1.9 billion in fiscal year 2004 for reinvestment in
recapitalization;
--Improvements in the quality of our operational training through a
Training Resource Strategy; and
--Investment in transformational unmanned underwater vehicles (UUV),
unmanned aviation vehicles (UAV), experimental hull forms and
other technologies.

A. Sustaining our Current Readiness
Your investment last year produced the most ready force in our
history. Training, maintenance, spare parts, ordnance, and fuel
accounts enabled our Fleet to be ready earlier, deploy at a higher
state of readiness, and as we are witnessing today, build a more
responsive surge capability. These investments were vital to sustaining
the war on terrorism, assuring friends and allies and leading the
nation's global response to crisis.
--Ship Operations and Flying Hours requests funds for ship operations
OPTEMPO of 54.0 days per quarter for our deployed forces and 28
days per quarter for our non-deployed forces. The flying hours
request receives an additional $137 million this year to
sustain the investment level we established in support of last
year's budget. This level of steaming and flying hours will
enable our ships and airwings to achieve required readiness six
months prior to deployment, sustain readiness during deployment
and increase our ability to surge in crisis. However, sustained
OPTEMPO at levels above this force-wide target, as is beginning
to occur during fiscal year 2003's time of accelerated and
extended deployments, will cause our current year execution to
run both ahead and in excess of the existing plan.
--Ship and Aviation Maintenance. Last year, we reduced our major ship
depot maintenance backlog by 27 percent and aircraft depot
level repair back orders by 17 percent; provided 32 additional
ships with depot availabilities; ramped up ordnance and spare
parts production; maintained a steady ``mission capable'' rate
in deployed aircraft; and fully funded aviation initial
outfitting. Our request for fiscal year 2004 aviation
maintenance funding adds over $210 million to fiscal year
2003's investment and will increase the number of engine
spares, improve the availability of non-deployed aircraft, and
meet our 100 percent deployed airframe goals.
Our ship maintenance request continues to ``buy-down'' the annual
deferred maintenance backlog and sustains our overall ship
maintenance requirement. The aggregate level of funding for
ship maintenance actually declines from fiscal year 2003 to
fiscal year 2004, due in part to the positive effects of the
additional maintenance funding provided in supplemental
appropriations in the previous year, in part to the accelerated
retirement of the oldest and most maintenance-intensive surface
ships, and as a result of scheduling and timing.
--Shore Installations. The fiscal year 2004 request provides 93
percent of the modeled sustainment cost for facilities, an
increase from fiscal year 2003's 84 percent. Although the
overall investment in facility recapitalization has reduced
from last year, slowing the replacement rate of facilities, our
increased investment in sustainment will better maintain
existing facilities as we continue to pursue innovations to
improve our base infrastructure. Our Base Operations Support
funding request is based on sustaining the current level of
common installation and important community and personnel
support functions; we have factored in management and business
efficiencies to reduce the cost of providing these services. We
continue to support a Base Realignment and Closure effort in
fiscal year 2005 to focus our future investment and improve our
recapitalization rate in the years ahead.
--Precision Guided Munitions receive continued investment in our
fiscal year 2004 request with emphasis on increasing inventory
levels for the Joint Stand-Off Weapon (JSOW), optimizing the
Navy's Joint Direct Attack Munition (JDAM) production rate and
commencing full rate production under multi-year procurement
for the Tactical Tomahawk (TACTOM). Our partnership with the
Air Force in several of our munitions programs will continue to
help us optimize both our inventories and our research and
development investment.
--Training readiness. The Training Resource Strategy (TRS) has been
developed to provide for more complex threat scenarios, improve
the training of our deploying ships, aircraft, Sailors and
Marines, and support the range and training technology
improvements necessary to ensure the long-term combat readiness
of deploying naval forces. The TRS has identified the training
facilities necessary to provide this superior level of training
as well. Their dispersed character is more like the battlefield
environment our forces will face today and tomorrow and will
better challenge our deploying forces--before they are
challenged in combat. Our fiscal year 2004 request includes $61
million to support the Training Resource Strategy.
At the same time, encroachment and environmental issues continue
to impact our ability to maintain an acceptable level of access
to our valuable testing and training ranges and operating
areas. As a result, we are looking for a balanced approach that
would protect our environmental obligations and our ability to
both train in realistic scenarios and develop transformational
systems for our future. Our approach would be limited to only
the most critical issues, such as the designation of critical
habitat on military lands designated for military training, and
the scientific measurements that achieve an appropriate balance
between our environmental concerns and our obligation to ensure
our Sailors are properly trained and our transformational
systems are properly tested. We will focus the use of our
ranges for these purposes while continuing to be an excellent
steward of these environmental resources. We look forward to
working with the Congress and the American people on this
important and urgent issue impacting our Sailors and Marines.

B. Deepening the Growth and Development of our People
We are winning the battle for people. Thanks to superb leadership
in the fleet and the full support of the American people and Congress,
we are making solid progress in addressing long-standing manpower and
quality of service issues vital to having what it takes to win the
competition for talent today and tomorrow.
We are enjoying now, the best manning I have witnessed in my
career. With few exceptions, we achieved C-2 manning status for all
deploying battle group units at least six months prior to deployment.
These accomplishments enabled our Navy to develop a more responsive
force--one that surged forward with the right people, at the right time
to fulfill our national security requirements.

Retention is at record levels and recruiting has never been better.
We achieved a 58.7 percent Zone A (<6 Years of service (YOS))
reenlistment rate, 74.5 percent Zone B reenlistment rate (6-10 YOS),
and a Zone C (10-14 YOS) reenlistment rate of 87.4 percent in 2002.
While we are also off to a great start in fiscal year 2003, we are
instituting measures to ensure our annualized reenlistment rate meets
our established goals (Zone A--56 percent, B--73 percent, C--86
percent).
Additionally, attrition for first term Sailors was reduced by 23
percent from fiscal year 2001 levels. 92 percent of our recruits are
high school graduates and 6 percent of them have some college
education.

These tremendous accomplishments allowed us to reduce at-sea
manning shortfalls last year and reduce our recruiting goals. We were
also able to increase the overall number of E-4 to E-9s in the Navy by
1.3 percent to 71.5 percent working toward a goal of 75.5 percent by
fiscal year 2007. This healthy trend allows us to retain more of our
experienced leaders to manage and operate the increasingly technical
21st century Navy.
Targeted pay raises, reenlistment bonuses, improved allowances,
enhanced educational benefits, retirement reforms, support for improved
family services, and better medical benefits are making a difference
and can be directly attributed to Congressional support and the
outstanding work of our Navy leaders in our ships, squadrons, bases and
stations.
Our fiscal year 2004 request capitalizes on last year's
accomplishments and provides the opportunity to align our manpower and
skills mix to balance our end strength and shape our 21st century
workforce. As part of Sea Power 21's transformed organizational process
improvements we will begin our Sea Warrior process.
Our goal is to create a Navy in which all Sailors are optimally
assessed, trained, and assigned so that they can contribute their
fullest to mission accomplishment. It is important that we sustain our
manpower progress by furthering our supporting initiatives, to include:
--Perform to Serve will align our Navy personnel inventory and skill
sets through a centrally managed reenlistment program. This
initiative makes Commander, Navy Personnel Command the final
authority for first term reenlistments and extensions and will
steer Sailors in over manned ratings into skill areas where
they are most needed. It provides the training necessary to
ensure these sailors will succeed in their new rating. Most
importantly, it will help us manage our skills profile.
--Navy Knowledge Online introduces our integrated web-based lifelong
learning initiative for personnel development and learning
management. It connects Sailors to the right information in a
collaborative learning environment; tracks their individual
skills and training requirements; and provides lifelong support
between our rating, leadership and personal development
Learning Centers and our Sailors.
--Task Force EXCEL (Excellence through our Commitment to Education
and Learning) is transforming the way we train and educate our
people. A more responsive organizational structure has been
established to include the Navy Chief Learning Officer, Naval
Personnel Development Command, and Human Performance Center. We
also partnered with Fleet, industry, and academia to improve
individual training and education; and with colleges, through
the Commissioned Navy College Program, to provide rating-
related Associate and Bachelor degrees.
--Project SAIL (Sailor Advocacy through Interactive Leadership), will
web-base and revolutionize the personnel assignment process by
putting more choice in the process for both gaining commands
and Sailors. It will empower our people to make more informed
career decisions and for the first time, create a more
competitive, market-oriented process.
Our Sea Swap initiative is underway now, with the first crew-change
on USS FLETCHER taking place in the Western Australia port of Fremantle
last month. We will continue this pilot with another crew change this
summer and we intend to continue to examine pilot programs in optimal
manning, rotational crewing, assignment incentive pay, rating
identification tools, and rate training.
Your support of our fiscal year 2004 request for a targeted pay
raise that recognizes and reaffirms the value of our career force and
acts as an incentive to junior personnel to stay Navy is critical to
staying the course. So, too, is continuing the reduction of average
out-of-pocket housing expenses and the extension and enhancement of
essential special pay and bonus authorities. All these efforts enable
our Navy to sustain our forces in the war on terrorism, continue the
increase in our Top 6 (E4 to E9), and develop the 21st Century, high-
technology personnel force that is our future.

C. Investing in Sea Power 21
Our 21st Century Navy will be a joint, netted, dispersed power
projection force and Sea Power 21 is the framework for how our Navy
will organize, integrate, and transform. It prescribes a strategy-to-
concepts-to-capabilities continuum by which current and future Naval
Forces will exploit the opportunity that information dominance and
rapid, highly accurate power projection and defensive protection
capabilities bring to us.
Together, these concepts will compress our speed of response and
provide the nation with immediately employable, secure and sovereign
forward ``capability sets'' from which to project firepower, forces,
command and control, and logistics ashore.
The following describes the core capabilities, and our initial
investments in our highest priority programs that support this vision.
Sea Strike is the projection of precise and persistent offensive
power. The core capabilities include Time Sensitive Strike;
Intelligence, Surveillance and Reconnaissance; Ship to Objective
Maneuver; and Electronic Warfare and Information Operations. We are
already investing in impressive programs that will provide the
capabilities necessary to support Sea Strike; these include the
following fiscal year 2004 priorities:

--F/A-18E/F Super Hornet.--The F/A-18E/F is in full rate production
and when combined with this year's request for the EA-18G, will
be the backbone of Navy sea-based precision and time-critical
strike, electronic attack and airborne tactical reconnaissance.
It is in the fifth of a five-year multi-year procurement (MYP)
contract (fiscal year 2000-04) that will yield $700 million in
total savings. The second multi-year contract for 210 aircraft
will yield approximately $1 billion in savings as compared to
the single-year price. The Super Hornet employs new knowledge
dominance technologies, such as the Joint Helmet Mounted Cueing
System, Advanced Tactical Forward Looking Infrared System,
Shared Reconnaissance System, and Multi-Informational Display
System data link. It provides 40 percent increase in combat
radius, a 50 percent increase in endurance, 25 percent greater
weapons payload, 3 times the ordnance bring back, and is more
survivable than our older Hornets; most importantly, it has the
growth capacity to remain a mainstay of our tactical aviation
for years to come. Three of these squadrons are already
deployed today at one-third the operational cost of our legacy
F-14 aircraft. Fiscal year 2004 budgets for 42 E/F aircraft;
this program maximizes the return on our procurement dollars
through a multi-year procurement contract and a minimum
economic order quantity buy.
--EA-18G.--The EA-18G will replace the aging EA-6B Prowler for joint
force electronic attack. Using the demonstrated growth capacity
of the F/A-18E/F, the EA-18G Growler will quickly recapitalize
our Electronic Attack capability at lower procurement cost,
with significant savings in operating and support costs and
three years earlier than previously planned; all while
providing the growth potential for future electronic warfare
(EW) system improvements. It will use the Improved Capability
Three (ICAP III) receiver suite and provide selective reactive
jamming capability to the war fighter. This will both improve
the lethality of the air wing and enhance the commonality of
aircraft on the carrier deck. It will dramatically accelerate
the replacement of our aging Airborne Electronic Attack
capability. Engineering and developmental efforts commence with
our fiscal year 2004 budget request.
--JSF.--The Joint Strike Fighter will enhance our Navy precision with
unprecedented stealth and range as part of the family of tri-
service, next-generation strike aircraft. It will maximize
commonality and technological superiority while minimizing life
cycle cost. The fiscal year 2004 budget requests $2.2 billion
in accelerated development funds; initial production is planned
for fiscal year 2006.
--MV-22.--The Joint Service MV-22 Osprey tilt-rotor, Vertical/Short
Take-Off or Landing (V/STOL) aircraft represents a
revolutionary change in aircraft capability. It will project
Marines and equipment ashore from our amphibious shipping,
operationalizing Ship to Objective Maneuver from the Sea Base
and improving our expeditionary mobility and force entry needs
for the 21st century. The MV-22 program has been restructured,
redesigned, rebuilt and is undergoing testing to deliver an
operationally deployable aircraft on the restructured schedule.
The MV-22 will replace the Vietnam-era CH-46E and CH-53D
helicopters, delivering improved readiness, upgraded
capability, and significantly enhanced survivability. It is
overwhelmingly superior to our legacy CH-46E providing twice
the speed, five times the range, and three times the payload
capacity.
--Unmanned Air Vehicles (UAV).--We increased our commitment to a
focused array of unmanned air vehicles that will support and
enhance both Sea Shield and Sea Strike missions with
persistent, distributed, netted sensors. We are initiating the
Broad Area Maritime Surveillance (BAMS) UAV this year to
develop a persistent, multi-mission platform capable of both
Sea Shield and Sea Strike surveillance and reconnaissance of
maritime and land targets, communications relay and some
intelligence collection. We have provided funding for testing,
experimentation and/or demonstration of the Fire Scout
Demonstration Systems, Global Hawk Maritime demonstration and
the Unmanned Combat Aerial Vehicle--Navy (UCAV-N) demonstration
vehicle as well.
Sea Shield is the projection of layered, global defensive power. It
will soon enhance deterrence and warfighting power by way of real-time
integration with joint and coalition forces, high speed littoral attack
platforms setting and exploiting widely distributed sensors, and the
direct projection of defensive powers in the littoral and deep inland.
It will enhance homeland defense, assure, and eventually sustain our
access in the littorals and across the globe. Sea Shield capabilities
include, Homeland Defense, Sea and Littoral Control, and Theater Air
and Missile Defense.

Our highest priority Sea Shield programs this year include:
--Missile Defense.--Our Navy is poised to contribute significantly in
fielding initial sea based missile defense capabilities to meet
the near-term ballistic missile threat to our homeland, our
deployed forces, and our friends and allies and we are working
closely with the Missile Defense Agency (MDA) to that end. As
partners, USS LAKE ERIE will be transferred to MDA to
facilitate a more robust testing program for missile defense.
In turn, MDA is requesting funds to upgrade three AEGIS guided
missile destroyers (DDG) for ICBM surveillance and tracking
duties and procurement of up to 20 Standard Missile
interceptors to help us provide a limited at sea capability to
intercept short and medium range ballistic missiles in the
boost and ascent phases of flight. Our sea-based missile
defense programs experienced tremendous success on the test
range during 2002, and we look forward to building on these
successes and developing a vital capability for our Nation.
--CG Conversion.--The first Cruiser Conversion begins in fiscal year
2004. The Cruiser Conversion Program is a mid-life upgrade for
our existing AEGIS cruisers that will ensure modern, relevant
combat capability well into this century and against evolving
threats. These warships will provide enhanced land attack and
area air defense to the joint force commander. Core to these
conversions is installation of the Cooperative Engagement
Capability, which enhances and leverages the air defense
capability of these ships, and the 5 inch/62 Gun System with
Extended Range Guided Munitions to be used in support of the
Marine Corps Ship-to-Objective-Maneuver doctrine. These
converted cruisers could also be available for integration into
ballistic missile defense missions when that capability
matures.
--Unmanned Underwater Vehicles (UUV).--We will continue development
of UUVs for minefield reconnaissance in the littoral and other
surveillance missions; including funding that will result in
initial operating capability for the Long-term Mine
Reconnaissance System (LMRS) in fiscal year 2005.
Sea Basing is the projection of operational independence. Our
future investments will exploit the largest maneuver areas on the face
of the earth: the sea. Sea Basing serves as the foundation from which
offensive and defensive fires are projected--making Sea Strike and Sea
Shield a reality. Sea Basing capabilities include, Joint Command and
Control, Afloat Power Projection and Integrated Joint Logistics. Our
intent is to minimize as much as possible, our reliance on shore-based
support nodes.

At the top of my list is the surface combatant family of ships--
centered on the next-generation multi-mission destroyer DD(X), the
next-generation cruiser (CG(X)), and the Littoral Combat Ship (LCS)--
this combination of ships will provide joint force commanders with a
robust range of transformational capabilities across the spectrum of
warfare. From the long-range precision strike and volume-fires of
DD(X), to the overland, theater and strategic ballistic and cruise
missile defensive reach of the CG(X), to the ability to clear the way
for the joint force in the tough littoral environment with LCS, the
Navy's future surface warships will be designed from their keels up to
operate as critical elements of our dispersed, networked, joint force.
At the heart of this family is DD(X). Our DD(X) research and
development effort is the baseline that will enable us to keep pace
with today's rapid technological advances; it will spiral promising
technologies to both CG(X) and LCS, and hence, permit us to both lead
the threat and leverage the capabilities needed for the 21st Century.
It will also enable us to upgrade in-service Aegis cruisers and
destroyers with selected leading-edge technologies to ensure this vital
core of our legacy, multi-mission fleet will maintain operational
effectiveness throughout their lifetimes and until the DD(X) and CG(X)
program comes to fruition. Specific highlights include:
--Littoral Combat Ship (LCS).--Our most transformational effort and
number one budget priority, the Littoral Combat Ship will
counter anti-access threats, namely small, fast surface craft
carrying anti-ship missiles, torpedo-armed ultra-quiet diesel
submarines, and large numbers of inexpensive mines. It will be
the first Navy ship to separate capability from hull form and
will provide a robust, affordable, focused-mission ship to
enhance our ability to establish sea superiority not just for
our Carrier Strike Groups and Expeditionary Strike Groups, but
for all the joint logistics, command and control and pre-
positioned ships that must transit the critical littoral threat
area to move and support forces ashore. They will be dispersed
and netted, both leveraging and enhancing the knowledge
superiority and defense of the theater joint force. They will
be the backbone of our organic battle group mine warfare
capability.
We will separate capability from platform by developing
``tailorable'' mission modules that can be rapidly changed in
forward locations. This kind of ``forward fit and fight''
capability will enable us to distribute these small, minimally
manned, persistent, high-speed vessels across the globe and it
will permit us to use innovative crewing techniques. By
employing networked sensors, modular mission payloads, a
variety of manned and unmanned vehicles, and an innovative hull
design, they will also have the inherent capacity for further
transformation. We will capitalize on DOD initiatives, spiral
development, and new acquisition methods to streamline the
acquisition process and begin construction of the first LCS by
2005. The fiscal year 2004 budget accelerates development and
construction of 9 LCS in the FYDP, key to ramping surface force
structure to Global CONOPs levels outside the FYDP.
--DD(X).--The DD(X) advanced multi-mission destroyer will be armed
with an array of land attack weapons to provide persistent,
distributed offensive fires in support of joint forces ashore.
Transformational and leap ahead technologies include an
integrated power system and electric drive; the Advanced Gun
System with high rate of fire and magazine capability; the new
Multi-Function Radar/Volume Search Radar suite; optimal manning
through advanced system automation, stealth through reduced
acoustic, magnetic, IR, and radar cross-section signature; and
enhanced survivability through automated damage control and
fire protection systems. The capacity in both hull form and
integrated electric power system, and the revolutionary radar
development work will allow us to spiral DD(X) to both an
entirely new class of ships--our robust, sea-based missile
defense CG(X) platform of the future--as well as other
potential systems, like the electro-magnetic rail gun, in the
years ahead.
In addition to the surface combatant family of ships, our other
high priority efforts include:
--CVN-21.--We have accelerated transformational technologies from the
CVNX development plan into CVN-21 while sustaining the CVNX-1
development schedule submitted last year. This is the first new
carrier design since 1967. The fiscal year 2004 budget request
provides $1.5 billion in RDT&E and advanced procurement for the
first CVN-21 and programs for split-funded construction for two
years beginning in fiscal year 2007. The transformational
technologies include a new electrical generation and
distribution system, improved flight deck design with Electro-
Magnetic Aircraft Launching System (EMALS), improved sortie
generation, enhanced survivability, reduced manning, and
incorporation of a flexible infrastructure that will allow the
insertion of new capabilities as they evolve. CVN-21 will be
the centerpiece of our Carrier Strike Groups in the future and
will replace USS ENTERPRISE in fiscal year 2014.
--VIRGINIA-class submarine (SSN-774).--The first four ships of this
class are under construction: Virginia will commission in 2004;
the keel was laid for Texas (SSN-775) in July 2002; Hawaii
(SSN-776) was begun in 2001; and North Carolina (SSN-777) in
2002. This class will replace LOS ANGELES-class (SSN-688)
attack submarines and will incorporate new capabilities,
including an array of unmanned vehicles, and the ability to
support Special Warfare forces. It will be an integral part of
the joint, networked, dispersed fleet of the 21st Century.
--SSGN Conversions.--We have requested two additional conversions in
fiscal year 2004; these ships will be configured to carry more
than 150 Tomahawk missiles, enabling covert, large-volume
strike. The SSGN will also have the capability to support
Special Operations Forces for an extended period, providing
clandestine insertion and retrieval by lockout chamber, dry
deck shelters or the Advanced Seal Delivery System, and they
will be arrayed with a variety of unmanned systems to enhance
the joint force commander's knowledge of the battlespace. We
will leverage the existing TRIDENT submarine infrastructure to
optimize their on-station time. The first two ships, the USS
OHIO and USS FLORIDA, enter the shipyard in fiscal year 2003 to
begin their refueling and conversion. USS MICHIGAN and USS
GEORGIA will begin their conversion in fiscal year 2004. We
expect this capability to be operational for the first SSGN in
fiscal year 2007.
--Maritime Prepositioning Force Future (MPF(F)).--Our vision for the
future Maritime Prepositioning Force and tomorrow's Amphibious
force continues to develop. This fiscal year's budget and the
Joint Forcible Entry Operations study will refine our effort
and posture us for enhanced sea basing of Navy and Marine Corps
assets. I expect MPF(F) ships will serve a broader operational
function than current prepositioned ships, creating greatly
expanded operational flexibility and effectiveness. We envision
a force of ships that will enhance the responsiveness of the
joint team by the at-sea assembly of a Marine Expeditionary
Brigade that arrives by high-speed airlift or sealift from the
United States or forward operating locations or bases. These
ships will off-load forces, weapons and supplies selectively
while remaining far over the horizon, and they will
reconstitute ground maneuver forces aboard ship after
completing assaults deep inland. They will sustain in-theater
logistics, communications and medical capabilities for the
joint force for extended periods as well.
Other advances in sea basing could enable the flow of Marine and
Army forces at multiple and probably austere points of entry as a
coherent, integrated combined arms team capable of concentrating lethal
combat power rapidly and engaging an adversary upon arrival. The
ability of the Naval Services to promote the successful transformation
of deployment practices of the other Services will dramatically improve
the overall ability of the Joint Force to counter our adversaries'
strategies of area-denial and/or anti-access. We are programming RDTE
funds to develop the future MPF and examine alternative sea basing
concepts in fiscal year 2008.
FORCEnet is the enabler of the foregoing capabilities, and the
operational construct and architectural framework for naval warfare in
the joint, information age. It will allow systems, functions and
missions to be aligned to transform situational awareness, accelerate
speed of decisions and allow naval forces to greatly distribute its
combat power in the unified, joint battlespace. It puts the theory of
network centric warfare into practice. We are just beginning this
effort and we have requested $15 million in funds to administer the
development of FORCEnet, the cornerstone of our future C\4\I
architecture that will integrate sensors, networks, decision aids,
warriors and weapons. Programs that will enable the future force to be
more networked, highly adaptive, human-centric, integrated, and enhance
speed of command include:
--E-2C Advanced Hawkeye Radar Modernization Program.--E-2 Advanced
Hawkeye (AHE) program will modernize the E-2 weapons system by
replacing the current radar and other aircraft system
components to improve nearly every facet of tactical air
operations. The modernized weapons system will be designed to
maintain open ocean capability while adding transformational
surveillance and Theater Air and Missile Defense capabilities
against emerging air threats in the high clutter and jamming
environment. The advanced Hawkeye will be a critical
contributor to Naval Integrated Fire Control-Counter Air, and
to Sea Strike and Shield. The fiscal year 2004 budgets over
$350 million for continued development with first production
planned for fiscal year 2008.
--Navy and Marine Corps Intranet (NMCI).--NMCI continues to bring
together Navy personnel, government civilians and contractors
into a single computing environment. This program is fostering
fundamental changes in the way we support critical war fighting
functions, conduct Navy business, and train and advance
Sailors. Fiscal year 2004 funding of $1.6 billion continues
user seat rollout and cutover to the NMCI architecture,
progressing toward a target end-state of 365,000 seats.
Although NMCI seat cutover was slowed initially by the need to
resolve the challenges of numerous, disparate legacy
applications, the transition to NMCI has succeeded in
eliminating more than 70,000 legacy IT applications and we are
on track for the future.
Sea Trial.--Commander, U.S. Fleet Forces Command (CFFC) is now in
charge of our Navy's revitalized process of experimentation, and is
rapidly developing emergent concepts and experimenting with new
technologies to speed delivery of innovation to the fleet. CFFC will
reach throughout the military and beyond to coordinate concept and
technology development in support of future warfighting effectiveness.
Embracing spiral development, the right technologies and concepts will
then be matured through targeted investment and rapid prototyping.
CFFC is working in concert with the U.S. Joint Forces Command to
refine the Sea Trial process and integrate select wargames,
experimentation and exercises. We are already testing new operational
concepts and technologies like the Collaborative Information
Environment, Joint Fires Initiative, and the Navy Joint Semi-Automated
Force Simulation in operations and exercises. We will continue to
pursue evaluation of multiple platforms and systems, including
experimental hull forms and electro-magnetic rail guns, among others.
The Systems Commands and Program Executive Offices will be integral
partners in this effort, bringing concepts to reality through
technology innovation and application of sound business practices.

IV. Harvesting Efficiencies for Transformation
We are working hard to identify and harvest the efficiencies needed
to balance competing priorities and invest in our Sea Power 21 vision.
Called Sea Enterprise, this process is intended to ensure our
warfighting capability both now and in the future. It will help
identify and produce those initiatives that both optimize our
warfighting capability and streamline our organization and processes;
to make it operate more efficiently, to reduce our overhead and to
produce the savings needed for investment in recapitalization and our
future. We have already identified several initiatives that have
produced over $40 billion in savings and cost avoidance across the
defense program--and many more billions outside the FYDP--to help fund
our future. A few of the highlights include:
--USN-USMC Tactical Aviation (TACAIR) Integration plan shows the
promise of cross-service partnerships. It will maximize forward
deployed combat power, enhance our interoperability, more fully
integrate our services, and save $975 million across the FYDP.
This aggressive effort introduces 200 modern aircraft in the
next six years while retiring legacy F-14, F/A-18A/B, S-3, and
EA-6B airframes, and it reduces our F/A-18 E/F and JSF total
buy requirements by 497 aircraft while enhancing our
warfighting capability. There is more than $30 billion in
projected cost avoidance outside the FYDP as well.

--Partnerships. We are pursuing other promising partnerships to
include new munitions with the U.S. Air Force, common
communications and weapons systems with the U.S. Coast Guard's
Deepwater Integrated Systems program, and joint experiments
with high-speed vessels with the U.S. Army. We will continue to
leverage the gains made in programs like joint weapons
development (JDAM, JSOW, AMRAAM) as well.
--Identifying savings within the force for recapitalization. Last
year we promised we would sharpen our focus on our force
structure in the years ahead--to buy the ships, aircraft and
the capabilities needed for tomorrow's Navy. At the same time,
we cannot overlook the important gains our focus on current
readiness made these last few years; it produced the more
responsive force on deployment today. As a result, we are
obligated to look hard at the ways we could balance these
priorities and our discretionary investments to both satisfy
the near term operational risks and prepare for the long term
risks of an uncertain future. This year we made some hard
choices across the Fleet to do more to address our future risk,
sustain our current readiness gains and strike this balance. We
looked hard at older systems with limited growth potential and
high operating and support costs (maintenance, parts, training,
etc.), and ultimately decided to accelerate the retirement of
11 ships and 70 aircraft, divest more than 50 systems and
eliminate 70,000 legacy IT applications from an original
baseline of 103,000.
Accelerating the retirement of these ships was a difficult
decision. However, our analysis indicates that our proposed
near-term inactivations and our remaining warfighting
capability provide an acceptable level of risk without
compromising our ability to accomplish our mission. Vertical
cuts in our least capable type-model series, both in ships and
in aircraft, allowed us to use the savings to recapitalize,
modernize other legacy platforms, and invest in Sea Power 21.
In all, these difficult decisions yielded $1.9 billion for
reinvestment and will do much to help reduce our future risk.
--Improved business operations and processes. We are improving both
the way we run the Fleet and our ability to control costs. The
LPD-DDG swap produced savings sufficient to purchase a third
guided missile destroyer in fiscal year 2004. We are using
multi-year procurement contacts and focusing where possible on
economic order quantity purchase practices to optimize our
investments. We conducted the Workload Validation Review, and
made Performance Based Logistics improvements. Other
initiatives like piloting mission funding for two of our public
shipyards, Enterprise Resource Planning, strategic sourcing,
NMCI and eBusiness are helping us find the funds necessary to
emerge with the optimal force structure, a healthy industrial
base and an efficient and appropriately sized infrastructure.
--Installation Claimant Consolidation. In October 2003 we will
establish a single shore installation organization, Commander,
Navy Installations Command (CNIC), to globally manage all shore
installations, promote ``best practices'' development in the
regions, and provide economies of scale, increased efficiency,
standardization of policies where practicable and improved
budgeting and funding execution. This initiative has the
potential to save approximately $1.6 billion in the next six
years.
We will continue to pursue the efficiencies that improve our
warfighting capability. We are committed to producing the level
investment stream that will help implement our bold new Navy vision and
produce the number of future ships, aircraft and systems we need to
counter the 21st Century threat. Harvesting savings for reinvestment is
an important part of that effort, and we will continue to examine the
potential efficiencies while weighing the operational risks, both now
and in the future.

V. Conclusion
The President has called upon us to ``be ready to strike at a
moment's notice in any dark corner of the world.'' We are answering
that call in the Global War on Terrorism and in the opening salvos of
Operation Iraqi Freedom. We will also prepare our force for the battles
of tomorrow by integrating Sea Strike, Sea Shield, and Sea Basing into
the Joint Force; capturing the funds needed to build the 21st century
Navy; and developing our workforce. We are creating the future
capabilities and force structure required to counter these 21st century
threats. In pursuing victory, the United States Navy--forward deployed,
highly capable, and poised for action--will continue to provide our
nation persistent combat power.
At the same time, our people remain at the heart of all we do; they
are the real capital assets in our Navy. We have invested heavily to do
what is right for the people who are investing themselves in our Navy.
``Growth and development'' is our byline. As we look to the future, we
will build on the impressive progress we have made in recruiting,
assigning, and retaining our military and civilian professionals.
Active leadership is making it happen today and will do so in the years
to come.
I thank the Committee for your continued strong support of our
Navy, our Sailors, and our civilian shipmates. Working together, I am
confident we will win the Global War on Terrorism, make our great Navy
even better, and provide our Nation with more power, more protection,
and more freedom in the years ahead.

Senator Stevens. Thank you very much. All this paper work
is about what is going on on the floor. General Hagee.

STATEMENT OF GENERAL MICHAEL W. HAGEE

General Hagee. Mr. Chairman, Senator Inouye, Senator
Cochran, other distinguished members of this committee, it is
indeed an honor for me to be here today representing your
Marine Corps. I would like to thank this committee for its
strong support for the issues and programs that are of such
vital importance to the readiness of the Marine Corps and the
Navy-Marine Corps team.
I would also like to thank my good friend, Admiral Vern
Clark, for his leadership of the Navy and his participation in
truly making the Navy-Marine Corps team a reality. And as he
mentioned, nothing reflects that more in my opinion, than these
14 amphibious task force ships, 7 from each coast, that left
within about a 2 to 3-week alert, carrying approximately 6,000
to 7,000 Marines on each task force, and all of them arrived in
the Gulf on time and on target. Now, Admiral Clark would say it
is because of the sailors that he has in his Navy, and he is
absolutely correct, but it takes leadership and vision, and
that comes from the top, and I thank him for that.
The actions of your Marines in Iraq attests to their
morale, readiness and warfighting capability better than any
words that I could say here today. They are performing
magnificently. In addition to the events that constantly scream
from our televisions, radios and newspapers, the Navy-Marine
Corps team continues to play a key role in the global war on
terrorism and in the establishment of stability and security in
many of our world's other trouble spots.
Active and reserve Marines are operating alongside
soldiers, sailors, airmen, non-governmental officials (NGOs)
and diplomats in diverse locations around the globe, from
Afghanistan to the Arabian Gulf, to the Horn of Africa, to the
Georgian Republic, Colombia, Guantanamo Bay, and the
Philippines. Today Marines are flying from Baghram Air Base in
Afghanistan and from Navy carriers at sea. Currently 67 percent
of the Marine Corps operating forces are forward deployed and
almost 80 percent of our operating forces are either forward
deployed, forward stationed, or forward based.
Marine Corps operations continue to highlight the
versatility of our expeditionary forces. We have had one of our
busiest years in terms of operational deployments,
participation in realistic worldwide exercises and training
events. To that end we have a thoroughly trained, ready and
capable force for the Nation.
Though the Nation is focused on current operations in Iraq,
we continue to develop the capabilities we will need for
tomorrow's challenges as well. Along with the Navy, we are
moving out with new organizational concepts mentioned by the
Chief of Naval Operations. These include tac air integration,
carrier and expeditionary strike groups, and our concept of
enhanced networked sea bases. These concepts will make us more
responsive, flexible and effective in the future.
The fiscal year 2004 budget continues our efforts to
modernize and transform the force. The support that you have
provided over the last 2 years has helped us make real progress
in our modernization, transformation, personnel and readiness
accounts. While Marines and their families have benefitted from
increased appropriations for targeted pay raises and improved
family housing and barracks, this committee's support for
important procurement programs has also ensured that our
Marines are better equipped and more likely to survive on the
battlefield today.
With regard to transformation and modernization, I am happy
to report that our top Marine Corps ground programs are
adequately funded over the near term. Among these are the
advanced amphibious assault vehicle, the high mobility
artillery rocket system and the lightweight 155 howitzer. On
the aviation side, we are on track for funding for the V-22,
the joint strike fighter, Short-Take-Off/Vertical Landing
(STOVL), and the four-bladed Cobra and Huey airframes.
Finally, we continue to make needed progress in readiness.
Having recently come from the operating forces, I can tell you
that there is a marked positive improvement in the way we are
funding for readiness now compared to just a few years ago.
Much of that improvement can be directly attributed to the
welcome attention readiness has received from this subcommittee
over the last few years. I know you are actually working on the
much needed supplemental and I thank you very much for that,
sir.
My main funding concern is the cost of reconstituting our
forces. We are making a concerted effort to capture these costs
and ensure we know what will be required to maintain the future
readiness of our Corps. We are currently doing what we have
been trained to do, and we are ready to support our Nation to
whatever challenges may lie ahead. We are on solid ground
regarding our mission and our direction. We will remain your
own only sea-based, rotational, truly expeditionary combined
armed force ready to answer the call as part of the integrated
joint force.

PREPARED STATEMENT

Thank you again, sir, on behalf of all your Marines, and I
look forward to your questions.
[The statement follows:]

Prepared Statement of General Michael W. Hagee

Chairman Stevens, Senator Inouye, distinguished members of the
Committee; it is my honor to report to you on the state of your United
States Marine Corps. First, on behalf of all Marines, I want to thank
the Committee for your continued support. Your sustained commitment to
improving the warfighting capabilities of our Nation's armed forces and
to improving the quality of life of our Service men and women and their
families is vital to the security of our Nation, especially now, while
our Nation is at war.

INTRODUCTION

The Navy-Marine Corps Team continues to play a key role in the
global war on terrorism and in the establishment of stability and
security in many of the world's trouble spots. Marines, both Active and
Reserve, are operating side-by-side in Iraq, as well as in diverse
locations, from Afghanistan, the Horn of Africa, Turkey, the Georgian
Republic, Colombia, Guantanamo Bay, and the Philippines. The actions of
your Marines--along with Navy Corpsmen and SeaBees--attest to their
morale and readiness better than any words I could say here today.
Marine Corps operations throughout the past year have highlighted
the versatility and expeditionary nature of our forces. Missions in
support of Operations Enduring Freedom and Noble Eagle marked the most
visible accomplishments of our forward-deployed forces. Marine Air
Control Squadrons continue to provide air control, surveillance, and
air traffic control support to Operation Enduring Freedom during their
deployments to the Central Command area of responsibility. Elsewhere,
the Marine Corps continues to support Operation Joint Forge in the
Balkans by sending Civil Affairs teams to Bosnia.
Even as the Marine Corps saw one of our busiest years in terms of
operational deployments, participation in realistic, worldwide
exercises remained critical to supporting the Combatant Commander's
Theater Security Cooperation Plans and ensuring that we maintained a
ready and capable force. Over the last year, Marines participated in
more than 200 service, joint, and combined exercises. These included
live fire, field training, command post, and computer-assisted
exercises. Participants varied in size from small units to Marine
Expeditionary Forces. Overseas, Marine Expeditionary Units (Special
Operations Capable) conducted exercises in Jordan, Italy, Croatia,
Tunisia, the Philippines, Australia, Thailand, and Kuwait.
At home, Marine reserve units were designated as ``on call'' forces
to support the Federal Emergency Management Agency's role in homeland
security. In addition, the Marine Corps also conducted numerous
training operations and internal exercises. This important training
helps develop individual and unit proficiency and competency. It also
allows the Marine Corps to examine unit operational skills and ensures
that each unit has the capabilities required to execute our full range
of missions.
The Marine Corps continues to contribute to the Nation's counter
drug effort, participating in numerous counter-drug operations in
support of Joint Task Force Six, Joint Interagency Task Force-East, and
Joint Interagency Task Force-West. These missions are conducted in the
Andean region of South America, along the U.S. Southwest border, and in
several domestic ``hot spots'' that have been designated as High
Intensity Drug Trafficking Areas. Individual Marines and task-organized
units are assigned to these missions in order to provide support for
domestic drug-law enforcement throughout the United States, and to
provide conventional training to military forces in South America that
execute counter-narcotics missions. Marine operational and intelligence
teams also support Colombian military efforts to combat narco-
terrorism. Marines of our reserve forces have executed the majority of
these missions.
Our successes in these global operations and exercises have not
been achieved alone. We have worked closely alongside the Navy, our
sister Services, and Federal agencies to realize the true potential of
joint, interoperable forces in the new environment of 21st Century
warfare. The operational and personnel readiness levels we have been
able to maintain directly reflect the strong, sustained support of the
Congress in last year's National Defense Authorization and
Appropriations Acts. In fiscal year 2004, we seek your continued
support for the President's Budget so we can consolidate the gains made
to date, improve those areas where shortfalls remain, and continue
transforming the way the Navy-Marine Corps Team will fight in the 21st
century.

BUILDING ON SUCCESS

The President's fiscal year 2004 budget, together with your
support, will provide a strong foundation on which we can continue
building on our successes. Our focus is on improving our ability to
operate as an agile, lethal, ready, and effective member of a broader
joint force that takes the complementary capabilities provided by each
Service, and blends them into an integrated and effective force for
meeting future challenges.
Increases in our Military Personnel accounts have a positive effect
on the retention of our most valued assets--our Marines. Given the
increasing pressure to modernize and transform the force, the Marine
Corps is constantly working to identify and assess program tradeoffs to
enable the most effectively balanced approach between competing demands
and programs. These tradeoffs occur within a larger context of the
Department's overall program tradeoff decisions, which is driving the
Navy and Marine Corps to work more closely than ever before in our
planning, budgeting, and decision making. An additional concern that
complicates this process is the sizeable unfunded cost of the ongoing
global war on terrorism.
Challenges also arise from the changing realities of our National
security environment. The Marine Corps is committed to the idea that we
will fight as an integral part of a joint team. We continue to place
high priority on interoperability, shared concept development, and
participation in joint exercises with our sister services.
Additionally, the security environment now demands that we pay more
attention to our role in Homeland Defense, our critical infrastructure,
and force protection--even as we deploy more forces overseas. These
challenges demand that we balance competing priorities while remaining
focused on maintaining excellence in warfighting.
Adapting to a Changing, Dynamic World
While we adapt the advantages of technology to meet the changing
face of warfare, we draw strength from the unique culture and core
values that make us ``Marines.'' We look for innovation in four broad
areas to address future challenges: Transformational technology; New
operational concepts; Refined organizations; and Better business
practices.
Innovative approaches culled from these efforts should provide
insight into new capabilities that we can adapt for future warfighting.
In this regard, we are currently engaged in an immediate and critical
tasking to define how we, along with our partners in the Navy, intend
to project Naval power ashore in the 2015-2025 timeframe. This effort
requires the intellectual rigor and participation of all the elements
of our Marine Air-Ground Task Forces and is influencing the entire
Marine Corps--from our structure and training to the way we will fight
on future battlefields as an integral component of a joint force.

Technology and Experimentation
The plan for realizing future joint concepts consists of three
closely related processes: (1) Joint Concept Development, (2) Joint
Experimentation & Assessment, and (3) Joint Integration &
Implementation. The overall process is more commonly known as Joint
Concept Development & Experimentation. In order to ensure support and
engagement throughout this process, the Marine Corps reorganized to
establish three Joint Concept Development & Experimentation divisions
under the cognizance of the Commanding General, Marine Corps Combat
Development Command. These three organizations are key elements of
Marine Corps Transformation and enable full Marine Corps involvement in
Joint Experimentation and Transformation as well as the Navy's Sea
Trial process for Naval Experimentation and Transformation.
The Marine Corps Warfighting Laboratory maintains cognizance over
Marine Corps-specific experimentation--with a focus on the tactical
level--to develop enhanced warfighting capabilities for the future.
Technologies and procedures are field tested in experiments conducted
with the operating forces. In addition, the Lab coordinates closely
with the Office of Naval Research to identify promising technologies
that support the next generation of warfighting capabilities.

New Concepts and Organizations
The Marine Corps is streamlining force development from concept to
acquisition under the Deputy Commandant for Combat Development. Our
Expeditionary Force Development System is a single system of dynamic
functions integrated into a process that produces and sustains
capabilities to meet the needs of the Marine Corps and the Combatant
Commanders. The Marine Corps advocates for ground combat, aviation
combat, command and control, and combat service support, as well as the
Marine Requirements Oversight Council, are key participants in the
process. The Expeditionary Force Development System continuously
examines and evaluates current and emerging concepts and capabilities
to improve and sustain a modern Marine Corps. The system is compatible
with and supports Naval and joint transformation efforts and integrates
transformational, modernization, and legacy capabilities and processes.
This integrated, concept-based driver for transformation is currently
working on several ideas that will influence the future Marine Corps.
Expeditionary Strike Groups.--The Marine Corps and Navy are engaged
in a series of experiments that will explore the Expeditionary Strike
Group concept. This concept will combine the capabilities of surface
action groups, submarines, and maritime patrol aircraft with those of
Amphibious Ready Groups and Marine Expeditionary Units (Special
Operations Capable), to provide greater combat capabilities to Regional
Combatant Commanders. In the near future, the Navy-Marine Corps Team
will conduct a pilot deployment on the west coast to test the
Expeditionary Strike Group concept. Navy combatants have already been
incorporated within the existing training and deployment cycle of the
Amphibious Ready Group. This experiment will also allow us to test
command-and-control arrangements for the Expeditionary Strike Group. It
will provide critical information to support the future implementation
of the concept and highlight any needed changes in service doctrine,
organization, training, materiel, leadership and education, personnel,
and facilities.
Tactical Aviation Integration.--The Navy and Marine Corps Team has
embarked on a Tactical Aircraft (Strike-fighter) Integration plan that
will enhance core combat capabilities and provide a more potent,
cohesive, and affordable fighting force. This integration is the
culmination of a long-term effort to generate greater combat capability
from Naval fixed-wing strike and fighter aircraft, and represents a
shared commitment to employ the Department of the Navy's resources as
judiciously as possible. This integration has been ongoing for several
years, with four Marine Corps F/A-18 Hornet squadrons operating as part
of embarked carrier air wings. This Navy-Marine Corps effort will
guarantee that Naval aviation will be integrated as never before, and
will effectively support the Marine Air-Ground Task Force and the joint
warfighter. Specifically, the integration plan:
--Reinforces our expeditionary ethos
--Provides a smaller, more capable, more affordable force for the
Department of the Navy
--Integrates Marine strike fighters in ten Navy Carrier Air Wings
--Integrates three Navy strike fighter squadrons into the Marine Unit
Deployment Program
--Includes the global sourcing of all DoN strike fighter assets and
ensures their support to Marine Air-Ground Task Forces and
Regional Combatant Commanders
--Provides increased combat capability forward
--Complements the enhanced seabasing concept.
A cornerstone of this plan is Department of the Navy funding and
maintenance of legacy aircraft at the highest levels of readiness until
the Joint Strike Fighter and F/A-18E/F replace them. This requires an
unwavering commitment to level funding of strike fighter readiness
across the Department of the Navy. These integration-driven readiness
levels will allow the Navy-Marine Corps Team to surge more aircraft
than what is possible today.
Enhanced Networked Seabasing.--Fully networked, forward-deployed
Naval forces and platforms that are integrated into our seabasing
capability will provide Naval power projection for Joint Force
commanders. These forces will use the sea as a means of maneuver,
enabling a broad range of joint campaign operations. Sea-based
operations incorporate, integrate, protect, and sustain all aspects of
Naval power projection, from space to the ocean floor, from blue water
to the littorals and inland--without dependence on land bases within
the Joint Operating Area. Seabasing will provide enhanced capabilities
to the Naval force, such as rapid force closure, phased arrival and
assembly at sea, selective offload of equipment tailored for individual
missions, and force reconstitution for follow-on employment. The
traditional Naval qualities of persistence and sustainment--enhanced by
advanced force-wide networks--underpin the staying power and
flexibility of the sea base. Naval platforms can stay on-station, where
they are needed, for extended periods of time. The at-sea
maneuverability of the seabase, coupled with advanced underway
replenishment technologies and techniques, will ensure force readiness
over time.
Integrated Logistics Capabilities.--The Integrated Logistics
Capabilities effort began as a unique collection of military, industry
and academic organizations collaborating to develop a future vision of
Marine Corps logistics processes. The product is a set of
transformational initiatives that will provide better support to the
warfighter. The purpose of the Integrated Logistics Capabilities
concept and process is to implement a transformation strategy, based on
best practices, that provides the framework for the execution of agile,
effective logistics support to the Marine Air-Ground Task Force, with
the focus of streamlining the logistics chain.
Capabilities are being conceptually refined and incrementally
validated in the Operating Forces as they are identified and
recommended. An assessment of the Proof-of-Concept, published in
November 2002 by the Center for Naval Analysis, reflected improved
supply response time (68 percent reduction in time) and overall repair
cycle time (33 percent reduction).
Over both the mid- and long-term, improved combat effectiveness and
efficiencies in the logistics chain are expected. However, efficiencies
cannot be fully realized until the people, process and technology
changes are applied across the entire operating force. The logistics
transformation and process modernization, together with the cutting
edge suite of technologies provided by the Global Combat Support
System, will greatly enhance the combat capabilities of Marine forces.
Reestablishment of Air-Naval Gunfire Liaison Companies.--We have
validated the requirement to reestablish our Air-Naval Gunfire Liaison
Companies (ANGLICO). These Companies will provide our Commanders a
liaison capability with foreign area expertise to plan, coordinate, and
employ terminal control of fires in support of joint, allied, and
coalition forces. ANGLICO will be reestablished with a company on each
coast, and a separate brigade platoon in Okinawa. Each company will
have a habitual relationship with the reserves. Full operational
capability is expected by late summer 2004.
Marine Corps--U.S. Special Operations Command Initiatives.--Today,
105 Marines are filling Special Forces billets around the world. In
addition to providing the current Chief of Staff to U.S. Special
Operations Command (US SOCOM), the Marine Corps provides support to and
ensures interoperability with Special Forces through the actions of the
SOCOM-Marine Corps Board. That board met twice in 2002 and developed
initiatives in the areas of Operations, Training and Education,
Communications/C\4\, Information Operations, Psychological Operations,
Civil Affairs, Intelligence, Aviation, Future Concepts, and Equipment &
Technology. One of the initiatives, pursued in coordination with the
Naval Special Warfare Command, is the Marine Corps' first sizeable
contribution of forces to the Special Operations Command. Consisting of
81 Marines and 5 Sailors, a detachment has been organized, trained and
equipped to conduct special reconnaissance, direct action, coalition
support, foreign internal defense and other special operations
missions, and will begin training at Camp Pendleton California in June
2003. They will subsequently transfer to the operational control of US
SOCOM during October 2003, and deploy in April 2004 as augmentation to
a Naval Special Warfare Squadron supporting both U.S. Pacific Command
and U.S. Central Command.

Better Business Practices
We continue to seek out and use better business practices to
achieve greater cost-effectiveness, improve performance, and sharpen
our focus on our warfighting core competencies. In line with the
competitive sourcing initiatives in the President's Management Agenda,
we are increasing emphasis across our Supporting Establishment on
competing our commercial activities with the private sector. We are
complementing this initiative with continued development of an
effective Activity-Based Costing and Management initiative across our
installations. This allows us to focus on the true cost of various
functions and services and to develop benchmarks that enable us to
improve performance and to focus analyses on cost-saving initiatives.
This will occur both in commercial areas that we compete, and in non-
commercial areas that cannot be competed. Competitions completed to
date have resulted in saving millions of dollars annually and returning
almost 900 Marines to the operating forces. We will continue to seek
additional competition candidates. Activity-Based Costing and
Management initiatives provided our installation commanders with cost
and performance information that enabled them to save over $37 million
last year. As we refine our databases, we expect continuing increases
both in performance and cost effectiveness.
Through all of the efforts outlined above, the Marine Corps is
building on today's success. As we build on our current capabilities,
embrace innovation, and transform to meet the daunting conventional and
asymmetric threats to U.S. security in the 21st century, we will
continue to be the Nation's Total Force in Readiness, fielding warriors
whose unique seabased expeditionary and combined-arms capabilities will
be critical to success in crisis and conflict. In the process of
balancing our programs to meet these goals, we will focus on two
primary objectives: (1) our main effort-maintaining excellence in
warfighting, and (2) taking care of our Marines and families.

TAKING CARE OF OUR OWN

Providing for the needs of our Marines, their families and our
civilian Marines remain among our top priorities. The most advanced
aircraft, ship, or weapons system is of no value without highly
motivated and well-trained people. People and leadership remain the
real foundations of the Corps' capabilities. It is important to note
that the Marine Corps operates as a Total Force, including elements of
both active and reserve components. We continue to strengthen the
exceptional bonds within our Total Force by further integrating the
Marine Corps Reserve into ongoing operations and training.

Human Resources
End Strength.--The Congressionally authorized increase in Marine
Corps end strength to 175,000 in response to the global war on
terrorism is very much appreciated. This increase of 2,400 Marines
allows us to sustain the increased missions associated with the
activation of the 4th Marine Expeditionary Brigade (Anti-Terrorism),
enabling us to replace Marines in the active units that we ``borrowed''
in standing up the Brigade, and continue to provide the Nation with a
robust, scalable force option specifically dedicated to anti-terrorism.
Recruiting.--Sustaining our ranks with the highest quality young
men and women is the mission of the Marine Corps Recruiting Command.
Recruiting Command has consistently accomplished this mission for more
than the past seven years for enlisted recruiting and twelve years for
officer recruiting. These achievements provide the momentum fueling the
continuous pursuit to improve the recruiting process and enhance the
quality of life for our recruiters. To continue to attract America's
finest youth, Recruiting Command has provided recruiters with the best
tools available to accomplish their mission. The Marine Corps supports
the National Call to Service Act and continues to work closely with DOD
in developing an implementation policy. We expect to commence enlisting
individuals under this program commencing October 1, 2003. The Marine
Corps Reserve achieved its fiscal year 2002 recruiting goals,
accessioning 5,904 Non-Prior Service Marines and 4,213 Prior Service
Marines. With regard to our Reserve Component, our most challenging
recruiting and retention issue is the ability to fill out our Selected
Marine Corps Reserve units with qualified officers. The Marine Corps
recruits Reserve officers almost exclusively from the ranks of those
who have first served a tour as an active duty Marine officer.
While this practice ensures our Selected Marine Corps Reserve unit
officers have the proven experience, knowledge and leadership abilities
when we need it the most--during mobilization--it limits the recruiting
pool that we can draw from to staff our units. As a result, the
Selected Reserve currently has a shortage of company grade (Second
Lieutenant to Captain) officers. We are exploring methods to increase
the reserve participation of company grade officers through increased
recruiting efforts, increased command focus on emphasizing reserve
participation upon leaving active duty, and reserve officer programs
for qualified enlisted Marines. We are also pursuing the legislative
authority to provide an affiliation bonus to reserve officers as an
additional incentive for participation in the Selected Marine Corps
Reserve.
Retention.--Retaining the best and the brightest Marines has always
been a major goal of the Marine Corps. The Marine Corps is by design a
youthful service, however, it is of paramount importance to retain the
highest quality Marines to lead our young force. History has proven
that leadership in the Staff Noncommissioned Officer ranks has been the
major contributor to the combat effectiveness of the Marine Corps. The
Marine Corps has two retention standards. Our First Term Alignment Plan
has consistently achieved its reenlistment requirements over the past
eight years. With one-third of the current fiscal year completed, we
have achieved 87 percent of our first-term retention goal. A look at
our Subsequent Term Alignment Plan (second tour and beyond)
demonstrates that we have already retained 51 percent of our goal for
this fiscal year. Both of these trends indicate healthy continuation
rates in our career force.
Current officer retention is at an eighteen year high, continuing
the strong performance of the last two years. Despite this positive
trend, we cannot become complacent. As a Corps, we will continue to
target specific qualifications and skills through continuation pay.
Military compensation that is competitive with the private sector
provides the flexibility required to meet the challenge of maintaining
stability in manpower planning.
Marine Corps Reserve--Partners in the Total Force.--It is important
to note that the Marine Corps operates as a Total Force, including
elements of both active and reserve components. We continue to
strengthen the exceptional bonds within our Total Force by further
integrating the Marine Corps Reserve into ongoing training and
operations. Concurrent with the various initiatives underway to improve
integration and update capabilities, the Marine Corps Reserve continues
to support its primary mission of augmentation and reinforcement.
Reserve units and Marines provided over 1.8 million man-days in fiscal
year 2002. Reserves provided support at all levels within the Marine
Corps and at Combatant Commands and High-Level Staffs.
As we enter the 21st Century, the overall structure of Marine
Forces Reserve will retain the current basic structure. However, Marine
Forces Reserve is currently working to create new capabilities
identified as part of its comprehensive review. Both as a structural
and an operational change, Marine Forces Reserve is increasing its
operational ties with the Warfighting Commanders by improving lines of
communication with our operating forces. These increased operational
ties will improve interoperability, increase training opportunities,
and enhance the warfighting capabilities of the Total Force.
Mobilization.--Since the events of 9/11, the Marine Corps
judiciously activated Individual Ready Reserve (IRR) Marines in
response to both internal and joint operational requirements. The
Marine Corps has maximized the use of individual volunteers to meet
these requirements primarily in the areas of staff augmentation and
force protection. In addition, Selected Marine Corps Units (SMCR), were
activated for force protection requirements in support of homeland
security. Because of emerging requirements associated with war on
terrorism, we began involuntary recall of some of our Individual Ready
Reserves on January 17, 2003.
Stop Loss.--On January 15, 2003, the Marine Corps instituted Stop
Loss across the Marine Corps to meet the emerging requirements
associated with the expanding war on terrorism. Stop Loss was initiated
to provide unit stability/cohesion, maintain unit readiness, meet
expanded force protection requirements, and to reduce the requirement
to active IRR personnel. We will continue to make judicious use of this
authority and continue to discharge Marines for humanitarian, physical
disability, administrative, and disciplinary reasons. We have
instructed our General Officers to continue to use a common sense
approach and have authorized them to release Marines from active duty
if it is in the best interest of the Marine Corps and the Marine.

Education
Our leaders--especially our noncommissioned officers--throughout
the entire chain of command have kept the Corps successful and
victorious. Their sense of responsibility is the cornerstone of our
hard-earned successes. We will continue to develop leaders who can
think on their feet, act independently, and succeed. In the future, as
today, leaders will continue to instill stamina and toughness in each
individual while simultaneously reinforcing character that values
honor, integrity and taking care of our fellow Marines--including
treating each other with dignity and respect. Aggressive and informed
leadership demands education, training, and mentoring. The importance
of these key elements cannot be over-emphasized, and we must attend to
each at every opportunity.
Marine Corps University has responsibility and authority for the
planning, coordinating and overseeing all education for our Marines.
The University is accredited by the Southern Association of Colleges
and Schools to confer Masters degrees and currently offers a Masters of
Strategic Studies at the Marine Corps War College, and a Masters of
Military Studies at the Command and Staff College. The Chairman of the
Joint Chiefs of Staff currently accredits the War College, Command and
Staff College, and the College of Continuing Education for Phase I
Joint Education. The President of the University also exercises command
authority over the Expeditionary Warfare School and the Staff
Noncommissioned Officer Academies worldwide. Notable accomplishments
include Department of Education approval of a Masters of Operational
Studies at the School of Advanced Warfighting, which is the first step
toward our third Master's degree program.
Plans for the future include providing coordination and continuity
through a coherent education plan for all Marines. Our goal is to
develop better warfighting leaders at all levels through an increased
emphasis on relevant, structured education--at the graduate and
undergraduate level--through both resident programs and distance
education. Our intent is to greatly expand beyond the current emphasis
on field-grade officers to support leadership development throughout
the training and education continuum from Marine Private through
General Officer, and to specifically bring senior Non-commissioned
Officers further along the education continuum.
Our Lifelong Learning mission is to establish an integrated
approach to learning; providing Marines with one destination for
enrollment in a college program, access to research tools such as
books, periodicals, and the Internet, basic skills enhancement, and
nonresident courses. In the face of a requirement to increase Tuition
Assistance from 75 percent to 100 percent of tuition costs, and the
rate from $187.50 per semester hour to $250 per semester hour, the
Marine Corps added the necessary funds to expand the Tuition Assistance
program in the fiscal year 2004 POM, which provides sustainment until
fiscal year 2009.

Quality of Life/Quality of Service
Congressional support for increases in the Basic Allowance for
Housing, as well as the aggressive Marine Corps use of the Public
Private Venture (PPV) authority provided by Congress five years ago,
are resulting in dramatic improvements to the housing of our Marines
and their families. Your continued support of our budget to help us
achieve zero out-of-pocket expenses by fiscal year 2005 is greatly
appreciated. The condition of other infrastructure, such as our
barracks, workspaces, and training ranges, are also key factors in
overall quality of life. While our infrastructure budgets reflect only
the minimal essential military construction and re-capitalization
necessary, they will allow us to achieve a re-capitalization rate of 67
years within the FYDP (down from 100 years in fiscal year 1999) and an
improvement of our facilities readiness by fiscal year 2013.
We have been aggressively working to reduce the number of Marines
and civilian Marines in non-core business areas, reapplying the Marines
to other operational requirements, and looking to optimize the use of
civil service/contractor support where appropriate. Our track record is
good. By example, we have reapplied Marines in the garrison food
service and mobile equipment areas back to the operating forces and
competed a significant number of civilian positions. We will continue
this process in line with the President's Management Agenda to review
fifty percent of our positions by fiscal year 2008. By ensuring that
quality of service remains high, we will help maintain our successful
record of recruitment and retention.

Families
The Marine Corps is an expeditionary force prepared to deploy on
short notice to accomplish assigned missions. While we may recruit
Marines, we almost always retain families--it becomes a family decision
for a Marine to stay for an entire career. Because of our expeditionary
culture, deployment support is provided to Marines and their families
as part of our normal operations, largely through the efforts of Marine
Corps Community Services. In addition to concerted efforts to improve
housing and family services, security and support is offered during
pre-deployment, deployment, and post-deployment phases of our
operations. The Marine Corps also offers numerous programs focused on
new parent support and the prevention of domestic violence, as well as
services and programs for infants, toddlers, children and teens. The
Exceptional Family Member Program focuses on assistance to service
personnel who have a family member with special needs before, during
and after Permanent Change of Station Orders.

Safety
Ensuring a safe command climate and working environment remains a
critical concern for the Marine Corps. Often, the settings and the work
our Marines do are dangerous, but effective command climates
continually mitigate those dangers through planning and leadership. Our
safety programs are integral to force protection and operational
readiness. Leadership and programming in safety awareness and standards
are vital to providing Marines and their families with a meaningful
quality of life and service. On the heels of a very successful year
prior, fiscal year 2002 was a disappointing year for safety in the
Corps, as we lost more Marines to mishaps in fiscal year 2002 than we
had in any single year for the preceding decade. Our aviation mishap
rate increased as well (from 1.40 to 3.9 class A mishaps per 100,000
flight hours).
These results do not indicate a lack of desire to safeguard
Marines. Rather, several factors were involved that made it
particularly difficult to prevent mishaps through normal operational
risk management efforts. Demographically, the Marine Corps is a younger
force than the other Services (by an average six to eight years), with
maturity being a contributing factor in many mishaps; however, none of
these factors are excuses for any failure to avoid preventable mishaps.
Our leadership at all levels is deeply concerned about the negative
trend and we are actively involved in multiple efforts to improve
readiness and save our most precious Marines and valuable equipment.

OUR MAIN EFFORT--EXCELLENCE IN WARFIGHTING

Marines have a vision for the future, and we are moving forward
with the modernization and transformation efforts needed to make this
vision a reality. We fully understand that our vision cannot be
achieved independent of our sister Services. Each of the Services has
its own critical role to play in providing for our Nation's collective
security; however, it is important that each of our contributions be,
simultaneously, both unique and complementary. In particular, the Corps
stresses the importance of our key partnership with the Navy. The Navy-
Marine Corps Team has never been stronger, or more necessary for our
Nation.
We have stated that our first concern is with the care and
stewardship of our people. This philosophy extends to the rest of our
programming in that we focus on procuring the programs and equipment
that will maximize the abilities of our Marines to perform effectively
in combat. With the foundation of requirements drawn from our emerging
concepts, the Marine Corps is transforming its warfighting systems and
assets throughout the elements of our Marine Forces. The following
examples reflect but a few of our transformation and modernization
efforts. A more comprehensive description of the Marine Corps' entire
acquisition program can be found in the publication entitled Marine
Corps Concepts & Programs 2003.

Training
We believe the enduring wisdom, ``you fight the way you train.''
Because of this, our training exercises are becoming ever more Joint
and Combined to provide our Marines with the experience they will need
when called upon to respond to crises--because there is no doubt that
we will work alongside our sister Services and coalition partners from
other Nations in such circumstances. The Marine Corps Combat Training
Center at Twenty-nine Palms, California focuses on integrated live fire
and maneuver, as well as combined arms training, and will continue to
play a central role as our foremost training and testing site for
Expeditionary Maneuver Warfare. Ongoing initiatives will expand the
role of the Combat Training Center and transform it into a ``Center of
Excellence'' that will focus the training efforts across our operating
forces. The Combat Training Center facilitates and supports the
development of new concepts and capabilities, thereby reinforcing our
combat effectiveness, enhancing joint interoperability, and supporting
Dodd transformation efforts.
The future role of the Combat Training Center will grow beyond its
current emphasis on battalion-level integrated live fire, combined arms
training to support expanded training opportunities for all elements
(ground, air, combat service support, and command) of Marine Air-Ground
Task Forces up to and including a Marine Expeditionary Brigade. This
will include: enabling multi-site, distributed training evolutions that
tie together units from various bases; and investing in technology that
simultaneously links live, virtual, and constructive training.
Additionally, improvements to the existing Expeditionary Air Field and
construction of a large-scale urban training facility are being studied
as possible ways to enhance training opportunities at Twenty-nine
Palms. All of these efforts have the potential to increase the
capability of our training center to support evolving training
requirements, enabling the Corps to maintain its focus on uniquely
Marine training skills, while providing a vehicle to further integrate
Marine Corps capabilities into those of the Joint Force.

Infrastructure
Marine Corps infrastructure consists of fifteen major bases and
stations and 185 Reserve facilities in the United States and Japan. In
keeping with the Corps' expeditionary nature, these installations are
strategically located near air and seaports of embarkation, and are
serviced by major truck routes and railheads to allow for the rapid and
efficient movement of Marines and materiel. Recognized as the ``fifth
element'' of the Marine Air-Ground Task Force because of the close link
to the operating forces and their operational readiness, the condition
of the Corps' bases and stations is of vital importance. With the
ability to train as an integrated force being a fundamental requirement
of the Corps, infrastructure development planning is designed to
provide the facilities, training areas, and ranges (both air and
ground) to accomplish this requirement while minimizing excess and
redundant capacities. With increasing encroachment pressures and
constrained fiscal resources, the Marine Corps face significant
challenges to provide and maintain a lean and efficient infrastructure
that fully meets changing mission demands.
Blount Island Acquisition.--We are committed to undertake the
wisest possible course to conserve our real property and, when
necessary, to acquire any additional property that is mission critical.
The Blount Island facility in Jacksonville, Florida, is a National
asset that must be acquired to ensure its availability for long-term
use. Blount Island's peacetime mission of supporting the Maritime Pre-
positioning Force is vitally important, while its wartime capability of
supporting large-scale logistics sustainment from the continental
United States gives it strategic significance. The facility will play a
vital role in the National military strategy as the site for
maintenance operations of the Maritime Pre-positioning Force for years
to come. The Marine Corps plans to acquire the Blount Island facility
in two phases. Phase 1, funded in fiscal year 2000 and fiscal year
2001, is currently in progress and is will acquire interests in
approximately 311 acres of land for the primary purpose of ensuring
public safety on parcels adjacent to the leased central management
operational area. Phase 2, planned for fiscal year 2004, involves
acquisition of the central maintenance operational area, consisting of
over 1,000 acres.
Training at Eglin Air Force Base.--With cessation of training at
Vieques, Puerto Rico, the established training ranges, quality of
training support, and proximity to the ocean available at Eglin Air
Force Base, Florida, can provide Naval Expeditionary Forces with an
alternative training capability. Eglin's capabilities, location, and
tenant commands provide the opportunity to facilitate joint training
between Air Force, Navy, Marine Corps, Army and Special Operations
Forces. Development of an expeditionary force training capability at
Eglin can support the Secretary of Defense's vision and direction for
training transformation and the development of a Joint National
Training Capability. This type of training will be critical to Naval
expeditionary combat-readiness.
The Marine Corps proposes to execute two ten-day training exercises
with a Marine Expeditionary Unit at Eglin each year. These exercises
include a variety of scenarios such as amphibious landings, raids,
mechanized operations, helicopter operations, and live fire and
maneuver exercises. No final decision on training activities will be
made until an Environmental Assessment currently underway is completed.
The Navy and Marine Corps are actively working to develop and sustain
cooperative relationships with the local community and the State of
Florida.
Encroachment and Environmental Issues.--Encroachment--defined as
any deliberative action that can cause the loss of, or restrict, the
use of land, airspace, frequency, or sea maneuver areas--is a serious
threat to the operational readiness of the Corps. Urban and residential
areas now surround many Marine installations that were originally
remotely situated. This growth is often accompanied by pressure for
access to Marine Corps resources, or demands to curtail Marine Corps
operations to make them more compatible with surrounding land uses. The
Corps' training lands often provide excellent habitat for threatened
and endangered species, serving as islands of biodiversity amid the
crush of densely populated urban areas that surround many of our
installations. The Marine Corps is proactively engaged with federal,
state, and local agencies and governments, as well as nongovernmental
organizations, to provide win-win solutions to these encroachment
pressures, and ensure compatible land usage and environmental security
without degrading training and mission readiness. Unimpeded access to
our installations and ranges is critical to the Marine Corps remaining
America's ``Force in Readiness.''
Our Nation has crafted a strong environmental code of conduct
structured on a wide range of federal, state, and local laws and
regulations. Vague or inflexible environmental requirements, however,
can present significant challenges for Marines performing their primary
mission. We support ongoing efforts to seek clarity and limited
flexibility in certain environmental laws, so that we may more
effectively balance our training requirements with our long-term
environmental stewardship responsibilities. Our ultimate goal is to
``fight the way we train,'' while preserving the natural environment.
Today, Marines at all levels perform their jobs with an increased
awareness of potential environmental impacts. All of our bases and
stations, for example, have implemented Integrated Natural Resource
Management Plans and aggressive pollution prevention programs. The hard
work does not end with these initiatives. The impact of encroachment on
the Corps' ability to fully utilize its installations are varied and
require constant vigilance and attention to ensure that operational
readiness is not diminished.

Command and Control
Interoperability is the key to improving Naval expeditionary
command and control effectiveness, especially as we begin to integrate
battlespace sensors residing in our manned and unmanned aerial, space,
and ground vehicles. This is particularly true as the Marine Corps
continues to work routinely with a range of government, non-government,
and international agencies. The command, control, communication, and
computer (C\4\) end-to-end interoperability of the Global Information
Grid will serve to enhance our ability to conduct joint, multi-
department, and multi-agency operations through the use of technology,
standards, architectures, and tools.
The Marine Corps works closely with the Joint Staff, combatant
commanders, operating forces, and other Services to ensure that, where
possible, joint concepts of operations are developed for common
capabilities. An example of this process is occurring with the
development of the Joint Tactical Radio System, which combines numerous
single function programs of current inventories into a single,
interoperable, joint radio program that will provide secure digital
communications while enhancing wideband tactical networking.

Intelligence
Our fiscal year 1996-fiscal year 2003 enhancements to Marine
Intelligence Support are paying off during Operation Enduring Freedom
and the Global War on Terrorism. Intelligence Support organic to Marine
Forces combined with capabilities from our Marine Corps Intelligence
Activity in Quantico, Virginia to provide federated production
(reachback) support has been validated through current operations.
Marine Expeditionary Unit's forward deployed with organic all-source
intelligence collection and production capabilities provide current
intelligence support to Marine and Special Operations units. Our
deployed signals intelligence, human intelligence, ground sensor, and
reconnaissance teams provide the commander current situational
awareness. All-source intelligence Marines have the systems and
training to integrate organic collection, network with the joint force
on the ground, and effectively reach back to the Marine Corps
Intelligence Activity and joint centers at secure locations.

Mobility
While the global war on terrorism has demonstrated the current
capabilities of the Navy-Marine Corps Team, our continuous
transformation and modernization efforts hold even greater potential
for increasing Naval power projection capabilities in the future. Many
of these efforts focus on increased speed, range, payload, and
flexibility of maneuver units--mobility. This concept includes a vision
of an all-vertical lift Air Combat Element, with the introduction of
tiltrotor and Short-Take-Off/Vertical-Landing (STOVL) aircraft. The
following initiatives are some of the keys to the achievement of Marine
Corps operational mobility objectives:
MV-22 Osprey.--The MV-22 remains the Marine Corps' number one
aviation acquisition priority. While fulfilling the critical Marine
Corps medium lift requirement, the MV-22's increased capabilities of
range, speed, payload and survivability will generate truly
transformational tactical and operational opportunities. With the
Osprey, Marine forces operating from the sea base will be able to take
the best of long-range maneuver and strategic surprise, and join it
with the best of the sustainable forcible-entry capability. Ospreys
will replace our aging fleets of CH-46E Sea Knight and CH-53D Sea
Stallion helicopters.
KC-130J.--The KC-130J will bring increased capability and mission
flexibility to the planning table with its satellite communications
system, survivability, and enhancements in aircraft systems, night
systems, and rapid ground refueling. The KC-130J is procured as a
commercial off-the-shelf aircraft that is currently in production. We
are pursuing a multi-year program for purchase with the U.S. Air Force.
Advanced Amphibious Assault Vehicle.--The Advanced Amphibious
Assault Vehicle (AAAV) is the Marine Corps' only Acquisition Category
1D program and will be one of the principal enablers of the
Expeditionary Maneuver Warfare concept. AAAV will provide never before
realized high-speed land and water maneuver, a highly lethal day/night
fighting ability, and advanced armor and Nuclear-Biological-Chemical
protection. This--coupled with a systematic integration into emerging
service and Joint Command and Control networked information,
communications and intelligence architectures--will provide the Marine
Corps with increased operational tempo, survivability, and lethality
across the spectrum of operations.
Maritime Pre-positioning Force.--The Maritime Pre-positioning Force
(Future) will be the true enabler of primarily sea-based operations.
When it becomes operational, the future Maritime Pre-positioning Force
role will expand beyond that of today, and will provide a true
seabasing capability. In this regard, it will serve four functions that
the current capability cannot: (1) Phased at-sea arrival and assembly
of units; (2) Selective offload of equipment and cargo; (3) Long-term,
sea-based sustainment of the landing force; and (4) At-sea
reconstitution and redeployment of the force. The Naval Services are
exploring several new technology areas during the development of
Maritime Pre-positioning Force (Future). Currently, the Maritime Pre-
positioning Force (Future) Program is conducting an analysis of
alternatives to inform an acquisition decision by the Office of the
Secretary of Defense.
High-Speed Vessel (HSV).--High-speed vessels will enhance the
Marine Corps' capability to perform a wide range of missions, from
providing support to a theater security cooperation plan to sustaining
long-term operations ashore. High-speed vessels can enhance our ability
to conduct sea-based operations and use the sea as maneuver space. HSVs
do not have the loitering and forcible entry capabilities of amphibious
ships or the pre-positioning capacity of our Maritime Pre-positioned
Force Squadrons. However, their shallow draft, high speed,
maneuverability, and open architecture make them a valuable link in a
seamless logistics system that extends from source of supply to the sea
base and the joint force, enabling a faster, more responsive, and
capable deployment of a range of force modules from forward-based
``hubs'' such as Okinawa, or from the United States. The Marine Corps
is currently testing and validating these concepts by employing a high-
speed vessel in the Pacific theater as a form of strategic lift.
Power Projection Platforms.--Combined with embarked Marines, Naval
expeditionary warships provide the Nation with forward-presence and
flexible crisis response forces. They also provide a truly unparalleled
expeditionary forcible-entry capability. As part of a joint effort, the
Marine Corps will remain capable of getting to the fight rapidly in
order to decisively deter or defeat adversaries who try to impose their
will on our country or its allies. A fiscally constrained programmatic
goal of twelve Amphibious Ready Groups--one that deliberately accepts
increased operational risk by attempting to balance force structure
with available resources--does not change the warfighting requirement
to lift the Assault Echelons of three Marine Expeditionary Brigades via
future platforms for amphibious shipping. The Marine Corps supports the
LPD-17 and a modified LHD-8 (``Plug Plus'') ship design in fiscal year
2007 and will evaluate the adequacy of the R&D and SCN funding for the
development of future LHA(R) ships for the remainder of the class.
Mine Countermeasure Capabilities.--Naval expeditionary forces
require an effective counter-mine warfare capability to open and
maintain sea lines of communication and to operate within the littoral
battle space. This is probably our greatest concern when it comes to
projecting power in an anti-access environment. With respect to mine
countermeasures, we require a family of capabilities that encompasses
mine detection, location, neutralization, marking, and data
dissemination. Designed to provide an organic mine counter-measures
capability within operationally acceptable timelines and with
acceptable levels of operational risk, this next generation of systems
includes the Advanced Mine Detector, the Assault Breacher Vehicle, the
Remote Minehunting System and the Long-term Mine Reconnaissance System.
Our most critical mine countermeasures deficiencies exist in the area
near the shoreline through the high water mark and beyond, where
detection and neutralization capabilities are extremely limited. Given
the broad proliferation of known and unknown mined areas throughout the
world, we must improve our ability to operate in this exceptionally
lethal environment. Our intent is to leverage America's strength in
technology to dramatically improve our ability to locate and avoid or
neutralize mines and obstacles as necessary, and eventually remove the
man from the minefield.

Fires and Effects
With the increased range and speed of expeditionary mobility
assets, the landward area of influence of Naval forces has increased by
an order of magnitude. Consequently, the Nation requires weapon systems
with correspondingly greater range, lethality, flexibility and tactical
mobility. A range of lethal and non-lethal fire-support programs is
moving the Corps in that direction. The development and acquisition of
non-lethal weapons systems will expand the number of options available
to commanders confronted with situations in which the use of deadly
force is inappropriate. The Marine Corps is developing a robust non-
lethal capability that will address the non-lethal core requirements of
clearing facilities, crowd control and area denial. Additionally, we
are enhancing the capabilities with which we can affect our adversaries
that defy the traditional concept of weapons and fire-support means.
Technical advances in directed-energy weapons hold much promise for
future capabilities in this area.
Joint Strike Fighter.--The Joint Strike Fighter is the next-
generation strikefighter for the Marine Corps, Air Force, and Navy and
will replace the Marine Corps' AV-8B and F/A-18A/C/Ds. The JSF family
of aircraft will include a short takeoff and vertical landing (STOVL)
variant, a conventional take-off and landing (CTOL) variant, and an
aircraft carrier-capable variant. Commonality between the variants will
reduce both development and life cycle costs and will result in
significant savings when compared to the development of three separate
aircraft. The Marine Corps requires that its STOVL variant be able to
operate from large-deck amphibious ships, austere sites, and forward
operating bases. The STOVL Joint Strike Fighter version can use from
three to five times more airfields around the world than our existing
conventional take-off and landing aircraft. Moreover, because the STOVL
variant can operate from both conventional carriers and amphibious
assault ship decks, it thereby effectively doubles the number of
platforms available for seabased operations. The advantages of a
stealthy STOVL strike fighter--capable of taking off from an
expeditionary base on land or at sea, flying at supersonic cruise,
accomplishing its mission with advanced sensors and weapons, and then
returning to its expeditionary site--are dramatic. The STOVL Joint
Strike Fighter will provide the reliability, survivability, and
lethality that Marines will need in the years ahead, and transform the
very foundations of Naval tactical air power for the 21st Century.
Naval Surface Fire Support.--Our ability to provide fires in
support of expeditionary forces operations beyond the beach has not
kept pace with the dramatic increases in mobility. Critical
deficiencies currently exist in the capability of the Navy to provide
all-weather, accurate, lethal and responsive fire support throughout
the depth of the littoral in support of expeditionary operations. The
Marine Corps supports the Navy's near-term efforts to develop an
enhanced Naval surface fire support capability with the fielding of the
5-inch/62-caliber Naval gun and the development of extended-range
munitions. In the far-term, the Marine Corps supports the development
and fielding of the Advanced Destroyer [DD(X)], armed with 155 mm
Advanced Gun Systems and Land Attack Missiles, to fully meet our Naval
surface fire support requirements. Our Nation's expeditionary forces
ashore will remain at considerable risk for want of suitable sea-based
fire support until DD(X) joins the fleet in significant numbers.
Indirect Fire-Support.--A triad of indirect fire-support programs
will provide needed firepower enhancements for Marines in the near- to
mid-term. The first element of the triad is the Lightweight-155 mm (LW-
155) towed howitzer needed to replace our current M-198 howitzer, which
is at the end of its service life. The Lightweight-155 is a joint
Marine Corps-Army effort that will meet or exceed all the requirements
of the current system while significantly reducing its weight.
The second element, the High Mobility Artillery Rocket System
(HIMARS), will deliver very high volumes of rocket artillery in support
of the ground scheme of maneuver. The HIMARS will provide accurate,
responsive general support and general support reinforcing indirect
fires at long range, under all weather conditions, and throughout all
phases of combat operations ashore. It will fire both precision and
area munitions to a maximum range of 36 miles.
The Expeditionary Fire Support System, the third system of the
land-based fire support triad, will accompany Marines in any
expeditionary mode of operation. It will be the primary indirect fire-
support system for the vertical assault element of the ship-to-
objective maneuver force. The Expeditionary Fire Support System, as a
system, will be internally transportable by helicopter or tilt-rotor
aircraft to allow the greatest range and flexibility of employment for
our future operations.
Information Operations.--Defense planners are engaged in studies
exploring Information Operations as a core military competency, fully
integrated into both deliberate and crisis action planning. The Marine
Corps intends to enhance our operational capability in both offensive
and defensive Information Operations. Marine Corps doctrine and
warfighting publications are being reviewed and revised to acknowledge
Information Operations as a core warfighting capability fundamental to
all operations spanning the spectrum of conflict with equal
significance during non-combatant and humanitarian operations. We
recognize a requirement to develop and train an Information Operations
career force of trained professionals from the ground up in support of
joint and inter-agency efforts.
New Weapons Technologies.--The Corps is particularly interested in
adapting truly transformational weapon technologies. We have forged
partnerships throughout the Department of Defense, other Agencies, and
with industry over the past several years in an effort to develop and
adapt the most hopeful areas of science and technology. Several notable
programs with promising technologies include: (1) advanced tactical
lasers, (2) high-power microwave, non-lethal active denial systems, (3)
free electron lasers, (4) electro-magnetic guns (rail guns), and (5)
common modular missiles for aircraft.

Logistics and Combat Service Support
The Marine Corps logistics' vision is to significantly enhance the
expeditionary and joint warfighting capabilities of our Operating
Forces. Key warfighting capabilities encompassed in our future
concepts--Enhanced Networked Seabasing and Ship-To-Objective-Maneuver--
will be defined by our logistic capabilities and limitations. Hence, we
are committed to exploring and implementing actions to increase combat
power, operational versatility, and deployability. The concept of
focused logistics in Joint Vision 2020 is guiding the Marine Corps as
we strive to increase the sustained forward-deployed capability of our
forces. Future force combat service support--and the Marine Corps
logistics that enables it--will be changing as we shift more of our
operations to the sea base. At the forefront of this effort is the
Marine Corps Logistics Campaign Plan that outlines essential objectives
and tasks based upon overarching Marine Corps, Naval, joint, and DOD
concepts and guidance. Our strategy encompasses four pillars:
Logistics Information Fusion and C\2\.--A key to current and
emerging warfighting capabilities is a robust and responsive logistics
information technology capability--one that is integrated with our
command-and-control architecture and interoperable with Naval and joint
systems. The Global Combat Support System--Marine Corps (GCSS-MC) and
shared data environment, along with the Common Logistics Command and
Control System, provide logisticians across the Marine Corps with a set
of common logistics assessment, planning, and execution tools that are
interoperable with the common operating picture.
Seamless Distribution.--The single capability that defines Marine
Forces in a joint environment is its ability to sustain itself over an
extended period of time. The principal goal is to move from defining
sustainment in terms of deployable ``days of supply'' to a continuous
uninterrupted sustainment capability for the force. A key element in
achieving this is integrating current distribution processes and
systems into broader Naval and joint distribution processes. Achieving
this capability will not only greatly enhance Naval operations, but
will be transferable to the task of sustaining joint forces and
operations.
Enhanced Equipment Readiness.--The bulk of our logistics effort and
associated ``footprint'' is driven by its equipment-support activities.
The Marine Corps seeks to reduce the required level of support for
equipment by greatly improving the reliability, availability, and
maintainability of ground tactical equipment.
Enterprise Integration.--Achieving the emerging warfighting
capabilities envisioned by future concepts require dynamic shifts in
our logistics processes and organizations. Leading this effort toward
logistics modernization is true enterprise integration consisting of
GCSS-MC, process reengineering, and organizational reform.

CONCLUSION

The major challenges confronting the Marine Corps today center on
organizing, training, and equipping our force to better support joint
force commanders, now and in the future. The modernization programs and
the transformational systems that we are pursuing are key to our
ability to meet the Nation's wartime, crisis, and peacetime
requirements. We have put into place well-conceived programs addressing
the needs of our Marines and their families, the requirement to enhance
the current readiness of legacy systems, the critical role
infrastructure plays in present and future readiness, and the balance
between modernization and transformation.
We are focusing on the development of integrated capabilities that,
when combined with those of our sister Services and Special Operations
Forces, will effectively meet the challenges of an increasingly varied
and threatening National security landscape. You can remain justifiably
proud of what your Marine Corps contributes as America's forward
engagement and expeditionary combined-arms force. We are grateful for
the unwavering support you provide in this vitally important work.

Senator Stevens. Thank you very much, gentlemen, and I
apologize for not being here at the opening so I will just
submit my opening statement in the record. We will soon take up
the supplemental, and I was working on it, as I said.
[The statement follows:]

Prepared Statement of Senator Ted Stevens

Secretary Johnson, Admiral Clark and General Hagee, I
welcome all of you today.
Today we will discuss the fiscal year 2004 budget request
for the Navy and Marine Corps. We are currently considering the
Administration's request for a fiscal year 2003 supplemental
for Operation Iraqi Freedom and the continuing Global War on
Terrorism. We know how much the Navy and Marine Corps need this
additional funding and will do all we can to get this to you as
quickly as possible.
The last two years have been a time of extraordinary
accomplishment, effort, dedication, and duty for the men and
women of our Navy and Marine Corps. Since September 11, 2001,
the Navy/Marine Corps team expanded the role of what was
thought possible for carrier-based flight operations and
expeditionary landing forces. Now, in Operation Iraqi Freedom,
our Navy and Marine Corps continue this excellence in the air,
on the ground, and at sea.
Right now, the Navy has 54 percent of the fleet forward
deployed and 68 percent of the fleet underway. I believe that
this is the highest deployed percentage since World War II.
Also interesting, is that the Navy is also the smallest it's
been since World War II--dropping to about 300 ships this year.
All this, while at the same time, the Navy is achieving its
highest retention rates in history.
The Marine Corps is equally engaged. 90 percent of the
deployable Marine Corps force is deployed today. This is 56
percent of the total U.S. Marine Corps end strength, the
highest percentage since World War II.
We look forward to your testimonies today on your
priorities for the fiscal year 2004 budget. As always, your
full statements will be made a part of the record.

Senator Stevens. I do want you to know we are grateful to
you for what you are doing, and for what all of the Navy and
Marine Corps are doing to support the war in Iraq and the war
in Afghanistan and the war against terrorism.

OPERATIONS AND MAINTENANCE

Let me start off by saying this, that the Army and Air
Force have informed us that because of the funds that have
already been expended for these efforts that I mentioned, there
will be a shortage in funds for operation and maintenance (O&M)
for their services by sometime in May. Is that the situation
with you also?
Secretary Johnson. I would say the summer, but it will vary
from May to July, but the same time frame.
Senator Stevens. They said their initial shortages will
start in May. Is that the situation with the Navy and Marines?
Secretary Johnson. Yes, sir.
Senator Stevens. General Hagee?
General Hagee. Yes, sir, it is. Without the supplemental
that is a true statement, sir.
Senator Stevens. Admiral Clark?
Admiral Clark. I will run out of money in June, the first
part of June.

SEA BASING

Senator Stevens. We have just seen the situation that has
developed because of our lack of access to the land mass of
Turkey. I was reminded last night of the proposal that was
outlined to us just informally by one of your predecessors,
Admiral Clark, a man for whom I had great regard, and
unfortunately he left us in a strange way, Admiral Boorda.
He outlined the plans for a floating cargo type landing
facility that could be easily moved from theater to theater.
Whatever happened to his proposal?
Admiral Clark. I did not see the specifics of that
proposal, Mr. Chairman, but I will tell you that when I talked
about an exciting future for the Navy-Marine Corps team, I will
tell you that as we look at the development of future ways to
exploit the sea under our sea basing concept and construct, we
have taken the approach that we are going to challenge every
assumption, and in the coming years, it is not reflected in
this budget because we are doing a lot of examination of
potential concepts right now with the Marine Corps, looking at
ways we can exploit the operational advantage and independence
of operating from the sea. And so I will tell you that we
believe that there is potential for new kinds of approaches and
new kinds of platforms, and this is a key part of the Maritime
Prepositioning Force (MPF) future concept. I will tell you that
2 years ago when we heard the word MPF future----
Senator Stevens. What does that mean?
Admiral Clark. That is the maritime preposition force for
the Marine Corps. I will tell you that now General Hagee and I
are looking at ways that that kind of capability can be
exploited by both of us. And I will not try to define it this
morning, Mr. Chairman, but I will tell you that I believe that
our future is about exploiting those kind of potential
opportunities.
Senator Stevens. Well, I commend to you the research that
Admiral Boorda had done, and urge you to go back and look at it
to see what happened to it because it sort of disappeared, but
I will not belabor it here now.
General Hagee, I think it is clear that the concept of air
superiority is something we must maintain. One of the things
that we have been very interested in is the new cutting edge
aircraft, the V-22. Tell us, what is the situation now?

V-22 PROGRAM

General Hagee. Sir, we continue to work on testing the V-22
and I can report to you, sir, that that testing is going very
well. We are about 80 to 85 percent finished with a high rate
of dissent testing, which investigates the so-called vortex
ring state phenomena where the aircraft comes down and actually
flies through its own wash when it is in the helicopter mode.
And what we have found is that the model accurately predicts
what will happen to that aircraft when it enters its downwash.
We have found that the envelope for the V-22 is actually
larger than for a normal helicopter, in other words, it is not
as vulnerable to this phenomena as a normal helicopter is. In
addition, we have found that it is easier to exit this
phenomena in the V-22, you simply rotate the nacelles forward
and you go into horizontal flight and you fly out of it.
We are also about 80 percent finished with the low speed
maneuverability testing, and that is going very well. A couple
months ago we landed on board amphibs, absolutely no problem at
all.
Through inspections we have found that the rubbing that was
noticed before we did the redesign on the engine is no longer
occurring, so I can report to you that that testing is going
very well and I am very optimistic about the aircraft.
Senator Stevens. Good. Your predecessor made a commitment
to me that I would ride on that very soon, and I believe it is
one of the real significant portions of our aeronautical
capabilities. You are testing a plane that will be used in the
future not only by you but by the Army and by the civilian
sector to a great extent.
As a matter of fact, there is a civilian portion of it that
has not had some of the problems that the larger ones have, as
I understand it. So, I would hope you keep us posted.

PRIOR YEAR SHIPBUILDING COSTS

Let me ask Secretary Johnson, and then I have to leave,
Secretary Johnson, last year at the request of I believe your
Department, added $635 million to the President's budget
request to help the Navy pay for shipbuilding cost overruns. My
staff advises me that despite the fact we provided those funds
to pay for those bills, that the overruns and deficits remain
the same. What happened to the $635 million we provided last
year?
Secretary Johnson. Sir, our deficits this year are the
lowest they have been in, I think we said 10 years, and that is
largely due to the great work that John Young is doing as our
head of research, development and acquisition. We are watching
those very carefully, and I can provide you the exact number.
Senator Stevens. Am I improperly advised that your bills
for past overruns are--have been paid? I have been told they
were not paid, despite the fact that we put up the $635.
Secretary Johnson. Sir, it is my understanding that they
have been paid. This year the deferred ones are on the order of
100, which is less than it has been in 10 years or more. So the
account is in better shape now than it has been in a long, long
time.
Senator Stevens. Will you give us a statement for the
record of the prior year bills that have not been paid for the
Navy?
Secretary Johnson. Yes, sir, I will.
[The information follows:]

Question. Explain status of overall PY bill throughout the FYDP to
include why fiscal year 2004 PB request is the same as the fiscal year
2003 PB despite the Congressional increase.
Answer. From PB03 to PB04 there was a $225.5 million increase in
the overall PY bill (PB03--$3,546, PB04--$3,771.5). The $635 million
Congressional increase in fiscal year 2003 was used to pay for this
increase in the overall PY bill and to reduce the PY bill in fiscal
year 2004-fiscal year 2006 by $409.5 million. The upcoming PY bills
were reduced as follows:

[In millions of dollars]
------------------------------------------------------------------------
PB03 PB04 Change
------------------------------------------------------------------------
Fiscal year:
2004............................... 645.9 635.5 -10.4
2005............................... 743.7 484.4 -259.3
2006............................... 185.3 45.5 -139.8
--------------------------------
Total............................ ......... ......... -409.5
------------------------------------------------------------------------

Question. Explain SECNAV's statement that PY bill was in the ``best
shape it has ever been in''.
Answer. The initiatives described in our Prior Year Report to
Congress of 2002 February 2003 have been very effective in reducing the
rate of increase in prior year shipbuilding costs. The prior year cost
growth from the fiscal year 2003 President's Budget request to the
fiscal year 2004 President's Budget request is 6 percent, as compared
to the 16 percent and 256 percent growth rates from the two previous
budget submissions.
Initiatives undertaken over the past year to address the prior year
shipbuilding costs, and to prevent cost estimate increases in future
programs include: (1) Elimination of configuration changes except to
remedy Government responsible defects; (2) Executive oversight and new
funding in addition to the budget baseline for mandatory changes in
requirements; (3) Reinstitution of the Chief of Naval Operations (CNO)
Ship Characteristics Improvement Panel Process; (4) Budgeting to Cost
Analysis Improvement Group (CAIG) estimates; (5) Employment of
Engineering Development Models to mitigate technology risk; and (6)
Adjustment of scope prior to contract award to better ensure budget
alignment.
Question. Breakdown all cost increases (by platform) and provide
the reason for the increase.
Answer. In recent years, the shipbuilding industry has experienced
material and labor escalation rates that exceeded the Department's
projections. Contributing factors include cost increases for health
care and workman's compensation costs that are not unique to the
shipbuilding industry.
A breakdown of all cost changes by platform (PB03 to PB04):

DDG
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal year--
---------------------------------------------- Total
2003 2004 2005 2006 2007
----------------------------------------------------------------------------------------------------------------
PB03..................................................... 125.5 59.4 70.2 38.1 ....... 293.2
PB04..................................................... 383.5 75.9 128.3 0 ....... 587.7
Change................................................... 258.0 16.5 58.1 -38.1 0 294.5
----------------------------------------------------------------------------------------------------------------

Reason for $294 million increase:
--$100 million--Higher labor, overhead, & production hour estimates.
--$96 million--PB03 budgeted change orders at 3 percent of basic,
whereas historic data supports 5 percent.
--$98 million--Increase in DDG 102 ship cost as a result of the ship
being transferred from NGSS to BIW.

VA CLASS
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal year--
--------------------------------------------------- Total
2003 2004 2005 2006 2007
----------------------------------------------------------------------------------------------------------------
PB03.............................................. 276.682 213.1 254.4 75.8 ........ 820.0
PB04.............................................. 326.7 300.4 91.3 38.7 ........ 757.1
Change............................................ 50.018 87.3 -163.1 -37.1 0 -62.882
----------------------------------------------------------------------------------------------------------------

Reason for $62.9 million decrease:
--$62.9 million for Post Shakedown Availability (PSA) moved to the
Post Delivery and Outfitting (PD/OF) line.
--PSA costs are properly funded in PD/OF, not in ship end cost.

LPD
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal year--
----------------------------------------------- Total
2003 2004 2005 2006 2007
----------------------------------------------------------------------------------------------------------------
PB03.................................................... 242.7 373.4 419.1 71.4 ....... 1,106.6
PB04.................................................... 569.7 259.2 264.8 6.8 ....... 1,100.5
Change.................................................. 327.0 -114.2 -154.3 -64.6 0 -6.1
----------------------------------------------------------------------------------------------------------------

Reasons for $6.1 million decrease:
--$10 million of PB03 request absorbed by program.
--$3.9 million net increase resulting from decrease in PYC bill,
Swap, increases from higher CAIG estimate, and increases in
shipyard rates.

IMMINENT DANGER PAY AND FAMILY SEPARATION ALLOWANCE

Senator Stevens. I hope, gentlemen, you will excuse me. We
had the Army hearing on March 19th and the Air Force hearing on
March 26th, and I asked your predecessors, and maybe I should
not just throw it at you, but we have an amendment pending that
would increase the hazardous duty pay.
In the Persian Gulf War, the amount going into the war was
$100 and now it has increased to $150. Family separation was
increased from $75 to $100. The proposal was to increase the
$150 to $400 and the $100 to $400, and that would come out of
your existing appropriations. We are talking about fiscal year
2003 now, 2003 bills.
Have you looked into the question of the adequacy of the
pay, we used to call it combat pay, you call it imminent danger
pay, or family separation allowance? Has that been looked at
yet by the Navy?
Admiral Clark. Mr. Chairman, that has not come before me
and I have not looked at that issue, no.
Senator Stevens. I did some rough calculations and the
increase in 1991 was a 36 percent increase, which was made
permanent. As I said, it was raised from $110 to $150. We are
in the position of having to go out to offer an amendment right
now, and I wonder, when you say you have not studied it, have
you studied it at all, Mr. Secretary?
Secretary Johnson. No, sir.
Senator Stevens. Have you, sir?
General Hagee. Nor have we, sir.
Senator Stevens. I worry about the amount that has been
proposed, a $400. We are prepared to go to about a 50 percent
increase in each of those allowances, but to go to $400 is
going to cost an enormous amount of money from the money that
we have made available so far, and this is the last bill I
believe we are going to have for Defense for fiscal year 2003,
so it will be a matter of substantial problems to fund much
more than a 50 percent increase. That would take the funds up
from $150 to $225, and the separation from $100 to $150, but
you still would have to absorb those increases.
I would appreciate it if you would put some comments in the
record with regard to those figures.
[The information follows:]

The Congressionally proposed rate increase will entitle
military personnel receiving Imminent Danger Pay (IDP), an
additional $75 per month retroactive to October 1, 2002,
raising the statutory entitlement from $150 per month to $225
per month, and entitle military personnel receiving Family
Separation Allowance (FSA), an additional $150 per month
retroactive to October 1, 2002, raising the statutory
entitlement from $100 per month to $250 per month. The
increased rate is projected to cost Navy an additional $131.6
million ($48.9 million for IDP and $82.7 mission for FSA) and
the Marine Corps $141.2 million ($67.8 million for IDP and
$73.4 million for FSA) in fiscal year 2003. Funding is required
to support the rate change for both this fiscal year and future
years if the increased rate for the entitlement extends beyond
October 1, 2003.

Senator Stevens. The matter will be decided at least in the
Senate before we get the replies. I do not know if my
colleagues have looked into that. I am worried about the
allowance because I do not foresee a substantial increase, but
yet I do believe that because of changes in the level of pay
between 1991 and now, that an increase in the imminent danger
pay, and I think my colleagues will remember I raised that
with, but we asked for a study by the Department here about
what, 3 weeks ago.
Gentlemen, I have to leave. Thank you very much. Senator
Inouye.
Senator Inouye. My only comment, Mr. Chairman, is I doubt
if anyone here would want to give anything less to our men and
women in combat. For those in combat, $400 does not suffice,
but the question before us will be if that means that we may
have to forego procurement of munitions, procurement of ships,
what choice do we take? Because there is a limit to what this
Government can raise from our taxpayers. As one who has had a
little experience in combat, every little dime is welcomed, no
question about that, but if it means giving up ammunition,
giving up weapons systems, we will have to give it a hard look.
Secretary Johnson. You captured it very well, sir, and we
would like to give more money to our combat people but
protecting them with good equipment is equally or more
important now.

DEPLOYMENT DAYS

Senator Inouye [presiding]. Admiral, may I ask you a
question, sir? How many days per year has the average sailor
spent deployed away from home since 9/11?
Admiral Clark. Senator, I do not have a specific answer for
you, but I can certainly put it in perspective. The average
sailor has spent more time away from home and underway since 9/
11 than he did before. I do not have specifics. I have a policy
in my Navy that we try to limit deployments to 6 months and
then guarantee a two-to-one turnaround when they are home. I
will tell you that I have violated that policy and when my
people have asked me about it, I told them I will do the very
best I can to hold to that, and that is a peacetime construct.
But then I told them this: If them staying longer on
deployment would make one difference in winning the global war
on terrorism, that I would not blink twice about having them
stay. And in the context of this current operation, I have
several units that are over the 6-month period.

NAVY RETENTION

Senator Inouye. I was well aware, as you pointed out, that
you spent less time deployed before 9/11 than since 9/11. I
asked that question because I am amazed that with those
numbers, your retention level has gone up.
Admiral Clark. If I can, I believe it is a tribute to the
people and to the challenges we have given them, and it says a
lot about America's young people. And what we have tried to do,
Senator, is say this: The young men and women--and by the way,
2 days ago I just reduced my retention goal for this year for
the second time, I cut 3,000 more out of the retention
objective, and the reason is because more and more people are
staying in.
What we have said to them is that we are going to do our
best, we are going to commit ourselves. They promised to
support and defend the Constitution of the United States
against all enemies, foreign and domestic, and to obey the
orders of the President and all the people in the chain of
command. And I have challenged our leaders to, you know, what
do we promise them in return? What we are promising them is a
chance to make a difference, and I promised them that I am
going to come up here and sit in front of this committee and
talk to them about the things that our men and women need so
that they have the right tools so they can get the job done.
And Senator, you have been out there, you have seen them.
They are fired up. They believe in what we are doing. They
believe that we are engaged in a just cause, and it shows in
their face and it shows in the work they are doing on station.

RETIRING SHIPS AND AIRCRAFT

Senator Inouye. Your plans for this budget request call for
the retirement of 16 ships and I believe about 260 aircraft. In
light of the mission that you have at this moment, can this be
carried out?
Admiral Clark. Senator, I believe it is the right plan and
let me describe it this way. The proposal to retire ships
early, principally the ships of the 963 class, that
recommendation from me to the Secretary and from him to the
Secretary of Defense (SecDef), is built upon the belief that we
need to retire those platforms that no longer bring the kind of
combat capability to the point that we can retire those and we
can accept the risk in retiring them.
And this strategy retires old airplanes as fast as we
possibly can. Yesterday, we lost an F-14 over southern Iraq.
That is one of the classes of airplanes that I am recommending
that we retire as rapidly as possible. It just turns out that
the aircraft that went down was the oldest one in the wing, and
one of our oldest airplanes. It is one of the most expensive
airplanes to operate and maintain, because of its age.
And I have talked to this committee before about the high
age of our air force, and the only way out of this dilemma is
to rapidly procure new aircraft, and the F-18E and F, which
will take the place of the F-14, is currently on its first
deployment and it is part of Operation IRAQI FREEDOM and is
performing brilliantly. So, Senator, those recommendations,
those are hard choices. They were choices that I recommended
because I believe that we should divert those resources to
recapitalize and transform our Navy for the future, and I
believe that this is the time to do it and I believe that the
operational risk is acceptable.

MARINE CORPS RETENTION

Senator Inouye. General Hagee, the Marine Corps has
traditionally surpassed any other service in recruiting goals.
Since 9/11, have the trends kept up?
General Hagee. Yes, sir, they have. In fact, for this
fiscal year, about the middle of the second quarter we were at
85 percent of our retention goal for the entire year. In
November of this year, we will reach the hundredth month of
having met mission on the enlisted side. On the officer side,
our retention goals have never been better over the last 12
years.
Senator Inouye. It seems like your retention goals are
better than the Naval Academy. Am I wrong on that?
General Hagee. I would have to check the numbers, Senator.
I am not sure.

NAVY RESERVE

Senator Inouye. Admiral Clark, according to the statistics
that we have received, compared to the Army, Air Force and
Marine Corps, the Navy has called a substantially low
proportion of its Ready Reservists to active duty. Can you tell
us why?
Admiral Clark. Yes, I can. We currently have about 10,500,
the number changes every day and is growing, and we have
authorized in the neighborhood of 12,000 and some of them are
in the process, but it is fundamentally because we do not have
to have Reserves to conduct the kind of operations, with the
force structure that we have to call forward, we do not need
more than we have called up.
We have been very careful with the number that we have
called up because we wanted to make sure that we have got jobs
with real requirements and real job content for the people that
we have called up. And I will tell you, Senator, that a large
number of those that we have called up have been for force
protection. But on the ships and in the squadrons and in the
submarines themselves, we do not require the Reserves for us to
conduct these combat operations. So it is the way our forces
are shaped.
I will tell you also that after 9/11, we saw areas where we
had force structure, an example would be harbor security kinds
of capabilities, that existed only in the Reserve structure.
And it became clear to us that we were going to have to
recreate some of that in the active force. And so in the last 2
years we have been adding active duty people in the force
protection area and in some of these areas that I addressed
like harbor security and so forth, so we would not have to rely
solely and completely on recalled Reservists.

FLEET SIZE

Senator Inouye. Admiral, the Administration speaks of a 310
ship fleet and the Department of the Navy 375. What number
should this committee follow?
Admiral Clark. Well, obviously the Secretary of Defense
when they speak to it, and the Quadrennial Defense Review had
numbers in it that identified the program for the current
force. They have, and the Secretary of Defense has commented on
this in congressional testimony, and when the question was
asked about Admiral Vern Clark talking about the number 375, he
has given me the leeway to talk about what I believe a longer
range projection is for the right number of ships in the Navy.
In the context of our current program and our current--the
program that we have today, that number is in the low 300s, but
the proposal that I have before you now takes us down under
300. It is not the objective that we want and that we believe
that we need. So, I have used the number about 375. I do not
believe numbers alone are the right answer. For example, I
could give you a program that would give you 375 ships that
were not the right kind of capability. Capability is more
important to me than the numbers per se, but the Secretary has
given me the authority to talk about a vision for the future
and where I believe it needs to go.
And so I believe when you look at the kinds of missions
that are going to come to us in the future, you look at the
addition of the Littoral combatant ship, the capability that we
are going to have to add to dominate the near land areas, when
you look at the addition of things like missile defense and sea
based missile defense, I believe those numbers are going to
grow. I cannot tell you exactly what the number is this
morning, Senator, but I believe that the 375 target is about
correct.

HARRIER

Senator Inouye. Let me now go to the Marines. Does the
Marine Corps intend to use the Harrier in operations in Iraq? I
say this because according to articles we have read, that
aircraft has been plagued with problems.
General Hagee. Sir, the Harrier is in Iraq right now. We
have a number of them flying, almost every night. Their
availability is about 75 percent, which is extremely good. We
have a squadron flying out of Baghram, Afghanistan. They are
flying every night. Their availability is over 90 percent, and
they are flying at night and being maintained during the day.
We are very happy with the performance of the Harrier to date.
Senator Inouye. Thank you. Senator Cochran.

SHIPBUILDING

Senator Cochran. Admiral Clark, I was interested in your
comments in response to Senator Inouye's question about the
shipbuilding rate and the number of ships that are projected to
be needed by the Navy over the next several years. Our
challenge is to put a number in the appropriations bill for
this next fiscal year that meets our near-term needs and what
can be foreseen just for next year or the next. So I wonder if
you have in mind a suggestion to the committee about how we can
most effectively use funding for shipbuilding in the near term.
Admiral Clark. Well, the program recommendation is the
recommendation for what we can do in the near term, Senator,
and I would say this. I have testified before this committee
now, this is my third year, talking about my belief that we
need to take every measure that we can to level fund the major
acquisition accounts. I believe that is a two-way street. I
think we have to do our part, and one of the reasons I am so
pleased about this submission is that it commits a significant
addition in the major investment accounts over last year.
We have worked hard to find resources to commit to the
shipbuilding and aircraft acquisition accounts. You know, last
year's submission had five ships; for this year, this has
seven. It is capability, not just numbers, but as you look at
the projection, we have diverted $39 billion in this multiyear
program and we have put that toward shipbuilding. I believe,
and there have been studies, Congressional Budget Office (CBO)
did a study that talked about the total amount of investment
that needed to be made long-term to support future
modernization and transformation requirements, and I have
testified that I believe that we need to be planning on a level
fund of $12 billion a year in new construction, so that we get
the best kind of balance. That would be the best balance that
we could put forward.
And we have done studies, for example, with the war games
actually, with the shipbuilding industry that said if we could
get to a level funding approach, we actually would produce more
product, we would be a better partner and we would produce more
product for each dollar that the taxpayer puts into
shipbuilding. So, I would say that that means then that
multiyear stands us in high, because they fit that mold,
multiyears are good.
If you look at what has gone in Amphibious Assault Ship
(LHD)-A, an incremental approach to funding that has allowed
use to proceed with construction without having the spike of it
in 1 year. The split funding approach that is in this budget
for the carrier in fiscal year 2007 and fiscal year 2008 is I
believe the right way to do these kinds of things.
Senator Cochran. We appreciate your leadership in helping
figure out how we can most efficiently use scarce funds that
are available to us and meet the needs that we have to continue
to keep forces deployed in areas that are so important to our
national security.
In that connection, General Hagee, I know you have some 30
ships deployed to the operation theater, I think 32 are forward
deployed in support of current operations, I hope that is not
classified. But with so many of our Marines and amphibious
ships forward deployed, I have to ask the question, do we have
enough Amphibious Transport Dock (LPDs) and LHDs to meet future
requirements?
General Hagee. I believe the ones we have on the books
right now will meet our future requirement. I can tell you we
need the LPD-17, we need all 12 of them, and we need them as
soon as we can based upon the resources that we have.
Senator Cochran. I notice the LPD-17, which Admiral Clark
mentioned we are going to see launched here in a couple of
months at the Avondale Shipyard on the Gulf Coast, what are
your thoughts about the LPD-17 program profile? I notice you
have funds requested for fiscal year 2004, but no LPD is in the
fiscal year 2005 plan. Should we do something about that?
Admiral Clark. Well, we put forward a recommendation again.
When you do this whole program, you put together the program in
the best balance that we knew how to put it together, Senator.
And so we had a number of ships under construction, and so we
left fiscal year 2005 that way, with then a couple in fiscal
year 2006, and the whole idea was that we had ships under
construction when we thought--you know, it is enough, and we
would look at it again in fiscal year 2005 to see--you know,
one of our responsibilities, and John Young as the acquisition
official who works the industrial base balance questions all
the time. So the way we put it together for the fiscal year
2004 submit was the best way we knew how to balance the total
resources that we had, and that is what we recommended.
I do know that there have been unsolicited proposals that
have been submitted to Secretary Young looking at potential
ways to work through that void in fiscal year 2005. I do not
know the specifics and details of that recommendation and
frankly, that is not in my area of authority or responsibility.
Secretary Young will deal with that kind of unsolicited
proposal.
But I have been, I believe rock solid in my testimony on
this. Last year when people asked me, I said my first priority
is to get the LPD line healthy and producing, and I am
extremely pleased with where we stand now. You know, we
introduced this ship and we had this computer aided design
approach, it was new, we experienced the kind of things that
one experiences when they are going through new first time ever
kind of developments. We are at a stage now where we are
reaping the benefits of that computer aided design, in the
acquisition process.
So the program is healthy. General Hagee said it right, we
believe that this ship is a tremendously capable ship, and
provides the kind of lift that the Marine Corps needs. And it
is at, from where I sit, it is going to be a key part of the
Marine Corps structure in expeditionary strike groups which we
talk about in our written testimony, our vision for the way
this force is going to operate and function in the future, LPD-
17 is going to be a key part of it.

HOMEPORTING

Senator Cochran. One of the other concerns I have is the
Navy's plan for the future of the use of home ports around the
country. Back in the 1980s a decision was made to distribute
ships among several or numerous home ports around the United
States, and then there came along something called a fleet
concentration area plan which was based on trying to achieve
maintenance and supply efficiencies.
One thing that concerns me, if we get too carried away
about concentration and putting all our ships in one place or
just a few places, in the face of the terrorist threats, does
this make us more vulnerable to a cataclysmic event that would
look like Pearl Harbor, or would we be wiser to think through
that again and think about distribution for safety's sake? Is
anybody thinking about that? Mr. Secretary, maybe that is a
question that is a good one for you.
Secretary Johnson. We always think about that, sir. We have
to make the trade-off of the cost involved of protecting the
ships no matter where they are and also the maintenance
associated. As we look at the great armada that we have at sea
now, when we bring them back we will have to maintain them, and
that will be a great expense. There is a trade-off between
dispersion and protection, and we look at that continuously,
sir.

PATROL COASTAL CRAFT

Senator Cochran. One of the programs that you mentioned,
Admiral Clark was the Littoral combat ship program. This is an
exciting new program, and I am told that in fiscal year 2005
the Navy is considering transferring five of its patrol coastal
craft to the Coast Guard and decommissioning the remaining
eight patrol craft. I wonder, before we get too far along on
that plan, whether consideration can be given to transferring
the remaining patrol craft to the Navy Reserve. I was told that
they would like to have those under their responsibility with a
mission that may very well make good sense. Have you had an
opportunity to look at that and has a final decision been made?
Admiral Clark. We have had discussions, Senator, and in
fact we have had discussions with the Coast Guard. I do not
know if it is widely known or not, but on 9/11 the second call
I made was to the Commandant of the Coast Guard, and we talked
about a memorandum of understanding between the two of us that
we had just signed. And we have had one for a number of years
but we had renewed it, sharpened it on points that we needed
to, and that memorandum is about going to war and that in
wartime the Coast Guard would become an operating support of
the Navy.
And I told him that day, I said obviously this one is
different, so tell me what you need. And then in the ensuing
weeks, I transferred all 13 of them to him, and we have been
operating. There have been discussions about potential
distribution, because indications are that the Coast Guard will
not need all 13 on a full-time basis. There have not been
decisions made, so for me to make a comment about potential
distribution would be premature, and that will have to be
submitted up the chain of command for a decision and approval.

MISSILE DEFENSE

Senator Cochran. You mentioned missile defense capabilities
and the tracking of missiles by the Navy ships, and the support
you are giving to the operations in the Persian Gulf area. I
understand you do have plans to upgrade several Arleigh Burke
class destroyers with significant missile defense capability.
Can you give us some idea of that program?
Admiral Clark. Absolutely. Thank you for asking the
question. The President announced last year that we would
develop an interim sea based capability in fiscal year 2004.
And in my guidance to the Navy for this year, I laid out the
direction for us to develop the path to achieve that objective.
The last 12 or 13 months has been an extraordinarily successful
period for the Navy and the missile defense program. We have
had six tests, 100 percent success in all six of them, three
tracking events and three firing events.
And so, the Missile Defence Agency runs this program. The
Missile Defense Agency was thinking about and proposing to
build a test ship, and in cooperation with key players in the
Office of the Secretary of the Navy, and I am talking
specifically about John Young, the Secretary and myself, and
key members of our team, we made the decision to offer an
existing ship to speed up this process.
And we are going to commit the U.S.S. Lake Erie to the
full-time testing that operates in Hawaii full time to rapidly
develop this capability. It is our belief that this is the
right thing to do for the country.
The capability that we have demonstrated in the last year,
we have taken that and we are still in research and
development, but we have taken that tracking capability and we
have been using it in the theater of operations and it has been
very successful.
Senator Cochran. Thank you. Mr. Chairman, I have a couple
more questions but I did not want to encroach on anyone else's
time.

UAV PROGRAM

I know in these unmanned vehicles such as Global Hawk, Fire
Scout, and others that are under development, the Navy is
investing substantially in this technology. General Jumper last
week referred to the Global Hawk when we had the Air Force
before our subcommittee as a very effective low level satellite
in terms of capability. What are the plans of the Navy
specifically in using this technology in the future?
Secretary Johnson. First of all, Admiral Clark and General
Jumper are working very, very closely in the unmanned air
vehicle program. The Marine Corps has the Pioneer, which
General Hagee can talk about, but we are moving forward on
unmanned vehicles in all media, in the air obviously,
underwater, and we are working very closely with the other
services, most closely with the Air Force of course.
Admiral Clark. Senator, this is one of the major changes
between last year and this year in our submission. We are
moving forward strongly in the UAV program. There is $3.6
billion across the FYDP in the program, and as the Secretary
said, General Jumper and I are working real closely together.
In February one of the S&T programs for the unmanned combat
air vehicle, the first flight was conducted on February 23. We
have put resources against the development of another vehicle,
and Secretary Young is working in concert with the Air Force to
accelerate this kind of capability. We are investing in two
Global Hawks ourselves.
We are seeing now the vertical take-off UAV that has been
in development, we are now seeing the potential utility in that
vehicle for our new Littoral Combat Ship (LCS), and so we see a
lot of potential here. We are also very interested in
developing long dwell surveillance capability that we believe
will be best done in an unmanned vehicle because of the ability
to persist long on station times without the wear and tear on
people, and that kind of long duration capability, crucial for
us to dominate the battle space in the maritime domain.
So this budget has significant additions for the Navy and
we are moving out as rapidly as we know how to move out in this
area that we believe is going to greatly improve our
warfighting effort.

LIGHTWEIGHT 155 HOWITZER PROGRAM

Senator Cochran. My last question which I am going to
submit, and then I will have a question or two to submit for
the record, is to General Hagee. I notice the budget request
includes funding for 60 lightweight 155 howitzers. Could you
provide us an assessment of that how this program is
progressing.
General Hagee. Yes, sir, I can. The program is actually
progressing very well. We are in the operational test phase of
the program. We are quite excited about it. It is going to
provide us the ability to lift heavy artillery with the Osprey.
The digital fire control is somewhat behind in its
development, but we are going to purchase that when it is
available. We project that will be available probably one to 2
years after we actually start receiving the lightweight 155,
but all the mounts will be on the artillery piece and as soon
as it is available, we will purchase it.
Senator Cochran. Thank you.
Senator Inouye. Thank you very much. Senator Durbin.
Senator Durbin. Thank you very much, Senator. I appreciate
you being here today, and thank you all for what you are doing
to serve our country. I have a family affection for the Navy as
I had two brothers who served during the Korean War, and I have
a political and personal connection to the Marine Corps by
virtue of the fact that the first man I ever worked for on
Capitol Hill was a Senator from Illinois named Paul Douglas,
who in 1942 enlisted in the Marine Corps and went through basic
training in Parris Island at the age of 50. And that is still
amazing as I reflect on what he did in the service. He served
in combat in the South Pacific and suffered a serious wound,
but went on to a great public career. I thank you all for being
here today.

FAMILY SEPARATION ALLOWANCE AND IMMINENT DANGER PAY

One of the things that I would like to reflect on was
brought to my attention by Senator Inouye on the floor of the
Senate, who rose one day to make a point that I think we should
all keep in mind. And that is in World War II, maybe you will
remember the exact percentage, Senator, but you told us that I
believe over 80 percent of the people in uniform in that war
were single, not married, and I believe today that statistic
has changed dramatically, that the majority of those in service
to our country are married with families. Could you tell us for
the record if you know, in each of your branches, what
percentage of your personnel are married today?
General Hagee. Yes, sir, I can. As you know, the Marine
Corps is a relatively young force, but even though we are a
young force, 44 percent of our personnel are married today.
Senator Durbin. Admiral.
Admiral Clark. Senator, I do not have the number, I will
provide it for the record, but what we are fond of saying is
that we know that we recruit individuals and we retain
families, and the major focus of our retention effort is to
make sure we are touching families and dealing with their
needs. So there is no question about that the numbers have
changed dramatically over time.
[The information follows:]

Fifty-three percent of Navy Enlisted personnel and 76
percent of Navy Officer personnel are married.

Secretary Johnson. That is particularly true at this time,
sir. I was up at Bethesda yesterday and the families were
there. We care about the families at home very much. Our
sailors and Marines forward are not as concerned about their
own safety as they are that their families are well cared for,
and everybody goes out of their way to take care of the
families.
Senator Durbin. The estimates I have read, Mr. Secretary,
suggest that about 60 percent of the servicemen now in the war
zone in Iraq have families back home, servicemen and women have
families back home. And that is the reason why I wanted to
speak for a moment and ask your thoughts about an issue. When I
meet with these families, as I recently did at the Rock Island
Arsenal back in my home State, I find of course they are
extremely proud of the member of the family that is serving,
they are encouraging it, praying for them, as we are all very
proud of them.
But they are also facing some unusual hardships that may
not have been the case even a few years ago, hardships
involving childcare, involving medical expense, additional
expenses related to the separation. And I was surprised to read
and learn that the current family separation allowance is $100
a month, and that the imminent danger pay, the combat pay is
$150 a month. I think that perhaps those, particularly the
family separation allowance, was a figure that was established
at a time when fewer servicemen and women came to serve our
country with a family or had a family, and may not reflect the
reality of the cost of service to those families.
One of the amendments which I hope to offer to the
supplemental to the Appropriations Bill will attempt to
increase both the imminent danger pay as well as the family
separation allowance, and I am working with Senator Inouye and
others to try to find if there is a way to do this in a
bipartisan fashion. Could you either, General Hagee or Admiral
Clark, or the Secretary, reflect on the concerns that you hear
expressed by the families of those who have been activated to
serve, beyond the obvious, that they want their loved ones home
as quickly and as safely as possible. General?
Secretary Johnson. Can I say something first?
Senator Durbin. Of course.
Secretary Johnson. You make a very interesting observation.
The current environment with family members is much different
now. We have women who are quite involved in almost every
aspect of our business, not necessarily as a rifle person. And
we have a bigger problem of oftentimes a husband and wife being
in the military. And it looks really bad when we send both of
them off to war, but yet, that is what they trained and desire
to do, and when we have to execute it, it looks like we do not
care. We care very much and we try very hard to take care, and
particularly where they have children, they have to have well
laid out plans to care for them.
Senator Durbin. General?
General Hagee. Obviously the most important things for the
families is that their Marine or sailor is well-trained and
well-armed and well-prepared so that they will come back. That
is obvious. And as Senator Inouye was really quite articulate
on this, on how we balance how much money we are able to pay
them, as compared to how much money we put into procurement and
insuring that they are properly trained and armed is something
that we have to work with the committee on. So the number one
thing is they want them to come back.
I think we have to look at this from a holistic standpoint.
If I could give you one example, the impact of family
separation allowance and hazardous duty pay that has occurred
to a Marine family out in California, and I strongly support
family separation allowance and hazardous duty pay, I am not
sure that we pay them enough for that, and I am not sure that
we can pay them enough for that, but we come back to the
balance again. But this particular Marine had a child that
needed special care and was getting that from the State of
California, and the State of California was providing about
$80,000 a year in care for this child, and that was based on
the income of this particular Marine. When he was deployed to
the Gulf, he received family separation allowance and he
received hazardous duty pay. That put him above the line, and
California by law was ready to take that funding away from him.
We are working that issue, I think that we can solve that
issue, but that is why I say we have to look at this from a
holistic standpoint, sir.
Senator Durbin. But what concerns do you hear expressed by
the families, aside from that very extraordinary one case? Do
you hear any particular concerns of the families of your
Marines that are left behind in terms of their economic
situation?
General Hagee. There are concerns. I have been a Marine for
35 years, I have deployed quite often. I know firsthand what
happens when an individual Marine leaves their family. The
costs actually go up, they do not go down. As the Secretary
mentioned, that is especially true today when we have male
Marines, female Marines, sometimes they are married, sometimes
they are not. They may have children. They have particular
challenges and I have heard those concerns from the families,
yes, sir.
Senator Durbin. Admiral Clark?
Admiral Clark. I recall vividly being an ensign in the Navy
and being off on my first deployment, and family separation was
a dollar a day. Like any kind of pay like that, it has to
have--you must periodically review to see if it is at the right
level. I am not hearing about family separation pay.
The one issue I am hearing raised is the issue of the tax
exclusion, which is, to most of our people is a significant
financial issue and so that when they are in a combat zone and
war, it makes a difference. And the issue of it being addressed
from my folks is that I have a large force in the Eastern
Mediterranean and they are not in it.
I will tell you that we have a large family support
structure that is a formal part of our Navy life whether we are
at war or not, and it runs on the back of volunteers and people
who are determined to be involved, and they make it work.
Senator Durbin. I am not going to dwell any further on this
other than to say to you, Admiral, that we are particularly
proud to have your training facility at Great Lakes in my
State, and I have visited there and seen the wonderful work
that is being done there, and we want to continue to help you
in any way we can to train the sailors to serve our Nation.
Admiral Clark. Thank you very much for your support, and
Great Lakes is doing superbly.
Senator Durbin. Thank you very much. Thank you, Senator
Inouye.
Senator Inouye. Senator Domenici.
Senator Domenici. Thank you very much, Mr. Chairman. I am
sorry I was late, I had to be somewhere else, but I hurried.
First, I want to take just a minute to do what I hope to do
every time I have the military before me in the future. I am
convinced that the story of this war is going to be told for a
long time and it is going to be what kind of men and women are
these Americans. It is absolutely fantastic for Americans and
the world to see the behavior of these young men and women.
That is the story. They are warriors but they are gentlemen.
They are warriors but they are considerate, they are
articulate. What kind of training they get and what kind of
esprit de corps and spirit they have is beyond what I could
have expected from any group of Americans or any group of
humans, so we are doing something very right.
We have had books written about other generations of
American warriors and I have read them. Now I am seeing these,
and I do not think the past books about American valor or
American military men or women, I do not think what we are
seeing, I think it far exceeds anything written about previous
generations of American fighters. It will be the story, what
kind of men and women are there and how did we happen to bring
them up that way. Concerning what goes on in American streets
and American neighborhoods and American families in terms of
the difficulties we have, it is truly something kind of
miraculous that is happening with reference to the transition
that the training and bringing of them together has brought.

NAVY PROGRAMS IN NEW MEXICO

So I say that for openers, and then I just have a couple
local issues. Believe it or not, even in the State of New
Mexico where things are very dry, the Navy has a program going
for water desalinization, and I just wanted to commend you for
the work being done on it. It is being done on a very large
inland aquifer in New Mexico, it is $6 or $7 million, I believe
being spent, and I want to commend you for bringing the
technology together, I think better than anyone else has
brought it together. We may see some breakthroughs as a result,
and we want to thank you for that and wish that program success
not only for the Navy but for the United States.
Secondly, there is a most incredible observatory that the
Navy is building in the State of New Mexico also, it is called
the Magdalena Ridge Observatory. It is a new kind of
observatory on top of a very beautiful mountain, and when it is
finished, this new approach to observing outer space is going
to magnify what we can see by many fold. It will not look like
a telescope and those things related to it, it is something
completely different. So as one who is a primary supporter of
this new approach, this program which is going to create a new
method for observing outer space, is also something the Navy
can be very proud of, and I want to commend you and thank you
for the work that is being done on that.
Are you aware of that, Mr. Secretary?
Secretary Johnson. Yes, sir. We expect to have the
groundbreaking on the 20th of October of this year.
And the first one you talked about, we know more and more,
anyplace we go, we have to take care of the water. Just
drilling and drinking and using the water around the world does
not work and in our business, a lot of it is on the seacoast,
and of course we have the reverse osmosis plants to take care
of the fresh water, but seawater is quite different.
Senator Domenici. I will tell you that the only significant
breakthrough on clean water is also in New Mexico technology,
you all are using it in the Marines. Have you seen any Marines
carrying around a water purification device that looks like a
fountain pen, General?
General Hagee. No, sir, I have not.
Senator Domenici. They are practicing with it now. It is
the size of a thick fountain pen and literally, you can take a
glass of muddy water with whatever bugs, bacteria are in it,
and you can purify it if you do not mind drinking muddy water,
and you can drink it, and it is absolutely pure.
Secretary Johnson. It probably tastes better at night.
Senator Domenici. That is an invention that came out of one
of the laboratories and actually it is quite the thing. And I
would assume the next conflict, if there is one, everybody will
be using those, but only a few thousand are using them now. It
is an interesting invention.
I also have one other item that I want to comment on with
reference to technology. The Navy has a high energy laser-
testing program in New Mexico, it is called High Energy Laser
(HEL). The Army has a program there that is not moving as
rapidly, but I want to express my interest in the testing that
is going on there, which has been putting pressure on the Army
to move ahead a little more quickly. That is to defend against
anti-ship cruise missiles. It is the first study that will
prove the feasibility of killing a missile head on with
reference to something like the cruise missile coming in our
direction. And again, that is moving ahead with great dispatch
and right on target, and I wanted to comment on it and thank
you for that effort.
Secretary Johnson. And we understand it takes a different
approach than some of the airborne lasers and others, it is a
new type of laser, and we are very excited, as you are aware.
Senator Domenici. That is correct. I will put something
into the record that goes into one of those in a little more
detail. I thank you, Mr. Chairman, and again, I apologize for
keeping the committee. Thank you all.

JOINT STRIKE FIGHTER (JSF)

Senator Inouye. My last question is to the Commandant. The
Joint Strike Fighter will be the future Marine Corps fixed wing
strike fighter. I gather it will replace the Harrier and the
current F-18C and D, and you have no plans to purchase the F-
18E and F. What is the status of the JSF now?
General Hagee. Sir, you are absolutely correct on what our
plans are. The Joint Strike Fighter will replace both the F-18C
and D that we have, and the Harriers, and we are going to wait
and not purchase the E and F, we are going to wait for the
Joint Strike Fighter, which is currently in the system
development phase.
My reports are that it is going relatively well. There is
some recent concern about weight growth, we expect that during
this phase about a 6 to 8 percent weight growth, both for the
Short Take-Off and Landing (STOL) version and the carrier (CV)
version; it is above that right now. We are talking with the
contractor, sharing our concern with them about that weight
growth.
Senator Inouye. I suppose you have concerns over the Navy's
F-18 and the Air Force F-22, do you not?
General Hagee. No, sir, we do not. I think the Navy has
made the absolute right decision to go to the E and F during
this interim period. Admiral Clark has already talked about
legacy systems and how he wants to move legacy systems out. We
believe, firmly believe that during this intervening period
that the Cs and Ds and the Harriers will stand us in good
stead.
I have to say, we look forward to having the Joint Strike
Fighter, especially as we move into tac air integration, and
the efficiencies that that is going to provide us where we have
one common air frame, common pilot training, common mechanic
training, it is going to provide us great efficiencies. At the
same time, it is going to significantly increase the
operational effectiveness.
Admiral Clark has talked about this significant range
increase that we will get with the Joint Strike Fighter, which
means we need less gas and less tankers.
Secretary Johnson. In our current environment we find that
most often the critical element is fuel, refueling, and these
aircraft will give us much longer range, and Admiral Clark has
some wonderful examples.
Admiral Clark. If I might comment on this, Senator, I would
like to talk about, I think it is important for all of us to
keep learning. I tell all of my leaders that we all have to
keep learning and I am continuing to learn, and my biggest
lesson learned from Afghanistan in these current operations is
the importance of combat range. We have told you the stories
about our pilots flying from a carrier to Afghanistan, some of
those missions 700, 800, 900 miles in range, and 7 or 8 hours
in the cockpit. Several times going to the tanker.
We have an E and F that, they are on their maiden
deployment right now on the U.S.S. Abe Lincoln. The U.S.S.
Nimitz will come into the theater in the next few days, I will
not talk about specific time on it, but the E and F is doing so
well, we springboarded some of the airplanes forward while the
U.S.S. Nimitz was en route, and the U.S.S. Nimitz E and Fs are
in theater flying off of the U.S.S. Lincoln right now.
The reason it is important is that it has 40 to 50 percent
more combat range, and so they can get to the target without
tanking. It is also important because this airplane can go with
Cs, and Ds for that matter, and it has such a much bigger
payload, and we can load it up with fuel and the E and F can
fuel three or four other airplanes and get them to the target
area, without going to the big airplane for fuel.
As good as that is, the JSF is going to be even better. The
projection is that it will fly 800 miles unrefueled out and
back to the target area. That kind of capability, we would
not--the whole investment in the tanking structure will be
totally different for Navy air.
So we are very pleased with what is going on in the E and
F. I am in an enviable position. I have got an effective
program that is performing, is delivering on time and
performing very well in the battle space. JSF is still going to
bring us important things that I very much want, an improved,
designed in from the beginning, improved reliability. It will
in fact change--and this is why when the Commandant and I put
together the Navy-Marine Corps tac air integration program, it
was based upon these new factors that allow us not to have to
replace airplanes on a one-for-one basis. And so, this kind of
delivery of this capability is important, and this budget we
have invested significantly in JSF.
Senator Inouye. Senator Cochran?
Senator Cochran. I have no further questions.

ADDITIONAL COMMITTEE QUESTIONS

Senator Inouye. If not, Mr. Secretary, Admiral Clark,
General Hagee, thank you very much. Your full statements will
be made part of the record.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]

Questions Submitted to Hansford T. Johnson
Questions Submitted by Senator Kay Bailey Hutchison

NAVAL FORCES--SOUTHERN COMMAND

Question. Do you have plans to relocate the headquarters of
Southern Command's Navy Forces from Puerto Rico?
Answer. In August 2001 the Secretary of Defense directed all
Combatant Commanders to review overseas basing requirements and to
examine opportunities for joint use of facilities and land by the
Services, consolidate infrastructure, and enhance training. The study,
which was recently completed, did not recommend any changes that were
not already contemplated to either our overseas forces or basing
structure. While the Department of Defense is continuing to examine its
overseas basing and presence within the context of a global strategy,
Commander, U.S. Naval Forces Southern Command is expected to remain at
Naval Station Roosevelt Roads for the foreseeable future.
Question. What locations are you considering?
Answer. The relocation of Commander, U.S. Naval Forces Southern
Command is not under consideration at this time.

JOINT STRIKE FIGHTER (F-35) PROGRAM PROGRESS

Question. Highlight the progress the Joint Strike Fighter is
making.
Answer. The Joint Strike Fighter (JSF) Program continues moving
forward in the early design stages of the program. It is 16 months into
a 126-month Systems Development and Demonstration (SDD) phase. Design
milestones the program passed early this year include numerous sub-
system Preliminary Design Reviews (PDRs) encompassing Mission Systems
and Air Vehicle Systems that lead up to the Air System PDR in March.
The March 2003 PDR has not been completed due to weight concerns with
JSF, particularly in the Short Takeoff and Vertical Landing (STOVL)
variant. A Blue Ribbon Action Team has been convened to review
mitigation measures and a final report is due in June 2003.
The Pratt and Whitney F135 engine will complete its Critical Design
Review in May 2003 leading to the F135 First Engine to Test currently
planned for September 2003. First flight of the Conventional Takeoff
and Landing (CTOL) variant of the F-35 is currently planned for the 4th
Quarter calendar year 2005. First flight for the STOVL aircraft is
scheduled for 2nd Quarter calendar year 2006 and the first flight of
the Carrier (CV) JSF variant is scheduled for 1st Quarter calendar year
2007.
The F-35 is the Department's largest cooperative development
program. In fiscal year 2002, the F-35 program successfully concluded
SDD cooperative agreements with seven additional international
partners: Canada, Denmark, the Netherlands, Norway, Italy, Turkey, and
Australia. Including the United Kingdom, this brings the total number
of international partners to eight.

V-22

Question. Provide a detailed update on the progress the V-22
program is making.
Answer. The V-22 program is currently mandated to continue
production at the minimum sustaining rate until the Secretary of
Defense certifies this aircraft meets the requirements outlined in
Section 123 of the fiscal year 2002 National Defense Authorization Act.
The program continues to ensure a methodical and event driven test
flight program to validate all engineering and software changes.
Program reviews have been comprehensive; the organizational, technical
and programmatic issues are well addressed. The plan represents a
rational ``event driven'' approach to flight testing.
The V-22 has flown over 400 flight hours (as of May 2003) since
return to flight May 29, 2002 and has accomplished the following:
--Three Engineering and Manufacturing Development (EMD) aircraft have
returned to flight.
--Three Low Rate Initial Production aircraft have been modified and
delivered early or on time.
--CV-22 EMD Aircraft 9 has accomplished 40 percent more test points
than planned in the Benefield Anechoic Chamber (BAF) at Edwards
AFB CA, resulting in a significant flight test savings.
--EMD CV-22, Aircraft 7 is progressing well thru multi-mode terrain
following radar testing to include flat rolling and isolated
peak at over 200 kts.
--Simultaneous deployments to U.S.S. IWO JIMA (shipboard suitability)
and Fort Bragg, NC (parachute loads testing).
Since return to flight the V-22 program has had no hydraulic
failures or software anomalies attributed to earlier mishaps.

MINE WARFARE FUNDING AND CAPABILITY

Question. What funding is there in the 2004 request for mine
warfare and what will it enable you to do?
Answer. The Department of Navy (DON) budget request for fiscal year
2004 is $734 million. The DON commitment to maintain readiness of the
dedicated Mine Countermeasure (MCM) Force is balanced with the
requirements to fund transformational capabilities, to include: the
development of seven organic MCM systems to integrate into Battle
Groups, replacing diver and mammal with unmanned systems, and the
development of a modular MCM capability from the Littoral Combat Ship
(LCS). The mine warfare ships, helicopters, and Explosive Ordnance
Disposal (EOD) force demonstrated their readiness in Operation IRAQI
FREEDOM, by clearing mines from Iraqi waterways and opening the port of
Umm Qasr for humanitarian relief supplies. Highlights of the request
include:
Organic Airborne MCM (OAMCM).--To meet the DON's goal of an organic
mine warfare capability by fiscal year 2005, the fiscal year 2004
budget continues the development and integration of five OAMCM
subsystems into the MH-60S platform. The notional plan for
consideration by companies planning proposals for the LCS Flight 0
design is that the OAMCM systems would be part of the mission modules
on the LCS, giving the LCS great flexibility to support the Carrier and
Expeditionary Strike Groups (CSG/ESG) in the MCM role.
ALMDS/AQS-20A.--In fiscal year 2005, the Navy will introduce the
minehunting suite of OAMCM systems. The AN/AQS-20A Advanced
Minehunting Sonar and Airborne Laser Mine Detection System
(ALMDS) (AN/AES-1) are scheduled for Initial Operational
Capability (IOC) in fiscal year 2005. The ALMDS will detect
near surface and floating mines with a water-penetrating laser,
while the AN/AQS-20A will detect, classify, and identify moored
and bottom mines with a towed sonar/laser system. The DON is
requesting $17.2 million for the AN/AQS-20A to continue system
developmental testing, and $21.9 million to complete
developmental testing and award two AN/AES-1 Low Rate Initial
Production units.
RAMICS/AMNS.--In fiscal year 2007, the Navy will introduce the
mine neutralization suite of OAMCM systems. The Rapid Airborne
Mine Clearance System (RAMICS) (AN/AWS-2) is being developed to
neutralize the near surface and floating mines found by ALMDS.
The RAMICS uses a supercavitating 30 mm projectile to pierce
the mine case, causing deflagration of the mine explosive, and
flooding of the case. The DON is requesting $31.2 million to
complete critical design review and begin developmental testing
of AN/AWS-2. The Airborne Mine Neutralization System (AMNS) is
being developed to counter deeper moored mines and visible
bottom mines and DON is requesting $14.5 million to continue
development through critical design reviews. The AMNS uses
tethered, small expendable neutralization vehicles to approach
the mine and destroy the mine with an explosive charge.
OASIS.--In fiscal year 2008, the Navy will introduce the Organic
Airborne and Surface Influence Sweep (OASIS) system. The OASIS
will generate magnetic and acoustic signals to satisfy the
firing logic of influence mines, causing them to actuate. The
DON is requesting $14.8 million for completion of critical
design review and commencement of development testing.
LMRS.--The fiscal year 2004 budget requests $56.1 million funding
to continue the development and acquisition of the Long-term Mine
Reconnaissance System (LMRS), which is on track for an fiscal year 2005
IOC on the LOS ANGELES Class submarine and will be incorporated on the
VIRGINIA Class as it delivers. The LMRS system features an untethered
Unmanned Underwater Vehicle (UUV), launched and recovered covertly from
the submarine's torpedo tubes. The LMRS will provide a clandestine
reconnaissance capability for mine-like objects.
RMS.--The fiscal year 2004 budget includes $55.5 million funding
for the development and acquisition of the Remote Minehunting System
(RMS), a surface ship-launched and recovered semi-submersible vehicle.
The RMS gives surface ships the capability to conduct low-observable
minehunting operations from over the horizon, maintaining control of
the vehicle from a safe standoff distance. The RMS will reach IOC in
fiscal year 2005, fielding on six new construction DDG Flight IIA ships
(DDGs 91-96). The RMS also is a strong candidate for future deployment
on the Littoral Combat Ship.
Very Shallow Water (VSW) MCM.--The capabilities of the Naval
Special Clearance Team ONE were highlighted in port clearance
operations in Umm Qasr. In addition to the superb performance of EOD
forces and marine mammals, small UUVs played a vital role in
identifying mine-like objects in very low visibility conditions. $6.6
million is requested in the fiscal year 2004 DON budget to support
small UUV programs to operate from surface MCM ships, in VSW MCM
applications, and in force protection missions.
High Speed Vessel (HSV).--The fiscal year 2004 budget contains
funding ($17 million) for the charter of a High Speed Vessel (HSV 2
SWIFT) for fleet experimentation and concept development, focusing on
MCM command and control issues and new technology demonstrations that
may feed into development of the LCS program.
Littoral Combat Ship (LCS).--The LCS will become the focal point of
DON efforts to transform Mine Warfare (MIW). Within the DON fiscal year
2004 request for LCS Mission Modules, $18.4 million contributes to the
development of the MIW Mission Modules. When equipped with the
appropriate Mission Package, LCS will conduct mine warfare missions
with on-board and off-board systems from deep water through the beach.
The potential for modernization through its modular, multi-mission
design will allow LCS to incorporate new unmanned vehicle technologies
as they mature.
Dedicated MCM ships.--The surface MCM fleet faces several
challenges in current readiness issues, which are addressed in this
proposed budget. The DON has requested $8.4 million in fiscal year 2004
OPN funds for the initiative to improve the operational readiness of
the surface MCM ships through replacement of low-reliability engines.
$1.8 million is requested in fiscal year 2004 to fund acoustic
generators to replace antiquated acoustic sweep systems on the MCM-1
class ships. $3.8 million is requested for sonar data recorders for the
AN/SQQ-32 minehunting sonar to record sonar targets of interest.

T-45 COCKPIT 21

Question. I understand that the Cockpit 21 program for T-45A
aircraft is unfunded in the fiscal year 2004 budget request. Does the
Navy plan to fund this in 2005 or 2006? What is the impact of not
funding the program?
Answer. The Navy remains committed to the T-45 program as an
integral part of undergraduate flight training. Cockpit 21 addresses
several avionics obsolescence issues in both the T-45A and the T-45C.
If left uncorrected, degradation in aircraft ``Ready For Training''
will eventually affect the ability to maintain the required pilot
training rate. The Navy will closely examine funding for Cockpit 21 as
part of the fiscal year 2005 Budget development process, but must
continue to balance this requirement against competing priorities.
______

Questions Submitted to Admiral Vernon E. Clark
Questions Submitted by Senator Thad Cochran

HSV PLANS

Question. Admiral Clark, I understand the Navy has been impressed
with the early feedback in operating a High Speed Vessel under a lease
arrangement. Can you comment on the HSV hull form, and how it might fit
into our shipbuilding planning?
Answer. Currently, there are three High Speed Vessel craft under
lease agreement with the Department of the Navy. The lease for HSV X1,
Joint Venture, originally contracted under a joint arrangement between
the Army and the Navy in October 2001 has been extended through
September 2003. HSV 2, Swift, a slightly larger version of Joint
Venture, will deliver in late July 2003 and will incorporate additional
military enhancements to its hull that support mine warfare
experimentation. Additionally, the USMC has been conducting intra-
theater lift missions with a third HSV, Westpac Express. All three
vessels are wave piercing, aluminum hulled, commercial catamarans,
based upon existing high-speed ferry designs.
The Navy is continuing its efforts to explore the concept of
advanced high-speed hull forms and propulsion systems, evaluating new
hull designs in monohulls, catamarans, trimarans and surface effect
ships. Additionally, efforts are underway to combine the lessons
learned from these vessels for application in the design of future
classes of Navy ships.
The U.S. shipbuilding industry has limited experience in the design
and construction of these categories of vessels with the necessary
displacement and speed. U.S. shipbuilders are, however, working
together with industry to explore the concepts and viability of these
advanced hull forms and propulsion systems for Naval applicability.

LONG-TERM HSV PLANS

Question. Admiral Clark, it seems leasing these craft during the
experimentation phase was appropriate. If the experiments have proven
successful, we should explore procuring U.S.-made craft to meet the
Services' needs. Can you explain the Department of the Navy's long-term
plan to eliminate the need for leasing commercial High Speed Vessels?
Answer. The High Speed Vessel (HSV) project is a joint effort with
the Navy, Marine Corps, Naval Special Warfare Command and Army. The
goal for HSV(X1) is to explore the concepts and capabilities associated
with commercial high-speed vessels with respect to advanced hull and
propulsion technologies integrated with advanced communications
technologies. HSV 2 will continue to build on these concepts and
evaluate the utility of the craft, while supporting new doctrine
associated with advancing Mine Warfare systems, including
experimentation with the use of unmanned underwater and surface
vehicles. Successful experimentation with Joint Venture has
demonstrated the utility and potential suitability of high-speed
vessels for military operations.
While experimentation to date with HSV(X)1 and Westpac Express has
been promising, the Navy is still assessing the utility of this type
platform to support Sea Power 21. Should an operational requirement be
developed for HSV to permanently support the Navy or USMC, the
vessel(s) will be competitively procured from a U.S. shipyard.

LITTORAL COMBAT SHIP--HULL FORM

Question. Admiral Clark, I understand the Navy has not yet
determined a hull form on which to base the Littoral Combat Ship (LCS).
Given the variety of roles and missions anticipated for these ships, is
it possible there may need to be more than one ``final'' hull form for
LCS, perhaps a percentage would be catamarans and a percentage would be
composite mono-hulls?
Answer. The current acquisition strategy envisions two Flight 0
ships to start construction in fiscal years 2005 and 2006. These ships
may be different designs built in different yards. The Navy will
evaluate both ships and will then make a decision on the remainder of
the Littoral Combat Ship (LCS) flights. Flight 1 LCS ships are
scheduled to start construction in fiscal year 2008.

______

Question Submitted to General Michael W. Hagee
Question Submitted by Senator Kay Bailey Hutchison

Question. I am concerned we take all measures necessary to prevent
a recurrence of Gulf War Syndrome now that our troops are in Iraq. One
way is to medically assess our troops before they deploy to establish a
health baseline. What percentage of Marines had a health baseline
established before they deployed to Southwest Asia? What percentage of
our personnel was pre-screened (with a health survey) before
deployment?
Answer. Pre-screening is required per Department of Defense
Instruction (DODI) 6490.3 for personnel deploying out of CONUS for more
than 30 days. The screening form is completed by the Marine or Sailor
and kept in his/her medical record for future reference. DODI 6490.3
included no reporting requirements to higher headquarters. Because a
centralized reporting requirement did not exist, the percentage of
personnel who deployed to participate in Operation Iraqi Freedom and
who were pre-screened is unknown at this time. On April 23, 2003, the
Under Secretary of Defense for Personnel and Readiness issued a
directive Memorandum, stating new reporting requirements for both Pre-
and Post-Deployment Surveillance. The new guidance requires the
Services to conduct and track post-deployment health surveys for all
personnel who were involved in Operation Iraqi Freedom. On May 1, 2003,
Health Services, HQMC, released a message to Marine Corps units
identifying the new requirements and providing further guidance. In
addition, The Medical Officer of the Marine Corps, in conjunction with
the Naval Bureau of Medicine and Surgery, is developing a comprehensive
plan to conduct required surveys and monitor compliance.

SUBCOMMITTEE RECESS

Senator Inouye. The next scheduled subcommittee meeting is
Wednesday, April 9. At that time we will receive testimony
regarding the activities of the Missile Defense Agency.
Thank you very much, and the hearing is recessed.
[Whereupon, at 11:35 a.m., Wednesday, April 2, the
subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
April 9.]