[Senate Hearing 108-676]
[From the U.S. Government Publishing Office]
DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2005
----------
MONDAY, MARCH 1, 2004
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:31 a.m., in room SD-192, Dirksen
Senate Office Building, Hon. Ted Stevens (chairman) presiding.
Present: Senators Stevens, Burns, Inouye, and Byrd.
DEPARTMENT OF DEFENSE
STATEMENT OF HON. DOV S. ZAKHEIM, Ph.D., UNDER
SECRETARY OF DEFENSE (COMPTROLLER)
ACCOMPANIED BY LIEUTENANT GENERAL JAMES E. CARTWRIGHT, U.S. MARINE
CORPS, J-8, JOINT CHIEFS OF STAFF
opening statement of senator ted stevens
Senator Stevens. Good morning, Mr. Secretary. I take it we
can assume from your presence that it was a friendlier dog than
originally thought. Happy to have you back with us.
Dr. Zakheim. Thank you, Mr. Chairman.
Senator Stevens. As we meet today, our servicemen and women
remain engaged in critical missions in Iraq, Afghanistan, and
around the globe. They are the ones that are fighting and
winning this global war, the war on terrorism. Since this time
last year, we have removed a dangerous, brutal tyrant in Iraq.
Sadly, more than 500 members of our armed services have lost
their lives in this struggle. The families of those lost should
know that their loved ones have changed history for the good,
have liberated a nation of 25 million people, and made our
Nation more secure.
This is the first of 10 hearings this subcommittee will
hold to review the Defense Department's budget request. We
thank you for agreeing to change the date. We had a conflict
before. The President's request includes $401.7 billion for the
Department of Defense (DOD), a 7 percent increase over fiscal
year 2004. That request reflects the President's commitment to
prosecute the global war on terrorism. It balances the
military's long-term needs for transformation and modernization
with the need to conduct the current operations around the
globe. The budget emphasizes readiness and training and
provides for quality of life for our troops.
The request continues several years of solid increases in
the Defense Department budget. The cumulative growth in the
Defense Department's budget over the last 3 years has been 33
percent.
Some say that this budget should include the fiscal year
2005 contingency costs for terrorism because those costs are
not known today. Another word for ``contingency'' is
``unpredictable.'' The situation is too dynamic, too
unpredictable to build a reliable budget 18 months in advance.
I will have some questions about that as we go forward, Dr.
Zakheim.
Before you make your full statement, which is a part of the
committee's record automatically now, I would turn to my
colleague and co-chairman from Hawaii for his opening remarks.
statement of senator daniel k. inouye
Senator Inouye. Thank you very much.
This morning I want to join my chairman in welcoming you,
Dr. Zakheim, as the first witness before the committee. It is a
pleasure to join my colleague and friend Chairman Stevens as we
begin this review.
Incidentally, this is the 24th year that our chairman has
presided over this subcommittee, and he and I have been
together throughout this time and I for one think it has been a
great partnership.
As we turn our attention to the request of fiscal year
2005, we see a regular defense appropriation request that will
exceed $400 billion. Mr. Chairman, I probably do not need to
remind you of this, but in your first year as chairman
President Ronald Reagan offered a request for $200 billion to
this subcommittee. So here we are almost 25 years later and the
defense budget has just about doubled.
Of course, this request that we are considering today does
not include funding for our overseas commitments in Afghanistan
and in Iraq, so unavoidably the total defense will exceed much
more than $400 billion before the end of the fiscal year.
Dr. Zakheim, since this administration established itself
the defense appropriations request has increased by more than
$100 billion or 35 percent, and that does not include the cost
of terrorism. As a result, many of our colleagues wonder
whether this year's increase of $25.5 billion on top of the
estimated $50 billion supplemental that will likely be required
to support our forces in Iraq is really necessary. I hope in
your testimony today you can explain why the increase you are
requesting is essential.
In addition, my colleagues want to know how the
administration intends to proceed with the many new benefit
programs that have been established over the past few years,
particularly health care for our Reserve families.
Finally, I have been asked by my colleagues if we will be
able to afford all the conventional weapon systems that are in
development. They question this because your budget reserves
most of the increases in investment programs for space and
missile defense. So, Dr. Zakheim, I hope you will be able to
address these issues today before the committee.
Mr. Chairman, it is good to be back here with you again,
sir.
Senator Stevens. Thank you.
Senator Byrd, do you have a statement, sir.
statement of senator robert c. byrd
Senator Byrd. Thank you, Mr. Chairman. I will not have a
statement at this time except to welcome Dr. Zakheim and I look
forward to his testimony. Thank you.
Senator Stevens. General Cartwright, we are happy to have
you also with us.
Mr. Secretary, do you have a statement for us?
Dr. Zakheim. Yes, I do, Mr. Chairman.
Senator Stevens. Would you pull that mike up a little bit,
please.
Dr. Zakheim. Is that better, sir?
Senator Stevens. Thank you.
Dr. Zakheim. Mr. Chairman, Senator Inouye, Senator Byrd:
First I want to apologize for sounding like sandpaper. I do
have some kind of flu and maybe it is better that we are
sitting as far apart as we are. Poor General Cartwright here is
a little closer to me, but I hope he will not catch anything.
I want to thank you for the opportunity to discuss
President Bush's fiscal year 2005 Department of Defense budget
with you. Because the committee and its staff have received
considerable information in support of the budget request, I am
going to limit my statement to key issues that are related to
my direct responsibilities as Under Secretary of Defense,
Comptroller.
Last week, actually the week before, I visited Afghanistan
and Iraq and I would like to report that our troops there
continue to perform magnificently. They appreciate the
steadfast support that is given to them by the Congress, and we
continue to witness progress in both of those countries. We
also enjoy the full cooperation of our allies and partners as
we work with Iraqis and Afghans to provide for their security,
stability, and prosperity.
I especially want to note the success of our Provincial
Reconstruction Teams, the so-called PRT's, in Afghanistan and
the contribution of our allies to PRT's. I visited the North
Atlantic Treaty Organization (NATO) German PRT in Kunduz. The
German forces are doing a marvelous job and are well liked by
the local townspeople. In Iraq, I visited the lead elements of
the Japanese contingent in As-Samawah, the Spanish brigade in
Ad-Diwaniyah, and the Polish multinational division
headquarters in Al-Hillah.
These units are having a major, positive impact on the
local populace and are demonstrating that the international
community shares America's desire to help Iraq emerge from 30
years of dictatorial darkness.
For the current fiscal year, our fiscal year 2004
supplemental appropriations provided sufficient resources to
enable the Department to finance its incremental costs for
operations in Iraq, Afghanistan, and the global war on terror
through the end of September. We will continue to provide
service support and transportation for our allies who are
contributing forces to coalition operations in Iraq, but who
nevertheless need some financial assistance.
We cannot yet determine the scope of the United States
(U.S.) operations in Afghanistan and Iraq in fiscal year 2005.
The President's request therefore does not reflect possible
incremental costs of those operations. It is extremely
difficult to estimate what demands we might have to meet later
this year and next year, particularly after the election in
Afghanistan and after sovereignty is transferred to the Iraqi
people, roughly in the June-July timeframe. Depending on the
circumstances, we could face the need for either more or fewer
troops and more or less intensive operations.
I should also note that there is a 3-month lag in the
availability of our data for actual costs in Afghanistan and
Iraq. As of today, we only have figures for the costs of
operations in November. Thus we will not know until the fall
what our actual costs were for the summer, when sovereignty
will have reverted to the Iraqi people.
The Department does not anticipate a further request for
DOD supplemental appropriations during the rest of calendar
year 2004. Therefore, for several months into fiscal year 2005
the Department will need to cover its incremental costs by
drawing down appropriated funds that were budgeted for
expenditure later in that fiscal year. We have done that in the
previous two fiscal years and we can do so again in fiscal year
2005 as long as the Congress moves quickly to approve a
supplemental early in the next calendar year.
One of the most important ways in which the Congress can
support the global war on terrorism is to support three special
authorities we have requested. The first one is for $500
million to train and equip military and security forces in
Iraq, Afghanistan, and friendly nearby regional nations, to
enhance their capability to combat terrorism and support U.S.
operations in Iraq and Afghanistan. It is critical that this
authority include security forces because the terrorism threat
in Iraq is inside its borders. Security forces, not the New
Iraqi Army, play the primary role in confronting this threat.
The second authority is the Commander's Emergency Response
Program (CERP) for $300 million to enable military leaders in
Iraq and Afghanistan to respond to urgent humanitarian relief
and reconstruction needs. This has been a remarkably successful
program. With quick turnaround projects averaging about $7,000
each, commanders not only help people in their operations area,
but also gain their support in defeating terrorists and
building themselves a better future. As we have already done in
fiscal year 2004, we propose to expand the CERP to Afghanistan,
as well as to continue the program in Iraq.
Finally, we are requesting authorities for increased
drawdown, $200 million, under the Afghan Freedom Support Act,
which would provide additional help for the Afghan National
Army (ANA). In the current pivotal year, this authority is
critical for advancing democracy and stability in Afghanistan.
During my visit there, everyone I met gave very high marks to
the professionalism and competence of the ANA.
The President's fiscal year 2005 budget does not request
specific appropriations for these three authorities and
therefore the Department would need to reprogram funding to use
them. This underscores the importance of Congress increasing
the Department's general transfer authority to $4 billion,
which would still represent just 1 percent of total DOD
funding.
Higher general transfer authority would also give us a
greater ability to shift funds from less pressing needs to fund
must-pay bills and emerging requirements. As we have seen in
the past 3 years, such requirements have become a constant
feature of our military programs. And as was mentioned just
before, it is not all that long ago that our budget was in the
vicinity of $200 billion, and the general transfer authority
that we now have essentially relates to that timeframe. So that
if we are asked to be more responsible, and rightly asked to be
more responsible, about managing our cash, we need to have the
ability to do so in a reasonable way.
One other authority would be especially helpful, given the
uncertainty we face in the global war on terrorism. We need to
convert operations and maintenance to a 2-year appropriation
account. This would preclude wasteful end-of-fiscal-year
scrambling, help us cover emerging requirements, and enhance
our ability to derive the very best value from every
appropriated dollar.
The President's fiscal year 2005 budget reflects the
administration's continuing commitment to our military men and
women and their families. It requests a 3.5 percent base pay
raise and completes the elimination of average out of pocket
housing costs for military personnel living in private housing.
Prior to fiscal year 2001, the average service member had to
absorb over 18 percent of these housing costs.
The budget also sustains the excellent health care benefits
available to military members, retirees, and their families and
keeps us on track to eliminate nearly all inadequate military
family housing units by fiscal year 2007, with complete
elimination in fiscal year 2009. Privatization is enabling the
Department to multiply the benefits of its housing budgets and
get more military families into top-quality accommodations much
sooner than would otherwise be possible. As of February 2004,
27 privatization projects have been awarded for a total of
55,000 units. We hope to get up to 136,000 by the end of fiscal
year 2005.
Taking good care of the Department's people, both military
and civilian, includes providing them quality facilities in
which to work. To that end, the fiscal year 2005 request funds
95 percent of the services' facilities sustainment requirements
and continues to improve our facilities recapitalization rate.
For the first time, the percentage that is being allotted
toward sustainment applies equally to all services across the
board.
Providing our people quality facilities requires that we
not expend money on redundant facilities and that our basing
structure be geared closely to our global strategy and
commitments. We need the 2005 Base Realignment and Closure
Commission to decide how best to streamline and restructure DOD
facilities so that we can make the most out of funding and
optimally support our global strategy.
The fiscal year 2005 request strongly supports force
protection. Although we are on track to meet most Central
Command requirements during the current fiscal year, I want to
give you some highlights of our ongoing force protection
program.
Interceptor body armor. U.S. Central Command (CENTCOM)
plans to have 175,000 of these body armor sets in theater by
the end of March, the end of this month, which will fully
support its requirements. But in addition, the 2005 budget
requests $40 million to sustain production of body armor sets
at 25,000 sets per month until the full Army requirement is
met.
We are also ramping up our up-armored high mobility
multipurpose wheeled vehicle (HMMWV's). Production is going up
to 220 per month by May. Production plus redistribution of
these up-armored HMMWV's that are on hand will meet CENTCOM
requirements by December, and we are asking for an additional
$156 million in fiscal year 2005 to procure another 818 of
these.
There are various detection and jamming devices in theater
already. Others will begin arriving in theater in March 2004,
and these are to deal with improvised explosive devices (IED).
Our fiscal year 2005 budget supports increased production and
accelerated research and development of other means and the
same means to deal with the IED's.
Then there are the vehicle ballistic protection kits. The
Army's plan for add-on armor kits is on track to meet CENTCOM
requirements for HMMWV's by October of this year and for other
critical vehicles by December 2004. We expect some 6,300 HMMWV
add-on armor kits to be delivered by July of this year.
I also want to highlight how the Department is transforming
the way in which it conducts its business. Our primary
initiative in this regard is the Business Management
Modernization Program. This is a massive undertaking involving
virtually all management functions and it will take several
more years to complete. We are in the process of transitioning
from more than 2,000 mostly incompatible management information
systems to a much smaller number of fully compatible systems
that will provide leaders everything needed for informed
decisionmaking. We will streamline processes and integrate
systems to enable DOD decisionmakers to get timely and accurate
information to optimize the allocation of defense resources and
people. The fiscal year 2005 budget requests about $100 million
to continue the evolution and extension of our business
enterprise architecture, which is guiding the overhaul. We
still anticipate that the architecture will lead to a
functional accounting system by fiscal year 2007. We have been
making progress for a couple of years, and we still believe we
are on track.
Another initiative I want to highlight is military to
civilian conversion. The Department has identified over 50,000
positions currently filled by military personnel for conversion
to positions supported by DOD civilians or contractors. The
services have begun to convert 10,000 positions in this fiscal
year. The fiscal year 2005 budget includes $572 million to
achieve the conversion of another 10,070 positions.
I would like to note that the Defense Finance and
Accounting Service (DFAS), which is part of my organization,
has already converted several hundred positions previously
filled by Air Force personnel. The airmen are now available to
the Air Force, which can retrain them to fulfil its
requirements.
In a similar vein, the Army has been retraining the
soldiers formerly assigned to DFAS. Again, we are talking about
several hundred personnel. In particular, many of these people
are being retrained at Fort Leavenworth to serve as military
police, a specialty which currently is in especially great
demand. At the same time, DFAS, the Financing and Accounting
Service, Finance and Accounting Service, does not need to hire
as many civilians to replace their uniformed predecessors. So
DFAS will be more efficient as well.
PREPARED STATEMENT
These are a few of the highlights of the fiscal year 2005
budget and related DOD activities. Together with General
Cartwright, who is the head of the J-8, which is the Joint
Staff's Programming and Analysis Division--and it is a much
longer formal title, but I think that sums it up--we would be
happy to address your questions on these or any other defense
budget matters. Thank you.
[The statement follows:]
Prepared Statement of the Honorable Dov S. Zakheim
Mr. Chairman, members of the Committee, thank you for this
opportunity to discuss President Bush's fiscal year 2005 Department of
Defense (DOD) budget. Because the Committee has received considerable
information in support of the budget request, I will limit my statement
to key issues that are related to my responsibilities as Under
Secretary of Defense (Comptroller).
FUNDING THE GLOBAL WAR ON TERRORISM
Two weeks ago I visited Afghanistan and Iraq, and so I will begin
by reporting that our troops there continue to perform magnificently.
They appreciate the steadfast support given them by this Congress. We
continue to witness progress in both countries, and enjoy the full
cooperation of our allies and partners as we work with Iraqis and
Afghans to provide security, stability and prosperity to their
respective countries. I especially want to note the success of our
Provincial Reconstruction Teams (PRTs) in Afghanistan, and the
contribution of our allies to PRTs. I visited the NATO/German PRT in
Kunduz. They are doing a marvelous job and are well-liked by the local
townspeople.
In Iraq, I visited the lead elements of the Japanese contingent in
As-Samawah, the Spanish brigade in Ad-Diwaniyah, and the Polish multi-
national division headquarters in Al-Hillah. These units are having a
major, positive impact on the local populace, and are demonstrating
that the international community shares America's desire to help Iraq
emerge from thirty years of dictatorial darkness.
For the current fiscal year, our fiscal year 2004 supplemental
appropriations provide sufficient resources to enable the Department to
finance its incremental costs for operations in Iraq, Afghanistan, and
the global war on terrorism through the end of September. We will
continue to provide service support and transportation for allies who
are contributing forces to coalition operations in Iraq, but who
nevertheless need some financial assistance.
We cannot yet determine the scope of U.S. operations in Afghanistan
and Iraq in fiscal year 2005. The President's request therefore does
not reflect possible incremental costs for those operations. It is
extremely difficult to estimate what demands we might have to meet
later this year and next year--particularly after the election in
Afghanistan and after sovereignty is transferred to the Iraqi people.
Depending on the circumstances, we could face the need for either more
or fewer troops--and more or less intensive operations.
I should note that there is a three-month lag in the availability
of our data for actual costs in Afghanistan and Iraq. As of today, we
only have figures for the costs of operations in November. Thus we will
not know until the fall what our actual costs were for the summer, when
sovereignty will have reverted to the Iraqi people.
The Department does not anticipate a further request for DOD
supplemental appropriations during the rest of calendar year 2004.
Therefore, for several months into fiscal year 2005, the Department
will need to cover its incremental costs by drawing down appropriated
funds that were budgeted for expenditure later in that fiscal year. We
have done this in the previous two fiscal years, and can do so again in
fiscal year 2005, as long as the Congress moves quickly to approve a
supplemental early in the next calendar year.
NEEDED ENHANCED AUTHORITIES
One of the most important ways in which Congress can support the
global war on terrorism is to support three special authorities we have
requested:
(1) $500 million to train and equip military and security forces in
Iraq, Afghanistan, and friendly nearby regional nations to enhance
their capability to combat terrorism and support U.S. operations in
Iraq and Afghanistan. It is critical that this authority include
security forces because the terrorism threat in Iraq is inside its
borders. Security forces--not the New Iraqi Army--play the primary role
in confronting this threat.
(2) The Commanders Emergency Response Program ($300 million) to
enable military leaders in Iraq and Afghanistan to respond to urgent
humanitarian relief and reconstruction needs. This has been a
remarkably successful program. With quick turnaround projects averaging
about $7,000 each, commanders not only help people in their operations
area, but also gain their support in defeating terrorists and building
themselves a better future. As we have already done in fiscal year
2004, we propose to expand CERP to Afghanistan, as well as to continue
the program in Iraq.
(3) Increased drawdown authority ($200 million) under the
Afghanistan Freedom Support Act, to provide additional help for the
Afghan National Army. During this pivotal year, this authority is
critical for advancing democracy and stability in Afghanistan. During
my visit to Afghanistan, everyone I met gave very high marks to the
professionalism and competence of the ANA.
The President's fiscal year 2005 budget does not request specific
appropriations for these three authorities, and therefore the
Department would need to reprogram funding to use them. This
underscores the importance of Congress increasing the Department's
General Transfer Authority (GTA) to $4 billion--which would still
represent just one percent of total DOD funding. Higher GTA also would
give us a greater ability to shift funds from less pressing needs to
fund must-pay bills and emerging requirements. As we have seen in the
past three years, such requirements have become a constant feature of
our military programs.
One other authority would be especially helpful, given the
uncertainty we face in the global war on terrorism: we need to convert
Operation and Maintenance (O&M) to a two-year appropriation account.
This would preclude wasteful end-of-fiscal-year scrambling, help us
cover emerging requirements, and enhance our ability to derive the very
best value from every appropriated dollar.
DOING RIGHT BY OUR PEOPLE
The President's fiscal year 2005 budget reflects the
Administration's continuing commitment to our military men and women
and their families. It requests a 3.5 percent base pay raise and
completes the elimination of average out-of-pocket housing costs for
military personnel living in private housing. Prior to fiscal year 2001
the average service member had to absorb over 18 percent of these
housing costs. The budget also sustains the excellent health care
benefits available to military members, retirees and their families.
And it keeps us on track to eliminate nearly all its inadequate
military family housing units by fiscal year 2007, with complete
elimination in fiscal year 2009.
Taking good care of the Department's people, both military and
civilian, includes providing them quality facilities in which to work.
To that end, the fiscal year 2005 request funds 95 percent of the
Services' facilities sustainment requirements and continues to improve
our facilities recapitalization rate. For the first time, this
percentage applies equally to all Services.
Providing our people quality facilities requires that we not waste
money on redundant facilities and that our basing structure be geared
closely to our global strategy and commitments. We need the 2005 Base
Realignment and Closure (BRAC) Commission to decide how best to
streamline and restructure DOD facilities so that we can make the most
out of our funding and optimally support our global strategy.
FORCE PROTECTION
The fiscal year 2005 request strongly supports force protection,
although we are on track to meet most Central Command (CENTCOM)
requirements during the current fiscal year. Following are the
highlights of our force protection program:
--Interceptor Body Armor (IBA).--CENTCOM plans to have 175,000 IBA
sets in theater by the end of March, which will fully support
its requirements. The fiscal year 2005 budget requests $40
million to sustain production of IBA at 25,000 sets per month
until the full Army requirement is met.
--Up armored HMMWV (UAHs).--Production will ramp up to 220 per month
by May. Production, plus redistribution of UAHs on hand will
meet CENTCOM requirements by December. The fiscal year 2005
request is $156 million to procure 818 UAHs.
--Improvised explosive device (IED) jamming/change detection
technology.--Various detection/jamming devices are in theater.
Others will begin arriving in theater in March 2004. Our fiscal
year 2005 budget supports increased production and accelerated
research and development.
--Vehicle ballistic protection kits.--The Army's plan for add-on
armor kits is on track to meet CENTCOM requirements for HMMWV
by October 2004, and for other critical vehicles by December
2004. Some 6,310 HMMWV add-on armor kits are expected to be
delivered by July 2004.
TRANSFORMING HOW DOD DOES BUSINESS
I also wish to highlight how the Department is transforming the way
in which it conducts its business.
Our primary initiative in this regard is the Business Management
Modernization Program (BMMP). This is a massive undertaking involving
virtually all DOD management functions, and it will take several more
years to complete. We are in the process of transitioning from more
than 2,000 mostly incompatible management information systems to a much
smaller number of fully compatible systems that will provide leaders
everything needed for informed decision-making. We will streamline
processes and integrate systems to enable DOD decision-makers to get
timely and accurate information to optimize the allocation of defense
resources and people. The fiscal year 2005 budget requests about $122
million to continue the evolution and extension of our Business
Enterprise Architecture, which is guiding our overhaul. We anticipate
that the architecture will lead to a functional accounting system by
fiscal year 2007.
Another initiative I want to highlight is military-to-civilian
conversion. The Department has identified over 50,000 positions
currently filled by military personnel for conversion to positions
supported by DOD civilians or contractors. The Services have begun to
convert 10,000 positions in fiscal year 2004. The fiscal year 2005
budget includes $572 million to achieve the conversion of another
10,070 positions. I should note that the Defense Finance and Accounting
Service (DFAS), which is part of the Comptroller organization, has
already converted several hundred positions previously filled by Air
Force personnel. The airmen now are available to the Air Force, which
can retrain them to fulfill its requirements. Similarly, the Army has
been retraining the soldiers formerly assigned to DFAS. In particular,
many of these personnel are being retrained at Fort Leavenworth to
serve as military police, a specialty which currently is in especially
great demand. At the same time, DFAS does not need to hire as many
civilians to replace their uniformed predecessors. As a result, DFAS
will be more efficient as well.
CLOSING
These, then, are a few highlights of President Bush's fiscal year
2005 defense budget and related Department of Defense activities. I
would be happy to address your questions on these or any other defense
budget matters. Thank you.
Senator Stevens. Thank you very much, doctor.
Since there are only four of us here, would it be
acceptable if we put a limit of 10 minutes on each one of us? I
expect two more members. Is there any objection to a 10-minute
limitation?
[No response.]
Senator Stevens. Dr. Zakheim, you have indicated a great
many things concerning the current conflicts in Iraq and
Afghanistan. As you have said, we will expect a supplemental
some time after the beginning of the next calendar year, which
means that the armed services will have to complete their work
during this fiscal year, through the end of September, and
beginning of October start using the funds that are in fiscal
year 2005.
I take it that it is your feeling that if there is a surge
in expenditures in the first quarter of the next fiscal year
you will use the food and forage concept and proceed with the
idea that we will not be able to get a supplemental through to
you probably until this time, some time around March 2005. Is
that your plan?
Dr. Zakheim. Obviously if there is a jump in expenditures
we have to revisit what we would do. Right now it could go any
of three ways. If things go wonderfully and more foreign troops
are sent in, along the lines of the Japanese and the Koreans
and so on--and with regard to those two countries in
particular, I do not think anyone would have anticipated 8 or 9
months ago that they would be in Iraq--then we could probably
reduce our presence.
If things go along the lines that we are talking about now,
our presence will reduce marginally, by about 10,000 troops. If
things go to hell in a handbasket--and there are those who
predict that, though I do not think that is the case, certainly
not what I have seen out there and certainly not in light of
the constitution coming out the way it did, which clearly shows
that the Iraqis themselves are determined to have a peaceful
transition. Nevertheless, if things went bad, then there would
be some kind of sharp increase and we would have to reevaluate.
As things stand now, we can draw upon the experience of the
last 2 years. As you know, we forward financed in excess of $30
billion before we came for a supplemental last spring. That
probably cut matters very close. The previous year we forward
financed in the region of $13 billion. So if we were to come to
you in January and request a supplemental then and the Congress
turned it around, as it can do, within 1 month or so, I do not
think we would face any difficulties.
HMMWV
Senator Stevens. I would like to shift over to the HMMWV's
if we can. This has been a very, very serious issue for us on
this committee. I have an equipment schedule here that shows
that the HMMWV's, developed in the early 70's, began
procurement in 1985. There are three models, I am told--no,
four: A0 through A3; and that most of those that were deployed
were the A0 and A1's.
Now, some of them are less capable of supporting the
armored packages. What are the ones that are being armored now?
The up-armor, what models are being up-armored?
Dr. Zakheim. I believe all of them are being up-armored. I
have not heard that there is a difference between them. General
Cartwright, do you have a different sense of that?
General Cartwright. They can use any of the models to
upgrade, but what essentially they do in the upgrade is they
increase the engine and the transmission in order to take the
additional weight. That is the key, so that when they go back
and put the up-armor kit on it takes a larger engine and it
also takes a transmission change. Which model they use does not
matter.
Senator Stevens. That was going to be my next question. Are
you selecting any particular model for up-armoring or just what
we can get a hold of? Are you bringing them back to up-armor
them? Where are they being up-armored?
General Cartwright. Some are new procurements, some are
upgrade kits that are being done in the field, some are upgrade
kits that are being done here in the United States. We are
going to the quickest place that we can to create the
capability out in the field. In some cases we have sent teams
out to do it in the field to the extent that we can. But again,
you are changing an engine and a transmission, which they can
do in the field. Some of them we are building new at the
factory.
Senator Stevens. These are basically built in Indiana and
Ohio?
Dr. Zakheim. I believe that is correct.
General Cartwright. I think that is right. Indiana is the
key place that I recall.
Senator Stevens. Are we procuring any new jeeps that are
not up-armored?
Dr. Zakheim. Not to my knowledge.
General Cartwright. Not right now.
Senator Stevens. We also heard that for the first time an
Abrams tank was destroyed by artillery shells that were wired
together and put into a road and set off, actually, by a cell
phone. How prevalent is that now, General?
General Cartwright. The enemy is certainly in using these
explosive devices becoming more and more creative, and to the
extent that they understand how to attack a particular target,
whether it be a vehicle or a convoy, and how to inflict the
damage, we have seen a steady progression in their
sophistication of being able to do that.
This often becomes an effort where our ability to armor or
protect is then offset by a different capability on the part of
the enemy, and we continually try to stay ahead of that game.
Dr. Zakheim. Without getting into too much detail in an
open forum, I think it is safe to say that basically there are
two approaches to this, active measures and passive measures.
We are pushing both and we have seen some success in both
cases.
Senator Stevens. What about this problem about
predictability in terms of the costs of Iraq and Pakistan?
Could you discuss that?
Dr. Zakheim. Sure.
Senator Stevens. My staff tells me that the situation is
incredibly fluid and because of the difficulty to really
predict what the costs will be over the next, what, 18 months,
it is hard for us to conceive right now what the supplemental
will look like. Is that correct?
Dr. Zakheim. Yes, I think your staff is right on target
there. Just to give you a concrete example, in November our
monthly cost was something under $4 billion. In October I
believe--I think it was October--the monthly cost was in the
region of $7 billion.
Senator Byrd. Monthly cost for what, please?
Dr. Zakheim. For operating in Iraq. Excuse me, Senator.
Senator Byrd. In Iraq?
Dr. Zakheim. Yes, sir. Actually, I think it was September.
There was a fluctuation. Now, we are still trying to understand
the spike, but the basic point is that we do get spikes. Again,
given that, and given the political uncertainties--and I think
this is what your staff was getting at and they are absolutely
right--given the political uncertainties, it is very, very
difficult to predict, even with respect to Afghanistan, which
has been fundamentally more stable, what exactly the costs will
be. If we are talking about a supplemental, we are in March now
and we are talking about moneys that would be expended
initially about 8 months from now through about 20 months from
now.
That really is the key to our desire to wait a little
longer and have a much better feel to the extent we can before
we come in with a supplemental request.
TEMPORARY STRENGTH INCREASES
Senator Stevens. Let me ask a related question. It is my
understanding that the costs associated with the temporary
strength increases are not in the fiscal year 2005 budget
either. Now, these are people that have been taken on now and
they have the additional cost of housing and various support
costs. Why did the budget not include the amount for those that
have already been brought on in temporary strength increases?
Dr. Zakheim. Because those increases are under the
emergency authorities and emergency authorities are funded by
the supplemental. The fiscal year 2004 supplemental therefore
funds those increases for fiscal year 2004. Again, when there
is a fiscal year 2005 supplemental it will fund those
increases. These are the emergency authorities over and above
the authorized end strength.
Senator Stevens. Well, there is an inconvenient gap there
between October 1 and March 1 of next year. How are you going
to fund them?
Dr. Zakheim. Again, we will fund it the same way we would
fund operations, that is to say forward financing. The issue is
not really our ability to fund forward. The issue is how long
we can continue to do it. Clearly, if it were to stretch on
into the late part of the second quarter of the next fiscal
year, we would have problems.
Senator Stevens. What does ``temporary'' mean with regard
to these employees?
Dr. Zakheim. Essentially ``temporary'' simply means that
you are going above the end strength, the authorized end
strength, and it is part of the emergency authorities and so
you do that until such time as you no longer have the
emergency. That is my understanding of it. General, is yours
different?
General Cartwright. The same.
Senator Stevens. Senator Inouye.
Senator Inouye. I am glad you asked that question, Mr.
Chairman, because there are many of us who would like to know
what we have in mind when we say ``temporary.''
Dr. Zakheim. Senator, as you know, the Secretary of Defense
has said over and over again we do not want to stay in either
Afghanistan or Iraq one day longer than is necessary. I think
the general view is that we will be able to ramp down our
forces over time. The question is what are the political
circumstances that would permit such a ramp down. Those involve
not just the internal situation in Iraq, but the degree to
which Iraqi forces are able to pick up the burden--as you know,
they actually are the largest force under arms in Iraq right
now--and second, what the international contribution would be.
There are a number of countries, as you know, that have sat
on the fence for some time waiting to see developments, waiting
to see a transfer of authority. So it is not at all
inconceivable that once July comes around you will see far more
contributions of forces than we have seen today.
HAITI
Senator Inouye. Dr. Zakheim, can I ask a few questions on
Haiti? Yesterday the United Nations announced an international
force will be going in, but apparently American forces would be
the major unit. What is happening now?
Dr. Zakheim. I do not know if the General has more insight
than I do. But as far as I understand, we are sending some
relatively small units out there. We are not going to be
working on our own. And then there will be a handover to the
United Nations (U.N.) peacekeeping force some months down the
road.
Clearly, one has to see. This is the day after President
Aristide decided to catch the next plane to Africa, and how the
situation persists at this stage, whether it quiets down,
whether there is rioting or not, is something that at least I
am not in a position to predict. But I do understand--and I
would like General Cartwright to jump in here--that we are
sending some small number of marines for at least 1 month or
so, until the United Nations feels it is ready to send in the
blue helmets.
General Cartwright. I think that is exactly right. The
unknowns in this situation are still pretty large. We are
trying to understand what the situation is on the ground. We
are trying to understand what it will take to be part of a
national--or an international coalition if that is what is put
together by the United Nations and what our role would be in
it. These initial moves are just meant to establish our
position there, first and foremost to protect our interests at
the Embassy.
TRICARE FOR GUARD AND RESERVES
Senator Inouye. Dr. Zakheim, last fiscal year we increased
several personnel benefits. Among these was TRICARE for Guard
and Reserves. But your fiscal year 2005 budget request provides
for ending this at the end of the calendar year. What is your
plan for the program?
Dr. Zakheim. The law told us to carry it through to the end
of the calendar year and we did, as you know, and we are asking
$300 million for that. And yes, we have not funded beyond that.
We are looking at how to deal with an issue that in our
view is a little more complicated than simply providing TRICARE
for Reserves. When the Reserves are on active duty they are
already covered by TRICARE and for a brief time thereafter.
Therefore the question is if someone is in the Reserves and not
on active duty and has access to other health care as well,
what do we do about that, since every dollar, quite honestly,
that is spent in that direction could well come at the expense
of other programs?
You noted, Senator, somewhat earlier that the defense
budget has increased significantly over the last few years.
Well, $27 billion of that is purely health-related: $17 billion
in the defense health program, $10 billion more in the accrual
account for medical retirees. That is a lot of money, and these
accounts grow of their own. We do not have any real control
over them. They are nominally discretionary. In fact, they are
entitlements.
This one would likewise be, in practice, an entitlement. So
we have to look very, very carefully before we extend these
kinds of benefits beyond where they already are. The law told
us this was to be in force until the end of the calendar year
and so we funded it to the end of the calendar year.
Senator Inouye. With all this, would you find that an
active duty soldier fighting together with a Reserve soldier
side by side, one getting full benefits, the other question
mark, is not quite fair?
Dr. Zakheim. It would not be fair if the Reserve were not
entitled to TRICARE while the Reserve were fighting as an
active. But in fact they are both entitled to the same benefits
while they are both functioning in the same way. The real issue
is as I see it--and maybe the General wants to expand--what do
we talk about when we have someone who is on active service on
the one hand and someone who is working at their regular job
not in the military on the other?
One could make the case that the unfairness, such as it is,
would be against the active service person, who would find that
they are still on the front lines somewhere, whereas the
Reserve, who was going about their daily life with their family
and their normal job in their normal town, is collecting the
same benefit. Then one could say, is that particularly fair?
General, do you want to add to that?
General Cartwright. I think that hits the heart of the
issue. We do not want to disadvantage the Reserve component
when they are on active duty or in their transition to and from
active duty. Clearly we want to take care of them, and I think
that the measures that have been put forward do that. The
question then becomes how long when they are not on active duty
and to what extent this benefit extends, and I think we want to
discuss that.
EXIT PLAN
Senator Inouye. The following two words are ones that we
hear quite often in the political arena: ``exit plan.'' Now, we
have planned for a temporary increase in troops. Does the
administration have any exit plan for a time when we might be
reducing these temporary forces?
Dr. Zakheim. As I mentioned, Senator, the current plan
envisions a reduction of about 10,000 this year alone. I am not
in the policy chain, at least not this time around in my
career, so it is probably a little bit out of bounds for me to
discuss this, other than to say that naturally the
circumstances will dictate our exit.
The one thing that I think we can all agree on is we do not
want a premature exit. Given the nature of the situation in
Iraq or in Afghanistan, for that matter, a premature exit would
create circumstances that probably could be so bad as to force
us to come in, to come back in, within stronger numbers. That
is what we all want to avoid.
But it will be the circumstances on the ground that dictate
just exactly when we go and at what pace.
General, do you want to add?
General Cartwright. Maybe I misunderstood the question. I
thought you were focused more on when will the temporary end
strength be drawn down versus when we will exit the conflict.
Is that correct?
In the thought process of the temporary end strength,
clearly the forces, the services, are taking advantage of the
opportunity to align themselves as quickly as they can to a
configuration that allows them to both meet the threats that we
have today and we envision having in the future and to get
themselves to a position where they can sustain presence at the
level that is necessary.
The thought process right now with the Army, who has
probably undertaken the greatest transformation of all the
services, is that it will probably take them somewhere in the
neighborhood of out through 2007 to accomplish this. They can
meter the rate out. If the temporary authorities are reduced,
they can stretch that out and stretch their transformation out.
While they have the temporary authorities, they can accelerate
that transformation, and that probably is to our benefit and
theirs, to be able to get into a configuration that is more
sustainable.
So the thought process is that right now if they stay at
the rate at which they are going that out in the 2007, 2008
timeframe they will be reconfigured in a way that allows them
to go back to that original strength level.
Dr. Zakheim. Sorry I misunderstood, Senator, but the way
the General outlined it is my understanding. We are talking
about getting down in approximately 3 to 4 years.
Senator Inouye. I have 30 seconds, sir. In my opening
remarks I mentioned that we have increases in space and
missiles, but decreases in the usual things like tanks, ships,
and planes.
SHIPBUILDING
Dr. Zakheim. Senator, I do not think that is entirely the
case. Yes, there are increases in space and yes, there are
increases in missiles and missile defense. But let me give you
one example of where the numbers might be a little misleading,
and that is in shipbuilding. What we did this year was to
finance the research and development portions of two ships, as
opposed to fully finance those ships. That at least is what we
are submitting to the Congress for approval, and we worked that
out with the Office of Management and Budget (OMB).
The impact of that is that had we fully financed those two,
one being a DDX, the other the Littoral Combat Ship, the
shipbuilding budget would be up about $2 billion. In practice,
it has no differential impact on the work force on the ground
and what goes on in the shipyards, but the numbers look a
little bit different. As you well know, in shipbuilding in
particular we only lay out about 4.5 to 5 percent of the total
cost of a program in the first year.
I think the same would apply to some of our other programs.
It is true that we do not have a tank being funded, but we have
not funded a tank in a number of years; and I would draw your
attention to the Stryker program, which is moving along quite
well.
In terms of aircraft, we continue to fund the F-22, we are
funding the F/A-18. Those have been our programs and they are
moving on a steady pace. The research and development for the
F-35, the Joint Strike Fighter, is moving ahead as well.
Senator Inouye. Thank you very much.
Thank you, Mr. Chairman.
Senator Stevens. Senator Byrd, you are recognized for 10
minutes, sir.
Senator Byrd. Thank you, Mr. Chairman.
FUNDING CONFLICTS
Dr. Zakheim, why is the Department of Defense breaking with
the modern tradition of how the United States has funded large-
scale ongoing wars by absolutely refusing to include any costs
of the war in its regular appropriations request?
Dr. Zakheim. I do not know that it is a break with
tradition. As I understand it, we funded 2 or 3 years of the
Vietnam war in the baseline. I believe it was 1967 to 1970,
fiscal years 1967 to 1970. It turned out that the estimates
were way off and we went back to funding conflicts with
supplementals.
So we now have approximately 35 years of doing it this way.
When this administration took office, we made clear that we did
not want to use supplementals to fund shortfalls in operations
and maintenance, for example, and we worked on changing the
culture of the Pentagon so that we would not do that, so that
people would not deliberately underfund budget requests and
then come back to the Congress and say the sky was falling.
What we did do was say to that in the event of a conflict--
and of course, in early 2001 we did not know that 9/11 would
come around--we said in the event of a conflict that would be
different. That is what we have done. It is consistent with
what has been done, as I say, Senator, I believe since 1970.
Senator Byrd. At least until--since when?
Dr. Zakheim. 1970, sir.
Senator Byrd. Well, in 1970 the moneys for combat
operations in Vietnam were included in the regular
appropriation bill.
Dr. Zakheim. That was the last time, I believe.
Senator Byrd. No, not the last time. In 1971, the funds for
combat operations in Vietnam were included in the regular bill,
and that was not the last year. 1972, 1973. So that is not
accurate, Dr. Zakheim, what you said.
Dr. Zakheim. I may have made a mistake between 1967 and
1970, as opposed to 1970 and 1973. But I believe that it was 3
years only and then we did not fund combat operations after
that.
Senator Byrd. You funded 1967 the Vietnam war, regular
bill, 1967. 1966, combat operations, at least partially, in the
regular bill.
Dr. Zakheim. Partially, yes.
Senator Byrd. Well, now, wait a minute. You know, what
years you said earlier does not square with the facts. So I
just want you to know I have got a whole table of all of these
dates and these wars and how they were funded. So that is the
basis for my question: Why is the Department of Defense
breaking the modern tradition of how the United States has
funded large-scale ongoing wars by absolutely refusing to
include any costs of war in its regular appropriations request?
Now, we have seen that this administration does not fund
operations in its regular bills in this war. There are two wars
going on here: one in Afghanistan, under which we were
attacked; and one in Iraq, in which we were the attackers. How
can the American people ever be prepared to support running
enormous deficits while spending scores of billions for a long-
term occupation mission halfway around the world if the
administration will not be open about its estimates for how
much the war will cost, how long our troops will be sent
abroad, or even what its exit strategy is for Iraq?
How much are we spending per month in Afghanistan? How much
are we spending per month in Iraq?
Dr. Zakheim. We are spending on the average $4.2 billion a
month in Iraq and on the average approximately $800 million a
month in Afghanistan. The total cost of Enduring Freedom which
exceeds just operations in Afghanistan is in excess of about--
it is about $1 billion a month, or at least that is what we saw
last year. It was about $12 billion for 12 months.
On the dates, I apologize, but you have got the numbers in
front of you, I do not. You have a better sense of history than
I do, Senator.
Senator Byrd. Well, thank you, Dr. Zakheim. You better
answer these questions when you come before the people's
representatives in the Department that controls the purse
strings. We are going to be watching these figures closely.
You and I have had good relations and we have worked
together on things before. These questions may sound like there
is a great deal of animus between you and me. There is none.
That is not my purpose here. I thank you for the good work you
do.
But it is increasingly clear that the Bush administration
has no idea of when to start to bring American soldiers home
from Iraq. It is increasingly clear that the Bush
administration intends to keep soldiers in Iraq for many, many
months. But does the administration include costs for this
mission in its budget? The answer is no, right?
Dr. Zakheim. That is correct, sir.
COSTS OF OCCUPATION OF IRAQ
Senator Byrd. Does the administration give the American
people an understanding of the costs of this prolonged
occupation of Iraq? The answer is no, right?
Dr. Zakheim. That one I am not sure I can fully agree with
you on, Senator.
Senator Byrd. Well, let us have it, then.
Dr. Zakheim. Well, as I said, certainly the American people
know that the costs have been large. If we are talking about
$4.2 billion a month, they can do their sums up to now and see
that we have been talking about significant amounts of money.
The difficulty for us, Senator, is that predicting the future,
as I indicated, is much more dicey. We can certainly come up
with the numbers that we have spent and no one is under any
illusions that these are not large expenditures. But the
prediction of the future is a completely different matter, and
that is why we have been very reluctant to make any statements.
ESTIMATED COSTS OF WAR
Secretary Rumsfeld has noted in a number of hearings that
we had originally requested in the case of Afghanistan a $10
billion estimate and the Congress decided not to go with that.
I know there is a lot of discussion about why the Congress did
not and so on. It turned out that estimate was reasonably
accurate for the first year.
Senator Byrd. Well, Dr. Zakheim, why does not the
administration send up in its budget the estimated cost of the
war in Afghanistan, the estimated cost of the war in Iraq, in
its regular budget? That is the question.
Dr. Zakheim. The answer is because we simply cannot predict
them at this stage, sir.
Senator Byrd. The White House plays hide and seek with the
costs of the war, hiding them from the American public until
after the November election. The country deserves an honest up-
front approach from the President. Instead, we get gimmicks and
games.
I offered an amendment to the fiscal year 2004 defense
appropriations bill that stated the sense of the Senate that
the President should include in his fiscal year 2005 budget a
request for ongoing military operations, including Iraq and
Afghanistan. This amendment was passed with an overwhelming 81
votes. But the costs of the war on terrorism and the war in
Iraq are not included in this budget, the estimated costs. Of
course, you cannot be absolutely sure down to the final dollar,
but certainly this administration must have some estimates.
Surely, the administration must talk about these things
within the administration. I certainly would be totally
surprised and shocked, astonished, if the truth were that the
administration does not have any estimates of the costs of the
wars, the two wars that are going on, the one in which we were
attacked, the other in which we were the attacker. There must
be some estimates.
The American people are entitled to know what these
estimates are, and that is what we are asking.
On February 10, the military services told the Armed
Services Committee that delaying a supplemental until next year
would cause them real budgetary problems when they run out of
money in early to mid-September. So, I remind you that the
administration sent its request for $87 billion to Congress on
September 17, 2003, and it was passed by Congress and signed
into law by the President within 1\1/2\ months. If the
Department can estimate the fiscal year 2004 costs of the war
by September 2003, why can it not estimate the fiscal year 2005
costs of the war by September 2004?
Dr. Zakheim. Senator, again, yes, we have estimated the
costs of 2004, but that is an estimate, it is true, and that is
what we think we will spend through September 30 of this year.
But we are reaching two watershed situations, both in Iraq and
Afghanistan. That is to say, the transfer of authority in Iraq
and the presidential election in Afghanistan. Both of those
could be, will be, significant factors in what is the American
military presence, posture, force level in fiscal year 2005.
Senator Byrd. Dr. Zakheim, we are also approaching an
election in this country, in November. The American people are
entitled to know before the election, not after the election,
what at least the estimated costs of these continuing wars are
to the American people in dollars as well as in lives, as well
as with regard to the length of the occupation.
Mr. Chairman, I hope I have not overrun my time.
Senator Stevens. Slightly, Senator.
Senator Byrd. All right, I will wait until the next round.
Thank you.
Thank you, Dr. Zakheim.
Dr. Zakheim. Thank you, Senator.
Senator Stevens. Senator Burns. Ten minutes, Senator.
PREPARED STATEMENT OF SENATOR CONRAD BURNS
Senator Burns. Thank you, Mr. Chairman. I have a statement
I would like to submit for the record, with the consent of the
committee.
Senator Stevens. It will be printed in the record.
[The statement follows:]
Prepared Statement of Senator Conrad Burns
Thank you, Mr. Chairman. Mr. Zakheim, I would like to thank you for
being here today to discuss the President's fiscal year 2005 Budget
request for the Department of Defense (DOD). I have just a very short
statement before we get going this morning.
The President has proposed a $401.7 billion fiscal year 2005 budget
for the Department of Defense. This number represents a seven percent
increase over the fiscal year 2004 budget of $375.3 billion.
I would like to start off by saying that for the most part, I think
you have presented us with a good budget, one that funds core needs to
allow troops currently engaged, to do so safely and to the best of
their ability. This budget also prepares our military forces for future
engagements, where battlefields will look much different than they have
in years past. We must ensure our military transforms in such a way as
to have the right military capabilities for any future engagement. An
overall Research and Development (R&D) request of $68.9 billion and
investment in Science and Technology, which has been included in this
fiscal year 2005 budget at $10.5 billion, helps get us there.
As you know, the men and women of our active, Guard and Reserve
components have seen an increased operations tempo (OPTEMPO) over the
past few years in particular. In my State of Montana, we'll soon see 40
percent of the Guard's total force mobilized, including the 495th
Transportation Battalion out of Kalispell, the 143rd Military Police
Detachment out of Bozeman and the 1022nd Medical Company. While I know
these men and women love what they do and love serving their country,
this increased OPTEMPO does not, however, come without costs. I am
pleased to see that the budget addresses this issue and looks at ways
to rebalance our forces and reduce the need for involuntary reserve
mobilization. I do think it is important to look at ways to add folks
to areas where we currently have a shortage, such as military police,
transportation and civilian affairs.
Increased operations also wear and tear on much of our already
aging equipment. This year's budget proposes $140.6 billion for the
Operation and Maintenance (O&M) account, up from $127.6 billion in
fiscal year 2004. The procurement account has been proposed at $74.9
billion, down from the fiscal year 2004 level of $75.3 billion.
The United States military would not be the best fighting force in
the world without the great people who wear the uniform. It is
important that we take care of our military men and women and ensure
their quality of life is good. The Military Personnel account is funded
at $104.8 billion in fiscal year 2005, while the Military Construction
and Family Housing accounts request is a total of only $9.5 billion.
Our military has performed nobly in their latest missions--
especially in Afghanistan and continuing in Iraq. This country's
fighting force is extremely skilled and capable. The United States
military responds to various missions across this nation and across the
world at a moment's notice, as we have recently witnessed in Haiti. We
must ensure our brave military men and women have the tools and
equipment needed to do their job and return home to their loved ones
safely and as quickly as possible.
I pledge to do what I can to make sure that our military has the
support they need to get the job done.
Again, thanks for coming before our subcommittee today. I look
forward to the discussion this morning. Thank you.
Senator Burns. We are all spending a lot of time at home
now, so thank you for coming this morning. I have a couple of
things I would like to ask.
With regard to the Senator from West Virginia's questions,
you know, I realize we are finally into a political season. I
had this all confused. I did not know that. But I want to point
out the Clinton administration never did provide advance
estimate costs for Haiti, Southwest Asia, or Kosovo. I would
just like to clear that for the record.
Senator Byrd. That is an old herring, going back to the
Clinton administration. What has that got to do with today?
Senator Burns. Well, you know there is a lot of truth in
that.
Senator Byrd. Well, there may be and there may not be. But
we have got to do the funding. That is our business, and we
need estimates upon which to proceed.
Senator Burns. That is exactly right. If it was an accepted
practice then, those practices will usually be carried forward
in Government, and you know how that is.
RETENTION OF TROOPS
I want to use an old Marine term here. As I talk to the
families of Guard and Reservists in the State, scuttlebutt has
it that our retention of those troops once they come home--they
have been deployed no less than 6 months, in some cases over 1
year--retention is going to be a problem. We have not heard
that because there are no figures for it yet.
Has this been discussed at the highest levels of the
Pentagon? Because, as you know, over 50 percent of our force
structure has been moved into Guard and Reserves. Has this been
discussed and is it a concern of the Pentagon?
Dr. Zakheim. Well, the answer is yes and yes, sir. My
colleague David Chu, the Under Secretary for Personnel, is
fully on top of this issue. As I understand it, right now we
are retaining Reserves at a historically high rate, about 5 to
6 percent higher than is normally the case.
There are some indicators that that retention rate will go
down some, and it might just level off at the historical rate.
Right now, like you, all we have are anecdotal pieces of
evidence. It really depends almost on which Reserve you speak
to. I have spoken to some who have voiced the concerns you just
did. I have spoken to others who say that the families are
supportive, the townspeople are supportive, they are all very
proud that they are out there, and they have absolutely every
intention of re-upping.
So until we actually see the numbers we do not know. But
yes, this is something that we are very cognizant of. I guess
we are fortunate that going into this potential situation we
actually have higher retention rates than is historically the
norm.
General, do you want to add to that?
General Cartwright. I think the retention rates are
something that is a quick look; you can kind of get a sense of
how many people are coming in. The longer term, which does not
come right away, certainly revolves around the satisfaction
that the individual soldier, sailor, airman, marine feels for
the duty that he is performing.
Even longer term and more problematic and one that we are
keeping a very close eye on is the satisfaction of the family.
This is a hard stress on a family and over time the question is
have we focused and provided the right incentives to keep the
families engaged and do they feel like the contribution is
meaningful.
Dr. Chu has certainly undertaken a broad program that goes
out and looks at the benefits that we associate both with the
individual service member and the benefits associated with the
family, making sure that we describe service when a Reservist
comes on duty that equates to the service that we actually
demand of them. This gets at the idea of if there is a certain
amount of readiness that we associate with a particular
soldier, let us say, in the Reserve or the Guard, i.e., that we
expect him to be up and available for 1 year out of every 5 or
6 years, or whether we expect him to come on service at a short
notice, that that is understood right up front and that that is
what they sign up for.
So we are looking at a broad range of things that get at
the issue of the continuum of service, not just at the
recruiting piece, because you have got to look broader than
just the recruiting piece.
FORCE STRUCTURE
Senator Burns. Well, Senator Inouye brought up a very valid
point, and correctly so, on benefits and this type thing. A lot
of us, every Senator sitting here at this table, when the trend
started of bringing down our force structure of people on
active duty, our regular forces, and when those numbers were
dropped and then more emphasis was put on our Reserve and Guard
forces, we all went to work and started to redevelop, to take a
look at the infrastructure under which those Guard and Reserves
are trained, that they have to have facilities and a training
procedure that makes them as good as those who train every day.
I think most of us who did that under the leadership of
this committee and the Armed Services Committee, understood
that. I just wonder, because we have integrated forces. The Red
Horse Brigade out of Mount Storm Air Force Base is integrated
Reserve and active duty forces. In fact, their first commander
was a Reservist. That will work pretty well as long as we
integrate those troops along with communication and training
that is at least equal to our citizen soldiers, sailors, and
marines.
I think we have to discuss that, because it becomes a vital
part of our force structure.
CACHES OF ARMS
I was in Iraq last October and we were in the northern
part, Mosul, where they were finding tremendously large caches
of conventional arms that Saddam had stored and stashed away. I
cannot help but think, as we see these bombs, these roadside
bombs, that within those caches that we have found and those
that we have not found is a supply of explosives that is much
deadlier when used in a very creative way.
Are we continuing to search for those caches and to destroy
the ones that we have found?
Dr. Zakheim. Please, let me start and I will then turn it
over to the General.
The answer is yes. We are also using Iraqis to do a lot of
that. There are really two parts to this. One is to search for
them; the other then is to guard them. Iraqis are providing a
lot of the guard units for that. We do continue to search, and
the more intelligence we get--and we are getting more
intelligence, and the best sources are the Iraqis themselves--
the more we are able to quickly find these ammunition storage
facilities and to guard them and dispose of them.
General?
General Cartwright. Clearly, a very aggressive effort, both
in Afghanistan and Iraq, to go after these caches, find them,
dry up that source as quickly as we can. The good news is that
both in Afghanistan and in Iraq, as the forces, the local
indigenous forces, stand up, as we use the tools available to
us to create a conduit of information back and forth between
locals, that has become our richest source of finding these
caches.
So in the case of Iraq, it is the Iraqis who are actually
helping us go find those, get them, get them into a safe place,
get them destroyed or disposed of otherwise. But the key here
is programs like--and we talked about it earlier--the CERP
fund, where we establish a relationship in the community and
then the information starts to flow, are so critical to the
soldiers as they try to do this.
Senator Burns. Mr. Chairman, it says ``stop'' here. You
never say ``whoa'' in a horse race. Oh, we are doing okay yet?
Senator Stevens. You still are.
Senator Burns. Well, this thing makes funny noises and has
funny colors to it.
Along that same line, there are some technologies supplied
by or are being developed in some of our colleges and
universities, also in small businesses, and especially in my
State, that would help us to find both weapons and personnel
underground. Have we seen any acceleration of taking a look at
these technologies and obtaining those technologies and then
deploying them?
Dr. Zakheim. The answer is yes. DARPA, our Defense Advanced
Research Projects Agency, in fact has--and I cannot get into
detail in an open forum, but they in fact have been
accelerating a number of these technologies, precisely for the
reasons you gave, in order to get them on the ground quickly.
We have got some on the ground quickly, and we are certainly
prepared to brief you in private as to what we have done.
Generally speaking, I think DARPA is open to ideas and
suggestions. Anything that will particularly help the forces is
welcome.
Senator Burns. Well, we established a program called the
Experimental Program to Stimulate Competitive Research (EPSCoR)
many years ago when I first came to this body and that allowed
consortias of smaller colleges and universities to do research
and development (R&D) on many projects. Montana State
University, I think you probably know, have made significant
improvements to laser technology and have developed a lot of
the technology that you are working with now.
But I hear that it is hard to get into the good old boy
network every now and again, and we have got to watch that
because there are some creative people outside the norm,
because EPSCoR has allowed these people to do a lot of R&D work
in areas where it traditionally had not been found. I would
like to see a little more notice taken of some of the advances
that have been made.
Mr. Chairman, thank you very much.
Dr. Zakheim. Senator, if you contact me about this I will
forward whatever information you have to Ron Sega, who heads up
that area in our Department. I do know that there is no old boy
network functioning with regard to force protection. They are
trying to get at whatever is out there.
Senator Burns. That is good, but it is still alive up here.
Thank you very much.
Dr. Zakheim. Mr. Chairman, just to correct for the record a
couple of things. First, Senator Byrd got it absolutely right.
I had flipped my history. I told you, Senator, you have a
better sense of history than I do. We used supplementals for
Vietnam in the first several years, 1965, 1966, and then we
went over to baseline budgets in the years you mentioned. Of
course, by that time we had a better sense of where we were
headed with that, I believe. But in any event, I had gotten the
years completely reversed.
I also had a question earlier about buying HMMWV's that
were not up-armored and I am told by the Army that in fact we
are buying some number that are not in 2005. We are buying a
total of 2,431 HMMWV's; 818 of those are up-armored, the rest
are not. So I wanted to be clear for the record on that, sir.
Senator Stevens. Thank you very much.
I assume you are marking those so they are not going to be
sent over to a war zone accidentally?
Dr. Zakheim. The intention is that everything that goes
over there is up-armored.
Senator Stevens. That is not what I asked. The ones we are
procuring new that are not up-armored, are they clearly marked
so they cannot be sent into war zones?
Dr. Zakheim. That is my understanding, but I will look into
it for the record.
[The information follows:]
Both standard and Up-Armored High Mobility Multipurpose
Wheeled Vehicles (HMMWV) are being procured in fiscal year
2005. HMMWVs which are not Up-Armored are visually
identifiable. New, non-up-armored HMMWVs coming out of
production are programmed to fill unit shortages according to
Army priorities. Both standard and Up-Armored HMMWVs will
continue to be available in the theater of operation for use as
appropriate by the Combatant Commander. Production of Up-
Armored HMMWVs is a Department priority and production is being
increased to meet CENTCOM requirements.
Senator Stevens. Thank you.
I understand the Senator from West Virginia's point. I
distinctly remember raising the question several times during
Bosnia, Kosovo, all of those, even with the first President
Bush in Somalia. We did not get budget estimates. We ran those
wars on supplementals. That is not something this committee
really believes in, but it has become a practice, whether we
like it or not. But the Senator made about the same speech I
did, as a matter of fact, in 1999 as we approached an election.
But let me shift to something else. I am worried about this
budget because I have before me your chart--I wish you had
brought it in a big chart so everyone could see it. 1969, 8.9
percent of our gross national product was dedicated to defense.
And if you look at 1969, that was 43.4 percent of the national
budget. Now we are looking at a budget that is 3.6 percent of
the gross national product. In the year 2000 the budget request
was 2.9 percent. We are looking at, instead of 43 percent of
the Federal budget, we are looking at 17.9 percent of the
Federal budget being committed to defense.
As I look at our projections, there will be an increase
over the next 5 years, not near enough to move us back up to
the point where we traveled for the 10 years of the 1980's,
somewhere in the vicinity of 20 percent of the Federal budget
and in the vicinity of 6 percent of the gross domestic product.
OUTLAYS
Now, I want to ask this. These outlays, do they include the
costs of the war?
Dr. Zakheim. The outlays in the charts for 2004 do, yes,
sir. Obviously, not for 2005. But they do include the costs of
the war. Anything that is an actual outlay is included, sir.
Senator Stevens. I am worried about the trend in terms of
being able to maintain the kind of a military we need if we are
going to not restore the concept of committing a sufficient
amount to our defense. I remember traveling the world with
Senator Jackson where we urged our allies to commit at least 3
percent, and we in those days were between 6 and 8 percent of
the gross national product.
What are our allies doing now? How much are they committing
to defense, do you know?
Dr. Zakheim. Off the top of my head, sir, I believe that
many of the allies that we tried to get to reach 3 percent in
those days are still not at 3 percent today. In our case, of
course, our gross national product is in the trillions and so
3.6 percent of such a large amount of money is still very, very
significant.
But nevertheless, I think it is fair to say that in most
cases our allies are not at the 3 percent of their gross
domestic products, and I can get you the answer for the record.
[The information follows:]
Please see the attached information on allied defense
spending from the 2003 Responsibility Sharing Report.
BUDGET
Senator Stevens. Well, I asked that other question that you
have just implied of the staff. We have not gotten the answer
back yet. But I think that the amount of your budget now, which
is roughly, what, 400----
Dr. Zakheim. 401 and change, yes.
Senator Stevens [continuing]. As compared to the $200
billion in 1981, the first budget that Senator Inouye and I
handled in defense, I think it is less than it was in terms of
real dollars, than it was in 1981.
Dr. Zakheim. I do not believe it is less than in 1981.
Certainly it is less than the 1985 real dollar number, which
was the peak of President Reagan's years, and I was part of
that administration. But you are absolutely right, you cannot
just take the $400 billion and compare it to the $200 billion
because there is an inflation factor and there are also much
increased benefits that did not exist in 1981.
Senator Stevens. Well, I am told in constant dollars what
you have is an increase from $257 billion to $393 billion
between 1981 and 2005.
Dr. Zakheim. I thought it was a little higher, sir, yes.
Senator Stevens. That to me is not an increase that
recognizes our global responsibilities now as compared to then.
I wonder how you can maintain a global war against terrorism
without some additional modernization.
ARMY AVIATION PROCUREMENT
Let me switch over to that if I may. We have not seen some
of the details on the Comanche termination and what is going to
happen there. Is our understanding correct that the money from
the Comanche termination, the net will be shifted over to the
Army aviation procurement accounts?
Dr. Zakheim. That is correct. Basically there is really a
change in the whole approach to Army aviation. What is
happening to Comanche is only a part of it. I can give you some
detail. We are going to modernize 1,400 aircraft and, because
of the funds available from Comanche, an additional 284 Apache
Block 3's and 19 Chinooks. We are going to acquire almost 800
new aircraft, both for the active and for the Reserve, and that
is more Chinooks, more Blackhawks, and a light utility
helicopter.
Senator Stevens. When will we see those modifications in
the budget?
Dr. Zakheim. We are going to be sending up an amendment
very quickly, sir, and that will address both sides of the
equation. That is to say, moving the money out of Comanche and
moving the money into many of the programs that I have
mentioned.
Senator Stevens. Will that change in any way the requests
that are before us for the Army for 2005?
Dr. Zakheim. I would have to check on that. I think that
basically it is pretty much in balance, but I would have to get
you that for the record. I do not think it will be significant,
no, sir.
[The information follows:]
The Army 2005 budget request does not change in total but
there has been realignment of resources between accounts. Army
Research and Development is reduced by nearly $1.2 billion. A
majority of the resources, $828 million, will be reapplied to
support Aircraft Procurement, acquiring high priority
helicopter equipment and additional CH-47, UH-60 and TH-67
aircraft. Another $155 million is reapplied to Procurement of
Ammunition, principally to support acquisition of additional
Hydra rockets, and Missile Procurement has been increased by
$93 million for the purchase of additional Hellfire missiles.
Smaller adjustments have been made in several other accounts
and the precise details of all adjustments are included in the
fiscal year 2005 Amended Budget Submission that the Department
has forwarded.
Senator Stevens. It is basically a shift from R&D to
procurement?
Dr. Zakheim. Yes, sir.
Senator Stevens. We have, I understand, a 2004 shortfall on
the global war against terrorism of $700 million, is that
right?
Dr. Zakheim. I would have to look at that, the basis for
that number. I do not recognize that figure, sir.
Senator Stevens. Well, we are talking about the defense
health program. Is there a shortfall there?
Dr. Zakheim. In the defense health program? I would have to
look at that.
Senator Stevens. Attributable to the global war on
terrorism?
Dr. Zakheim. I am told that in fact there is that shortfall
and we are going to reprogram money to cover it. So we will be
sending you a reprogramming action for that.
IFF
Senator Stevens. All right. Why are they not, those
shortfalls, not being funded from the Iraqi Freedom Fund (IFF)?
Dr. Zakheim. I have to look at where the sources will come
from. We will clearly fund the shortfall from the most
acceptable source, and of course we have to send those sources
up to you.
Senator Stevens. Well, can you answer me this. Is the Iraqi
Freedom Fund, which we created for the fiscal year 2003
budget--it was the supplemental really--has that been
exhausted?
Dr. Zakheim. Not entirely exhausted. We are still
reprogramming money out of the IFF. We are coming close to
exhausting it, yes.
Senator Byrd. Mr. Chairman, how much money does remain in
that fund?
Senator Stevens. Well, I was just going to get to that. I
do not like to see any of these funds left, have us get
supplementals when there is money in technical funds we created
in the past that is not being charged. Are you doing that, Mr.
Zakheim?
Dr. Zakheim. No, I do not think that is the case at all. We
anticipate using it all up. Actually we are almost there. I am
trying to get the numbers for you and I hope before this
hearing is over I will be able to tell you exactly where we are
with what remains of the IFF. But I do not think it is a
situation of asking for more money over and above what we have
because we have more money in the kitty. That is not the case
at all.
Senator Stevens. Well, you are the Comptroller. Do we have
existing funds over there? These are 2003 funds now we are
talking about.
Dr. Zakheim. That is correct.
Senator Stevens. I do not understand why those funds were
not used.
Dr. Zakheim. Out of the $1.9 billion IFF, the Iraqi Freedom
Fund, we have already committed over $1.5 billion. So we are
down to about $400 million in the Iraqi Freedom Fund. For
example, that in and of itself would not cover the DHP, the
defense health program. But in any event, the health program is
not directly war related, so we would have to fund it out of
something else. The IFF is for what is directly war related.
As I said, we are down to $400 million, or less than 25
percent, of the original IFF and that will be expended pretty
soon.
Senator Stevens. I would hope there would be a policy of
charging some of those funds like that, these reprogrammings,
so that we do not create additional demands.
Dr. Zakheim. It is in fact the policy to do that, but we
can only reprogram for things that are directly war related. So
in the case of the DHP we could not do that.
Senator Stevens. I am not going to comment on that. We have
seen it done before, let us put it that way.
Gentlemen, I am going to have to leave here in a minute. We
have got a 10-minute rule here, so I presume each member would
want another 10 minutes. I will leave the gavel with the co-
chairman and thank you very much, Mr. Zakheim.
Dr. Zakheim. Before you go, sir, I was passed a note
without the right numbers. IFF is completely committed for
2003, which is what you were asking me about. The $400 million
that is left is in the IFF of 2004. So here we are in the
second quarter of 2004, we have committed $1.5 billion out of
$1.9 billion, and the 2003 is completely committed.
Senator Stevens. Senator Inouye.
Senator Inouye [presiding]. Thank you.
I am glad that the chairman brought up the matter of
shortfalls in military medicine and health care because in all
the studies that we have looked at men and women in uniform are
more concerned about health care than pay.
That being the case, I have been also monitoring some of
the assignments we have made of military personnel in medicine.
I note, for example, that from Walter Reed we have been sending
doctors to Iraq who are specialists. One just sent there is a
specialist in knee replacements, which is a highly specialized
area.
Senator Stevens. Senator, would you yield to me just 1
minute? I apologize.
Senator Inouye. Certainly.
Senator Stevens. When the subcommittee closes out today,
our next hearing will be at 10 a.m. in this room for a hearing
on the Army's fiscal year 2005 budget request.
Thank you, Senator.
Senator Inouye. Thank you.
As I was saying this doctor is being sent to Iraq for 6
months. He wants to go there to do his part, but in 6 months he
is not going to do one knee replacement, he is not going to do
any one of those highly skilled specialties, and when he gets
back he will have to go back to school again.
Why do you not have a policy that would, say, limit these
people to 3 months?
Dr. Zakheim. I would have to refer that to Dr. Winkenwerder
and Dr. Chu.
Senator Inouye. I am not a doctor, but it just does not
make sense. You send someone out there and you are going to
lose all his skills.
Dr. Zakheim. On its face the question is an excellent one.
I am sure there is an answer and a response. I do not know if
General Cartwright is into that, but I claim no particular
expertise. I would have to get you an answer for the record
based on what Dr. Chu and Dr. Winkenwerder were to tell me.
General Cartwright. We need to go back and look at the case
for you, Senator.
Senator Inouye. I would appreciate that, sir.
[The information follows:]
Surgeons are chosen for deployment based on the skill
qualifications requested by the combatant commander.
Once a requirement for a certain specialty is validated (in
this case, orthopedics), the skill set requirement is matched
to the skill level of the surgeons available to meet the
requirement. Each Service has a system for coordinating these
requests, utilizing its specialty consultants, medical manpower
experts, and others familiar with the necessary skill
qualifications. While orthopedists may have a subspecialty (in
this case joint replacement) they are trained in (and typically
treat) the full range of cases that may present. Indeed, well-
trained orthopedists are critical to caring for the wounds
occurring in Iraq.
Moreover, this rotation will help maintain excellence in
the Military Health System's graduate medical education
programs. Even the most highly trained subspecialists need
operational/deployment military medicine expertise in order to
be fully competent and credible role models and teachers for
military physicians in training.
This six-month period for the rotation balances the needs
for the combatant commander with prudent use of highly trained
medical staff.
Senator Inouye. Senator Byrd.
ROTATION OF FORCES
Senator Byrd. Thank you, Mr. Chairman, my esteemed friend.
References have been made to a rotation of forces. The
administration is in the midst of a massive rotation of forces
in Iraq. Is the cost of rotating these forces reflected in the
average monthly cost of $4.2 billion for operations in Iraq?
Dr. Zakheim. To the extent--remember, Senator, that the
monthly costs we have up to now only reflect what we have up to
November. But the answer is yes, sir, those rotation costs will
be reflected in the monthly costs. So that here we are in
March; I do not expect to see any actuals until probably the
June timeframe.
Senator Byrd. Recent news reports indicate that the
Pentagon and the Central Intelligence Agency (CIA) are stepping
up the intensity of the hunt for Osama bin Laden. Is that
increased effort requiring any corresponding increase in the
average monthly cost of operations in Afghanistan or in the
number of military personnel in Afghanistan?
Dr. Zakheim. At this stage I simply do not know. Should
there be an increase, it will be reflected. But again, that is
not something I will be able to address in any detail for the
next couple of months.
Senator Byrd. Do you have any idea, any indications as to
whether or not the effort is requiring any corresponding
increase in the average monthly cost of operations in
Afghanistan?
Dr. Zakheim. General, do you want to?
General Cartwright. The only thing I would say, Senator--
and it would be reflected--is that as the weather gets better
the opportunity to do more will be there and we will try to
take advantage of that. To the extent that that is a delta
between what we are doing in the winter versus what we are
doing in the spring and the summer would be the difference.
Senator Byrd. General, does the Department anticipate any
substantial drawdown of U.S. forces from Afghanistan at any
point in the near future, keeping in mind the increase, the
stepping up of the intensity of the hunt for bin Laden?
General Cartwright. The program for 2004 is laid out and is
relatively stable and includes the efforts that we have to
chase after various targets. The longer range look, as I said
earlier, our intent is to move out of there as quickly as the
country is ready to take over. So that remains a little bit
cloudy and ambiguous right now.
Senator Byrd. Is there anything you can tell us about this
hunt for Osama bin Laden? We have been reading a good bit about
it. There are some reports that he has already been caught--I
heard that report 2 or 3 days ago--and that the administration
is waiting, waiting until a more opportune time to make the
announcement. I did not give a great deal of credence to that,
but I am not surprised at anything these days.
Dr. Zakheim. Senator, you are right not to give much
credence to that, particularly, as you know, the Middle East is
a place where rumors start circulating and grow with the
passage of days and hours.
Senator Byrd. Just in the Middle East?
Dr. Zakheim. That is the area we were addressing just now,
sir.
Senator Byrd. But you are making a rather broad statement
when you say that in the Middle East rumors----
Dr. Zakheim. There have been a lot of studies to that
effect, about the impact of rumors on perceptions in the Middle
East. That is why I referred to that one, sir.
Senator Byrd. All right. Let me get back to my earlier
subject of contention perhaps. The Department of Defense has
adopted an all or nothing approach, sending Congress an
ultimatum: Either give the Pentagon a blank check for $10
billion, as was requested 2 years ago, or the administration
will wait until untold billions have already been spent before
asking for a supplemental appropriations bill. And we have done
both. We have advanced that slush fund, as you might call it,
of $10 billion, a blank check, and then at the same time we are
still depending upon supplemental appropriations bills.
This is an unnecessarily confrontational and shortsighted
posture. So I have to continue to express my disappointment in
this method of approach. Now, you can go back to preceding
administrations, if you can find it to be a fact in each case,
and talk about the war in Vietnam, the war on Bosnia, the war
in Korea, or whatever. We are here to appropriate moneys today
and we need to know, we are entitled to know, what the facts
are.
The American people, and we are here to represent them, are
entitled to know what the costs of this war are and what the
estimate of the future costs are going to be. There is an
election coming up and there is a pretty well-founded
suspicion, it appears, that these figures are going to be
withheld from the people's elected representatives in Congress
before the election, but that after the election, then the
costs will be sprung upon us.
I think it is a poor way to legislate. I am in my 46th year
here on this committee and my 51st year on the Hill, in
Congress. And we have not seen it done like that before, and
this administration continues, it seems, to proceed in this
manner.
IRAQ RECONSTRUCTION FUNDING
Now, let us talk about the supplemental Iraq reconstruction
funding. The OMB Director, Josh Bolten, stated that he
estimates that the administration's supplemental appropriation
request, whenever it may be submitted, could be in the
neighborhood of $50 billion. Dr. Zakheim, does that estimate
include any additional funds for reconstruction projects in
Iraq?
Dr. Zakheim. To my knowledge it does not.
Senator Byrd. Can you give a ballpark estimate of what
additional reconstruction funds the administration might
request for Iraq on top of the $18.4 billion that was
appropriated last fall?
Dr. Zakheim. I cannot, and permit me to explain why I
cannot. The $18.4 billion was not really a 1-year request. It
was a request for essentially front-loading what would be an
international effort to reconstruct Iraq. I was personally
involved in organizing the Madrid conference. There we got
commitments of up to $17 billion for reconstruction from the
international community. Just this past weekend there was a
meeting in Abu Dhabi where the United Nations and the World
Bank trust funds announced they were open for business and
countries started to commit money to those trust funds.
In addition, there are the revenues that are coming from
Iraqi oil. If you add all of those--our commitment, Iraqi oil,
other revenues that are still coming in from frozen assets and
Oil for Food contracts that were not implemented, as well as
the international contributions--you are in the vicinity of
about $50 billion.
So that it is not at all clear at this stage just how much
more we as the United States might have to contribute. I think
the general sense is that, should we feel there is a further
need for reconstruction funds, it would not be packaged as a
supplemental, but instead be part of our total foreign
assistance budget and sent up to the Congress that way.
Senator Byrd. Just before the White House sent Congress its
draft of an Iraq war resolution in September 2002, some
proponents of confrontation with Iraq said that Members of
Congress should explain to the American people their position
on Iraq before the midterm elections. Now the administration
wants to delay until after the upcoming Presidential election
sending Congress the bill for keeping our troops in Iraq for
another year.
Dr. Zakheim, since the administration was so keen on
getting the authority to go to war right before an election,
does not the administration have the responsibility to let the
American people know how much this war will cost? We are almost
on the verge of getting into another election, and I think the
American people are entitled to know this. What do you think?
Dr. Zakheim. Well, sir, I certainly agree with you that
there is another election coming. I think people can disagree
about this. As we see it, we do not really have a good
estimate. And I would not share your characterization of this
as a slush fund. I want to make that clear. That is not how I
would look at it. We do provide to the Congress monthly reports
on our obligations. We do not have immediate monthly reports.
We always run 3 months late.
I believe, just as an analyst that to estimate the costs of
fiscal year 2005 prior to the changes that are going to take
place in Iraq and Afghanistan is probably to misestimate those
costs, probably to put the wrong dollars in the wrong accounts,
and therefore create problems thereafter.
Senator Byrd. Why can you not say, though, doctor: this is
the way we see it today. Now, there may be changes. Perhaps
this will happen, perhaps that will happen, something else may
happen. But, Members of Congress, this is the way we see it
today; and on this basis, we would estimate thus and so.
Now, if the administration would be up front like that,
then we would have confidence in the administration, what it
says. The American people would have some idea, knowing that it
is not the final figure, of course, have some idea of what they
are going to be asked to pay and over what period, how long a
period. This would be, it seems to me, the fair way of
proceeding, rather than do as the administration is doing:
spend the money, present the Congress then with an ultimatum,
give us the check, and Congress in the meantime has had no
opportunity to conduct oversight as it is its responsibility,
constitutional responsibility, to do.
I see my time is up. Mr. Chairman, may the witness answer
my question first?
Senator Inouye. Yes.
Senator Byrd. Thank you.
Dr. Zakheim. Certainly, Senator. First of all, as you know,
we do have expenditures that will be going out to September 30.
So that is already spoken for and we will have to justify those
and we will report those. The real issue is what do we do about
the period between October 1 and roughly January-February
timeframe, whenever the next supplemental would be available.
Clearly, it is very difficult to estimate those costs at
this time, for the reason I have given you. I do not think this
is a deliberate effort to mislead. After all is said and done
we know what the monthly costs are right now, $4.2 billion. We
anticipate what the monthly costs will be through the end of
September. But beyond that, I do not want to sound like a
broken record, but beyond that we just do not know what the
impact of this summer's events is going to be like.
The Congress clearly will not have any kind of ultimatum,
for the simple reason that if we go to the Congress next
January with a request for the entire fiscal year, the entire
fiscal year will not have happened by then and the Congress can
choose how much and to what degree it wishes to support that
supplemental.
Senator Byrd. Mr. Chairman, I do not want to prolong this,
but this makes it impossible for the Congress to conduct its
constitutional oversight. The money is already spent, then we
get the bill. In the meantime, we have no opportunity to delve
into the facts which justify x number of dollars. That is
number one.
Number two, the President can go before the American people
and say that he is going to cut, reduce the budget deficit by
half, in 5 years, and he presents the Congress and the people
with a budget for this year, and that is what we are working
on. That is what these hearings are about. But in the meantime,
these moneys that we will be spending in Iraq and Afghanistan
do not show. Those are hidden figures.
So the administration has the advantage, the political
advantage, of saying, well, this is our budget for this year.
The administration is not counting the costs of the wars in
Iraq and in Afghanistan. These costs are on the side, you see.
This is a gimmick that this administration is using, I must
say, and the American people are being kept in the dark.
This is what I am complaining about, and I hope that we
will continue to press the administration to shed some light on
this budget. The American people are entitled to have that
light because they are footing the bill, and Congress is
entitled to have that light. I have never seen it done like
this. It is a practice here, it is a pattern, and it is
calculated. Everybody ought to be able to see that.
Mr. Chairman, thank you for your patience. Thank you, Dr.
Zakheim. You have got a tough job to do. You have a hard job. I
know you have to pursue the company line, as we used to say
back in the coal mining camps in southern West Virginia, the
company line. You have to do that, I know that. Thank you.
Senator Inouye. Thank you very much.
Senator Burns.
PROVINCIAL RECONSTRUCTION TEAMS
Senator Burns. I think I have only one more question and
that will wrap it up for me. We met with some of the folks over
in Iraq, and in your statement you referred to it this morning
on the PRT's. Would you elaborate on the plan to expand those
Provincial Reconstruction Teams in Afghanistan and the cost?
Have you got an estimated cost for that?
I know we have one German-led PRT there currently. Are the
Germans contributing to the cost of those PRT's? Would you sort
of give us some sort of an idea of what is going on?
Dr. Zakheim. Sure. The cost, because that is an answer I
cannot give you offhand, I will get you for the record. We had
eight. We are up to, I believe, 12 PRT's, of which one is a
NATO/German one. That is the one in Kunduz. That is the one I
was at. The British are running one in Mazar-e Sharif. The New
Zealanders are running another one.
[The information follows:]
There are currently 17 PRTs. 14 are coalition-run (13 by
United States and 1 by New Zealand) and 3 are NATO-run, 1 by
Germany and 2 by the United Kingdom.
Each PRT was estimated to cost $5 million to setup. The
cost of supporting a PRT has been roughly estimated at $39,000
to $98,000 per month. However, the size and composition of each
PRT varies. Some have more military personnel, some have more
USAID staff. In addition, frequent troop rotations from the
U.S. military units supporting the PRTs lead to cost
fluctuations. U.S. military units are supporting PRTs are
funded with O&M funds.
DOD has provided just under $30 million in Overseas
Humanitarian Disaster and Civic Aid funds for PRT and civil
affairs assistance projects combined in Afghanistan to date.
Senator Burns. I think we ran into ours at Kandahar.
Dr. Zakheim. We have a bunch of them now.
There is a push for NATO--and not just NATO; for instance,
the Swedes are going to be contributing and they are not in
NATO--to start four more. In fact, your question about footing
the bill goes to the heart of our position regarding these
four. We are telling NATO that of course we support four more.
We think it is a great idea. We think PRT's work. But NATO
needs to provide the support.
The Germans are contributing, although some of the support,
the helicopter support, is what we are providing. We have made
it clear that was a once-only exception. We are not going to do
that. If countries want to contribute to PRT's, and we
encourage them to, then they need to cover the costs.
So we hope that eventually a significant number of these
PRT's will be supported by the international community. There
is talk of a Nordic one. There is talk of a second British one,
and so on. There is a lot of interest around the world to
contributing to them, because of what they do--and you have
seen them. They are unique. There is a mix of troops, of
civilians, of representatives of the central Afghan government.
They work very well with international nongovernmental
organizations. Actually, it is fascinating to see the
evolution.
A lot of these organizations were very suspicious of the
military and therefore thought PRT's were just a stalking horse
for the military. Now it is quite different, and you see people
from institutions that you would not dream of having anything
to do with the military speaking positively about it. It really
is a terrific development, because what it does is enable the
central government to demonstrate its reach throughout the
country.
Still, if countries want to be involved, they have got to
foot the bill.
OPERATIONAL SUPPORT
Senator Burns. Also, I ask about--and I think whenever we
talk about technology, and this thing, I will just throw this
as a question out there that I would like an answer to and we
can do that in a private conversation also. We had four very
good friends during the Afghanistan operation: Pakistan,
Kazakhistan, Kyrgistan, and Jordan. I am wondering, are we
doing anything in those countries to relieve some of the
financial pressure off of those four countries?
Dr. Zakheim. The answer is yes. Congress allowed us,
actually with this committee's help, to reimburse a number of
countries for the operational support they provide, and
Pakistan is by far the biggest recipient. That continues. We
are reimbursing Jordan as well. In fact, those two countries
were specified in the legislation. But we are reimbursing
others, too.
Senator Burns. Well, we had tremendous support under the
circumstances from Kazakhistan and Kyrgistan. I am going to
Kazakhistan. I want to be met on friendly terms there when I
get there.
Dr. Zakheim. I think you will be.
Senator Burns. Also, I made a couple trips out at Walter
Reed to see some of the troops from Montana that were out
there, which is a very rewarding situation. You know, we have
got one young man out there who is afraid that they are not
going to let him stay in the Guard and he wants to stay. He
took quite a beating over there.
With regard to that, I am told by--you know, the American
people I do not think understand really fully, in the medical
communities like Walter Reed and our research people on
diseases we run into different kinds of challenges whenever we
send our troops to foreign soil. I noticed a little bit in this
last one that you cut back a little bit on R&D as far as
research on the different kind of diseases. You know, we are
going through a severe acute respiratory syndrome (SARS) thing
now on the Pacific Rim and in China. These people are exposed
to these things.
I would question cutting back on your research because I
think it is vitally important that the research moves forward
in our medical communities, such as Walter Reed, Bethesda, the
naval hospital, and that this work continue.
Dr. Zakheim. Well, I will get for the record a breakdown of
what has been, to the extent it has been reduced. I think Dr.
Chu and Dr. Winkenwerder would be best in a position to give
you that answer. I can say, however, that the level of research
is still significantly high and it is precisely for the reasons
you gave. When we send our troops to different parts of the
world, they encounter diseases that have either been eradicated
here or never existed here at all.
I know there is a lot of research, not just within the Army
medical community; the Army Medical Command manages research in
universities, including international universities. Very often
you will find that universities in the regions in which these
diseases are found have a comparative advantage in terms of
dealing with those diseases. That funding continues.
But I will get you for the record details of that.
[The information follows:]
The military infectious disease research program continues
to address countermeasures against the same number of different
kinds of infectious diseases of military importance. Diseases
such as malaria, bacterial diseases responsible for diarrhea,
viral diseases (e.g. dengue fever and hanta virus), meningitis,
viral encephalitis, scrubtyphus, leishmaniasis, hemorrhagic
fever, and HIV are all part of the military infectious disease
research program. This research is funded with core dollars out
of the Medical Research and Materiel Command's budget. This
means that the funds are programmed and budgeted for through
the President's Budget process. From fiscal year 2002 to fiscal
year 2004, there have been shifts in programs and changes in
accounting for indirect laboratory costs. Overall there was a
4.6 percent reduction in the core program between fiscal year
2003 and fiscal year 2004 as priorities changed and other
programs emerged in importance.
Senator Burns. It is a different kind of research than we
find in our traditional National Institutes of Health (NIH) or
anything else, on infectious diseases.
Dr. Zakheim. Absolutely, that is right.
Senator Burns. And that has concerned most of us.
Thank you, Mr. Chairman. That is all that I have.
Senator Inouye. Thank you very much.
Pursuant to the direction of Chairman Stevens----
Senator Byrd. Mr. Chairman, might I ask another question?
Senator Inouye. Please do.
Senator Byrd. Thank you, Mr. Chairman. Thank you. I thank
the acting chairman, and I thank you, Dr. Zakheim, and you,
General Cartwright.
OPERATIONAL POST-HANDOVER NUMBERS
Let me repeat my question earlier. The President sent his
$87 billion fiscal year 2004 supplemental to Congress on
September 17, 2003. Roughly 6 weeks later, that request was
enacted and signed into law. Now, if the supplemental could be
submitted in September in that instance, why can it not be
presented in September this year, rather than wait until, was
it January I believe you said?
Dr. Zakheim. It is a function of the fact that in the first
place we are, unlike September of that year where we were not
funded at all, we are funded through the end of September, so
that we have operations that will be covered.
Second, we do not feel that it would pose particular
difficulties for us to cash flow for about 3 months. Again, as
I mentioned earlier, the Congress has its discretion, as you
well know, Senator; it can choose whatever it wants to do for
the remaining part of fiscal year 2005 in a supplemental or
indeed how it wants to treat what we have requested for that
first part of fiscal year 2005 in a supplemental.
So the discretion is clearly there. We believe we can
effectively cash flow those funds for the first few months. As
I said, by September we will not have as yet a sense of the
costs after the handover. If the handover is in the beginning
of July, we will not have any numbers, any operational post-
handover numbers, with which to work in September. It is as
simple as that.
We simply cannot come with any credible number. I mean,
there will be such a massive----
Senator Byrd. The way you are operating, it is not
credible. It is not credible at all. What is the magic about
January?
Dr. Zakheim. Again, Senator, as I said, we need a couple of
months experience subsequent to the handover in Iraq. That
brings us to November-December timeframe. We need a month to
put a supplemental together and that brings us to January.
Senator Byrd. Mr. Chairman, just this final. At Secretary
Rumsfeld's confirmation hearing, I asked what he was going to
do about the Pentagon's broken accounting systems. Three years
later, the Department of Defense is still nowhere close to
passing an audit of its books. Congress has appropriated more
than $200 million to develop a blueprint for a new computerized
accounting system, but work on that plan, which was supposed to
be completed in April 2003, is still not yet done.
Meanwhile, DOD will spend $19 billion this year on those
computers, on top of the $18 billion spent in 2003 on those
faulty systems. You, Dr. Zakheim, and Secretary Rumsfeld have
recognized the seriousness of these accounting problems. But
how can you justify spending tens of billions of dollars on
these computerized accounting systems when you do not even know
how to fix what is wrong with those systems that we are pouring
money into?
How much more time and money is it going to take before the
Pentagon can pass an audit of its books?
Dr. Zakheim. Senator, as I have said for the last 2 years
and as you and I have discussed, there are a number of steps
necessary if we are going to get this right. We did in fact
complete the enterprise architecture to which you refer on time
and under budget in April 2003. We still have to test it with
various pilot programs.
The game plan was always to try to get a clean audit by
2007. Now, we are not just waiting for the next 4 years to make
that happen. Huge amounts of assets and liabilities have been
added to--and are now showing on our books. Our fund balance
with the Treasury has improved significantly. We have cut back
on problem disbursements by, I believe, approximately two-
thirds. I can get you all those numbers for the record.
[The information follows:]
In January 2001, the Department's problem disbursements stood at
$4.163 billion. As of January 2004, we have reduced those problem
disbursements by 65 percent to $1.437 billion.
Dr. Zakheim. Frankly, I thank you for your encouragement in
this regard. It has made a difference. We are trying to change
the culture and the culture is changing. We review, I
personally review, financial statements four times a year
together with OMB, the Inspector General, and the General
Accounting Office, sitting in my office reviewing these
statements.
We have cleaned those up. We have improved the footnotes,
which nobody ever used to bother to read.
Senator Byrd. I hope you are getting overtime pay.
Dr. Zakheim. Well, I have not gotten it yet, sir.
But I guess my long answer to your good question is we are
on schedule to have clean audits by 2007. We are doing a lot of
different things, and I will get you a fuller answer for the
record.
[The information follows:]
But I guess that my long answer to your good question is we
are on schedule to have clean audits by 2007. We are doing two
major things in this unprecedented effort. First, I have
directed fund holders within Defense to develop financial
improvement plans which detail how the fund holder will
overcome its deficiencies which prevent it from obtaining an
unqualified audit opinion. Plans identify deficiencies,
corrective actions by financial statement line item, and
prepare the entity for audit. Lastly, I have established an
executive steering committee (ESC) to oversee execution of the
initiative. Committee members include the Deputy Chief
Financial Officer, the Deputy Comptroller, Program/Budget, the
Director of the Defense Finance and Accounting Service, and the
Inspector General, DOD. In accordance with Section 1008, the
ESC reviews the plans and prioritizes assessments and audits of
entities when they assert audit readiness.
Senator Inouye. If there are any additional committee
questions, they will be submitted to you for your response.
SUBCOMMITTEE RECESS
Senator Byrd. Thank you. Thank you, Dr. Zakheim.
Thank you, Senator.
Senator Inouye. Thank you very much.
Pursuant to the direction of Chairman Stevens, the hearing
is recessed.
[Whereupon, at 12:20 p.m., Monday, March 1, the
subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
March 3.]